insufficient requirement of surety bond

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insufficient requirement of surety bond

Post by wild_card23 on Wed May 16, 2012 1:00 pm


Sir/maa:

This pertains to the posting of a bid security in the form of a surety bond. My question is the following:

Is the non-submittance of a certification coming from an authorized Insurance Commission that a surety or insurance company is authorized to issue such instrument an immediate ground for post-disqualification of the bidder? Or may the bidder be given a chance to produce the required document, i.e., certification.

Awaiting for your valuable comments. Thank you very much po.

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Re: insufficient requirement of surety bond

Post by engrjhez® on Wed May 16, 2012 2:00 pm

wild_card23 wrote:
Sir/maa:

This pertains to the posting of a bid security in the form of a surety bond. My question is the following:

Is the non-submittance of a certification coming from an authorized Insurance Commission that a surety or insurance company is authorized to issue such instrument an immediate ground for post-disqualification of the bidder? Or may the bidder be given a chance to produce the required document, i.e., certification.

Awaiting for your valuable comments. Thank you very much po.

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. No further submission of document shall be allowed after the deadline. Smile
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Re: insufficient requirement of surety bond

Post by alpha1 on Wed May 16, 2012 2:12 pm

Good day Wild_card23!

The certification maybe required during the post qualification.
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Re: insufficient requirement of surety bond

Post by engrjhez® on Wed May 16, 2012 3:18 pm

alpha1 wrote:Good day Wild_card23!

The certification maybe required during the post qualification.

I may have to object to that suggestion. It is very clear from the IRR and in the GPPB opinions that the certification from the Insurance Commission should be submitted together with the surety bond. Also, post qualification documents are very much specific and that does not include any other documents other than:

  1. Tax clearance;
  2. Latest income and business tax returns;
  3. Certificate of PhilGEPS Registration; and
  4. Other appropriate licenses and permits required by law and stated in the Bidding Documents.

No more, no less.

Smile
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