Floor price for biddings

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Floor price for biddings

Post by advocacy on Tue Mar 20, 2012 5:40 pm

In biddings for security and janitorial services, some procuring entities choose to set a floor price for Administrative Overhead and Profit Margin. (This is in spite of the provisions of R.A. 9184, which provide that there should be no floor price in competitive bidding.)

The rationale for this is they want to ensure that no bidders give unrealistically low bids, which would be detrimental to the wages of the guards and janitors.

Be that as it may, in cases where a floor price is set by procuring entities, how should the BAC resolve the inevitable tie which will occur? As there is now a floor price, it is generally assumed that most if not all bidders will bid on the floor price.

Should the BAC hold a game of chance, or lottery to resolve the tie? What does the GPPB recommend to do in cases such as this?

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Re: Floor price for biddings

Post by engrjhez® on Wed Mar 21, 2012 10:13 am

advocacy wrote:In biddings for security and janitorial services, some procuring entities choose to set a floor price for Administrative Overhead and Profit Margin. (This is in spite of the provisions of R.A. 9184, which provide that there should be no floor price in competitive bidding.)

The rationale for this is they want to ensure that no bidders give unrealistically low bids, which would be detrimental to the wages of the guards and janitors.

Be that as it may, in cases where a floor price is set by procuring entities, how should the BAC resolve the inevitable tie which will occur? As there is now a floor price, it is generally assumed that most if not all bidders will bid on the floor price.

Should the BAC hold a game of chance, or lottery to resolve the tie? What does the GPPB recommend to do in cases such as this?

There is only one absolute floor price of bid under RA 9184 and it is a bid amount of "zero", meaning, all items are to be delivered for free. The Procuring Entity has no basis whatsoever in setting up the lower limit. They can only set the upper limit which is the ABC.

Now, can the PEs be correct in precluding that any amount proposed by bidders of such services below the anticipated minimum wages can be detrimental to the service? Again, NO. There is still that provision under the the bidder declared under oath (OSS) that they will follow and comply with "existing labor laws and standards". Whether the bid will yield a negative profit or not is left for the bidder to resolve. So the PE must assume that despite the "below minimum" bid was proposed, the bidder must still be compliant with other laws. The same must hold true even if the bidder bid for "zero" amount. Otherwise, they may be suspended or blacklisted for not accepting the consequence of their bids. Smile
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Re: Floor price for biddings

Post by sunriser431 on Wed Mar 21, 2012 10:55 am

advocacy wrote:In biddings for security and janitorial services, some procuring entities choose to set a floor price for Administrative Overhead and Profit Margin. (This is in spite of the provisions of R.A. 9184, which provide that there should be no floor price in competitive bidding.)

The rationale for this is they want to ensure that no bidders give unrealistically low bids, which would be detrimental to the wages of the guards and janitors.

Be that as it may, in cases where a floor price is set by procuring entities, how should the BAC resolve the inevitable tie which will occur? As there is now a floor price, it is generally assumed that most if not all bidders will bid on the floor price.

Should the BAC hold a game of chance, or lottery to resolve the tie? What does the GPPB recommend to do in cases such as this?
Opinion of the GPPB, follow the LINK 1 , or LINK 2. good luck. bounce
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