DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 4 2010

MANUAL PROCEDURES FOR THE PROCUREMENT OF

2
DEPARTMENT OF HEALTH CUSTOMIZED
PROCUREMENT MANUAL

VOLUME 3

MANUAL OF PROCEDURES
FOR THE PROCUREMENT OF
INFRASTRUCTURE PROJECTS

DOH PROCUREMENT SERVICE

Building 6, San Lazaro Compound, Rizal Avenue, Sta. Cruz, 1003 Manila
Trunk Line 651-7800 Loc. 1601-1602; 1608; 1624-1627; 1649-1651
Fax 741-9775 URL: http://www.doh.gov.ph
DOH Customized Procurement Manuals (Volumes 1 to 4)

These Procurement Manuals are customized for the use of the Department of Health based on the GENERIC
PROCUREMENT MANUALS published by the Government Procurement Policy Board through Technical Support Office.
The Manuals must be reviewed and updated periodically by the DOH as the GPPB introduces changes in the original
Manuals (2006) to ensure its applicability to existing conditions. The DOH shall submit to the GPPB its recommendations
for specific revisions to the original Manual. Any such revisions must be approved by the GPPB and must be consistent
with existing procurement law, rules, regulations, and policies. This edition has been approved by the GPPB on 25 June
2010.

Published by the Department of Health

First Edition……………………………….. 2010

This customization of the generic procurement manuals, issued by the GPPB, was made possible with the technical inputs from various
DOH procurement practitioners and committee members and other stakeholders from the Hospitals, Centers for Health Development,
Services and Bureaus in the Central Office especially the Procurement Service/COBAC Secretariat, the Inter- agency Technical Working
Group, and the GPPB Technical Support Office. The process has been initially facilitated by a Procurement Specialist, hired by the TSO
through the financial support of the World Bank.

The GPPB in October 2007 approved the DOH Customized Procurement Manual. However, it was not published. With the issuance of the
Revised Implementing Rules and Regulations of RA 9184, the DOH updated the Customized Manuals and submitted for GPPB’s approval on
March 2010.
5
Foreword
It is fundamental that we purchase the needed goods, services and works in the right
quantity and quality at the right time and price to better support the implementation of health
programs and delivery of health services.

We need to plan our procurements better, improve our systems, use better tools and
produce a cadre of committed and trustworthy procurement professionals. We need to better
manage our procurements to have significant impacts of lowering costs, generating substantial
savings, and ensuring that quality goods and services are available for health program at all
cost and in service delivery points. We need to make our transactions more transparent,
competitive, faster, and to comply with existing laws that relates to purchasing of health goods,
services and works. It is also essential that we have procurement reform activists and a core
group of highly competent and honest professionals and support staff.

The procurement reform is an essential component of our health sector reform agenda.
The Government Procurement Reform Act or Republic Act 9184 of 2002 and its Implementing
Rules and Regulations gives us a legal basis for conducting our procurements. In addition, the
Government Procurement Policy Board wherein the Department is an active member has been
issuing standard bid documents and forms, various resolutions, circulars, opinions and the
generic manuals to support compliance, facilitate the procurement processes and make it more
efficient and effective.

With the variations in procurement practices in each of the DOH procuring entities and
special requirements of health goods, services and works, the generic procurement manuals
have been customized to minimize variations and ensure that all concerned follow the
procurement law and related laws. For your reference and guidance are the four (4) customized
volumes: Volume I: Guidelines on the Establishment of Procurement Systems and Organizations;
Volume II: Guidelines on the Procurement Goods; Volume III: Guidelines on the Procurement of
Civil Works and Volume IV: Guidelines on the Procurement of Consulting Services .

With these, we hope to improve the efficiency and effectiveness of our procurement
systems, practices and processes.

ENRIQUE T. ONA, MD
Secretary of Health
Executive Summary
The role of public procurement in any government worldwide has changed drastically over
the years. Once a matter exclusive only to experts has now become subject to public scrutiny.
TRANSPARENCY and GOOD GOVERNANCE – these were the principal motivating factors, among
others, which facilitated the legislation of comprehensive procurement law to govern the acquisition
of goods and services in the government. Anchored on the understanding that public procurement is
at the heart of delivering public service, sound procurement policies and procedure is fundamental
to any government operations.

In the Philippines, a comprehensive procurement act was enacted in 2003. On 26 January

2003, Republic Act 9184 or the Government Procurement Reform Act took effect. It established a
systematic and standardized procurement process for all government agencies, bureaus,
departments, government-owned, and government-controlled corporations. The conduct of
procurement shall be governed by the principle of transparency in all procurement transactions, fair
and equitable competition among prospective bidders/suppliers, streamlined procurement process,
system of accountability for both procurement practitioners and prospective bidders/suppliers, and
public monitoring to ascertain compliance with the provisions of RA 9184, its Implementing Rules and
Regulations and other procurement-related governmental issuances. The procurement framework
covers the procurement process from planning to contract implementation and termination. A
procurement policy-making body referred to as the Government Procurement Policy Board was also
established by virtue of the same statute.

On 08 October 2003, the Implementing Rules and Regulations Part-A of RA 9184 was
approved. It covered only all domestically funded procurement but not those involving Foreign
Assisted Projects. Competitive bidding is established as the principal mode of procurement but the
existence of certain procurement conditions warrants the use of alternative mode of procurement
such as Negotiated Procurement, Shopping, Limited Source Bidding, Repeat Order, and Direct
Contracting. For those procurement projects undertaken through competitive bidding, procurement
tenders/invitations must be publicized in the prescribed media and locations. Submission of eligibility
documents forms a crucial role in the public bidding.

The GPPB, pursuant to its mandate to formulate and amend public procurement policies,
practices, rules and regulations, formulated the Revised Implementing Rules and Regulations which
took effect on the 2 September 2009. The revised IRR now shall cover all domestically funded and
foreign assisted projects. Major amendments in the procurement guidelines include a more detailed
procurement planning align with the Agency’s budget allocation, the change of procurement
procedure for Infrastructure projects from two-stage bidding process to a single-stage, the
introduction of the two-envelope system, the additional instances or conditions for the use of
alternative mode of procurement such as Negotiated Procurement, increase threshold for the
conduct of Shopping and Small Value Procurement and longer procurement timelines, among others.

The Philippine Bidding Documents, standard forms, and the Generic Procurement Manual are
prepared and harmonized to reflect the amendment contained in the revised IRR of RA 9184. The
mandatory usage of the abovementioned documents will promote a systematized procurement
process, avoid confusion, and ultimately ensure transparency.

Since the agency is given the prerogative to customize the GPM to suit the needs, peculiarity,
nature, or complexity of its procurement by virtue of Section 6.2 of the revised IRR, the following
Manuals are being issued by the Department of Health to address procurement concerns of DOH
procurement practitioners: Volume I: Guidelines on the Establishment of Procurement Systems and
Organizations; Volume II: Guidelines on the Procurement Goods; Volume III: Guidelines on the
Procurement of Civil Works; and Volume IV: Guidelines on the Procurement of Consulting Services.
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

TABLE OF CONTENTS
SECTION 1: INTRODUCTION 1
SCOPE OF VOLUME 3 3

SECTION 2: PREPARING FOR PROCUREMENT OF INFRASTRUCTURE PROJECTS 5

A. PROCUREMENT PLANNING 8
1. Legal Reference 8
2. Purpose 8
3. Rules and Guidelines 9
B. PREPARING THE BIDDING DOCUMENTS 17
1. Legal Reference 17
2. Purpose 17
3. Rules and Guidelines 17
4. Procedures 20
C. CONDUCT OF PRE-PROCUREMENT CONFERENCE 22
1. Legal Reference 22
2. Purpose 22
3. Rules and Guidelines 22

SECTION 3: PROCUREMENT OF INFRASTRUCTURE PROJECTS THROUGH

COMPETITIVE BIDDING 25
PART ONE: COMPETITIVE BIDDING 27
STEP 1: ADVERTISE AND POST INVITATION TO BID 28
1. Legal Reference 28
2. Purpose 28
3. Rules and Guidelines 28
4. Procedures 31
STEP 2: ISSUE BIDDING DOCUMENTS 33
1. Legal Reference 33
2. Purpose 33
3. Rules and Guidelines 33
4. Procedures 34
5. Posting of Bidding Documents 35
STEP 3: CALL A PRE-BID CONFERENCE AND ISSUE SUPPLEMENTAL BID
BULLETINS 36
1. Legal Reference 36
2. Purpose 36
3. Rules and Guidelines 36
4. Procedures 39

i
MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

STEP 4: RECEIVE AND OPEN THE BID PROPOSALS (TECHNICAL AND

FINANCIAL ENVELOPES) 41
1. Legal Reference 41
2. Purpose 41
3. Rules and Guidelines 41
4. Procedures 66
STEP 5: CONDUCT BID EVALUATION 69
1. Legal Reference 69
2. Purpose 69
3. Rules and Guidelines 69
4. Procedures 70
STEP 6: CONDUCT POST-QUALIFICATION 72
1. Legal Reference 72
2. Purpose 72
3. Rules and Guidelines 72
4. Procedures 75
STEP 7: AWARD THE CONTRACT AND ISSUE NOTICES OF AWARD 76
1. Legal Reference 76
2. Purpose 76
3. Rules and Guidelines 76
4. Procedures 79
STEP 8: SIGN AND APPROVE THE CONTRACT 80
1. Legal Reference 80
2. Purpose 80
3. Rules and Guidelines 80
4. Procedures 85
STEP 9: ISSUE THE NOTICE TO PROCEED 89
1. Legal Reference 89
2. Purpose 89
3. Procedures of Issuance of the NTP 89

RESERVATION CLAUSE 89
1. Legal Reference 89
2. Rules and Guidelines 89

SECTION 4: PROCUREMENT OF INSFRASTRUCTURE PROJECTS THROUGH

ALTERNATIVE MODE OF PROCUREMENT 91
PART TWO: ALTERNATIVE METHODS OF PROCUREMENT 93
NEGOTIATED PROCUREMENT 94
1. Negotiated Procurement Defined 94
2. Rules and Guidelines 94
3. Procedures 97

ii
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

INFRASTRUCTURE PROJECTS UNDERTAKEN BY ADMINISTRATION 102

1. By Administration Defined 102
2. Legal Basis 102
3. Rules and Guidelines 102

SECTION 5: GUIDELINES ON CONTRACT IMPLEMENTATION 105

CONTRACT IMPLEMENTATION FOR THE PROCUREMENT OF
INFRASTRUCTURE PROJECTS 107
1. Legal Reference 107
2. Rules and Guidelines 107
CONTRACT PRICE AND PAYMENT 114
1. Legal Reference 114
2. Rules and Guidelines 114
VARIATION ORDER 119
1. Legal Reference 119
2. Variation Order Defined 119
3. Rules and Guidelines 119
4. Procedures 122
SUSPENSION OF WORK 124
1. Legal Reference 124
2. Rules and Guidelines 124
3. Procedures 125
CONTRACT TIME EXTENSION 127
1. Legal Reference 127
2. Rules and Guidelines 127
DELAY IN WORK COMPLETION AND LIQUIDATED DAMAGES 129
1. Legal Reference 129
2. Liquidated Damage Defined 129
3. Rules and Guidelines 129
4. Procedures 130
CONTRACT TERMINATION FOR DEFAULT, UNLAWFUL ACT, OR INSOLVENCY 132
1. Legal Reference 132
2. Rules and Guidelines 132
CONTRACT TERMINATION FOR CONVENIENCE 134
1. Contract Termination for Convenience Defined 134
2. Grounds on Contract Termination for Convenience 134
3. Procedures 134
CONTRACT COMPLETION 136
1. Legal Reference 136
2. Rules and Guidelines 136

iii
MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

WARRANTY 136
1. Legal Reference 136
2. Purpose 136
3. Rules and Guidelines 136
SECTION 6: GUIDELINES FOR THE PROCUREMENT AND IMPLEMENTATION OF
CONTRACT FOR DESIGN AND BUILD INFRASTRUCTURE PROJECTS 141

SECTION 7: PERIOD OF ACTION ON PROCUREMENT ACTIVITIES 153

SECTION 8: ANNEXES 163

A. ABBREVIATIONS AND ACRONYMS 165
B. GLOSSARY 168
C. REFERENCES 178

SECTION 9: SAMPLE FORMS 179

iv
 SECTION 1

INTRODUCTION
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

SCOPE OF VOLUME 3
This Manual seeks to provide its users clear, concise, and accurate information on the public procurement of
infrastructure projects, by discussing the steps that need to be taken to effect such procurement in the
manner prescribed by R.A. 9184, otherwise known as the “Government Procurement Reform Act,” and the
revised IRR. It also discusses important issues that may confront government procurement officials in all
stages of infrastructure procurement, from the preparation of bid documents, to the actual bidding activity,
monitoring of contract implementation and the final payment to the contractor.

This Manual focuses on public procurement of Infrastructure projects. The procedures are harmonized to a
large extent with the International Financing Institutions and bilateral agencies lending to the Philippines.
There are, however, policies which are specific to a particular lending agency or grantor and the document
highlight the main differences. It should however be noted that the loan, credit or grant agreement with the
relevant IFIs and/or bilateral and their respective Guidelines will be the overriding factors governing the
foreign assisted projects.
Infrastructure projects are undertakings to construct, improve, rehabilitate, demolish, repair, restore, or
maintain DOH buildings, hospitals and other related health and communication facilities, civil works
components of information technology projects or diagnostics or reference laboratory systems. It also
encompasses such infrastructures as drainage, water supply, sanitation, sewerage and solid waste
management systems, laboratory buildings, and other related construction projects of the government.
Under R.A. 9184 and the revised IRR, the term “infrastructure projects” has the same meaning as and is
used interchangeably with the term “civil works.” (Section 5.u of the revised IRR)

In addition, the following terms are used in the manner indicted below:
1. The bidder shall be referred to differently at different stages of the procurement process. Thus, the
bidder is called:

a. prospective bidder from the posting of the IB

b. bidder with the LCB after evaluation;
c. bidder with the LCRB after post-qualification; and
d. contractor after the issuance of the NTP.

2. The term bid will be used instead of “proposal” or “offer.”

3. The Eligibility Requirements and Technical component of the bid are enclosed in the Technical
Envelope.

4. The Financial Envelope contains the financial component of the bid.

Finally, this Manual ought to be used together with the PBDs for Infrastructure Projects prescribed by the
GPPB.

3
 SECTION 2

PREPARING FOR
PROCUREMENT OF
INFRASTRUCTURE
PROJECTS
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

PREPARING FOR THE PROCUREMENT

INFRASTRUCTURE PROJECTS
Volume I of this Manual contains an extensive discussion of Procurement Planning as a general concern for all
kinds of government procurement. This Section, however, focuses mainly on procurement of infrastructure
projects. As such, the reader is advised to refer to the pertinent discussions in Volume I before and during the
reading of this Section.

Preparation creates a higher efficiency and efficacy in any kind of activity. It enables the procurement
officials concerned to anticipate the onset of events and, as a consequence, better calibrate their response to
them. Having a better appreciation of forthcoming events gives these officials the opportunity to test a range of
possible courses of action, choose the best and most feasible of these, and identify measures to put them into
action. Ultimately, it would enable them to determine the best manner by which such measures are to be
implemented, ensuring that their individual and collective impacts are optimized at the least cost.

Preparing for procurement basically involves three (3) activities: procurement planning, preparation of bidding
documents, and the conduct of the pre-procurement conference. Procurement planning entails ensuring that
detailed engineering investigations are conducted. The plans for procurement are linked to budgets. Preparing
the Project Procurement Management Plan and consolidating all PPMPs into the Annual Procurement Plan.
Formulating the PPMP involves identifying the procurement project requirements, writing the technical
specifications, determining the Approved Budget for the Contract, identifying the schedule of milestone
activities, and determining the method of procurement.

The PPMP is then converted into the bidding documents, which ought to contain all the information a
prospective bidder needs to prepare its bid. Therefore, in preparing the bidding documents, the procuring entity
has to ensure that such accurately and comprehensively reflect the main elements of the PPMP. One also has
to make sure that the documents are of the kind and form prescribed by the revised IRR and this Manual.

The pre-procurement conference is the forum where all officials of the Procuring Entity involved in the project
meet to discuss all aspects of the said project to determine the readiness of the same to undertake the
procurement. The conference focuses on the technical specifications, the ABC, the appropriateness and
applicability of the recommended method of procurement, and the availability of pertinent budget releases,
among others.

The preparation of the bidding documents and the conduct of the pre-procurement conference for the
procurement of infrastructure projects are discussed in this Volume.

7
MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

A. PROCUREMENT PLANNING
1. LEGAL REFERENCE
Sections 7, 17.6 and Annex A of the revised IRR provide the rules in relation to Detailed Engineering
and Procurement Planning.

2. PURPOSE
The purpose of procurement planning is for the Procuring Entity to schedule its procurement
activities in advance, consistent with its approved budget and its target date of implementation.
For infrastructure projects, the APP shall consider the appropriate timing/phasing of related project
activities such as engineering design and acquisition of Right of Way to reduce/lower project costs,
among others.
The government hospitals or medical centers should have a master site development plans which
indicates the rational allocation of land using activities showing at least the location and plan of
existing and proposed building layout of road networks including entrances, exits and parking areas
and landscaped areas. All hospital plans for new construction, major renovation and rehabilitation
should have a Permit to Construct issued by the Bureau of Health Facilities and Services, for
licensing purposes. The minimum space and medical equipment for licensing and design purposes
should comply with BHFS standards otherwise the License to Operate will not be issued if such
standards are not complied with. For the construction of a new hospital, a certificate of need is
required based on Administrative Order No. 2006-0004 (Reference A) and its succeeding
amendments, AO 2006-0004-A (Reference B) and AO 2006-0004-B (Reference C).
Hospital design development should refer to the existing DOH Technical Guidelines on Planning and
Design of 10-bed, 25-bed and 100-bed hospitals. It should strictly comply with the pertinent
provisions of the following national codes:
• Revised National Building Code of the Philippines
• Accessibility Law
• Structural Code of the Philippines
• Revised Electrical Code of the Philippines
• Sanitary Code of the Philippines
• Mechanical Code of the Philippines
• Fire Code of the Philippines

8
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

3. RULES AND GUIDELINES

3.1 DETAILED ENGINEERING

No bidding and award of contract shall be made unless the detailed engineering
investigations, surveys and designs including the acquisition of the ROW for the project have
been sufficiently carried out. These investigations must then be duly approved in accordance
with the standards and specifications prescribed by the Head of the Procuring Entity
concerned or his duly authorized representative, and in accordance with the provisions of
Annex A of the revised IRR of R.A. 9184. The only exception to this are design and build
schemes wherein bidders are allowed to submit detailed engineering designs as part of their
bids. (Section 17.6 of the revised IRR)

3.2 HOW TO COMMENCE

Prior to the conduct of the detailed engineering investigations, surveys and designs, the
implementing office should draw a feasibility or preliminary engineering study which
establishes the technical viability of the project and conformance to land use and zoning
guidelines prescribed by existing laws.
The findings contained in the feasibility study, if undertaken for the project, should be
examined. If, in the course of this exercise, it is found that changes would be desirable in
the design standards of principal features, as proposed, specific recommendations for
such changes should be supported by detailed justifications, including their effects on the
cost, and, if necessary, the economic justification (Annex A-1 of the revised IRR).

3.3 ACTIVITIES COVERED

Only after the acceptance and approval of the feasibility study shall the detailed engineering
investigations be conducted. A schedule of detailed engineering activities shall include the
following:
a. Survey
b. Site Investigation
c. Soils and Foundation Investigation
d. Construction Materials Investigation
e. Preparation of Design Plans and Design Analysis
f. Preparation of Technical Specifications
g. Preparation of Quantity and Cost Estimates
h. Preparation of Program of Work
i. Preparation of Proposed Construction Schedule [and estimated Cash Flow for
projects with Schedule over six (6) Months]

9
MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

j. Preparation of Site or Right of Way Plans including Schedule of Acquisition

k. Preparation of Utility Relocation Plan
l. Preparation and Submission of Design Report
m. Environmental Impact Statement for critical project or project in a critical area, as
defined by the Department of Environment and Natural Resources

n. Preparation of minimum requirements for a Construction Safety and Health

Program for the project being considered

o. Preparation of Tender/Bidding Documents

Furthermore, work under detailed engineering shall include, but not necessarily be limited to,
the following:

1. Setting Design Standards – Design standards shall be in accordance with

appropriate standards and accepted detailed engineering practice adopted by the
DOH. Design standards for structures shall take into account, among other things,
the seismicity of the area to determine the optimum safety of structures and to
minimize possible earthquake damage.
Health facilities have special requirements. The Health Facility Infrastructure
Standards Manual and related administrative issuances issued by the DOH
through the National Center for Health Facilities Development shall be referred and
adhered including the minimum standards set by the BHFS for licensing purposes,
As mentioned these include among others minimum space and equipment
requirements; security, sanitary and protection standards. For example, X-ray
facilities and ionizing radiation emitting diagnostic or therapeutic equipments have
technical and protection standards to be considered as early as construction of
place of installation.

2. Conduct of Field Surveys and Investigations – Necessary field surveys and

investigations which may include aerial, topographic, hydrographic, hydrologic,
geological, soil and materials, parcellary and other surveys shall be carried out in
accordance with the design guidelines, criteria and standards adopted by the
agency concerned. All survey and investigation works shall be done so as to
provide input data for the design and production of plans that will permit quantity
estimates to be made within plus or minus ten percent (10%) of the final quantities
of the completed structure.

3. Conduct of Design Analyses, and Preparation of Design Plans and Design Report.
These shall conform to standards of DOH-NCHFD and other relevant government
and international standards.

10
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

4. Preparation of Contract Plans – The following plans shall be prepared for each
construction contract in accordance with guidelines and standards adopted by the
Procuring Entity concerned, incorporating at least the following:

a. Site development plan;

b. Plans and profile sheet;

c. Typical sections and details;

d. Drainage details where applicable;

e. Structural plans at appropriate scales indicating all details necessary in

order that the complete structure can be set out and constructed; and

f. Other details which may be required by health infrastructure licensing and

design
5. Preparation of Technical Specifications –These shall adopt the NCHFD standards
or health industry standard which is most applicable. Supplemental Specifications
shall be prepared for specific items of work or methods of construction,
measurement and payment. Reference can be made to the DOH Standard
Specifications as well if necessary.

6. Preparation of Quantity Estimates – All construction quantities shall be estimated

with a degree of accuracy of not more than plus or minus ten percent (10%) of the
final quantities as the as-built structure.

7. Preparation of Cost Estimates and Approved Budget for the Contract – Unit prices
for the different work items shall be prepared for each contract using costs based
on current market prices as projected over the proposed construction period,
divided into local and foreign exchange costs, as the case may be. The ABC shall
be prepared by the official duly designated by the HOPE. The ABC shall be
approved by the HOPE or his duly designated official. The ABC is further
discussed in the succeeding parts of this Manual.

8. Preparation of Program of Work including Schedule – The program of work must

include, estimates of the work items, quantities and costs, the general methods,
arrangements, order and timing of the project activities, including a PERT/CPM
diagram and bar chart with S-curve. The program of work must cover at least a
usable portion of the project. No construction shall be started for portions of the
project that are less than usable, except projects requiring stage construction, in
which case continuity of construction up to the completion of a usable portion must
be assured.

11
MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

9. Determination of Contract Packages. The number and sizes of the contracts into
which the project is to be packaged depends on the kind, complexity, magnitude,
cost and timetable of the project. A large infrastructure project, say, costing P100
million or more may, where feasible, be packaged into smaller contracts covering
separate sections or work components, provided that the technical integrity of the
structure is not impaired, and that the contracts are within the capabilities of
Filipino contractors. This is in line with the objective of E.O. 278, series of 2004.
There shall be no splitting of contracts, however, as defined in E.O. 109-A for the
purpose of circumventing the provisions of law and existing rules and regulations.

10. Preparation of Site or ROW Plans, Schedule of Acquisition and Resettlement

Action Plans – This shall be based on parcellary surveys and socio-economic
surveys on households affected by the project.

11. Preparation of Utilities Relocation Plan – As necessary, these shall include

electric, water, sewerage, telephone, drainage, and other utilities that will be
affected by the project.

12. Preparation of Environmental Impact Statement – This shall be done for a critical
project or a project in a critical area, as defined by the DENR.

13. Preparation of Minimum Requirements for a Construction Safety and Health

Program – These shall conform to the standards of the Department of Labor and
Employment.
14. Conduct of Value Engineering Studies – Value engineering shall be undertaken for
all projects costing P15 million or more. Value engineering shall analyze alternative
schemes of achieving the project objectives in order to delete or reduce the non-
essential features and lessen life cycle costs of the project without sacrificing the
quality and integrity of the structure, while attaining its essential function,
performance, and safety.

15. Contract Time or Duration – The proposed contract time in calendar days shall be
calculated by first estimating the number of working days required to complete the
works through a PERT/CPM analysis of the project activities. Then, added to this
will be (1) the non-working days (Sundays and holidays) and (2) the estimated
number of rainy/unworkable days considered unfavorable for implementing the
works at the site, based on the records of the PAGASA. Item (2) shall be made
known before the date of bidding through the Instructions to Bidders for the
purpose of guiding both the government and winning contractor in taking action on
requests for time extensions.

16. Warranty Period – This shall be specified from 2-15 years, depending upon the
type of project in accordance with the provisions of the revised IRR of R.A. 9184.

12
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

17. Preparation of Bidding Documents – This is discussed in Section 2.3, Volume III
the above rules shall apply to the implementation of infrastructure projects under
normal or ordinary conditions. However, under emergency or extraordinary cases
involving major calamities and disasters as declared by the President of the
Philippines, where time is of the essence to save lives and properties and restore
damaged infrastructures, detailed engineering shall be conducted in accordance
with the guidelines and procedures prescribed by the Department of Public Works
and Highways and approved by the Infrastructure Committee of the National
Economic and Development Authority Board. This will enable quick response in
such cases, while maintaining the safety and integrity of the structure.

The NCHFD shall implement, at the Central Office, CHDs, and Hospitals, a system
for the review and assurance of the quality of detailed engineering outputs to
ensure that they conform to the prescribed design standards and will allow
estimates of quantities to be made within plus or minus ten percent (10%) of the
final values of the completed structure. The survey and design data of structural
components that are prone to significant overstatement and variation, such as
earthworks and base course, shall be especially scrutinized to assure the integrity
of the design and estimates.

3.4 CONSIDERATION IN SETTING THE STANDARDS AND TECHNICAL SPECIFICATIONS

a. Standards and technical specifications quoted in bidding documents should

promote the broadest possible competition, while assuring the critical
performance or other requirements for the goods and/or works under procurement;

b. As far as possible, the Procuring Entity should specify internationally accepted

standards such as those issued by the International Standards Organization with
which the equipment or materials or workmanship should comply, except that
where such international standards are unavailable or are inappropriate, national
standards may be specified; and

c. In all cases, the bidding documents should state that equipment, material or
workmanship meeting other standards, which promise at least substantial
equivalent, should also be accepted.

For Hospital construction/repair/upgrading and all its ancillary facilities, refer to the Manuals on
Technical Guidelines for Hospitals and Health Facilities Planning and Design, published by the
Health Infrastructure Division of the National Center for Health Facilities and Services. These are
posted on the DOH website.
http://www.doh.gov.ph/wiki/images/4/4f/Volume_1_Introduction_and_Instruction_for_use.pdf

13
MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

3.5 APPROVED BUDGET OF THE CONTRACT

The ABC is the budget for the contract duly approved by the HOPE, as included in the
Budget reflected in the approved or proposed General Appropriations Act, continuing, and
automatic appropriations, in the case of national government agencies; the corporate
budget for the contract approved by the governing board, pursuant to Executive Order No.
518, series of 1979 (E.O. 518). For Foreign-funded Procurement, the estimated contract
cost for the project refers to the cost estimate prepared by the procuring entity and
approved by the foreign government/foreign or international financing institution as
specified in the Treaty or International or Executive Agreement. Thus, the ABC referred
to in R.A. 9184 and the revised IRR basically refers to the proposed budget for the
project approved by the Head of the Procuring Entity based on the APP as consolidated
from various PPMPs.

3.6 FACTORS TO CONSIDER IN DETERMINING THE ABC

The Procuring Entity shall consider the following factors in determining the ABC:

a. Complete and adequate detailed engineering which enable estimates of quantities

to be made within plus or minus ten percent (10%) of the final value of the finished
works.
b. Compliance with the DPWH Standard Specifications for Public Works and
Highways Projects, particularly Volume II for Highways, Bridges and Airports, 2004,
and Volume III for Buildings, Flood Control and Drainage, and Water Supply,
1995.
c. Use of appropriate construction methods.
d. Use of applicable construction industry norms and practices, including minimum
production rates of construction equipment and labor and components of direct
and indirect costs.
e. Use of identified feasible sources of construction materials.
f. Use of market prices of component labor, materials and equipment and monitored
as-built costs of contract work items.
g. Reasonable risks and contingencies.
h. Inclusion of all relevant and legitimate cost items to be incurred by the contractor.
i. Compliance with D.O. No. 57, series of 2002, as amended, regarding the ABC.
The ABC must be based on the detailed engineering of the project which passes the quality
assurance system for design of the Department and is duly cleared by NCHFD.
The ABC shall consist of the following cost elements, based on DPWH D.O. No. 57, series of
2002, as amended.

14
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

a. Direct Cost

i. Cost of materials – cost source (including processing), hauling, handling,

storage, and allowance for at waste/losses not exceeding 5% of the
materials requirement.

ii. Cost of labor – salaries/wages and fringe benefits in accordance with law
and based on market rates in the locality, and considering the minimum
production rate for labor set by the DPWH.

iii. Cost of equipment – rental, mobilization/demobilization, considering

minimum production rates for equipment set by the DPWH.

b. Indirect Cost

i. Overhead expenses – engineering and administrative supervision,

transportation allowances, office expenses, and premiums on
Comprehensive All-Risk Insurance and Warranty Security, not exceeding
5-10% of Estimated Direct Cost, following the schedule of overhead,
contingencies and miscellaneous expenses for different costs, duration,
and warranty periods set by the DPWH based on industry norms as
embodied in a Department Order.

ii. Contingencies – not exceeding 0.5-2% of EDC, following the said schedule
of OCM expenses.

iii. Miscellaneous – laboratory tests, etc., not exceeding 0.3-1% of EDC.

iv. Profit per year – not exceeding OCC (n+2)/12 multiplied by the EDC,
where OCC is the opportunity cost of capital in the Philippines in percent
per annum as determined by the NEDA (presently 15%), and n is the
contract duration in months, provided that the profit shall be (a) at least
one-half (1/2) of the OCC and (b) at most two-thirds (2/3) of the OCC
multiplied by the EDC.

v. Value Added Tax – twelve percent (12%) of [EDC + (Estimated IC for (1) to
(4))]

Since the contract cost is fixed, the estimated unit price for each work item
must allow for the projected inflation and foreign exchange fluctuation
during the implementation period, especially for construction with duration
of more than one year. The estimator shall refer to the NEDA for estimates
of likely inflation rates and to the Bangko Sentral ng Pilipinas for estimates
of probable foreign exchange fluctuation.

15
MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

In preparing, reviewing, and approving the ABC, the Procuring Entity shall
refer to the computerized DPWH database which monitors and posts (a)
prices of component materials, labor, and equipment based on market
prices in the locality, and (b) prices of completed work items in place, e.g.,
base course, based on as-built costs.

If the project or contract has a foreign component, it is also best to include

a currency valuation adjustment factor, in order to hedge against any
foreign exchange rate fluctuations between the planning phase and the
actual procurement date. To determine the factor to be used, the PMO or
end-user unit may request for guidance from the BSP, or refer to BSP
forecasts, if available.

If the resulting sum of the different cost components is lower than the
appropriation for the procurement, then the ABC should be equal to the
sum of the cost components. If the resulting sum is higher than the
appropriation, it is advisable to review the technical specifications and the
computation of the ABC. In any case, the ABC should not exceed the
appropriation.

In case of bid failure, the BAC is obligated under Section 35 of the revised
IRR to conduct mandatory review. In order to determine the reason for the
failed bidding, the BAC shall conduct a mandatory review and evaluation
of the terms, conditions, and specifications in the Bidding Documents,
including its cost estimates (Section 35.2 of the revised IRR). Based on
its findings, the BAC shall revise the terms, conditions, and specifications,
and if necessary, adjust the ABC, subject to the required approvals, and
conduct a re-bidding with re-advertisement and/or posting, as provided
for in Section 21.2 of the revised IRR.

Under this new rule, ABC may be adjusted upward or downward without
any restriction/limitation if so warranted. This is a variation from the
previous rule, embodied in GPPB Resolution 07-2005, which only allows
upward adjustment of the ABC from the original amount on the condition
that there has been two-failed bidding and previous modification of the
terms, conditions, and specifications of the project.

Furthermore, downward adjustment of the ABC may be considered after

the first failed bidding to reflect prevailing market prices and/or scope of
work or suit actual field conditions of the project.

16
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

B. PREPARING THE BIDDING DOCUMENTS

1. LEGAL PURPOSE

Section 17 of the revised IRR is the legal basis for the issuance of the bidding documents for the
procurement of infrastructure projects.

2. PURPOSE
As defined in Section 5.f of the revised IRR, bidding documents refer to the documents issued by the
procuring entity as the basis for bids, furnishing all information necessary for a prospective bidder to
prepare a bid for the infrastructure projects, goods and/or consulting services required by the
procuring entity. These clearly and adequately define, among others:

2.1 The scope of work, approved budget, duration, and expected outputs of the proposed
contract;

2.2 The minimum legal, technical, and financial requirements that the bidder must meet to be
eligible to bid;

2.3 The documents and other requirements that the bidder must include in its bid;

2.4 The process and rules for the submission and receipt of bids, evaluation of bids, post-
qualification, and award of contract; and

2.5 The terms and conditions of the contract between the winning bidder and the Procuring
Entity including their prospective obligations.

3. RULES AND GUIDELINES

3.1 Contents

The PBDs contain the following:

Section I - Invitation to Bid

Section II - Instructions to Bidders

Section III - Bid Data Sheet

Section IV - General Conditions of Contract

Section V - Special Conditions of Contract

Section VI – Specifications

Section VII - Drawings

17
MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

Section VIII - Bill of Quantities

Section IX – Forms

Specifically, as provided in Section 17.1 of the revised IRR, the bidding documents shall
include the following information embodied in the standard forms and in this manual as
approved by the GPPB, as follows:

a. ABC and source of funds;

b. Date, time and place of the pre-bid conference (where applicable), submission of
bids and opening of bids;

c. Eligibility Requirements;
d. ITB, including criteria for eligibility, bid evaluation and post-qualification;
e. Scope of Work;
f. Plans and Technical Specifications;

g. Form of Bid and Bill of Quantities;

h. Completion Schedule;
i. Form, amount and validity period of Bid Security, the amount to be stated in
Philippine Peso terms (Section 27.3 of the revised IRR) and its validity period to
be determined by the Head of the Procuring Entity but not to exceed one hundred
twenty (120) calendar days after the opening of bids (Section 28.1of the revised
IRR);
j. Form and amount of Performance Security and Warranty; and
k. Form of Contract, GCC and SCC.
The contents of the standard bidding documents for FAPs may vary. For every contract to
be bid, the Procuring Entity shall prepare the BDs by adopting the PBD, Third Edition. The
Procuring Entity, however, shall insert in the PBDs the necessary information specific to the
contract, particularly in the IB, BDS, SCC, Specifications, Drawings, and BOQ, in order to
produce the complete BDS.

The specifications and other terms in the Bidding Documents shall reflect minimum
requirements or specifications required to meet the needs of the procuring entity in clear
and unambiguous term (Section 17.2 of the revised IRR). A bidder may, therefore, be
allowed to submit a superior offer. However, in the evaluation of the bids, no premium or
bonus must be given as a result of this superior offer. This rule is based on the nature of
the procedure used to evaluate the technical proposals – a “passed/failed” method – such
that the presence or absence of the technical requirements is the sole basis for determining
technical compliance. After having established compliance with the technical specifications,
the next factor to consider would then be the price or financial bid.
18
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

In addition to properly crafted bidding documents, there are other practices that should be
observed by the Procuring Entity to ensure successful procurement.

