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Guidelines on Comparison of Bids Submitted by Cooperatives

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Guidelines on Comparison of Bids Submitted by Cooperatives

Post by cuteangels on Tue Sep 13, 2011 6:09 pm

This has reference to GPPB Circular No. 02-2010 re: Guidelines on Comparison of Bids Submitted by Cooperatives. Section 3.3 of the said circular states: "to ensure that all bids shall be evaluated on an equal footing, all taxes itemized by non-cooperatives in their bids and which cooperatives are exempt from shall be added to the bids of cooperatives strictly for purposes of evaluation and comparison". In this regard, what if there are more than 1 non-cooperative bidders, whose itemized taxes shall be added to the bids of cooperatives, considering that their taxes vary in amount? Would it be fair enough if we will just get the amount of tax using the same percentage used by non-cooperatives? Rolling Eyes

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Re: Guidelines on Comparison of Bids Submitted by Cooperatives

Post by RDV @ GP3i on Tue Sep 13, 2011 10:14 pm

cuteangels wrote:
This has reference to GPPB Circular No. 02-2010 re: Guidelines on Comparison of Bids Submitted by Cooperatives. Section 3.3 of the said circular states: "to ensure that all bids shall be evaluated on an equal footing, all taxes itemized by non-cooperatives in their bids and which cooperatives are exempt from shall be added to the bids of cooperatives strictly for purposes of evaluation and comparison". In this regard, what if there are more than 1 non-cooperative bidders, whose itemized taxes shall be added to the bids of cooperatives, considering that their taxes vary in amount? Would it be fair enough if we will just get the amount of tax using the same percentage used by non-cooperatives? Rolling Eyes

Good evening, cuteangels. Your point is correct and that is what the GPPB Circular really refers to. All taxes itemized by non-cooperatives, such as VAT, Income Tax, etc., should be added to the bid price of the cooperatives, and it means the rate of percentage of each tax computed, which generally based on the bid price of the cooperative concerned. Therefore, you are correct the amount of taxes would vary for each bidder.
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Re: Guidelines on Comparison of Bids Submitted by Cooperatives

Post by cuteangels on Wed Sep 14, 2011 11:29 am

Thank you sir for clarifying the issue.

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Re: Guidelines on Comparison of Bids Submitted by Cooperatives

Post by cuteangels on Wed Jan 11, 2012 5:19 pm

Sir RDV Happy New Year! For clarification lang po, is the bidder, who is a cooperative (exempt from tax), needs to include the cost of all taxes which shall be itemized in their bid form and reflected in their detailed estimates as required under Section 32.2.2 of the Revised IRR of RA 9184? What then is the effect if the tax is not indicated? Is it correct to automatically disqualify the said bid during the bid evaluation process?

I am confused, considering that under Item 3.3 of GPPB Circular 02-2010, my understanding is that all taxes itemized by non-cooperatives will only be added to the bids of cooperatives strictly for purposes of evaluation and comparison. So it means, the BAC will be the one to compute the amount of tax and add to the bids of cooperatives during bid evaluation to determine the LCB. Thus, further mean that taxes will not be itemized in the bid form and in the detailed estimates submitted by the cooperative bidder. Rolling Eyes

Confused. Please help..Thanks

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Re: Guidelines on Comparison of Bids Submitted by Cooperatives

Post by engrjhez® on Thu Jan 12, 2012 9:49 am

cuteangels,

Please allow me to share my understanding. You have to consider "equal footing" when evaluating. To illustrate, let us have an example. Suppose Bidder A is a non-cooperative while Bidder Bis a cooperative and the ABC for goods to be bid is say 1M. The following bids were obtained

Bidder A: P896,000.00
Bidder B: P850,000.00

But during the evaluation, it was found out that the bid price were based on the following:

Bidder A: P800,000.00(before tax) + P96,000.0(12%VAT) = P896,000.00
Bidder B: P850,000.00(before tax) + P0(no tax considered) = P850,000.00

Since the rule provides evaluation on equal footing, it would not be proper to accept that the bid price of Bidder B is the lowest calculated bid. Instead, for evaluation purposes they must be compared on "no tax" or "all tax" basis as applied t both. If we are to consider the adjusted (calculated) bid price of the cooperative, it will now be P850,000.00+102,000.00 = P952,000.00 which clearly now exceeds the bid amount of Bidder A. Hence LCB is Bidder A

It must be noted however that the addition of P102,000.00 as (pseudo) tax shall be for evaluation purposes only and not for award purposes if in case Bidder B later wins the bidding (should Bidder A be post disqualified). Smile
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Re: Guidelines on Comparison of Bids Submitted by Cooperatives

Post by cuteangels on Thu Jan 12, 2012 10:47 am

Thanks engrjhez for sharing your ideas.

