BAC member or LCE being owner or amongst the owners of company-bidder

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BAC member or LCE being owner or amongst the owners of company-bidder

Post by tjslim97 on Thu Apr 09, 2009 2:02 am

As the subject so states: what is the legal implications or are the legal requirements or prohibitions in the event that a bidder-company is actually owned or partly owned by a member of the BAC? by the LCE?
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Re: BAC member or LCE being owner or amongst the owners of company-bidder

Post by RDV @ GP3i on Thu Apr 09, 2009 11:26 am

tjslim97 wrote:As the subject so states: what is the legal implications or are the legal requirements or prohibitions in the event that a bidder-company is actually owned or partly owned by a member of the BAC? by the LCE?

First, there is a legal requirement for the inclusion in the bidder’s Technical Proposal a “sworn affidavit of Compliance with the Disclosure Provision under Sec. 47” of the GPRA in relation to other provisions of R.A. 3019. Failure to submit that sworn affidavit, the bidder shall be automatically disqualified under the “pass or fail” criteria. Sec. 47, of course, provides that relationship of the bidder or any officer of the corporation (if the bidder is a corporation) to the HOPE within the 3rd civil degree of consanguinity or affinity, shall be ground for automatic disqualification. Sec. 47 of IR-A even includes relationship to the members of the BAC, TWG, BAC Sec. or any officer or employee of the procuring entity who has direct access to information which would substantially affect the result of the bidding.

Second, having submitted a sworn affidavit of no relationship, despite the fact that the bidder is “actually owned or partly owned by a member of the BAC” or “by the LCE”, the bidder could be criminally and/or administratively liable under Sec. 65.3 and 69.1 of IRR-A. His Bid Security could be forfeited as a penalty. He could be suspended and/or blacklisted by the procuring entity. The public officials who conspired with him could also be held administratively or criminally liable.
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Re: BAC member or LCE being owner or amongst the owners of company-bidder

Post by engrjhez® on Thu Apr 09, 2009 2:09 pm

RDV wrote:
First, there is a legal requirement for the inclusion in the bidder’s Technical Proposal a “sworn affidavit of Compliance with the Disclosure Provision under Sec. 47” of the GPRA in relation to other provisions of R.A. 3019. Failure to submit that sworn affidavit, the bidder shall be automatically disqualified under the “pass or fail” criteria. Sec. 47, of course, provides that relationship of the bidder or any officer of the corporation (if the bidder is a corporation) to the HOPE within the 3rd civil degree of consanguinity or affinity, shall be ground for automatic disqualification. Sec. 47 of IR-A even includes relationship to the members of the BAC, TWG, BAC Sec. or any officer or employee of the procuring entity who has direct access to information which would substantially affect the result of the bidding.

Second, having submitted a sworn affidavit of no relationship, despite the fact that the bidder is “actually owned or partly owned by a member of the BAC” or “by the LCE”, the bidder could be criminally and/or administratively liable under Sec. 65.3 and 69.1 of IRR-A. His Bid Security could be forfeited as a penalty. He could be suspended and/or blacklisted by the procuring entity. The public officials who conspired with him could also be held administratively or criminally liable.
Suppose we have such case when the LCE is a corporate owner of a business which existed long before he/she became a LCE/HOPE. That same continued to do business with his/her private partners after being elected/appointed as the LCE/HOPE. The corporation does not involve any of the LCE/HOPE's relatives (and in no way related to its members up to the 3rd degree of affinity). Can the firm, provided all requirements under the law were submitted, and no misrepresentation or false declaration was committed with the bid, be awarded a contract?

The ethical justification is that the bidder is legally doing business, technically and financially have passed thru the BAC's scrutiny, and no connivance or collusion was evident in the couse of the procurement process.
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Re: BAC member or LCE being owner or amongst the owners of company-bidder

Post by RDV @ GP3i on Thu Apr 09, 2009 6:04 pm

engrjhez wrote:Suppose we have such case when the LCE is a corporate owner of a business which existed long before he/she became a LCE/HOPE. That same continued to do business with his/her private partners after being elected/appointed as the LCE/HOPE. The corporation does not involve any of the LCE/HOPE's relatives (and in no way related to its members up to the 3rd degree of affinity). Can the firm, provided all requirements under the law were submitted, and no misrepresentation or false declaration was committed with the bid, be awarded a contract?

The ethical justification is that the bidder is legally doing business, technically and financially have passed thru the BAC's scrutiny, and no connivance or collusion was evident in the couse of the procurement process. [/justify]

No problem if the corporation does not have business dealings in the LGU where the LCE is the HOPE, but if it does, it violates Sec. 47. How can we say that the firm complies with all the requirement and no misrepresentation or false declaration was committed, when one of the requirement is the submission of sworn statement on the Disclosure Provision? If it did submit such a requirement, then it is already committing a misrepresentation. There could also be a violation of R.A. 3019.

