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Contract Implementation

Post by riddler on Wed Mar 11, 2009 4:48 pm

I have sent this query to the GPPB last month and i am still waiting for the reply, perhaps somebody can help me on this matter.

This is with regards to the to the following issues and concerns relative to the construction of the New City Hall building of Koronadal City;

a) DPWH Department Order No. 12, Series of 1987 allows Materials on Site (MOS) with Security Bond on infrastructure projects to be included in the billing for payment to the Contractor.

May I inquire if the LGU-Koronadal City can use the abovementioned Department Order No. 12 as basis for payment to the Contractor on MOS without violating the pertinent provisions of RA 9184,


b) Whether the LGU-Koronadal City can modify the Contract, to cash advance to the Contractor the payment for imported items such as Purchase of Elevators, although its purchase and installation were included in the Bid Documents as Pay Item,

Does DILG Opinion 9 s. 2006, applicable on;

c. Whether the Head of Procuring Entity is required to seek Legislative Authority from the Local Sanggunian on the signing of Amendment to Contracts such as Contract Extensions, which amendments are within the Scope of the Project.
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Re: Contract Implementation

Post by RDV @ GP3i on Thu Mar 12, 2009 12:22 pm

tianchon,ruel wrote:I have sent this query to the GPPB last month and i am still waiting for the reply, perhaps somebody can help me on this matter.

This is with regards to the to the following issues and concerns relative to the construction of the New City Hall building of Koronadal City;

a) DPWH Department Order No. 12, Series of 1987 allows Materials on Site (MOS) with Security Bond on infrastructure projects to be included in the billing for payment to the Contractor.

May I inquire if the LGU-Koronadal City can use the abovementioned Department Order No. 12 as basis for payment to the Contractor on MOS without violating the pertinent provisions of RA 9184,


b) Whether the LGU-Koronadal City can modify the Contract, to cash advance to the Contractor the payment for imported items such as Purchase of Elevators, although its purchase and installation were included in the Bid Documents as Pay Item,

Does DILG Opinion 9 s. 2006, applicable on;

c. Whether the Head of Procuring Entity is required to seek Legislative Authority from the Local Sanggunian on the signing of Amendment to Contracts such as Contract Extensions, which amendments are within the Scope of the Project.

Ruel, I would defer to a forthcoming GPPB opinion since, as you said, you had referred the matter to GPPB for opinion.

Let me just suggest that you read Annex "E" of IRR-A which contains the "Contract Implementation Guidelines for the Procurement of Infrastructure Projects".
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Re: Contract Implementation

Post by engrjhez® on Tue Mar 17, 2009 11:20 pm

tianchon,ruel wrote:
b) Whether the LGU-Koronadal City can modify the Contract, to cash advance to the Contractor the payment for imported items such as Purchase of Elevators, although its purchase and installation were included in the Bid Documents as Pay Item,
In my (engineering) opinion, amendments or modification for the contract may be permitted with:
(a) consent from both parties,
(b) it does not constitute to a change order or additional costs, and
(c) it does not violate RA 9184 particularly Annex "E" of the September 2007 Procurement Manual issued by the GPPB.

tianchon,ruel wrote:
Does DILG Opinion 9 s. 2006, applicable on;

c. Whether the Head of Procuring Entity is required to seek Legislative Authority from the Local Sanggunian on the signing of Amendment to Contracts such as Contract Extensions, which amendments are within the Scope of the Project.
I believe so. The law expressly identified the existence of a Head of Procuring Entity to be the approving authority under RA.9184. Unless the procurement method, process, or a significant deviation that will introduce insufficiencies of the GPRA is imminent, satisfying (a), (b), and (c) may be sufficient to make use of the Opinion.

cherry
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Re: Contract Implementation

Post by RDV @ GP3i on Thu Mar 19, 2009 5:18 pm

Amendments to contracts are allowed with the written consent of both parties to the contract, but amending the contract to allow for the advance payment when the goods are not yet delivered is another thing.

Here are the provisions on advance payment under Annex D of IRR-A:

"4. Advance Payment
4.1. In accordance with Presidential Decree 1445, advance payment shall be
made only after prior approval of the President
, and shall not exceed fifteen
percent (15%) of the contract amount, unless otherwise directed by the
President; Provided, however, that for cases mentioned under 4.3 and 4.4 of
these guidelines, no prior approval by the President shall be necessary.

4.2. All progress payments shall first be charged against the advance payment
until the latter has been fully exhausted, unless otherwise approved by the
President.

