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Transfer of Services during implementation

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Transfer of Services during implementation

Post by regina avelino on Mon Mar 19, 2012 4:32 pm

Dear all,

Our current security agency (Agency AAA) wrote a letter to us informing that starting June 1, there sister company (Agency BBB), which is also a security agency, will handle its security service to our company. Agency AAA has been with us for 5 months already after winning the bidding last October 2011. According to Agency AAA, the same security personnel shall be deployed to our company and same people from Agency AAA shall manage the security operations. There will be no change terms and conditions including the rate. The only change is that instead of Agency AAA, Agency BBB will now be the servicing security agency. Even though the same security personnel will be deployed, top official of Agency BBB will be different. Is this acceptable. please advise

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Re: Transfer of Services during implementation

Post by regina avelino on Tue Mar 20, 2012 10:05 am

hello po to all. requesting po your opinion regarding this. thanks po in advance.

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Re: Transfer of Services during implementation

Post by Jovinal on Tue Mar 20, 2012 11:27 am

I think this is illegal because the existing contract of service is between your agency and Agency AAA. And it cannot be considered as sub contracting too.
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Re: Transfer of Services during implementation

Post by regina avelino on Tue Mar 20, 2012 11:56 am

salamat po sa reply. pwede po din bang ground to deny this intention of Agency AAA is that eventhough Agency BBB is a sister company of Agency AAA, underwent post qualification and subsequently issued NOA? The legal existence, technical experience and financial stability of Agency BBB are not known to the procuring entity. Like a Star @ heaven queen Like a Star @ heaven

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Re: Transfer of Services during implementation

Post by regina avelino on Tue Mar 20, 2012 2:20 pm

additional queries po. what if Agency AAA would push thru with its intention, could we forfeit its performance bond and initiate blacklisting proceedings? can we accept Agency BBB or negotiate with the second LCB pertaining to the bidding conducted last october when Agency AAA won? please advise po......

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Re: Transfer of Services during implementation

Post by RDV @ GP3i on Tue Mar 20, 2012 5:22 pm

regina avelino wrote:Dear all,

Our current security agency (Agency AAA) wrote a letter to us informing that starting June 1, there sister company (Agency BBB), which is also a security agency, will handle its security service to our company. Agency AAA has been with us for 5 months already after winning the bidding last October 2011. According to Agency AAA, the same security personnel shall be deployed to our company and same people from Agency AAA shall manage the security operations. There will be no change terms and conditions including the rate. The only change is that instead of Agency AAA, Agency BBB will now be the servicing security agency. Even though the same security personnel will be deployed, top official of Agency BBB will be different. Is this acceptable. please advise

Any change in the terms of the contract will be subject to the consent and approval of both contracting parties. Since the request is being made by the security agency, the request has to be in writing and would be subject to the written consent or acceptance by the government agency.

If the contract to the security agency was done thru public bidding and the Philippine Bidding Documents were used, then there is that provision in the contract, which is contained in Sec. 61 of the General Conditions of Contract (GCC) on Assignment of Rights, which provides that "The Supplier shall not assign his rights or obligations under this Contract, in whole or in part, except with the Procuring Entity's prior written consent."

Therefore, as a general rule, what the security agency is planning to do is not allowed, unless he has secured the prior written consent of the procuring entity. On the part of the procuring entity, one consideration it should look into, before it decides on whether to give consent on not, is whether the assignment of rights would not be ultimately disadvantageous to the procuring entity.
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Re: Transfer of Services during implementation

Post by Jovinal on Tue Mar 20, 2012 11:22 pm

In this case of assignment of obligation to Agency BBB, is there a need to post qualify the agency bbb and a new contract of service is required between the procuring agency and agency bbb ?
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Re: Transfer of Services during implementation

Post by engrjhez® on Fri Mar 23, 2012 1:21 am

Jovinal wrote:In this case of assignment of obligation to Agency BBB, is there a need to post qualify the agency bbb and a new contract of service is required between the procuring agency and agency bbb ?

Seems like falling into sub contracting already. Excerpts from Instruction to Bidders (PBD 4th Ed):

8.1. Unless otherwise specified in the BDS, the Bidder may subcontract portions of the Goods to an extent as may be approved by the Procuring Entity and stated in the BDS. However, subcontracting of any portion shall not relieve the Bidder from any liability or obligation that may arise from the contract for this Project.

8.2. Subcontractors must comply with the eligibility criteria and the documentary requirements specified in the BDS. In the event that any subcontractor is found by the Procuring Entity to be ineligible, the subcontracting of such portion of the Goods shall be disallowed.

