lowest bidder and highest bidder same brand but highest bidder is the exclusive distributor

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lowest bidder and highest bidder same brand but highest bidder is the exclusive distributor

Post by arlynpvic on Sat Jan 19, 2013 5:01 pm

Lowest bidder and highest bidder offered same brand but highest bidder is the exclusive distributor.
Our company is the lowest bidder for the bid of lab equipment. During post-qua, BAC requires us to submit Declaration under oath that the products we offered are genuine and authentic and we are required to explain where will we be getting our products (since the highest bidder who happened to be the exclusive distributor claims that our product is fake). Do we need to provide them our source? Of course if we disclose from which distributor in the US we are getting our product, some competitors may find out. What should be our argument? Those allegations are based on hearsay. The items are to be imported. Our company and the other bidder cannot provide sample equipment for inspection.

(Note the apparatus to be bid are simple only. Anybody can operate plus we have after sales service).
I will appreciate your opinions..Thank you in advance.

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Re: lowest bidder and highest bidder same brand but highest bidder is the exclusive distributor

Post by arlynpvic on Sat Jan 19, 2013 5:09 pm

Follow-up question :
CAN THE BAC REQUIRES AFFIDAVIT (SWORN STATEMENT) DURING POST-QUA EXPLAINING WHICH MANUFACTURER/SUPPLIER/DISTRIBUTOR IN THE U.S. WE ARE GETTING OUR EQUIPMENT? AND A SWORN STATEMENT STATING THAT OUR PRODUCT IS GENUINE?
PLEASE NOTE THAT THOSE ARE NOT INDICATED IN THEIR BDS AND ITB. THEY TOLD US IN THEIR LETTER THAT THEY WILL DISQUALIFY US IF WE FAILED TO SUBMIT THE REQUESTED AFFIDAVITS.
PLS. HELP. I WILL REALLY APPRECIATE ALL YOUR COMMENTS.

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Re: lowest bidder and highest bidder same brand but highest bidder is the exclusive distributor

Post by regina avelino on Mon Jan 21, 2013 10:14 am

My opinion on the matter:

To justify the need to procure through direct contracting, the BAC should conduct a thorough survey of the industry and determine the supply source. The survey should verify the exclusivity of the source of goods. In such case where direct contracting is considered, the survey must be conducted prior to the commencement of the procurement process. Moreover, the procuring entity must justify the necessity for an item that may only be procured through direct contracting, and it must be able to prove that there is no suitable substitute in the market that can be obtained at more advantageous terms. In addition, specifications for the procurement of goods shall be based on relevant characteristics and/or performance requirements. If the procuring entity performed the procedures above, then the PE should have procured through direct contracting. On the case you have mentioned, it seems that public bidding was conducted and not direct contracting. In my humble opinion, you are not at fault as the PE pursued public bidding and NOT direct contracting in which the you and the other (claiming to be the exclusive distributor) were the participants. In such case, the highest bidder cannot attack you based on their exclusivity rights.

What is now present is that the you will pass the post-qualification stage in which the procuring entity will determine your technical qualification such as those required under section 34.3 b. iii.

Lastly, the affidavits being required explaining source of the items is out of line. I think this will not hold water as it is not included/provided in the bidding documents.

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Re: lowest bidder and highest bidder same brand but highest bidder is the exclusive distributor

Post by arlynpvic on Mon Jan 21, 2013 3:47 pm

Thank you Regina Avelino for your inputs. I really appreciate it.
BAC is firm in requiring us the said affidavits or else they will disqualify us.
It appears to us that they want the highest bidder to win. scratch

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Re: lowest bidder and highest bidder same brand but highest bidder is the exclusive distributor

Post by mojacko on Mon Jan 21, 2013 4:39 pm

arlynpvic wrote:Follow-up question :
CAN THE BAC REQUIRES AFFIDAVIT (SWORN STATEMENT) DURING POST-QUA EXPLAINING WHICH MANUFACTURER/SUPPLIER/DISTRIBUTOR IN THE U.S. WE ARE GETTING OUR EQUIPMENT? AND A SWORN STATEMENT STATING THAT OUR PRODUCT IS GENUINE?
PLEASE NOTE THAT THOSE ARE NOT INDICATED IN THEIR BDS AND ITB. THEY TOLD US IN THEIR LETTER THAT THEY WILL DISQUALIFY US IF WE FAILED TO SUBMIT THE REQUESTED AFFIDAVITS.
PLS. HELP. I WILL REALLY APPRECIATE ALL YOUR COMMENTS.