3.2 OTHER PRACTICES TO ENSURE SUCCESSFUL PROCUREMENT

a. All prospective bidders should be provided the same information, and should be
assured of equal opportunities to obtain additional information on a timely basis.

b. Procuring Entities should provide reasonable access to project sites for visits by
prospective bidders.

c. For works, particularly for those requiring refurbishing existing works, a pre-bid
conference may be arranged whereby potential bidders may meet with the
Procuring Entity’s representatives to seek clarifications (in person or online).

d. Any additional information, clarification, correction of errors, or modifications of

bidding documents should be sent to each recipient of the original bidding
documents in sufficient time before the deadline for receipt of bids to enable
bidders to take appropriate actions. If necessary, the deadline should be extended.

3.3 PARTICIPANT
The following may participate in the preparation of the bidding documents:
a. BAC;
b. BAC Secretariat.
c. TWG or technical experts, when necessary;
d. Consultants, if any; and
e. End-user unit/PMO.

3.4 TIME OF PREPARATION

The bidding documents must be prepared in time for presentation at the pre- procurement
conference. After the conference, and preferably before the advertisement and/or posting
of the IB, it should be ascertained that these documents are finalized.

3.5 VARIOUS TYPES AND SIZES OF CONTRACTS

The bidding documents should clearly state the type of contract to be entered into and
contain the proposed contract provisions appropriate therefore. The most common types of
contracts provide for payments on the basis of a lump sum, unit price, or combinations
thereof. Reimbursable cost contracts are acceptable to IFIs only in exceptional
circumstances such as conditions of high risk or where costs cannot be determined in
advanced with sufficient accuracy. Such contracts should include appropriate incentives to
limit costs.
19
MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

The size and scope of individual contracts will depend on the magnitude, nature, and
location of the project, for example:

a. For projects requiring a variety of goods and works, separate contracts may be
awarded for the supply and/or installation of different items of equipment and
plant (“plant” refers to installed equipment, as in a production facility) and for
the works.

b. For a project requiring similar but separate items of equipment or works, bids may
be invited under alternative contract options that would attract the interest of both
small and large firms, which could be allowed, at their option, to bid for individual
contracts (lots) or for a group of similar contracts (package). All bids and
combinations of bids should be received by the same deadline and opened and
evaluated simultaneously so as to determine the bid or combination of bids offering
the lowest calculated cost to the Procuring Entity.

c. In certain cases, the Procuring Entity may require a turnkey contract under which
the design and engineering, the supply and installation of equipment, and the
construction of a complete facility or works are provided less than one (1) contract.
Alternatively, the Procuring Entity may remain responsible for the design and
engineering, and invite bids for a single responsibility contract for the supply and
installation of all goods and works required for the project component. Also
acceptable where appropriate are contracts such as, but not limited to:

i. Design and build;

ii. Design, build and operate;
iii. Design, build and lease; and
iv. Management contract.
4. PROCEDURES

BAC Secretariat, with the assistance from the TWG members or technical experts whenever
necessary, consultants (if any) and the end-user unit/PMO, prepares the bidding documents by using
the PBD, as described in Section 3.1 of the revised IRR hereof, following the standard forms and this
manual as approved by the GPPB.

The Procuring Entity may require additional document requirements or specifications, where
applicable and necessary for prospective bidders to prepare their respective bids. The bidding
documents, as amended, shall subsequently form an integral part of the contract. Statements not
made in writing at any stage of the bidding process shall not modify the bidding documents.

20
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

4.1 POSTING AND DOWNLOADING OF BIDDING DOCUMENTS FROM THE PHILGEPS

WEBSITE

The procuring entity shall also post the Bidding Documents at its website and at the
PhilGEPS website from the time that the Invitation to Bid is advertised. Prospective
bidders may download the Bidding Documents from any of the said websites; provided
that, bidders shall pay the fee for the Bidding Documents upon submission of their Bids
(Section 17.5 of the revised IRR).

The above cited provision facilitates a more expeditious and efficient issuance of the
bidding documents because it is made available online. However, the bidders are still
required to pay the necessary fee for the bidding documents upon submission of their bids.

4.2 MONITORING OF BIDDING DOCUMENTS

To monitor the issuance of bidding documents, the BAC may label or number copies of
such documents, i.e., “Copy No. 1, 2, 3, etc.” or “Copy for Observer”, “Copy for BAC
Member No.1”. The Secretariat may choose a numbering or labeling system that is
appropriate for the Procuring Entity.

21
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

C. PRE-PROCUREMENT CONFERENCE
1. LEGAL REFERENCE
Section 20 of the revised IRR is the legal basis for the conduct of a pre-procurement conference.

2. PURPOSE
The pre-procurement conference is the forum where all officials involved in the procurement meet
and discuss all aspects of the transaction and check whether the project is ready for procurement in
terms of legal, technical and financial requirements. These aspects include the technical
specifications, the ABC, the applicability and appropriateness of the recommended method of
procurement and the related milestones, the bidding documents, and availability of the pertinent
budget release for the project.

The conference shall confirm the scope of work under the proposed contract, ensure that the
procurement is consistent with the PPMP and the APP, check the budget for the contract, and
review and approve the Bidding Documents, making sure that they are complete and comply with
the set standards and rules. The conference will also review the criteria for the examination of
eligibility and bid requirements, bid evaluation, post- qualification, and award, and agree on the
mode and schedule of procurement.

3. RULES AND GUIDELINES

For projects involving an ABC amounting to more than Five Million Pesos (P5,000,000.00), a pre-
procurement conference shall be conducted to determine the readiness of the Procuring
Entity to procure infrastructure projects in terms of the legal, technical and financial requirements.
More specifically, it ensures that the procurement will proceed in accordance with the PPMP and
APP, confirms the availability of appropriations and programmed budget for the contract, and
reviews all relevant documents in relation to their adherence to the law (Section 20 of the revised
IRR).

Even when the ABC of the infrastructure project amounts to Five Million Philippine Pesos (PhP
5,000,000.00) million and below, the BAC is encouraged to conduct a pre-procurement conference
if the circumstances, like the complexity of the technical specifications, warrant the holding of such
a conference before the Procuring Entity proceeds with the procurement.

3.1 Period of Action

The pre-procurement conference must be conducted prior to the advertisement or issuance

of the IB (Section 20.1 of the revised IRR). At least seven (7) calendar days prior to
publication or issuance of the IB would be an advisable timeframe for the pre-procurement
conference, to give the technical staff sufficient time to incorporate the necessary
changes, amendments or revisions thereto.

22
3.2 Responsibility of the BAC

The BAC, through its Secretariat, calls a pre-procurement conference.

3.3 Participants

The participants in a pre-procurement conference are:

a. BAC;
b. Secretariat;
c. Representatives of the PMO or end-user unit/s;
d. Members of the TWG/s or technical experts, whenever necessary, who help in the
preparation of the bidding documents and consultants hired by the Procuring
Entity who prepared the technical specifications, TORs, bidding documents and
the draft advertisement, as the case may be, for the procurement at hand;

e. Officials who reviewed the above-enumerated documents prior to final approval, if

any; and

f. Other officials concerned, as may be required.

3.4 Expected Results

A pre-procurement conference should: (Section 20.1 of the revised IRR)
a. Confirm the description and scope of the contract, the ABC, and contract duration.

b. Ensure that the procurement is in accordance with the project and annual
procurement plans;

c. Determine the readiness of the procurement at hand, including, among other

aspects, the following:

i. Availability of appropriations and programmed budget for contract;

ii. Completeness of the Bidding Documents and their adherence to relevant

general procurement guidelines;

iii. Completion of the detailed engineering according to the prescribed

standards in the case of infrastructure projects; and

iv. Confirmation of the availability of ROW and the ownership of affected

properties.

d. Review, modify and agree on the criteria for eligibility screening, evaluation, and
post-qualification;
MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

e. Review and adopt the procurement schedule, including deadlines and timeframes,
for the different activities;

f. Reiterate and emphasize the importance of confidentiality, in accordance with

Section 19 of the revised IRR, and the applicable sanctions and penalties, as well
as agree on measures to ensure compliance with the foregoing;

g. Review, modify and agree on the criteria for the evaluation of bids, and ensure that
the said criteria are fair, reasonable and applicable to the procurement at hand, are
of the “passed-failed” type for the evaluation of the technical component, pertain to
the price for the evaluation of the financial component, and includes those which
will affect the completeness of the bids in the bill of quantities and any minor
arithmetical correction in getting the correct calculated price;

h. Clarify that the specifications and other terms in the bidding documents are
minimum requirements and that the bidder may submit an offer which provides for
superior specifications, better terms and conditions to the government at no extra
cost, without any bonus, credit or premium in the bid evaluation. For example, the
bidding documents shall emphasize that the bidder shall provide information on the
minimum equipment required for the project – with the corresponding engine
numbers, chassis numbers and/or serial numbers. Additionally, the bidding
documents shall clearly state the minimum required experiences of the bidders’
personnel, such as project managers, project engineers, material engineers and
foreman; and,
i. Ensure that the requirements to be procured are in accordance with the ABC and
Finalize and approve the IB.

24
 SECTION 3

PROCUREMENT OF
INFRASTRUCTURE
PROJECTS
THROUGH
COMPETITIVE BIDDING
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

PART ONE – COMPETITIVE BIDDING

COMPETITIVE BIDDING
Competitive or Public Bidding is a method of procurement that is open to any interested and qualified party. It
is preferred over other methods of procurement. A Procuring Entity should, therefore, see to it that its
procurement program allows enough time to conduct such Public Bidding (Section 48.2 of the revised IRR).

Refers to a method of procurement which is open to participation by any interested party and which consists of
the following processes: advertisement, pre-bid conference, submission, receipt, opening and examination of
bids, evaluation of bids, post-qualification, and award of contract. For purposes of, and throughout the revised
IRR, the terms “Competitive Bidding” and “Public Bidding” shall have the same meaning and shall be used
interchangeably (Section 5.h of the revised IRR).

The procurement process from the opening of bids up to the award of contract should not exceed three (3)
months, or a shorter period to be determined by the Procuring Entity concerned (Section 38 of the revised
IRR). In case the deadline for each activity falls on a non-working day (i.e. Saturday and Sunday), legal
holiday, or special non-working holiday, the deadline shall be the next working day. (Refer to detailed
timeline as follows and Annex C of the revised IRR).

27
MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

STEP1. ADVERTISE AND POST THE INVITATION TO

BID
1. LEGAL REFERENCE

Section 21 of the revised IRR provides for the legal reference for advertisement and posting of the
IB.

2. PURPOSE

The IB serves as the notice to the public and all interested parties of the procurement and bidding
opportunities of the Procuring Entity.
The IB serves as the notice to interested contractors and to the general public and other interested
parties of the proposed procurement for a specific contract of the Procuring Entity. It provides basic
information that will enable prospective bidders to decide whether or not to participate in the
procurement at hand.
Advertising and posting the IB and ensuring its widest possible dissemination will increase the
number of prospective bidders and intensify competition for the procurement activity or project.
Intensified competition, in turn, will ensure that the government, in general, and the Procuring
Entity, in particular, will get the best possible proposals as to quality and cost.

3. RULES AND GUIDELINES

3.1 Contents
The IB must contain the following:
a. Name and location of the contract to be bid, the project background and other
relevant information regarding the proposed contract works, including a brief
description of the type, size, major items, and other important or relevant features
of the works (Section 21.1.a.ii of the revised IRR).

b. A general statement on the criteria to be used by the Procuring Entity for:

i. Preliminary examination of eligibility and bid requirements;
ii. Detailed bid evaluation; and
iii. Post-qualification;
c. The date, time and place of the deadline for:
i. The pre-bid conference, if any; and,
ii. The submission, receipt, opening and examination of the eligibility and bid
requirements;

28
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

d. ABC;
e. Source of funding;
f. Period of availability of the bidding documents, the place where the bidding
documents may be secured and, where applicable, the price of the eligibility
documents;

g. Contract duration;

h. Name, address, telephone number, facsimile number, e-mail and website

addresses of the concerned Procuring Entity, as well as its designated
contact person;

i. Reservation Clause, which is normally located at the bottom of the notice; and

j. Such other necessary information deemed relevant by the Procuring Entity.

3.2 Posting

The IB for infrastructure projects with ABCs of more than Five Million Pesos (PhP
5,000,000.00) must be advertised and posted as follows (Section 21.2.2 of the revised
IRR):
a. Advertised at least once in a newspaper of general nationwide circulation, which
has been regularly published for at least two (2) years, before the date of issue of
the advertisement. It is advisable that the posting be made at least on the seventh
(7th) calendar day after the pre-procurement conference. However, if during the
pre-procurement conference, the BAC finds that it is not prepared to undertake the
bidding process, it should not hesitate to consider moving date of the
advertisement/posting thereof at a later date to allow more time to perfect the
same);

b. Continuously on the website of the Procuring Entity, as provided in the revised

Section 8 of the revised IRR, the PhilGEPS for seven (7) calendar days starting on
date of advertisement, if applicable, and the website prescribed by the foreign
government/foreign or international financing institution, if applicable; and

c. At any conspicuous place reserved for this purpose in the premises of the
Procuring Entity as certified by the head of the BAC Secretariat, for seven (7)
calendar days, if applicable. Moreover, the IB shall also be posted at the
city/municipal hall and/or provincial capitol where the project is located. Finally, the
heads of contractors’ organizations in the area shall also be informed of such
advertisement.

29
MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

For projects with ABCs of Five Million Pesos (P 5,000,000.00) and below, the IB should be
posted:
a. Continuously on the website of the Procuring Entity, as provided in Section 8
of the revised IRR, and the PhilGEPS for seven (7) calendar days starting on date
of advertisement, if applicable; and

b. At any conspicuous place reserved for this purpose in the premises of the
Procuring Entity, as certified by the head of the BAC Secretariat, for seven (7)
calendar days, if applicable. Moreover, the IB shall also be posted at the
city/municipal hall and/or provincial capitol where the project is located. Finally,
the heads of contractors’ organizations in the area shall also be informed of such
advertisement.

FAPs may have additional publication requirements. For this reason, reference should be
made to the appropriate standard bidding documents for the project.

3.3 Responsibility of the BAC

The BAC is responsible for ensuring that the IB is advertised and posted in accordance
with law. However, the actual advertisement and posting thereof shall be undertaken by the
BAC Secretariat, in performance of its function, as prescribed in RA 9184, the revised IRR,
and this manual.

3.4 Reservation Clause

The Reservation Clause declares that the Procuring Entity reserves the right to reject any
and all bids, to declare a failure of bidding, or not to award the contract in the following
situation:

a. If there is prima facie evidence of collusion between appropriate public officers or

employees of the procuring entity, or between the BAC and any of the bidders, or if
the collusion is between or among the bidders themselves, or between a bidder
and a third party, including any act which restricts, suppresses or nullifies or tends
to restrict, suppress or nullify competition;

b. If the BAC is found to have failed in following the prescribed bidding procedures for
which the applicable sanctions shall be applied to the erring officers, as provided in
Section 65 of the revised IRR; or

c. For any justifiable and reasonable ground where the award of the contract
will not redound to the benefit of the GOP, as follows:

i. If the physical and economic conditions have significantly changed so as

to render the project no longer economically, financially, or technically
feasible, as determined by the HOPE;

30
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

ii. If the project is no longer necessary as determined by the HOPE; and

iii. If the source of funds for the project has been withheld or reduced
through no fault of the procuring entity. (Section 41 of the revised IRR)

In the case of Mata V. San Diego, G.R. No. L-30447 (March 21, 1975), the Supreme Court
of the Philippines declared that a bidder is bound by the reservation clause, and the said
clause vests in the authority concerned the discretion to ascertain who among the
bidders is the lowest responsive bidder or the lowest and best bidder or most
advantageous to the best interest of the Government. As such, a bidder has no right or
cause of action to compel the BAC or agency to award the contract to it. The Court further
stated that this requires inquiry, investigation, comparison, deliberation and decision – a
quasi-judicial function which, when honestly exercised, may not be reviewed by the courts.
It should be noted, however, that R.A. 9184 Section 41 of the revised IRR, has placed
some limiting qualifiers on the possible contents of the Reservation Clause.

If the HOPE abuses his power to reject any and all bids, as provided by the Reservation
Clause, with manifest preference to any bidder who is closely related to him in accordance
with Section 47 of the revised IRR, or if it is proven that he exerted undue influence or
undue pressure on any member of the BAC or any officer or employee of the Procuring
Entity to take such action, and the same favors or tends to favor a particular bidder, he
shall be meted with the penalties provided in Section 65 of the revised IRR of RA 9184
(Section 65.1.e of the revised IRR).

4. PROCEDURES
The following steps are followed in the advertising and posting of IBs:
a. For public bidding of contracts with an ABC costing more than Five Million Philippine Pesos
(PhP 5,000,000.00)
i. The BAC Secretariat prepares the draft IB for review/approval of the BAC.
ii. The BAC approves the contents of the IB.
iii. The BAC Secretariat posts the IB in any conspicuous place reserved for this
purpose in the premises of the Procuring Entity for the duration required; and
this fact will be certified to by the head of the Secretariat.

iv. The BAC Secretariat advertises the IB in a newspaper for the duration required, as
described above. For priority programs and projects funded out of the annual GAA,
which are intended for implementation within the province, the IB may also be
advertised in a local newspaper for the same duration as above.

v. The BAC Secretariat, through its member who is authorized to transact with the
PhilGEPS, posts the IB in the following websites: the PhilGEPS and that of the
Procuring Entity, if available, for the duration so required.
31
MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

b. For public bidding of contracts with an ABC costing Five Million Philippine Pesos (PhP
5,000,000.00) and below:
i. BAC Secretariat prepares the draft IB for review/approval of the BAC.
ii. BAC approves the contents of the IB.
iii. BAC Secretariat performs steps iii and v in Item a above.

32
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

STEP 2. ISSUE BIDDING DOCUMENTS

1. LEGAL REFERENCE

Section 17 of the revised IRR is the legal reference for the issuance of the bidding documents.

2. PURPOSE

This is the stage when the Procuring Entity provides the prospective Bidders a copy of the bidding
documents so that prospective Bidders can study the requirements and conditions of the
procurement process being adopted in general and the specific procurement being bided.

3. RULES AND GUIDELINES

3.1 Schedule bidding documents issuance

Prospective bidders must be allowed to acquire or purchase the bidding documents from the
time the IB is first advertised/posted until the deadline for the submission and receipt of bids
(Section 17.3 of the revised IRR).

No bidding and award of contract for infrastructure projects shall be made unless the
detailed engineering investigations, surveys and designs, including the acquisition of the
ROW, for the project have been sufficiently carried out and duly approved in accordance
with the standards and specifications prescribed by the HOPE concerned or his duly
authorized representative, and in accordance with the provisions of Annex “A” of the revised
IRR.

The exception is design and build scheme, wherein the bidders shall be allowed to submit
its detailed engineering designs as part of its bid. The procedures for the procurement and
contract implementation of infrastructure projects using a design and build scheme shall be
in accordance with the provisions of Annex “G” of the revised IRR. (Section 17.6 of the
revised IRR)

The bidding documents are strictly confidential and may not be divulged or released
to any person prior to its official release, except to those officially authorized in the
handling of the documents. However, after its official release, it shall be made available to
the public, unless the procurement at hand affects national security.

3.2 Cost of bidding documents

The BAC must consider the cost recovery component in determining the price which
interested contractors would have to pay for the bidding documents ensure that the same
would not have an effect of discouraging competition.

33
MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

The cost recovery component may include the following:

a. Direct costs, which include:
i. Development costs, which are incurred in developing the original content
of the documents, designs, plans and specifications. However, the design
cost may be excluded if it is to be included in the capitalized cost of the
project, or the project cost, which is to be recovered from the use of the
completed project facility;
ii. Reproduction costs, which are labor, supplies and equipment rental costs
incurred in the reproduction of the documents; and
iii. Communication costs, which include mail and fax costs, plus costs of
advertising, meetings, internet/web posting, and other costs incurred for
the dissemination of information about the bidding.
b. Indirect costs, such as overhead, supervision, and administrative costs, allocated
to the bidding activity. This may include the costs of paying honoraria to the
officers and personnel of the Procuring Entity who are entitled thereto under the
law.

In practice, cost recovery entails getting the sum of Direct and Indirect Costs and
dividing the total by the expected number of prospective bidders who will
purchase the bidding documents. This number is an estimate derived from the
initial survey of the industry conducted by the procurement office/unit. The BAC is
discouraged from using the cost of bidding documents to limit the number of
bidders. If the procurement involves a fairly large project of a particular complexity,
and project implementation requires a higher level of size or capacity on the part of
the contractor, it would be more advisable for the BAC to allow the project
requirements to naturally limit competition among eligible contractors, by
summarizing the qualification requirements in the IB and detailing these in the
bidding documents, rather than for the BAC to unilaterally increase the price of
the bidding documents and hope that this price discourages competition. As
such, if the BAC wants to encourage the participation of as many bidders as
possible to create competition, it should consider charging a lower price for the
bidding documents, keeping in mind that this price should be sufficient to recover
the above-enumerated costs.

4. PROCEDURES

The BAC Secretariat issues the bidding documents to the prospective bidders that may wish to
secure the said documents. If the bidding documents are sold, only those prospective bidders who
have paid the amount required shall be issued bidding documents, and bidders should be informed
that the Procuring Entity will only accept bids from bidders that have purchased the bidding
documents from the office indicated in the IB. Prior to the issuance of the bidding documents,

34
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

eligible bidders may be required to show the official receipt as proof of payment (Section 14.1.e of
the revised IRR).

5. POSTING OF BIDDING DOCUMENTS

The procuring entity shall also post the Bidding Documents at its website and at the PhilGEPS
website from the time the IB is advertised. Prospective bidders may download the Bidding
Documents from any of the said websites; provided that, bidders shall pay the Bidding Documents
upon submission of their bids (Section 17.5 of the revised IRR).

35
MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

STEP 3. CALL A PRE-BID CONFERENCE AND ISSUE

SUPPLEMENTAL BID BULLETINS
1. LEGAL REFERENCE

Section 22 of the revised IRR provides for the imprimatur on the conduct pre-bid
conference and issuance of supplement bid bulletins.

2. PURPOSE
The pre-bid conference is the initial forum where the Procuring Entity’s representatives and the
prospective bidders discuss the different aspects of the procurement at hand.

The ground rules that will govern the procurement are discussed. In particular, the participants
discuss the technical and financial components of the contract to be bid. This is also an opportunity
for the prospective bidders to request for clarifications about the bidding documents. However, it
should be noted that any statement made at the pre-bid conference would not modify the terms of
the bidding documents, unless such statement is specifically identified in writing as an amendment
of the documents and issued as a supplemental/bid bulletin (Section 22.4 of the revised IRR).

It is important that responsible and knowledgeable officials attend the conference. The persons
who actually formulated the scope of work, plans and technical specifications for the project should
be present and among those representing the Procuring Entity. Prospective bidders, on the other
hand, should be encouraged to send representatives who are legally and technically
knowledgeable about the requirements of the procurement at hand. It is also important that the
prospective bidders are given ample time to review the bidding documents prior to the pre-bid
conference.

3. RULES AND GUIDELINES

3.1 PERIOD OF ACTION AND THRESHOLD OF PRE-BID CONFERENCE

A pre-bid conference must be held for all contracts with ABCs of at least One Million Pesos
(PhP1,000.000.00) and above. For contracts with ABCs of less than One Million Pesos
(PhP1,000.000.00), pre-bid conferences may or may not be held at the discretion of the
BAC. The BAC may also decide to hold such a pre-bid conference upon the written
request of a prospective bidder (Section 22.1 of the revised IRR).

The pre-bid conference must be held at least twelve (12) calendar days before the deadline
for the submission and receipt of bids (Section 22.2 of the revised IRR). If the pre-bid
conference is held less than twelve (12) calendar days before the deadline for the
submission and receipt of bids, that deadline should be moved to a later date. If the
procuring entity determines that, by reason of the method, nature, or complexity of the
contract to be bid or when international participation will be more advantageous to the
GOP, a longer period for the preparation of bids is necessary, the pre-bid conference shall
36
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

be held at least thirty (30) calendar days before the deadline for the submission and
receipt of bids.

3.1.1 PARTICIPANTS IN THE PRE-BID CONFERENCE

The following must attend the pre-bid conference:

a. BAC;
b. BAC Secretariat;
c. TWG members and consultants, if any;
d. Procuring unit/end-user unit;
e. Prospective bidders; and
f. Observers.
The attendance of the prospective bidders shall not be mandatory. However, the
procuring entity has the option whether or not to allow only those prospective
bidders who have purchased the bidding documents to participate in the pre-bid
conference and raise or submit written queries and/or clarifications (Section 22.3
of the revised IRR).

Neither will the absence of the observers nullify the BAC proceeding provided that
they were duly invited in writing (Section 13.3 of the revised IRR).

3.1.2 PROPER CONDUCT OF PARTICIPANTS

The BAC, BAC Secretariat, TWG, and other officials involved in procurement are
expected to act in an impartial, courteous and professional manner in all their
dealings and interactions with the bidders during all stages of the procurement.
The bidders’ representatives are likewise enjoined to adopt the same professional
manner in their dealings with the Procuring Entity’s officials. Communications
between the parties must, as much as possible, be made in writing, except during
the pre-bid conference when verbal clarifications may be allowed – keeping in
mind, however, that any statement made at the pre-bid conference would not
modify the terms of the bidding documents, unless such statement is specifically
identified in writing as an amendment of the documents and issued as a
supplemental/bid bulletin.

3.2 SUPPLEMENTAL BID BULLETINS

Supplemental Bid Bulletins are issuances of the procuring entity which seeks to amend,
clarify, and/or modify any provision in the bidding documents, whether agreed upon during
the pre-bid conference or as a response to a written request for clarification or
interpretation espoused by a prospective bidder on any part of the bidding document, which
shall form an integral part thereof.

37
MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

3.2.1 ISSUANCE OF SUPPLEMENTAL BID BULLETINS

a. Request for Clarification after the Pre-bid Conference

Requests for clarification(s) on any part of the bidding documents or for an

interpretation may be made by prospective bidders provided that these are
in writing and are submitted to the BAC at least ten (10) calendar days
before the deadline for the submission and receipt of bids. In this case, the
BAC shall issue its response by issuing a supplemental/bid bulletin, to be
made available to all those who have properly secured the bidding
documents at least seven (7) calendar days before the deadline for the
submission and receipt of bids (Section 22.5.1 of the revised IRR).

b. Procuring entity’s initiative to clarify or modify

The Procuring Entity may, at its own initiative, also issue supplemental/bid
bulletins for purposes of clarifying or modifying any provision of the bidding
documents not later than seven (7) calendar days before the deadline for
the submission and receipt of bids. Any modification to the bidding
documents must be identified as an “AMENDMENT” (Section 22.5.2 of
the revised IRR).

3.2.2 PARTICIPANTS IN THE PREPARATION AND ISSUANCE OF SUPPLEMENTAL

BID BULLETINS

The following have an integral part in the preparation and subsequent issuance of
the Supplemental Bid Bulletins:

a. BAC;
b. BAC Secretariat;
c. End-user units/PMOs;
d. TWG members or technical expert, whenever necessary; and
e. Prospective bidders.

3.2.3 FORM AND CONTENTS OF THE SUPPLEMENTAL BID BULLETINS

Bidders who have submitted bids before a supplemental/bid bulletin is issued have
to be informed in writing and allowed to modify or withdraw their respective bids
(Section 22.5.3 of the revised IRR).

A supplemental/bid bulletin must contain a brief but comprehensive and accurate

summary of the issue or issues that it wishes to address. If it was a bidder that
raised the issue addressed by the bulletin, then it ought to contain a summary of

38
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

that bidder’s request for clarification and/or interpretation, without identifying the
prospective bidder.

3.2.4 POSTING OF SUPPLEMENTAL BID BULLENTINS

The BAC should also post the supplemental/bid bulletin on the website of the
Procuring Entity concerned, if available, and on the PhilGEPS, within the same
timetable. Nonetheless, it will be the bidders’ responsibility to ask for, and secure,
these bulletins; however BAC should ensure that all prospective bidders receive
the bid bulletin.

4. PROCEDURES

4.1 Pre-bid Conference

How the pre-bid conference is conducted depends on the discretion of the BAC
Chairperson or his/her alternate who shall chair the proceedings. However, several events
need to take place in the conference, namely:

The BAC must initiate discussions on contentious issues, most especially if the
participating prospective bidders have no ready questions. It is probable that there are
issues that may not be apparent in the bidding documents but are known to the
representatives of the procuring entity. If these issues are brought out and openly
discussed, prospective bidders will be able to prepare responsive bids, thus avoiding
situations that may give rise to a failure of bidding due to lack of bids received or failure of
bids to comply with all the bid requirements. This would also help prevent the birth of
contentious issues during the bidding itself.

a. The BAC shall discuss, among other things, the technical and financial
components of the contract to be bid, including the explanation of the different
documents to be submitted by each bidder (Section 22.3 of the revised IRR).

b. The BAC Chairperson shall also discuss the requirements in the ITB, the replies to
the bidders’ queries about the requirements, specifications and other conditions of
the project, the bid evaluation of all bidders and post- qualification evaluation of the
lowest calculated bidder. Emphasis should also be given to the warranty
requirement of the project and the different offenses and penalties provided for in
the revised IRR of R.A. 9184.

c. The recording, by the BAC Secretariat of minutes of the pre-bid conference,

and its availability to all participants not later than three (3) calendar days after the
pre-bid conference (Section 22.4 of the revised IRR).

4.2 Issuance of Bid Bulletin

If the supplemental/bid bulletin is being issued upon the initiative of the BAC, the following
steps are followed:
39
MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

a. The BAC Secretariat, with the assistance of the TWG whenever necessary, drafts
the supplemental/bid bulletin for approval by the BAC.

b. The BAC approves the supplemental/bid bulletin and the BAC Chairperson signs it.

c. The BAC Secretariat sends copies of the supplemental bid bulletin to all
prospective bidders who have properly secured or purchased the bidding
documents, within the period prescribed above.

d. The BAC Secretariat posts the supplemental/bid bulletin in the websites of the
PhilGEPS and the procuring entity concerned, within the same period prescribed in
number (3) above.

If the supplemental/bid bulletin is being issued in response to a request for

clarification submitted by an eligible bidder, on the other hand, the process goes as follows:

a. The eligible bidder submits to the BAC, through the BAC Secretariat, a written
request for clarification, within the period prescribed above.

b. The BAC directs the BAC Secretariat, and/or the TWG whenever necessary, to
study the request for clarification.

c. BAC Secretariat performs the steps undertaken in the issuance of the

supplemental/bid bulletin issued at the initiative of the BAC.

40
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

STEP4. RECEIVE AND OPEN THE BID PROPOSAL

(TECHNICAL AND FINANCIAL ENVELOPES)
1. LEGAL REFERENCE

Sections 25 to 31 of the revised IRR are the legal bases on the receipt and opening of bids.

2. PURPOSE

This is the phase wherein prospective bidders formally submit their eligibility and bid requirements
and the procuring entity has to receive and check for the presence and completeness of the
eligibility and bid documents to undertake the contract.

3. RULES AND GUIDELINES

3.1 PROSPECTIVE BIDDERS ELIGIBLE TO PARTICIPATE IN THE PROCUREMENT OF

INFRASTRUCTURE PROJECTS

Bidders are those eligible contractor, manufacturer, supplier, distributor and/or consultant
competing for the award of a contract in any procurement by the GOP. A contractor is said
to be eligible if it meets all the eligibility requirements issued by the procuring entity.
(Section 5.e of the revised IRR)

A prospective bidder is eligible to bid for the procurement of infrastructure projects if it

complies with the eligibility requirements. The eligibility requirements shall provide for fair
and equal access to all prospective bidders.

3.1.1 Eligibility Criteria

a. Under Section 23.5.2.1 of the revised IRR, the following persons/entities

shall be allowed to participate in the bidding for infrastructure projects:

i. Duly licensed Filipino citizens/sole proprietorships;

ii. Partnerships duly organized under the laws of the Philippines and
of which at least seventy-five percent (75%) of the interest belongs
to citizens of the Philippines;

iii. Corporations duly organized under the laws of the Philippines,

and of which at least seventy-five percent (75%) of the
outstanding capital stock belongs to citizens of the Philippines;

iv. Cooperatives duly organized under the laws of the Philippines,

and of which at least seventy percent (75%) belongs to citizens of
the Philippines; or
41
MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

v. Persons/entities forming themselves into a joint venture, i.e., a

group of two (2) or more persons/entities that intend to be jointly
and severally responsible or liable for a particular contract:
Provided, however, that, in accordance with Letter of Instructions
No. 630, Filipino ownership or interest of the joint venture
concerned shall be at least seventy-five percent (75%): Provided,
further, that joint ventures in which Filipino ownership or interest
is less than seventy-five percent (75%) may be eligible where the
structures to be built require the application of techniques and/or
technologies which are not adequately possessed by a
person/entity meeting the seventy-five percent (75%) Filipino
ownership requirement: Provided, finally, that in the latter case,
Filipino ownership or interest shall not be less than twenty-five
percent (25%). For this purpose, Filipino ownership or interest
shall be based on the contributions of each of the members of the
joint venture as specified in their JVA.

vi. Foreign bidders may be eligible to participate in the procurement

of infrastructure projects when provided for under any Treaty or
International or Executive Agreement as provided in Section 4 of
RA 9184 and the revised IRR.

vii. In accordance with Republic Act 4566, entitled “An Act Creating
the Philippine Licensing Board for Contractors, Prescribing its
Powers, Duties and Functions, Providing Funds Therefore, and for
Other Purposes”, the persons/entities enumerated in Section
23.5.1.1 of the revised IRR may participate in public bidding if he
has been issued a license by the Philippine Contractors
Accreditation Board to engage or act as a contractor.

viii. Government corporate entities may be eligible to participate in

Competitive Bidding only if they can establish that:

a. They are legally and financially autonomous;

b. They operate under commercial law; and,
c. They are not dependent agencies of the GOP or the
procuring entity.

The GPPB shall promulgate the necessary guidelines for this

provision (Section 23.6 of the revised IRR).

42
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

b. The Constructors Performance Evaluation Summary rating and/or

certificate of completion and owner’s acceptance of the contract must be
satisfactory.

c. The prospective bidder must have an experience of having completed,

within a period of ten (10) years from the date of submission and receipt
of bids, at least one (1) contract that is similar to the contract to be bid, and
whose value, adjusted to current prices using the National Statistics Office
consumer price indices, must be at least fifty percent (50%) of the ABC to
be bid: Provided, however, that contractors under Small A and Small B
categories without similar experience on the contract to be bid may be
allowed to bid if the cost of such contract is not more than fifty percent
(50%) of the Allowable Range of Contract Cost of their registration based
on the guidelines as prescribed by the PCAB.

For Foreign-funded Procurement, the GOP and the foreign government/

foreign or international financing institution may agree on another track
record requirement. Moreover, a contract shall be considered “similar” to
the contract to be bid if it has the same major categories of work.

3.1.2 Eligibility requirements of a foreign entity

Foreign contractors, when allowed to bid under the circumstances mentioned in

Section 23.5.2.2 of the revised IRR must submit the same eligibility requirements
as domestic entities. However, the legal documents and the audited financial
statements under the Class “A” documents may be substituted by the appropriate
equivalent documents issued by the country of the foreign contractor. A translation
of the documents in English certified by the appropriate embassy or consulate in
the Philippines must accompany the eligibility requirements under Class “A” and
“B” Documents if they are in other foreign language. IFIs permit firms and
individuals from eligible countries to offer goods, works, and services. Any
conditions for participation should be limited to those that are essential to ensure
the firm’s capability to fulfill the contract in question. In connection with any contract
to be financed in whole or in part from an IFI loan, the IFI generally does not permit
a procuring entity to deny pre- or post-qualification to a firm for reasons unrelated
to its capability and resources to successfully perform the contract; nor does it
permit a procuring entity to disqualify any bidder for such reasons. Consequently,
Procuring Entities should carry out due diligence on the technical and financial
qualifications of bidders to be assured of their capabilities in relation to the specific
contract.

43
MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

3.1.3 Procuring Entity’s right to review eligibility of bidders

The procuring entity has the right to review the qualification of the prospective
bidders, notwithstanding eligibility therefore, at any stage of the procurement
process if the procuring entity has reasonable grounds to believe that the following
circumstances exist:

a. Misrepresentation has been made by the said prospective bidder.

