II. PROCEDURAL STEPS
FOR THE
PROCUREMENT OF
GOODS AND
INFRASTRUCTURE
PROJECTS
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II. Procedural Steps for the
Procurement of Goods and
Infrastructure Projects
 A.

Procurement Planning
1. Preparation of bidding Documents
 a) Forms and Contents of the Bidding
Documents
 Approved Budget for the Contract;
 Invitation To Bid;
 Eligibility Requirements;
 Instructions To Bidders;
 Scope of work;
 Plans/Drawings and Technical Specs;
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II Procedural Steps for the
Procurement of Goods and
Infrastructure Projects

Form of Bid, Price Form, and List of Goods or
Bill of Quantities;
 Delivery Time or Completion Schedule;
 Form, Amount, and Validity Period of Bid
Security;
 Form, Amount, and Validity of Performance
Security and Warranty; and,
 Form of Contract and General and Special
conditions of Contracts.
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2. Determination of ABC
Quantities – all construction quantities shall
be computed of not more than 10% of the
final quantities.
 Unit Prices – shall be based on current
prices as projected over the proposed
construction period.
 The ABC shall specify for each major work
item, such as earthwork, roadwork, and
massive concreting, the components for
equipment rentals, fuel, labor, materials
and overhead, including the cost of the
approved construction safety and health
program and warranty premium.

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2. Determination of ABC

The ABC shall be composed of Direct Cost
and Indirect Cost.
 Direct Cost:
a) Cost of Materials per Items of Work:
- cost at source including processing,
- loading, royalties, local taxes, etc.
- expenses for hauling to project site.
- handling expenses.
- storage expenses.
- allowance for waste and/or losses.
b) Cost of Labor
c) Equipment Expenses
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2. Determination of ABC

Indirect Cost:
a) Overhead Expense (5 – 8% of EDC)
b) Contingencies (.5 – 3% of EDC)
c) Miscellaneous Expenses( .5 – 1% of
EDC)
d) Contractors Profit Margin (5 -10% of
EDC)
e) VAT – 12% of EDC, OCM, and Profit
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3. Annual Procurement Plan (APP)
 The
APP shall include provisions for
foreseeable
emergencies
based
on
historical records
 No
procurement shall be undertaken
unless it is in accordance with the
approved APP
 The end-user units shall prepare the
respective
Project
Procurement
Management Plan (PPMP) for the different
programs, activities, and projects (PAPs)
 Updating
of the PPMPs and the
consolidated APP shall be undertaken
every 6 mons or as often as may be
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required by the HOPE.
Project Procurement Management
Plan (PPMP) shall include:
a)
b)
c)
d)
e)
f)
Info on whether PAPs will be contracted out,
implemented by Admin or consigned;
Type and objective of the contract to be
employed;
Extent/size of contract scopes/packages;
Procurement methods to be adopted
(indicating if outsourced);
Time schedule for each procurement activity
and for the contract implementation;
Estimated budget for the general
components of the contract.
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PROCEDURES IN PROCUREMENT
(Infrastructure Projects)
1. Pre-procurement Conference
2. Advertisement / Posting
3. Pre-Bid Conference
4. Submission and Receipt of Bid
5. Bid Evaluation
6. Post-Qualification
7. Award of Contract
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B. Pre-procurement Conference
A.
B.
C.
D.
E.
Prior to advertisement, the BAC, through it
Secretariat, shall call for a pre-procurement
conference, to;
Confirm the description and scope of the contract,
the ABC, and the contract duration;
Ensure that the procurement is in accordance
with the APP and PPMP
Determine the readiness of the procurement;
Review, modify and agree on the criteria for
eligibility screening;
Review, modify and agree on the criteria for the
evaluation of bids/proposals;
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F. Clarify that the specifications and other terms in
the bidding documents are minimum
requirements;
G. Reiterate and emphasize the importance of
confidentiality during the bid evaluation
process, and the applicable sanctions
and penalties;
The holding of a pre-procurement
conference may not be required for small
procurements,
i.e.,
procurement
of
infrastructure projects costing five million
pesos (P5,000,000.00) and below;
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C. Advertisement / Posting
A. For contracts above P5 million
1. Advertised at least ONCE in a
newspaper of general nationwide
circulation
which
have
been
regularly published for at least two
(2) years before the date of
issuance of the advertisement;
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2. Posted continuously in the website
of the procuring entity
concerned;(FOR 7 CALENDAR
DAYS)
3. Posted in the G-EPS (FOR 7
CALENDAR DAYS)
4. Posted at any conspicuous place
reserved for this purpose in the
premises of the procuring entity.
