personal check as cash bid security

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personal check as cash bid security

Post by kim on Fri Jan 15, 2010 9:55 am

the bidder used currently dated personal or company check as bid security. Can we consider this check as cash? In accounting concept, currently dated check is considered cash.
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Re: personal check as cash bid security

Post by fe a. araya on Fri Jan 15, 2010 10:57 am

In my opinion, (am not an accountant) it's too risky to accept a personal check even if it's currently dated. What if the BDS states that the bid security is 120 calendar days (which is maximum)? Are we assured by that period the "cash" covered by the personal check is still available? Or is the burden of encashing it already with the PE to ensure that we have the cash? And to think na kelangan natin iencash or deposit it on the date indcated on the check kasi baka kinabukasan wala na or nagbounce (hope it wont happen). Perhaps in theory, it is accepted in accounting concept. Am not sure. perhaps others may have different opinion on this
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Re: personal check as cash bid security

Post by Guest on Fri Jan 15, 2010 12:21 pm

kim wrote:the bidder used currently dated personal or company check as bid security. Can we consider this check as cash? In accounting concept, currently dated check is considered cash.

no, the law is clear that cash would be given or other forms in the provision. Even though some decision of the court considered check as actual payment it cannot be said the same with the provisions of the IRR. The rules are specific.

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Re: personal check as cash bid security

Post by engrjhez® on Fri Jan 15, 2010 7:06 pm

kim wrote:the bidder used currently dated personal or company check as bid security. Can we consider this check as cash? In accounting concept, currently dated check is considered cash.

NO.

The law speaks in a categorical manner regarding the form and corresponding minimum amount of bid security according to form. It must not be interpreted because there is no ambiguity in the said provisions of law. Very Happy
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Re: personal check as cash bid security

Post by sunriser431 on Sun Jan 17, 2010 4:37 pm

kim wrote:the bidder used currently dated personal or company check as bid security. Can we consider this check as cash? In accounting concept, currently dated check is considered cash.
Here is the latest amendments (Resolution 06-2009) to the Revised IRR On the forms of bid and xxxxx under Sections 27.2.
Form of Bid Security
Cash, or cashier’s/manager’s check, issued by a Universal or Commercial Bank

In my personal opinion/or in laymans terms this cash refers to the paper bills and coins which are legal tender in the Philippines, But in accounting parlance this will also include cash equivalent such as checks( comes in many forms).other acceptable securities mention is the cashier’s/manager’s check, issued by a Universal or Commercial Bank, so the question now is the personal or company check valid as bid security?, meanwhile section 27.2 provides the only acceptable forms, so its clear personal/company check is not mention. Hope this would be of help. bounce
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personal check as bid security

Post by charlie brown on Mon Jan 18, 2010 2:31 pm

GPPB should clarify whether the accepted accounting concept of cash and cash equivalents (e.g. personal/company checks) is considered in its definition of cash. It must be noted tho that unlike a manager's/cashier's check that is automatically debited to the account of the issuer and is thus as good as any bill or coin, a personal check will have to be encashed or deposited to the account of the payee before one can be certain that it is adequately funded.

The purpose of specifying the type of bid or performance security is to be assured that it can be called when necessary. In my opinion, if the personal check has cleared the bank and is in the account of the PE then it is now as good as any bill or coin (which in any case must also be deposited with the account of the PE in accordance with accounting and auditing rules). At the most and depending on the location of the bank upon which a check was issued, a phillipine check will clear in a week. just enough time for the BAC/TWG to wrap up their post qualification
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Re: personal check as cash bid security

Post by Guest on Mon Jan 18, 2010 2:46 pm

In my opinion no further clarification is needed, the provision is specific and if such cash equivalent is to be included in the forms accepted therefore it is only right to specify such fact.