Good Day!

If the item that has been bid pertains to a certain brand then a certain supplier may claim exclusivity for it but since the specifications is somewhat generic and can be offered by any bidder/supplier then exclusivity is out of the question.

I agree with Mam Regina that since the procurement was done through public bidding they cannot disqualify you for asking documents that are not part of the process.

What the PE should do is deny the acceptance of the equipment if it is really fake.

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Re: lowest bidder and highest bidder same brand but highest bidder is the exclusive distributor

Post by engrjhez® on Fri Jan 25, 2013 7:36 pm

arlynpvic wrote:Lowest bidder and highest bidder offered same brand but highest bidder is the exclusive distributor.
Our company is the lowest bidder for the bid of lab equipment. During post-qua, BAC requires us to submit Declaration under oath that the products we offered are genuine and authentic and we are required to explain where will we be getting our products (since the highest bidder who happened to be the exclusive distributor claims that our product is fake). Do we need to provide them our source? Of course if we disclose from which distributor in the US we are getting our product, some competitors may find out. What should be our argument? Those allegations are based on hearsay. The items are to be imported. Our company and the other bidder cannot provide sample equipment for inspection.

(Note the apparatus to be bid are simple only. Anybody can operate plus we have after sales service).
I will appreciate your opinions..Thank you in advance.

My straightforward answer to the question is NO.

34.2. Within three (3) calendar days from receipt by the bidder of the notice from the BAC that the bidder has the Lowest Calculated Bid or Highest Rated Bid, the bidder shall submit the following documentary requirements to the BAC:

a) Tax clearance;
b) Latest income and business tax returns;
c) Certificate of PhilGEPS Registration; and
d) Other appropriate licenses and permits required by law and stated in the Bidding Documents.

Failure to submit the above requirements on time or a finding against the veracity of such shall be ground for the forfeiture of the bid security and disqualify the bidder for award.
The requirement is clear and exclusive. The Affidavit that the BAC is asking not mentioned on those enumerated, hence there is no basis for asking it, much more causing it as a ground for disqualification. Smile
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Re: lowest bidder and highest bidder same brand but highest bidder is the exclusive distributor

Post by arlynpvic on Sat Jan 26, 2013 5:24 pm

I love this forum. I can get answers right away. The experts are all awesome..
Thanks a lot Experts! Regina Avelino, Mojacko, engrjhez..
cheers

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Re: lowest bidder and highest bidder same brand but highest bidder is the exclusive distributor

Post by arlynpvic on Wed Jan 30, 2013 6:47 pm

Thanks for the comments. I really appreciate it.
However, We received a notice this afternoon that they DISQUALIFIED us for the reasons stated above. No

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Re: lowest bidder and highest bidder same brand but highest bidder is the exclusive distributor

Post by regina avelino on Thu Jan 31, 2013 9:11 am

then file a motion for reconsideration. if they will deny the motion then file a protest. if protest is denied again, you may go to court. you may refer to Rule XVII - Protest Mechanism of the IRR.

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Re: lowest bidder and highest bidder same brand but highest bidder is the exclusive distributor

Post by arlynpvic on Thu Jan 31, 2013 10:21 am

Thanks Maam Regina Avelino.
Yes we are going to do that. We will keep you posted of the development. This will be a landmark case. Idea

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Re: lowest bidder and highest bidder same brand but highest bidder is the exclusive distributor

Post by kim_wd on Wed Apr 24, 2013 12:00 pm

I've come across this thread and I can't help but give my opinion.

When it comes to exclusivity, I think there is a difference between being an exclusive distributor of a particular brand of an item and an exclusive distributor of a particular item. Exclusive distributorship means that no other entity can offer a much lesser price, whether it's for a particular brand or a particular item. That is, this exclusivity is granted by the manufacturer itself to the distributor.

To the procurement experts, am I on the right track?
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Re: lowest bidder and highest bidder same brand but highest bidder is the exclusive distributor

Post by engrjhez® on Wed Apr 24, 2013 12:21 pm

kim_wd wrote:I've come across this thread and I can't help but give my opinion.

When it comes to exclusivity, I think there is a difference between being an exclusive distributor of a particular brand of an item and an exclusive distributor of a particular item. Exclusive distributorship means that no other entity can offer a much lesser price, whether it's for a particular brand or a particular item. That is, this exclusivity is granted by the manufacturer itself to the distributor.