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B.For contracts P5 million and below
1. Posted continuously in the website of the
procuring entity concerned;(FOR 7
CALENDAR DAYS)
2. Posted in the G-EPS FOR 7 CALENDAR
DAYS)
3. Posted at any conspicuous place
reserved for this purpose in the premises
of the procuring entity.
Note: For priority programs and infra
projects funded out of the annual GAA
the procuring entity may also publish in
local newspaper of general circulation
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For infrastructure projects, the
following maximum periods from
date of advertisement and/or 1st
day of posting of the Invitation to
Apply for Eligibility and to Bid up
to bid opening shall be observed:
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Estimated Contract
Cost (in pesos)
Period
Fifty (50) million and
below
50 calendar
days
Above fifty (50)
million
65 calendar
days
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Eligibility Screening
A. Eligibility Criteria
1. The following persons/entities shall be
allowed to participate in the bidding for
infrastructure project:
a. Duly licensed Filipino citizens/sole
proprietorships;
(Foreign bidders may be eligible to
participate in the procurement of
Infrastructure Projects when provided
for under any treaty or international or
executive agreement)
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b. Partnership duly organized under the
laws of the Phil. and of which at least
75% of the interest
belongs to
citizens of the Phil.;
c. Corporations duly organized under
the laws of the Phil. And of which at
least 75% of the outstanding capital
stock belongs to citizen of the Phil.;
d. Persons/entities forming themselves
into a joint venture;
e. Cooperatives duly registered with
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CDA
2. Must have a PCAB license
3. Must have completed, within 10 years, at least
one contract that is similar to the contract to
be bid and whose value adjusted to current
price using the NSO consumer price indices
website, at least 50% of the ABC to be bid:
In the case of small A and B contractors
without similar experience on the contract to
be bid, they may be allowed to bid if the cost
of such contract is not more than 50% of their
registration particular for such category. The
allowable range of contract cost per PCAB
registration of contractor shall be:
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Registration Particular
Category
Small A
Allowable Range of
Contract Cost (in Million
Pesos)
Up to 0.5
Small B
Medium A
Up to 15
Up to 100
Medium B
Up to 200
Large A
Up to 300
Large B
Less than or above 300
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4. The Contractor’s Performance Evaluation
System (CPES) rating and/or certificate of
completion and owner’s acceptance of the
contract must be satisfactory.
5. Credit line commitment of at least 10% of
ABC, or,
The prospective bidder’s NFCC must be at
least equal to the ABC, calculated as
follows:
NFCC =[(Current assets minus current
liabilities) multiplied by (K)] minus the value
of all outstanding works or projects under
ongoing contracts, including awarded
contracts yet to be started.
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K = 10 for a contract duration of one year or
less, 15 for a contract duration of more than
one year up to two years, and 20 for a
contract duration of more than two years.
The BAC shall determine if each prospective
bidder is eligible to participate in the bidding by
examining
the
completeness
of
each
prospective bidder’s eligibility requirements or
statements against a checklist of requirements,
using a non discretionary “pass/fail” criteria,
and shall be determined as either “eligible” or
“ineligible”. The eligibility check shall not
exceed 3 days
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6. TAX CLEARANCE CERTIFICATE
DULY APPROVED BY BIR
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Notwithstanding
the
eligibility
of
a
prospective bidder, the procuring entity
concerned reserves the right to review it
qualifications at any stage of the
procurement process if it has reasonable
grounds to believe that a misrepresentation
has been made by the said prospective
bidder, or that there has been a change in
the prospective bidder’s situation from the
time it submitted its eligibility requirements.
