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Question on Uniform Guidelines For Blacklisting Of Manufacturers, Suppliers, Distributors, etc.

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Question on Uniform Guidelines For Blacklisting Of Manufacturers, Suppliers, Distributors, etc.

Post by Rick on Tue Nov 10, 2009 1:06 am

Hello,

Can someone please elaborate the blacklisting guidelines "Prohibition On Blacklisted Persons/Entities To Participate In The Bidding Of Government Projects/Contracts and Consultants" ?

In the case of corporations, a single stockholder, together with his/her relatives up to the third civil degree of consanguinity or affinity, and their assignees, holding at least twenty percent (20%) of the shares therein, its chairman and president, shall be blacklisted after they have been determined to hold the same controlling interest in a previously blacklisted corporation or in two corporations which have been blacklisted; the corporations of which they are part shall also be blacklisted.

Here is my specific query on this matter.

Let's say for example ABC Corporation is blacklisted.
Mr. ABC owns 20% shares of ABC Corporation.
He has a brother named Mr. XYZ who owns 20% shares of XYZ Corporation.
Can XYZ Corporation join a government public bidding?
Yes or No?

Thank you. Hope you can help me.
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Re: Question on Uniform Guidelines For Blacklisting Of Manufacturers, Suppliers, Distributors, etc.

Post by engrjhez® on Tue Nov 10, 2009 10:16 pm

Rick wrote:Hello,

Can someone please elaborate the blacklisting guidelines "Prohibition On Blacklisted Persons/Entities To Participate In The Bidding Of Government Projects/Contracts and Consultants" ?

In the case of corporations, a single stockholder, together with his/her relatives up to the third civil degree of consanguinity or affinity, and their assignees, holding at least twenty percent (20%) of the shares therein, its chairman and president, shall be blacklisted after they have been determined to hold the same controlling interest in a previously blacklisted corporation or in two corporations which have been blacklisted; the corporations of which they are part shall also be blacklisted.

Here is my specific query on this matter.

Let's say for example ABC Corporation is blacklisted.
Mr. ABC owns 20% shares of ABC Corporation.
He has a brother named Mr. XYZ who owns 20% shares of XYZ Corporation.
Can XYZ Corporation join a government public bidding?
Yes or No?

Thank you. Hope you can help me.

Welcome to the forum Rick!

If ABC Corporation is blacklisted for any reason, the affiliation of XYZ Corporation as referring to individual shareholders being related to the second degree of consanguinity (brothers) to each other, will have no basis for blacklisting/disqualification as far as RA.9184 is concerned.

Automatic blacklisting or disqualification shall only be imposed if the bidder is related (up to 3rd degree of consanguinity or affinity) to the Head of Procuring Entity. Very Happy
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Re: Question on Uniform Guidelines For Blacklisting Of Manufacturers, Suppliers, Distributors, etc.

Post by Rick on Thu Nov 12, 2009 12:58 pm

Thank you for your help Engrjhez!

I have a follow up questions on this, what if XYZ Corporation joins a bidding as a trading company (not a joint venture) but will get the goods from a blacklisted manufacturer which is ABC Corporation?

Hope you can help me.
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Re: Question on Uniform Guidelines For Blacklisting Of Manufacturers, Suppliers, Distributors, etc.

Post by sunriser431 on Thu Nov 12, 2009 2:55 pm

Rick wrote:
I have a follow up questions on this, what if XYZ Corporation joins a bidding as a trading company (not a joint venture) but will get the goods from a blacklisted manufacturer which is ABC Corporation?

Hope you can help me.
Hello Rick welcome to the forum.
Government Procuring agency will only enter into contracts for those that can comply with the requirements of Legally, Technically and Financially capable suppliers, as specified in the revised IRR of RA9184, However procuring agency can allow suppliers to enter into subcontracts. For additional information, consider the following:
Excerpt from GPM2006. Subcontracts
Is subcontracting allowed for the procurement of goods and services?
Generally, a supplier may be allowed to subcontract a portion of the contract or project. However, the supplier should not be allowed to subcontract a material or significant portion of the contract or project, which portion must not exceed twenty percent (20%) of the total project cost. The bidding documents must specify what are considered as significant/material component(s) of the project.
All subcontracting arrangements must be disclosed at the time of bidding, and subcontractors must be identified in the bid submitted by the supplier.
Any subcontracting arrangements made during project implementation and not disclosed at the time of the bidding shall not be allowed. The subcontracting arrangement shall not relieve the supplier of any liability or obligation under the contract. Moreover, subcontractors are obliged to comply with the provisions of the contract and shall be jointly and severally liable with the principal supplier, in case of breach thereof, in so far as the portion of the contract subcontracted to it is concerned.
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Re: Question on Uniform Guidelines For Blacklisting Of Manufacturers, Suppliers, Distributors, etc.

Post by Rick on Thu Nov 12, 2009 4:34 pm

Thank you for your help.

When you said "subcontractors are obliged to comply with the provisions of the contract and shall be jointly and severally liable with the principal supplier" is XYZ Corporation ok to join even though ABC Corporation is blacklisted?

XYZ Corporation is just a trading company. ABC Corporation is a blacklisted manufacturer.
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Re: Question on Uniform Guidelines For Blacklisting Of Manufacturers, Suppliers, Distributors, etc.