4.3. A single advance payment not to exceed fifty percent (50%) of the contract
amount shall be allowed for contracts entered into by a procuring entity for the
following services where requirement of down payment is a standard industry
practice:
1. Hotel and restaurant services;
2. Use of conference/seminar and exhibit areas; and
3. Lease of office space.

4.4. Advance payment not to exceed fifteen percent (15%) of the contract
amount, unless otherwise directed by the President, shall also be allowed for
procurement of goods required to address contingencies arising from natural or
man-made calamities in areas where a “State of Calamity” has been declared by
appropriate authorities.
"
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Re: Contract Implementation

Post by riddler on Fri Mar 20, 2009 9:19 am

Thanks RDV, what I meant in my (b) query is the cash advance payment for "imported" elevator, which the contractor promised to post Surety Bond to cover the amount for the purchase of the elevator item. Our contactor explained that the foreign supplier requires an advance payment as an insurance before they manufacture the item. Our consultant failed to explain to us the nature of the Elevator work. As the end-user, we would like to help the contractor in extra-ordinary matters such as this. I hope there is other possible legal way to help them.

RDV, if you have the time, can i still ask your liberal opinion with regrds to my query (a) (c) and (d)? I have already solved the mystery of Sec. 32.4.3 (my hunch was right) and we really need to change the phrase per paragraph as i have suggested in my previous query on Bid Evaluation to clear up the matter. I will discuss it as much as i can soon on this venue. Thanks also engrjhez.
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Re: Contract Implementation

Post by RDV @ GP3i on Tue Mar 24, 2009 11:30 am

tianchon,ruel wrote:Thanks RDV, what I meant in my (b) query is the cash advance payment for "imported" elevator, which the contractor promised to post Surety Bond to cover the amount for the purchase of the elevator item. Our contactor explained that the foreign supplier requires an advance payment as an insurance before they manufacture the item. Our consultant failed to explain to us the nature of the Elevator work. As the end-user, we would like to help the contractor in extra-ordinary matters such as this. I hope there is other possible legal way to help them.

Ruel:

Maybe you should consider the following provision of Sec. 42.5 on Contract Implementation and Termination:

"42.5. Procuring entities may issue a letter of credit in favor of a local or foreign suppliers; Provided, that, no payment on the letter of credit shall be made until delivery and acceptance of the goods as certified to by the procuring entity in accordance with the delivery schedule provided for in the contract; Provided further, that, the cost for the opening of letter of credit shall be for the account of the local or foreign supplier and to be so stated in the bidding documents.

A letter of credit, not a surety bond, would be acceptable form of "insurance" to a foreign supplier for the goods that the latter will manufacture. There will be no advance payment, as it is not allowed, but payment for the letter of credit will be made upon delivery and accetance.
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Award of Contract

Post by jomadel86 on Fri Oct 02, 2009 3:04 pm

Consider the following Scenario:(Under the IRR-A)

1. Company A joined the bidding for the procurement of 206 units mechanical flatbed dryer.
2. Company A was declared the lowest calculated and responsive bidder and was awarded the contract.
3. The said company has failed to install 50% of the dryers and is now asking for an extension of the delivery period for another 3 months which will likely be granted by the HOPE.
4. Company A joined a negotiated procurement (after two failed biddings) for the procurement of another 87 mechanical flatbed dryer. However, company B beat him during the negotiated procurement. But, the BAC declared company B not a technically capable supplier. Can we award the dryer to company A considering that it failed in its commitment under the contract award notwithstanding that it applied for an extension of the delivery period which will likely be granted by the HOPE? Evil or Very Mad Twisted Evil Evil or Very Mad Twisted Evil
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Re: Contract Implementation

Post by amang'65 on Sat Oct 03, 2009 3:57 pm

jomadel86 wrote:Consider the following Scenario:(Under the IRR-A)

1. Company A joined the bidding for the procurement of 206 units mechanical flatbed dryer.
2. Company A was declared the lowest calculated and responsive bidder and was awarded the contract.
3. The said company has failed to install 50% of the dryers and is now asking for an extension of the delivery period for another 3 months which will likely be granted by the HOPE.
4. Company A joined a negotiated procurement (after two failed biddings) for the procurement of another 87 mechanical flatbed dryer. However, company B beat him during the negotiated procurement. But, the BAC declared company B not a technically capable supplier. Can we award the dryer to company A considering that it failed in its commitment under the contract award notwithstanding that it applied for an extension of the delivery period which will likely be granted by the HOPE? Evil or Very Mad Twisted Evil Evil or Very Mad Twisted Evil