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B. Eligibility Check for Infrastructure Projects
The determination of eligibility shall be
based on the submission of the following:
1. Class “A” Documents
2. Legal Documents
a. Department of Trade and Industry
(DTI) business name registration or
SEC registration certificate, or CDA
for cooperatives, whichever may be
appropriate under existing laws of
the Philippines;
b. Valid and current Mayor’s
permit/municipal license.
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Technical Documents
c. Statement of the prospective
bidder of all its ongoing and
completed govt. and private
contracts, including awarded but
not yet started, if any;
d. Valid
PCAB
license
and
registration
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Financial Documents
Prospective bidders Audited
Financial Statement for the
preceding calendar which should
not be earlier than 2 years from
the date of bid submission
f, Prospective bidders computation
of its NFCC
e,
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2. Class “B” Documents
a. Valid joint venture agreement, in case
of a joint venture and eligibility docs
for each member; and
b. Letter authorizing the BAC or its duly
authorized representative/s to verify
any or all of the documents submitted
for the eligibility check.
The prospective bidder or its duly authorized
shall certify under oath that each of the
documents submitted is an authentic and
original copy, or a true and faithful reproduction
or copy of the original, complete, and that all
statement and information provided therein are
true and correct
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For Foreign-funded Procurement, the GOP
and the bilateral or international financing
institution may agree on another track record
requirement
Government corporate entities may be
eligible to participate in Competitive bidding
only if they can establish that they:
a) legally and financially autonomous,
b) operate under commercial law, and
c) are not dependent agencies of the GOP or
the Procuring Entity
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D. Pre-Bid Conference
For contracts to be bid with an a approved
budget of P1,000,000.00 or more, the BAC shall
convene at least one (1) pre-bid conference to
clarify and/or explain any requirements, terms,
conditions and specifications stipulated in the
bidding documents.
For contracts to be bid costing less than
P1,000,000.00, pre-bid conferences may be
conducted at the discretion of the BAC. Subject
to the approval of the BAC, a pre-bid conference
may also conducted upon written request of any
prospective bidder.
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The pre-bid conference shall be held at least 12 cd
before the deadline for the submission and receipt
of bids.
If the proc entity determines that by reason of the
method, nature, or complexity or when intern’l
participation will be more advantageous to the
GOP, a longer period for the preparation of bid is
necessary, pre-bid can be held at least 30 cd
before submission and receipt of bids.
The pre-bid conference shall discuss, the
technical and financial components of the
contract to be bid. The minutes of the pre-bid
conference be made available to all participants
not later than 3 cd after the pre-bid conference. 31
Request for clarification(s) must be in writing
and submitted to the BAC at least 10 cd before
the deadline set for the submission and receipt
of bids. The BAC shall respond to the said
request by issuing a Supplemental/Bid Bulletin,
at least 7 cd before the deadline for the
submission and receipt of bids.
Any Supplemental/Bid Bulletin issued by the
BAC shall also be posted on the website of the
procuring entity concerned, if available, and on
the G-EPS
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E. Submission and Receipt of Bids
Eligible bidder shall submit their bids through
their authorized officer or their duly
authorized representative ;
(i) in the prescribed Bid Form, including its
annexes, as specified in the bidding
documents,
(ii) on or before the specified deadline, and
(iii) in two (2) separate sealed bid envelopes, the
technical component and the financial
component of the bid.
Bids submitted after the deadline shall not be
accepted by the BAC.
