Non-Posting of Performance Security <mayang>

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Non-Posting of Performance Security <mayang>

Post by RDV @ GP3i on Fri Apr 17, 2009 4:17 pm

The following questions were posted by mayang in the GPPB'S SHOUTBOX:

"Gu morning! Can you help me? This iss with regard to the posting of performance security. The bidder failed to post performance security even up to twon months of extension. Will his bid security be foerfeited? What comes first, forfeiture or blacklisting?"

Sec. 40.1 of IRR-A provides as follows:

"40.1. If the bidder with the Lowest Calculated Responsive Bid or Highest Rated
Responsive Bid, as the case may be, or the bidder with the Single
Calculated/Rated Responsive Bid, fails, refuses or is unable to make good its bid
by entering into a contract with the procuring entity or post the required
Performance Security within the period stipulated in the bidding documents, the
bid security shall be forfeited and the appropriate sanctions provided in this IRRA
and existing laws shall be imposed
, except where such failure, refusal or
inability is through no fault of the said bidder
."

Yes, the bid security shall be forfeited and it should come first. First, it is easier to do than blacklisting. In blacklisting, there has to be a due process to be done by the procuring entity (see GPPB's Uniform Guidelines on Blacklisting), so it will take some time before you can blacklist a bidder. Second, you cannot delay so much the forfeiture of Bid Security because it is valid up to a maximum of only 120 calendar days from the opening of bids. With the extension of 2 months it is possible that the Bid Security has already lapsed. If it has not yet lapsed, you have to forfeit it immediately after accordingly informing the bidder.
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RDV @ GP3i
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