Net Financial Contracting Capacity (NFCC) of the bidder

View previous topic View next topic Go down

Net Financial Contracting Capacity (NFCC) of the bidder

Post by *depedne on Wed Aug 17, 2011 6:44 pm

Sir/Madam:

This is to query about the NFCC of the bidder presented, Is there a ground for disqualification to a bidder which the computation of NFCC presented was iincluded his four (4)companies owned including the company he was used in competitive bidding? If it is not, what will be our next steps. Thank you very much. . .

*depedne
New Member
New Member

Male Number of posts : 5
Company/Agency : DepEd, Division of Nueva Ecija
Occupation/Designation : Planning Officer II
Registration date : 2011-08-17

Back to top Go down

Re: Net Financial Contracting Capacity (NFCC) of the bidder

Post by accounting on Thu Aug 18, 2011 2:14 pm

This is to query about the NFCC of the bidder presented, Is there a ground for disqualification to a bidder which the computation of NFCC presented was iincluded his four (4)companies owned including the company he was used in competitive bidding? If it is not, what will be our next steps. Thank you very much. . .

i cant get the point of the questioned. however my understanding would be like this, each company have a separate financial statement. now, if the bidder's company (x) owns several company, the bidder's company (X) investments in each company is reflected in the (X) financial statement particularly in the Investments section of the balance sheet which is usually longterm in nature.

NFCC = [(Current assets minus current liabilities) (K)]

the NFCC computation requires current asset and current liabilities only, so that bidders company (x) investment in several company which is longterm is not to be used in the computation. However if such investment will become current as of the bidding time and rightfully reflected in the current asset portion of the BS, then it must be included.

disqualification could be a result of the bidders not meeting the required NFCC. Smile
avatar
accounting
Active Poster
Active Poster

Male Number of posts : 84
Company/Agency : State Universities and Colleges
Occupation/Designation : Accountant III
Registration date : 2010-08-10

Back to top Go down

Re: Net Financial Contracting Capacity (NFCC) of the bidder

Post by RDV @ GP3i on Fri Aug 19, 2011 9:59 am

*depedne wrote:Sir/Madam:

This is to query about the NFCC of the bidder presented, Is there a ground for disqualification to a bidder which the computation of NFCC presented was iincluded his four (4)companies owned including the company he was used in competitive bidding? If it is not, what will be our next steps. Thank you very much. . .

The scenario is that the bidder submitted its own computation of its NFCC. The bidder's computation of its NFCC considered not only the company participating in the bidding but also the other companies of the bidder which are not involved in the bidding.

Of course, only the financial capability of the company participating in the bidder should be considered in the computation of the NFCC and not the other companies although also owned by one person.

You ask what next steps to take. If the bidder, based on its computation, was declared 'passed' during the bid opening because it submitted its computation of NFCC which is at least equal to the ABC, albeit erroneous, but considering you are only using pass-fail criteria during bid opening was (correctly) considered as passed, the next step is during post-qualification. You will do your own computation of the NFCC. In your computation you will only consider the factors which are only particular to the company participating in the bidding, meaning its current assets, current liabilities, and outstanding, not including that of the other companies owned by the bidder. Of course, if your computation of the NFCC resulted to an amount less than the ABC, then the bidder should be declared post-disqualified.
avatar
RDV @ GP3i
Grand Master
Grand Master

Male Number of posts : 1611
Company/Agency : DBM-Reg'l Office IV-B
Occupation/Designation : Regional Director/ Procurement Trainer
Registration date : 2008-09-04

http://gppphil.org/

Back to top Go down

Re: Net Financial Contracting Capacity (NFCC) of the bidder

Post by edprintshoppe on Sat Aug 20, 2011 2:09 pm

Sir. . . does the computation of NFCC should reflect the deduction of on-going contracts to obtain real NET FINANCIAL CONTRACTING CAPACITY? Could failure to present such computation be ground for mis-representation of docs resulting for DQ? or it doesn't matter if the NFCC is way too high against the ABC even in the absence of reflecting the on-going?

edprintshoppe
New Member
New Member

Male Number of posts : 16
Age : 45
Company/Agency : A P and S Printshoppe
Occupation/Designation : proprietor
Registration date : 2011-07-12

Back to top Go down

Re: Net Financial Contracting Capacity (NFCC) of the bidder

Post by RDV @ GP3i on Sun Aug 21, 2011 4:34 pm

edprintshoppe wrote:Sir. . . does the computation of NFCC should reflect the deduction of on-going contracts to obtain real NET FINANCIAL CONTRACTING CAPACITY? Could failure to present such computgoiation be ground for mis-representation of docs resulting for DQ? or it doesn't matter if the NFCC is way too high against the ABC even in the absence of reflecting the on-going?