Depende sa HOPE nyo yan but we can counter the HOPE's approval of contract, by considering the following:

1. Company A should be of good standing, why award a new contract to this company kung may negative slippage sya.
2. Tray evaluating company A's NFCC kung kakayahin pa for another new contract.

one thing to consider sa mga bidders natin ay ang kanilanag performances, not just because completo sila sa mga documents o kaya may pera sila eh pwede ulit silang makakuha ng contrata.

please take note we have a revised IRR for RA9184, it is a combination of the old IRR-A and B.
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Re: Contract Implementation

Post by engrjhez® on Sun Oct 04, 2009 11:58 am

The next question would be, if the conditions as pointed out by amang 1965 fails for Company A, will the Negotiated Procurement fail? (See a discussion on failed Negotiated Procurement after 2 failed biddings here. )

There are also other questions such as "why conduct separate biddings of dryers (206 and 87 units)?". There may be a reason why there is a need to procure them separately. The other reason may be violative in nature. Whatever the reason is surely a contributor to the complexity of this case. Very Happy
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Re: Contract Implementation

Post by sunriser431 on Mon Oct 05, 2009 3:41 pm

jomadel86 wrote:Consider the following Scenario:(Under the IRR-A)
1. xxxx
2. xxxx
3. The said company has failed to install 50% of the dryers and is now asking for an extension of the delivery period for another 3 months which will likely be granted by the HOPE.
4. xxxx:
You might as well consider this Terms and Conditions as specified in the sample form no. SF-GOOD-58, which set the maximum allowed extension of 15 calendar days.
TERMS and CONDITIONS
1. xxxx
2. xxxx
3. xxxx
4.Subject to the provisions of the preceding paragraph, where AWARDEE has accepted a purchase order but fails to deliver the required product(s) within the time called for in the same order, he shall be extended a maximum of fifteen (15) calendar days under liquidated damages to make good his delivery. Thereafter if AWARDEE has not completed delivery within the extended period, the subject purchase order shall be cancelled and the award for the undelivered balance withdrawn from that AWARDEE. The Procurement Service shall then purchase the required item(s) from such other source(s) as it may determine, with the difference in price to be charged against the DEFAULTING AWARDEE. Refusal by the DEFAULTING AWARDEE to shoulder the price difference shall be ground for his disqualification from future bids of the same or all items, without prejudice to the imposition of other sanctions as prescribed under RA 9184 and its IRR-A. Hope this might help. bounce
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Re: Contract Implementation

Post by amang'65 on Mon Oct 05, 2009 4:12 pm

engrjhez wrote:
The next question would be, if the conditions as pointed out by amang 1965 fails for Company A, will the Negotiated Procurement fail? (See a discussion on failed Negotiated Procurement after 2 failed biddings here. )

There are also other questions such as "why conduct separate biddings of dryers (206 and 87 units)?". There may be a reason why there is a need to procure them separately. The other reason may be violative in nature. Whatever the reason is surely a contributor to the complexity of this case. Very Happy


I think the reason for another bidding is that the 87 units is a separate fund, baka panibagong download ng central office nila (alam nyo na sa DA malaki ang pondo nila) kaya kailangan mag bid ulit for the 87 units flatbed driers. kung pasok sana sa repeat order ok sana pero 87 units is more than 25% of the 206 units. and besides i think we are speaking of millions of pesos here kasi i believe ang isang unit ng flatbed drier is costing about 200thou+ so imagine the cost of 87 or 206 units, kaya hindi rin pasok sa shopping as discussed to the link you have directed us, kahit na sa bagong IRR, 500thou lang ang treshold.
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Re: Contract Implementation

Post by sunriser431 on Tue Oct 06, 2009 3:25 pm

For purpose of Discussion:
The Flatbed Drying System consists of a Moisture Meter and Flatbed Dryer consisting of a drying bin made of concrete panels and bolted construction with perforated metal bed flooring; a blower driven by a diesel engine and a direct-fired biomass fed furnace that serves as the heater. The dryer is installed with concrete flooring and built-in shed of all metal/steel construction with corrugated GI roofing.

click this link for additional info http://www.mixph.com/2008/09/techno-guide-on-making-a-flatbed-dryer.html

Considering the scope of work for each Dryer, and the number of units needed, this will cost millions, average cost for 1 unit 670thousand plus, now multifly it by 206 or 87 units, definitely repeat order is not feasible, or shopping. bounce
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