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Nature of business of prospective bidder

Post by regina avelino on Wed May 23, 2012 12:47 pm

hi to all forum member again.

one of our contractors usually bids and wins bidding on ground maintenance. this time, the same contractor joins bidding for janitorial services. what documents po ba ang kailangang i-check during eligibility check that they also into janitorial as well as maintenace services. SEC, DTI or BIR registration?

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Re: Nature of business of prospective bidder

Post by jcolas on Wed May 23, 2012 12:55 pm

"regina avelino wrote"
one of our contractors usually bids and wins bidding on ground maintenance. this time, the same contractor joins bidding for janitorial services. what documents po ba ang kailangang i-check during eligibility check that they also into janitorial as well as maintenace services. SEC, DTI or BIR registration?.

It is always written at the face of the Business Permit. The Business/Mayors Permit is the source document.
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Re: Nature of business of prospective bidder

Post by Guest on Thu Aug 30, 2012 11:45 am

Relative to this post, can the bac disqualify a bidder who bids for a project wherein according to its SEC, DTI and business permit documents the project being bidded is clearly not covered in its business scope?

Thank you po.

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Re: Nature of business of prospective bidder

Post by jcolas on Sat Sep 01, 2012 11:52 am

"eagerlearner wrote"
Relative to this post, can the bac disqualify a bidder who bids for a project wherein according to its SEC, DTI and business permit documents the project being bidded is clearly not covered in its business scope?

What is excluded by the business permit should not be included. Simply, if its not covered by the Business permit, then it shall not be allowed by the BAC.
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Re: Nature of business of prospective bidder

Post by engrjhez® on Mon Sep 03, 2012 1:53 pm

eagerlearner wrote:Relative to this post, can the bac disqualify a bidder who bids for a project wherein according to its SEC, DTI and business permit documents the project being bidded is clearly not covered in its business scope?

Thank you po.

Plainly speaking, you cannot. There is no such criteria under RA 9184 that when the line of business as reflected in the Mayor's Permit is not consistent with the item to be bid, it qualifies for failure. What matters is their experience as indicated in the Statement of On-Going and Completed Projects.

This (to me) is one the abuses of discretion. Eligibility check is non-discretionary, hence there is no basis in disqualifying a bidder on such grounds. Smile
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Re: Nature of business of prospective bidder

Post by isabelo c. rodriguez on Mon Sep 03, 2012 6:02 pm

but then again, wouldn't it be unfair to those doing business specific or limited only to what their business permits allow? or, stretching our imagination further, can a food caterer enter into contract for janitorial services just because he has a biz permit (as caterer) and experience (as janitorial srvc.) to show for it? is this even possible? medyo naguluhan po ako. pasensya na po.

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Re: Nature of business of prospective bidder

Post by riddler on Mon Sep 03, 2012 8:46 pm

isabelo c. rodriguez wrote:but then again, wouldn't it be unfair to those doing business specific or limited only to what their business permits allow? or, stretching our imagination further, can a food caterer enter into contract for janitorial services just because he has a biz permit (as caterer) and experience (as janitorial srvc.) to show for it? is this even possible? medyo naguluhan po ako. pasensya na po.

Hi. Kindly click this interesting thread too.

http://gppb.topicsolutions.net/t2050-line-of-business?highlight=Business+permit
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Re: Nature of business of prospective bidder

Post by elib on Mon Sep 03, 2012 9:07 pm

isabelo,

i could not agree more to what engrjhez® had already laid out:

Plainly speaking, you cannot. There is no such criteria under RA 9184 that when the line of business as reflected in the Mayor's Permit is not consistent with the item to be bid, it qualifies for failure. What matters is their experience as indicated in the Statement of On-Going and Completed Projects.

however, there are some work-around that i think, could be made to limit the competing bidders which whom possesses the required experience and expertise to the services youre trying to procure. this is by asking additional requirements with which, is only significant and particular to that line of business.

per your example; a janitorial service provider is bidding on a catering services. why not include sanitary permit as an additional requirements. i dont know, if janitorial service provider will have his kind of permit....

just my 1 cent worth...

cheers.....
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Re: Nature of business of prospective bidder

Post by engrjhez® on Mon Sep 03, 2012 9:59 pm

isabelo c. rodriguez wrote:but then again, wouldn't it be unfair to those doing business specific or limited only to what their business permits allow? or, stretching our imagination further, can a food caterer enter into contract for janitorial services just because he has a biz permit (as caterer) and experience (as janitorial srvc.) to show for it? is this even possible? medyo naguluhan po ako. pasensya na po.

