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Re: ABC for Security and Janitorial Services

Post by sunriser431 on Tue Jun 09, 2009 11:40 am

The following factors we have considered in setting the Approved Budget Cost for the Security and Janitorial Services.
For Purpose of Diccussion:

A. Amount Payable to Employee
1.DWR/Monthly Rate
2.13th month pay
3. Night shift differential 10%
4.Service Incentive leave pay 5 days
5.Cost of Living allowance
6.Retirement Benefits per RA 7641
B. Employer contribution in favor to Employee
1.SSS contribution employer share
2.Phil Health Employer share
3.State Insurance fund
4.Pag-Ibig contribution Employer share RA 7742
C. Total amount Payable to Employee and Government (A+B)
D. Agency Administrative Overhead Margin (10% of C )
E. Contract Rate per Security and Janitorial Services (C+D)
F. Value Added Tax (12% of D)
G. Minimum Contract Rate per Security and Janitorial Services (E + F)

Any additional input would be greatly appreciated.


Last edited by sunriser431 on Sun Jun 21, 2009 2:00 pm; edited 1 time in total
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Re: Re: ABC for Security and Janitorial Services

Post by misty on Wed Jun 10, 2009 4:44 pm

what about the costs of cleaning materials in case of janitorial services? i assume they are not covered by the 10% overhead margin.
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Re: Re: ABC for Security and Janitorial Services

Post by sunriser431 on Sun Jun 21, 2009 2:27 pm

misty wrote:what about the costs of cleaning materials in case of janitorial services? i assume they are not covered by the 10% overhead margin.
The expenses for cleaning materials (ex. detergent etc. ) for use are in the account of the agency(Govt.). For item A (Amount Payable to Employee) and item B (Employer contribution in favor to Employee) these are subject to labor laws and other social obligations (mandatory requirements), what really concern me is the item D (Agency Administrative Overhead Margin (10% of C )). The Security and Janitorial contractors are not allowed to bid more than 10% of C, but they be allowed to bid less than 10% of C or even allowing to bid "O" zero percentage of C. My question now will this 10% threshold margin not violate any provision of the GPRA?
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Re: Re: ABC for Security and Janitorial Services

Post by sunriser431 on Wed Jun 24, 2009 2:03 pm

For purpose of Discussion
Assumptions:

10,000.00 A.Amount Payable to Employee
1,000.00 B. Employer contribution in favor to Employee
11,000.00 C.Total amount Payable to Employee and Government (A+B)
1,100.00 D. Agency Administrative Overhead Margin (10% of C )
12,100.00 E. Contract Rate per Security and Janitorial Services (C+D)
132.00 F. Value Added Tax (12% of D)
12,232.00 G. Minimum Contract Rate per Security and Janitorial Services (E + F)

Given G: 12,232 Minimum contract rate per Security and Janitorial Services
Contract Duration : 1 year (12 months)
number of Security and Janitorial Services needed: 5
Approved Budget Cost P 733,920.00 (P 12,232.00 x 5 x 12months)

For item A (Amount Payable to Employee) and item B (Employer contribution in favor to Employee) these are subject to labor laws and other social obligations (mandatory requirements), what really concern me is the item D (Agency Administrative Overhead Margin (10% of C )). The Security and Janitorial contractors are not allowed to bid more than 10% of C, but they be allowed to bid less than 10% of C or even allowing to bid "O" zero percentage of C. The dominant factor that will determine the outcome of the financial proposal of the prospective bidder is the Agency Administrative Overhead Margin 10% of C. My question now will this 10% threshold margin not violate any provision of the GPRA?
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Re: Re: ABC for Security and Janitorial Services

Post by engrjhez® on Fri Jun 26, 2009 10:48 pm

sunriser431 wrote:For purpose of Discussion
.... My question now will this 10% threshold margin not violate any provision of the GPRA?
Not at all.

The 10%margin constitutes all possible overheads, contingencies and other cost. It is discretionary on the bidder's capacity to "gamble" with the figures. It is part of the computation itself and should not be treated as "item" that may cause an 'incomplete bid". So, whether they include 0% or n% (n is a positive real number) in the bid, it doesn't matter for as long as they do not violate the cardinal rule - not to exceed ABC.

Very Happy
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Re: Re: ABC for Security and Janitorial Services

Post by sunriser431 on Sat Jun 27, 2009 6:53 am

engrjhez wrote:
sunriser431 wrote:For purpose of Discussion
.... My question now will this 10% threshold margin not violate any provision of the GPRA?
Not at all.

The 10%margin constitutes all possible overheads, contingencies and other cost. It is discretionary on the bidder's capacity to "gamble" with the figures. It is part of the computation itself and should not be treated as "item" that may cause an 'incomplete bid". So, whether they include 0% or n% (n is a positive real number) in the bid, it doesn't matter for as long as they do not violate the cardinal rule - not to exceed ABC.