What if after considering the tax, the adjusted (calculated) bid price of the cooperative exceeded the ABC? Will he automatically be disqualified? What if the cooperative is a lone bidder? would it mean failure of bidding?

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Re: Guidelines on Comparison of Bids Submitted by Cooperatives

Post by Jovinal on Thu Jan 12, 2012 7:24 pm

No because the taxes is for evaluation purposes only and the bases for awarding is the actual bid price proposed w/o taxes.l
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Re: Guidelines on Comparison of Bids Submitted by Cooperatives

Post by cuteangels on Fri Jan 13, 2012 1:10 am


If the situation goes like this:

ABC - 1M
Bids obtained:
Bidder A (non -cooperative) - P986,000.00 (with 12% VAT)
Bidder B (Cooperative) - P983,000.00 (without VAT)

To evaluate the bids on equal footing, VAT must be added to bidder B:

Bidder A- P986,000.00
Bidder B- P983,000.00 + (12%VAT) 117,960.00= P1,100,960.00

Based on my understanding, P1,100,960.00 is now the adjusted (calculated) bid price of bidder b, which shall be considered in determining the LCB. Section 32.2.4 states that if the calculated bid price exceeds the ABC, the bid shall be disqualified.

Any comment please!

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Re: Guidelines on Comparison of Bids Submitted by Cooperatives

Post by Jovinal on Fri Jan 13, 2012 12:39 pm

Award will be given to Bidder A because it win under evaluation process and award will be on 986,000.00 actual bid price proposal.
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Re: Guidelines on Comparison of Bids Submitted by Cooperatives

Post by cuteangels on Fri Jan 13, 2012 4:14 pm

Yes. The award will be given to Bidder A if found to be the Lowest Calculated and Responsive Bid, after the post-qualification. What if Bidder A will be post disqualified? Are we going to post-qualify bidder B considering that during the evaluation process, the calculated bid price of bidder b exceeds the ABC?

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Re: Guidelines on Comparison of Bids Submitted by Cooperatives

Post by Jovinal on Fri Jan 13, 2012 11:20 pm

Yes we have to post-qualify bidder B as long as their actual bid price did not exceed ABC , the purpose of evaluation process is for ranking only.
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Re: Guidelines on Comparison of Bids Submitted by Cooperatives

Post by engrjhez® on Sat Jan 14, 2012 11:32 am

cuteangels wrote:
If the situation goes like this:

ABC - 1M
Bids obtained:
Bidder A (non -cooperative) - P986,000.00 (with 12% VAT)
Bidder B (Cooperative) - P983,000.00 (without VAT)

To evaluate the bids on equal footing, VAT must be added to bidder B:

Bidder A- P986,000.00
Bidder B- P983,000.00 + (12%VAT) 117,960.00= P1,100,960.00

Based on my understanding, P1,100,960.00 is now the adjusted (calculated) bid price of bidder b, which shall be considered in determining the LCB. Section 32.2.4 states that if the calculated bid price exceeds the ABC, the bid shall be disqualified.

Any comment please!

Looking back on the assailed provision:

32.2.4. Bids shall then be ranked in the ascending order of their total calculated bid prices, as evaluated and corrected for computational errors, and other bid modifications, to identify the Lowest Calculated Bid. Total calculated bid prices, as evaluated and corrected for computational errors, and other bid modifications, which exceed the ABC shall be disqualified.

But we have GPPB Circular 02-2010 that provides:

3.0 Guidelines on Comparison of Bids Involving Cooperatives and NonCooperatives

3.1 Under Section 32.2.2 of the Implementing Rules and Regulations (IRR)
of Republic Act 9184, all bidders shall be required to include the cost of
all taxes, such as, but not limited to, value added tax, income tax, local
taxes, and other fiscal levies and duties which shall be itemized in the
bid form and reflected in the detailed estimates.

Such bids, including said taxes, shall be the basis for bid evaluation and
comparison.

3.2 Since cooperatives are granted tax exemptions by law, they enjoy a clear
advantage over non-cooperatives.

3.3 To ensure that all bids shall be evaluated on an equal footing, all taxes
itemized by non-cooperatives in their bids and which cooperatives are
exempt from shall be added to the bids of cooperatives strictly for
purposes of evaluation and comparison
.

3.4 If, after evaluation and comparison, the bid submitted by a cooperative
is still determined to be the lowest bid, the taxes added during bid
evaluation shall be removed.
Award of contract shall be based on the
original bid price, subject to Section 34.4 of the IRR.


As Jovinal correctly pointed out, we do not disqualify the Cooperative because its bid exceeded the ABC. Our fundamental rule that the ABC should not be exceeded is not violated in this case should award is to be given to the cooperative. Smile
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Re: Guidelines on Comparison of Bids Submitted by Cooperatives

Post by Jovinal on Sat Jan 14, 2012 9:46 pm

I agree with you SIR.
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