I know it may sound absurd at first. But try to separate the application of laws. Here on one side, we talk of procurement law. The other side, we talk of legally engaging into business and its limitations. It may be true that under Corporation Code or any other pertinent business or trade law, that doing business other than that allowed is violative of that law. The violation if any, is to that particular law or laws. It must not be applied to procurement law if it was not expressly stated. Under RA 9184, the eligibility criteria is well defined under Sec.23.5 for goods and infra and at Sec.24.3 for consulting services. Expressio unius est exclusio alterius or the express mention of one thing excludes all others.

In your example, if the bidder submitted a business permit, for as long as it is not expired, the BAC may still be considered PASSED in the eligibility check. Why? because the BAC cannot deviate or make its own rules other than that provided by law. If there is really inconsistency in the identity and capability of the bidder, it must manifest naturally. Test the consistency and validate documents during post qual.

I am also not to agree that there will be unfairness. In fact, it is the contrary. Suppose the that bidder in the example above PASSED the eligibility check, what's next? That bidder must have the lowest calculated bid for it to be post-qualified. If after opening, that bidder was found have the highest bid proposal, they get the least chance to be awarded. And even if the bidder was declared the lowest, they will still have to pass the stringent post qualification procedure. From there, the documents will be checked and validated as a whole. Remember that business permit is not the sole document submitted. The entirety of their submission and their substantial compliance must prevail until in the end. The idea is that, all will be given fair chance to be considered under the principle of competitiveness.
Smile
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Re: Nature of business of prospective bidder

Post by engrjhez® on Mon Sep 03, 2012 10:06 pm

elib wrote:isabelo,

i could not agree more to what engrjhez® had already laid out:

Plainly speaking, you cannot. There is no such criteria under RA 9184 that when the line of business as reflected in the Mayor's Permit is not consistent with the item to be bid, it qualifies for failure. What matters is their experience as indicated in the Statement of On-Going and Completed Projects.

however, there are some work-around that i think, could be made to limit the competing bidders which whom possesses the required experience and expertise to the services youre trying to procure. this is by asking additional requirements with which, is only significant and particular to that line of business.

per your example; a janitorial service provider is bidding on a catering services. why not include sanitary permit as an additional requirements. i dont know, if janitorial service provider will have his kind of permit....

just my 1 cent worth...

cheers.....

I would like to point out that as far as eligibility is concerned, we cannot ask any other additional requirements. In your example, the sanitary permit may be possibly required only during post qualification, provided that such is indicated in the bidding documents.

Now it leads us to the idea that we should think and establish our requirements and specification in a grand manner. If we only meticulously and judiciously prepare our bidding documents, then there can be no confusion of the acceptability or non-acceptability of cases or situations.

If we only read thoroughly the PBDs and craft from it the Bidding Documents, there can be no doubt that the procurement process can be implemented smoothly and seamlessly. Smile
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Re: Nature of business of prospective bidder

Post by elib on Tue Sep 04, 2012 11:35 am

hi engrjhez®,
i found that you and others here are pretty well versed with the procurement law and its irr. showering this forum with pearls of wisdom and experience. i am learning a lot in here......reading interesting topics that could benifit all the member of this forum.... thank you ....

moving forward,from youre post;

"I would like to point out that as far as eligibility is concerned, we cannot ask any other additional requirements. In your example, the sanitary permit may be possibly required only during post qualification, provided that such is indicated in the bidding documents.
please clarify, why does one cannot ask for an additional requirements.

