SANCTIONS AGAINST NUISANCE BIDDERS

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SANCTIONS AGAINST NUISANCE BIDDERS

Post by kruger on Fri Mar 13, 2009 1:51 pm

Hi,

Our BAC here at the DOTC is inquiring on what sanctions we can impose on bidders who habitually withdraw their bids. It is becoming common practice with some of our bidders and the BAC is asking us, the TWG, to come up with some kind of sanction/penalty that we can enforce.

Any suggestions would be highly appreciated!


Thanks
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Re: SANCTIONS AGAINST NUISANCE BIDDERS

Post by RDV @ GP3i on Fri Mar 13, 2009 3:25 pm

kruger wrote:Hi, Our BAC here at the DOTC is inquiring on what sanctions we can impose on bidders who habitually withdraw their bids. It is becoming common practice with some of our bidders and the BAC is asking us, the TWG, to come up with some kind of sanction/penalty that we can enforce.

Any suggestions would be highly appreciated!

If they are habitually withdrawing their bids, that could be an indication of collusion among the bidders, for which a penalty is provided for in IRR-A, as follows:

"65.2. Private individuals who commit any of the following acts, and any public officer
who conspires with them, shall upon conviction, suffer the penalty of
imprisonment of not less than six (6) years and one (1) day but not more than
fifteen (15) years:
x-x-x
3. When two or more bidders enter into an agreement which calls upon one
or more of them to refrain from bidding for procurement contracts, or
which requires one or more of them to withdraw Bids already submitted,
in order to secure an undue advantage to any one of them.
"

"65.3. Private individuals who commit any of the following acts, and any public officer
conspiring with them, shall upon conviction, suffer the penalty of imprisonment
of not less than six (6) years and one (1) day but not more than fifteen (15)
years:
x-x-x
4. Withdrawing a Bid, after it shall have qualified as the Lowest Calculated
Bid/Highest Rated Bid, or refuse to accept an award, without just cause

or for the purpose of forcing the Procuring Entity to award the contract
to another bidder. This shall include the non-submission within the
prescribed time, or delaying the submission of requirements such as, but
not limited to, performance security, preparatory to the final award of
the contract.
"

The administrative penalty of suspension, blacklisting, and/or forfeiture of bid security may also be imposed under Section 69.1 of IRR-A.

In the case of DPWH, for example, its customized procurement manual contains a provision that if a contractor withdraws its LOI, or, if found eligible, fails to submit a bid or withdraws its bid, or submits an incomplete bid, without justifiable reason, in 3 separate instances within 12 months in the entire DPWH, that contractor shall be liable for suspension for one year for the first 3 offense, and suspension for 2 years for the next 3 offenses.
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Just Cause / Justifiable Reason

Post by kruger on Mon Mar 16, 2009 7:51 am

Hi,

Thanks for your reply! We have been contemplating the same sanctions, however, the terms "without just cause" and "without justifiable reason" always tend to be interpreted subjectively. Common reasons cited in their letters of withdrawal, are: 1. "...our estimates exceeded that of the ABC...." and 2. "...our resources have already been committed to a recently-awarded contract.." For all we know, these are all valid and justifiable but on the other hand, these could also be products of their creative imaginations Smile

Is it more practical if we just suspend them outright upon committing three (3) instances of withdrawal and any other violations within one (1) year? Maybe we can state this in the IAEB and the PBDs for every procurement. Or do we need the BAC to issue a Resolution to this effect?

Thanks again and regards...
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Re: SANCTIONS AGAINST NUISANCE BIDDERS

Post by engrjhez® on Mon Mar 16, 2009 2:29 pm

kruger wrote:Hi,

Thanks for your reply! We have been contemplating the same sanctions, however, the terms "without just cause" and "without justifiable reason" always tend to be interpreted subjectively. Common reasons cited in their letters of withdrawal, are: 1. "...our estimates exceeded that of the ABC...." and 2. "...our resources have already been committed to a recently-awarded contract.." For all we know, these are all valid and justifiable but on the other hand, these could also be products of their creative imaginations Smile

Is it more practical if we just suspend them outright upon committing three (3) instances of withdrawal and any other violations within one (1) year? Maybe we can state this in the IAEB and the PBDs for every procurement. Or do we need the BAC to issue a Resolution to this effect?

Thanks again and regards...
If you would want to extend your suggestion to the next level, please have it also posted under Topics on Revised IRR. Your idea is very much welcomed. Very Happy
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Re: SANCTIONS AGAINST NUISANCE BIDDERS

Post by RDV @ GP3i on Tue Mar 17, 2009 3:21 pm

kruger wrote:Hi, We have been contemplating the same sanctions, however, the terms "without just cause" and "without justifiable reason" always tend to be interpreted subjectively. Common reasons cited in their letters of withdrawal, are: 1. "...our estimates exceeded that of the ABC...." and 2. "...our resources have already been committed to a recently-awarded contract.." For all we know, these are all valid and justifiable but on the other hand, these could also be products of their creative imaginations Smile

Is it more practical if we just suspend them outright upon committing three (3) instances of withdrawal and any other violations within one (1) year? Maybe we can state this in the IAEB and the PBDs for every procurement. Or do we need the BAC to issue a Resolution to this effect?

Of course the terms "without just cause" and "without justifiable reason" is up to you to determine. Yes, it could be interpreted subjectively, but you can do it objectively also by giving the parties concerned "due process." Therefore, I don't advise you to suspend them outright upon committing 3 instances of withdrawal or other violations within a year, but give them a "show cause" notice why they do not deserve to be suspended or blacklisted. Give them the opportunity to present their side and provide evidences like its NFCC Computation (for their financial capacity) and their estimates.

For example, their NFCC would show their projects, awarded and those not yet started which would affect their financial resources, particularly those which are awarded after the bidding. Their estimates also would show whether their computations exceed the ABC. But why did they participate in the first place if their estimates already show that the ABC is exceeded? They should not have participated, in the first place, after determining that the ABC is understated, so there is nothing to withdraw.

With those show cause notices, they would be more cautious next time, rather than just accepting their reasons, hook, line and sinker.
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