Joint Venture Eligibility Docs

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Joint Venture Eligibility Docs

Post by orlan747 on Mon Jun 08, 2009 3:07 pm

Dear Guys,
Please help me on this:
1. I attended the checking of the eligibility requirements for one project here in Iloilo City and it turned out that three of us were found eligible to bid.
2. I found out later however that one of those who was declared eligible, Company A, was a Joint Venture. I might not be listening intently during the eligibility checking, but I was so sure that during that event, only one set of legal documents of Company A was checked.
3. I therefore brought this concern to the BAC during the Pre-Bid Conference. Indeed, the BAC was not able to check the Legal Documents of the second party of the JV of Company A. The BAC said it was the first time for them to have a "joint venture" participant and they just looked for the Joint Venture Affidavit which was present during the Eligibility Check. I referred them to Rule VIII 23.6 No. 2a of IRR of RA9184, and they seem to be puzzled by the said passage and they asked for more time to study the said provision of the law.

My questions therefore are the following:
a. Would the BAC still have the power to declare Company A eligible despite this glaring violations?
b. Will it be possible for BAC to declare the first party of the joint venture of Company A as Eligible as a solo contractor, since it's Eligibility requirements were checked during the Eligibility Checking, despite of the fact that they submitted a Joint venture affidavit?
c. Would the BAC still be within its power to reverse itself by declaring Company A as ineligible?
d. Do we have the right to request for the BAC's decision about this before the dropping of the Bids?

Thank you very much.
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Re: Joint Venture Eligibility Docs

Post by engrjhez® on Mon Jun 08, 2009 3:58 pm

orlan747 wrote:Dear Guys,
My questions therefore are the following:
a. Would the BAC still have the power to declare Company A eligible despite this glaring violations?
b. Will it be possible for BAC to declare the first party of the joint venture of Company A as Eligible as a solo contractor, since it's Eligibility requirements were checked during the Eligibility Checking, despite of the fact that they submitted a Joint venture affidavit?
c. Would the BAC still be within its power to reverse itself by declaring Company A as ineligible?
d. Do we have the right to request for the BAC's decision about this before the dropping of the Bids?

Thank you very much.
Looking back to Section 24.7.2.b of the IRR:

  • Valid joint venture agreement, in case of a joint venture. Each member of the joint venture shall submit the required eligibility documents,
    x x x
This was an amendment published (Memorandum Order No. 176) in the Official Gazette (27 June 2005). Hence, my answers are as follows:
a. The BAC may still want to declare "A" as eligible, but this is a sure violation;
b. Since the bidder is a JV (which is another entity), you cannot declare a party as a solo contractor (unless a separate set of eligibility and bid documents is submitted by that party);
c. The BAC can always declare a failure of bidding by virtue of the Reservation Clause (Section 41);
d. Yes you can always file a MR if within the prescribed period.

May I also confirm that this is an infrastructure project? Because your statements suggest the eligibility check as different from the date of opening of bids.

PS: You may also want to see a topic/discussion from IRR-drafting here.

Very Happy
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Thanks

Post by orlan747 on Mon Jun 08, 2009 4:35 pm

Thanks Engr. Jhez.

Yes sir it is an Infrastructure Project.

So, the BAC cannot declare Company A as ineligible but declare the bidding as a failure instead?
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Re: Joint Venture Eligibility Docs

Post by RDV @ GP3i on Mon Jun 08, 2009 6:59 pm

orlan747 wrote:My questions therefore are the following:
a. Would the BAC still have the power to declare Company A eligible despite this glaring violations?
It would be violating the required bidding procedure if it will declare Company A (a JV) eligible without conducting eligibility check on each of the legal documents of the members of the JV.

orlan747 wrote:b. Will it be possible for BAC to declare the first party of the joint venture of Company A as Eligible as a solo contractor, since it's Eligibility requirements were checked during the Eligibility Checking, despite of the fact that they submitted a Joint venture affidavit?
If the bidder which submitted an LOI to participate in the bidding, and later on declared as eliguible, is a JV, the BAC cannot later on declare as eligible a solo contractor, which is only a member of the JV, and allowed to submit a bid.

