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Required validity period for a bank credit line

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Required validity period for a bank credit line

Post by rhdviterbo@yahoo.com on Tue Mar 15, 2011 5:10 pm

Please pahelp naman po. What is the validity period required for certification issued by a commercial bank/any bank that will grant a credit line for a bidder. We have an ongoing bulk water supply project classified under procurement of goods. RA 9184 does not specify kasi. Ang meron lang is Bid Security. Thank you very much po sa assistance....
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Re: Required validity period for a bank credit line

Post by RDV @ GP3i on Wed Mar 16, 2011 10:10 am

rhdviterbo@yahoo.com wrote:Please pahelp naman po. What is the validity period required for certification issued by a commercial bank/any bank that will grant a credit line for a bidder. We have an ongoing bulk water supply project classified under procurement of goods. RA 9184 does not specify kasi. Ang meron lang is Bid Security. Thank you very much po sa assistance....

What is required as part of Class A, Financial Eligibility Requirement, is either an NFCC or a Credit Line Commitment. It is a commitment by a bank (Universal or Commercial Bank) that the bidder, if it happens to be awarded the contract, will submit an actual Credit Line from the same bank which is at least 10% of the ABC.

Since it is only a commitment, its validity should follow the validity of the bidder's bid, which is a maximum of 120 c.d. from bid opening or until it is replaced by an actual credit line.
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Re: Required validity period for a bank credit line

Post by rhdviterbo@yahoo.com on Wed Mar 16, 2011 3:09 pm

Thanks po.... Smile
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Re: Required validity period for a bank credit line

Post by firstlady_5167 on Wed Mar 16, 2011 4:20 pm

Good day everyone! For clarification lang po sir. . . . So you mean that Credit Line Commitment in the Class "A" (Financial Eligibility Requirement) is different from Credit Line Certificate? We will require them to submit the Credit Line Certificate when the project is already awarded to them which is 10% of the ABC. Tama po ba? Is it before contract signing or after contract signing?
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Re: Required validity period for a bank credit line

Post by RDV @ GP3i on Thu Mar 17, 2011 5:33 am

firstlady_5167 wrote:Good day everyone! For clarification lang po sir. . . . So you mean that Credit Line Commitment in the Class "A" (Financial Eligibility Requirement) is different from Credit Line Certificate? We will require them to submit the Credit Line Certificate when the project is already awarded to them which is 10% of the ABC. Tama po ba? Is it before contract signing or after contract signing?

That is correct, firstlady. what is actually required as part of bid submission is just a bank commitment to extend a credit line, as an actual credit line is not yet necessary since there is no assurance that the bidder will actually be awarded the contract.

If the bidder will later be awarded the contract, that is the only time that he will actually replace the commitment with an actual credit line. That credit line will have to be submitted after the award but before or at the time of contract signing since the credit line will form part of the contract itself.
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Re: Required validity period for a bank credit line

Post by firstlady_5167 on Fri Mar 18, 2011 2:30 pm

Thank you so much RDV. Na clarified na ako sa CLC. Iba kasi ang interpretation ng ibang members ng BAC at TWG lalo na may mga new members kaya gusto nila umatend ng seminar and if possible malayo sa place namin para mka concentrate daw sila hindiyung hahabul habulin ng mga pirmahan o kaya ipapatawag sa ibang meeting.
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Re: Required validity period for a bank credit line

Post by RDV @ GP3i on Fri Mar 18, 2011 3:33 pm

firstlady_5167 wrote:Thank you so much RDV. Na clarified na ako sa CLC. Iba kasi ang interpretation ng ibang members ng BAC at TWG lalo na may mga new members kaya gusto nila umatend ng seminar and if possible malayo sa place namin para mka concentrate daw sila hindiyung hahabul habulin ng mga pirmahan o kaya ipapatawag sa ibang meeting.

Welcome, firstlady. Tama yun, mas maganda mag-attend ng seminar outside of your office so that you can concentrate more on the topics discussed without being bothered by office works, at least for 1 to 3 days.
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Re: Required validity period for a bank credit line

Post by litehouse on Mon Apr 01, 2013 6:23 am

We have caused the posting of a bidding on the last week of January 2013 which was declared failed. A prospective bidder bought the bid docs but failed to drop. Now, it was re-published last February 26,2013. The same prospective bidder bought the bid docs and dropped its bid. Upon scrutiny, it submitted a Credit Line Certificate instead of a Credit Line Commitment. What is worst, the date stamped in the jurat of the submitted Certificate is February 09,2013. It is now patent that the bidder used the certificate obtained during the first publication as its document for the second publication. May I solicit your opinion on the matter of its post-disqualification.Thank you and God bless.

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Re: Required validity period for a bank credit line

Post by regina avelino on Mon Apr 01, 2013 11:46 am

good morning, you are correct that what is required under the law during eligibility check is the CLC which is the credit line COMMITMENT. before a contract is executed, part of this contract will be the credit line CERTIFICATE which is the fulfillment of the universal or commercial bank's commitment by issuing the actual credit line in favor of the bidder. Such credit line shall then be submitted by the bidder to the procuring entity as required under Section 37.2.3 (e) of the IRR of RA 9184.

Now, in my opinion, there is no problem if the bidder has secured already the credit line certificate in favor of the bidder if awarded the contract for such project even during the eligibility checking. How was the bidder convinced the universal or commercial bank to issue such is not your concern. It actually exceeded what is required under the law which is only a commitment. Definitely, the bidder complied with the requirement during contract execution when the bidder has already on hand the actual credit line from the bank.

I don't see any problem, on the other hand, if the bidder used the same credit line certificate/commitment during the first and the second bidding for as long as the the credit line is issued in favor of the bidder for the said project, less any other technical issues concerning the said credit line.

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