Should such review uncover any misrepresentation made in the eligibility

requirements, statements or documents, or any changes in the situation of
the prospective bidder which will affect the capability of the bidder to
undertake the project so that it fails the eligibility criteria, the procuring
entity shall consider the said prospective bidder as ineligible and shall
disqualify it from obtaining an award or contract, in accordance with Rules
XXI, XXII of the revised IRR.

b. There has been a change in the prospective bidder’s capability to

undertake the project from the time it submitted its eligibility requirements.
(Section 23.7 of the revised IRR)

3.1.4 Responsibilities of prospective bidders

In the Philippine Bidding Documents 3rd edition, including those provided for under
RA 9184 and the revised IRR, the following are the identified responsibilities of
prospective bidders when participating in the procurement of infrastructure
projects:

a. The Bidder is responsible for the following:

i. Having taken steps to carefully examine all of the Bidding

Documents;

ii. Having acknowledged all conditions, local or otherwise, affecting

the implementation of the contract;

iii. Having made an estimate of the facilities available and needed for
the contract to be bid, if any; and

iv. Having complied with its responsibility to inquire or secure

Supplemental/Bid Bulletin.

v. Ensuring that it is not “blacklisted” or barred from bidding by the

GOP or any of its agencies, offices, corporations, or LGUs,
including foreign government/ foreign or international financing
institution whose blacklisting rules have been recognized by the
GPPB;
44
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

vi. Ensuring that each of the documents submitted in satisfaction of

the bidding requirements is an authentic copy of the original,
complete, and all statements and information provided therein are
true and correct;

vii. Authorizing the HOPE or its duly authorized representative/s to

verify all the documents submitted;

viii. Ensuring that the signatory is the duly authorized representative of

the Bidder, and granted full power and authority to do, execute
and perform any and all acts necessary and/or to represent the
Bidder in the bidding, with the duly notarized Secretary’s
Certificate attesting to such fact, if the Bidder is a corporation,
partnership, cooperative, or joint venture;

ix. Complying with the disclosure provision under Section 47 of the

Act in relation to other provisions of R.A. 3019; and

x. Complying with existing labor laws and standards, if applicable.

Failure to observe any of the above responsibilities shall be at the risk of

the Bidder concerned.

b. The Bidder, by the act of submitting its bid, shall be deemed to have
inspected the site and determined the general characteristics of the
contract works and the conditions for this Project. Unless otherwise
indicated in the Bid Data Sheet of the PBD, failure to furnish all information
or documentation required in this Bidding Documents shall result in the
rejection of the bid and the disqualification of the Bidder.

c. It shall be the sole responsibility of the prospective bidder to determine and

to satisfy itself by such means as it considers necessary or desirable as to
all matters pertaining to the infrastructure project, including:

i. The location and the nature of the contract, project, or work;

ii. Climatic conditions;

iii. Transportation facilities;

iv. Nature and condition of the terrain, geological conditions at the

site communication facilities, requirements, location and
availability of construction aggregates and other materials, labor,
water, electric power and access roads; and

v. Other factors that may affect the cost, duration and execution
or implementation of the contract, project, or work.

45
MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

d. Before submitting their bids, the Bidders are deemed to have become
familiar with all existing laws, decrees, ordinances, acts and regulations of
the Philippines which may affect the contract in any way.

However, if the contract is affected by new laws, ordinances, regulations or

other acts of government promulgated after the date of the bidding, a
contract price adjustment shall be made or appropriate relief shall be
applied on a no loss-no gain basis provided such is not covered by the
contract provisions on price adjustment.

e. The Bidder shall bear all costs associated with the preparation and
submission of his bid, and the Procuring Entity will in no case be
responsible or liable for those costs, regardless of the conduct or outcome
of the bidding process.

f. Bidders should note that the Procuring Entity will only accept bids only
from those that have paid the nonrefundable fee for the Bidding
Documents at the office indicated in the Invitation to Bid.

g. Failure to observe any of the above responsibilities shall be at the risk of

the eligible bidder concerned. For this purpose, the bidder or its duly
authorized representative shall submit a sworn statement in the form
prescribed in Section IX. Bidding Forms as required Section IX. Bidding
Forms as required in ITB Clause 12.1 (b) (iii) of the PBD.

This omnibus sworn statement which shall state, among others, that the
prospective bidders complies with the responsibilities of a prospective or eligible
bidder provided in the PBD (Section 25.2.iv of the revised IRR).

In view of the foregoing, the procuring entity shall not assume any responsibility
regarding erroneous interpretations or conclusions by the prospective or eligible
bidder out of the data furnished by the procuring entity.

3.1.5 Standard of Ethics to be observed

As Procuring Entities, bidders and contractors are required to observe the highest
standard of ethics during the procurement and execution of contract, bidders
should not be under a declaration of ineligibility for corrupt, fraudulent,
collusive and coercive practices by the government.

In pursuance of this policy, PBD 3rd edition provides for the following

a. Defines, for purposes of this provision, the terms set forth below as
follows:

i. "Corrupt practice" means behavior on the part of officials in the

public or private sectors by which they improperly and unlawfully
enrich themselves, others, or induce others to do so, by
46
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

misusing the position in which they are placed, and includes the
offering, giving, receiving, or soliciting of anything of value to
influence the action of any such official in the procurement
process or in contract execution; entering, on behalf of the
Procuring Entity, into any contract or transaction manifestly and
grossly disadvantageous to the same, whether or not the public
officer profited or will profit thereby, and similar acts as provided in
Republic Act 3019;

ii. "Fraudulent practice" means a misrepresentation of facts in order

to influence a procurement process or the execution of a contract
to the detriment of the Procuring Entity, and includes collusive
practices among Bidders (prior to or after Bid submission)
designed to establish bid prices at artificial, non-competitive levels
and to deprive the Procuring Entity of the benefits of free and
open competition;

iii. “Collusive practices” means a scheme or arrangement between

two or more bidders, with or without the knowledge of the
Procuring Entity, designed to establish bid prices at artificial, non-
competitive levels; and
iv. “Coercive practices” means harming or threatening to harm,
directly or indirectly, persons, or their property to influence their
participation in a procurement process, or affect the execution of a
contract;

b. Will reject a proposal for award if it determines that the bidder

recommended for award has engaged in corrupt or fraudulent practices in
competing for the Contract; and

c. Will declare a firm ineligible, either indefinitely or for a stated period of

time, to be awarded Contract funded by the Funding Source if it at any
time determines that the firm has engaged in corrupt or fraudulent
practices in competing or, or in executing, a Contract funded by the
Funding Source.

Furthermore, the Procuring Entity will seek to impose the maximum civil,
administrative, and/or criminal penalties available under the applicable
laws on individuals and organizations deemed to be involved in any of the
practices mentioned.

Relative thereto, the Funding Source and the Procuring Entity reserve the
right to inspect and audit records and accounts of a contractor in the
bidding for and performance of a contract themselves or through
independent auditors.

The pertinent provisions of the Anti-Graft and Corrupt Practices Act, or

R.A. No. 3019, shall also be applied in determining the existence of
“corrupt or fraudulent practice.”
47
MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

3.2 BIDDERS DISQUALIFIED TO PARTICIPATE IN THE PROCUREMENT OF GOODS AND

SERVICES

Disqualification is a distinct concept from ineligibility and post-disqualification. When a

Bidder is disqualified, it is barred from further participating in the procurement at hand,
even if, in some instances, it has initially been declared eligible. Even if a Bidder is Post-
qualified, if after such Post-qualification, the Procuring Entity has found grounds for
disqualification, the latter may declare such Bidder disqualified, hence, the Procuring Entity
shall not award the contract to the former.

Aside from those who are not eligible to bid for the procurement of goods, a bidder that has
a conflict of interest shall be disqualified to participate in the procurement at hand. A Bidder
would be considered as having a conflict of interest with another bidder in any of the events
described in paragraphs 1 through 3 below and a general conflict of interest in any of the
circumstances set out in paragraphs 4 through 6 below:

3.2.1 If the bidder is a corporation or a partnership and it has officers, directors,

controlling shareholders, partners or members in common with another bidder; or
if the bidder is an individual or a sole proprietorship and he is the proprietor of
another bidder, or an officer, director or a controlling shareholder of another bidder;
or if the bidder is a joint venture and it or any of its members has officers, directors,
controlling shareholders or members in common with another bidder, or any of its
members is a bidder;

3.2.2 A bidder receives or has received any direct or indirect subsidy from another
bidder;

3.2.3 A bidder has the same legal representative as any other bidder for purposes
of the bidding at hand.

3.2.4 A bidder has a relationship directly or through common third parties, that puts them
in a position to have access to information about or influence on the bid of another
bidder, or influence the decisions of the Procuring Entity regarding the bidding
process. This will include a firm or an organization that lends, or temporarily
seconds, its personnel to firms or organizations which are engaged in consulting
services for the preparation related to procurement for or implementation of the
project, if the personnel would be involved in any capacity on the same project;

3.2.5 A bidder submits more than one bid in the bidding process. However, this does not
limit the participation of subcontractors in more than one bid; or
-
3.2.6 A bidder who participated as a consultant in the preparation of the design or
technical specifications of the goods and related services that are the subject of
the bid.

48
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

In accordance with Section 47 of the revised IRR, the bidder should not be related to the
HOPE, members of the BAC, the TWG, the BAC Secretariat, and the Head of the PMO or
end-user unit, and the project consultants by consanguinity or affinity up to the third (3rd)
civil degree. This prohibition shall apply to the following persons:

a. If the bidder is an individual or a sole proprietorship, to the bidder

himself;
b. If the bidder is a partnership, to all its officers and members;
c. If the bidder is a corporation, to all its officers, directors and controlling
stockholders; and

d. If the bidder is a joint venture, items 1 through 3 above shall

correspondingly apply to each of the members of the said joint venture,
as may be appropriate.

To establish the non-existence of the above relationship, and to bind the Bidders to its
representation relating to the foregoing, all bids must be accompanied by a Omnibus
Sworn Statement, including therein a Disclosure Provision of the bidder to that effect.
The bidder that fails to comply with any of the Technical or Financial requirements of the
Bid will be disqualified by the BAC. Similar to ineligible bidders, it may file a written request
for reconsideration within three (3) days from the receipt of the communication regarding its
bid’s deficiency (Section 55.1 of the revised IRR).

3.3 MINIMUM ELIGIBILITY REQUIREMENTS

Included in the technical component of the Bid is the eligibility requirements prescribed in
Section 23.1 of the revised IRR.

For the purpose of determining the eligibility of prospective bidders using the criteria stated
in Section 3.1.1 of this manual- following Section 23.5 of the revised IRR - the following
documents shall be required by the BAC using the forms prescribed in the Bidding
Documents:
a. Class “A” Documents
Legal Documents
i. Registration certificate from SEC, Department of Trade and Industry for
sole proprietorship, or CDA for cooperatives, or any proof of such
registration as stated in the Bidding Documents.

ii. Mayor’s permit issued by the city or municipality where the principal place
of business of the prospective bidder is located.

49
MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

Technical Documents

iii. Statement of the prospective bidder of all its ongoing and completed
government and private contracts, including contracts awarded but not yet
started, if any, whether similar or not similar in nature and complexity to
the contract to be bid, within the relevant period as provided in the Bidding
Documents. The statement shall include all information required in the
PBDs prescribed by the GPPB.

iv. Valid Philippine Contractors Accreditation Board license and registration

for the type and cost of the contract to be bid.

Financial Documents

v. The prospective bidder’s audited financial statements, showing, among

others, the prospective bidder’s total and current assets and liabilities,
stamped “received” by the BIR or its duly accredited and authorized
institutions, for the preceding calendar year which should not be earlier
than two (2) years from the date of bid submission.

vi. The prospective bidder’s computation for its Net Financial Contracting
Capacity or a commitment from a Universal or Commercial Bank to extend
a credit line certificate in favor of the prospective bidder if awarded the
contract to be bid.

b. Class “B” Documents

Valid JVA, if the prospective bidder is a joint venture, with the agreement
containing a statement on who the joint venture/association has constituted and
appointed as the lawful attorney-in-fact to sign the contract, if awarded the project,
and on who among the members is the lead representative of the joint venture;

All members of the joint venture should submit all the Class “A” eligibility
documents. All members of the joint venture should comply with all the legal
eligibility requirements, but compliance by one of the joint venture members
with the technical and financial requirements will suffice.

3.3.1 Facilitating eligibility checks

To facilitate eligibility checking, the BAC of a procuring entity may maintain a file of
Class “A” documents submitted by contractors. When such file is required by the
procuring entity, a contractor who wishes to participate in a public bidding for
infrastructure projects should maintain this file current and updated at least once a
year, or more frequently when needed. A contractor who maintains a current and

50
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

updated file of his Class “A” documents will be issued a certification by the BAC to
that effect, which certification may be submitted to the procuring entity concerned
in lieu of the foregoing Class “A” documents (Section 23.5.2 of the revised IRR).

3.3.2 DOH Simplified Supplier Registration System

To facilitate eligibility check, the DOH COBAC established a Simplified Supplier

Registration System or SSRS through which any prospective bidder registered in
the system is issued a SSRS Certificate. Registration in the SSRS requires
prospective suppliers to submit certain specified documents necessary for its
participation in the conduct of procurement within the department. These
documents include, among others, a duly registered certification from SEC or
Department of Trade and Industry for sole proprietorship or CDA for cooperatives,
or any proof of such registration as stated in the Bidding Documents and others, In
lieu thereof, a SSRS Certificate is issued to the registrant supplier which the latter
may use in the procurement process. Evidently the objective behind the
development and maintenance of the registry system is to facilitate eligibility check
and expedite procurement process.
However, the SSRS would be rendered useless if not maintained current and
updated such that registered suppliers must constantly renew their SSRS
registration, when applicable, by submitting copies of the recent documents
required to be submitted.

Furthermore, the coverage and applicability of the SSRS shall extend to, and
mandatorily be recognized by, the Center for Health Development, DOH Hospitals,
Special/Specialty Hospital, Medical Centers, Bureaus and Attached Agencies.

3.4 SUBMISSION AND RECEIPT OF BIDS

3.4.1 Bid/Proposal/Tender
Bids are signed offer or proposal to undertake a contract submitted by a bidder in
response to and in consonance with the requirements of the Bidding Documents.
For purposes of, and throughout the revised IRR, the term “Bid” shall be equivalent
to and be used interchangeably with “Proposal” and “Tender” (Section 5.d of the
revised IRR).

Bidders shall submit their bids through their duly authorized representative using
the forms specified in the Bidding Documents in two (2) separate sealed bid
envelopes, and which shall be submitted simultaneously.

A Bid has two (2) components, the Technical Proposal or the Technical Bid, and
the Financial Proposal or the Financial Bid. The Technical and Financial Bids must
each be contained in separate sealed bid envelopes. The first shall contain the

51
MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

technical component of the bid, including the eligibility requirements under Section
23.1 of the revised IRR, and the second shall contain the financial component of
the bid.

3.4.1.1 Number of copies of bid

The BAC shall require one (1) original and at least three (3) duplicate
copies of the Eligibility Documents, Technical Bid Documents and
Financial Bid Documents. The original copy will be the one initialed by
the BAC members or their authorized representatives and will be kept by
the BAC Secretariat for check and balance purposes while the duplicate
copies will be the ones used during Bid Evaluation.

3.4.1.2 Language use in the Bid Proposal

As indicated in the PBD, Third (3rd) Edition, it is most ideal that the bid,
as well as all correspondence and documents relating to the bid
exchanged by the Bidder and the Procuring Entity, shall be written in
English. Supporting documents and printed literature furnished by the
Bidder may be in another language provided they are accompanied by
an accurate translation in English certified by the appropriate embassy or
consulate in the Philippines, in which case the English translation shall
govern for purposes of interpretation of the bid.

3.4.1.3 Period for the Submission and Receipt of Bid

Bids shall be received by the BAC on the date, time, and place specified
in the IB. The maximum period for the submission and receipt of bid
proposal for infrastructure projects shall follows the last day of posting
the IB shall be followed (Section 25.4.b of the revised IRR):

APPROVED BUDGER FOR THE CONTRACT

PERIOD
(IN PHILIPPINE CURRENCY)

Fifty (50) Million and below 50 calendar days

Above fifty (50) Million 65 calendar days

3.4.1.4 Late Submission of Bid

Bids, including the eligibility requirements under Section 23.1 of the

revised IRR, submitted after the deadline shall not be accepted by the
BAC (Section 25.5 of the revised IRR).

52
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

3.5 CONTENTS OF THE FIRST ENVELOPE

The Technical Proposal should contain, at the minimum, the following technical information/
documents for the contract to be bid:

a. Eligibility requirements under Section 23.1 of the revised IRR;

b. Bid security in the prescribed form, amount and validity period;

c. Project Requirements, which shall include the following:

i. Organizational chart for the contract to be bid;
ii. List of contractor’s personnel (viz, Project Manager, Project Engineers,
Materials Engineers, and Foremen), to be assigned to the contract to be bid,
with their complete qualification and experience data;

iii. List of contractor’s equipment units, which are owned, leased, and/or under
purchase agreements, supported by certification of availability of equipment
from the equipment lessor/vendor for the duration of the project; and

d. Sworn statement by the prospective bidder or its duly authorized representative in

the form prescribed by the GPPB as to the following:

i. It is not “blacklisted” or barred from bidding by the GOP or any of its

agencies, offices, corporations, or LGUs, including foreign government/
foreign or international financing institution whose blacklisting rules have
been recognized by the GPPB;
ii. Each of the documents submitted in satisfaction of the bidding requirements
is an authentic copy of the original, complete, and all statements and
information provided therein are true and correct;

iii. It is authorizing the HOPE or his duly authorized representative/s to verify all
the documents submitted;

iv. The signatory is the duly authorized representative of the prospective bidder,
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 the
prospective bidder is a corporation, partnership or joint venture;

v. It complies with the disclosure provision under Section 47 of the Act in

relation to other provisions of R.A. 3019;
vi. It complies with the responsibilities of a prospective or eligible bidder
provided in the PBDs; and

vii. It complies with existing labor laws and standards.

53
MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

3.6 CONTENTS OF THE SECOND ENVELOPE

The second envelope shall contain the financial information/documents as specified in the
PBDs (Section 25.3 of the revised IRR).

The Financial Proposal as indicated in the PBD shall contain the following financial
information/documents, at the least:

a. Bid prices in the Bill of Quantities in the prescribed Bid Form;

b. Detailed estimates including a summary sheet indicating the unit prices of

construction materials, labor rates and equipment rentals used, indicating also the
direct and indirect costs, in coming up with the bid; and

c. Cash flow by the quarter and payments schedule.

3.6.1 Single Largest Contract (Track Record)
The prospective bidder must have an experience of having completed,
within a period of ten (10) years from the date of submission and receipt of
bids, at least one (1) contract that is similar to the contract to be bid, and
whose value, adjusted to current prices using the NSO consumer price
indices, must be at least fifty percent (50%) of the ABC to be bid:
Provided, however, that contractors under Small A and Small B categories
without similar experience on the contract to be bid may be allowed to bid
if the cost of such contract is not more than fifty percent (50%) of the
Allowable Range of Contract Cost of their registration based on the
guidelines as prescribed by the PCAB.

According to PCAB Board Resolution No. 001, series of 2004, and GPPB
Resolution No. 012-2004, the ARCC is as follows:

Registration Particulars
Category Allowable Range of Contract Cost (in Million Pesos)
Prior and up to CFY CFYs 2004-2005 CFYs 2006-2007 & CFYs 2008-2009
2003-2004 (For & 2005-2006 (For 2007-2008 (For & 2009-2010 (For
projects advertised projects advertised projects advertised projects advertised
for bidding prior and for bidding from July for bidding from July
for bidding from July
to June 30, 2004) 1, 2004 to June 30, 1, 2006 to June 30,
2008) 1, 2008 to June 30,
2006) 2010)
Small A Up to 0.5 Up to 0.5 Up to 0.5 Up to 0.5
Small B Up to 3 Up to 10 Up to 20 Up to 30
Medium A Up to 15 Up to 50 Up to 100 Up to 150
Medium B Up to 30 Up to 100 Up to 200 Up to 300
Large A Up to 50 Up to 150 Up to 300 Up to 500
Large B Less than or above Less than or above Less than or above Less than or above
50 150 300 500
54
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

Last 28 February 2009, PCAB, through its Circular No. 001, series of 2009,
resolved to implement the following second stage of Adjustments on the
ARCC and they are as follows:
REGISTRATION PARTICULARS
SIZE RANGE/ SINGLE LARGEST ALLOWABLE RANGE OF
CATEGORY LICENSE CATEGORY PROJECT/ REQUIRED CONTRACT COST
TRACK RECORD
LARGE B AAA Above Php 150M < or above Php 300 M
LARGE A AA Above Php 100M up to
Up to Php 300 M
Php 150M
MEDIUM B A Above Php 50M up to 100M Up to Php 200 M
MEDIUM A B Above Php 10 M up to 50 M Up to Php 100 M
SMALL B B&C < Php 10 M Up to Php 15 M
SMALL C TRADE < Php 500 Th Up to Php 500Th

The procuring entity, however, must be keen in securing the latest

guidelines prescribed by the PCAB regarding the ARCC.
For Foreign-funded Procurement, the GOP and the foreign government/
foreign or international financing institution may agree on another track
record requirement.

Moreover, a contract shall be considered “similar” to the contract to be bid

if it has the same major categories of work, such as in both bridges and fly-
over (Section 23.5.2.5 of the revised IRR).

3.6.1.1 Constructors Performance Evaluation System

All Procuring Entities implementing government infrastructure
projects are mandated to evaluate the performance of their
contractors using the NEDA-Approved CPES Guidelines for the
type of project being implemented (Annex E Section 12.1 of the
revised IRR).

The CPES rating and/or certificate of completion and owner’s

acceptance of the contract must be satisfactory (Section 23.5.2.4
of the revised IRR).

3.6.1.2 PCAB License

In accordance with R.A. 4566, entitled “An Act Creating the
Philippine Licensing Board for Contractors, Prescribing its Powers,
Duties and Functions, Providing Funds Therefore, and for Other
Purposes”, the persons/entities enumerated in Section 23.5.1.1 of
the revised IRR of R.A. 9184 may participate in public bidding if
the prospective bidder has been issued a license by the PCAB to
engage or act as a contractor (Section 23.5.2.3 of the revised
IRR).

55
MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

3.6.2 Financial requirements

The prospective bidder must meet the requirement for NFCC as discussed
below. If the NFCC is not sufficient to meet the requirement, it must meet
the requirement for the credit line commitment. The bidder’s liquidity, its
capacity to absorb the additional obligations in connection with the contract
to be bid and to finance its implementation/completion is establish with
either the NFCC or credit line.

Compliance with this eligibility requirement may be done on the alternative,

such that submission of any of the two (2) is acceptable for purposes of
determining a bidder’s eligibility.

NFCC should be at least equal to the ABC, calculated as follows (Section

23.5.1.4 of the revised IRR):

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.

Where:
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.

Example:
Given:
Current Assets= P 3,000,000
Current Liabilities= P 500,000
Value of Outstanding Works= P 4,000,000
Contract Duration= 1 year
=[ (P 3,000,000 – P 500,000) x 10 ]
NFCC – P 4,000,000
= P 25,000,000 – P 4,000,000
= P 21,000,000

The credit line commitment extended by the prospective bidder must be

at least equal to ten percent (10%) of the ABC to be bid and issued by a
universal or commercial bank only, if the credit line commitment is issued
by a foreign universal or commercial bank, it shall be confirmed or
authenticated by a universal or commercial bank.

56
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

3.7 BID SECURITY

A bid security is a guarantee that the successful bidder will:
1. Not default on its offer; and
2. All bids shall be accompanied by a bid security, payable to the procuring entity
concerned as a guarantee that the successful bidder shall, within ten (10) calendar
days or less, as indicated in the Instructions to Bidders, from receipt of the notice of
award, enter into contract with the procuring entity and furnish the performance
security required by the law, except when Section 37.1 of the revised IRR allows a
longer period. Failure to enclose the required bid security in the form and amount
prescribed herein shall automatically disqualify the bid concerned.

A bid security must be submitted together with every bid. It must be operative on
the date of bid opening, and payable to the Procuring Entity.

3.7.1. Forms and corresponding amounts

The bid security shall be in any or a combination of the following forms, with
the corresponding required amount (Section 27.2 of the revised IRR):

AMOUNT OF BID SECURITY (EQUAL TO

FORMS OF BID SECURITY
PERCENTAGE OF THE ABC)

a. Cash or cashier’s/manager’s check issued by a

Universal or Commercial Bank.
b. Bank draft/guarantee or irrevocable letter of credit
issued by a Universal or Commercial Bank: Two percent (2%)
Provided, however, that it shall be confirmed or
authenticated by a Universal or Commercial Bank,
if issued by a foreign bank.
c. Surety bond callable upon demand issued by a
surety or insurance company duly certified by the
Five percent (5%)
Insurance Commission as authorized to issue
such security.
d. Any combination of the foregoing. Proportionate to share of form with respect to
total amount of security

For FAPs, reference should be made to the appropriate standard bidding

documents for the project in order to determine the requirement of a bid
security and, if one is so required, the applicable amount and form thereof.

57
MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

3.7.2 Who determines form

The Bid Security shall be in the form prescribed in the revised IRR and shall
be left upon the discretion of the prospective bidders. The procuring entity
cannot limit the allowable forms of bid security by enumerating the
preferred forms in the bidding documents. With respect to surety bonds, it
bears stressing that the GPPB is moving towards accreditation of surety
companies. Once the guidelines on accreditation are issued by the GPPB,
only surety bonds from companies accredited by the procuring entity may
be allowed as bid securities.

The bid security shall be denominated in Philippine currency (Section 27.3

of the revised IRR).

If a bidder does not submit a bid security, its bid will be rejected.

3.7.3. Period of validity of Bids and Bid Security

Bids and bid securities shall be valid for a reasonable period as determined
by the HOPE concerned, which shall be indicated in the Bidding
Documents, but in no case shall the period exceed one hundred twenty
(120) calendar days from the date of the opening of bids (Section 28.1 of
the revised IRR). Should it become necessary to extend the validity of the
bids and bid securities beyond one hundred twenty (120) calendar days,
the procuring entity concerned shall request in writing all those who
submitted bids for such extension before the expiration date there for.
Bidders, however, shall have the right to refuse to grant such extension
without forfeiting their bid security (Section 28.2 of the revised IRR).

Bidders shall have the right to refuse to grant such extension without
forfeiting their bid securities. The bid security of bidders who refuse to grant
the Procuring Entity’s request for an extension of the validity of their
respective bid securities will have these securities returned to them.
However, they are deemed to have waived their right to further participate
in the bidding.

In no case shall bid security be returned later than the expiration of the bid
validity period indicated in the Bidding Documents, unless it has been
extended in accordance with Section 28.2 of the revised IRR.

3.7.4 Currency/Denomination

The bid security must be denominated in Philippine currency (Section 27.3

of the revised IRR), except in the case of foreign bidders, which may be
allowed to submit foreign currency denominated bids allowed in the bidding
documents.
58
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

3.7.5 Bidder does not submit a bid security

The bid will be rejected.

3.7.6 When to return

In no case shall the bid security be returned later than the expiration of the
bid validity period indicated in the Bidding Documents, unless it has been
extended in accordance with Section 28.2 of the revised IRR (Section
27.5 of the revised IRR). Furthermore, Section 27.4 of the revised IRR
provides that bid securities shall be returned only after the bidder with the
Lowest Calculated Responsive Bid has signed the contract and furnished
the performance security, except to those declared by the BAC as failed or
post-disqualified in accordance with the revised IRR, upon submission of a
written waiver of their right to file a motion for reconsideration and/or
protest.

3.7.7. Forfeiture

A bidder’s bid security may be forfeited when:

a. The bidder withdraws its bid beyond the deadline therefore;

b. The bidder does not accept corrections of arithmetical errors;

c. The bidder being considered for award does not accept the award
or does not sign the contract within the period prescribed in the
bidding documents;

d. The bidder being post-qualified is suspended for not providing the

BAC required clarifications within the prescribed period; or
e. The bidder is proven to commit any of the acts under Sections 65
and 69 of R.A. 9184 and the revised IRR.

3.8 MODIFICATION OR WITHDRAWAL OF BIDS

A bidder may modify its bid, provided that this is done before the deadline for the
submission and receipt of bids. If 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, linked or related to its original bid and marked as a “MODIFICATION” of the
original, and stamped “RECEIVED” by the BAC. Bid modifications received after the
applicable deadline will not be considered and must be returned to the bidder unopened
(Section 26.1 of the revised IRR). Any discount should form part of the bid submission in
the financial envelope.

59
MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

A bidder may, through a Letter of Withdrawal, withdraw its bid, before the deadline for the
receipt of bids. 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 bid shall not be permitted to
submit another bid, directly or indirectly, for the same contract. Moreover, an eligible bidder
that withdraws its bid without any justifiable cause therefore shall be subject to the
administrative sanctions provided in Section 69.1 of the revised IRR. It should be noted
however that the act of habitually withdrawing from bidding, submitting late bids or patently
insufficient bid for at least three (3) times within a year is a ground for the position of
administrative penalties, except when done for a valid reason.

A bidder that withdraws its bid prior to the deadline for submission of bids, for a justifiable
cause, does not forfeit its bid security. The bidder that withdraws its bid beyond the
deadline for the submission of bids will forfeit its bid security, as well as the imposition of
any applicable administrative, civil and/or criminal sanction prescribed in R.A. 9184 and the
revised IRR.

3.9 OPENING OF BIDS

The BAC shall open the bids at the time, date, and place specified in the Bidding
Documents. The bidders or their duly authorized representatives may attend the opening of
bids. The BAC shall adopt a procedure for ensuring the integrity, security, and
confidentiality of all submitted bids. The minutes of the bid opening shall be made available
to the public upon written request and payment of a specified fee to recover cost of
materials.
The BAC shall open the first bid envelopes of prospective bidders in public to determine
each bidder’s compliance with the documents required to be submitted for eligibility and for
the technical requirements, as prescribed in the revised IRR.
3.9.1 For this purpose, the BAC shall check the submitted documents of each bidder
against a checklist of required documents to ascertain if they are all present, using
a non-discretionary “passed/failed” criterion. If a bidder submits the required
document, it shall be rated “passed” for that particular requirement. In this regard,
bids that fail to include any requirement or are incomplete or patently insufficient
shall be considered as “failed”. Otherwise, the BAC shall rate the said first bid
envelope as “passed”.

3.9.2 Immediately after determining compliance with the requirements in the first
envelope, the BAC shall forthwith open the second bid envelope of each remaining
eligible bidder whose first bid envelope was rated “passed”. The second envelope
of each complying bidder shall be opened within the same day. In case one or
more of the requirements in the second envelope of a particular bid is missing,
incomplete or patently insufficient, and/or if the submitted total bid price exceeds
the ABC unless otherwise provided in ITB Clause of the PBD, the BAC shall rate
the bid concerned as “failed”. Only bids that are determined to contain all the bid
requirements for both components shall be rated “passed” and shall immediately
be considered for evaluation and comparison.
60
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

3.9.3 Letters of withdrawal shall be read out and recorded during bid opening, and the
envelope containing the corresponding withdrawn bid shall be returned to the
Bidder unopened. If the withdrawing Bidder’s representative is in the attendance,
the original bid and all copies thereof shall be returned to the representative during
the bid opening. If the representative is not in attendance, the bid shall be returned
unopened by registered mail. The Bidder may withdraw its bid prior to the deadline
for the submission and receipt of bids, provided that the corresponding Letter of
Withdrawal contains a valid authorization requesting for such withdrawal, subject to
appropriate administrative sanctions.

3.9.4 If a Bidder has previously secured a certification from the Procuring Entity to the
effect that it has previously submitted the above-enumerated Class “A” Documents,
the said certification may be submitted in lieu of the requirements enumerated in
PBD.

3.9.5 In the case of an eligible foreign Bidder, the Class “A” Documents may be
substituted with the appropriate equivalent documents, if any, issued by the
country of origin of the foreign Bidder concerned.

3.9.6 Each partner of a joint venture agreement shall likewise submit the requirements in
the PBD and the revised IRR. Submission of documents required by any of the
joint venture partners constitutes compliance.

3.9.7 A Bidder determined as “failed” has three (3) calendar days upon written notice or,
if present at the time of bid opening, upon verbal notification, within which to file a
request for reconsideration with the BAC: Provided, however, that the request for
reconsideration shall not be granted if it is established that the finding of failure is
due to the fault of the Bidder concerned: Provided, further, that the BAC shall
decide on the request for reconsideration within seven (7) calendar days from
receipt thereof. If a failed Bidder signifies his intent to file a request for
reconsideration, the BAC shall keep the bid envelopes of the said failed Bidder
unopened and/or duly sealed until such time that the motion for reconsideration or
protest has been resolved.

3.9.8 The Procuring Entity shall prepare the minutes of the proceedings of the bid
opening that shall include, as a minimum: (a) names of Bidders, their bid price, bid
security, findings of preliminary examination; and (b) attendance sheet. The BAC
members shall sign the abstract of bids as read.

The minutes of the bid opening shall be made available to the public upon written request
and payment of a specified fee to recover cost of materials (Section 29 of the revised
IRR).

3.10 REQUEST FOR RECONSIDERATION

A Request for Reconsideration is a written document which seeks for the reversal of a BAC
decision.

61
MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

3.10.1 Failure of the bidder to comply with the Technical and Financial Requirement

An eligible bidder that has failed to comply with any of the Technical or Financial
requirements of the Bid will be rated as “failed” by the BAC and disqualified from
participating therein. Similar to the case of ineligible bidders, it may file a written
request for reconsideration within three (3) calendar days from the receipt of notice
of its failure.

A bidder determined as “failed” has three (3) calendar days upon written notice or,
if present at the time of bid opening, upon verbal notification, within which to file a
request for a reconsideration with the BAC: Provided, however, That the request
for reconsideration shall not be granted if it is established that the finding of failure
is due to the fault of the bidder concerned: Provided, further, That the BAC shall
decide on the request for reconsideration within seven (7) calendar days from
receipt thereof. If a failed bidder signifies his intent to file a request for
reconsideration, in the case of a bidder who fails in the first bid envelopes, the BAC
shall hold the second bid envelope of the said failed bidder unopened and duly
sealed until such time that the motion for reconsideration has been resolved.

3.10.2 Motion for Reconsideration by Ineligible bidders

A prospective bidder that was absent during the opening of the bids and was found
ineligible or was declared failed has three (3) calendar days from receipt of the
Notice of Ineligibility/Failure, within which to file a written request for
reconsideration before the BAC. If the prospective bidder was present during bid
opening and was duly notified (a verbal notification will suffice in this case) of its
ineligibility/failure, it also has three (3) calendar days upon such notice within which
to file a written request for reconsideration. Seven (7) calendar days after it
receives a letter requesting for reconsideration, the BAC should resolve such
request. In the meantime, it will hold on to the Eligibility, Technical and Financial
envelopes of the prospective bidder until the request for reconsideration is
resolved. In so doing, it can request the prospective bidder to clarify its eligibility
documents, if necessary.

The BAC may return the Technical and Financial envelopes if the prospective
bidder is declared “ineligible” and expressly waives his right to file a request for
reconsideration. Such waiver shall be made in writing, to be executed by the
authorized representative of the ineligible bidder.

If its request for reconsideration is denied, the ineligible bidder may protest the
decision in writing with the HOPE within seven (7) calendar days from receipt of
the resolution. A protest may be made by filing a verified position paper with the
HOPE concerned, accompanied by the payment of a non-refundable protest fee.
The non-refundable protest fee shall be in an amount equivalent to no less than
one percent (1%) of the ABC (Section 55.1 of the revised IRR).
62
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

The verified position paper shall contain the following information:

a. Name of the bidder;
b. Office address of the bidder;
c. Name of the project/contract;
d. Implementing office/agency or procuring entity;
e. Brief statement of facts;
f. Issue to be resolved; and
g. Such other matters and information relevant to the proper resolution of the
protest.

The position paper is verified by an affidavit that the affiant has read and
understood the contents thereof and that the allegations therein are true and
correct of his personal knowledge or based on authentic records. An unverified
position paper shall be considered unsigned, produces no legal effect, and results
to the outright dismissal of the protest (Section 55.2 of the revised IRR).

The protests shall be resolved strictly based on records of the BAC. The HOPE
shall resolve a protest within seven (7) calendar days from receipt thereof. Subject
to the provisions of existing laws on the authority of Department Secretaries and
the heads of agencies, branches, constitutional commissions or instrumentalities of
the Government to approve contracts, the decisions of the HOPE concerned shall
be final up to the limit of his contract approving authority (Section 56 of the
revised IRR).

3.10.3 Motion for Reconsideration of BAC’s Decision declaring a bidder eligible

The filing for a request for reconsideration of BAC’s decision declaring another
bidder eligible is allowed pursuant to Section 55.1 of the revised IRR.