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The first envelope (Technical Proposal)
shall contain the following technical
information/documents, at the least:
1. Eligibility requirements
2. Bid security as to form, amount and validity
period;
3. Project Requirements:
a) Organizational chart for the contract to be
bid,
b) List of contractor’s personnel (viz., project
managers, project engineers, materials engineers
and foremen), to be assigned to the contract to be
bid, with their complete qualification and
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experience data;
c) list of contractor’s equipment units, which are
owned, leased, and/or under purchased
agreements, supported by certification of
availability of equipment from the equipment
lessor/vendor for the duration of the project;
4. Sworn Statement as to the following:
a) It is not “ blacklisted” or barred from bidding
b) Each of the documents submitted in
satisfaction of
the bidding requirements is
an authentic copy of the original, complete, and
all statements made therein
are
true
and
correct,
c) it is authorizing the head of the procuring
entity or his duly authorize representative/s to
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verify all documents submitted,
d) The signatory is the duly authorize representative,
and granted full power and authority to do,
execute and perform any and all acts necessary
and/or to represent the prospective bidder in the
bidding, with the duly notarized Secretary’s
Certificate attesting to such fact, if corporation,
partnership or joint venture
e) It complies with the Disclosure provision under
Section 47
f) It complies with the responsibilities of a
prospective or eligible bidder provided in the
PBDs;
g) It complies with existing labor laws and standards
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The second envelope shall contain
the
following
financial
information:
a, Bid in the Financial Bid form ;
b, Bid in the Bill of Quantities;
c, Detailed Estimate;
d, Cash Flow by quarter
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Modification and Withdrawal of Bids
A bidder may modify its bid, provided that this
is done before the deadline for the submission
and receipt of bids.
Where a bidder modifies its bid, it shall not be
allowed to retrieve its original bid, but shall
only be allowed to send another bid equally
sealed, properly identified, marked as a
“modification”.
Bid modifications received after deadline shall
not be considered and shall be returned to the
bidder unopened.
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A bidder may, through a letter, withdraw its bid
before the deadline for the receipt of bids.
Withdrawal of bids after the applicable deadline
shall be subject to appropriate sanctions.
A bidder may also express its intention not to
participate in the bidding through a letter which
should reach and be stamped received by the
BAC before the deadline for the receipt of bids.
A bidder that withdraws its bids shall not be
permitted to submit another bid, directly or
indirectly, for the same contract.
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Bid Security
The Bid security shall be in an
amount at least equal to, and not
lower than, a percentage of the
approved budget for the contract to
be bid, as advertised by the
concerned procuring entity, in a
form of;
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Form of Security
1. Cash, cashier’s check,
manager’s
check,
back
draft/guarantee confirmed by
a universal or commercial
bank duly licensed in the Phil
2. Irrevocable letter of credit
issued by a universal or
commercial bank confirmed
or authenticated in the Phil if
3. Surety bond, callable on
demand
4. Any combination of the
foregoing
Amount
in
%
Approved Budget
the Contract
of
for
Two percent(2%)
Two percent (2%)
Five percent (5%)
Proportionate to share of form
with respect to total amount of
security
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Bid Securing Declaration
This is a duly notarized undertaking
which states, among others, that the
bidder shall enter into contract with
the procuring entity and furnish the
required performance security within
10 cd from receipt of NTA and
committing to pay the corresponding
fine and be suspended to participate
in any govt. procurement in the event
it violates any of the conditions stated
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Bid Opening
The BAC shall open the bids at the time, date
and place specified in the Invitation to Apply for
Eligibility and to Bid and the bidding
documents.
The bidders or their duly authorized
representatives may attend the opening of bids.
All members of the BAC or their duly authorized
representatives who are present during bid
opening shall initial every page of the original
copies of all bids received and opened.
The minutes of the bid opening shall be made
available to the public upon written request and
payment of a specified fee.
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Ceiling of Bid Prices
The approved budget for the contract
under bidding shall be the upper limit or
ceiling for acceptable bid prices.
If a bid price, as evaluated and
calculated in accordance with this IRR,
is higher than the approved budget for
the contract under bidding, the bidder
submitting
the
same
shall
be
automatically disqualified.
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. For Foreign-funded Procurement, the ABC
shall be applied as ceiling provided that:
a. Bidding documents are obtainable free of charge on
a freely accessible website;
b. The procuring entity has procedures in place to
ensure that the ABC is based on recent estimates
made by the Engineer or the responsible unit of the
procuring entity and that they are based on
adequate detailed engineering and reflect the
quality, supervision and risk and inflationary factors,
as well as the prevailing market price;
c. The procuring entity has trained estimators on
estimating prices and analyzing bid variance;
d. The agency has established a system to monitor and
report bid prices relative to ABC and Engineers
estimate.
e. The procuring entity has established monitoring and
evaluation system for contract implementation to
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provide feed back on actual goods and works.