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Re: personal check as cash bid security

Post by charlie brown on Mon Jan 18, 2010 3:17 pm

if the GPPB does not clarify then how do we differentiate now a cash meaning paper bills or coins that are to be deposited to the trust account of the PE and a cleared personal check also in the account of the PE? Both can be withdrawn easily at the copnvenience of the PE when required. what is the logic then of excluding a cleared personal check?
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Re: personal check as cash bid security

Post by Guest on Mon Jan 18, 2010 3:39 pm

What clarification do you need? Cash moolah pera, the provision do not provide for the forms you mentioned.

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Re: personal check as cash bid security

Post by charlie brown on Mon Jan 18, 2010 4:43 pm

What im trying to say is that if the intent of GPPB is not to include personal checks as part of cash, I am rasing the issue of a cleared check in the account of the PE and paper bills/coins also deposited with the account of the PE. Both are essetially the same. so why can we not consider persona check as part of cash?

If GPPB do not clarify, I for one will accept personal check provided it will be submitted in advance and has already cleared the bank and only the OR given by our cashier will be required in lieu of the personal check which has already been deposited and cleared with the bank. I will of course make thisn very clear during the pre-bid conference and will issue the necessary supplemental bid bulletin to the effect.

I am saying that unless GPPB categorically explain the logic for rejecting one and accepting the other when under the conditions cited, bills/coins and cleared personal checks are not only similar but one and the same carabao in the account of the PE - THEN i will allow such form under the conditions cited even when it is not categorically stated in the IRR.

I dont think it will take much effort on the part of GPPB considering that it has issued a resolution 13-2009 which to my mind can be stated in the PBD. (having said that, i still appreciate the fact that gppb issued the res if only to clarify things) I hope it does the same to the cash issue.

it is a very valid issue particularly if you are doing actual bidding activities. I wont mind if the GPPB will say personal checks are not be included for as long as it makes a stand I will follow. Until then i will let logic guide my decision in that particular regard
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Re: personal check as cash bid security

Post by Guest on Mon Jan 18, 2010 4:55 pm

charlie brown wrote:What im trying to say is that if the intent of GPPB is not to include personal checks as part of cash, I am rasing the issue of a cleared check in the account of the PE and paper bills/coins also deposited with the account of the PE. Both are essetially the same. so why can we not consider persona check as part of cash?

If GPPB do not clarify, I for one will accept personal check provided it will be submitted in advance and has already cleared the bank and only the OR given by our cashier will be required in lieu of the personal check which has already been deposited and cleared with the bank. I will of course make thisn very clear during the pre-bid conference and will issue the necessary supplemental bid bulletin to the effect.

I am saying that unless GPPB categorically explain the logic for rejecting one and accepting the other when under the conditions cited, bills/coins and cleared personal checks are not only similar but one and the same carabao in the account of the PE - THEN i will allow such form under the conditions cited even when it is not categorically stated in the IRR.

I dont think it will take much effort on the part of GPPB considering that it has issued a resolution 13-2009 which to my mind can be stated in the PBD. (having said that, i still appreciate the fact that gppb issued the res if only to clarify things) I hope it does the same to the cash issue.

it is a very valid issue particularly if you are doing actual bidding activities. I wont mind if the GPPB will say personal checks are not be included for as long as it makes a stand I will follow. Until then i will let logic guide my decision in that particular regard

and I also raise to the bidder that why not encash the check instead of raising new issues. no offense.

If you have such opinion, accepting which is not in the forms required in the provision then I respect your opinion however I ask you this are you ready for any consequences that may arise or issued that may be raised by (makukulet na bidder)?

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Re: personal check as cash bid security

Post by charlie brown on Mon Jan 18, 2010 5:35 pm

If the bid security is say P500,000 and you want it in bills, that would require quite an envelope dont you think. also it will take a lot of time counting the money during bid opening and there is always the risk in depositing this to the bank.

Now supposing the bid submission is in cagayan de oro and the bidder is coming from manila dont you think it would be safer and less bulkier if the bidder submits the check in advance for clearing in the account of the PE. If for arguments sake we will insist on his bringing along cash to the PE and the PE just the same will have to deposit it to its account but this time at greater risk and inconvenience on the part of the PE. in both instances, the money, this time convertible to bills is with the account of the PE but with less hassle and risk (counting the money during bid opening and depositing the same) to both the PE and the bidder

Im am not trying to raise new issues for as far as im concerned i have been experiencing this issue for quite sometime already and im trying to feed it back to gppb.