The corporation may be doing business legally, even prior to to the election of the LCE, but since he did not divest himself from the corporation the moment he was elected, he is still a part owner of the corporation. Connivance or collusion may not happen, but when the BAC knows the fact that the LCE is a part-owner, they should have discqualified the corporation outright. Having failed to do it, they could be help responsible also.
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Re: BAC member or LCE being owner or amongst the owners of company-bidder

Post by engrjhez® on Thu Apr 09, 2009 9:35 pm

RDV wrote:No problem if the corporation does not have business dealings in the LGU where the LCE is the HOPE, but if it does, it violates Sec. 47. How can we say that the firm complies with all the requirement and no misrepresentation or false declaration was committed, when one of the requirement is the submission of sworn statement on the Disclosure Provision? If it did submit such a requirement, then it is already committing a misrepresentation...
I believe Section 47 (Disclosure of Relations) cannot be enforced if the LCE/HOPE does not really have any relations up to the 3rd degree of consanguinity/affinity. Hence, the bidder can, without doubt, submit this requirement without any conflict, because none of the corporate owners have such relations to the LCE/HOPE. Now, if the bidder is not related by consanguinity or affinity, does the bidder will still be required to declare that the LCE/HOPE is their co-owner?

RDV wrote:...There could also be a violation of R.A. 3019.
This we have to see. Upon looking at this law, specifically Section 4:

  • Section 4. Prohibition on private individuals.

    (a) It shall be unlawful for any person having family or close personal relation with any public official to capitalize or exploit or take advantage of such family or close personal relation by directly or indirectly requesting or receiving any present, gift or material or pecuniary advantage from any other person having some business, transaction, application, request or contract with the government, in which such public official has to intervene. Family relation shall include the spouse or relatives by consanguinity or affinity in the third civil degree. The word "close personal relation" shall include close personal friendship, social and fraternal connections, and professional employment all giving rise to intimacy which assures free access to such public officer.

    (b) x x x

And there goes the answer to my own question. This means that absence of relation under Section 47 of RA.9184 does not exemplify the bidder from being disqualified because of the ANTI-GRAFT AND CORRUPT PRACTICES ACT (RA.3019) which was existent pala since 1960. Very Happy
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Re: BAC member or LCE being owner or amongst the owners of company-bidder

Post by RDV @ GP3i on Fri Apr 10, 2009 12:35 am

engrjhez wrote:I believe Section 47 (Disclosure of Relations) cannot be enforced if the LCE/HOPE does not really have any relations up to the 3rd degree of consanguinity/affinity. Hence, the bidder can, without doubt, submit this requirement without any conflict, because none of the corporate owners have such relations to the LCE/HOPE. Now, if the bidder is not related by consanguinity or affinity, does the bidder will still be required to declare that the LCE/HOPE is their co-owner?

Going back to your question, it was premised under the situation the the LCE is part-owner of a corporation engaging in business long before he became the LCE, which I quoted below:

"Suppose we have such case when the LCE is a corporate owner of a business which existed long before he/she became a LCE/HOPE. That same continued to do business with his/her private partners after being elected/appointed as the LCE/HOPE. The corporation does not involve any of the LCE/HOPE's relatives (and in no way related to its members up to the 3rd degree of affinity). Can the firm, provided all requirements under the law were submitted, and no misrepresentation or false declaration was committed with the bid, be awarded a contract"

I qualified my answer that so long as the coporation, in which he is a part-owner, does not deal with his LGU, no problem. But the moment it deals with his own LGU, then there is a prohibited relationship, the owners/officers of the corporation should not be related within the 3rd degree of consanguinity or affinity with the HOPE. If he is the owner and at the same time the HOPE, you don't see any relationship in that?

You are looking at the relationship between the owners of the corporation alone. What is being prohibited under Sec. 47 is relationship of the bidder with the HOPE. If a bidder is a corporation, it would apply to the owners/officers of the corporation, not among themselves, but with the HOPE.
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Re: BAC member or LCE being owner or amongst the owners of company-bidder

Post by engrjhez® on Fri Apr 10, 2009 11:06 am

RDV wrote:I qualified my answer that so long as the coporation, in which he is a part-owner, does not deal with his LGU, no problem. But the moment it deals with his own LGU, then there is a prohibited relationship, the owners/officers of the corporation should not be related within the 3rd degree of consanguinity or affinity with the HOPE. If he is the owner and at the same time the HOPE, you don't see any relationship in that?
This would clarify that although the LCE/HOPE is not related to any of the co-owners, BUT RELATED TO HIMSELF (being the co-owner too), the bidder shall in no way be allowed to participate in the bidding where the LCE/HOPE has jurisdiction.

This in hand would require the inclusion of the LCE/HOPE be declared under Section 47 as related to the bidder. If someone will ask as to what relationship and to what degree, I may now say: "to the zeroth degree of consanguinity - being related to him/herself " Very Happy
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