to further explain my point let me post an excertp from the irr;
17.2. The specifications and other terms in the Bidding Documents shall reflect minimum
requirements or specifications required to meet the needs of the procuring entity in
clear and unambiguous terms.
from this precept isn't it that what is written in the irr are just the minimum requirements and which can be complimented by other significant requirements which will feed the pe's needs.

the irr have expressly stated what are the minimum set of eligibility requirements, however one can can still argue that an additional requirement not being listed can still be required as the law is silent about it.

from Section 34. Objective and Process of Post-Qualification of the irr
34.2.d)Other appropriate licenses and permits required by law and stated in the Bidding Documents.
in my understanding, the purpose of post qualification is to only verify,validate and ascertain all documents with which have been required in the bidding documents....


cheers.....
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Re: Nature of business of prospective bidder

Post by engrjhez® on Tue Sep 04, 2012 12:20 pm

elib wrote:hi engrjhez®,
i found that you and others here are pretty well versed with the procurement law and its irr. showering this forum with pearls of wisdom and experience. i am learning a lot in here......reading interesting topics that could benifit all the member of this forum.... thank you ....

moving forward,from youre post;

"I would like to point out that as far as eligibility is concerned, we cannot ask any other additional requirements. In your example, the sanitary permit may be possibly required only during post qualification, provided that such is indicated in the bidding documents.
please clarify, why does one cannot ask for an additional requirements.
The eligibility requirements listed under Sec.23 and 24 are fixed. This was one of the significant changes under the revised IRR. In the old IRR-A, there was this "other documents/requirements..." that was prone to abuse by some (if not most) procuring entities. Hence, there are only 5 documents for goods (and consulting), and an additional document of valid PCAB license (making it 6) for infra. No more, no less.

elib wrote:to further explain my point let me post an excertp from the irr;
17.2. The specifications and other terms in the Bidding Documents shall reflect minimum
requirements or specifications required to meet the needs of the procuring entity in
clear and unambiguous terms.
from this precept isn't it that what is written in the irr are just the minimum requirements and which can be complimented by other significant requirements which will feed the pe's needs.
Section 17.2 refers to the specifications which is a part of technical requirement. What is explicitly fixed by law is eligibility requirements. Please do not be confused because the two ane not one and the same.

elib wrote:the irr have expressly stated what are the minimum set of eligibility requirements, however one can can still argue that an additional requirement not being listed can still be required as the law is silent about it.
Again, the law is not silent on this. Eligibility requirement is fixed. You cannot ask for additional eligibility requirements. However, for technical documents, the provision is so worded that the enumeration of technical documents are minimum. You should be able to distinguish the two.

elib wrote:from Section 34. Objective and Process of Post-Qualification of the irr
34.2.d)Other appropriate licenses and permits required by law and stated in the Bidding Documents.
in my understanding, the purpose of post qualification is to only verify,validate and ascertain all documents with which have been required in the bidding documents....


cheers.....
You are correct that the purpose of post qualification is to verify, validate and ascertain documents. But it is also required under Sec.34 to submit the documents enumerated therein. Actually, in the old IRR-A, such documents were included as part of the eligibility requirements. The reason that they were moved and required in the post qual was to simplify the required documents during bid opening. With number of documents for eligibility reduced, participation is expected to increase dramatically. Now, even if the bidder has not updated their Tax Clearance, Income/Business Tax Returns, PhilGEPS registration certificate and other appropriate pertmits/licenses indicated in the bidding documents, they can still participate. Anyway, they will still have to be qualified if their bids are declared the lowest.
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Re: Nature of business of prospective bidder

Post by Guest on Tue Sep 04, 2012 2:57 pm

Sirs,

This topic is really becoming more interesting. As engrjhez stated that "The violation if any, is to that particular law or laws. It must not be applied to procurement law if it was not expressly stated." It's quite disturbing...

How can a bac, for example, in good conscience, award the fabrication of boats to a bidder with the lcb who's scope of business is the importation and wholesaling of electronics equipment?

Can those introducing amendments to the RA 9184 and its IRR look into this also?

