DDP or DDU

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DDP or DDU

Post by iceman on Sun Aug 02, 2009 9:43 pm

Good day to the members and administrators of this useful and enriching forum. I would just like to be informed as to when and how does a PE determine if the good's ABC should be DDU or DDP-say in the instance of procuring ammunition?

I understand that one of the provisions that allows foreign bidders to partake in our public bidding is when the goods being sought for is not available in the Philippines. In relation to the former, I have the following queries for my understanding:

  1. Does this also mean that foreign suppliers may be invited if the PE made a "diligent market research" and determined that there is no local industry, such as Armscor, that manufactures or produces the goods being sought for; or if the local goods are not manufactured domestically in sufficient quantity, comparable quality, and at reasonable prices?

  2. If my understanding is correct, the goods should be in the Philippines and are readily available for delivery in the required quantity. If the goods being sought for are available locally, when and how does the PE determine if the quantity is sufficient?


Warm regards to all.
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Re: DDP or DDU

Post by engrjhez® on Sat Aug 08, 2009 12:27 am


Welcome to this forum iceman,

I will try to answer your query in the best layman that I can be. Your question on whether the goods to be procured shall be Delivered-Duty-Paid (DDP) or Delivered-Duty-Unpaid (DDU) is actually up to Procuring Entity's (PE's) discretion and terms. In either mode, what is important is the ABC (for funding issues) and the conditions of the contract are clear on such.

On No.1, it may not actually be your intention to procure goods from foreign source (unless you specifically opted to) but foreign bidders were given the opportunity to compete with local players as long as the price and the minimum specifications are met. The rule on no reference to brand names for goods still apply. The "diligent market research" must not lose the spirit of competition for some requirements or specs that limits items based on "excessive" or "over-superior" standards with outputs or use not justifiable of its required costing.

On No.2, the goods may not be within the country. But the conditions and delivery schedule as indicated in the Bidding Documents must be specific on this in case a foreign bidder would want to join the bidding. The purpose of the law is to obtain the price and terms most advantageous to the government, that is, regardless of the source. The bidder must answer (by himself) your question based on your required quantity requirements. If the foreign bidder can deliver the goods legally on time, then be it. It is also his responsibility to check on his inventory if he can provide the what is being bidded for.

Most of your query has to do with Procurement Planning. The bidding process is still practically the same as the past IRR except for more rooms on submission of eligibility requirements. Hope this helps. Very Happy
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Re: DDP or DDU

Post by RDV @ GP3i on Sun Aug 16, 2009 7:57 pm

iceman wrote:
Good day to the members and administrators of this useful and enriching forum. I would just like to be informed as to when and how does a PE determine if the good's ABC should be DDU or DDP-say in the instance of procuring ammunition?

I understand that one of the provisions that allows foreign bidders to partake in our public bidding is when the goods being sought for is not available in the Philippines. In relation to the former, I have the following queries for my understanding:

  1. Does this also mean that foreign suppliers may be invited if the PE made a "diligent market research" and determined that there is no local industry, such as Armscor, that manufactures or produces the goods being sought for; or if the local goods are not manufactured domestically in sufficient quantity, comparable quality, and at reasonable prices?
  2. If my understanding is correct, the goods should be in the Philippines and are readily available for delivery in the required quantity. If the goods being sought for are available locally, when and how does the PE determine if the quantity is sufficient?

Warm regards to all.
Under the guidelines issued by GPPB in Resolution No. 018-2005 dated 12 September 2005, foreign bidders may be invited to participate under any of the following circumstances:
1. When the goods sought to be procured are not available from local suppliers, subject to Item 5 herein; or
2. When there is a need to prevent situations that defeat competition or restrain trade, subject to Item 6 herein; or
3. When the foreign supplier, manufacturer and/or distributor is a citizen, corporation or association of a country the laws or regulations of which grant reciprocal rights or privileges to citizens, corporations or associations of the Philippines, irrespective of the availability of goods from local suppliers; or
4. When provided for under any treaty or international or executive agreement.

Under the same guidelines, "goods are not available from Local Suppliers when, at any time before advertisement for their procurement, it is determined that no Local Supplier is capable to supply the required goods to the Government, in which case, foreign suppliers, manufacturers and/or distributors may be invited to participate in the bidding. Therefore, the head of the procuring entity or his duly authorized representative shall certify that, after diligent market research conducted by the procuring entity, the goods sought to be procured are not available from Local Suppliers. In addition, when applicable, the procuring entity shall secure a certification from the appropriate Government regulatory body, such as, but not limited to, the Bureau of Product Standards of the Department of Trade and Industry (DTI) for electrical products, mechanical/building & construction materials, chemicals, foods and other consumer products, and the Bureau of Food and Drugs of the Department of Health (DOH) for drugs, medicine, and other related medical devices, that based on its available records, the goods sought to be procured are not available from Local Suppliers."

Likewise, "If despite the availability of the goods sought to be procured, no local supplier is interested to participate in the procurement process, the head of the procuring entity shall certify that it has advertised the same for public bidding and shall make a statement that no local supplier participated in the bidding and that the same is due to reasons not attributable to the procuring
entity
."
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