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Lapsed Audited Financial Statement

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Lapsed Audited Financial Statement

Post by orlan747 on Tue Apr 21, 2009 11:52 am

I represent here in Negros Occidental a construction company from Luzon . We intended to participate on a project here so I submitted our LOI and Elligibility Documents before the deadline which was yesterday 20th April. Upon the documents examination however, the Audited Financial Statement which I submitted was found inadmissable because it was of last year yet which was received by BIR last February 20, 2008. My questions are:
1. Was the BAC right in saying that our Audited Financial Statement was already lapsed and therefore inadmissible? My principal is saying that this Statement is still valid till 30th April.
2. In our request for reconsideration, can we submit a newer and current Audited Financial Statement? The BAC chairman was saying that they will not be accepting any additional document during the recon deliberation.
3. Could you please offer some advice on how we can successfully get a favorable ruling during the recon proceeding?

Thanks.
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Re: Lapsed Audited Financial Statement

Post by venom.0420 on Tue Apr 21, 2009 1:07 pm

orlan747 wrote:I represent here in Negros Occidental a construction company from Luzon . We intended to participate on a project here so I submitted our LOI and Elligibility Documents before the deadline which was yesterday 20th April. Upon the documents examination however, the Audited Financial Statement which I submitted was found inadmissable because it was of last year yet which was received by BIR last February 20, 2008. My questions are:
1. Was the BAC right in saying that our Audited Financial Statement was already lapsed and therefore inadmissible? My principal is saying that this Statement is still valid till 30th April.
2. In our request for reconsideration, can we submit a newer and current Audited Financial Statement? The BAC chairman was saying that they will not be accepting any additional document during the recon deliberation.
3. Could you please offer some advice on how we can successfully get a favorable ruling during the recon proceeding?

Thanks.

Hi Orlan,

Here's my take on ur query:
1. I think the BAC made the right decision in declaring u ineligible because the date of the eligibility check was April 20 which was 5 days after the last day of filing of ITR and AFS to the BIR. Which means, you indeed submitted a lapsed AFS. Take note that in the IRR-A Section 23.6, AFS of the immediately preceding year is required as part of ur eligibility requirements. It just so happen that the deadline for filing of the ITR with attached AFS is April 15, so the extension of the effectivity of the previous AFS is also extended. Needless to say, as soon as the deadline for the filing of Annual ITR expires, so does the previous AFS.
2. In making a request for reconsideration, all the reasons for making such a request will be contained in ur letter. If and only if the BAC decides to allow you to submit ur latest AFS can you do so. However, I think it would be unlikely to happen because that would be tantamount to improvement of bids.
3. I'm sorry but I think all you can do right now is wait if the BAC will eventually declare the bidding as a failure due to disqualification of all bidders and join again the bidding as soon as it is rebidded.

These are only my opinion and maybe the others here can give you other information to help you in ur case. Very Happy
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Re: Lapsed Audited Financial Statement

Post by RDV @ GP3i on Tue Apr 21, 2009 1:08 pm

orlan747 wrote:I represent here in Negros Occidental a construction company from Luzon . We intended to participate on a project here so I submitted our LOI and Elligibility Documents before the deadline which was yesterday 20th April. Upon the documents examination however, the Audited Financial Statement which I submitted was found inadmissable because it was of last year yet which was received by BIR last February 20, 2008. My questions are:
1. Was the BAC right in saying that our Audited Financial Statement was already lapsed and therefore inadmissible? My principal is saying that this Statement is still valid till 30th April.

The requirement is for the bidder to submit "audited financial statements, stamped 'received' by the BIR or its duly accredited and authorized institutions, for the immediately preceding calendar year..."

So, for this year, the immediately preceding calendar year is 2008. What is, therefore, required to be submitted is the audited financial statements for 2008 (not the one received by the BIR for 2008, which may pertain to audited financial statements for 2007)

orlan747 wrote:2. In our request for reconsideration, can we submit a newer and current Audited Financial Statement? The BAC chairman was saying that they will not be accepting any additional document during the recon deliberation.