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Re: Nature of business of prospective bidder

Post by elib on Tue Sep 04, 2012 3:06 pm

engrjhez®,

thank you for the clarrification and shedding light .

cheers....
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Re: Nature of business of prospective bidder

Post by engrjhez® on Tue Sep 04, 2012 3:49 pm

eagerlearner wrote:Sirs,

This topic is really becoming more interesting. As engrjhez stated that "The violation if any, is to that particular law or laws. It must not be applied to procurement law if it was not expressly stated." It's quite disturbing...

How can a bac, for example, in good conscience, award the fabrication of boats to a bidder with the lcb who's scope of business is the importation and wholesaling of electronics equipment?

Can those introducing amendments to the RA 9184 and its IRR look into this also?

To simplify the discussion, the breaking question would be "what would be the ground for disqualifying such bidder?". If we stick on conscience alone, we might get trapped in an unwarranted discretion, which the procurement law is trying to eliminate. If we are disqualifying the bidder based on its line of business alone, the question is where in procurement rules can you disqualify the bidder with its line of business? The is none. And even if there is such thing as line of business, for as long as the transaction is completed, accepted, and appropriate tax paid, to me the question of one's line of business is moot and academic.

However, please do not misconstrue that as plainly stated in the example, that fabrication of boats can be awarded to a wholesaler of electronics equipment. There are many documents that must be considered before we conclude of disqualification. Aside from the statement of completed projects, what did his income tax and audited financial statement say? What does his DTI/SEC/CDA cerificate says? What did the rest of their documents lead to? if there is a MISREPRESENTATION, or FRAUD in the document just to satisfy the requirements of procurement, then there is a valid ground for disqualification. If the declaration of one's line of business is a simple omission through no fault or intent of the bidder, it must not be necessarily taken against them. To me, that is fair conscience.

My emphasis is to avoid immediate preclusions that a line of business (on its sole basis) is a ground for disqualification.


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Re: Nature of business of prospective bidder

Post by alpha1 on Tue Sep 04, 2012 5:06 pm

Whew!

This forum is really educational as if you're also attending a seminar. Thanks guys for your very informative discussion.
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Re: Nature of business of prospective bidder

Post by RDV @ GP3i on Tue Sep 04, 2012 10:05 pm

eagerlearner wrote:Sirs,

This topic is really becoming more interesting. As engrjhez stated that "The violation if any, is to that particular law or laws. It must not be applied to procurement law if it was not expressly stated." It's quite disturbing...

How can a bac, for example, in good conscience, award the fabrication of boats to a bidder with the lcb who's scope of business is the importation and wholesaling of electronics equipment?

Can those introducing amendments to the RA 9184 and its IRR look into this also?

Maybe the following opinion of the GPPB in a query on the nature of business as reflected in the mayor's permit would help resolve the issue that you raised, eagerlearner:

Issue: Whether the submitted Mayor's Permit of the construction company that does not include the nature of business for the bidding of the “Garbage Collection and Hauling” project of the City of Bacolod could pass the eligibility requirements for said project.

GPPB Opinion: "A Mayor’s Permit is in the nature of a business permit which authorizes the person, natural or otherwise, to engage in business or some commercial activity. Consequently, a prospective bidder's business as stated in the Mayor's Permit should at the very least be similar to the project to be bid.

[T]he "Garbage Collection and Hauling" project envisions not simply the pulling, dragging, and transport of garbage, but also the proper collection, transfer, storage, processing, and recycling of Bacolod City’s solid waste. Although a construction company collects and hauls materials, aggregates, equipment, tools, and implements in the course of its construction work, such collection and hauling work may not be considered or treated to be within the purview of garbage collection and hauling.

In addition, appropriate environmental licenses and permits must be secured by a prospective bidder from relevant government agencies, such as but not limited to, the Department of Environment and Natural Resources (DENR), to be able to engage in garbage collection and hauling, which may also factor in safety, sanitary, health, and labor standards, which a construction company engaged in hauling of construction materials, aggregates, and others, may not possess."