Yes, the value of ongoing contracts has to be deducted to get the net financial contracting capacity of the bidder. If it is proven that there are ongoing contracts and these were deliberately hidden from the procuring entity, then the bidder could be guilty of mis-representation and could be ground not only for the disqualification of the bidder but also for imposition of appropriate sanctions.
avatar
RDV @ GP3i
Grand Master
Grand Master

Male Number of posts : 1611
Company/Agency : DBM-Reg'l Office IV-B
Occupation/Designation : Regional Director/ Procurement Trainer
Registration date : 2008-09-04

http://gppphil.org/

Back to top Go down

Re: Net Financial Contracting Capacity (NFCC) of the bidder

Post by edprintshoppe on Sun Aug 21, 2011 5:01 pm

Sir.. .does mis-representation and ground for DQ applies even if his NFCC is 600M and bidder forgot to state his on-going though ABC is only 50M w/c is still more than sufficient? or even NFCC is insufficient say 16M and forgot the VALUE of on-going but presented a CLC- do this still valid for mis-representation and ground for DQ?

edprintshoppe
New Member
New Member

Male Number of posts : 16
Age : 45
Company/Agency : A P and S Printshoppe
Occupation/Designation : proprietor
Registration date : 2011-07-12

Back to top Go down

Re: Net Financial Contracting Capacity (NFCC) of the bidder

Post by RDV @ GP3i on Sun Aug 21, 2011 6:41 pm

edprintshoppe wrote:Sir.. .does mis-representation and ground for DQ applies even if his NFCC is 600M and bidder forgot to state his on-going though ABC is only 50M w/c is still more than sufficient? or even NFCC is insufficient say 16M and forgot the VALUE of on-going but presented a CLC- do this still valid for mis-representation and ground for DQ?

You have to convince the BAC that your failure to include the value of ongoing projects is a mere oversight on your part. But the BAC has to make its own calculations and if its calculations, which includes deducting the value of ongoing projects, show that the NFCC is still more than the ABC, then you will not be disqualified. If the resultant NFCC will be less than the ABC, then you will have to be disqualified. You cannot present a CLC to cover for your NFCC shortage. You can only submit either NFCC or CLC not a combination of both.
avatar
RDV @ GP3i
Grand Master
Grand Master

Male Number of posts : 1611
Company/Agency : DBM-Reg'l Office IV-B
Occupation/Designation : Regional Director/ Procurement Trainer
Registration date : 2008-09-04

http://gppphil.org/

Back to top Go down

Re: Net Financial Contracting Capacity (NFCC) of the bidder

Post by cfr_rap1226@yahoo.com.ph on Wed Oct 12, 2011 1:10 pm

what does "valueof all outstanding works under ongoing contracts" mean? how does it being computed? for ex.. ca of p5.1m, total assets of p7m, cl of p3.5m total liab of p6.5m??

cfr_rap1226@yahoo.com.ph
New Member
New Member

Female Number of posts : 2
Company/Agency : none
Occupation/Designation : none
Registration date : 2011-10-12

Back to top Go down

Re: Net Financial Contracting Capacity (NFCC) of the bidder

Post by cfr_rap1226@yahoo.com.ph on Wed Oct 12, 2011 1:13 pm

and the variable K pertains to what?? i mean the contract bet d existing clients?? or d contracts to be entered into thru bidding? naguguluhan po ako.. thank u..

cfr_rap1226@yahoo.com.ph
New Member
New Member

Female Number of posts : 2
Company/Agency : none
Occupation/Designation : none
Registration date : 2011-10-12

Back to top Go down

Re: Net Financial Contracting Capacity (NFCC) of the bidder

Post by RDV @ GP3i on Wed Oct 12, 2011 3:18 pm

cfr_rap1226@yahoo.com.ph wrote:and the variable K pertains to what?? i mean the contract bet d existing clients?? or d contracts to be entered into thru bidding? naguguluhan po ako.. thank u..

wala pong bayad dito, kaya pwede naman buuin niyo text nyo para hindi naman mukhang nakikipag text ka lang. Very Happy
avatar
RDV @ GP3i
Grand Master
Grand Master

Male Number of posts : 1611
Company/Agency : DBM-Reg'l Office IV-B
Occupation/Designation : Regional Director/ Procurement Trainer
Registration date : 2008-09-04

http://gppphil.org/

Back to top Go down

Re: Net Financial Contracting Capacity (NFCC) of the bidder

Post by RDV @ GP3i on Wed Oct 12, 2011 3:32 pm

RDV @ GP3i wrote:
cfr_rap1226@yahoo.com.ph wrote:and the variable K pertains to what?? i mean the contract bet d existing clients?? or d contracts to be entered into thru bidding? naguguluhan po ako.. thank u..

wala pong bayad dito, kaya pwede naman buuin niyo text nyo para hindi naman mukhang nakikipag text ka lang. Very Happy

The variable "K" would pertain to the duration of the project that you are bidding out, or the number of months/years you are requiring the contractor to complete the project.

