Surety Bond, what is needed?

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Surety Bond, what is needed?

Post by wild_card23 on Wed May 16, 2012 11:13 am

Sir,

We have a problem.

These are the short facts of the case.

A bidder submitted a surety bond during the bidding but there was no attached certification from the Insurance Commission. Is this a ground for outright disqualification or should the bidder be given a chance to produce the said certification?

Looking forward to your advise on the matter.

Thank you and more power.

Wildcard23

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Re: Surety Bond, what is needed?

Post by regina avelino on Wed May 16, 2012 11:21 am

the bidder po should be rated "failed" thus disqualified as per 27.2 (c) which states that "surety bond callable upon demand issued by surety or insurnace company duly CERTIFIED BY THE INSURANCE COMMISSION AS AUTHORIZED to issue such security.

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Re: Surety Bond, what is needed?

Post by engrjhez® on Wed May 16, 2012 12:42 pm

wild_card23 wrote:Sir,

We have a problem.

These are the short facts of the case.

A bidder submitted a surety bond during the bidding but there was no attached certification from the Insurance Commission. Is this a ground for outright disqualification or should the bidder be given a chance to produce the said certification?

Looking forward to your advise on the matter.

Thank you and more power.

Wildcard23

There has been several opinions already issued by the GPPB regarding this matter, to wit:

The certification which must be submitted by the bidder together with the surety bond must (i) unequivocally state that the surety or insurance company is specifically authorized to issue surety bonds callable upon demand, and (ii) must be issued by the Insurance Commission. Consequently, a copy of the firm’s license or certificate of authority to transact in insurance business will not suffice. It must be a separate certificate which cannot be issued by any other entity except the Insurance Commission.
Taken from NPM 24-2010 >>> http://www.gppb.gov.ph/opinions/view_opinion.asp?o_id=615

In view of said objective, it is our considered opinion that the certification which must be submitted by the bidder together with the surety bond must (i) unequivocally state that the surety or insurance company is specifically authorized to issue surety bonds callable on demand, and (ii) must be issued by the Insurance Commission.
Taken from NPM 13-2010 >>> http://www.gppb.gov.ph/opinions/view_opinion.asp?o_id=606

As regards the content of the certification, please note that as discussed in a previous opinion and in compliance with Sections 27.2 (c) and 39.2 (c), the certification which must be submitted by the bidder together with the surety bond must (i) unequivocally state that the surety or insurance company is specifically authorized to issue surety bonds callable on demand, and (ii) must be issued by the Insurance Commission. Further, we wish to note that since the surety bond required under Sections 27.2 (c) and 39.2 (c) is required to be project specific, the certification from the Insurance Commission must also be project specific.
Taken from NPM 17-2012 >>> http://www.gppb.gov.ph/opinions/view_opinion.asp?o_id=728

The absence of such certification will result to a "patently insufficient" document in the form and substance as required by the IRR of RA 9184, and shall be rated as FAILED using the non-discretionary pass/fail criterion. Smile
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Re: Surety Bond, what is needed?

Post by wild_card23 on Thu May 24, 2012 10:43 am

Thanks for all your valuable replys to my query... more power to you Smile

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