Submission of additional documents after the opening of bids would be tantamount to the improvement of bids, which is not allowed. The fact that you are saying you will be submitting a current audited financial statement is pretty much an admission that what you really submitted is not what was required.While you are allowed to file an MR, the result would still be the same.
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Re: Lapsed Audited Financial Statement

Post by orlan747 on Tue Apr 21, 2009 1:21 pm

Thanks Sirs Venom and RDV.

The project is an infra project. The activity yesterday was just the examination of the eligibility documents to determine our eligibility. If I submit a current AFS at this stage, I mean on my recon appeal, would that still be an improvement of bid, considering that the submission of bids documents would still be next month?
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Re: Lapsed Audited Financial Statement

Post by RDV @ GP3i on Tue Apr 21, 2009 1:36 pm

orlan747 wrote:Thanks Sirs Venom and RDV.

The project is an infra project. The activity yesterday was just the examination of the eligibility documents to determine our eligibility. If I submit a current AFS at this stage, I mean on my recon appeal, would that still be an improvement of bid, considering that the submission of bids documents would still be next month?

The term "improvement of bid", which was also used by venom, is just a general term being used by GPPB-TSO. Although the document is part of Class A documents under the Eligibility Envelope (not of the bid), nevertheless, the same principle applies. It would be an improvement of the eligibility document, if we may say it, which is also prohibited.

During eligibility check, we use the pass/fail criteria, the presence or absence of a document. Although you might say that the AFS is present, the fact that it is a "lapsed AFS" it is tantamount to no submission at all.
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Re: Lapsed Audited Financial Statement

Post by shobe on Tue Apr 21, 2009 3:19 pm

I represent here in Negros Occidental a construction company from Luzon . We intended to participate on a project here so I submitted our LOI and Elligibility Documents before the deadline which was yesterday 20th April. Upon the documents examination however, the Audited Financial Statement which I submitted was found inadmissable because it was of last year yet which was received by BIR last February 20, 2008. My questions are:

1. Was the BAC right in saying that our Audited Financial Statement was already lapsed and therefore inadmissible? My principal is saying that this Statement is still valid till 30th April.

Assuming for the sake of argument that your principal is correct in saying that said Audited Financial Statement (AFS) is still valid until April 30, 2008, then I first suggest you look for the legal basis for the aforementioned statement of your principal. Assuming further that the purported basis is an issuance of the BIR or that of the GPPB, then I believe your company may rightfully file for a motion for reconsideration under the rules. Absence of any legal basis will unfortunately make any move on your part to file for reconsideration, futile.Sad

2. In our request for reconsideration, can we submit a newer and current Audited Financial Statement? The BAC chairman was saying that they will not be accepting any additional document during the recon deliberation.

A perusal of the provisions under the IRR-A regarding the filing of motions for reconsideration leads me to infer that said motion shall only be given a favorable action by the BAC, if by clear and convincing evidence, the bidder who files for a reconsideration has pointed out a lapse or mistaken action on the part of the BAC. This is just my opinion on the matter. I noticed that making use of the pass/fail criterion makes it quite easy for members of the BAC to rule against motions for reconsideration.

Likewise, I agree with the BAC Chairman that regardless of the motion for reconsideration, the BAC can no longer accept additional documents from bidders who were adjudged ineligible to participate in the procurement activity due to absence of a document or failure to submit a valid document.silent

. 3. Could you please offer some advice on how we can successfully get a favorable ruling during the recon proceeding?

try and get the legal basis as discussed in number 1 orlan747. then let's discuss some more.
Smile I'll try to help.
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Thank you very much.

Post by orlan747 on Thu Apr 23, 2009 12:08 pm

Thanks very much to all of you.

There are few good lessons I have learned here:
1. Forums (fora) like this are really helpful and informative.

2. Next time I need to be very careful with my documents' submission.

Thanks again.
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