F. Detailed Evaluation of Bids
•
•
The BAC shall immediately conduct a detailed
evaluation of all bids rated “passed” using a nondiscretionary criteria, which shall include a
consideration of the following:
Completeness of the bid. Bids not addressing or
providing all of the required items in the bidding
documents including, where applicable, bill of
quantities, shall be considered non-responsive,
but specifying a “0” (zero) for the said item would
mean that its being offered for free to the
Government; and
Arithmetical corrections. Consider computational
errors, omissions, and other Bid modifications, if
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allowed in the Bidding Documents
In case of discrepancies between:
(a) bid prices in figures and in words,
the latter shall prevail;
(b) total prices and unit prices, the latter
shall prevail;
(c) unit cost in the detailed estimates
and unit cost in the bill of quantities,
the latter shall prevail.
47
F. Detailed Evaluation of Bids
 The
entire evaluation process shall
be completed in not more than 7 cd
for projects costing more than 50
million and not more than 5 cd for
projects less than 50 million.
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Ranking of Total Bid Prices
Based on the detailed evaluation of bids, those
that comply with the above-mentioned
requirements shall be ranked in the ascending
order of their total calculated bid prices, as
evaluated and corrected for computational
errors, discounts and other modifications, to
identify the Lowest Calculated Bid.
Total calculated bid prices, as evaluated and
corrected for computational errors, discounts
and other modifications, which exceed the
approved budget for the contract shall not be
considered.
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G. Post- Qualification
The post-qualification shall verify,
validate and ascertain all statements
made and documents submitted by the
bidder with the Lowest Calculated Bid,
using non-discretionary criteria. These
criteria shall consider, but shall not be
limited to, the following:
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a.Legal Requirements. To verify, validate and
ascertain
licenses
and
agreements
submitted by the bidder and the fact that he
is not included in any Government
“blacklist”
b.Technical Requirements. To determine
compliance with the requirements.
a. Financial Requirements. To verify , validate
and ascertain the bid price proposal of the
bidder and, the required bank commitment
to provide a credit line to the bidder in the
amount specified and over the period
stipulated in the Instructions to Bidders. 51
G. Post-Qualification
 Within
7 cd from the determination of
the LCB, the BAC shall conduct and
accomplish the post-qualification of the
bidder with LCB
 In exceptional cases, the postqualification may be extended by the
HOPE but in no case shall the
aggregate period exceed 30 cd
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VIII. Award of Contract
Award of contract shall be made to
the bidder with the Lowest
Calculated Responsive Bid, as its
submitted
bid
price
or
its
calculated bid price, whichever is
lower.
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Amount of Performance
Form of Performance
Security (% of Total
Security
Contract Price)
1. Cash, cashier’s check,
manager’s
check,
back
draft/guarantee confirmed by
a universal or commercial
bank duly licensed in the Phil
2. Irrevocable letter of credit
issued by a universal or
commercial bank confirmed
or authenticated in the Phil if
3. Surety bond, callable on
demand
4. Any combination of the
foregoing
Ten percent (10%)
Ten percent (10%)
Thirty Percent (30%)
Proportionate to share of form
with respect to total amount of
security
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H. CONTRACT AWARD
 HOPE
shall approve or disapprove
the recommendation of award
within a period not exceeding:
 7 cd - projects costing above 50
million
 5 cd – projects costing 50 million
and below
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I. CONTRACT SIGNING
 The
winning bidder shall comply
with all the remaining documentary
requirements within 10 cd.