As i have said i just need a clear pronouncement from gppb. otherwise i cannot see the logic of not allowing a personal check when it serves the same purpose (even better in some instances). One only need to look at the issue from a wider perspective to realize that while some things will look smart on paper they are really not as practical one you implement it.
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Re: personal check as cash bid security

Post by Guest on Tue Jan 19, 2010 8:40 am

charlie brown wrote:If the bid security is say P500,000 and you want it in bills, that would require quite an envelope dont you think. also it will take a lot of time counting the money during bid opening and there is always the risk in depositing this to the bank.

Now supposing the bid submission is in cagayan de oro and the bidder is coming from manila dont you think it would be safer and less bulkier if the bidder submits the check in advance for clearing in the account of the PE. If for arguments sake we will insist on his bringing along cash to the PE and the PE just the same will have to deposit it to its account but this time at greater risk and inconvenience on the part of the PE. in both instances, the money, this time convertible to bills is with the account of the PE but with less hassle and risk (counting the money during bid opening and depositing the same) to both the PE and the bidder

Im am not trying to raise new issues for as far as im concerned i have been experiencing this issue for quite sometime already and im trying to feed it back to gppb.

As i have said i just need a clear pronouncement from gppb. otherwise i cannot see the logic of not allowing a personal check when it serves the same purpose (even better in some instances). One only need to look at the issue from a wider perspective to realize that while some things will look smart on paper they are really not as practical one you implement it.

If that is your stand then I advice you to write us, send it to GPPB TSO office so we could address you comment and suggestion.

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re: Personal check

Post by charlie brown on Tue Jan 19, 2010 11:08 am

let me make myself perfectly clear. I DONT HAVE A STAND ON WHETHER A PERSONAL OR COMPANY CHECK IS CONSIDERED PART OF CASH AS IS NORMALLY CONSIDERED FROM AN ACCOUNTING POINT OF VIEW. What im trying to convey is my own experience in regard to the actual implementation of this particular requirement. Im trying to convey to GPPB through you sir the ramifications as actually experienced. I am not and will not question the opinion of GPPB should it decide to clarify that personal checks should not be considered as cash even under the conditions i have cited previously. As a "user" of RA 9184 i do not see the logic of disallowing the use of personal checks under certain conditions. But then of course i am not a lawyer and im not discounting the fact that I may not be looking at the issue the right way. Which was why I was suggesting that perhaps GPPB can clarify this matter because from my own experience as a layman i rely merely on what i think will pass off as logic in trying to implement as best as i can the provisions of the law.

also sir, i do not think that the gppb should need a formal letter from me to act on an issue (if it is considered as such). if im not mistaken, this forum was created among other things for "bridging gaps and breaking walls for a better understanding of procurement reforms". gbbp should not only be open but should encourage inputs and feedback whether it be through a formal letter, a call, or through this forum.
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Re: personal check as cash bid security

Post by Guest on Tue Jan 19, 2010 12:43 pm

How can GPPB clarify without any formal letter raising such fact. Let me remind you that

1. No posting by the Government Procurement Policy Board (GPPB) or its Technical Support Office (GPPB-TSO) may be used as basis for action or inactions on particular issues or concerns. Official response on issues and concerns is provided by the GPPB or the GPPB-TSO, or both, through official channels, not through this Forum.
2. Postings are not reviewed before they appear. Each posting is the sole responsibility of its poster. The GPPB and the GPPB-TSO do not endorse or guarantee the accuracy of any posting, accept no responsibility for the opinions and information posted on this Forum by its users, and disclaim all warranties with regard thereto. In no event shall the GPPB and the GPPB-TSO be liable for any special, indirect, or consequential damages of any kind resulting from loss of use, data, or profits arising out of or in connection with the use or performance of any information posted on this Forum.


