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Applicable provisions on Joint Venture Agreement

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Applicable provisions on Joint Venture Agreement

Post by redxet on Sat Oct 06, 2012 8:25 pm

I am a bidder (JVA partner), may I please be clarified on the eligibility requirement of the JVA. During the first day opening of legal, technical and financial requirement the BAC declared the compliance of Eligiblity of both primary and secondary partner of JVA as both passed the eligibility which only required the eligibility documents of JVA second partner compliance to legal documents of 1) DTI registration, 2) Mayor's permit, 3) BIR Certificate of registration, 4) PhilGEPS certificate of registration. However, during the second day, the resumption of bidding opening of financial proposal the BAC subjected the second partner of JVA to thorough eligibility check which include not only the 4 documents mentioned above but also the requirement of previous one single contract of goods (procurement of quality assorted seedlings for DENR National Greening Program) equivalent of 25% of the ABC of the said bidded DENR-NGP in NCR, and audited financial statement. They reverse their decision on the first day of both JVA partner pass/compliance and eligible into fail/non-compliance and in-eligible of the second partner of the JVA. May I please request to clarify if the procedures is compliant with the provisions of procurement laws. Based on my research, the BAC on the first day ruling of declaring both partner eligible/complied and pass the requirement based their ruling on the Revised IRR of RA 9184 whille the second day ruling declaring the second partner of JVA failed,non compliance and in-eligible is based on the Amended IRR of RA 9184. Is the BAC reversion of decision valid? Is the opening of the proposal on the second day is permissible which the reason of suspending the reading of already open envelop of financial proposal was they have to went home because its already passed 5 pm.

Thank you


Last edited by redxet on Sat Oct 06, 2012 8:32 pm; edited 1 time in total (Reason for editing : syntax)

redxet
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Re: Applicable provisions on Joint Venture Agreement

Post by engrjhez® on Mon Oct 08, 2012 9:46 pm

redxet wrote:I am a bidder (JVA partner), may I please be clarified on the eligibility requirement of the JVA. During the first day opening of legal, technical and financial requirement the BAC declared the compliance of Eligiblity of both primary and secondary partner of JVA as both passed the eligibility which only required the eligibility documents of JVA second partner compliance to legal documents of 1) DTI registration, 2) Mayor's permit, 3) BIR Certificate of registration, 4) PhilGEPS certificate of registration. However, during the second day, the resumption of bidding opening of financial proposal the BAC subjected the second partner of JVA to thorough eligibility check which include not only the 4 documents mentioned above but also the requirement of previous one single contract of goods (procurement of quality assorted seedlings for DENR National Greening Program) equivalent of 25% of the ABC of the said bidded DENR-NGP in NCR, and audited financial statement. They reverse their decision on the first day of both JVA partner pass/compliance and eligible into fail/non-compliance and in-eligible of the second partner of the JVA. May I please request to clarify if the procedures is compliant with the provisions of procurement laws. Based on my research, the BAC on the first day ruling of declaring both partner eligible/complied and pass the requirement based their ruling on the Revised IRR of RA 9184 whille the second day ruling declaring the second partner of JVA failed,non compliance and in-eligible is based on the Amended IRR of RA 9184. Is the BAC reversion of decision valid? Is the opening of the proposal on the second day is permissible which the reason of suspending the reading of already open envelop of financial proposal was they have to went home because its already passed 5 pm.

Thank you

These are my observations.

First, in eligibility check, only the following documents are allowed under Sec.23.1
  1. DTI/SEC/CDA Registration Certificate
  2. Mayor's Permit from principal place of Business
  3. Statement of completed and ongoing private and government contracts
  4. Audited financial statement stamped "received" by the BIR
  5. NFCC Computation or Credit Line Commitment from a Universal/Commercial Bank

A non-discretionary PASS/FAIL criteria would mean that only those submitting all documents shall be rated PASS. Absence or patently insufficient documents shall be rated FAIL.

Second, eligibility (documents) of all members of the partnership (JV) is required.
Number : NPM 061-2009
Subject : Eligibility Requirements for Joint Ventures
Date : 2009-11-27
Requesting Entity : Federal Management and Maintenance, Inc.
Issues Concern : Eligibility Requirements for Joint Ventures
Details : Whether a joint venture should be disqualified if one of its members failed to comply with a technical requirement and another failed to comply with the financial requirement.

[F]rom past rulings of GPPB, it is clear that each member of the joint venture shall submit the legal documents under the eligibility requirements. This is to ensure that all the parties thereto have the requisite legal personality to conduct business.

However, inasmuch as the Government recognizes the need to encourage small and medium businesses, which are unable, either technically or financially, to carry out a business undertaking on its own, to solicit the assistance of capable or bigger businesses through a joint venture. Hence, it is sufficient that the technical documents under the eligibility requirements should be complied with by at least one of the members of the joint venture for purposes of determining the joint venture’s eligibility.

Stated differently, therefore the required eligibility requirements that must be submitted by each member of the joint venture under Section 23.6 (2) of the Implementing Rules and Regulations Part A (IRR-A) of Republic Act No. 9184, refer to the legal documents specified under Section 23.6 (1). With respect to the technical and financial eligibility documents, submission of these documents by any member of the joint venture constitutes substantial compliance.
Third, the opening of the financial component would only be possible if the eligibility and technical envelope is rated PASS.

Fourth, the opening of financial component (provided the eligibility and financial component is rated PASS) should be done the same day. This will also be true on the determination of eligibility of all members of a JV. There is no reason why opening of all appropriate envelopes need to be postponed the next day. Time of past 5PM is not a valid reason.
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