3.11 IF A QUESTION IS RAISED AFTER THE DECLARATION OF ELIGIBILITY

Notwithstanding the eligibility of a prospective bidder, the Procuring Entity concerned

reserves the right to review its 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 capability to
undertake the project from the time it submitted its eligibility requirements. Should such
review uncover any misrepresentation made in the eligibility requirements, statements or
documents, or any changes in the situation of the prospective bidder which will affect the
capability of the bidder to undertake the project so that it fails the preset eligibility criteria,
the Procuring Entity shall consider the said prospective bidder as ineligible and shall
disqualify it from submitting a bid or from obtaining an award or contract. A prospective
63
MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

bidder found guilty of false information faces imprisonment of not less that six (6) years and
one (1) day but not more than fifteen (15) years (Section 65 of the revised IRR).

3.12 SINGLE CALCULATED RESPONSIVE BID SUBMISSION

Despites effort to promote competition among prospective bidders, there are instances
when only a single bidder is declared eligible to participate in the next stage of the
procurement process which is the bid evaluation. The following situations are those
contemplated in the foregoing:

3.12.1 Only one bidder submits a bid envelope

Even if only one bidder submits a bid envelope, the bidding process may proceed.
If its bid is found to be responsive to the bidding requirements, its bid will be
declared as a SCRB and considered for contract award (Section 36 of the
revised IRR).

3.12.2 Only one bidder passes the preliminary examinations of bids

The procurement process also proceeds with the subsequent step of detailed did
evaluation. Again, if the eligible bidder submits a bid that is found to be responsive
to the bidding requirements, its bid shall be declared as a SCRB and considered
for contract award (Section 36 of the revised IRR).

3.13 FAILURE OF BIDDING

Failed bidding occurs when the procurement project undertaken was not successfully
awarded pursuant to Section 35 of the revised IRR.

3.13.1. No eligible bidder submitted a bid

If no bidder submits a bid, the BAC should declare the bidding a failure. In such a
case, the BAC shall issue a Resolution declaring a failure of bidding. In order to
determine the reason for the failed bidding, the BAC shall conduct a mandatory
review and evaluation of the terms, conditions and specifications in the Bidding
Documents, including its cost estimates. Based on its findings, the BAC shall
revise the terms, conditions, and specifications, and if necessary, adjust the ABC,
subject to the required approvals, and conduct a re-bidding with re-advertisement
and/or posting, as provided for in Section 21.2 of the revised IRR (Section
35.3 of the revised IRR). All bidders that have initially responded to the IB in
the first bidding shall be allowed to submit new bids.

If the original estimate is found to be inadequate on reassessment to meet the

objectives of the project, it is may be necessary to reduce the scope of the project
(or adjust the ABC should there be a second failure of bidding).

64
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

Should there occur a second failure of bidding, the procuring entity may resort to
negotiated procurement (Sections 35.5 and 53 of the revised IRR). Once the
bidding failed for the second time, the BAC again should conduct a mandatory
review and evaluation of the reasons for failure of bidding. If based on the findings,
there is a need to change the terms, conditions and specifications, and if
necessary, adjust the ABC, it can do so, subject to the required approvals and the
adjustment of the ABC shall only be limited to twenty percent (20%) of the ABC of
the last failed bidding.

3.13.2 No prospective bidder is declared eligible

If no prospective bidder is found to be eligible, the BAC should declare the bidding
a failure. In such a case, the BAC shall issue a Resolution declaring a failure of
bidding. In order to determine the reason for the failed bidding, the BAC shall
conduct a mandatory review and evaluation of the terms, conditions and
specifications in the Bidding Documents, including its cost estimates (Section 35.2
of the revised IRR).

Based on its findings, the BAC shall revise the terms, conditions, and
specifications, and if necessary, adjust the ABC, subject to the required approvals,
and conduct a re-bidding with re-advertisement and/or posting, as provided for in
Section 21.2 of the revised IRR. All bidders that have initially responded to the IB
in the first bidding shall be allowed to submit new bids.

If the original estimate is found to be inadequate on reassessment to meet the

objectives of the project, it is may be necessary to reduce the scope of the project
(or adjust the ABC should there be a second failure of bidding).

Should there occur a second failure of bidding, the procuring entity may resort to
negotiated procurement (Sections 35.5 and 53 of the revised IRR). Once the
bidding failed for the second time, the BAC again should conduct a mandatory
review and evaluation of the reasons for failure of bidding. If based on the findings,
there is a need to change the terms, conditions and specifications, and if
necessary, adjust the ABC, it can do so, subject to the required approvals and the
adjustment of the ABC shall only be limited to twenty percent (20%) of the ABC of
the last failed bidding.

3.14 PARTICIPANTS IN THE SUBMISSION AND RECEIPT OF BIDS AND IN THE OPENING
OF BIDS

The following shall participate in the Submission and Receipt of Bids as well as the Opening
of Bids:

a. BAC;

65
MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

b. TWG;

c. BAC Secretariat;

d. Prospective bidders; and

e. Observers.

3.15 SUBCONTRACTING
3.15.1 Extent of subcontracting
Unless otherwise specified in the bidding documents, the prospective bidder may
subcontract portions of the Works to an extent as may be approved by the
Procuring Entity and stated in the bidding documents, provided that only a
maximum of fifty percent (50%) of the works may be subcontracted. However,
subcontracting of any portion shall not relieve the Bidder from any liability or
obligation that may arise from the contract for this Project Subcontractors must
submit the eligibility requirements and comply with the eligibility criteria provided in
the revised IRR and the bidding documents. In the event that any subcontractor is
found by the Procuring Entity to be ineligible, the subcontracting of such portion of
the Works shall be disallowed.

3.15.2 Notification of subcontracting arrangements

The Bidder may identify the subcontractor to whom a portion of the Works will be
subcontracted at any stage of the bidding process or during contract
implementation. If the Bidder opts to disclose the name of the subcontractor during
bid submission, the Bidder shall include the required documents as part of the
technical component of its bid.

4. PROCEDURES

The following steps are undertaken in the receipt, opening and preliminary examination of bids:

4.1 Bidders shall submit their bids through their duly authorized representative using the forms
specified in the Bidding Documents in two (2) separate sealed bid envelopes, and which
shall be submitted simultaneously. The first shall contain the technical component of the
bid, including all the eligibility requirements under Section 23.1 of the revised IRR, and the
second shall contain the financial component of the bid (Section 25.1 of the revised IRR).

4.2 The BAC convenes on the bid opening date. The presence of the majority of the BAC
members shall constitute a quorum, provided that either the Chairperson or the Vice-
chairperson is present. In cases where both the principal Chairperson and/or Vice-
Chairperson are not present; then, their respective alternates can preside over the meeting.

66
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

4.3 The BAC receives the bids at the time, date and place specified in the bidding documents.
Upon receipt of the bid envelope or container containing the Technical and Financial
Proposals, the BAC Secretariat must stamp the face of the outer envelope/container as
“RECEIVED,” indicating there on the date and time of receipt, and have the stamp
countersigned by an authorized representative.

4.4 The BAC then proceeds with the opening and preliminary examination of bids in public,
using a non-discretionary “passed” or “failed” criteria. For each bid, the BAC first opens the
envelope containing the Eligibility and Technical Proposal Documents to determine its
compliance with the required documents for eligibility and the technical bid. The BAC
checks the submitted documents in the First Envelope (Technical Proposal) of each bidder
against a checklist of required documents to ascertain if they are all present, using non-
discretionary “passed/failed” criteria (Section 30.1 of the revised IRR).

4.5 In case one or more of the above-required documents in the First Envelope (Technical
Component and Eligibility Documents) is missing, incomplete or insufficient, the BAC rates
the bid “failed.” Otherwise, the BAC rates the Technical Proposal “passed”.

When is a document deemed “complete” and “sufficient”?

For a document, to be deemed “complete” and “sufficient”, it must be complete on its face,
that is, contain all the information required, and must comply with the requirements set out
in the bidding documents. For example, a Mayor’s Permit should be current, and
submission of an expired Mayor’s Permit is deemed a “non- submission”. Another example
of an insufficient submission is a Bid Security in an amount below the requirement.

4.6 The BAC then immediately opens the envelope containing the Financial Proposal of each
remaining bidder who’s first Envelope (Eligibility and Technical Bid) was rated “passed.”
The Second Envelope (Financial Component) of each complying bidder shall be opened
within the same day. The BAC determines whether all the requirements/documents
required for the Second Envelope (Financial Component) are complete and sufficient, and
if the total bid price does not exceed the ABC. If so, the BAC rates the bid “passed”. If not,
then the BAC rates the bid “failed”. Only bids that are rated “passed” for both the Technical
and Financial Proposals shall be considered for the next stage of the procurement process,
i.e. detailed evaluation and comparison of bids (Sections 30.2 of the revised IRR).

In the case of foreign currency denominated bids, where allowed by the law and rules, the
same shall be converted to Philippine currency, based on the exchange rate prevailing on
the day of the bid opening. The BSP reference rate as of the date of the bid opening shall
be used.

4.7 The BAC reads the total bid prices of the bidders that are rated “passed.”

67
MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

4.8 All members of the BAC or their duly authorized representatives who are present during the
bid opening, shall initial every page of the original copies of all bids received and opened.
The BAC can also adopt other similar procedures for ensuring the integrity, security, and
confidentiality of all submitted bids (Section 29 of the revised IRR).

4.9 The BAC members and the Observers (if they concur with the proceedings) shall also sign
the “Abstract of Bids as Read” after the Preliminary Examination of Bids.

4.10 The BAC Secretariat shall record the proceedings using an electronic tape recorder, or a
video recorder. The minutes of the bid opening should be prepared within three (3)
calendar days after the bid opening date, so that copies thereof could immediately be sent
to the BAC members, observers, bidders and other interested parties. Copies of the
minutes shall also be made available to the public upon written request and payment of a
specified fee to recover cost of materials.

68
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

STEP5. CONDUCT BID EVALUATION

1. LEGAL REFERENCE
Sections 30 and 32 of the revised IRR are the legal bases in the evaluation of bids.

2. PURPOSE

Bid evaluation is done to determine the LCB (Section 32.1 of the revised IRR). This is done by:

2.1 Establishing the correct calculated prices of the bids, through a detailed evaluation of the
financial component of the bids; and

2.2 Ranking of the total bid prices as so calculated from the lowest to the highest. The bid with
the lowest price shall be identified as the LCB (Section 32.2 of the revised IRR).

3. RULES AND GUIDELINES

3.1 Period of Bid Evaluation

The entire evaluation process for the bids shall be completed in not more than seven (7)
days from the deadline for receipt of proposals. However, for projects costing Fifty Million
PesosPhilippine (PhP 50,000,000.00) and below, the entire evaluation process should be
completed in not more than five (5) calendar days from the deadline for receipt of proposals
(Section 32.3 of the revised IRR). It is advisable that the BAC exert best efforts to
complete the Bid Evaluation even before the lapse of the aforementioned periods as this
will expedite the procurement process.

3.2 Participants

The following must participate in the bid evaluation process:

a. BAC;
b. TWG;
c. BAC Secretariat; and
d. Observers.

3.3 “No Contact Rule” during bid evaluation

There is a “No Contact” rule during bid evaluation. The BAC and the TWG shall not
entertain clarifications from bidders, neither shall they initiate communication with the
bidders, during the bid evaluation stage. There are two reasons for this rule:

a. There is no need for clarifications of technical issues since the evaluation is

focused on arithmetical computations which are determined from the face of the
bid itself; and
69
MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

b. Communications with the Bidders might lead to possible collusion or the Bidder
might try to influence the outcome of the bidding process.

3.4 Non acceptance of arithmetical corrections by Bidder

The BAC must disqualify the bid and forfeit the bid security of the bidder.
3.5 No bid complies with all bid requirements
If no bid complies with all bid requirements, the BAC should declare the bidding a failure. In
such a case, the BAC shall issue a Resolution declaring a failure of bidding. In order to
determine the reason for the failed bidding, the BAC shall conduct a mandatory review and
evaluation of the terms, conditions, and specifications in the Bidding Documents, including
its cost estimates (Section 35.2 of the revised IRR). Based on its findings, the BAC shall
revise the terms, conditions, and specifications, and if necessary, adjust the ABC, subject
to the required approvals, and conduct a re-bidding with re-advertisement and/or posting,
as provided for in Section 21.2 of the revised IRR (Section 35.3 of the revised IRR). All
bidders who have initially responded to the IB shall be allowed to submit new bids. The
BAC shall observe the same process and set the new periods according to the same rules
followed during the previous bidding (Section 35.4 of the revised IRR).

Should there occur a second failure of bidding, the procuring entity may resort to
negotiated procurement, as provided for in Section 53.1 of the revised IRR of R.A. 9184.

4. PROCEDURES
4.1 After the preliminary examination of bids, the BAC, through the TWG, shall
immediately conduct a detailed evaluation of all bids rated “passed,” using a non-
discretionary criteria, as stated in the IB and the ITB, which shall include a
consideration of the following (Section 32.2.1 of the revised IRR):

a. The bid must be complete. Unless the ITB specifically allow partial bids, bids not
addressing or providing all of the required items in the bidding documents
including, where applicable, bill of quantities, shall be automatically disqualified. In
this regard, where a required item is provided, but no price is indicated, the same
shall be considered as non- responsive, but specifying a “0” (zero) for the said item
would mean that it is being offered for free to the Government.

b. Minor arithmetical corrections to consider computational errors, omissions and

discounts, if allowed in the bidding documents, to enable proper comparison of all
eligible bids. Any adjustment shall be calculated in monetary terms to determine
the calculated prices (Section 32.2.1.b of the revised IRR). The BSP reference
rate prevailing on the date of the bid opening shall be used.

c. In the evaluation of bids, all bids shall be evaluated on an equal footing to ensure

70
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

fair and competitive bid evaluation. For this purpose, all bidders shall be required to
include the cost of all taxes, such as, but not limited to, value added tax, income
tax, local taxes, and other fiscal levies and duties which shall be itemized in the bid
form and reflected in the detailed estimates. Such bids, including said taxes, shall
be the basis for bid evaluation and comparison (Sections 32.2.2 of the revised
IRR).

d. 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 estimate and unit cost in the bill of quantities, the latter shall prevail
(Section 32.2.3 of the revised IRR). The corrected per item cost for all items
shall be the basis for the corrected grand total cost.

4.2 Based on the detailed evaluation of bids, those that comply with the abovementioned
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 LCB. Total calculated bid prices, as evaluated and corrected for computational
errors, discounts and other modifications, which exceed the ABC shall be disqualified
(Section 32.2.4 of the revised IRR).

4.3 After all bids have been received, opened, examined, evaluated and ranked, the BAC shall
prepare the corresponding Abstract of Bids. All members of the BAC shall sign the Abstract
of Bids and attach thereto all the bids with their corresponding Bid Securities and the
minutes or proceedings of the bidding (Section 32.3 of the revised IRR). The Observers
shall also sign the Abstract of Bids if, in their independent observation, the bidding activity
conducted by the BAC followed the correct procedure indicated under R.A. 9184 and the
revised IRR. The Abstract of Bids shall contain the following:

a. Name of the contract and its location, if applicable;

b. Time, date and place of bid opening; and
c. Names of bidders and their corresponding calculated bid prices arranged from
lowest to highest, the amount of Bid Security and the name of the issuing entity.
4.4 The TWG, with the assistance of the BAC Secretariat, when directed by the BAC, should
prepare the Evaluation Report, containing the details of the evaluation conducted,
preferably within three (3) calendar days from the date the evaluation was concluded.

4.5 The entire evaluation process shall be completed within seven (7) calendar days from the
deadline for the receipt of proposals. However, for infrastructure projects costing Fifty
Million Philippine Pesos (PhP 50,000,000.00) and below, the entire evaluation process
shall be completed in not more than five (5) calendar days from the deadline for receipt of
bids.

71
MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

STEP6. CONDUCT POST-QUALIFICATION

1. LEGAL REFERENCE
Section 34 of the revised IRR is the legal basis of post-qualification.
2. PURPOSE
Post-qualification is the process of verifying, validating and ascertaining all the statements made and
documents submitted by the bidder with the LCB, which includes ascertaining the said bidder’s
compliance with the legal, financial and technical requirements of the bid.

The LCB shall undergo post-qualification in order to determine whether the bidder concerned
complies with and is responsive to all the requirements and conditions as specified in the Bidding
Documents (Section 34.1 of the revised IRR).
The examination of eligibility documents does not ascertain the validity and genuineness of the
eligibility documents submitted by the bidders. Neither does it determine the veracity of the claims
made by the bidders in their financial and technical proposals.

The post-qualification process, on the other hand, does.

3. RULES AND GUIDELINES

3.1 Requirements in Post-qualification

Post-qualification involves the BAC verifying, validating and ascertaining that the bidder
satisfies the following requirements: (Section 34.3 of the revised IRR)
a. Legal Requirements. To verify, validate, and ascertain licenses, certificates,
permits, and agreements submitted by the bidder, and the fact that it is not included
in any “blacklist” as provided in Section 25.2 of the revised IRR. For this purpose,
the GPPB shall maintain a consolidated file of all “blacklisted” suppliers, contractors,
and consultants.

b. Technical Requirements. To determine compliance of the goods, infrastructure

projects, or consulting services offered with the requirements specified in the
Bidding Documents, including, where applicable:

1. Verification and validation of the bidder’s stated competence and

experience, and the competence and experience of the bidder’s key
personnel to be assigned to the project, for the procurement of
infrastructure projects and consulting services;

2. Verification of availability and commitment, and/or inspection and testing

for the required capacities and operating conditions, of equipment units to
be owned/leased/under purchase by the bidder for use in the contract
under bidding, as well as checking the performance of the bidder in its
ongoing government and private contracts (if any of these on-going
contracts shows a reported negative slippage of at least fifteen percent
72
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

(15%), or substandard quality of work as per contract plans and

specifications, or unsatisfactory performance of the contractor’s obligations
as per contract terms and conditions, at the time of inspection, and if the
BAC verifies any of these deficiencies to be due to the contractor’s fault or
negligence, the agency shall disqualify the contractor from the award), for
the procurement of infrastructure projects;

3. Verification and/or inspection and testing of the goods/product, after sales

and/or maintenance capabilities, in applicable cases, for the procurement
of goods; and

4. Ascertainment of the sufficiency of the bid security as to type, amount, form

and wording, and validity period.

c. Financial Requirements. To verify, validate and ascertain the bid price proposal of
the bidder and, whenever applicable, the required CLC in the amount specified and
over the period stipulated in the Bidding Documents, or the bidder’s NFCC to
ensure that the bidder can sustain the operating cash flow of the transaction.

3.2 Period of Action

The post-qualification process shall be completed in not more than seven (7) calendar days
from the determination of the LCB. In exceptional cases, the post-qualification period may
be extended by the HOPE, but in no case shall the aggregate period exceed thirty (30)
calendar days (Section 34.8 of the revised IRR).

3.3. Participants
The following parties ought to be involved in the conduct of post-qualification:
a. BAC;

b. TWG; and

c. BAC Secretariat; and

d. Contractor, ranked starting from bidder with the LCB.

3.4 Grounds for Disqualification

a. A bidder that has been blacklisted by any government agency or instrumentality will
be disqualified by the BAC from further participating in the bidding process.

b. A bidder or its employees is related within the third (3rd) civil degree of
consanguinity or affinity to the HOPE or any of officials of employees of the
Procuring Entity with direct access to information that may substantially affect the
results of the bidding.

c. A bidder is found to have committed an act that constitutes fraud or

73
MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

misrepresentation or to have colluded with others for the purpose of influencing the
outcome of the Bidding. Such bidder will be disqualified by the BAC, its bid security
forfeited and, upon conviction, it will suffer the penalty of imprisonment of not less
than six (6) and one (1) day and not more than fifteen (15) years, (Section 65.2 of
the revised IRR) and likewise suffer the administrative penalties of suspension for
one (1) year from participation in government procurement for the first offense, and
suspension for two (2) years for the second offense (Section 69.1 of the revised
IRR).

3.5 Motion for Reconsideration from Post-qualified LCB

If the bidder with the LCB fails to pass post-qualification, the BAC shall immediately
notify the said bidder in writing of its post-disqualification and the grounds for it. The post-
disqualified bidder shall have three (3) calendar days from receipt of the said notification
to request from the BAC, if it so wishes, a reconsideration of this decision. Similar to
the cases of bidders deemed to be ineligible and whose bids are rated “failed,” the bidder
with the LCB who fails to pass post-qualification may likewise file a protest with the
corresponding fee in case the BAC denies its request for reconsideration.

Immediately after the BAC has notified the first bidder of its post-disqualification, and
notwithstanding any pending request for reconsideration thereof, the BAC shall initiate and
complete the same post-qualification process on the bidder with the second LCB. If the
second bidder passes the post-qualification, and provided that the request for
reconsideration of the first bidder has been denied, the BAC shall declare the second
bidder as the bidder with the LCRB. The HOPE shall then award the contract to it (Section
34.6 of the revised IRR).

If the second bidder, however, fails the post-qualification, the procedure for post-
qualification shall be repeated for the bidder with the next LCB, and so on until the
LCRB is determined for award (Section 34.7 of the revised IRR).

3.6 When all qualified bidders are post-qualified

If no bidder passes post-qualification, the BAC should declare a failure of bidding. In such a
case, the BAC shall issue a Resolution declaring a failure of bidding. In order to determine
the reason for the failed bidding, the BAC shall conduct a mandatory review and evaluation
of the terms, conditions, and specifications in the Bidding Documents, including its cost
estimates (Section 35.2 of the revised IRR). Based on its findings, the BAC shall revise
the terms, conditions, and specifications, and if necessary, adjust the ABC, subject to the
required approvals, and conduct a re-bidding with re-advertisement and/or posting, as
provided for in Section 21.2 of the revised IRR. All bidders who have initially responded to
the Invitation to Bid/Request for Expression of Interest and have been declared eligible or
short listed in the previous biddings shall be allowed to submit new bids. The BAC shall
observe the same process and set the new periods according to the same rules followed
during the previous bidding (Section 35.4 of the revised IRR).
74
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

Should there occur a second failure of bidding, the procuring entity may resort to negotiated
procurement, as provided for in Section 53.1 of the revised IRR.

4. PROCEDURES

The following steps are followed in the conduct of post-qualification:

4.1 The BAC/TWG verifies, validates, and ascertains the genuineness, validity and accuracy of
the legal, technical and financial documents submitted by the bidder with the LCB, using the
non-discretionary criteria described above.

In verifying the information contained in such documents, the TWG may make inquiries with
appropriate government agencies and examine the original documents kept in the bidder’s
place of business. The use of other means for verification and validation of such documents
may be resorted to by the TWG, such as the Internet and other research methods that yield
the same results.

The BAC/TWG inquires about the bidder’s performance in relation with other
contracts/transactions as indicated in its eligibility statement (statement of ongoing,
completed or awarded contracts).

4.2 If the TWG conducts post-qualification, it TWG prepares a post-qualification report to be

submitted to the BAC. The Report shall contain, among others, the activities undertaken
with regard to the post-qualification process, including feedback from inquiries conducted.

4.3 The BAC reviews the Post-qualification Report submitted by the TWG.

4.4 The BAC determines whether the bidder with the LCB passes all the criteria for post-
qualification.

4.5 If the LCB passes the post-qualification, the BAC declares it as the LCRB.

4.6 After the BAC has determined the LCRB, the Secretariat, with the assistance of the TWG, if
necessary, prepares the BAC Resolution declaring the LCRB and the corresponding Notice
to the said bidder informing it of its post-qualification.

75
MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

STEP7. AWARD THE CONTRACT AND ISSUE NOTICE

OF AWARD
1. LEGAL REFERENCE
Section 37 of the revised IRR is the legal basis for award of contract.

2. PURPOSE

This is the stage when the contract is granted to the lowest calculated and responsive bidder.

3. RULES AND GUIDELINES

3.1 Notice of Award

The contract shall be awarded to the bidder with the LCRB at its submitted bid price or
its calculated bid price, whichever is lower.

The BAC shall recommend to the HOPE the award of contract to the bidder with
the LCRB or the SCRB after the post-qualification process has been completed
(Section 37.1.1 of the revised IRR).

To facilitate the approval of the award, the BAC shall submit the following
supporting documents to the Head of the Procuring Entity:

a. Resolution of the BAC recommending award;

b. Abstract of Bids;
c. Duly approved program of work or delivery schedule, and Cost Estimates;
d. Document issued by appropriate entity authorizing the procuring entity to incur
obligations for a specified amount; and

e. Other pertinent documents required by existing laws, rules, and/or the procuring
entity concerned.

Prior to the expiration of the period of bid validity, the Procuring Entity should notify the
successful bidder in writing that its bid has been accepted, through a NOA received
personally or sent by registered mail or electronically. It is important that, in case the NOA
is not received personally, its receipt must be confirmed in writing within two (2) days by the
successful bidder and submitted personally or sent by registered mail or electronically to
the Procuring Entity (this particular instruction must be included in the ITB so that the
bidder may be guided accordingly).

76
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

3.2 Period of Action

Within a period not exceeding seven (7) calendar days from the date of receipt of the BAC
recommendation, the HOPE shall approve or disapprove the said recommendation.
However, for infrastructure projects with an ABC of Fifty Million Pesos (P50,000,000.00)
and below, the HOPE shall approve or disapprove the said recommendation within four
(4) calendar days (Section 37.1.2 of the revised IRR).

The NOA shall be given to the bidder with the LCRB immediately after approval of the
recommendation. Simultaneously, a copy of the Notice shall be furnished to all losing
bidders, and posted in the website of the PhilGEPS, as well as the websites of the
Procuring Entity and its electronic procurement service provider, if any.

The procurement process from the opening of bids up to the award of the contract shall not
exceed three (3) months or a shorter period to be determined by the procuring entity
concerned (Section 38.1 of the revised IRR). The maximum period to be observed for the
entire procurement process from advertisement or posting of the IB to the issuance of the
NTP should not exceed seventy (70) calendar days for projects with ABC costing Fifty
Million Pesos (P50, 000,000.00) and below and one hundred (100) calendar days for
projects with ABC above Fifty Million Pesos (P50, 000,000.00)

Notwithstanding the issuance of the NOA, award of contract shall be subject to the
following conditions.

3.3 Contract Signing

Submission of the following documents within the prescribed period:

a. Valid JVA, if applicable, within ten (10) calendar days from receipt by the bidder of
the notice from the BAC that the bidder has the LCRB, as the case may be; or

b. In the case of infrastructure projects, valid PCAB license and registration for the
type and cost of the contract to be bid for foreign bidders, within thirty (30) calendar
days from receipt by the bidder of the notice from the BAC that the bidder has the
LCRB, when the Treaty or International or Executive Agreement expressly allows
submission of the PCAB license and registration for the type and cost of the
contract to be as a pre- condition to the Notice of Award;

c. Posting of performance security in accordance with Section 39 of the revised IRR;

d. Signing of the contract as provided in Section 37.2 of the revised IRR; and

e. Approval by higher authority, if required, as provided in Section 37.3 of the revised

IRR.

Contract award shall be made within the bid validity period provided in Section.
The BAC, through the Secretariat, shall post, within three (3) calendar days from its
77
MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

issuance, the Notice of Award in the PhilGEPS, the website of the procuring entity,
if any, and any conspicuous place in the premises of the procuring entity.

The winning bidder shall post the required Performance Security and enter into
contract with the procuring entity within ten (10) calendar days from receipt by the
winning bidder of the NOA. The procuring entity shall enter into contract with the
winning bidder within the same ten (10) day period provided that all the
documentary requirements are complied with.

The following documents shall form part of the contract:

1. Contract Agreement;

2. Bidding Documents;

3. Winning bidder’s bid, including the Eligibility requirements, Technical and

Financial Proposals, and all other documents/ statements submitted;

4. Performance Security;

5. Credit line in accordance with the provisions of the revised IRR, if applicable;

6. Notice of Award of Contract; and

7. Other contract documents that may be required by existing laws and/or the
procuring entity concerned in the Bidding Documents, such as the
construction schedule and S-curve, manpower schedule, construction
methods, equipment utilization schedule, construction safety and health
program approved by the DOLE and PERT/CPM for infrastructure projects.

3.4 Participants

The following parties must participate in the activities related to the awarding of the
contract:
a. HOPE;
b. BAC;
c. Procurement Unit/Office;
d. BAC Secretariat; and
e. Bidder who submitted the LCRB/SCRB.

3.5 Non-acceptance of award of contract

If the bidder refuses to accept the award within the bid validity period, the BAC shall forfeit

78
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

the bid security of the bidder and shall initiate the blacklisting proceedings in accordance
with the Uniform Guidelines for Blacklisting provided under GPPB Resolution No. 09-2004.
It then initiates and completes the post-qualification of the bidder with the second bidder
with the LCB. If found qualified, the said bidder shall be awarded the contract. This
procedure is repeated until the LCRB is determined. Should all eligible bidders fail post-
qualification, the BAC must declare the bidding a failure.

Refusal to accept an award, without just cause or for the purpose of forcing the Procuring
Entity to award the contract to another bidder, if proven, is meted with a penalty of
imprisonment of not less than six (6) years and one (1) day by not more than fifteen (15)
years (Section 65.3.d of the revised IRR). Additional penalties of suspension for one (1)
year from participation in government procurement for the first offense, and suspension for
two (2) years for the second offense shall also be imposed on the bidder (Section 69.1 of
the revised IRR).

4. PROCEDURES

The following steps are followed in the awarding of a contract:

4.1 The BAC Secretariat drafts the BAC Resolution recommending award.

4.2 The BAC Secretariat consolidates all the documents and/or records of the proceedings of
the BAC with regard to the procurement at hand, and attaches the same to the BAC
Resolution.

4.3 The BAC approves and signs its resolution recommending award, and transmits the same
to the HOPE.

4.4 The HOPE or his/her duly authorized representative, acts on the recommendation for award
within fifteen (15) calendar days from the date of determination and declaration by the BAC
of the LCRB/SCRB. In the case of GOCCs and GFIs, the governing Board shall have thirty
(30) calendar days within which to approve the recommendation for award.

4.5 In case of a disapproval of the recommendation of award, the HOPE shall state the
reason(s) for disapproval and instruct the BAC on the subsequent steps to be adopted. In
case of approval of the recommendation, the Head of the Procuring Entity, through the
procurement unit/office, issues the Notice of Award to the bidder with the LCRB/SCRB,
while the BAC accordingly notifies the losing bidders.

4.6 The bidder with the LCRB/SCRB accepts the NOA.

79
MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

STEP8. SIGN AND APPROVE CONTRACT

1. LEGAL REFERENCE
Section 37 of the revised IRR specifies the rules regarding contract signing and approval.

2. PURPOSE

This is the stage that the procuring entity enters into an agreement with the LCRB to undertake the
project within the conditions and period set forth in the procurement process. This is also the stage
when actual notice is given to LCRB to commence the project.

3. RULES AND GUIDELINES

3.1 Period of entering into contract

The winning bidder and the Procuring Entity must enter into a contract immediately after
the former has submitted the performance security and all other documentary
requirements within the period specified in the revised IRR. The parties must sign the
contract within ten (10) calendar days from receipt by the winning bidder of the NOA
(Section 37.2.1 of the revised IRR).

The Chief Accountant or the Chief Budget Officer may sign the contract as an instrumental
witness thereto.

The Procuring Entity signatory is encouraged to sign within the same day as the signing of
the bidder as there are penalties against delaying, without justifiable cause, the award of
the contract (Section 65.1 of the revised IRR). Moreover, it would be best for the winning
bidder and the HOPE, or its appropriate signing authority, to sign/execute the contract
together – provided that all contract documents and requirements are complete – so that
both may personally appear before a Notary Public.

3.2 Timelines in contract approval

When, after contract signing, further approval of a higher authority is required, the
approving authority for the contract, or his duly authorized representative, shall be given a
maximum of fifteen (15) calendar days from receipt thereof, together with all documentary
requirements to perfect the said contract, to approve or disapprove it (Section 37.3 of the
revised IRR).

3.3 Contract Effectivity

Unless otherwise specified in the contract, a contract is effective upon receipt of the NTP.
If an effectivity date is provided in the NTP by the Procuring Entity, all notices called for by
the terms of the approved contract shall be effective only from such effectivity date
(Section 37 of the revised IRR).

80
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

3.4 Participants

The following parties are involved in contract signing and approval and in the issuance of
the NTP:

a. Procurement Unit/Office/End-User Unit;

b. HOPE and/or higher contract approving authority; and

c. Winning bidder.

3.5 Contract documents

The contract shall include the following. The first nine (9) requirements are provided by the
Procuring Entity, while the winning bidder submits the rest:

a. The Contract Agreement;

b. Conditions of Contract

c. Drawings/Plans, if applicable;
d. Specifications, if applicable;
e. Invitation to Bid;
f. Bidding Documents;

g. Addenda and/or Supplemental/Bid Bulletins, if any;

h. Bid form including all the documents/statements contained in the winning bidder’s two
bidding envelopes, as annexes;

i. Eligibility requirements, documents and/or statements;

j. Performance Security and Contractor’s All-Risk Insurance;

k. Credit Line issued by a licensed bank in accordance with the provisions of the revised
IRR, if applicable; (Actual credit line from the same bank who issued the written
commitment. This is different from the written commitment from the bank submitted
during eligibility);

l. NOA with the winning bidder’s ”Conforme” thereto;

m. PERT/CPM approved by the Procuring Entity; and

n. Other contract documents that may be required by existing laws and/or the Procuring
Entity concerned.

3.6 Performance Security

A performance security is a guarantee that the winning bidder will faithfully perform its
obligations under the contract prepared in accordance with the bidding documents
81
MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

(Section 39.1 of the revised IRR). It must be posted in favor of the Procuring Entity, and
will be forfeited in the latter’s favor in the event it is established that the winning bidder is in
default in any of its obligations under the contract (Section 39.2 of the revised IRR).

3.6.1 When to Post performance security

Within a maximum period of ten (10) calendar days from the receipt of the NOA
from the Procuring Entity, and in all cases upon the signing of the contract, the
successful bidder should furnish the Procuring Entity with the performance security
in accordance with the Conditions of Contract, and in the Form prescribed in the
Bidding Documents (Section 39.1 of the revised IRR). The performance security
forms part of the contract (Section 37.2.3 of the revised IRR).

3.6.2 Forms and corresponding amounts required

The performance security must be in any of the following or a combination of

forms with the corresponding required amounts:
AMOUNT OF PERFORMANCE SECURITY (EQUAL
FORM OF PERFORMANCE SECURITY
TO THE PERCENTAGEOF THE TOTAL CONTRACT
PRICE)
a. Cash or cashier’s/manager’s check issued by a
Universal or Commercial Bank.
b. Bank draft/guarantee or irrevocable letter of credit
issued by a Universal or Commercial bank: Ten percent (10%)
Provided, however, that is shall be confirmed or
authenticated by a Universal or Commercial Bank,
if issued by a foreign bank.
c. Surety bond callable upon demand issued by any
Thirty (30%)
reputable surety or insurance company; or
d. Any combination of the foregoing forms. Proportionate to share of form with respect to total
amount of security

3.6.3 Determination of form of the Performance Security

The Procuring Entity can no longer limit the allowable forms of performance
security provided under the revised IRR of R.A. 9184, even if it expressly states
the same in their bidding documents. Prospective bidders have the option to
choose from any of these allowable forms of performance security.

3.6.4 Additional Performance security in case of contract price amendment

The winning bidder shall post an additional performance security following the
schedule above to cover any cumulative increase of more than ten percent (10%)
over the original value of the contract as a result of change orders or extra work
orders, as the case may be (Section 39.6 of the revised IRR). The percentages
in the schedule above must be applied to increases in the original value of the
contract. The winning bidder must also cause the extension of the validity of the
performance security to cover approved contract time extensions.
82
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

For partially completed works under the contract which are usable and accepted
by the government, and the use of which, in the judgment of the implementing
agency or the Procuring Entity, will not affect the structural integrity of the entire
project, the Procuring Entity shall allow a proportional reduction in the original
performance security. However, this proportional reduction in the value of the
performance security is allowed only when the reductions are more than ten
percent (10%) and the aggregate of such reductions is not more than fifty percent
(50%) of the original performance security (Section 39.7 of the revised IRR).

3.6.5 Release of Performance Security

Subject to the conditions of the contract, the Procuring Entity may release the
performance security to the winning bidder after the issuance of the Certificate of
Completion of the contract, provided that there are no claims for labor and
materials filed against the contractor or the surety company, (Section 39.5 of the
revised IRR) and provided that it is replaced by a warranty covering the defects
liability period in accordance with Section 62 of the revised IRR.