Very Happy
In my opinion it has to be treated as a separate "item" otherwise your computation for VAT will not be correct. (Refering to "item" D. Agency Administrative Overhead Margin (10% of C ). another example, For "item" A (A. Amount Payable to Employee) those are not subject to VAT but subject to Income tax on wages(compensation) which is also treated as a separate 'item". Cool
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Re: Re: ABC for Security and Janitorial Services

Post by sunriser431 on Wed Jul 01, 2009 10:17 pm

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Re: Re: ABC for Security and Janitorial Services

Post by sunriser431 on Wed Jul 15, 2009 3:48 pm

In my experience, its much complicated to prepare the ABC for Security and Janitorial services, you have to be updated on the laws and other requirements, otherwise the prospect of failiure of bidding is just around the corner. Smile
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Re: Re: ABC for Security and Janitorial Services

Post by sunriser431 on Thu Jul 30, 2009 10:09 pm

sunriser431 wrote:In my experience, its much complicated to prepare the ABC for Security and Janitorial services, you have to be updated on the laws and other requirements, otherwise the prospect of failiure of bidding is just around the corner. Smile
Update
Ha Ha Ha as expected the bid was a failure, want to know the reason/cause click this link http://gppb.topicsolutions.net/competitive-bidding-f8/re-class-a-financial-documents-t198.htm a lesson for bidders/suppliers click this link for guidance http://gppb.topicsolutions.net/contract-implementation-f2/re-tips-on-how-to-win-bids-t301.htm#2055 Cool
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Re: Re: ABC for Security and Janitorial Services

Post by TalnaPj on Wed Dec 16, 2009 8:31 pm

We have a scenario in our bidding of our security guards wherein one of the bidders took off the rate on night shift differential arguing later on that it deemed unnecessary to provide the guards such compensation since they will be rendering services during regular office hours and not during night time. Is his contention valid?
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Re: Re: ABC for Security and Janitorial Services

Post by engrjhez® on Wed Dec 16, 2009 8:58 pm

TalnaPj wrote:We have a scenario in our bidding of our security guards wherein one of the bidders took off the rate on night shift differential arguing later on that it deemed unnecessary to provide the guards such compensation since they will be rendering services during regular office hours and not during night time. Is his contention valid?

If if it the way of the bidder, i believe whether it is justifiable or not is not the PE's concern. Since the government shall be looking for the lowest calculated responsive bid, whatever ways the bidder has to resort to attain it as long as no harm is induced to the PE. Very Happy
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Re: Re: ABC for Security and Janitorial Services

Post by Guest on Thu Dec 17, 2009 8:52 am

engrjhez wrote:
TalnaPj wrote:We have a scenario in our bidding of our security guards wherein one of the bidders took off the rate on night shift differential arguing later on that it deemed unnecessary to provide the guards such compensation since they will be rendering services during regular office hours and not during night time. Is his contention valid?

If if it the way of the bidder, i believe whether it is justifiable or not is not the PE's concern. Since the government shall be looking for the lowest calculated responsive bid, whatever ways the bidder has to resort to attain it as long as no harm is induced to the PE. Very Happy

But we must also take into consideration that the Bidder is required a certification of compliance with existing labor laws and standards which is verified during post qualification.

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Re: Re: ABC for Security and Janitorial Services

Post by sunriser431 on Thu Dec 17, 2009 9:13 am

TalnaPj wrote:We have a scenario in our bidding of our security guards wherein one of the bidders took off the rate on night shift differential arguing later on that it deemed unnecessary to provide the guards such compensation since they will be rendering services during regular office hours and not during night time. Is his contention valid?
It depend upon the technical requirements/scope of work of the procuring agency, for example if it requires 3 shifting for the security services (24/7), then the requirements have to be complied otherwise you will be violating the labor code of the Philippines. However this have to be clarified with the procuring agency (Pre-bid conference), so the prospective bidder will be properly guided. bounce Hope this would be of great help.
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Re: Re: ABC for Security and Janitorial Services

Post by engrjhez® on Thu Dec 17, 2009 2:32 pm

WormaixJr wrote:[
But we must also take into consideration that the Bidder is required a certification of compliance with existing labor laws and standards which is verified during post qualification.

Agree, agree. Definitely. But provided all aspects were compliant as to legal and technical aspect, the financial proposal should already be out of question. Very Happy
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Re: Re: ABC for Security and Janitorial Services

Post by Guest on Thu Dec 17, 2009 2:36 pm

engrjhez wrote:
WormaixJr wrote:[
But we must also take into consideration that the Bidder is required a certification of compliance with existing labor laws and standards which is verified during post qualification.

Agree, agree. Definitely. But provided all aspects were compliant as to legal and technical aspect, the financial proposal should already be out of question. Very Happy

Therefore, the BAC has no choice but to award the contract to the lowest bidder(granting he/she passed all qualification). Very Happy

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Re: Re: ABC for Security and Janitorial Services

Post by engrjhez® on Thu Dec 17, 2009 3:37 pm

WormaixJr wrote:
engrjhez wrote:
WormaixJr wrote:[
But we must also take into consideration that the Bidder is required a certification of compliance with existing labor laws and standards which is verified during post qualification.