Last edited by WormaixJr on Tue Jan 19, 2010 12:45 pm; edited 1 time in total

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Re: personal check as cash bid security

Post by sunriser431 on Tue Jan 19, 2010 12:44 pm

charlie brown wrote:let me make myself perfectly clear. I DONT HAVE A STAND ON WHETHER A PERSONAL OR COMPANY CHECK IS CONSIDERED PART OF CASH AS IS NORMALLY CONSIDERED FROM AN ACCOUNTING POINT OF VIEW. What im trying to convey is my own experience in regard to the actual implementation of this particular requirement. Im trying to convey to GPPB through you sir the ramifications as actually experienced. I am not and will not question the opinion of GPPB should it decide to clarify that personal checks should not be considered as cash even under the conditions i have cited previously. As a "user" of RA 9184 i do not see the logic of disallowing the use of personal checks under certain conditions. But then of course i am not a lawyer and im not discounting the fact that I may not be looking at the issue the right way. Which was why I was suggesting that perhaps GPPB can clarify this matter because from my own experience as a layman i rely merely on what i think will pass off as logic in trying to implement as best as i can the provisions of the law.

also sir, i do not think that the gppb should need a formal letter from me to act on an issue (if it is considered as such). if im not mistaken, this forum was created among other things for "bridging gaps and breaking walls for a better understanding of procurement reforms". gbbp should not only be open but should encourage inputs and feedback whether it be through a formal letter, a call, or through this forum.
Hi charlie brown good PM. For further information, try this link http://gppb.topicsolutions.net/bulletin-board-f1/forum-rules-and-guidelines-t450.htm. Hope this would be of help. Smile
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Re: personal check as cash bid security

Post by charlie brown on Tue Jan 19, 2010 2:03 pm

hi sunriser431,

thank you for directing me to the forum rules tho im not quite sure which among those should i particularly apply in this case. Hope you can be more specific
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Re: personal check as cash bid security

Post by charlie brown on Wed Jan 20, 2010 1:24 pm

Im reading closely item 1 and it seems to me that what should be considered an official stand of the GPPB/GPPB tso are those pronouncements or responses made thru official chanels. I imagine this to the the Res and Circulars/NPMs issued by GBBP. Which is why i am asking for that if possible.

But nowhere does it say that GPPB will only take suggestions/comments/inputs from official channels and in any case isnt this forum a kind of official channel as it is for getting inputs?
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Re: personal check as cash bid security

Post by RDV @ GP3i on Wed Jan 20, 2010 1:36 pm

charlie brown wrote:Im reading closely item 1 and it seems to me that what should be considered an official stand of the GPPB/GPPB tso are those pronouncements or responses made thru official chanels. I imagine this to the the Res and Circulars/NPMs issued by GBBP. Which is why i am asking for that if possible.

But nowhere does it say that GPPB will only take suggestions/comments/inputs from official channels and in any case isnt this forum a kind of official channel as it is for getting inputs?

I agree with you, charlie brown.

The forum is a very good venue for the GPPB, as well as for the TSO, to gather inputs as well as reactions (both from the procuring entities and bidders) on the implementation of the procurement law, including that of administrative issuances by the GPPB.

As a matter of fact, on the basis of one of my posts, in which I pointed out an omission in the revised IRR, as well as error in the reference to a particular section in the said IRR, the GPPB has recently issued a Resolution amending certain provisions in thereto. I did not prepare an official communication before the amendment was made.

I am also hoping that subsequently another observation, though minor, on the definition on "treaties" in the revised IRR, should also be corrected as explained in my post.
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Re: personal check as cash bid security

Post by Guest on Wed Jan 20, 2010 2:28 pm

RDV wrote:
charlie brown wrote:Im reading closely item 1 and it seems to me that what should be considered an official stand of the GPPB/GPPB tso are those pronouncements or responses made thru official chanels. I imagine this to the the Res and Circulars/NPMs issued by GBBP. Which is why i am asking for that if possible.

But nowhere does it say that GPPB will only take suggestions/comments/inputs from official channels and in any case isnt this forum a kind of official channel as it is for getting inputs?