3.6.6 Parties involved in the posting of the Performance Security

The bidder with the LCRB, the Procuring Entity and the issuer of the security, e.g.,
the banking/financial institution or the insurance company, are all involved in the
posting of the performance security.

3.7 Refusal or inability of LCRB/SCRB to post the performance security and sign the
contract within the prescribed period

If the bidder with the LCRB/SCRB refuses to, or is unable, through its own fault, to post the
performance security and sign the contract within the prescribed period:

a. Its bid security is forfeited;

b. It is disqualified from further participating in the bidding at hand;

c. Upon conviction, the relevant officers or individuals will suffer the penalty of
imprisonment of not less than six (6) and one (1) day and not more than fifteen
(15) years; and

d. Upon determination of administrative liability, it will suffer the administrative

penalties of suspension for one (1) year from participation in government
procurement for the first offense, and suspension for two (2) years for the second
offense. This is without prejudice to the blacklisting proceedings undertaken in
accordance with the Uniform Guidelines for Blacklisting (Appendix 11 of the
revised IRR).

83
MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

If the failure of the bidder with the LCRB/SCRB to sign the contract within the prescribed
period is not due to its fault, the sanctions mentioned above shall not be imposed (Section
40.1 of the revised IRR).

For its part, the BAC must initiate and complete the post-qualification of the bidder the
second LCB. This procedure must be repeated until the LCRB is determined for award. If
no bidder passes post-qualification, the BAC declares the bidding a failure and conducts a
re-bidding with re-posting and re-advertisement. Should there be another failure of
bidding after the conduct of the re-bidding, the Procuring Entity may enter into a
negotiated procurement (Section 40.2 of the revised IRR).

If, on the other hand, the bidder that fails to post the performance security and sign the
contract happens to be one with the SCRB, the BAC must declare the bidding a failure. It
then conducts a re-bidding with re-posting and re- advertisement. Should there be another
failure of bidding after the conduct of the re-bidding; the Procuring Entity may enter into a
negotiated procurement (Section 40.3 of the revised IRR).

If the failure of the bidder with the LCRB/SCRB to sign the contract within the prescribed
period is not due to its fault, the sanctions mentioned above shall not be imposed (Section
40.1 of the revised IRR).

3.8 Approving authorities

In most procuring entities, particularly the bureaus or lower-level offices of national

government agencies or centrally managed GOCCs or GFIs, the contract signatory is a
different official from the approving authority. For example, a bureau director may only be
authorized to approve contracts up to Fifty Million Philippine Pesos (PhP 50,000,000.00).
Contracts exceeding the said amount are brought up to the Secretary for approval.
Different procuring entities have different levels of delegated authority, but the principle is
essentially the same – the higher the contract amount, the higher is the level of the
approving authority. In cases like this, the contract is considered approved upon the
approval of such higher authority. The existence of this policy is the usual cause of
delays in procurement transactions.

Section 38 and Section 38.2 of R.A. 9184 and the revised IRR are designed to remove this
cause for delay. These provisions mandate that if further approval of a higher authority
within or outside the procuring entity (other than the President of the Philippines) is
required, and that authority does not take any action on the contract within the prescribed
period, the contract concerned is deemed approved.

Only contracts that are duly signed by the appropriate signatory, but require further
approval, are covered by this rule, because an unsigned contract is a mere piece of paper
and cannot be the basis of a government liability. Refer to the most recent delegation of
authorities AO 2006-003 (Reference D) and its subsequent amendment AO 2006-003-A
(Reference E).
84
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

3.9 Rules governing the review and approval of government contracts

Executive Order 423, s. 2005, as amended by E.O. 645 prescribes the rules and
regulations on the review and approval of government contracts. Essentially, E.O. 423
provides that, except for government contracts required by law to be acted upon and/or
approved by the President, the HOPE shall have full authority to give final approval and/or
enter into all government contracts of his respective government agency, awarded through
public bidding, regardless of amount.

Provided, that the HOPE certifies under oath that the contract has been entered into in
faithful compliance with all applicable laws and regulations. The HOPE may also delegate
in writing this full authority to give final approval and/or enter into government contracts
awarded through public bidding as circumstances may warrant (i.e. to decentralization of
procurement in a government agency), subject to such limitations as he may impose. For
procurement undertaken through any of the alternative methods allowed by law, where the
government contract involves an amount less than Five Hundred Million Philippine Pesos
(PhP 500,000,000.00), except where action or approval of the President is required, the
HOPE shall have full authority to give final approval and/or enter into such contract,
provided that the Department Secretary concerned certifies under oath that the contract
has been entered into in faithful compliance with all applicable laws and regulations. He
may delegate in writing this authority, as circumstances may warrant (i.e. to decentralize
procurement), subject to such limitations as he may impose.

Where the HOPE has made a determination that a Government contract, including
Government contracts required by law to be acted upon and/or approved by the President,
involving an amount of at least Five Hundred Million Philippine Pesos (PhP
500,000,000.00) falls under any of the exceptions from public bidding allowed by law, the
HOPE shall, before proceeding with the alternative methods of procurement provided by
law and applicable rules and regulations, obtain an approval from the GPPB that said
Government contract falls within the exceptions from public bidding and the proposed
specific alternative method of procurement is appropriate.

Except for Government contracts required by law to be acted upon and/or approved
by the President, the Head of the Procuring Entity, after obtaining the foregoing
requirements, shall have full contracts of their his respective agency, entered into through
alternative methods of procurement allowed by law. Provided, that the head of the
procurement entity certifies under oath that the contract has been entered into in faithful
compliance with all applicable laws and regulations.

4. PROCEDURES

4.1 Signing and approval of Contract

The winning bidder submits all the documentary requirements, including the performance
security, and signs the contract.
85
MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

The procurement unit/office transmits the contract and its attachments to the Budget Office
(for issuance of OS) and the Chief Accountant (for issuance of the CAF).

The procurement unit/office transmits the contract documents to the appropriate signing
authority for signature, together with the following documents:

a. Duly approved program of work and cost estimates;

b. CAF;

c. Abstract of Bids as Calculated;

d. Resolution of the BAC or duly designatedprocurement office recommending

Award;

e. Approval of award by appropriate government approving authority; and

f. Other pertinent documents that may be required by existing laws and/or the
Procuring Entity concerned.

After signing, if the contract needs the approval of a higher authority – such as, for
bureaus, the Department Secretary, when required – the procurement unit/office transmits
the contract and related documents to the approving authority or his authorized
representative for approval.

In most Procuring Entities, particularly the bureaus or lower-level offices of National

Government Agencies or centrally managed GOCCs or GFIs, the contract signatory is a
different official from the approving authority. For example, a bureau director may only be
authorized to approve contracts up to Fifty Million Philippine Pesos (PhP 50,000,000.00).
Contracts exceeding the said amount are brought up to the Secretary for approval.
Different Procuring Entities have different levels of delegated authority, but the principle is
essentially the same – the higher the contract amount, the higher is the level of the
approving authority. In cases like this, the contract is usually deemed effective upon
approval of such higher authority. The existence of this policy is the usual cause of
delays in procurement transactions.

Section 38 of R.A. 9184 and the revised IRR are designed to remove this cause for delay.
These provisions mandate that if further approval of a higher authority (other than the
President of the Philippines) is required, and that authority does not take any action on the
contract within the prescribed period, the contract concerned is deemed approved.

Only contracts that are duly signed by the appropriate signatory are covered by this rule.
An unsigned contract is a mere piece of paper and cannot be the basis of a government
liability.
86
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

The approving authority or his authorized representative acts on the contract within
twenty (20) calendar days, or thirty (30) calendar days for GOCCs and GFIs, from receipt
thereof.

If higher approval is required (e.g., approval of the Office of the President), or a review by
another government body is necessary (e.g., NEDA or DOJ review), the Head of the
Procuring Entity transmits the contract documents to the appropriate approving authority
or reviewing body. The periods indicated above for approvals of contracts still apply,
except if the approving authority is the Office of the President.

The HOPE or his/her duly authorized representative issues the NTP within three (3)
calendar days from the date of the approval of the contract by the appropriate government
approving authority.

4.2 Posting of Performance Security

The following steps are followed in the posting of the performance security:
a. The bidder with the LCRB posts a performance security. In so doing, it must
comply with the following conditions:
i. The performance security must be executed in the form prescribed by the
Procuring Entity in the ITB; and

ii. The following provisions shall form part of the performance security: “The
right to institute action on the penal bond pursuant to Act No. 3688 of any
individual firm, partnership, corporation and association supplying the
contractor with labor and materials for the prosecution of the work is hereby
acknowledged and confirmed.”
b. The procurement unit/office accepts the performance security and indicates such
posting and acceptance by attaching the appropriate form to the contract.

87
MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

STEP 9. ISSUE NOTICE TO PROCEED

1. LEGAL REFERENCE
Section 37.4 of the revised IRR is the legal basis for the issuance of the NTP and its subsequent
posting.
2. PURPOSE
NTP is procurement document which signify that the procuring entity and the awarded bidder have
already undergone contract signing and the latter shall now be obliged to perform its obligation
based upon the terms and conditions of the contract.
3. PROCEDURES OF ISSUANCE OF THE NTP
3.1 Issuance of the NTP
The NTP shall be issued together with a copy or copies of the approved contract to the
successful bidder within three (3) calendar days from the date of approval of the contract
by the appropriate government approving authority (Section 37.4.1 of the revised IRR).
The contract effectivity date shall be provided in NTP by the procuring entity, which shall not
be later than seven (7) calendar days from its issuance.
3.2 Participants in the issuance of the NTP
The following parties are involved in the issuance of the NTP:
3.2.1 Procurement Unit/Office/End-User Unit;
3.2.2 HOPE, or its duly authorized representative, and/or higher contract approving
authority if so warranted; and
3.2.3 Winning bidder.
3.3 Posting of NTP
3.3.1 When NTP is posted
According to the revised IRR of RA 9184, the procuring entity, through the BAC
Secretariat, shall post a copy of the procuring entity, if any, within fifteen (15)
calendar days from the issuance of the NTP.
3.3.2 Where NTP is posted
For transparency purposes and to inform the public of the status of the various
procurement projects, the NTP shall be posted in either of the following:
a. PhilGEPS website; or

b. Procuring Entity’s website, if available

88
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

RESERVATION CLAUSE
1. LEGAL REFERENCE
Section 41 of the revised IRR is the legal basis of the Reservation Clause.

2. RULES AND GUIDELINES

2.1 RIGHT TO REJECT BIDS, DECLARE A FAILURE OF BIDDING, OR NOT AWARD

THE CONTRACT

The Head of the Procuring Entity reserves the right to reject any and all bids, declare a
failure of bidding, or not award the contract in any of the following situations:
a. If there is prima facie evidence of collusion between appropriate public officers or
employees of the Procuring Entity, or between the BAC and any of the bidders, or
between or among the bidders themselves, or between a bidder and a third party,
including any act which restricts, suppresses or nullifies or tends to restrict,
suppress or nullify competition;

b. If the BAC is found to have failed in following the prescribed bidding procedures,
for which the applicable sanctions shall be applied to the erring officers; or

c. For any justifiable and reasonable ground where the award of the contract will not
contribute to the benefit of the Government as follows:

i. If the physical and economic conditions have significantly changed so as to

render the project no longer economically, financially or technically feasible as
determined by the Head of the Procuring Entity;

ii. If the project is no longer necessary as determined by the Head of the

Procuring Entity; and

iii. If the source of funds for the project has been cancelled, withheld or reduced
through no fault of the Procuring Entity.

2.2 INSTANCES OF NOT FOLLOWNG PRESCRIBED PROCEDURES

The following are some instances when a BAC fails to follow procedures:

a. Prescribing an insufficient number of days in the advertisement and/or posting of the

IB;

b. Exceeding the required periods for eligibility screening, bid evaluation, post-
qualification for each lowest calculated bidder or for awarding the contract without
justifiable cause;
89
MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

c. Conducting the pre-bid conference or issuing the bidding documents in less than the
required number of days before deadline for the submission and opening of bids;

d. Requiring the bidder to submit additional documents which is tantamount to improving

his bidding documents; and

e. Allowing a bidder to be declared eligible or pass the post-qualification with incomplete

documents.

90
 SECTION 4

PROCUREMENT OF
INFRASTRUCTURE
THROUGH
ALTERNATIVE METHOD
OF PROCUREMENT
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

PART TWO – ALTERNATIVE METHODS OF PROCUREMENT

RULES ON THE USE ALTERNATIVE METHOD OF
PROCUREMENT FOR INFRASTRUCTURE PROJECTS
Generally, procurement should be through public bidding. In preparing the APP, the Procuring Entity must
ensure that there is sufficient time to undertake public bidding. However, the law allows the use of
alternative methods of procurement in some exceptional instances, provided:

1. There is prior approval of the Head of the Procuring Entity on the use of alternative methods of
procurement, as recommended by the BAC; and

2. The conditions required by law for the use of alternative methods are present.

One of the reasons for the use of alternative methods of procurement is for administrative convenience.
This means that the Procuring Entity is given the opportunity to procure infrastructure projects at
advantageous terms without having to undergo the entire public bidding process which could be time-
consuming. Or, there could be changes in circumstances that preclude the use of public bidding as
originally proposed in the APP, like in those cases where the BAC has twice declared a failure of bidding.

In resorting to any of the alternative methods of procurement, the Procuring Entity must ensure that the
method chosen promotes economy and efficiency, and that the most advantageous price for the
government is obtained.

While the law allows the use of alternative methods or procurement, it emphasizes that splitting of
government contracts is not allowed. There is splitting of government contracts when, for the purpose of
evading or circumventing the requirements of law and the revised IRR, especially the necessity of public
bidding and the requirements for the alternative methods of procurement, The Procuring Entity:

1. Divides or breaks up government contracts into smaller quantities and amounts; or

2. Divides contract implementation into artificial phases or sub-contracts. (Section 54.1 of the
revised IRR)

For the procurement of infrastructure projects, negotiated procurement is the only alternative method of
procurement that may be used.

93
MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

NEGOTIATED PROCUREMENT
1. NEGOTIATED PROCUREMENT DEFINED

Negotiated Procurement is a method of procurement whereby the Procuring Entity directly

negotiates a contract with a legally, technically and financially capable contractor (Section 53 of
the revised IRR).

2. RULES AND GUIDELINES

2.1 When to use

Negotiated procurement must be resorted to only if:

2.1.1 Two – Failed Bidding
Where there has been failure of public bidding for the second time as
provided in Section 35 of RA 9184 and the revised IRR;

2.1.2 Emergency Cases

In case of imminent danger to life or property during a state of calamity, or when
time is of the essence arising from natural or man-made calamities or other
causes where immediate action is necessary to prevent damage to or loss of life
or property, or to restore vital public services, infrastructure facilities and other
public utilities. In the case of infrastructure projects, the procuring entity has the
option to undertake the project through negotiated procurement or by
administration or, in high security risk areas, through the AFP.

Under these conditions, in the case of infrastructure projects, the Procuring Entity
has the option to undertake the project through negotiated procurement or by
administration (which may include “pakyaw” labor contracts in accordance
with P.D. 950), or, in high security risk areas, through the Armed Forces of the
Philippines;

2.1.3 Take-Over of Contracts

Take-over of contracts, which have been rescinded or terminated for causes
provided for in the contract and existing laws, where immediate action is
necessary to prevent damage to or loss of life or property, or to restore vital
public services, infrastructure facilities and other public utilities;

2.1.4 Adjacent or Contiguous

Where the subject contract is adjacent or contiguous to an on-going Infrastructure
Project or Consulting Service where the consultants have unique experience and
expertise to deliver the required service: Provided, however, that:

94
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

a. Original contract is the result of a Competitive Bidding;

b. Subject contract to be negotiated has similar or related scopes of work;

c. It is within the contracting capacity of the contractor/consultant;

d. Contractor uses the same prices or lower unit prices as in the original
contract less mobilization cost;

e. Amount involved does not exceed the amount of the ongoing project; and

f. Contractor has no negative slippage/delay:

Provided, further, that negotiations for the procurement are commenced before
the expiry of the original contract;

2.1.5 Agency-to-Agency
Procurement of infrastructure projects, consulting services, and goods from
another agency of the GOP, such as the PS-DBM, which is tasked with a
centralized procurement of Common-Use Supplies for the GOP in accordance
with Letters of Instruction No. 755 and Executive Order No. 359, series of 1989;

2.1.6 Procurement Agent

In order to hasten project implementation, Procuring Entities which may not have
the proficiency or capability to undertake a particular procurement, as determined
by the Head of the Procuring Entity concerned, may request other GOP agencies
to undertake such procurement for them, or at their option, recruit and hire
consultants or procurement agents to assist them directly and/or train their staff in
the management of the procurement function. The GPPB shall issue guidelines to
implement this provision;

2.1.7 Small Value Procurement

Where the procurement does not fall under Shopping in Section 52 of the revised
IRR and the amount involved does not exceed the thresholds prescribed in
Annex “H” of the revised IRR:

a. The procuring entity shall draw up a list of at least three (3) suppliers,
contractors, or consultants of known qualifications which will be invited to
submit proposals, in the case of goods and infrastructure projects, or
curriculum vitae, in the case of consulting services;

b. The thresholds prescribed in Annex “H” of the revised IRR shall be

subject to the periodic review by the GPPB. For this purpose, the GPPB
shall be authorized to increase or decrease the said amount in order to
reflect the changes in economic conditions and for other justifiable
reasons; and
95
MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

c. According to Annex H of the revised IRR, there has been an increase in

the threshold of the procuring entity for Small Value Procurement under
Section 53.9, the threshold is increased to Five Hundred Thousand
Pesos (PhP 500,000.00) from Two Hundred Fifty Thousand Pesos (PhP
250, 000.00).

2.1.8 NGO Participation

When an appropriation law or ordinance earmarks an amount to be specifically
contracted out to Non-Governmental Organizations, the procuring entity may
enter into a Memorandum of Agreement with an NGO, subject to guidelines to be
issued by the GPPB;

2.1.9 Community Participation

Where, in the interest of project sustainability or to achieve certain specific social

objectives, it is desirable in selected project components to call for participation of
local communities in the delivery of services, the procuring entity shall propose
the procedures, specifications, and contract packaging which is subject to the
approval of the GPPB.

2.2 Invited contractors for negotiations

The Procuring Entity can invite for negotiations only bona fide contractors that:

2.2.1 Are licensed with the PCAB, whose eligibility documents are on file with the
Procuring Entity concerned or the DPWH Contractors’ Registry, as the case may
be; and

2.2.2 Have been classified under the type of contract/project where the subject contract
falls are eligible to be invited for negotiation.
Other contractors not previously deemed eligible may also apply for
eligibility.

All Procuring Entities must maintain a registry of contractors, suppliers and

consultants as basis for drawing up the short list and/or selecting the contractors
for negotiations.

Eligible contractor(s) for the project under consideration shall be furnished copies
of the instructions to bidders, plans, specifications, proposal book form, and other
tender documents for their use in submitting their bids and other information
called for in the format. The contractors shall submit, simultaneously with their
bid, the bid security as stipulated above.

96
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

2.3 Participants

The following must participate in the undertaking of negotiated procurement:

a. HOPE;
b. BAC;
c. TWG;
d. BAC Secretariat;
e. End-user unit or PMO; and
f. Accredited or Registered Contractors.

2.4 Posting of performance security

Bid security is no longer required in negotiated procurement. As a general rule,

performance security as prescribed under Section 39 of the revised IRR of R.A. 9184
shall be submitted for contract acquired through negotiated procurement, except for the
following circumstances:

a. Negotiated Procurement (Emergency Cases);

b. Negotiated Procurement (Small Value Procurement);
c. Negotiated Procurement (Lease of Real Property); and
d. Negotiated Procurement (UN Agencies)

3. PROCEDURES
The following steps are followed in undertaking negotiated procurement:
3.1 If the original mode of procurement recommended in the APP was competitive bidding,
the BAC recommends the change in the mode of procurement to negotiated procurement
through a Resolution to be approved by the HOPE.

3.2 The BAC convenes the appropriate officials for the pre-procurement conference, if
deemed necessary.

3.3 The BAC, through the Secretariat, posts for a period of seven (7) calendar days the
procurement opportunity for Negotiated Procurement (Two-Failed Biddings), as well as,
Negotiated Procurement (Lease of Real Property) with an ABC amounting to more than
Fifty Thousand Philippine Pesos (P 50,000.00) and Negotiated Procurement (Small
Value) with an ABC amounting to more than Fifty Thousand Philippine Pesos (P
50,000.00) in the:

a. PhilGEPS;
97
MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

b. Procuring Entity’s website, if any; and

c. Any conspicuous place in the premises of the Procuring Entity.
The Procuring Entity, however, need not post the procurement opportunity in the following
cases of Negotiated Procurement:

a. Emergency Cases;

b. Take-Over of Contracts;
c. Adjacent or Contiguous;
d. Agency-to-Agency;
e. Procurement Agents;
f. NGO Participation;
g. Community Participation;
h. UN Agencies; and,
i. Emergency Cases
However, the award of the contract must be posted in the aforementioned websites,
except for the following Negotiated Procurement (Lease of Real Property) and Negotiated
Procurement (Small Value)1 with ABC of Fifty Thousand Philippine Pesos (P 50,000.00)
and below.

3.4 If Negotiated Procurement is resorted because there has been a failure of bidding for the
second time as provided un Section 35 of R.A. 9184 and the revised IRR, the BAC
conduct a mandatory review of the terms, conditions, specifications, and cost estimates,
as prescribed in Section 35 of the revised IRR of R.A. 9184 in order to determine the
reason for the failure of bidding. Based on its findings, the BAC shall revise and agree
on the minimum technical specifications, and if necessary, adjust the ABC, subject to
the required approvals.

However, the ABC cannot be increased by more than twenty percent (20%) of the ABC
for the last failed bidding. The BAC shall invite and engage in negotiations with a sufficient
number of contractors to ensure effective competition. Any requirements, guidelines,
documents, clarifications, or other information relative to the negotiations that are
communicated by the procuring entity to a contractor shall be communicated on an equal
basis to all other contractors engaging in negotiations with the procuring entity relative to
the procurement.

Following completion of the negotiations, the procuring entity shall request all contractors

1
GPPB Resolution No. 09-2009 dated 23 November 2009: Guidelines for Shopping and Small-Value Procurement, Section 3.i
98
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

remaining in the proceedings to submit, on a specified date, a best and final offer with
respect to all aspects of their proposals. The procuring entity shall select the successful
offer on the basis of such best and final offers which should meet the procuring entity’s
minimum technical requirements and should not exceed the ABC. In all stages of the
negotiations, observers shall be invited.

3.5 If the procurement is being negotiated in case of imminent danger to life or property, the
BAC, through the BAC Secretariat, may negotiate with any legally, technically and
financially capable contractor.

3.6 Bona fide contractors licensed with the CIAP whose eligibility documents are on file with
the DOH or DPWH Contractor’s Registry, as the case may be, and who are classified
under the type of contract/project where the subject contract falls are eligible to be invited
for negotiation, provided that other contractors not previously deemed eligible may also
apply for eligibility (Section 53.1.2.1 of the revised IRR). For this reason, DOH shall
maintain a registry of contractors as basis for drawing up the short list and/or selecting the
contractors (Section 53.1.2.2 of the revised IRR).

3.7 If the procurement is being negotiated as a result of a terminated or rescinded contract

being taken over because immediate action is necessary to prevent damage to, or
loss of, life or property, or to restore vital public services, infrastructure facilities and other
public utilities, then the contract may be negotiated starting with the second lowest
calculated bidder for the project under consideration at the bidder’s original bid price
(Section 53.3.1 of the revised IRR). If negotiation fails, then negotiation shall be done
with the third lowest calculated bidder at his original price. If the negotiation fails again, a
short list of at least three (3) eligible contractors shall be invited to submit their bids, and
negotiation shall be made starting with the lowest bidder (Section 53.3.2 of the revised
IRR). Authority to negotiate contracts for projects under these exceptional cases shall be
subject to prior approval by the Head of the Procuring Entity or other higher authorities, if
required, within their respective limits of approving authority (Section 53.3.3 of the
revised IRR).

3.8 If the procurement being negotiated is adjacent or contiguous, the procuring entity will
directly negotiate with the previous winning contractor, provided that all the conditions
under Section 53.4 of the revised IRR of the R.A. 9184; provided further, that negotiation
for the procurement are commenced before expiry of the original contract.

3.9 In case of Agency-to-Agency, the procuring entity should follow the procedures provided
under the Implementing Guidelines on Agency-to-Agency Agreements, approved and
adopted by the GPPB through Resolution No. 18 – 2007, dated 31May 2007. The general
conditions for implementing Agency-to-Agency Agreements are as follows:

a. Agency-to-Agency Agreements may only be resorted to if the following conditions

are complied with:
99
MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

i. Conduct of a Cost-benefit Analysis by the Procuring Agency indicating

that entering into an Agency-to-Agency Agreement with the Servicing
Agency is more efficient and economical for the government;

ii. Total amount of all goods, consulting, and infrastructure projects

undertaken or to be undertaken through Agency-to-Agency Agreements
shall not exceed twenty-five percent (25%) of the Procuring Entity’s total
procurement budget for each category (i.e., goods, infrastructure, or
consulting) as reflected in its approved APP;

iii. Servicing Agency has the mandate to deliver the goods and services
required to be procured or to undertake the infrastructure project or
consultancy required by the Procuring Agency; and

iv. Servicing Agency owns or has access to the necessary tools and
equipment required for the project.

b. In addition, for procurement of infrastructure projects under Agency-to- Agency

agreements, the Servicing Agency must comply with the following conditions:

i. It must have a track record of having completed, or supervised a project,

by administration or by contract, similar to and with a cost of at least fifty
percent (50%) of the project at hand; and

ii. It shall not directly or indirectly engage private contractors to

undertake the project and may only implement the infrastructure project
in-house, by job-order, or through the pakyaw contracting system.

In-house labor is undertaken if the workers are employees or personnel

occupying regular plantilla positions in the Servicing Agency. Job-order
contracts shall be governed by the applicable rules of the Commission on
Audit and/or Civil Service Commission. Pakyaw Contracting System shall
be governed by the GPPB Revised Guidelines for the Implementation of
Infrastructure Projects by Administration provided under GPPB Resolution
No. 18-2006, as amended by GPPB Resolution No. 07-2009.

iii. Subject to appropriate guidelines, the Procuring Agency may require the
Servicing Agency to post a performance security under Section 39 of R.A.
9184 and/or post a warranty security under Section 62 of R.A. 9184.
iv. All procurement to be undertaken by the Servicing Agency, including
those required for the project, shall continue to be governed by the
provisions of R.A. 9184.

v. All projects undertaken through Agency-to-Agency Agreements shall be

subject to pertinent budgeting, accounting, and auditing rules.
100
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

The procedural requirements for implementing Agency-to-Agency Agreements are as

follows:

a. The end-user unit shall undertake a Cost–benefit analysis, taking into

consideration the following factors: prevailing standard cost for the project in the
market, absorptive capacity of the Servicing Agency, and such other factors.

b. It shall likewise secure a certificate from the relevant officer of the Servicing
Agency that the latter complies with the following conditions: (i) mandate to deliver
the goods and services required to be procured or to undertake the infrastructure
project or consultancy required by the Procuring Agency; and (ii) owns or has
access to the necessary tools and equipment required for the project.

c. Based on the assessment and recommendation of the end-user unit, the BAC
shall issue a resolution recommending the use of Agency-to-Agency Agreement to
the head of the Procuring Agency.

d. Upon approval of the BAC resolution, the Procuring Agency shall enter into a
Memorandum of Agreement with the Servicing Agency.

e. The MOA shall reflect the agreement of the parties with regard to the posting of a
performance bond and/or a warranty security.

f. For purposes of transparency, the Procuring Agency shall post the award of the
contract, in the following areas:

i. PhilGEPS website;
ii. Website of the Procuring Agency and its electronic service provider, if
any; an

iii. Any conspicuous place in the premises of the Procuring Agency.

101
MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

INFRASTRUCTURE PROJECTS UNDERTAKEN BY

ADMINISTRATION
1. BY ADMINISTRATION DEFINED

By administration refers to the procedure by which the implementation of an infrastructure project is

carried out under the administration and supervision of the concerned agency through its own
personnel.

2. LEGAL BASIS

Revised guidelines for the Implementation of Infrastructure Projects by Administration provided

under GPPB Resolution No. 18–2006, dated 6 December 2006, as amended by GPPB Resolution
No. 07-2009, dated 30 September 2009.

3. RULES AND GUIDELINES

3.1 CONDITIONS AND REQUIREMENTS

3.1.1 Projects undertaken by Administration shall be included in the approved APP of

the procuring entity concerned. If the original mode of procurement recommended
in the APP was Public Bidding but cannot be ultimately pursued, or the project to
be undertaken by administration has not been previously included, the BAC,
through a resolution shall justify and recommend the change in the mode of
procurement or the updating of the APP to be approved by the Head of the
Procuring Entity.

3.1.2 To undertake projects by administration, the implementing agency must:

a. Have a track record of having completed, or supervised a project, by

administration or by contract, similar to and with a cost of at least fifty
percent (50%) of the project at hand, and

b. Own the tools and construction equipment to be used or have access to

such tools and equipment owned by other government agencies.

3.1.3 Any project costing Twenty Million Philippine Pesos (PhP 20,000,000) or less may
be undertaken by administration or force account by the implementing agency
concerned. A project costing over Twenty Million Philippine Pesos (PhP
20,000,000) may be undertaken by the agency concerned only in the following
cases:
a. Emergency arising from natural calamities or where immediate action is
necessary to prevent imminent loss of life or property;

b. To comply with government commitments, as certified by the concerned

government authority;
102
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

c. Failure to award a contract after competitive bidding for a valid cause;

d. Termination or rescission of contract;

e. Areas with critical peace and order problems as certified by the Local Peace
and Order Council.
Provided, that prior authority shall be obtained from the Secretary of Public
Works and Highways, if the project cost is Twenty Million Philippine Pesos
(PhP 20,000,000.00) up to Fifty Million Philippine Pesos (PhP
50,000,000.00), or from the President of the Philippines, upon the favorable
recommendation of the Secretary of Public Works and Highways, if the
project cost is more than Fifty Million Philippine Pesos (PhP 50,000,000.00).

3.1.4 No contractor shall be used by the procuring entity, directly or indirectly for works
undertaken by administration.

3.1.5 Procurement of tools and construction equipment shall be subject to the rules on
public bidding.

3.1.6 For projects funded by the National Government and implemented by a Local
Government Unit, the latter shall be required to post the necessary warranty
security in accordance with Section 62 of R.A. 9184 and the revised IRR.

3.1.7 The manual labor component of projects undertaken by administration may be

undertaken in-house by the implementing agency concerned, by job-order or
through the pakyaw contracting system. In-house labor is undertaken if the
workers are employees or personnel occupying regular plantilla positions in the
implementing agency. Job-order contracts shall be governed by relevant
Commission on Audit and/or Civil Service Commission rules

103
 SECTION 5

GUIDELINES ON
CONTRACT
IMPLEMENTATION
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

CONTRACT IMPLEMENTATION FOR THE

PROCUREMENT OF INFRASTRUCTURE PROJECTS
1. LEGAL REFERENCE
Section 42 and Annex “E” of the revised IRR is the legal bases of contract implementation for the
procurement of infrastructure projects.

2. RULES AND GUIDELINES

2.1 Coverage of Contract Implementation
Contract implementation covers the following milestones:
a. Effectivity of the contract;
b. Contractor’s performance of his contractual obligations;
c. Procuring Entity’s performance of its contractual obligations, as specified in the
contract;

d. Final acceptance or project sign-off;

e. All other related activities; and
f. Payment by the Procuring Entity.

2.2 Period of Contract Implementation

The PMO or end-user unit should determine the period of contract implementation during
the procurement planning stage, and include it in the PPMP. In determining the contract
implementation period, it must ensure that the contractor is given ample time to undertake
any preparatory activity/ies necessary for it to comply with the conditions of the contract.

2.3 Effectivity of contract

The contract effectivity date shall be provided in the NTP by the procuring entity, which
date shall not be later than seven (7) calendar days from its issuance.

The contract effectivity date usually indicated is on the date of the receipt by the winning
bidder of the NTP. Nonetheless, if an effectivity date is stated in the NTP, such date should
not be later than seven (7) calendar days from its issuance.

All notices called for by the terms of the contract shall be effective only from either of
foregoing effectivity date. These provisions must be stated clearly in the contract itself
(Section 37.4 of the revised IRR).

107
MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

2.4 Role of Chief Accountant

The PMO or end-user unit must ensure that the Chief Accountant of the procuring entity
issues a CAF for the project. Only with a CAF can the contract be valid.

The Chief Accountant must also sign the contract as a witness.

2.5 Procuring Entity’s Responsibilities

Whenever the implementation of the infrastructure project requires that the contractor obtain
permits, approvals, and import and other licenses from national or local government
agencies, the Procuring Entity may, if so requested by the contractor, assist the latter in
complying with such requirements in a timely and expeditious manner. However, the
contractor shall bear the costs of such permits and/or licenses. On the other hand, the
Procuring Entity shall pay all costs involved in the performance of its responsibilities, in
accordance with the contract.

The Health Infrastructure Division of the National Center for Health Facilities and Services
not only provide Technical Assistance to the various DOH Procuring entities during planning
but also contract implementation. The HID conducts monitoring and inspection of various
DOH infrastructure projects as well.

2.6 Subcontracting

Generally, a contractor may be allowed to subcontract a portion of the contract or project.

However, the contractor should not be allowed to subcontract a material or significant
portion of the contract or project, which portion must not exceed fifty percent (50%) of the
total project cost. The bidding documents must specify what are considered as
significant/material component(s) of the project. Moreover, except if otherwise provided by
the contract, it should not subcontract any part of the works without the prior consent of the
HOPE. However, this consent shall not relieve the contractor of any liability or obligation
under the contract. The contractor will be responsible for the acts, defaults and neglects of
any subcontractor, his agents, servants or workmen as fully as if these were its own acts,
defaults or neglects, or those of its agents, servants or workmen.

The Bidder may identify the subcontractor to whom a portion of the Works will be
subcontracted at any stage of the bidding process or during contract implementation. If the
Bidder opts to disclose the name of the subcontractor during bid submission, the Bidder
shall include the required documents as part of the technical component of its bid

Subcontractors disclosed and identified during the bidding may be changed during the
implementation of the contract, subject to compliance with the required qualifications
and the approval of the Procuring Entity.

108
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

2.7 Inspection and Tests

All materials, plant/s and workmanship shall be of the kind described in the contract
and in accordance with the Procuring Entity’s engineer’s instructions. To ensure that this,
indeed, is the case, these materials, plant/s and workmanship will be subjected, from time
to time, to such tests as the Procuring Entity’s engineer may require. These tests must be
at the place of manufacture, fabrication or preparation, or on site or at such other place or
places as may be specified in the contract, or at all or any of such places.

The Procuring Entity’s engineer, and any person authorized by him, must, at all reasonable
times, have access to the site and to all workshops and places where materials or plant are
being manufactured, fabricated or prepared for the works.

The contractor, for its part, shall afford every facility for, and every assistance in, obtaining
the right to such access.

The Procuring Entity’s engineer shall be entitled, during manufacture, fabrication or

preparation of materials to be used in the project, to inspect and test these materials and
the plant or plants where these materials are being manufactured, fabricated, and/or
prepared. If the materials are being manufactured, fabricated or prepared in workshops or
places other than those of the contractor, the contractor must obtain permission for the
Procuring Entity’s engineer to carry out inspection and testing in those workshops or
places. Such inspection or testing will not release the contractor from any obligation under
the contract.

If, at the time and place agreed above, the materials or plant are not ready for inspection or
testing, the Procuring Entity’s engineer may reject these materials or the plant and must
notify the contractor of such rejection immediately. He/she must also do so if, as a result of
the inspection or testing, he/she determines that the materials or plant are defective or
otherwise not in accordance with the contract. The notice must state the Procuring
Entity’s engineer’s objection and the reasons for the objection. The contractor, for its part,
must then promptly make good the defect or ensure that rejected materials or plant comply
with the contract. If the Procuring Entity’s engineer so requests, the test of rejected
materials or plant shall be made or repeated under the same terms and conditions.

The Procuring Entity’s engineer will, after consultation with the contractor, determine
all the costs incurred in the repetition of the test or tests. These costs are recoverable from
the contractor by the Procuring Entity and may be deducted from any monies due to the
contractor. The Procuring Entity’s engineer must notify the contractor accordingly, with a
copy being furnished the Procuring Entity.