Agree, agree. Definitely. But provided all aspects were compliant as to legal and technical aspect, the financial proposal should already be out of question. Very Happy

Therefore, the BAC has no choice but to award the contract to the lowest bidder(granting he/she passed all qualification). Very Happy

Exactly. Despite TalnaPj's question of the bidder's contention. Very Happy
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ABC for Security and janitorial Services

Post by fe a. araya on Sat Dec 19, 2009 10:21 am

Sir engrjhez and Wormaixjr, can you please show me the link of previous posts on this topic. Am interested because we have a scheduled bidding for Security Services for 2010, but sorry, di ko masundan your discussion on this topic posted Dec. 17, 2009. Been very busy of year-end activities. Actually, I have been printing posts of forum members for my reference later given the time but am afraid I missed this topic. Thanks and Merry Christmas!
Thanks and merry Christmas
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Re: Re: ABC for Security and Janitorial Services

Post by engrjhez® on Sat Dec 19, 2009 11:14 am

fe a. araya wrote:Sir engrjhez and Wormaixjr, can you please show me the link of previous posts on this topic. Am interested because we have a scheduled bidding for Security Services for 2010, but sorry, di ko masundan your discussion on this topic posted Dec. 17, 2009. Been very busy of year-end activities. Actually, I have been printing posts of forum members for my reference later given the time but am afraid I missed this topic. Thanks and Merry Christmas!
Thanks and merry Christmas

You mean this thread? Simply click page number "1" (at the lower right side portion before the "quick reply" segment) to go back to previous posts. We are currently on page number "2". Very Happy
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Re: Re: ABC for Security and Janitorial Services

Post by sunriser431 on Sat Dec 19, 2009 5:58 pm

In my first post, I did present the components/details of the ABC for the security services, however in the submission of the Bids/offer of the prospective biddders, they provided additional requirements other than those originally required, which is the security guard uniforms allowance, this was not provided or required in the original technical requirements, since procuring entity does not provide premiums for those uniforms can this be considered in the evaluation process? (the offer is within the ABC).
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Re: Re: ABC for Security and Janitorial Services

Post by TalnaPj on Mon Dec 21, 2009 2:02 pm

Many thanks to the moderator and all who have shared their views about this. I was able to talk with a PADPAO Official to raise the same concern and I was readily given a reply that the PADPAO rate on night shift differential should not be "touched" by the bidders because they have been fixed and really intended as part of the remuneration that is due to the guards. Short to saying "Give to Juan what belongs to Juan and to Pedro what belongs to Pedro." To make it otherwise would be violating the existing laws imposing the same.
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Re: Re: ABC for Security and Janitorial Services

Post by sunriser431 on Mon Jan 11, 2010 2:22 pm

TalnaPj wrote:Many thanks to the moderator and all who have shared their views about this. I was able to talk with a PADPAO Official to raise the same concern and I was readily given a reply that the PADPAO rate on night shift differential should not be "touched" by the bidders because they have been fixed and really intended as part of the remuneration that is due to the guards. Short to saying "Give to Juan what belongs to Juan and to Pedro what belongs to Pedro." To make it otherwise would be violating the existing laws imposing the same.
Additional info Re:Lowest Calculated Bid vis-ŕ-vis PADPAO Rate http://www.gppb.gov.ph/opinions/view_opinion.asp?o_id=418
Additional readings http://www.gppb.gov.ph/opinions/view_opinion.asp?o_id=84
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Re: Re: ABC for Security and Janitorial Services

Post by pocoyo on Mon Nov 22, 2010 9:22 am

The breakdown of the ABC is very helpful. It shows that the VAT is only applied to the agency fees.

However based on the discussions, it seems to me that the rule applies only to security agencies. Could you please guide me where to find the basis to show that the said rule applies also to janitorial services? Thanks.
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Re: Re: ABC for Security and Janitorial Services

Post by advocacy on Tue Mar 20, 2012 5:17 pm

If there is a deployment list for guards to be posted in the evening hours, Night Differential must be included in the bid proposal. If this was not included, the bid should be considered non-responsive because it was not in accordance with the terms of reference.


Last edited by advocacy on Wed Mar 21, 2012 12:16 pm; edited 1 time in total (Reason for editing : Missed a word)

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Re: Re: ABC for Security and Janitorial Services

Post by sunriser431 on Wed Mar 21, 2012 10:41 am

advocacy wrote:If there is a deployment list for guards to be posted in the evening hours, Night Differential must be included in the bid proposal. If this was not included, the bid should be considered non-responsive because it was in accordance with the terms of reference.
Maybe you mean "because it was not in accordance with the terms of reference". anyway the night shift differential will commence from 10:00 in the evening till 6:00 in the morming. any personnel rendering service in between those period will be entitled proportionate to the hours work. bounce
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Re: Re: ABC for Security and Janitorial Services

Post by misty on Thu May 17, 2012 10:24 am

gud am,

may I know the basis of the 10% limit on the overhead margin?

what if the PE desires to include the janitorial supplies and equipment in the bidding?

are the costs of the janitorial supplies also subject to the 10% overhead?

thank you.
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Re: Re: ABC for Security and Janitorial Services

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