Whenever subcontracting is allowed, the eligibility and documentary requirements for the subcontractor must be indicated in the BDS as well as the % of contract allowed to be subcontracted. So if these provisions are not part of your contract, then there must be a thorough review of the contract again to be able to apply such changes. It will be a sensitive issue later.

My suggestion is parallel to the observation of RDV that contract terms must not be amended once perfected. Any attempt to amend the contract is a flaw waiting to be refuted. Like, why AAA company transfers the responsibility to BBB? Would that mean AAA is in fact NOT capable of handling the contract? Think again. Smile
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Re: Transfer of Services during implementation

Post by regina avelino on Fri Mar 23, 2012 9:16 am

good morning po engrjhez, agency AAA informed our company that they will focus on training school instead, that is why they are transferring/assigning their contract to its sister company. Going back to the query of sir Jovinal, what will be the procedures if our company will accept the proposal of agency AAA assigning its contract to agency BBB. would this require eligibility and post qualification process? what if we do not agree with the proposal but agency AAA pursue with its plan of terminating its contract with us? Aside from forfeiting its performance security and blacklist agency AAA, what do we do next? can we reject agency BBB and proceed with negotiation with other security agency by way of emergency cases? please advise po

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Re: Transfer of Services during implementation

Post by Jovinal on Fri Mar 23, 2012 1:12 pm

You may rescind the contract and follow this guidelines:

53.3. Take-Over of Contracts. Take-over of contracts, which have been rescinded or
terminated for causes provided for in the contract and existing laws, where
immediate action is necessary to prevent damage to or loss of life or property, or to
restore vital public services, infrastructure facilities and other public utilities.
53.3.1. The contract may be negotiated starting with the second lowest
calculated/highest rated bidder for the project under consideration at the
bidder’s original bid price.(a)
53.3.2. If negotiation fails, then negotiation shall be done with the third lowest
calculated/highest rated bidder at his original price. If the negotiation fails
again, a short list of at least three (3) eligible contractors shall be invited to
submit their bids, and negotiation shall be made starting with the lowest
calculated/highest rated bidder.(a)
53.3.3. Authority to negotiate contracts for projects under these exceptional cases shall
be subject to prior approval by the Heads of the Procuring Entities concerned,
within their respective limits of approving authority.(a)
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Re: Transfer of Services during implementation

Post by regina avelino on Fri Mar 23, 2012 4:01 pm

sir Jovinal, agency AAA is a single lowest calculated and responsive bidder. according to our bac secretariat section 53.3 applies only to infra projects. our bac is considering section 53.2 on the grounds of "other causes where immediate action is necessary to prevent damage to or loss of life or property" because according to them once the security personnel is pulled out, this might cause damage of life or property. The BAC instructed our security manager to negotiate with a different security agency and the TWG was instructed to conduct eligibility. Is this proper?????

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Re: Transfer of Services during implementation

Post by Jovinal on Fri Mar 23, 2012 9:40 pm

I think it may apply to goods/services, so apply a short list of at least three (3) eligible contractors shall be invited to
submit their bids, and negotiation shall be made starting with the lowest
calculated/highest rated bidder.(a)
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Re: Transfer of Services during implementation

Post by RDV @ GP3i on Sat Mar 24, 2012 8:44 am

Section 53.3 will apply to the procurement of goods, infra and consulting services, but the process of negotiation starts with the 2nd LCB when the original contract was bidded out. You will only invite at least 3 providers after there is failure of negotiation with the 2nd LCB, and then with the 3rd LCB at their original bid prices.
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Re: Transfer of Services during implementation

Post by Jovinal on Sat Mar 24, 2012 10:09 am

but agency AAA is a single lowest calculated and responsive bidder, no 2nd LCB.
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Re: Transfer of Services during implementation

Post by sunriser431 on Sat Mar 24, 2012 12:22 pm

regina avelino wrote:sir Jovinal, agency AAA is a single lowest calculated and responsive bidder. according to our bac secretariat section 53.3 applies only to infra projects. our bac is considering section 53.2 on the grounds of "other causes where immediate action is necessary to prevent damage to or loss of life or property" because according to them once the security personnel is pulled out, this might cause damage of life or property. The BAC instructed our security manager to negotiate with a different security agency and the TWG was instructed to conduct eligibility. Is this proper?????
May I butt in. Have you tried to explore other possibilities? Follow the LINK . Hope it might be of help. bounce
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