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Confidentiality of Contracts

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Confidentiality of Contracts

Post by DefCon on Mon Feb 16, 2009 2:07 pm

Hi, my expertise is defense contracts. I have studied in depth the Philippine Defense Procurement, which, unfortunately falls within the scope of GOVERNMENT PROCUREMENT under RA 9184. I was also part of the initial committee which crafted the IRR-A, and we tried as much as possible to infuse our ideas -- to no avail. The response we got from then Cong Andaya was to observe how the initial IRR will perform, and later on propose the amendments. I guess the time has come...

I will be regularly posting my comments here, hoping that amendments will be made which will lead to a more efficient DEFENSE PROCUREMENT.

The Philippine Bidding Documents STATE:
12. Use of Contract Documents and Information
12.1 The Supplier shall not, except for purposes of performing the obligations in this Contract, without the PROCURING ENTITY’s prior written consent, disclose this Contract, or any provision thereof, or any specification, plan, drawing, pattern, sample, or information furnished by or on behalf of the PROCURING ENTITY. Any such disclosure shall be made in confidence and shall extend only as far as may be necessary for purposes of such performance.

The same is true for other DEFENSE CONTRACTS entered into by the SUPPLIER with various governments and end users.

The IRR to RA9184 requires that suppliers must disclose details of its previous contracts as an eligibility requirement. Failure to do so will make them ineligible and thus not qualified to participate in the procurement. Suppliers who do participate are either LIABLE for violation of this provision, or the documents submitted are FAKE. Either way, the Government would NOT want to deal with these suppliers...

QUESTION:
To enable MORE bona-fide suppliers of defense munitions to participate in defense procurements, CAN WE ELIMINATE this requirement? The essence of POST-QUALIFICATION is to establish the capability of the supplier to perform the contract.

RECOMMENDATION:
A mere statement, under oath, by the supplier that it has supplied or has existing contracts with the countries of end users -- not the end users themselves, should suffice. Copies of contracts, delivery receipts, and or acceptance certificates can be shown, to the extent that they do not violate the CONFIDENTIALITY CLAUSE, during PQ. If during PQ, it turned out to be false, then DISQUALIFY AND BLACKLIST THEM.
Known manufacturers/suppliers are very few. Now, DND is forced to accept documents from lesser known mere TRADERS because the BONAFIDE suppliers WILL NOT VIOLATE THE CONFIDENTIALITY CLAUSE.

DefCon
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Re: Confidentiality of Contracts

Post by RDV @ GP3i on Mon Feb 16, 2009 4:18 pm

DefCon wrote:The Philippine Bidding Documents STATE:
12. Use of Contract Documents and Information
12.1 The Supplier shall not, except for purposes of performing the obligations in this Contract, without the PROCURING ENTITY’s prior written consent, disclose this Contract, or any provision thereof, or any specification, plan, drawing, pattern, sample, or information furnished by or on behalf of the PROCURING ENTITY. Any such disclosure shall be made in confidence and shall extend only as far as may be necessary for purposes of such performance.

The same is true for other DEFENSE CONTRACTS entered into by the SUPPLIER with various governments and end users.

The IRR to RA9184 requires that suppliers must disclose details of its previous contracts as an eligibility requirement. Failure to do so will make them ineligible and thus not qualified to participate in the procurement. Suppliers who do participate are either LIABLE for violation of this provision, or the documents submitted are FAKE. Either way, the Government would NOT want to deal with these suppliers...

QUESTION:
To enable MORE bona-fide suppliers of defense munitions to participate in defense procurements, CAN WE ELIMINATE this requirement? The essence of POST-QUALIFICATION is to establish the capability of the supplier to perform the contract.

RECOMMENDATION:
A mere statement, under oath, by the supplier that it has supplied or has existing contracts with the countries of end users -- not the end users themselves, should suffice. Copies of contracts, delivery receipts, and or acceptance certificates can be shown, to the extent that they do not violate the CONFIDENTIALITY CLAUSE, during PQ. If during PQ, it turned out to be false, then DISQUALIFY AND BLACKLIST THEM.
Known manufacturers/suppliers are very few. Now, DND is forced to accept documents from lesser known mere TRADERS because the BONAFIDE suppliers WILL NOT VIOLATE THE CONFIDENTIALITY CLAUSE.