To the procurement experts, am I on the right track?

The term "exclusive distributor" is not a technical term under R.A. No. 9184. Hence, ordinary and plain meaning should apply. To me, it means exclusivity in distributing the item to any reseller. It does not guarantee that prices at lowest from them. Otherwise, no one would get from other resellers. They usually give the same uniform price as some sort of protection for distribution. It is also not within the parlance of Sec.50 of R.A. No. 9184 which identified only exclusive dealer or manufacturer.
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Re: lowest bidder and highest bidder same brand but highest bidder is the exclusive distributor

Post by kim_wd on Wed Apr 24, 2013 3:08 pm

I think I have to disagree. When an item or brand is offered to resellers and the selling prices can vary, then the term should only be "authorized distributors" and not exclusive distributors. When one is an exclusive distributor, let's say in a particular area like the Visayas, it means that there are no other resellers in that area for that particular item or brand. Exclusive nga e. So ang magbabanggaan na lang dyan during bidding ay yung mga exclusive distributors from different areas nationwide.

Just my insights... Smile
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Re: lowest bidder and highest bidder same brand but highest bidder is the exclusive distributor

Post by engrjhez® on Wed Apr 24, 2013 3:53 pm

kim_wd wrote:I think I have to disagree. When an item or brand is offered to resellers and the selling prices can vary, then the term should only be "authorized distributors" and not exclusive distributors. When one is an exclusive distributor, let's say in a particular area like the Visayas, it means that there are no other resellers in that area for that particular item or brand. Exclusive nga e. So ang magbabanggaan na lang dyan during bidding ay yung mga exclusive distributors from different areas nationwide.

Just my insights... Smile

No problem in disagreeing. What I would like to point out here is that even in the deliberations of Committee on Appropriations (22 January 2002) before the consolidated bills become law, this was already observed:

MS. TALAVERA: x x x Our example is, we had experience in audit where an equipment was procured by an agency at a certain price, supposedly from an exclusive distributor. So nobody questioned the price because it is from an exclusive distributor. But during the audit when we asked for a quotation from the same supplier, of course, not saying that we are auditors, it is as if we are an entity, we used a hospital, a private hospital, for the purpose of request for quotation. The quotation offered one year after the procurement of government agency was 200 percent less than the price of the item provided to the government agency. x x x

The excerpts from the legislative journals would reveal that prices really depend on case to case basis, whether exclusive or authorized distributor.
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Re: lowest bidder and highest bidder same brand but highest bidder is the exclusive distributor

Post by kim_wd on Wed Apr 24, 2013 4:24 pm

Point taken. engrjhez... Thank you!
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Re: lowest bidder and highest bidder same brand but highest bidder is the exclusive distributor

Post by engrjhez® on Fri Apr 26, 2013 11:24 am

arlynpvic wrote:I love this forum. I can get answers right away. The experts are all awesome..
Thanks a lot Experts! Regina Avelino, Mojacko, engrjhez..
cheers

It seems that the BAC also queried the GPPB-TSO. The answer was recently posted in the GPPB website thru Non-Policy Matter Opinion HERE.

Number : NPM 025-2013
Subject : Post-disqualification for Non-submission of Additional Documents

Date : 2013-03-27

Requesting Entity : Batangas State University (BSU)

Issues Concern : Post-disqualification for Non-submission of Additional Documents

Details : Whether the BSU-BAC could validly declare a bidder post-disqualified for its refusal to submit an Affidavit declaring that they will deliver genuine and authentic products and disclosing its source.

[T]he procuring entity may request for the submission of additional documents from the bidder in support of the information it has provided in the bidding documents. However, non-submission of the additional supporting documents requested cannot be a ground for the bidder’s post-disqualification, as a bidder may be post-disqualified only upon ascertainment, validation, and verification of its non-compliance with the legal, technical, and financial requirements of the project as provided in the bidding documents.

BSU-BAC cannot post-disqualify PVIC for non-compliance with the submission of the requested Affidavit attesting to the genuineness and authenticity of the goods it will deliver and disclosing its source. However, as part of post-qualification, BSU can validly inspect and test the products that PVIC proposes to deliver vis-ŕ-vis the legal, technical and financial requirements provided for in the bidding documents, to determine its compliance, and post-disqualify PVIC if it fails to meet such requirements.
Can you update us?

Please also visit and like the Philippine Government Procurement page on Facebook Smile
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