There is basis, therefore, to disqualify a bidder if the nature of its business as appearing in its Mayor's Permit is very much different from the project to be bid.
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Re: Nature of business of prospective bidder

Post by regina avelino on Wed Sep 05, 2012 9:42 am

Good morning to all. I agree with sir RDV's opinion. I have a lot of friends also working in government who is also involved in procurement activities and they experience the same scenario where the project being bidded out were not in accordance with the nature of business as appearing in its business permit. Half of them allows such and the other half disqualifies the bidder. How did the other half able to disqualify the bidder because of such conflicting permit-project cases? It is not because the BAC disqualified them but the competitor bidder files motion for reconsideration to consider their bid and disqualify the bidder whose nature of business appearing on the permit is different from the project. They even refer NPM 77-2012 to such case which eventually the BAC grants the motion and eventually disqualifies bidder with conflicting permit-project scenario.

In our company we follow NPM 77-2012 and it has been our practice ever since. thanks queen

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Re: Nature of business of prospective bidder

Post by elib on Wed Sep 05, 2012 10:55 am

hi all,
based on the foregoing, am i correct to conclude the following;

1)one could not disqualify upfront any prospective bidder if he complies with all the requirement as stated in sec 23 & 24.

2)other additional requirements that could be found in the bid docs and not listed in sec 23 & 24 are requirements that is to be verified & validated only during the post qualification stage.

3)along the course of the procurement process, the eligibility check could be put in place

kindly share you insights..

cheers.....
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Re: Nature of business of prospective bidder

Post by regina avelino on Wed Sep 05, 2012 2:42 pm

I agree with you for number 1 and 3. for number 2, i think the "other additional requirements" should be focused on the technical document/specs???

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Re: Nature of business of prospective bidder

Post by isabelo c. rodriguez on Fri Sep 07, 2012 12:32 am

isn't NPM 77-2012 an example of "abuse of discretion"? i agree with engrjez that you cannot disqualify a bidder even if the item to be bid is not within the purview of his line of business. all he has to show is a valid biz/mayor's permit. but here comes NPM 77-2012 which to my mind runs in conflict with what "pass/fail' criteria hopes to avoid and that is abuse of discretion on the part of bac.

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Re: Nature of business of prospective bidder

Post by Lord_007 on Fri Sep 07, 2012 2:08 am

I agree with the idea of Mr. Rodriguez.

I believed that the only way we can say that the item being bid is not within the purview of the line of business of the bidder if the said item being bid is not stipulated in the Primary or secondary purpose of the COmpany's Corporate Registration with the SEC.

Most of the time the Business Permit does not specify the above purposes or businesses allowable to the Company as stated in the Article of Incorporation.

Thus if the business is part of the purposes of the Corporation, the Company complied with the other requirements like submission of similar contracts then even if the Business Permits specify a different nature of business (not complete discription) then the BAC has no right to disqualify the bidder.
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Re: Nature of business of prospective bidder

Post by RDV @ GP3i on Fri Sep 07, 2012 6:54 am

isabelo c. rodriguez wrote:isn't NPM 77-2012 an example of "abuse of discretion"? i agree with engrjez that you cannot disqualify a bidder even if the item to be bid is not within the purview of his line of business. all he has to show is a valid biz/mayor's permit. but here comes NPM 77-2012 which to my mind runs in conflict with what "pass/fail' criteria hopes to avoid and that is abuse of discretion on the part of bac.

Although the query is whether a bidder could pass eligibility check if the business permit of the bidder does not include the nature of business similar to the project being bidded, the NPM itself does not state that the bidder should be disqualified during the eligibility check itself, in fairness to the GPPB.

If nature of business of the bidder is not evident on the face of the business permit, as pointed out by Lord_007, then it is correct that it should not be done during eligibility check. Instead it is properly done, to determine whether the bidder is actually eligible or not (or responsive to the eligibility requirement), during post-qualification stage.
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Re: Nature of business of prospective bidder

Post by Guest on Fri Sep 14, 2012 3:02 pm

Thank you, engrjhez...very well said and very clear...

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