Welcome to this forum, Defcon.

You have good point by citing the confidentiality provision of Sec. 12.1 of the General Conditions of Contracts (GCC), which is part of the Philippine Bidding Documents. Please take note, however, of the following: (1) the confidentiality on the use of contract documents and information contained therein is not absolute. If the supplier gets the written consent of the government agency which is the other party to the contract, then the supplier could not be cited for violating the provision; and (2) what is prohibited is disclosure of the details of the contract, such as its provisions, or any specification, plan, drawing, pattern, sample, or information furnished by or on behalf of the PROCURING ENTITY. The provision of Sec. 23.6.1(g) requiring the submission of "Statement of the prospective bidder of all its ongoing and completed government and private contracts within the relevant period..." I think, would not be disclosing the details or sensitive information in the contract, which could be matters of national security concern.

The Sample format of the Statement (SF-GOOD-13a) is available in the GPPB wesite: http://www.gppb.gov.ph/downloadables/downloadables.asp?d_cat_id=6&offset=20
The information required therein are ONLY: 1) name of project/cost; 2) owner's name, address, and tel no.; 3) nature of work; 4) bidder's role; date project awarded, started, and completed; 5) % of work accomplished; and 6) value of outstanding works/undelivered portion. I think, the procuring entity's written consent for most, if not all, of these information is no longer necessary since they are anyway required to be posted after award of contract in the PhilGEPS and in the procuring entity's websites (if they have), for the purpose of transparency.

If we argue that the "confidentiality clause" would pause a hindrance to the eligibility requirement on technical capability, requiring the copies of the contract only during post-qualification would not, in any way, be different.

Submission of FAKE documents is definitely not the solution as it is not the intention of GPPB to encourage such submission by incorporating the "confidentiality clause" in the PBDs while the IRR requires the submission of certain basic information about a prior government contract.

Just my personal take on your post. Hopefully, GPPB will come up with an official position on your concern.

Keep on posting though.

RDV
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Re: Confidentiality of Contracts

Post by DefCon on Wed Feb 18, 2009 11:38 am

RDV thanks for your reply. It is most enlightening, and I would say authoritative. The problem however arises because the STATEMENT OF COMPLETED/ON GOING CONTRACTS form REQUIRES that actual copies of the CONTRACTS, NOTICES of Awards, and or Acceptance Certificates BE ATTACHED. This actually constitutes a PRE-QUALIFICATION when we are supposed to be doing Post-Qual. I think all of these can be done during Post-Qualification.

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Re: Confidentiality of Contracts

Post by RDV @ GP3i on Wed Feb 18, 2009 12:05 pm

Thank you, too, Defcon.

I agree with you most certainly that problem will arise if the procuring entity would require that actual copies of contracts be attached. Since the GPPB Sample Form-GOODS-13a is but a sample form, the procuring entity may put therein additional information to be submitted. If the submission of those documents, which are properly looked into during Post-Qual. (as you correctly pointed out), are required, then the problem arises.

For the moment, until may be the GPPB has come up with a standard form, what the prospective bidders need to to is put a colatilla in the Statement, such as "subject to the Confidentiality Clause of the Contract, the same will be submitted during Post-Qualification", something to that effect. It is only a suggestion, just in case the procuring entity would require the submission of documents which would should not have been required during eligibility check.

If you will take note, the Sample Form has only the following attachments needed to support the Statement:

"Note: This statement shall be supported with:
1 Notice of Award and/or Contract
2 Notice to Proceed issued by the owner
3 Certificate of Accomplishments signed by the owner or authorized representative."

The Notice of Award, aside from the NTP and Cert. of Accomplishments, are already enough to support the Statement.

RDV
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