2.8 Day works undertakings and compensate

If applicable, as indicated in the contract, the day works rates in the contractor’s bid shall
be used for small additional amounts of work, only when the Procuring Entity’s engineer
has given written instructions in advance for additional work to be paid for in that way.
109
MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

All works to be paid for as day works shall be recorded by the contractor on forms
approved by the Procuring Entity’s engineer. Each completed form shall be verified and
signed by the Procuring Entity’s engineer within two (2) days of the work being done.

The contractor shall be paid for day works subject to obtaining signed day works forms.

2.9 Use of Accredited Testing Laboratories

To help ensure the quality of materials being used in infrastructure projects, the BRS of the
DPWH, the DOST or the DTI shall accredit the testing laboratories that can be used in
government infrastructure projects. All government agencies implementing infrastructure
projects must use only these laboratories. Only tests done by these laboratories shall be
recognized and accepted, except for the testing of new materials to be undertaken through
procedures approved by the DPWH Secretary.

2.10 Evaluation of Contractor’s Performance

All Procuring Entities implementing government infrastructure projects must evaluate the
performance of their contractors using the NEDA-Approved CPES Guidelines for the type
of project being implemented. These guidelines cover all infrastructure projects awarded by
the government regardless of contract amount and funding source.

CPES evaluation must be done during construction and upon completion of the project.
To ensure continuous implementation of CPES, all Procuring Entities concerned are
required to include in their Projects’ Engineering and Administrative Overhead Cost the
budget for such system’s implementation pursuant to NEDA Board Resolution No. 18
(s.2002).

2.10.1 If there are no CPES Guidelines

For project types that do not have specific CPES Guidelines, the Procuring Entities
concerned may formulate and adopt their own implementing guidelines specific to
their needs, provided that the NEDA Infrastructure Committee poses no objections to
their adoption, and that the said guidelines are made known to all prospective
bidders.

2.10.2 Establishment of Implementation mechanisms for the CPES Guidelines

All Procuring Entities implementing infrastructure projects are required to establish or

designate CPES Implementing Units in their respective offices/ agencies/
corporations. The CPES Implementing Units shall be responsible for the
implementation of the CPES Implementing guidelines, including but not limited to,
the supervision of CPEs to be accredited by the CIAP. The Procuring Entity’s CPES
IU shall be responsible for the following: a) pre-screening of applications of CPEs; b)
funding for CPEs accreditation and training, including seminars; and c) yearly
evaluation of CPEs.
110
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

The Health Infrastructure Division of the National Center for Health Facilities
Development shall be responsible for establishing a CPES at the DOH.

2.10.3 Submission and Dissemination of CPES evaluation results

All Procuring Entities implementing CPES shall submit the results of their
performance evaluation to the CIAP on a monthly basis or as often as necessary.
The Procuring Entity’s CPES IU shall likewise develop and maintain a databank and
disseminate the CPES reports to the concerned units/departments within the
Procuring Entity and to other interested users.

For additional guidelines, refer to Administrative Order 161-A s. 2002, “Implementing

Guidelines on Contractors Performance Evaluation System for DOH Infrastructure
Projects.”

2.10.4 Use of CPES evaluation results

The CIAP shall consolidate all of the CPES evaluation results it receives and
disseminate these to all Procuring Entities concerned. The CPES ratings and other
information shall be used by the concerned government agencies for the following
purposes:
a. Eligibility screening of constructors;

b. Awarding of contracts;
c. Project monitoring and control;
d. Issuance of Certificate of Completion;
e. Policy formulation/review;
f. Industry planning;

g. Granting of Incentives/Awards; and

h. Adoption of measures to further improve performance of contractors in the

prosecution of government projects.

2.11 Measurement of works

The quantities set out in the Bill of Quantities are the estimated quantities for the works.
They should not therefore be taken as the actual and correct quantities of the works to be
executed by the contractor in fulfillment of his obligations under the contract. They can vary
to up to ten percent (10%) of the contract price to account for variation orders as provided
for in Annex E of the revised IRR.

111
MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

The Procuring Entity’s engineer must, except if otherwise stated in the Quantities of the
Detailed Engineering, measure the value of the works actually in-place in accordance with
the contract. This measurement will be the basis for the payment that will be made to the
contractor in accordance with the Statement of Work Accomplished. The Procuring Entity’s
engineer must, when he/she needs to measure any part of the works, give reasonable
notice to the contractor’s authorized agent, who must:

a. Forthwith attend or send a qualified representative to assist the Procuring Entity’s

engineer in making such measurement; and
b. Supply all particulars required by the Procuring Entity’s engineer.

2.12 Impact of infrastructure project on traffic and adjoining properties

All operations necessary for the execution and completion of the works and the remedying
of any defects therein must, so far as compliance with the requirements of the contract
permits, be carried on so as not to interfere unnecessarily or improperly with:

a. Flow of traffic;
b. Convenience of the public; and
c. Access to, use and occupation of public or private roads and footpaths to or of
properties whether in the possession of the Procuring Entity or any other person.

The contractor shall save harmless and indemnify the Procuring Entity in all claims,
proceedings, damages, costs, charges and expenses arising out of, or in relation to, any
such matters insofar as the contractor is responsible for them.

2.13 Responsibilities of the contractor

During the execution of the works, the contractor must keep the site reasonably free from
all unnecessary obstruction. It must also store or dispose of any equipment and surplus
materials and clear away and remove from the site any wreckage, rubbish or temporary
works that are no longer required.

Upon the issue of the Taking-Over Certificate, the contractor shall remove from that part of
the site to which the certificate relates all equipment, surplus material, rubbish and
temporary works of every kind. It must leave such part of the site and works clean and in a
workmanlike condition to the satisfaction of the Procuring Entity’s engineer. However, it is
entitled to retain until the end of the defects liability period such materials, equipment and
temporary works he may need to fulfill his obligations in relation to the project.

112
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

2.14 Materials and equipment paid for by the Procuring Entity

Unless otherwise provided for in the contract, the contractor must turn-over to the
Procuring Entity all excess, used, unused and/or reusable materials paid for in the contract
such as, formworks, laboratory apparatus and equipment, vehicles, field office, safety
gadgets and devices, etc. Vehicles and equipment should be in operating condition when
turned over.

113
MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

CONTRACT PRICE AND PAYMENT

1. LEGAL REFERENCE
Section 61 and Annex “E” of the revised IRR is the legal bases for contract price and payment.

2. RULES AND GUIDELINES

2.1 Fixed contract prices
Price escalation is generally not allowed.2 For the given scope of work in the contract as
awarded, the price must be considered as a fixed price, except under extraordinary
circumstances as determined by the NEDA in accordance with the Civil Code of the
Philippines, upon recommendation of the Procuring Entity concerned, and upon prior
approval of the GPPB. Any request for price escalation under extraordinary circumstances
should be submitted by the concerned entity to the NEDA with the endorsement of the
Procuring Entity. The burden of proving the occurrence of extraordinary circumstances that
will allow for price escalation shall rest with the entity requesting for such escalation. NEDA
shall only respond to such request after receiving the proof and the necessary
documentation.

“Extraordinary circumstances” shall refer to events defined in the Civil Code of the
Philippines, consistent with the guidelines issued by the GPPB. In particular, the Revised
Guidelines for Contract Price Escalation provides that the term “extraordinary
circumstances” shall refer to the following Articles of the Civil Code of the Philippines:

a. Article 1174, as it pertains to Ordinary Fortuitous Events or those events which

ordinarily happen to which could be reasonable foreseen but are inevitable, such
as, but not limited to the following: (a) typhoons; (b) thunderstorms; (c) flooding of
lowly areas; and (d) vehicular accidents; provided that the following are present:

i. The cause of the extraordinary circumstances must be independent of the

will of the parties;
ii. The event must be either unforeseeable or unavoidable;

iii. The event must be such as to render it difficult but not impossible for the
supplier to fulfill his obligation in a normal manner or within the
contemplation of the parties;

2
For FAPs, the bidding documents would have to state whether the bid prices will be fixed or whether price adjustments would be made to reflect any changes
(upwards or downwards) in major cost components of the contract, such as labor, equipment, materials, and fuel. Price adjustment provisions are usually not
necessary in simple contracts involving completion of works generally within twelve (12) months in the case of JBIC- or eighteen (18) months in the case of World
Bank-funded projects, but should be included in contracts which extend beyond eighteen (18) months. Prices may be adjusted by the use of a prescribed formula
(or formulae) which breaks down the total price into components that are adjusted by price indices specified for each component or, alternatively, on the basis of
documentary evidence (including actual invoices) provided by the contractor. The use of the formula method of price adjustment is preferable to that of
documentary evidence. The method to be used, the formula (if applicable), and the base date for application shall be clearly defined in the bidding documents. If
the payment currency is different from the source of the input and corresponding index, a correction factor shall be applied in the formula, to avoid incorrect
adjustment.
114
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

iv. The supplier must be free from any participation in or aggravation of the
injury to the Procuring Entity; and

v. The allowance for price escalation, should an ordinary fortuitous event

occur, is stipulated by the parties or the nature of the obligation
requires the assumption of risk.

b. Article 1250, as it pertains to Extraordinary Inflation or Deflation, which may refer to

the decrease or increase of the purchasing power of the Philippine currency which
is unusual or beyond the common fluctuation in the value of said currency, in
accordance with the two (2) standard deviation rule computed in accordance
with the Guidelines for Contract Price Escalation, and such decrease or increase
could not have been reasonably foreseen or was manifestly beyond the
contemplation of the parties at the time of the establishment of the obligation.

c. Article 1680, as it enumerated Extraordinary Fortuitous Events or those events

which do not usually happen, such as, but not limited to the following: (a)
fire; (b) war; (c) pestilence; (d) unusual flood; (e) locusts; and (f) earthquake;
provided that the circumstances before, during and after the event shall be taken
into consideration.

2.2 Denomination of contract prices

All contract prices must be denominated and payable in Philippine currency, and this shall
be stated in the bidding documents. Should the Procuring Entity receive bids denominated
in foreign currency, the same shall be converted to Philippine currency based on the
exchange rate officially prescribed for similar transactions as established by the BSP on
the date of the bid opening (Section 61.4 of the revised IRR).

2.3 Method of payment for works

The method and conditions of payment shall be specified in the contract. Generally,
payment for works can be made in two ways: unit price or lump-sum payment. Unit price
payments are made based on the unit prices of specific items as applied to actual
quantities accomplished according to the Statement of Work Accomplished. Lump-sum
payments, on the other hand, are based on the value of actual accomplished work in
proportion to total contract cost.

Procuring entity is allowed to issue a letter of credit in favor of a local or foreign

manufacturers or suppliers, with respect to any procurement (Section 42.5 of the revised
IRR).

115
MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

2.4 Schedule of payments

Any kind of payment, including advance and progress payments, must be made by the
Procuring Entity as soon as possible, but in no case later than forty-five (45) days after the
submission of an invoice or claim by the contractor, accompanied by documents submitted
pursuant to the contract, and upon fulfillment of other obligations stipulated in the contract.
The Procuring Entity must also ensure that all accounting and auditing requirements are
met prior to payment. The Procuring Entity should commence inspection within twenty-four
(24) hours after delivery.

2.5 Currency of payments

Payments must be made in the Philippine currency.3

2.6 Advance payment for mobilization

A contractor may request for advance payment for mobilization. However, the payment
must not exceed fifteen percent (15%) of the total contract price, and must be made in
lump sum or, at the most, two (2) installments according to a schedule specified in the ITB
and other relevant bidding documents. Moreover, it must be made only upon the
submission by the contractor of a written request. The contractor must also submit to the
Procuring Entity an irrevocable standby letter of credit from a commercial bank, a bank
guarantee or a surety bond callable upon demand, issued by a surety or insurance
company duly licensed by the Insurance Commission and confirmed by the Procuring
Entity. This letter of credit, surely bond or bank guarantee must be equal in value to the
advance payment and must be accepted by the Procuring Entity.

2.7 Recovery of advance payment made to a contractor

The Procuring Entity must recover the advance payment by deducting from the progress
payments to the contractor fifteen percent (15%) until the advance is fully liquidated within
the duration of the contract, and before full payment is made to the contractor.

The contractor may reduce his standby letter of credit or guarantee/surety instrument by
the amounts recovered to liquidate the advance payment.

3
For FAPs, payment of the contract price should be made in the currency or currencies in which the bid price is expressed in the bid of the successful bidder. When
the bid price is required to be stated in local currency but the bidder has requested payment in foreign currencies expressed as a percentage of the bid price, the
exchange rates to be used for purposes of payments should be those specified by the bidder in the bid, so as to ensure that the value of the foreign currency
portions of the bid is maintained without any loss or gain. At any rate, where the price is to be paid, wholly or partly, in a currency or currencies other than the
currency of the bid, the exchange risk should not be borne by the supplier or contractor and, to this end, the contract should provide that amounts payable in a
currency or currencies other than that of the bid should be calculated at the rates of exchange between these currencies specified for the purpose in the bidding
documents.

116
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

2.8 Incentive bonuses

No incentive bonus, in whatever form or for whatever purpose, must be allowed.4
(Section 42.4 of the revised IRR)

2.9 Progress Payment

The first progress payment may be paid by the Procuring Entity to the contractor after
twenty percent (20%) of the work had been accomplished. Thereafter, payments can be
made once a month, provided that the latter submits a Progress Billing or a request for
payment for work accomplished. Such request for payment, including the Statement of
Work Accomplished by the contractor, must be verified and approved by the government
project engineer concerned. Except as otherwise stipulated in the ITB, materials and
equipment delivered on the site but not completely put in place shall not be included for
payment.

The Procuring Entity has the right to deduct from the contractor’s progress billing such
amount as may be necessary to cover third party liabilities. It must not process any
progress payment unless the discovered defects are corrected.

2.10 Retention Money

“Retention money” refers to the amount equal to ten percent (10%) of the progress
payments, before deductions are made, that is withheld by the Procuring Entity to cover the
uncorrected discovered defects and third party liabilities. It is collected from all progress
payments until works equivalent to fifty percent (50%) of the value of works, as determined
by the Procuring Entity, is accomplished. If, after fifty percent (50%) completion, the work is
satisfactorily done and on schedule, no additional retention shall be made; otherwise, the
ten percent (10%) retention shall continue to be imposed.

The total “retention money” shall be due for release after the defects liability period, upon
final acceptance of the works.

The contractor may request the Procuring Entity that, instead of retention money being
withheld from each progress billing, it issues in favor of the government, irrevocable
standby letters of credit from a commercial bank, bank guarantees or surety bonds callable
on demand. These financial instruments must be of amounts equivalent to the retention
money substituted for and acceptable to government. They must also be valid for duration
to be determined by the concerned implementing office/agency or Procuring Entity and will
answer for the purpose for which the ten percent (10%) retention is intended. The

4
For FAPs, provision may be made for a bonus to be paid to suppliers or contractors for completion of works or delivery of goods ahead of the times specified in the
contract when such earlier completion or delivery would be of benefit to the procuring entity. The option to grant incentive bonus is given by the IFIs to the
procuring entity

117
MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

Procuring Entity, for its part, may agree to the request, provided that the project is on
schedule and is satisfactorily undertaken.5

2.11 Final Payment

The contractor may request for the penultimate payment for the project it is implementing
when ninety percent (90%) of the work has been completed.

The final payment will be made upon one hundred percent (100%) completion of the work.
This payment will be reduced by whatever balance remains of the amount that is needed in
order to return to the government the 15% advance payment previously made. Ten percent
(10%) of the remainder will then be retained to cover for all defects that may be detected,
including maintenance costs for one year after project completion. This amount will be
returned to the contractor only after the one-year defects liability period. An alternative to
the ten percent (10%) final retention would be for the contractor to post a guarantee bond
equivalent to 10% of the contract price.

5
For FAPs, the usual percentage of retention is from five percent (5%) to ten percent (10%).

118
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

VARIATION ORDERS
1. LEGAL REFERENCE
Annex “E” of the revised IRR.
2. VARIATION ORDER DEFINED
A Variation Order refers to any increase/decrease in quantities within the general scope of the
project as bid and awarded, in any of the following aspects:

a. Introduction of new work items that are not included in the original contract; or
b. Reclassification of work items that are either due to change of plans, design or alignment to
suit actual field conditions resulting in disparity between the pre- construction plans used
for purposes of the bidding and the “as staked plans” or construction drawings prepared
after a joint survey by the contractor and the government after award of the contract, or
during actual construction.

A Variation Order may either be in the form of a Change Order or Extra Work Order.
A Change Order covers any increase/decrease in quantities of original work of items in the contract.

An Extra Work Order covers the introduction of new work necessary for the completion/
improvement or protection of the project which are not included as items of work in the original
contract. As an example, there may be subsurface or latent physical conditions at the site that differ
materially from those indicated in the contract. There might also be duly unknown physical
conditions at the site of an unusual nature that differ materially from those ordinarily encountered
and generally recognized as inherent in the work or character provided for in the contract.

The addition/deletion of works should be within the general scope of the project as bid and
awarded, and the deletion of the work should not affect the integrity and usefulness of the structure.

3. RULES AND GUIDELINES

3.1 When to issue

Variation Orders may be issued by the Procuring Entity concerned at any time during
contract implementation. However, the adjustment provided for in these orders must be
necessary to fully meet the requirements of the project. The issuance of a Variation Order
must conform to the following:

a. That there will not be any short changes in the original design;
b. That it will not affect the structural integrity and usefulness of the structure; and
c. That it is covered by a CAF.

119
MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

3.2 Limits
The net cumulative amount of the Variation Order should not exceed positive ten percent
(+10%) of the original project cost.

If the adjustments provided for in a Variation Order costs more than ten percent (10%) of
the original project costs, these shall be the subjects of another contract to be bid out if the
works are separable from the original contract. However, if these adjustments are urgently
necessary to complete the original scope of work, the Head of the Procuring Entity may
authorize the Variation Order beyond ten percent (10%) but not more than twenty percent
(20%), subject to the guidelines to be determined by the GPPB.

In case the Variation Order exceeds ten percent (10%), the Procuring Entity must ensure
that appropriate sanctions are imposed on the designer, consultant or official responsible
for the original detailed engineering design which failed to consider the conditions that led
to the need for adjustments costing more than ten percent (10%) of the original total
contract price.

3.3 Start of work and Payments under Variation Orders

Under no circumstances can a contractor proceed to commence work under any Change
Order or Extra Work Order unless the HOPE or his/her duly authorized representative has
approved the order.

The Procuring Entity’s Regional Director or equivalent official, under whose

jurisdiction the project is located, may, subject to the issuance of the CAF, authorize
the immediate start of work under any Change or Extra Work Order, subject to any or all
of the following conditions:

a. In the event of any emergency where the prosecution of the work is urgent to avoid
any detriment to public service, or damage to life and/or property; and/or

b. When time is of the essence, for works in the critical path based on the approved
PERT/CPM;

However, the approval is valid on work done up to the point where the cumulative
increase in value of work on the project which has not yet been duly fully approved
does not exceed five percent (5%) of the adjusted original contract price whichever
is less. Furthermore, immediately after the start of work, the corresponding Change
Order or Extra Work Order must be prepared and submitted for approval in
accordance with the above rules herein set. Payments for works satisfactorily
accomplished on any Change Order or Extra Work Order may be made only after
approval of the same by the HOPE or his duly authorized representative.

For a Change Order or Extra Work Order involving a cumulative amount exceeding
five percent (5%) of the original contract, no work thereon may be commenced
120
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

unless said Change Order or Extra Work Order has been approved by the
Secretary or his duly authorized representative.

3.4 Rules on price adjustments due to a Variation

The payment to the contractor for additional work under Variation Orders must be derived
based on the following:

a. For additional/extra works duly covered by Change Orders involving work items
which are exactly the same or similar to those in the original contract, the
applicable unit prices of work items in the original contract shall be used.

b. For additional/extra works duly covered by Extra Works Orders involving new work
items that are not in the original contract, the unit prices will be based on the direct
unit costs used in the original contract (e.g., unit cost of cement, rebars, form
lumber, labor rate, equipment rental, etc.). All new components of the new work
item shall be fixed prices, provided the same is acceptable to both the government
and the contractor. The direct unit costs of new components must also be based
on the contractor’s estimate as validated by the Procuring Entity, in comparison
with the construction price indices issued by the NSO. The Procuring Entity must
validate these prices through a documented canvass among three eligible
suppliers registered with the DPWH or PhilGEPS in accordance with existing rules
and regulations. The direct cost of the new work item must then be combined with
the mark-up factor (i.e. taxes and profit) used by the contractor in his bid to
determine the unit price of the new work item.

The request for payment by the contractor for any extra work must be
accompanied by a statement, with the approved supporting forms, giving a
detailed accounting and record of amount for which he claims payment. This
request for payment must be included in the contractor’s statement for progress
payment.

3.5 Participants in the issuance of a Variation Order

The following parties are involved in the issuance of a Variation Order:

a. PMO or end-user unit;
b. Contractor;
c. HOPE or his duly authorized representative.

121
MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

4. PROCEDURES
The following must be undertaken in issuing a Variation Order:
4.1 Within seven (7) calendar days after the contractor discovers that there is a need for
variation order, the said contractor must communicate the same to the Procuring Entity by
giving it notice of the findings. Afterwards, the contractor has twenty-eight (28) days to
submit a full documentation of the variation order. Failure to provide either of such notices
in the time stipulated shall constitute a waiver by the contractor for any claim.

4.2 If the Project Engineer finds that a Change Order or Extra Work Order is justified, he/she
must prepare the proposed order, accompanied with the following:

a. Notices submitted by the contractor;

b. The plans to effect the adjustments;

c. The contractor’s computations as to the quantities of the additional works involved

per item indicating the specific stations where such works are needed, the date of
his inspections and investigations thereon, and the log book thereof; and

d. A detailed estimate of the unit cost of such items of work, together with his
justifications for the need of such Change Order of Extra Work Order

The project engineer then submits the same to the Regional Director or equivalent
official of the office/agency/corporation/LGU concerned.

4.3 The Head of End-User/PMO or equivalent official concerned, upon receipt of the proposed
Change Order or Extra Work Order shall immediately instruct the technical staff to
conduct an on-the-spot investigation to verify the need for the work to be prosecuted. A
report of such verification shall be submitted directly to the Head of the End-User/PMO.

4.4 The Head of the End User/PMO or equivalent official concerned, after being satisfied that
such Change Order or Extra Work Order is justified and necessary, shall review the
estimated quantities and prices and forward the proposal with the supporting
documentation to the head of Procuring Entity for consideration.

4.5 If, after review of the plans, quantities and estimated unit cost of the items of the work
involved, the proper office of the Procuring Entity empowered to review and evaluate
Change Orders or Extra Work Orders recommend approval thereof, the Head of the
Procuring Entity or his duly authorized representative, finding that the Change Order or
Extra Work Order is in order and covered by the CAF, shall approve the same.

4.6 Upon approval by the HOPE or his duly authorized representative, the PMO or end-user
unit shall notify the contractor to proceed with the work/delivery of items in accordance with
the amendment.
122
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

4.7 The PMO shall likewise post the Variation Order in the PhilGEPS and website of the
Procuring Entity, if any.

4.8 The contractor shall proceed with the work/delivery of items in accordance with the
amended contract.

The timeframe for the processing of Variation Orders from the preparation up to the approval by the
Procuring Entity concerned should not exceed thirty (30) calendar days.

123
MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

SUSPENSION OF WORK
1. LEGAL REFERENCE
Annex “E” of the revised IRR.
2. RULES AND GUIDELINES
2.1 Conditions on suspension of work by Procuring Entity

The Procuring Entity has the authority to suspend the work wholly or partly by written order
due to the following:

a. Force majeure or any fortuitous event;

b. Failure on the part of the contractor to:

i. Correct bad conditions which are unsafe for workers or for the general public;

ii. Carry out valid orders given by the Procuring Entity; or

iii. Perform any provisions of the contract.

c. Adjustment of plans to suit field conditions as found necessary during construction.

It is suggested that the contract specify a period of seven (7) calendar days from
date of receipt of the written order or notice, after which the said order may take
effect and thus bind the contractor to immediately comply therewith. The
order/notice may specify the period deemed necessary for its effectivity.

2.2 Conditions on suspension of work by contractor

The contractor or its duly authorized representative has the right to suspend work operation
on any or all projects/activities along the critical path of activities due to any of the
following:
a. There exist right-of-way problems that prohibit the contractor from performing work
in accordance with the approved construction schedule;

b. Requisite construction plans, which must be furnished by the Procuring Entity, are
not issued to the contractor, in the process precluding any work called for by such
plans.

c. Peace and order conditions make it extremely dangerous, if not impossible, to

work, such conditions having been certified in writing by the Philippine National
Police station which has responsibility over the affected area and confirmed by the
Department of Interior and Local Government Regional Director;
124
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

d. There is a failure on the part of the Procuring Entity to deliver government–

furnished materials and equipment as stipulated in the contract; or

e. The payment of the contractor’s claim for progress billing beyond forty-five (45)
calendar days from the time the claim has been certified by the Procuring Entity’s
authorized representative as having been supported by complete documentation,
unless there are justifiable reasons thereof which shall be communicated in
writing to the contractor.

The contractor may suspend work fifteen (15) calendar days after the district
engineer/regional director/consultant or equivalent official, as the case may be,
have received a written notice of the suspension of work.

2.3 Extension of contract time due to work suspension

Contract time is extended due to work suspension(s), but only in cases when the total
suspension or suspension of activities along the critical path is not due to the fault of the
contractor. In such cases, the elapsed time between the effective order suspending
operation and the order to resume work shall be allowed the contractor by adjusting the
contract time accordingly.

2.4 Contract price adjustment resulting from work suspensions

No payment can be made to the contractor for any standby time expense during the
suspension period, except when prior clearance is secured from the HOPE and for
justifiable reasons.

2.5 Resumption of work

Work must be resumed either upon notice from the Procuring Entity of the lifting of the
suspension order or upon the expiration of the suspension order.

2.6 Participants in the issuance of Suspension Order

The following parties are involved in the issuance of a Suspension Order

a. PMO or end-user unit;
b. HOPE or his/her duly authorized representative; and
c. Contractor.
3. PROCEDURES
The following steps are undertaken in the issuance of a suspension order by the Procuring Entity:
3.1 The PMO or end-user unit determines the existence of any of the grounds for suspension
enumerated above.

125
MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

3.2 The PMO or end-user unit drafts the suspension order for the approval of the HOPE.

3.3 The suspension order is issued to the contractor, stating the grounds therefor.

3.4 Prior to the expiration of the suspension order, the PMO or end-user unit shall determine
whether or not the grounds for suspension still exist.

i. If such grounds continue to exist, or if it is no longer practicable to continue with the

work, it shall terminate the work subject of the order or cancel the delivery of the items
subject of such suspension.

ii. If, however, the grounds for suspension no longer exist, and continuation of the work is
practicable, the PMO, with the approval of the Head of the Procuring Entity or his/her
duly authorized representative, shall lift the suspension order and notify the contractor to
proceed with the work/delivery of items in accordance with the amended contract.

126
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

CONTRACT TIME EXTENSION

1. LEGAL REFERENCE
Annex “E” of the revised IRR.
2. RULES AND GUIDELINES
2.1 Conditions of contract time extension
a. There is additional work or other special circumstances that would entitle the
contractor to an extension of its contract;

b. The affected activities fall within the critical path of the PERT/CPM network;
c. The contractor shall have notified the Procuring Entity that the amount of additional
work or the occurrence of the special circumstance merits the extension of its
contract, and that it had done so before the expiration of the contract and within
thirty (30) calendar days after the start of the additional work or of the special
circumstance has arisen; and

d. The Procuring Entity, after due investigation, finds the request justified, determines
the appropriate extension period, and approves the request of the contractor for a
contract extension.

If the contractor fails to notify the Procuring Entity within the time period provided
for, it waives any claims to contract extension.

2.2 Special Circumstances of contract time extension

a. Major calamities such as exceptionally destructive typhoons, floods and
earthquakes, and epidemics;

b. Non-delivery on time of materials, working drawings, or written information to be

furnished by the procuring entity;

c. Non-acquisition of permit to enter private properties within the right-of-way resulting

in complete paralysis of construction activities;

d. Region-wide or nationwide shortage of construction materials, as certified by the

DTI Secretary;

e. Region-wide or nationwide general labor strikes, as certified by the DOLE

Secretary; and

f. Serious peace and order problems as certified by the DILG or AFP Provincial
Commander and approved by the DND Secretary.

127
MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

2.3 Circumstances for disapproving request for contract extension

No extension of contract time will be granted if the reason given to support the request for
extension was already considered in the determination of the original contract time during
the conduct of detailed engineering and in the preparation of the contract documents. The
contract period includes a particular number of unworkable days, to cover days when
unfavorable weather conditions and special circumstances not within the control of the
contractor prevent any work from being done. This number of unworkable days should be
consumed first before any contract extension can be considered. For example, if the total
project duration is two hundred (200) calendar days inclusive of the forty-five (45) calendar
days of unfavorable weather condition, the contractor cannot claim for time extension citing
unfavorable weather condition if the forty-five (45) calendar days anticipated unfavorable
weather condition has not been consumed.

Thus, no contract extension must be given to a contractor due to:

a. Ordinary unfavorable weather conditions, in that such weather conditions had

already been taken into consideration and anticipated in the computation of
the unworkable days; and

b. Inexcusable failure or negligence of contractor to provide the required equipment,

supplies or materials.

If the reason of unfavorable weather condition will be used for the time extension,
the considerations of both nationwide and region wide conditions should be looked
into, using the records from PAG-ASA.

128
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

DELAY IN WORK COMPLETION AND LIQUIDATED

DAMAGES
1. LEGAL REFERENCE
Section 68 and Annex “E” of the revised IRR and the Civil Code of the Philippines Article 2226
provide the rules in relation to delivery and liquidated damages.

2. LIQUIDATED DAMAGE DEFINED

Liquidated damages are damages agreed upon by the parties to a contract, to be paid in case of
breach thereof (Civil Code of the Philippines Article 2226).

3. RULES AND GUIDELINES

3.1 Applicable period for the completion of work
The contractor must complete the work procured within the period prescribed by the
Procuring Entity as specified in the contract.

If delays are likely to be incurred, the contractor must notify the Procuring Entity in writing,
stating therein the duration and causes of the expected delay. The Procuring Entity may
grant time extensions, at its discretion, if such extensions are meritorious, with or without
liquidated damages.

In all cases, the request for extension shall always be filed before the expiry of the original
completion date. Maximum allowable extension shall not exceed the original construction
period.

3.2 Grounds for imposition of liquidated damages

When the contractor refuses or fails to satisfactorily complete the works under the contract
within the specified contract duration, plus any time extension duly granted, and is
thus considered in default under the contract, it will be liable for liquidated damages for the
delay. The Procuring Entity need not prove that it has incurred actual damages to be
entitled to liquidate damages from the contractor, and the same shall not be by way of
penalty. Such amount shall be deducted from any money due or which may become due
the contractor under the contract and/or from the retention money or other securities posted
by the contractor, whichever is convenient to the Procuring Entity.

3.3 Amount of Liquidated Damages

The formula for computing liquidated damages for the procurement of infrastructure projects
is now the same with goods and consulting services which is one-tenth of one percent
(0.1%) of the cost of the unperformed portion for every day of delay.

129
MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

In no case shall the sum of liquidated damages reach ten percent (10%) of the contract
amount. If it does, the contract shall automatically be rescinded by the Procuring Entity,
without prejudice to other courses of action and remedies open to it. The Procuring Entity
may also take over the contract or award the same to a qualified supplier through
negotiation. In addition to the liquidated damages, the erring contractor’s performance
security shall also be forfeited.6

4. PROCEDURES

If a contractor incurs a delay and wishes to request for an extension of the completion or
construction period:

4.1 It must submit a written request to the PMO or end-user unit for an extension of the
completion or construction period, citing the reason/s for such delay.

4.2 The PMO or end-user unit shall either approve or disapprove the request for extension.

4.3 If the extension is granted, the liquidated damages shall not be imposed and the contractor
will be so informed in writing.

4.4 If, however, the request for extension is denied, the PMO or end-user unit shall inform the
contractor in writing of such denial, and ensure that the said notice or communication is
received by the latter within a reasonable time from receipt of the request for extension.
The Procuring Entity then imposes the liquidated damages in accordance with the
provisions of the contract and the procedures outlined below Steps 2 to 3.

If the Contractor incurs a delay and there is no request for extension:

a. The PMO or end-user unit shall, within a reasonable time from the first day of
delay, inform the contractor that the Procuring Entity will impose the liquidated
damages agreed upon by the parties.

b. Upon contract completion, the PMO or end-user unit and the Acceptance
Committee shall record the delay in the inspection documents, noting therein the
amount of the liquidated damages imposable on the contractor.

c. The amount of liquidated damages due shall be deducted from the total amount
payable to the contractor, and the same shall be reflected in the disbursement
vouchers. Or, if the contract provides that the liquidated damages shall be

6
For FAPs, the applicable liquidated damages is at least 1/10 of 1% of the cost of unperformed portion for every day of delay.
The maximum deduction shall be 10% of the amount of the contract, and the procuring entity shall rescind the contract,
without prejudice to other courses of action and remedies open to it.

130
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

collected from securities or warranties posted by the contractor, the PMO or end-
user unit shall so inform the official authorized to call on the securities or
warranties about the delay and the corresponding liquidated damages imposable.

131
MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

CONTRACT TERMINATION FOR DEFAULT,

UNLAWFUL ACTS OR INSOLVENCY
1. LEGAL REFERENCE
Guidelines on Termination of Contracts, approved by the GPPB through Resolution 018- 2004,
dated December 22, 2004. Appendix 4 of the revised IRR attached in the Handbook on the
Philippine Government Procurement, Fifth Edition.

2. RULES AND GUIDELINES

2.1 Grounds for contract termination for Default

The HOPE may terminate a contract for default when any of the following conditions attend
its implementation:

a. Due to the contractor’s fault and while the project is on-going, it has incurred
negative slippage of fifteen percent (15%) or more in accordance with P.D. 1870;

b. Due to the contractor’s fault and after the contract time has expired, it has incurred
a negative slippage of ten percent (10%) or more in the completion of the work; or

c. The contractor:

i. Abandons the contract works, refuses or fails to comply with a valid

instruction of the Procuring Entity or fails to proceed expeditiously
and without delay despite a written notice by the Procuring Entity;

ii. Does not actually have on the project site the minimum essential
equipment listed on the bid necessary to prosecute the works in
accordance with the approved work plan and equipment
deployment schedule as required for the project;

iii. Does not execute the works in accordance with the contract or persistently
or flagrantly neglects to carry out its obligations under the contract;

iv. Neglects or refuses to remove materials or to perform a new work that has
been rejected as defective or unsuitable; or

v. Sub-lets any part of the contract works without approval by the Procuring
Entity.

The rescission of the contract shall be accompanied by the confiscation by

the Procuring Entity of the contractor’s performance security. The
contractor will also be recommended for blacklisting. The contractor shall
be paid on a quantum meruit basis.

132
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

2.2 Grounds for contract termination due to Unlawful Acts

The Procuring Entity may terminate the contract in case it is determined prima facie
that the contractor has engaged, before or during the implementation of the contract,
in unlawful deeds and behaviors relative to contract acquisition and implementation.
Unlawful acts include, but are not limited to, the following:

a. Corrupt, fraudulent, collusive and coercive practices;

b. Drawing up or using forged documents;

c. Using adulterated materials, means or methods, or engaging in production

contrary to rules of science or the trade; and

d. Any other act analogous to the foregoing. The contractor shall be paid on a
quantum meruit basis.

2.3 Grounds for Contract Termination due to Insolvency

The Procuring Entity should terminate the contract if the contractor is declared bankrupt
or insolvent as determined with finality by a court of competent jurisdiction. In this event,
termination will be without compensation to the contractor, provided that such
termination will not prejudice or affect any right of action or remedy which has accrued or
will accrue thereafter to the Procuring Entity and/or the contractor.

2.4 Conditions for contract termination by contractor

The contractor may terminate its contract with the Procuring Entity if the works are
completely stopped for a continuous period of at least sixty (60) calendar days through no
fault of its own, due to any of the following reasons:

a. Failure of the Procuring Entity to deliver, within a reasonable time, supplies,

materials, right-of-way, or other items it is obligated to furnish under the terms of
the contract; or

b. The prosecution of the work is disrupted by the adverse peace and order
situation, as certified by the AFP Provincial Commander and approved by the
DND Secretary.

The contractor must serve a written notice to Procuring Entity of its intention to terminate
the contract at least thirty (30) calendar days before its intended termination. The
contract is deemed terminated if it is not resumed in thirty (30) calendar days after the
receipt of such notice by the Procuring Entity.