I agree with you, charlie brown.

The forum is a very good venue for the GPPB, as well as for the TSO, to gather inputs as well as reactions (both from the procuring entities and bidders) on the implementation of the procurement law, including that of administrative issuances by the GPPB.

As a matter of fact, on the basis of one of my posts, in which I pointed out an omission in the revised IRR, as well as error in the reference to a particular section in the said IRR, the GPPB has recently issued a Resolution amending certain provisions in thereto. I did not prepare an official communication before the amendment was made.

I am also hoping that subsequently another observation, though minor, on the definition on "treaties" in the revised IRR, should also be corrected as explained in my post.

Because your issue was raised during the GPPB meeting prior to your posting Very Happy (I believe it was the discrepancy of the percentage in the PBD and the IRR)

In this instance we cannot consider the suggestion of charlie because the term cash used pertains to philippine currency, if we would like to include its equivalent then we should amend or issue another resolution to that effect. (Unless a member of the GPPB raise again the issue)

But don`t worry ill try to ask my seniors to raise the issue to the Board. Embarassed

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Re: personal check as cash bid security

Post by RDV @ GP3i on Wed Jan 20, 2010 3:08 pm

WormaixJr wrote:
RDV wrote:
charlie brown wrote:Im reading closely item 1 and it seems to me that what should be considered an official stand of the GPPB/GPPB tso are those pronouncements or responses made thru official chanels. I imagine this to the the Res and Circulars/NPMs issued by GBBP. Which is why i am asking for that if possible.

But nowhere does it say that GPPB will only take suggestions/comments/inputs from official channels and in any case isnt this forum a kind of official channel as it is for getting inputs?

I agree with you, charlie brown.

The forum is a very good venue for the GPPB, as well as for the TSO, to gather inputs as well as reactions (both from the procuring entities and bidders) on the implementation of the procurement law, including that of administrative issuances by the GPPB.

As a matter of fact, on the basis of one of my posts, in which I pointed out an omission in the revised IRR, as well as error in the reference to a particular section in the said IRR, the GPPB has recently issued a Resolution amending certain provisions in thereto. I did not prepare an official communication before the amendment was made.

I am also hoping that subsequently another observation, though minor, on the definition on "treaties" in the revised IRR, should also be corrected as explained in my post.

Because your issue was raised during the GPPB meeting prior to your posting Very Happy (I believe it was the discrepancy of the percentage in the PBD and the IRR)

In this instance we cannot consider the suggestion of charlie because the term cash used pertains to philippine currency, if we would like to include its equivalent then we should amend or issue another resolution to that effect. (Unless a member of the GPPB raise again the issue)

But don`t worry ill try to ask my seniors to raise the issue to the Board. Embarassed

It wasn't that, wormaixjr.

It was this
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Re: personal check as cash bid security

Post by Guest on Wed Jan 20, 2010 3:11 pm

ow well I`ll try what I can to help. I`ll ask my seniors if they can raise the issue tot he Board.

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Re: personal check as cash bid security

Post by fe a. araya on Wed Jan 20, 2010 5:58 pm

I am also of the same opinion with Sir RDV and charlie brown that this forum is one venue to raise issues which to us may not be clear with the hope that the GPPB can help us. We appreciate that there are members of this forum who can bring our concerns to the attention of the GPPB coz they are officials of the said office, not necessarily sending official communication to the concerned office.

There are really some provisions in the IRR and the PBDs which need clarification from the GPPB. As in my previous post, I requested clarification on the inconsistencies in the schedule of performance security in the IRR and the PBD for Infrasture. This may not be related to the topic at hand but in some way there is similarity in our desire to be clarified on vague issues.

I noted that in Sec. 32.2 the Amount of Performance Security in the PBD for infra as far as bank draft/guarantee or irevocable letter of credit etc. is concerned is 5% of Contract Price while in Sec. 39.2 of the IRR says it's 10%. While one member of this forum said the IRR shall prevail, this inconsistencies should be reconciled. Still there is a need for an official stand from the GPPB if there is really inconsistencies.
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