If the contract duration is 1 year or less, K would have a value of 10; if more than 1 year up to 2 years, the value is 15; and if the contract duration is over 2 years, then the value of K is 20.
avatar
RDV @ GP3i
Grand Master
Grand Master

Male Number of posts : 1611
Company/Agency : DBM-Reg'l Office IV-B
Occupation/Designation : Regional Director/ Procurement Trainer
Registration date : 2008-09-04

http://gppphil.org/

Back to top Go down

Re: Net Financial Contracting Capacity (NFCC) of the bidder

Post by RDV @ GP3i on Wed Oct 12, 2011 3:39 pm

cfr_rap1226@yahoo.com.ph wrote:what does "valueof all outstanding works under ongoing contracts" mean? how does it being computed? for ex.. ca of p5.1m, total assets of p7m, cl of p3.5m total liab of p6.5m??

The "value of all outstanding works" would refer to the ongoing contracts and contracts awarded and not yet started of the bidder-contractor. It would be the same amount as reflected in the Statement of Ongoing and Completed contracts, which the bidder will submit as part of his Class A - Technical Documents. That statement would contain a listing of his ongoing projects, including projects awarded which he has not yet started.

You can therefore already apply the formula from all the givens: a) from the Audited Financial Statement (current assets and current liabilities); b) from the Statement of Ongoing and Completed contracts (ongoing and awarded but not yet started); and c) bidding documents (value of constant "K")
avatar
RDV @ GP3i
Grand Master
Grand Master

Male Number of posts : 1611
Company/Agency : DBM-Reg'l Office IV-B
Occupation/Designation : Regional Director/ Procurement Trainer
Registration date : 2008-09-04

http://gppphil.org/

Back to top Go down

Re: Net Financial Contracting Capacity (NFCC) of the bidder

Post by Jomari on Thu Jun 05, 2014 4:05 pm

Admin

If for example a financial statement would look like this:

ASSETS
Current Asset is 10 Million
NonCurrent Asset is 25 Million
Total Assets would be 35 Million

LIABILITIES
Current Liabilities is 5 Million
NonCurrent LIabilities is 50 Million
Total Liabilties would be 55 Million

NEGATIVE STOCKHOLDERS' EQUITY of P20 Million

Assuming a 1 year contract. Based on formula of NFCC, which is current assets vs. current liabilities, a company has an NFCC of P50 Million (CA 10M - CL 5M) x K (10)...

Can a company qualify to enter into a bidding contract based on result of its NFCC, despite having a negative stockholders' equity? Normally under bank loan application purposes, a negative stockholders equity is already a sign of doubt of a company financial capability and usually a disqualification for its loan application... Is the negative SH also a factor considered by BAC in awarding of contract?

Thank you very much



Jomari
New Member
New Member

Male Number of posts : 1
Company/Agency : JOSE MATTEO'S LAUNDRY SERVICES
Occupation/Designation : PROPRIETOR
Registration date : 2014-06-05

Back to top Go down

Re: Net Financial Contracting Capacity (NFCC) of the bidder

Post by regina avelino on Tue Jun 10, 2014 10:42 am

The submission of the audited financial statements and the NFCC requirement which are complying with the requirement of the procurment law are adequate under the rules as proof of financial stability regardless of any substantial negative stockholders equity. If you will disqualify a bidder because of negative stockholders' equity then, this will be consider discretion on the part of the procuring agency which is prohibited by law.

regina avelino
Board General
Board General

Female Number of posts : 671
Company/Agency : gocc ncr
Occupation/Designation : staff
Registration date : 2012-02-15

Back to top Go down

Re: Net Financial Contracting Capacity (NFCC) of the bidder

Post by tmmortel on Thu Aug 14, 2014 2:48 pm

Hello just a clarification, can we possibly submit a Letter of Commitment to infuse more capital from an Investment House in replacement of the NFCC and Bank Commitment for Credit Line?

Thank you so much.

tmmortel
New Member
New Member

Male Number of posts : 1
Company/Agency : We Lead Comtech Inc.
Occupation/Designation : Sales and Marketing Head
Registration date : 2014-08-14

Back to top Go down

Re: Net Financial Contracting Capacity (NFCC) of the bidder

Post by regina avelino on Fri Aug 22, 2014 5:23 pm

there is no such requirement as Letter of Commitment. CLC is no longer acceptable based on gppb resolution 20-2013.

regina avelino
Board General
Board General

Female Number of posts : 671
Company/Agency : gocc ncr
Occupation/Designation : staff
Registration date : 2012-02-15

Back to top Go down

Re: Net Financial Contracting Capacity (NFCC) of the bidder

Post by tristar on Fri Nov 25, 2016 10:07 am

What if we dont have on going contracts or projects. what would be the value of K? thank you

tristar
New Member
New Member

Male Number of posts : 2
Company/Agency : tristar steel works
Occupation/Designation : Computer Engineer
Registration date : 2016-11-25

Back to top Go down

Re: Net Financial Contracting Capacity (NFCC) of the bidder

Post by Sponsored content


Sponsored content


Back to top Go down

View previous topic View next topic Back to top

- Similar topics

 
Permissions in this forum:
You cannot reply to topics in this forum