In cases of termination, the Procuring Entity shall return to the contractor its performance
security and unpaid claims.

133
 MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

CONTRACT TERMINATION FOR CONVENIENCE

1. CONTRACT TERMINATION FOR CONVENIENCE DEFINED

The Procuring Entity, by written notice sent to the contractor, may terminate the contract, in whole or
in part, at any time for its convenience. The notice of termination shall specify that the termination is
for the Procuring Entity’s convenience, the extent to which performance of the contractor under the
contract is terminated, and the date upon which such termination becomes effective.
2. GROUNDS FOR CONTRACT TERMINATION FOR CONVENIENCE
Any of the following circumstances may constitute sufficient grounds to terminate a contract
for convenience:

2.1 If physical and economic conditions have significantly changed so as to render the project
no longer economically, financially or technically feasible, as determined by the Head of
the Procuring Entity;

2.2 The HOPE has determined the existence of conditions that make project implementation
impractical and/or unnecessary, such as, but not limited to, fortuitous event/s, changes in
laws and government policies;

2.3 Funding for the project has been withheld or reduced by higher authorities through no fault
of the Procuring Entity;

2.4 Failure of the Procuring Entity to acquire the necessary right-of-way; or

2.5 Any circumstance analogous to the foregoing.

3. PROCEDURES

The following steps are undertaken in the termination of contracts:

3.1 Upon receipt of a written report of acts or causes which may constitute grounds for contract
termination, or upon its own initiative, the end-user unit shall verify the existence of such
grounds and cause the execution of a Verified Report with the Project Engineer.

3.2 The HOPE shall issue a written notice to terminate the contract upon recommendation of the
PMO/End-user. The written notice shall include the following information: grounds for
termination, extent of termination, action to be taken by the Contractor and special
instructions to the PMO/End-User.

3.3 Upon receipt of the Notice of Termination, the Contractor shall submit to the HOPE a verified
position paper stating why the contract should not be terminated.

3.4 The HOPE shall decide whether or not to terminate the contract upon receipt of the verified
position paper. It may create a Contract Termination Review Committee to assist in the
discharge of its functions. All decisions recommended by the CTRC shall be subject to the
134
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

approval of the Head of the Procuring Entity. The Head of the Procuring Entity shall serve a
written notice to the Contractor of its decision.

3.5 If the Procuring Entity terminates the contract due to default, insolvency, or for cause, it may
enter into a negotiated procurement pursuant to Section 53(c) of R.A. 9184 and the revised
IRR.

3.6 In case of contract termination by the Contractor, the Contractor must serve a written notice
to the Procuring Entity of its intention to terminate the contract. The Contract is deemed
terminated if it is not resumed after the receipt of such notice by the Procuring Entity.

Also see the Guidelines on Termination of Contracts approved by the GPPB in Resolution
No. 018-2004, dated December 22, 2004.

May termination be allowed for reasons other than those attributable to the contractor?
The Procuring Entity, by written notice sent to the contractor, may terminate the contract, in whole
or in part, at any time for its convenience. The notice of termination shall specify that the
termination is for the Procuring Entity’s convenience, the extent to which performance of the
contractor under the contract is terminated, and the date upon which such termination becomes
effective.
What circumstances may constitute sufficient grounds to terminate a contract for
convenience?

Any of the following circumstances may constitute sufficient grounds to terminate a contract for
convenience:

1. If physical and economic conditions have significantly changed so as to render the project
no longer economically, financially or technically feasible, as determined by the HOPE;

2. The HOPE has determined the existence of conditions that make project implementation
impractical and/or unnecessary, such as, but not limited to, fortuitous event/s, changes in
laws and government policies;

3. Funding for the project has been withheld or reduced by higher authorities through no fault
of the Procuring Entity; or

4. Any circumstance analogous to the foregoing.

Also see the Guidelines on Termination of Contracts approved by the GPPB in Resolution
018-2004, dated December 22, 2004.

135
MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

CONTRACT COMPLETION
1. LEGAL REFERENCE
Annex “E” of the revised IRR.

2. PROCEDURE
Once the project reaches an accomplishment level of ninety-five percent (95%) of the total contract
amount, the Procuring Entity may create an inspectorate team to make preliminary inspection and
submit a punch-list to the contractor in preparation for the final turnover of the project. This punch-
list will contain, among others, the remaining works, work deficiencies for necessary corrections,
and the specific duration/time to fully complete the project considering the approved remaining
contract time. This, however, shall not prejudice the Procuring Entity’s claim for liquidated
damages.

WARRANTY
1. LEGAL REFERENCE
Section 62 of the revised IRR provides for the statutory basis on Warranty.

2. PURPOSE
A warranty is required to ensure that the contractor will correct structural defects and failures. It
should be noted that a one-year period after the completion of the project, called the defects liability
period, is observed until final acceptance by the Procuring Entity. At any rate, the length of the
warranty period will depend on the nature of the project.

3. RULES AND GUIDELINES

3.1 Arrangements during the Defects Liability Period

The defects liability period for infrastructure projects shall be one year from project
completion up to issuance of the Certificate of Final Acceptance by the government. As
such, the contractor shall assume full responsibility for the contract work from the time
project construction commenced up to final acceptance by the government and shall be
held responsible for any damage or destruction of the works except those occasioned by
force majeure. The contractor shall be fully responsible for the safety, protection, security,
and convenience of his personnel, third parties, and the public at large, as well as the
works, equipment, installation and the like to be affected by his construction work. During
this period, the contractor shall undertake the repair works, at his own expense, of any
damage to the infrastructure projects on account of the use of materials of inferior quality
within ninety (90) days from the time the HOPE has issued an order to undertake repair.
In case of contractor’s failure or refusal to comply with this mandate, the government shall
undertake such repair works and shall be entitled to full reimbursement of expenses
incurred therein upon demand at the cost of the contractor (Section 62.2.2.1 of the
revised IRR).
136
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

Any contractor who fails to comply with the preceding paragraph shall suffer perpetual
disqualification from participating in any public bidding and his property or properties
shall be subject to attachment or garnishment proceedings to recover the costs. All
payables of government in his favor shall be offset to recover the costs (Section
62.2.2.2 of the revised IRR).

To guarantee that the contractor shall perform his responsibilities as prescribed in

Section 62.2.3.1 (a) of the revised IRR, it shall be required to post a warranty security in
accordance with the following schedule:

FORM OF WARRANTY SECURITY AMOUNT OF WARRANTY SECURITY (EQUAL

TO PERCENTAGE OF THE TOTAL CONTRACT
PRICE)
a. Cash or Letter of Credit issued by a Universal
or Commercial Bank: Provided, however, that
the LC shall be confirmed or authenticated by Five percent (5%)
a Universal or Commercial Bank, if issued by
a foreign bank.
b. Bank guarantee confirmed by a Universal or
Ten percent (10%)
Commercial Bank.
c. Surety bond callable upon demand issued by
GSIS or a surety or insurance company duly
Thirty percent (30%)
certified by the Insurance Commission as
authorized issue such 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 Final Acceptance by the procuring
entity, and returned only after the lapse of the said one (1) year period.

During the defects liability period, the security posted is still the performance security.
Hence, the coverage of the performance security is from contract signing until issuance of
the Certificate of Final Acceptance; thereby covering contract execution, completion and
the defects liability period.
3.2 Arrangements during the Warranty Period
After issuance of the Certificate of 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 (Section 62.2.2 of the
revised IRR):

a. Permanent Structures: Fifteen (15) years

Buildings of types 4 (steel, iron, concrete, or masonry construction with walls,

ceilings, and permanent partitions of incombustible fire resistance) and 5 (steel, iron,
concrete, or masonry construction), 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 similar structures;
137
MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

b. Semi -Permanent Structures: Five (5) years

Buildings of types 1 (wooden), 2 (wood with 1 hour fire resistance), and 3 (masonry
and wood construction), 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 developments, and other similar
structures.

3.3 Warranty if the project is a combination of different types of structures

A schedule of warranty shall be made to cover the warranty for the different types of
structures for the project.
3.4 Responsible for defects/failures during the Warranty period
In cases where structural defects and/or failures arise during the warranty period, the
following persons/parties shall be held liable individually or solidarily, as the case may be
(Section 62.2.3 of the revised IRR):

a. Contractor – Where structural defects and/or failures arise due to faults attributable
to improper construction use of inferior quality/substandard materials, and any
violation of the contract plans & specifications, the contractor shall be held liable;

b. 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;

c. Procuring Entity’s Representatives/Project Manager/Construction Managers and

Supervisors – The project owner’s representative(s), project manager, construction
manager, 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;

d. Third Parties - Third Parties shall be held liable in cases where structural
defects/failures 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 construction 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.
138
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

The term “structural defects” shall mean major faults/flaws/deficiencies in one or more key
structural 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 (Section 62.2.3.1 of the revised
IRR).

In case of structural defects/failures occurring during the applicable warranty period provided
above, the government shall undertake the necessary restoration or reconstruction works
and shall be entitled to full reimbursement by the parties found to be liable, of expenses
incurred therein upon demand, without prejudice to the filing of appropriate administrative,
civil, and/or criminal charges against the responsible persons as well as the forfeiture of
warranty securities posted in favor of the government (Section 62.2.4 of the revised IRR).

139
 SECTION 6

GUIDELINES ON THE
PROCUREMENT AND
IMPLEMENTATION OF
CONTRACT
FOR DESIGN AND
BUILD INFRASTRUCTURE
PROJECT
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

DESIGN AND BUILD

1. LEGAL REFERENCE
Annex “G” of the revised IRR of the Handbook on Philippine Government Procurement, Fifth (5 th)
Edition, entitled the Guidelines for the procurement and implementation of contract for design and
build infrastructure projects which was took effect through GPPB Resolution No. 22-2007 dated 10
November 2007.

2. PURPOSE
The guideline was formulated to determine the conditions for the use of the design and build
scheme for infrastructure projects and the procedures for the implementation thereof.

3. SCOPE AND APPLICATION

The guideline shall govern the procurement and implementation of contracts for design and build
infrastructure projects and shall supplement applicable provisions of Republic Act No. 9184 and its
Implementing Rules and Regulations Part A in particular Section 17.6 and Annex E.

4. RULES AND GUIDELINES

4.1 GUIDING PRINCIPLES

The procuring entity, prior to resorting to the design and build scheme, should consider the
following advantages and disadvantages of said scheme:

4.1.1 Advantages:
a. In making use of the design and build scheme, the procuring entity is
assured that only one contractor shall bear all responsibilities, which shall
include the risks related to design;

b. The design and construction periods, as well as the final project cost, will
definitely be reduced; and

c. The procuring entity is assured of the quality of the structure, considering

that only infrastructure and design experts are involved in a construction
utilizing the design and build scheme.

4.1.2. Disadvantages:
a. Procuring entities should, however, take into account that in utilizing the
design and build scheme for a particular project, contractors are given too
much discretion in determining the project cost and there is difficulty in
predicting its final cost until the actual commencement of construction;
and
143
MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

b. Considering that the extent of the integration of design and construction of

the project is exceptionally dependent on the contractor, there may be
cases when the end-result may not be exactly in accordance with what the
procuring entity has required.

4.2 DEFINITION OF TERMS

4.2.1 Approved Budget for the Contract
This shall be a lump sum amount that shall cover the cost of design and
construction works (at the option of the procuring entity) based on the conceptual
design and performance specifications and in accordance with applicable
provisions of the law or agency guidelines. The ABC shall be calculated based on
either the approximate quantities of work of the conceptual design, from
standardized designs or from cost records of previous projects of similar kind.

4.2.2 Bidding Documents for Design and Build Scheme

These shall basically be similar to the bidding documents for infrastructure projects
and shall also include the performance specifications and parameters to be
followed by the design and build contractors and the method for allocation of risks
for the design and build contract, among others.

4.2.3 Conceptual Design

This shall describe the general idea of the procuring entity with regard to the
completed facility and shall identify the scope or physical components and
structures, specific outputs and requirements of the structures and proposed
methods of construction, where necessary.

4.2.4 Design and Build Projects

This refers to infrastructure projects where the procuring entity awards a single
contract for the architectural/engineering design and construction to a single firm,
partnership, corporation, joint venture or consortium.

4.2.5 Performance Specifications and Parameters

The procuring entity shall define the required performance specifications and
criteria and its means of measurement based on the operating outputs and in
accordance with appropriate design and construction standards, legal and
technical obligations and any other relevant government commitments as required
by existing laws and regulations. It shall not be drawn up to favor a particular
solution, design and construction method.

144
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

4.2.6 Preliminary Investigations

These shall include, among others, information on soil, geotechnical, hydrologic,
hydraulic, seismic, traffic, and environmental conditions that shall be used to
define project design criteria, to set the basis for any changed conditions and
establish preliminary project cost estimates.

4.2.7 Preliminary Survey and Mapping

These shall determine boundaries and provide stationing along control lines to
establish feature and design criteria location, and identify existing and future right-
of-way limits and construction easements associated with the procuring entity’s
conceptual design.

4.2.8 Project Description

This shall define the objectives, purpose, limitations or constraints, as well as the
allocation of risks between the procuring entity and the winning bidder.

4.2.9 Utility Locations

The procuring entity shall provide information on existing utilities in and around the
project’s area.

4.3. CONDITIONS FOR THE USE OF THE DESIGN AND BUILD SCHEME
4.3.1 The Design and Build scheme shall be applied under any of the following cases:

a. For flagship, priority and fast track projects that need to be completed
on a tight completion schedule, as included in the Medium Term Public
Investment Program for national projects and in the Regional
Development Investment Plan for regional and provincial projects;

b. For infrastructure projects requiring advanced engineering or construction

technologies or whose intellectual property rights belong to private
companies;

c. For infrastructure projects where design, equipment, plant and

construction can be provided exclusively by a company or where
manufacturer’s know-how is important in the construction of such facility;
or

d. For small projects where there are previously approved drawings or

standardized designs and an innovation in design and construction
methods under the design and build scheme will result in lower costs and
higher quality projects. Examples of these are school buildings, rural
health units, among others.
145
MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

4.3.2 All design and build projects shall be included in the Annual Procurement Plan of
the procuring entity concerned and shall be subject to prior approval by the head
of the procuring entity or his/her duly authorized representative.

4.4. CREATION OF DESIGN and BUILD COMMITTEE

The procuring entity may create a Design and Build Committee composed of highly
technical personnel experienced in the field of architecture, engineering and construction
in the particular type of project to be bid. The DBC shall assist the project management
office in the preparation of the conceptual design and performance specifications and
parameters, review of detailed engineering design and supervision of the project. It shall,
likewise, assist the Bids and Awards Committee and the Technical Working Group in the
evaluation of technical proposals in accordance with the criteria set in the bid documents.

4.5. PRELIMINARY DESIGN AND CONSTRUCTION STUDIES

No bidding and award of design and build contracts shall be made unless the required
preliminary design and construction studies have been sufficiently carried out and duly
approved by the head of the procuring entity that shall include, among others, the
following:

a. Project Description

b. Conceptual Design

c. Performance Specifications and Parameters

d. Preliminary Survey and Mapping

e. Preliminary Investigations

f. Utility Locations

g. Approved Budget for the Contract

h. Proposed Design and Construction Schedule

i. Minimum requirements for a Construction Safety and Health Program for the project
being considered

j. Tender/Bidding Documents

146
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

The above data are for reference only. The procuring entity does not guarantee that these
data are fully correct, up to date, and applicable to the project at hand. The contractor is
responsible for the accuracy and applicability of all data, including the above, that it
will use in its design and build proposal and services.

The acquisition of right-of-way and the conduct of eminent domain proceedings shall still
be the responsibility of the procuring entity, which shall include a preliminary budget for
this purpose.

4.6. DETAILED ENGINEERING REQUIREMENTS

4.6.1 Upon award of the design and build contract, the winning bidder shall be
responsible for the preparation and submission of all necessary detailed
engineering investigations, surveys and designs in accordance with the provisions
of Annex “A” of the revised IRR (with the exception of the bid documents and the
ABC).

4.6.2 The procuring entity shall ensure that all the necessary schedules with regard to the
submission, confirmation and approval of the detailed engineering design and the
details of the construction methods and procedures shall be included in the
contract documents.

4.6.3 The procuring entity shall review, order rectification, and approve or
disapprove – for implementation only - the submitted plans within these schedules.
All instructions for rectification shall be in writing stating the reasons for such
rectification. The design and build contractor shall be solely responsible for the
integrity of the detailed engineering design and the performance of the structure
irrespective of the approval/confirmation by the procuring entity.

4.7. ELIGIBILITY REQUIREMENTS

4.7.1. The eligibility requirements for Design and Build Infrastructure Projects shall comply
with the applicable provisions of Sections 23-24 of the revised IRR.

4.7.2. A modified set of requirements integrating eligibility documents and criteria for
infrastructure projects and consulting services shall be adopted, as follows:

a. Class “A” Documents (Legal, Technical and Financial Documents) and

Class “B” Documents

The prospective bidder shall submit all the required Class “A” and Class “B”
documents for infrastructure projects and the following:
i. Relevant statements of all on-going, completed, awarded but not
yet started design/design and build related contracts, curriculum
vitae of key staff, partners or principal officers; and
147
MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

ii. Valid licenses issued by the Professional Regulatory Commission

for design professionals in accordance with the provisions under
Section 24.7.1 (Technical Documents) of the revised IRR.

b. Eligibility Criteria

i. The eligibility of design and build contractors shall be based on the

legal, technical and financial requirements abovementioned. In the
technical requirements, the design and build contractor (as solo or
in joint venture/consortia) should be able to comply with the
experience requirement under the revised IRR of R.A. 9184, where
one of the parties (in a joint venture/consortia) should have at least
one similar project, both in design and construction, with at least
50% of the cost of the ABC.

ii. If the bidder has no experience in design and build projects on its
own it may enter into partnerships or joint venture with design or
engineering firms for the design portion of the contract.

iii. The relevant provisions under Section 23.11.2.1 of the revised IRR
of R.A. 9184 on eligibility requirements shall be observed, with the
following exceptions:

Joint ventures/consortia among Filipino contractors and consultants shall be

allowed subject to pertinent laws and the relevant provisions of the revised IRR of
R.A. 9184. The joint venture/consortia shall be jointly and severally responsible for
the obligations and the civil liabilities arising from the design and build contract:
Provided, however, That Filipino ownership or interest thereof shall be at least
seventy five percent (75%): Provided further, That joint ventures/consortia in which
Filipino ownership or interest is less than seventy-five percent (75%) may be eligible
where the structures to be built require the application of techniques and/or
technologies which are not adequately possessed by Filipinos and that Filipino
ownership or interest shall not be less than twenty-five percent (25%): Provided,
finally, that when the design services in which the joint venture wishes to engage
involve the practice of professions regulated by law, all those who will actually
perform the services shall be Filipino citizens and registered professionals
authorized by the appropriate regulatory body to practice those professions and
allied professions and where foreign designers are required, the foreign designer
must be authorized by the appropriate Philippine Government professional
regulatory body to engage in the practice of those professions and allied
professions.

148
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

5. PROCEDURES
5.1 SUBMISSION AND RECEIPT OF BIDS
5.1.1 In the submission of bids, the first envelope (Technical Proposal) shall contain all
the required documents for infrastructure projects under Section 25.3 (b) of the
revised IRR of R.A 9184 and the following additional documents:

a. Preliminary Conceptual Design Plans in accordance with the degree of

details specified by the procuring entity;

b. Design and construction methods;

c. List of design and construction personnel, to be assigned to the contract
to be bid, with their complete qualification and experience data; and

d. Value engineering analysis of design and construction method.

5.1.2. The second envelope (Financial Proposal) shall contain all the required
documents for infrastructure projects under Section 25.3 (b) of the revised IRR of
R.A. 9184 and the following additional documents:

a. Lump sum bid prices, which shall include the detailed engineering cost, in
the prescribed Bid Form;

b. Detailed estimates including a summary sheet indicating the unit prices of

construction materials, labor rates and equipment rentals used in coming
up with the bid; and

c. Cash flow by the quarter and payments schedule.

5.2 BID EVALUATION

For the detailed evaluation of the design and build proposals a two-step procedure shall be
adopted by the BAC, which may be undertaken with the assistance of the DBC.

5.2.1. First-Step Procedure

a. The first step of the evaluation shall involve the review of the preliminary
conceptual designs and track record submitted by the contractor as
indicated in the bid documents using non-discretionary “passed/failed”
criteria that involve compliance with the following requirements:

i. Adherence of preliminary design plans to the required

performance specifications and parameters and degree of details;

ii. Concept of approach and methodology for detailed engineering,

design and construction with emphasis on the clarity, feasibility,
149
MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

innovativeness and comprehensiveness of the plan approach,

and the quality of interpretation of project problems, risks, and
suggested solutions;

iii. Quality of personnel to be assigned to the project which covers

suitability of key staff to perform the duties of the particular
assignments and general qualifications and competence including
education and training of the key staff;

b. For complex or unique undertakings, such as those involving highly

specialized or advanced engineering technology, eligible bidders may be
required, at the option of the agency concerned, to make an oral
presentation within fifteen (15) calendar days after the deadline for
submission of technical proposals.

5.2.2 Second-Step Procedure

Only those bids that passed the above criteria shall be subjected to the second
step of evaluation. The BAC shall open the financial proposal of each “passed”
bidder and shall obtain the correct calculated prices. The financial bids as so
calculated shall be ranked, in ascending order, from lowest to highest. The bid with
the lowest price shall be identified as the Lowest Calculated Bid.

5.3. POST-QUALIFICATION and AWARD OF THE CONTRACT

5.3.1. The LCB shall be subject to post-qualification in accordance with Section 34, Rule
X of the revised IRR to determine its responsiveness to the eligibility and bid
requirements. If after post-qualification the Lowest Calculated Bid is determined to
be post-qualified it shall be considered the Lowest Calculated and Responsive Bid
and the contract shall be awarded to the bidder. In case of post-disqualification of
the LCB, the procedure under Section 34 of the revised IRR shall also be followed.

5.3.2. The head of the procuring entity shall approve or disapprove the
recommendations of the BAC within a period not exceeding seven (7) calendar
days from the determination and declaration by the BAC of the LCRB.

5.3.3. The head of the procuring entity concerned shall award the contract to the said
bidder pursuant to the provisions of Section 37, Rule XI of the revised IRR.

5.4 CONTRACT IMPLEMENTATION

As a rule, contract implementation guidelines for the procurement of infrastructure projects
shall comply with Annex “E” of the revised IRR. The following provisions shall supplement
these procedures:

150
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

5.4.1. No works shall commence unless the contractor has submitted the required
documentary requirements and the procuring entity has given written approval.
Work execution shall be in accordance with reviewed and approved documents.

5.4.2. The contractor shall be responsible for obtaining all necessary information as to
risks, contingencies and other circumstances which may affect the works and shall
prepare and submit all necessary documents specified by the procuring entity to
meet all regulatory approvals as specified in the contract documents.

5.4.3. The Contractor shall submit a detailed program of work within fourteen (14)
calendar days after the issuance of the NTP for approval by the procuring entity
that shall include, among others:

a. The order in which it intends to carry out the work including anticipated
timing for each stage of design/detailed engineering and construction;

b. Periods for review of specific outputs and any other submissions and
approvals;

c. Sequence of timing for inspections and tests as specified in the contract

documents;

d. General description of the design and construction methods to be

adopted;

e. Number and names of personnel to be assigned for each stage of the

work;

f. List of equipment required on site for each major stage of the work; and

g. Description of the quality control system to be utilized for the project.

5.4.4. Any errors, omissions, inconsistencies, inadequacies or failure submitted by the

contractor that do not comply with the requirements shall be rectified, resubmitted
and reviewed at the contractor’s cost. If the Contractor wishes to modify any
design or document which has been previously submitted, reviewed and
approved, the contractor shall notify the procuring entity within a reasonable period
of time and shall shoulder the cost of such changes.

5.4.5. As a rule, changes in design and construction requirements shall be limited only to
those that have not been anticipated in the contract documents prior to contract
signing and approval. The following guidelines shall govern approval for change or
variation orders:

a. Change Orders resulting from design errors, omissions or non-

conformance with the performance specifications and parameters and the

151
MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

contract documents by the contractor shall be implemented by the

contractor at no additional cost to the procuring entity.
b. Provided that the contractor suffers delay and/or incurs costs due to
changes or errors in the procuring entity’s performance specifications and
parameters, he shall be entitled to either one of the following:

i. An extension of time for any such delays under Section 10 of

Annex E of the revised IRR; or

ii. Payment for such costs as specified in the contract documents,

provided, that the cumulative amount of the variation order does
not exceed ten percent (10%) of the original project cost.
5.4.6. The contract documents shall include the manner and schedule of payment
specifying the estimated contract amount and installments in which the contract
price will be paid.

5.4.7. The contractor shall be entitled to advance payment subject to the provisions of
Section 4 of Annex E of the revised IRR.

5.3.8. The procuring entity shall define the quality control procedures for the design and
construction in accordance with agency guidelines and shall issue the proper
certificates of acceptance for sections of the works or the whole of the works as
provided for in the contract documents.

5.4.9. The contractor shall provide all necessary equipment, personnel, instruments,
documents and others to carry out specified tests.

5.4.10. All design and build projects shall have a minimum Defects Liability Period of one
(1) year after contract completion or as provided for in the contract documents. This
is without prejudice, however, to the liabilities imposed upon the engineer/architect
who drew up the plans and specification for a building sanctioned under Section
1723 of the New Civil Code of the Philippines.

5.4.11 The contractor shall be held liable for design and structural defects and/or failure of
the completed project within the warranty periods specified in Section 62.2.2 of the
revised IRR.

5.5 AMENDMENTS AND FORMS

In the implementation of these guidelines, the GPPB may issue additional guidelines or
introduce modifications thereto through the amendment of its specific provisions as the need
arises, as well as, formulate, approve and disseminate standard bidding documents, forms
and evaluation documents, whenever necessary.

152
 SECTION 7

PERIOD OF
ACTION
OF PROCUREMENT
ACTIVITIES
MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

154
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

PERIOD OF ACTION ON PROCUREMENTACTIVITIES

FOR INFRASTRUCTURE PROJECT

PERIOD OF ACTION
Latest Possible Time
Earliest
For ABC For ABC
Possible
Stage Activities Deadline 50 M and above 50
Time
below M

Advertisement/ Posting of
1 Invitation to Bid/Request for 7 cd 7cd 7cd
Expression of Interest

Eligibility Check (and Short

Refer to
2 Listing, in case of Refer to Stage 5
Consulting Service) Stage 5

Issuance and availability of From 1st day of

3
Bidding Documents Stage 1 until Stage 5

Pre-bid Conference 12 cd before Stage 5 1 cd 1cd 1cd

Request for
10 cd before Stage 5
4 Clarification
Supplemental/Bid
7cd before Stage 5
Bulletin
45 cd from last day of Stage
1 for Goods 1 cd (includes 1 cd (includes
50/65 cd from last day of opening of opening of
Submission and
Stage 1 for Infrastructure bids and bids and
Receipt of Bids
Projects 75 cd from the last eligibility eligibility
5 check) check)
day of Stage 1 for
Consulting Services
Submission of additional
3 cd after Stage 5
requirements

6 Bid Evaluation 5 cd 7cd 1cd

Notification for
7 n/a n/a n/a
Negotiation

8 Negotiation n/a n/a n/a

9 Post-qualification 30 cd 30 cd 1cd

155
MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

Approval of 2cd
10 Resolution/Issuance of 4 cd 7cd (1 cd for
Notice of Awards BAC Resolution
and 1 cd for
NOA)
2cd
(1 cd for
Contract preparation and Contract
11 10 cd 10 cd
signing Preparation and
1 cd for Contract
Signing )
Approval of Contract by
12 5 cd 15 cd 1cd
higher authority
Issuance of Notice to
13 2 cd 3cd 1cd
Proceed
TOTAL 113 cd 144 cd 28 cd

Note: The procurement process from the opening of bids up to the award of contract shall not exceed three
(3) months, or a shorter period to be determined by the procuring entity concerned. All members of the
BAC shall be on a “jury duty” type of assignment until the Notice of Award is issued by the head of the
procuring entity in order to complete the entire procurement process at the earliest possible time.

156
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

MAXIMUM
NUMBER OF PROCUREMENT UNDERTAKING OR REQUISITE DOCUMENTS AND ITS
PROCUREMENT DAYS AS CORRESPONDING DELIVERABLES
ACTIVITY PRESCRIBE
D IN RA 9184 EXPECTED RESPONSIBLE
NECESSARY RESPONSIBLE
AND THE OUTPUT ENTITY
INPUT ENTITY
REVISED
IRR
A. Procurement 1. Project 1. End-user 1. Evaluation 1. Budget
Planning Procurement 2. Project and Officer
Management Management inclusion into (Section
Plan Officer the Agency 7.3.3.)
2. Purchase Budget 2. BAC Secretariat
Request Proposal (Section 7.3.4)
3. Approved 2. Consolidation of 3. Head of the
Budget for the the PPMP to the Procuring Entity
Contract Annual
4. Certificate of Procurement
Availability of Plan
Funds 3. Approval of
5. Clearance from the APP
the clearing
office
B. Preparation of 1. Duly approved 1. BAC 1. Invitation to Bid 1. BAC Secretariat
the Invitation APP Secretariat 2. Philippine
to Bid and 2. Duly approved 2. TWG/ Bidding
Bidding and signed PR Technical Documents
Documents Expert, if
needed
3. Consultants
hired to
prepare the
PBD
C. Pre- Prior to the 1. Notices to pre- 1. BAC 1. Minutes of the 1. BAC Secretariat
procurement advertisement procurement 2. BAC Secretariat pre- 2. End-users
Conference of IB conference 3. End-users procurement
2. Attendance 4. TWG/ Technical conference
sheet Expert, if 2. Duly signed
needed attendance
5. Consultants sheet
hired to prepare 3. Revised
the PBD technical
specifications
and detailed
engineering if
required

157
 MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

MAXIMUM
NUMBER OF PROCUREMENT UNDERTAKING OR REQUISITE DOCUMENTS AND ITS
PROCUREMENT DAYS AS CORRESPONDING DELIVERABLES
ACTIVITY PRESCRIBED
IN RA 9184 EXPECTED RESPONSIBLE
NECESSARY RESPONSIBLE
AND THE OUTPUT ENTITY
INPUT ENTITY
REVISED IRR

D. Advertisement/ Advertisement/ 1. Invitation to BAC Secretariat 1. Newspaper BAC Secretariat

Posting of the posting in the Bid advertisement
Invitation to following media 2. Bidding 2. Proof of posting
Bid for at least Documents in the PhilGEPS
seven (7) 3. Checklist of website
calendar days eligibility 3. Certification from
requirements the BAC
for suppliers Secretariat of
and posting in the
contractors Procuring
Entity’s premises
E. Availability From the time 1. Bidding BAC Secretariat 1. Receipt of BAC Secretariat
and Issuance the IB is first Documents payment for
of the Bidding advertised/ 2. List of Bidding
Documents posted until the suppliers Documents
deadline of 3. Checklist of 2. List of bidders
submission and technical and who purchased
receipt of bids financial the Bidding
envelope Documents
requirements
for suppliers
F. Pre-bid Twelve (12) 1. Notices to pre- 1. Prospective Minutes of the BAC Secretariat
Conference calendar days bid conference bidders pre-bid
before the 2. Attendance 2. BAC conference made
submission and sheet 3. BAC Secretariat available within
receipt of bids 4. End-users/PMO three (3)
5. TWG calendar days
6. Observers
F1. Written request Ten (10) Written request for Prospective Bidder Written response/ BAC or appropriate
for clarification calendar days clarification on the comment authority
before the Bidding Documents
submission and
receipt of bids

158
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

MAXIMUM PROCUREMENT UNDERTAKING OR REQUISITE DOCUMENTS AND ITS

NUMBER OF CORRESPONDING DELIVERABLES
PROCUREMENT
DAYS AS
ACTIVITY
PRESCRIBED IN
NECESSARY RESPONSIBLE EXPECTED RESPONSIBLE
RA 9184 AND
INPUT ENTITY OUTPUT ENTITY
THE REVISED IRR

G. Issuance of Seven (7) CD Supplemental/ BAC Posting BAC

Bid Bulletins before the Bid Bulletin Secretariat 1. PhilGEPS Website Secretariat
submission and 2. Website of the
receipt of bids procuring entity, if
available
3. Conspicuous places
within the procuring
entity’s premises
H. Submission Forty-five (45) 1. Notice of bid 1. BAC 1. Abstract of Bids as 1. BAC
and Receipt calendar days opening 2. BAC Read 2. BAC
of Bids after (BAC, TWG, Secretariat 2. Minutes of Opening Secretariat
advertisement/ End-user) 3. Prospective of Bids
posting of IB 2. Attendance Bidders 3. Duly accomplished
H1. Opening of One (1) calendar sheet 4. Observers and signed eligibility
Bids and day for the 3. Eligibility 5. TWG requirement
Conduct of submission, Requirement 6. End-user checklist
Preliminary receipt, and Checklist 4. Notice of Eligibility/
Examination opening of bids. 4. Invitation Ineligibility
Bids are opened letters 5. Duly accomplished
immediately after addressed to attendance sheet
the deadline for observers
submission and
receipt of bids
H2. Submission Three (3) Notice to submit BAC Secretariat Additional requirements BAC
of Additional calendar days additional submitted by the Lowest Secretariat
Requirement after submission requirements Calculated Bidder
and receipt of
bids
I. Conduct Bid Must be 1. Notice for BAC Secretariat 1. Bid Evaluation 1. BAC
Evaluation completed within Bid Report 2. TWG
and seven (7) Evaluation 2. Abstract of Bid as
determine the calendar days 2. Eligible bid Calculated
Lowest from the deadline proposals 3. Minutes of the
Calculated of receipt of bids BAC/TWG
and Evaluation
Responsive
Bid

159
 MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

MAXIMUM PROCUREMENT UNDERTAKING OR REQUISITE DOCUMENTS AND

PROCUREMENT NUMBER OF DAYS ITS CORRESPONDING DELIVERABLES
ACTIVITY AS PRESCRIBED IN
RA 9184 AND THE NECESSARY RESPONSIBL EXPECTED RESPONSIBLE
REVISED IRR INPUT E ENTITY OUTPUT ENTITY

J. Post- Must be completed in 1. Post- BAC Secretariat 1. Post- 1. BAC/TWG

qualification not more than seven qualification qualification 2. BAC
(7) calendar days from requirements evaluation Secretariat
the determination of 2. Notice for report
the Lowest Calculated post- 2. Minutes of
Bid qualification post-
qualification
Extendible to not more 3. Notice of post-
than thirty (3) calendar qualification
days in exceptional
cases
K. Drafting and Approval of the BAC resolution to BAC Approval or HOPE
Approval of the resolution to declare declare the LCRB Secretariat disapproval of
Resolution to LCRB and and recommend the BAC
Declare Lowest recommend award award (or BAC resolution to
Calculated and shall not exceed resolution to declare declare LCRB
Responsive seven (7) calendar a failure of bidding) and recommend
Bidder and days award
recommend
award
L. Issuance and After approval, 1. Notice of Award BAC 1. Acceptance 1. Awarded
Posting of HOPE shall cause 2. Submission of Secretariat (through bidder
Notice of Award the immediate the following: signing of 2. BAC
issuance of the NOA a. JVA within conforme by Secretariat
to consultant ten (10) CD, the supplier)
declared as the if applicable and posting
LCRB b. Performance of
security performance
3. Notification of security
the bidding 2. Posting of
results NOA within
three (3) CD
in the
following
media:
a. PhilGEPS
b. Website of
procuring
entity

160
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

MAXIMUM
NUMBER OF PROCUREMENT UNDERTAKING OR REQUISITE DOCUMENTS AND ITS
PROCUREMENT DAYS AS CORRESPONDING DELIVERABLES
ACTIVITY PRESCRIBED
IN RA 9184 NECESSARY RESPONSIBLE EXPECTED RESPONSIBLE
AND THE INPUT ENTITY OUTPUT ENTITY
REVISED IRR
M. Contract Draft of BAC Secretariat Contract (Services) or BAC Secretariat
Preparation Contract PO (Goods)
(Services) or
Purchase
Order (Goods)
N. Contract Enter into Contract BAC Secretariat Duly approved and 1. HOPE or
Signing contract with (Services) or PO signed contract authorized
the winning (Goods) (Services) or PO signatory
bidder within (Goods) 2. Winning
ten (10) CD bidder
after posting of
performance
security and
submission of
documentary
requirements

In contract
approval, the
approving
authority shall
have fifteen
(15) CD from
receipt thereof
for approval or
disapproval
O. Issuance of the NTP and 1. NTP BAC Secretariat Proof of receipt BAC Secretariat
Notice to approved 2. Approved (Return Card)
Proceed contract shall contract and/or Registry or
be issued (Services) delivery receipt of
within three (3) or PO the NTP and
CD (Goods) approved contract
P. Posting of NTP Within fifteen 1. NTP BAC Secretariat Posting: BAC Secretariat
(15) CD from 2. Approved 1. PhilGEPS
the issuance of contract 2. Website of the
NTP (Services) procuring entity
or PO
(Goods)

161
 SECTION 8

ANNEXES
MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

164
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

ANNEX A. ABBREVIATIONS AND ACRONYMS

Carriage and Insurance Paid to
ABC Approved Budget for the Contract CIP
(named place of destination)

ABM Agency Budget Matrix CLC Credit Line Certification

ADB Asian Development Bank COA Commission on Audit

Central Office Bids and Awards
AFP Armed Forces of the Philippines COBAC
Committee
Confederation of Filipino Consulting
AFS Audited Financial Statement COFILCO
Organizations

Contractors Performance Evaluation

AO Administrative Order CPES
System

Annual Procurement Plan Contractors Performance Evaluation

APP CPESIU
System Implementing Unit

APR Annual Procurement Report CPM Customized Procurement Manual

BAC Bids and Awards Committee CSC Civil Service Commission

BC Budget Circular CSO Civic Society Organization

Development Budget Coordination
BDS Bid Data Sheet DBCC
Committee
Department of Budget and
BIR Bureau of Internal Revenue DBM
Management

Department of Budget and

Bureau of Research and DBM-PS/ PS-
BRS Management-Procurement
Standards DBM
Service

BSP Bangko Sentral ng Pilipinas DOH Department of Health

CAF Certificate of Availability of Funds DTI Department of Trade and Industry

Cooperatives Development
CDA DV Delivery Voucher
Authority

CHD Center for Health Development E.O. Executive Order

Construction Industry Authority of the Engineering Supervision and

CIAP ESAO
Philippines Administration Overhead
Ex Works, Ex Factory or Off- the-
CIF Cost, Insurance and Freight EXW
Shelf
165
MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

FAPs Foreign Assisted Projects ITB Instructions to Bidders

FDA Food and Drug Administration ITR Income Tax Return

Financial Management Information Japan Bank for International
FMIS JBIC
System Cooperation
GAA General Appropriations Act JVA Joint Venture Agreement

GCC General Conditions of Contract LC Letter of Credit

GFI Government Financial Institution LCB Lowest Calculated Bid

Government-Owned or – Controlled Lowest Calculated and Responsive
GOCC LCRB
Corporation Bid
GOP Government of the Philippines LGU Local Government Unit

MOOE Maintenance and Other

GPM Generic Procurement Manual
Operating Expenses
Government Procurement Policy NACAP National Constructors
GPPB
Board Association of the Philippines
Government Procurement Policy Board
GPPB-TSO NBC National Budget Circular
– Technical Support Office
Government Procurement Reform
GPRA NCB National Competitive Bidding
Act of 2003
HOPE Head of Procuring Entity NFCC Net Financial Contracting Capacity

HRB Highest Rated Bid NGA National Government Agency

HRRB Highest Rated and Responsive Bid NGO Non-Government Organization

IB Invitation to Bid NOA Notice of Awards

ICB International Competitive Bidding NSO National Statistics Office

Information and Communications
ICT NTP Notice to Proceed
Technology
IFI International Financing Institution OS Obligation Slip

IPR Intellectual Property Rights PA Professionals’ Association

Revised Implementing Rules and
IRR PAPs Program, Activities and Programs
Regulations
Implementing Rules and Regulations
IRR-A PBDs Philippine Bidding Documents
Part-A of RA 9184

166
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

Philippine Constructors Association,

PCA ROW Right-of-Way
Incorporated
Philippine Contractors
PCAB SARO Special Allotment Release Order
Accreditation Board
Philippine Chamber of Commerce and
PCCI SBD Standard Bidding Documents
Industry
Project Evaluation Review Technique /
PERT/CPM SCC Special Conditions of Contract
Critical Path Method

PhilGEPS/ Philippine Government Electronic Securities and Exchange

SEC
GEPS Procurement System Commission

Philippine Institute of Civil

PICE SME Small and Medium Enterprises
Engineers
Philippine Institute of Certified
PICPA SOW Scope of Work
Public Accountants

PMO Project Management Office SRRB Single Rated and Responsive Bid

Philippine National Drug Simplified Supplier’s Registration

PNDF SSRS
Formulary System

PNP Philippine National Police SUC State Universities and Colleges

Project Procurement
PPMP SWA Statement of Work Accomplished
Management Plan
Technical Assistance Coordinating
PR Procurement Request TACT
Team
Professional Regulation
PRC TOR Terms of Reference
Commission
Procurement Watch
PWI TSO Technical Support Office
Incorporated
R.A. Republic Act TWG Technical Working Group
Republic Act No. 9184, otherwise known
United Nations Development
R.A. 9184 as the “Government Procurement UNDB
Business
Reform Act”
REI Request for Expression of Interest VAT Value-Added Tax

RFP Request for Proposal WB The World Bank

RFQ Request for Quotation WFP Work and Financial Plan

RIS Requisition and Issuance Slip

167
MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

ANNEX B. GLOSSARY
Abstract of Bids The corresponding document prepared by the BAC after all bids
have been received, opened, examined, evaluated and ranked.