 The procuring entity shall enter into
contract with the winning bidder
within the same 10 day period
provided that all documentary
requirements are complied with
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APROVAL OF CONTRACT
 HOPE
shall be given the following
maximum period for approving the
contract:
15 cd - for projects with an ABC
of above 50 million
5 cd – for projects with an ABC of
50 million and below
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J. Notice to Proceed
 The
procuring entity shall issue the
NTP together with a copy of the
approved contract within:
3 cd – for projects with an ABC of
above 50 million
2 cd – for projects with an ABC of
50 million and below
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Warranty
Defects/Liability Period
Project
Completion
1 Year
Warranty Period
Final
Acceptance
2 to 15
Years
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After final acceptance of the project by the
Government, the contractor shall be held
responsible for structural defects and/or failure of
the completed project within the following warranty
periods from final acceptance, except those
occasioned by force majeure and those caused by
other parties:
Permanent Structures: Fifteen (15) years
Building of types 4 and 5, steel and concrete
bridges, flyovers, concrete aircraft movement areas,
ports, dams, diversion tunnels, causeways,
wharves, piers, dikes, filtration and treatment plants,
sewerage systems, power plants, transmission and
communication towers, railway system, and other
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similar structures
b. Semi-Permanent Structures: Five (5) years
Building types 1, 2 and 3, concrete roads,
asphalt roads, river control, drainage, irrigation
and drainage canals, municipal ports and river
landing, deep wells, rock causeway, pedestrian
overpass, and other similar structures; and
c. Other Structures: Two (2) years
Bailey and wooden bridges, shallow wells,
spring development, and other similar
structures.
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WARRANTY SECURITY
The warranty security shall be
denominated in Philippine pesos,
remain effective for one (1) year
from the date of issuance of the
Certificate of Acceptance by the
Procuring Entity
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In cases where structural defects and/or failure
arise during the warranty period, the following
persons/parties shall be held liable:
• Contractor – where structural defects and/or
failure arise due to faults attributable to improper
construction use of inferior quality/substandard
materials, and any violation of the contract plans
and specs. the contractor shall be held liable;
• Consultants – where structural defects and/or
failures arise due to faulty and/or inadequate
design and specifications as well as construction
supervision, then the consultant who prepared the
design or undertook construction supervision for
the project shall be held liable;
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c. Procuring
Entity’s
Representatives/Project
Manager/Construction
Managers
and
supervisors
–
the
project
owner’s
representative/s project manager, construction
managers, and supervisor/s shall be held liable
in cases where the structural defects/failures are
due to his/their willful intervention in altering the
designs and other specifications; negligence or
omission in not approving or acting on
proposed changes to noted defects or
deficiencies in the design and/or specifications;
and the use of substandard construction
materials in the project;
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d. Third Parties – Third Parties shall be held liable in
cases where structural defects/failure are caused
by work undertaken by them such as leaking
pipes, diggings/excavations, underground cables
and electrical wires, underground tunnel, mining
shaft and the like, in which case the applicable
warranty to such structure should be levied to
third parties for their constn. or restoration works.
e. Users – in cases where structural defects/failures
are due to abuse/misuse by the end user of the
constructed facility and/or non-compliance by a
user with the technical design limits and/or
intended purpose of the same, then the user
concerned shall be held liable
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The term “Structural Defects” shall mean major
faults/flaws/deficiencies in one or more key
structural elements of the completed elements of
the project which may lead to structural failure of
the completed elements or structure.
The term “Structural Failures” is defined as an
occurrence where one or more key structural
elements in an infrastructure facility fails or
collapses, thereby rendering the facility or part
thereof incapable of withstanding the design loads,
and/or endangering the safety of the users or the
general public.
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CONTRACT IMPLEMENTATION
Variation Orders – are change
orders or extra work
orders which should not
exceed 10 % of the original
project cost.
67
Variation Orders beyond 10% shall
either
be
subjected
to
another contract to be bid if
the works are separable
to complete the original scope
of work, be authorized by the
head of the procuring entity but
not more
than 20% subject to
guidelines by
GPPB, but with
appropriate sanctions to the
designer,
consultant
or
official responsible for
the
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original design.
Supplemental agreement is no
longer allowed .
Liquidated Damages shall be
imposed
for delays in
completion of work but
“Incentive Bonus” shall not
be allowed.
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THANK YOU
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