orlan747 wrote:c. Would the BAC still be within its power to reverse itself by declaring Company A as ineligible?
Yes, the BAC has the power to later on declare a bidder as ineligible even if it has earlier been declared eligible. Sec. 23.4 of IRR-A provides that "Notwithstanding the eligibility of a prospective bidder, the procuring entity reserves the right to review its qualifications at any stage of the procurement process if it has reasonable grounds to believe that a misrepresentation has been made by said prospective bidder, or that there has been a change in the prospective bidder's capability to undertake the project from the time it submitted its eligibility requirements."

orlan747 wrote:d. Do we have the right to request for the BAC's decision about this before the dropping of the Bids?.
YES, The other competing bidders have the power to file a Motion for Reconsideration against the BAC decision allowing an "ineligible" bidder to submit a bid.
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Re: Joint Venture Eligibility Docs

Post by engrjhez® on Mon Jun 08, 2009 11:22 pm

orlan747 wrote:Thanks Engr. Jhez.

Yes sir it is an Infrastructure Project.

So, the BAC cannot declare Company A as ineligible but declare the bidding as a failure instead?
The BAC cannot declare Company A as ineligible if it does not submit LOI and participated the bidding as Company A. Company A participated as a part of JV and not as an individual so they can neither be declared eligible nor ineligible.

What the BAC can invoke is bid annulment due to failure "...in following the prescribed bidding procedures" (Sec.41.b).

Very Happy
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Re: Joint Venture Eligibility Docs

Post by RDV @ GP3i on Tue Jun 09, 2009 10:14 am

engrjhez wrote:
orlan747 wrote:Thanks Engr. Jhez.

Yes sir it is an Infrastructure Project.

So, the BAC cannot declare Company A as ineligible but declare the bidding as a failure instead?
The BAC cannot declare Company A as ineligible if it does not submit LOI and participated the bidding as Company A. Company A participated as a part of JV and not as an individual so they can neither be declared eligible nor ineligible.

What the BAC can invoke is bid annulment due to failure "...in following the prescribed bidding procedures" (Sec.41.b).

Very Happy

The way I understand it, mr orlan747 has indicated that Company A is the JV, and not just a member of the JV. My answer is based on that understanding.
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Re: Joint Venture Eligibility Docs

Post by engrjhez® on Tue Jun 09, 2009 12:41 pm

RDV wrote:...
The way I understand it, mr orlan747 has indicated that Company A is the JV, and not just a member of the JV. My answer is based on that understanding.
I based my answer to the query that "...Will it be possible for BAC to declare the first party of the joint venture of Company A as Eligible as a solo contractor...", and that a single company cannot form a JV by itself. (can they?) scratch

Anyway, I may have overlooked that fact. By mentioning "Company A" i precluded there is "Company B" from which they form a JV. Applicable eligibility check must be conducted on both members of JV. A failure on one of its member constitutes ineligibility to the JV as a whole.
Very Happy
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Re: Joint Venture Eligibility Docs

Post by RDV @ GP3i on Tue Jun 09, 2009 1:17 pm

engrjhez wrote:
RDV wrote:...
The way I understand it, mr orlan747 has indicated that Company A is the JV, and not just a member of the JV. My answer is based on that understanding.
I based my answer to the query that "...Will it be possible for BAC to declare the first party of the joint venture of Company A as Eligible as a solo contractor...", and that a single company cannot form a JV by itself. (can they?) scratch

Anyway, I may have overlooked that fact. By mentioning "Company A" i precluded there is "Company B" from which they form a JV. Applicable eligibility check must be conducted on both members of JV. A failure on one of its member constitutes ineligibility to the JV as a whole.
Very Happy

I based mine on this statement:

"2. I found out later however that one of those who was declared eligible, Company A, was a Joint Venture. I might not be listening intently during the eligibility checking, but I was so sure that during that event, only one set of legal documents of Company A was checked."
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