Post by engrjhez® on Thu Nov 12, 2009 5:49 pm

Rick wrote:Thank you for your help Engrjhez!

I have a follow up questions on this, what if XYZ Corporation joins a bidding as a trading company (not a joint venture) but will get the goods from a blacklisted manufacturer which is ABC Corporation?

Hope you can help me.
You mean, if XYZ Corporation will join in public bidding but XYZ Corp will actually get the items from ABC? If that is the case, the liability is left for XYZ Corp to decide. It is well beyond the control of the Procuring Entity. XYZ Corp, must resolve two issues before joining:

1. Can they bid based on the price and terms ABC will offer them?
2. Will the reason for 'blacklisting' (say delayed delivery) be extended to the internal agreement between XYZ and ABC?

In the end, no problem for the Procuring Entity as long as the Contract is executed properly by XYZ Corp. (if awarded). The other possibility of ABC Corp be awarded the contract, I think, will not be possible since you mentioned ABC is blacklisted.
Very Happy
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Re: Question on Uniform Guidelines For Blacklisting Of Manufacturers, Suppliers, Distributors, etc.

Post by Rick on Fri Nov 13, 2009 10:40 am

Ok, thank you po afro
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Re: Question on Uniform Guidelines For Blacklisting Of Manufacturers, Suppliers, Distributors, etc.

Post by RDV @ GP3i on Sat Nov 14, 2009 8:52 am

Rick wrote:Hello,

Can someone please elaborate the blacklisting guidelines "Prohibition On Blacklisted Persons/Entities To Participate In The Bidding Of Government Projects/Contracts and Consultants" ?

In the case of corporations, a single stockholder, together with his/her relatives up to the third civil degree of consanguinity or affinity, and their assignees, holding at least twenty percent (20%) of the shares therein, its chairman and president, shall be blacklisted after they have been determined to hold the same controlling interest in a previously blacklisted corporation or in two corporations which have been blacklisted; the corporations of which they are part shall also be blacklisted.

Here is my specific query on this matter.

Let's say for example ABC Corporation is blacklisted.
Mr. ABC owns 20% shares of ABC Corporation.
He has a brother named Mr. XYZ who owns 20% shares of XYZ Corporation.
Can XYZ Corporation join a government public bidding?
Yes or No?

Thank you. Hope you can help me.

Based on the following quoted provisions of the "Uniform Guidelines on Blacklisting":

"In the case of corporations, a single stockholder, together with his/her relatives up to the third civil degree of consanguinity or affinity, and their assignees, holding at least twenty percent (20%) of the shares therein, its chairman and president, shall be blacklisted after they have been determined to hold the same controlling interest in a previously blacklisted corporation or in two corporations which have been blacklisted; the corporations of which they are part shall also be blacklisted."

Mr. ABC, being a stockholder holding at least 20% share, should be blacklisted also by the procuring entity. You did not say, however, if he has been blacklisted already as blacklisting is not automatic, there is a process that the procuring entity has to undergo which is provided in the said Uniform Guidelines. Let us assume he is not yet blacklisted.

What about Mr. XYZ, a brother of Mr. ABC, who owns 20% of XYZ Corporation. Both Mr. XYZ and XYZ Corporation are not blacklisted. Should Mr. XYZ be blacklisted also and could he join in government biddings?

Although Mr. XYZ is related by consanguinity within the 3rd civil degree with Mr. ABC; First, Mr. ABC is not even blacklisted yet. Second, the term quoted above ("together with his/her relatives up to the third civil degree of consanguinity or affinity, and their assignees, holding at least twenty percent (20%) of the shares therein") pertains to relatives holding at least 20% of the shares of the same corporation. Mr. XYZ, although a relative by the 2nd degree, is not holding a share in ABC Corporation which is blacklisted. The answer to the question, therefore, is NO, there is no basis to blacklist Mr. XYZ; and, YES, he could join in government biddings.

RDV
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Re: Question on Uniform Guidelines For Blacklisting Of Manufacturers, Suppliers, Distributors, etc.

Post by Guest on Fri Jun 10, 2011 1:21 pm

Sir,

In Section 69.1(i), on blacklisting, what could be considered as valid reason(s), since we have such with the reason that their calculations are over the ABC hence they cannot submit a bid?

Thanks for enlightenment.

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Re: Question on Uniform Guidelines For Blacklisting Of Manufacturers, Suppliers, Distributors, etc.

Post by engrjhez® on Fri Jun 10, 2011 2:09 pm

eagerlearner wrote:Sir,

In Section 69.1(i), on blacklisting, what could be considered as valid reason(s), since we have such with the reason that their calculations are over the ABC hence they cannot submit a bid?

Thanks for enlightenment.

There are no fixed list of reasons that may be considered valid.

69.1 i) All other acts that tend to defeat the purpose of the competitive bidding, such as habitually withdrawing from bidding, submitting late Bids or patently insufficient bid, for at least three (3) times within a year, except for valid reasons.

You can only decide whether the reasons are valid or not if you have encountered and investigated it. Smile
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Re: Question on Uniform Guidelines For Blacklisting Of Manufacturers, Suppliers, Distributors, etc.

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