Abstract of Bidding Documents A summary containing general information on the procurement at

hand that is posted in the PhilGEPS.

Advance payment Refers to any payment made prior to the delivery and acceptance of
Goods, Works, or Consulting Services.

Approved Budget for the Contract The budget for the contract duly approved by the head of the
procuring entity, as provided for in the General Appropriations Act
and/or continuing appropriations, in the case of national
government agencies; the corporate budget for the contract
approved by the governing board, pursuant to Executive Order No.
518, series of 1979 (“E.O. 518”), in the case of GOCCs and GFIs,
and Republic Act No. 8292 in the case of SUCs; and the budget
approved by the Sanggunian in the case of LGUs.

Bids and Awards Committee It is also referred to as the BAC which is established in accordance
with Rule V of the revised IRR of R.A. 9184. It primarily perform the
following functions: (a) advertise and/or post the invitation to
bid/request for expressions of interest; (b) conduct pre-procurement
and pre-bid conferences; (c) determine the eligibility of prospective
bidders; (d) receive bids; (e) conduct the evaluation of bids; (f)
undertake post-qualification proceedings; (g) resolve motions for
reconsideration; (h) recommend award of contracts to the Head of
the Procuring Entity or his duly authorized representative: (i)
recommend the imposition of sanctions in accordance with Rule
XXIII; (j) recommend to the Head of the Procuring Entity the use of
Alternative Methods of Procurement as provided for in Rule XVI
hereof; and (k) perform such other related functions as may be
necessary, including the creation of a Technical Working Group
from a pool of technical, financial, and/or legal experts to assist
in the procurement process, particularly in the eligibility screening,
evaluation of bids, and post-qualification.

Bid A signed offer or proposal to undertake a contract submitted by a

bidder in response to and in consonance with the requirements of
the bidding documents. Also referred to as Proposal and Tender,
particularly when referring to the procurement of consulting
services.

Bid Evaluation The process of determining the Bidder with the Lowest Calculated
Bid or the Highest Rated Bid.

168
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

Bid Opening Date The date specified in the IB for the opening of bids.

Bid Security Cash, check, bank draft, letter of credit, bank guarantee, surety
bond or a foreign government guarantee that serves as a guarantee
that the successful bidder shall not default on his offer, and shall
enter into contract with the Procuring Entity and furnish the
performance security.

Bid Validity A reasonable period determined by the head of the Procuring Entity
concerned, but in no case shall exceed one hundred twenty (120)
calendar days from the date of the opening of bids, wherein a Bid
Security is considered valid.

Bidder An individual or entity that submits a bid. The term includes anyone
acting on behalf of the individual or other entity that submits a bid,
such as agents, employees, and representatives. More specifically,
a contractor, manufacturer, supplier, distributor and/or consultant
competing for the award of a contract in any government
procurement. See Eligible bidder, Prospective bidder.

Bidding Documents The documents issued by the procuring entity as the bases for bids,
furnishing all information necessary for a prospective bidder to
prepare a bid for the infrastructure projects, goods and/or consulting
services required by the procuring entity.

Blacklisting To place on, or as if on, a list of persons or organizations that have

incurred disapproval or suspicion or are to be boycotted or
otherwise penalized.

Brand Name A trade name or product name, which identifies a product as having
been made by a particular manufacturer.

Calculated Bid Price The price of a bid, after taking into account minor arithmetical
corrections to consider computational errors, omissions and
discounts, if allowed.

Civil Works See Infrastructure Projects.

Collusion An agreement between two or more persons, to commit acts to

accomplish a fraudulent or deceitful purpose.

Common-Use Supplies Goods, materials and equipment that are repetitively used in the
day-to-day operations of procuring entities in the performance of
their functions, which are included in the Price List of the
Procurement Service of the Department of Budget and
Management.

169
MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

Competitiveness A principle in Government procurement that allows broad

participation by eligible and qualified suppliers, contractors,
consultants to put forward offers for a project.
Competitive Bidding Use interchangeably with term Public Bidding: It is a method of
procurement which is open to participation by any interested party
and which consists of the following processes: advertisement, pre-
bid conference, eligibility screening of prospective bidders, receipt
and opening of bids, evaluation of bids, post-qualification, and
award of contract.

Communication costs Mail and fax costs, plus cost of advertising, meetings, internet/web
posting and other costs incurred for the dissemination of information
about the bidding.

Conference Notice A formal written communication sent to the participants of the

conference (such as the Pre-procurement, Pre-bid and Post- Award
Conference) informing them when and where the conference will be
held.

Conflict of Interest Refers to a clash between public interest and the private pecuniary
interest of the individual concerned (Black’s law Dictionary, 5th ed.)

Consulting Services Refer to services for Infrastructure Projects and other types of
projects or activities of the Government requiring adequate external
technical and professional expertise that are beyond the capability
and/or capacity of the Government to undertake such as, but not
limited to: (i) advisory and review services; (ii) pre-investment or
feasibility studies; (iii) design; (iv) construction supervision; (v)
management and related services; and (vi) other technical services
or special studies (Sec. 5 i of the revised IRR).

Consolidated Blacklisting Report A report issued by the GPPB that contains a list of people and/or
organizations that are barred from participating in any Government
procurement project.

Consulting Services Services for Infrastructure Projects and other types of projects or
activities of the Government requiring adequate external technical
and professional expertise that are beyond the capability and/or
capacity of the Government to undertake such as, but not limited to:
(i) advisory and review services; (ii) pre-investment or feasibility
studies; (iii) design; (iv) construction supervision; (v) management
and related services; and (vi) other technical services or special
studies.

Contract Completion Project sign-off or acceptance of the project/goods by the end- user.

170
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

Contract Implementation The execution of a contract, covering the following milestones:

effectivity of the contract; contractor’s performance of his
contractual obligations; procuring entity’s performance of its
contractual obligations, as specified in the Contract; final
acceptance or project sign-off; all other related activities; and
payment by the Procuring Entity.

Contractor One who undertakes to perform a work or service, or supply goods

for a public or private entity.

Contract Termination Ending of a contract prior to its completion.

Corrupt practice The offering, giving, receiving, or soliciting of anything of value to

influence the action of a public official in the procurement process
or in contract execution. Compare fraudulent practice.

Cost Recovery Component Direct and indirect costs accounted for in determining the price of
Bidding Documents to be sold to interested suppliers/contractors.

Demand Regulation Component A positive (+) or negative (-) unit amount allocated to the bidding
activity for the purpose of regulating the participation of bidders

Development Cost Costs incurred in developing the original content of the documents,
designs, plans and specifications. The design cost may be excluded
if the same is to be included in the capitalized cost of the project
which is to be recovered from the usage of the completed project
facility.

Direct Costs Costs directly incurred such as development, reproduction, and

communication costs allocated to the bidding activity. See
Communication Cost, Development Cost, Reproduction Cost.
Compare Indirect Costs.

Disclosure The act of disclosing, uncovering, or revealing

Disqualification The act of barring a bidder from further participation in the

procurement at hand, even if, in some instances, it has initially been
declared eligible or post-qualified.

Domestic Bid Any offer of unmanufactured articles, materials, or supplies of the

growth or production of the Philippines, or manufactured articles,
materials or supplies manufactured or to be manufactured in the
Philippines, substantially from articles, materials or supplies of the
growth, production or manufacture, as the case may be, of the
Philippines.

Eligible Bidder A contractor, manufacturer, supplier, distributor or consultant who

meets all the eligibility requirements issued by the procuring entity.

171
MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

Eligibility Refers to the status of a Bidder in relation to its legal, technical and
financial competence to comply with the requirements of the
contract to be bid, as shown by eligibility documents submitted to
and checked by the BAC.

Eligibility Check The process of determining the compliance of Prospective Bidders

with the eligibility requirements prescribed, using a non-
discretionary, “passed/failed” criteria.

Eligibility Screening (see) Eligibility Check.

Financial Bid One of two components comprising a bid, the other being the
Technical Bid.

Force Majeure (see) Fortuitous events.

Foreign Bid Any offer of articles, materials or supplies not manufactured or to be

manufactured in the Philippines, substantially from articles,
materials or supplies of the growth, production, or manufacture, as
the case may be, of the Philippines.

Foreign Supplier A supplier who is not a local supplier.

Fortuitous events It is an event which could not be foreseen, or which though

foreseen, was inevitable. (Art. 1174, Civil Code)

Fraudulent practice Misrepresentation of facts in order to influence a procurement

process or the execution of a contract to the detriment of the
Procuring Entity. Compare corrupt practice.

Goods Refer to all items, supplies, materials and general support services,
except consulting services and infrastructure projects, which may
be needed in the transaction of public businesses or in the pursuit
of any government undertaking, project or activity, whether in the
nature of equipment, furniture, stationery, materials for construction,
or personal property of any kind, including non- personal or
contractual services such as the repair and maintenance of
equipment and furniture, as well as trucking, hauling, janitorial,
security, and related or analogous services, as well as procurement
of materials and supplies provided by the procuring entity for such
services. The term “related” or “analogous services” shall include,
but not be limited to, lease or purchase of office space, media
advertisements, health maintenance services, and other services
essential to the operation of the procuring entity (Sec. 5 r of the
revised IRR).

Head of the Procuring Entity (i) the head of the agency or body, or his duly authorized official, for
NGAs and the constitutional commissions or offices, and
branches of government; (ii) the governing board or its duly
authorized official, for GOCCs, GFIs and SUCs; or (iii) the local
172
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

chief executive, for LGUs: Provided, however, that in an agency,

department, or office where the procurement is decentralized, the
Head of each decentralized unit shall be considered as the head of
the procuring entity subject to the limitations and authority
delegated by the head of the agency, department, or office.
Invitation to Bid This serves as the notice to the public and all interested parties of
the procurement opportunity.

Incidental Services This are services ancillary to the supply of the Goods, such as
transportation and insurance; installation, commissioning, provision
of technical assistance, training, and other such obligations of the
Supplier covered under the contract, RFP, TOR, and/or bidding
documents.

Indirect Costs Costs indirectly incurred such as overhead, supervision, and

administrative costs allocated to the bidding activity. Compare
Direct Costs.

Ineligible Bidder A contractor, manufacturer, supplier, distributor or consultant who

fails to meet any or all of the eligibility requirements issued by the
procuring entity.
Infrastructure Projects Include the construction, improvement, rehabilitation, demolition,
repair, restoration or maintenance of roads and bridges, railways,
airports, seaports, communication facilities, civil works components
of information technology projects, irrigation, flood control and
drainage, water supply, sanitation, sewerage and solid waste
management systems, shore protection, energy/power and
electrification facilities, national buildings, school buildings, hospital
buildings, and other related construction projects of the
government. Referred also as civil works (Sec. 5.u of the revised
IRR).

Inspection Examination and/or testing of merchandise to determine whether it

has been received in the proper quantity and condition and to verify
that it conforms to the applicable specifications.
Latent Defect A defect that is not apparent to the buyer by reasonable
observation. A latent defect is “hidden” or one that is not
immediately determinable.
Liquidated Damages Damages agreed upon by the parties to a contract, to be paid in
case of breach thereof.
Request for Reconsideration In procurement, it is an application made to the BAC for the
purpose of obtaining a rule or order setting aside a previous
decision.

173
MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

Negotiated Procurement An alternative method of procurement of goods, infrastructure

projects and consulting services, whereby the procuring entity
directly negotiates a contract with a technically, legally and
financially capable supplier, contractor or consultant.

Notice of Award The document issued by the HOPE to the bidder to whom the
contract is awarded.

Notice of Eligibility The document issued by the BAC to the eligible bidder/s formally
informing the same that he/she/they met the eligibility requirements
issued by the procuring entity.

Notice of Ineligibility The document issued by the BAC to the bidder/s who failed to meet
any or all of the eligibility requirements issued by the procuring
entity.

Notice of Post-qualification The document issued by the BAC to the bidder with LCB whose bid
is found responsive.

Notice to Proceed The document issued by the Head of the Procuring Entity to the
winning bidder to proceed with the implementation of the contract.

Observer One who is invited to attend and observe all stages of the
procurement, especially: the pre-bid conference; opening of bids;
bid evaluation; post-qualification; contract award; and special
meetings of the BAC.

Patent Defect A defect that is apparent to the buyer on normal observation. An

apparent or obvious defect.

Performance Security A security posted by the winning bidder to guarantee the faithful
performance by the same of its obligations under the contract
prepared in accordance with the bidding documents.

Portal A website that integrates a wide variety of contents for the

purpose of attracting and aggregating multiple users together in a
central virtual space.

Post-qualification The process of validating and verifying the documents, information

and statements made in the Eligibility Documents by the Bidder
who submitted the Lowest Calculated Bid, as well as ascertaining
the said Bidder’s compliance with the legal, financial and technical
requirements of the bid.

Post-qualification Report The report prepared by the TWG containing the findings/results of
the post-qualification conducted on the bidder with the LCB or HRB,
as the case may be.

174
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

Pre-bid Conference It is the forum where the Procuring Entity’s representatives and the
Prospective Bidders discuss the different aspects of the
procurement at hand.

Pre-procurement Conference It is the forum called by the BAC for procurements undertaken
through public bidding, where all officials involved in the
procurement meet and discuss all aspects of the transaction,
including the technical specifications, the Approved Budget for the
Contract, the applicability and appropriateness of the recommended
method of procurement and the milestones, the bidding
documents, availability of the pertinent budget release for the
project / contract, among others.

Procurement The acquisition of Goods, Consulting Services, and the contracting

for Infrastructure Projects b Cthe Procuring Entity. Procurement
shall also include the lease of goods and real estate. With respect
to real property, its procurement shall be governed by the
provisions of R.A. 8974 and other applicable laws, rules and
regulations.

Procurement Observation Report The report submitted by the Observer to the Head of the Procuring
Entity based on the procurement checklist.

Procurement Unit Refers to the organic office of the Procuring Entity that carries out
the procurement function.

Procuring Entity Any branch, constitutional commission or office, agency,

department, bureau, office, or instrumentality of the Government,
including GOCC, GFI, SUC and LGU procuring Goods, Consulting
Services and Infrastructure Projects.

Project Management Office The unit/office/department of the procuring entity that is primarily
responsible for implementing and managing a project.

Proposal (see) Bid.

Protest A formal declaration made by a person interested or concerned in

some acts to be done, or already performed, whereby he expresses
his dissent or disapproval, or affirms the act against his will. The
object of such declaration is usually to save some right which would
be lost to him if his implied anent could be made nil, or to exonerate
himself from some responsibility which would attach to him unless
he expressly negate his assent (Black’s Law Dictionary, 5th Ed.)

Provincial bidder A contractor who participates in the bidding of provincial priority

programs and infrastructure projects as defined in Section 44 of the
revised IRR of R.A. 9184, and whose principal office is within the
same province.

175
MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

Public Bidding (see) Competitive Bidding.

Public Monitoring It is one of the governing principles of public procurement which

seeks to ascertain compliance of a procuring entity to the provisions
of R.A. 9184 and its revised IRR.
Reproduction cost It is the labor, supplies and equipment rental costs incurred in the
reproduction of the documents.
Request for Clarification A written request submitted by the bidder to the BAC, asking the
latter to clarify a particular provision of the Bidding Documents.
Request for Proposal A written request for proposals concerning goods or services the
government intends to acquire by means of alternative method of
procurement such as Shopping or Negotiated Procurement (Small-
value Procurement). The solicitation document used in acquiring
quotations. The procedure allows changes to be made after other
proposals are opened and contemplates that the nature of the
proposals and/or prices offered will be negotiated prior to award.
Spare parts Refer to extra components, equipment, tools, instruments or parts
of machinery or apparatus that replace the ones that are damaged
or worn out.
Specification A description of what the purchaser requires and what a bidder
must offer.

Splitting of Contracts Splitting of Government Contracts means the division or breaking

up of GOP contracts into smaller quantities and amounts, or
dividing contract implementation into artificial phases or sub-
contracts for the purpose of evading or circumventing the
requirements of law and the revised IRR, especially the necessity of
public bidding and the requirements for the alternative methods of
procurement (Section of the revised IRR 54.1)

Standard The established and fixed measure used in assessing quality or

performance.

Subcontractor One who takes a specific part of the work undertaken by the
principal contractor (Black’s Law Dictionary, 5th Ed.)

Submitted bid price The bid price as indicated in the financial proposal submitted by the
bidder.

Supplemental/Bid bulletin A notice issued by the Procuring Entity to Prospective Bidders with
respect to any clarifications or modifications in the Bidding
Documents, including those affecting the technical specifications,
eligibility requirements, procurement schedule, and other similar
matters.

176
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

Technical Bid One of two components comprising a bid, the other being the
Financial Bid.

Tender (see) Bid.

Warranty An undertaking by the supplier, manufacturer or distributor to

guarantee that it will correct any manufacturing defects of the goods
procured by the government.

177
MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

ANNEX C. REFERENCES

REFERENCE
REFERENCE NO. NAME OF ADMINISTRATIVE ISSUANCE NUMBER AND TITLE DATE OF EFFECTIVITY

Administrative Order No. 2006-0004 (Guidelines for the

REFERENCE A: 13 MARCH 2006
Issuance of Certificate of Need to Establish a New Hospital)

Administrative Order No. 2006-0004-A (Amendment to

REFERENCE B: Administrative Order No. 2006-004: Guidelines for the Issuance 27 JANUARY 2007
of Certificate of Need to Establish a New Hospital)

Administrative Order No. 2006-0004-B (Amendment to

Certain Provisions of Administrative Order No. 2006-0004- A
REFERENCE C: 17 JUNE 2009
on the Guidelines for the Issuance of Certificate of Need
to Establish a New Hospital

Administrative Order No. 2006-0034 (Delegation of Authorities

REFERENCE D: for certain Transactions in the Offices under the Department 10 OCTOBER 2006
of Health)

Administrative Order No. 2006-0034-A: Amendment of

Administrative Order No. 2006-0034 “Delegation of
REFERENCE E: 07 DECEMBER 2009
Authorities for Certain Transactions in the Offices under the
Department of Health” dated October 10, 2006

178
 SECTION 9

SAMPLE FORMS
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

A. PROJECT PROCUREMENT MANAGEMENT PLAN

PROJECT PROCUREMENT MANAGEMENT PLAN

CAPITAL OUTLAY
ADMINISTRATIVE SERVICE

CY 2009

CONTRACT PACKAGE (Discription) FUNDING EXPECTED USE OF

TOTAL PROPOSED
UNIT SOURCE GOODS
QUANTITY UNIT COST REMARKS
ITEMS (per categoryt) DISCRIPTION PROPOSED (Specify whether COMMENCEMENT PROCUREMENT
ABC GOP of FAPs) OF SERVICES METHOD
Construction of MMD Warehouse 2010
1 LOT 9,933,252.67 9,933,252.67 GOP 4TH QTR. PUBLIC BIDDING
BUDGET
Roofing works
Downspout
Concrete/Masonry Works
Ceiling Works
Painting Works
Structural Works
Purlins & Sag rods
Roof Beam
Electrical Works
Insulation Works
Other Works
Total Budget Amount 9,933,252.67
Adjusted Amount with 10%

Requested by: Recommending Approval: Approved by:

181
MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

B. ANNUAL PROCUREMENT PLAN

DEPARTMENT OF HEALTH ANNUAL PROCUREMENT PLAN CY 2010

EXPECTED
TOTAL COST/ TIME OF
TOTAL REQUESTING FUNDING MODE OF
ITEMS SPECIFICATIONS UNIT UNIT COST PROPOSED USE OF
QUANTITY OFFICE SOURCE PROCUREMENT
ABC GOODS OR
SERVICES

Construction of
Construction of MMD
MMD 1 LOT 9,933,252.67 9,933,252.67 NCHP GOP 4TH QTR. BIDDING
Warehouse
Warehouse

SUB - TOTAL 9,933,252.67 9,933,252.67

182
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

C. SUBMISSION OF PROCUREMENT REQUEST

Republic of the Philippines

Department of Health
BIDS AND AWARDS COMMITTEE

09 August 2010

XYZ
Director
Procurement Service
This Department

Dear Dir. XYZ,

We are respectfully forwarding the following documents submitted by Dir. ABC, Administrative
Service per memorandum dated August 3, 2010 for the proposed procurement of Design and
Build for the Construction of MMD Warehouse Extension and Repair/Renovation/Elevation of
MMD Warehouse, DOH Compound, Manila:

1. Scope of Works
2. Terms of Reference
3. Detailed Estimates
4. Existing Floor Plans
5. Proposed Floor Plans
6. Sections
7. Elevations
8. Supplemental APP

For immediate procurement work. Thank you very much.

Very truly yours,

(Sgd.) ARCH. MRP

Director
NCHFD

183
MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

D. NOTICE OF PRE-PROCUREMENT CONFERENCE

Republic of the Philippines

Department of Health
BIDS AND AWARDS COMMITTEE

NOTICE OF MEETING

FOR: Vice Chairperson

COBAC Regular Member
COBAC Regular Member
COBAC Regular Member
End-user

FROM: COBAC Chairperson

SUBJECT: Pre-Procurement Conference for the procurement of Design and Build for the
Constructions of Material and Management Warehouse Extension and
Repair/Renovation/elevation of MMD Warehouse

DATE: 24 August 2010, Wednesday, 10:30 A.M.

WHERE: COBAC Conference Room

1st Floor, Bldg. #6, San Lazaro Compound,
Department of Health, Sta. Cruz, Manila

For details and confirmation, please contact BAC Secretariat at 651-7800 local 1601-1602;
1608; 1624-1627; 1649-1651.

184
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

E. MINUTES OF PRE-PROCUREMENT CONFERENCE

Republic of the Philippines

Department of Health
BIDS AND AWARDS COMMITTEE

Pre-Procurement Conference for the procurement of Design and Build for the Constructions of
Material and Management Warehouse Extension and Repair/Renovation/Elevation of
MMD Warehouse
IB NO. 2010-09-27
24 August 2010

Present:

1. VICE-CHAIRPERSON
2. REGULAR MEMBER
3. REGULAR MEMBER
4. END-USER MEMBER
5. END-USER MEMBER
6. TWG MEMBER
7. BAC SECRETARIAT
8. BAC SECRETARIAT

The Pre-Procurement meeting took place as scheduled on 24 August 2010, 1:00 pm at the BAC
Conference Room, F/F, Building 6, Department of Health, San Lazaro Compound, Sta. Cruz, Manila. The
meeting was called to order by Dir. ABC, BAC Vice Chairperson.

The following requirements for the pre-procurement in accordance with the IRR Section 20.1 of the Revised
Implementing Rules and Regulations of Republic Act No. 9184 were discussed by BAC.

1. Procurement is in accordance with the Supplemental APP for 2010.

2. Approved Budget for the Contract (ABC) amounting to Nine Million Nine Hundred Thirty-Three
Thousand Two Hundred Fifty-Two and 67/100 Philippine Pesos (PhP 9,933,252.67).

3. Readiness of the procurement at hand, including among others aspects, the following:
a. The detailed engineering investigations, surveys and designs.
b. Adherence of the bidding documents, technical plans, specifications and scope of work to
relevant general procurement guidelines.

4. Invitation to Bid for publication on 04 September 2010 in leading newspaper of general

circulation and posting at PhilGEPS and DOH websites.

5. Completion of Works is required by 120 calendar days.

185
MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

6. Review, modify and agree on the criteria for eligibility screening, evaluation and post
qualification.

7. Review and adopt the procurement schedule, including deadlines and time frames, for different
activities.

8. Reiterate and emphasize the importance of confidentiality, in accordance with the IRR Section
19 and the applicable sanctions and penalties, as well as agree on measures to ensure
compliance with the foregoing.

Having no other matters to be discussed, the pre-procurement adjourned at 1:30 P.M.

Prepared by: Approved by:

MS. ABC DIR. ABC

BAC Secretariat BAC Chairperson

186
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

F. DEPARTMENT PERSONNEL ORDER

Republic of the Philippines

Department of Health
BIDS AND AWARDS COMMITTEE

12 March 2010

DEPARTMENT PERSONNEL ORDER

BAC NO. 2010-________

SUBJECT: Composition of Technical Working Group (TWG) re: Procurement of Design and Build for
the Constructions of Material and Management Warehouse Extension and Repair/
Renovation/ Elevation of MMD Warehouse IB NO. 2010-09-27:

Relative to the bidding for the Procurement of Design and Build for the Constructions of Material and
Management Warehouse Extension and Repair/Renovation/Elevation of MMD Warehouse IB NO. 2010-09-
27, the following are hereby designated as members of the Technical Working Group:

1. Chairperson
2. Vice-Chairperson
3. Member
4. Member
5. Member

The Committee is expected to submit their recommendation and technical evaluation report seven (7) days
upon receipt of the proposals at the office of the undersigned.

Under this order, the above listed personnel are entitled to claim all expenses incurred such as meal,
gasoline and other incidental expenses related to the above activity, chargeable against the funds of the
Procurement System Development Fund subject to the usual accounting and auditing rules and regulations.

BAC CHAIRPERSON

187
MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

G. INVITATION TO BID

Republic of the Philippines

Department of Health
BIDS AND AWARDS COMMITTEE

INVITATION TO BID

PROCUREMENT OF DESIGN AND BUILD FOR THE CONSTRUCTIONS OF MATERIAL AND

MANAGEMENT WAREHOUSE EXTENSION AND REPAIR/RENOVATION/ELEVATION OF MMD
WAREHOUSE, DOH COMPOUND, MANILA
IB NO. 2010-09-27

1. The Department of Health (DOH), through the General Appropriations Act CY 2010 intends to apply
the sum of Nine Million Nine Hundred Thirty Three Thousand Two Hundred Fifty Pesos and Sixty
Seven Centavos (PhP9,933,252.67) being the Approved Budget for the Contract (ABC) to payments
under the contract for the Procurement of Constructions of Material and Management Warehouse
Extension and Repair/Renovation/Elevation of MMD Warehouse IB NO. 2010-09-27. Bids received in
excess of the ABC shall be automatically rejected at bid opening.

2. The DOH now invites bids for the procurement of the above-caption package. Completion of the
Works is required by One Hundred Twenty (120) calendar days. Bidders should have completed,
within ten (10) years from the date of submission and receipt of bids, a contract similar to the Project.
The description of an eligible bidder is contained in the Bidding Documents, particularly, in Section II.
Instructions to Bidders.

3. Bidding will be conducted through open competitive bidding procedures using a non-discretionary
“passed/failed” criterion as specified in the Implementing Rules and Regulations (IRR) of Republic
Act (R.A.) 9184, otherwise known as the “Government Procurement Reform Act.”

Bidding is restricted to Filipino citizens/sole proprietorships, partnerships, or organizations with

at least sixty percent (60%) interest or outstanding capital stock belonging to citizens of the
Philippines, and to citizens or organizations of a country the laws or regulations of which grant
similar rights or privileges to Filipino citizens, pursuant to R.A. 5183 and subject to Commonwealth
Act 138.

4. Interested bidders may obtain further information from the BAC Secretariat, 3/F, Building 6,
Department of Health, San Lazaro Compound, Sta. Cruz, Manila and inspect the Bidding Documents
at the address given above during 8:00 am to 5:00 P.M.

5. A complete set of Bidding Documents may be purchased by interested Bidders on 03-21 May 2010
from the address below and upon payment of a nonrefundable fee for the Bidding Documents in the
amount of Three Thousand Philippine Pesos (Php3,000.00).

188
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

It may also be downloaded free of charge from the website of the Philippine Government Electronic
Procurement System (PhilGEPS) and the website of the Procuring Entity, provided that Bidders shall
pay the nonrefundable fee for the Bidding Documents not later than the submission of their bids.

6. The DOH will hold a Pre-Bid Conference on 13 September 2010; 2:00 p.m. at BAC Conference Room,
Building 6, which shall be open only to all interested parties who have purchased the Bidding
Documents.

Only bidders who purchase the bidding documents are allowed to attend and ask questions.

7. Bids must be delivered to the address below on or before September 27, 2010; 9:00 A.M.
All Bids must be accompanied by a bid security in any of the acceptable forms and in the amount
stated in ITB Clause 18.

Bids will be opened in the presence of the Bidders’ representatives who choose to attend at the
address below. Late bids shall not be accepted.

8. The DOH reserves the right to accept or reject any Bid, to annul the bidding process, to reject all Bids
and may not award the contract without incurring any liability and make no assurance that a contract
shall be entered into as a result of the bidding when the funds for the program/project activity has been
withheld ore reduced though no fault of the DOH at any time prior to contract award, without thereby
incurring any liability to the affected Bidder or Bidders.

For further information, please refer to:

BAC Secretariat
Department of Health
San Lazaro Compound Sta. Cruz, Manila
Tel. Nos. 651-7800 local 1601-1602; 1608; 1624-1627; 1649-1651
Facsimile No.: 741-9775

(SIGNATURE OVER PRINTED NAME)

BAC CHAIRPERSON

189
MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

H. BID DATA SHEET

ITB Clause
1.1 The Procuring Entity is Department of Health (DOH). The identification of the
contract is IB No. 2010-0927
2 The Funding Source is:
The Government of the Philippines (GOP) through General Appropriations Act CY
2009 in the amount of Nine Million, Nine Hundred Thirty Three Thousand, Two
Hundred Fifty Two Pesos and Sixty Seven Centavos (PhP9,933,252.67).

The name of the Project is: “Design and Build for the Construction of MMD
Warehouse Extension and Repair/Renovation/Elevation of MMD Warehouse, DOH
Compound, Manila “
4.1 All DOH personnel are expected to uphold the Code of Conducts of DOH (AO
#2007-0042 Norms of Behavior for Officials and Employees of the DOH) in each
dealing with all procurement activities including declaring conflict of interest when
determined at any stage of process and consequently inhibiting him/her in any
deliberation and activities thereafter.
5.1 As State Party of the World Health Organization, Framework Convention on
Tobacco Control (FCTC) ratified as treaty on April 2005, the DOH prohibits
participation of any bidder with any current engagement and/or partnership, joint
sponsorship or any other activity with the tobacco industry.
5.2 Bidding is restricted to eligible bidders as defined in ITB Clause 5.1.
5.4 The Bidder must have completed, within ten (10) years from the submission of bids,
a single contract that is similar to this Project, equivalent to at least fifty percent
(50%) of the ABC.
For this purpose, similar contracts shall refer to pre-detail design, detailed design
and construction for the construction of MMD Warehouse
5.5 No further instructions.
6.3 No further instructions.
7 No further instructions.
8.1 “Subcontracting is allowed
8.2 “Not applicable”.
9.1 The Procuring Entity will hold a pre-bid conference for this Project on:
September 13, 2010 @ 2:00 pm
Department of Health
BAC Conference Room
Ground Floor, Building 6, San Lazaro Compound, Rizal Avenue
Sta. Cruz, Manila 1003
“Only bidders who purchased the bidding documents are allowed to attend or
ask questions.”
10.1 The Procuring Entity’s address is:
Ground Floor, Building No. 6
Department of Health
San Lazaro Compound, Rizal Avenue
Sta. Cruz, 1003 Manila
BAC Secretariat: 651-7800 local 1601-1602; 1608; 1624-1627; 1649-1651
190
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

12.1 The Bidder shall submit the following Eligibility and Technical Documents
arranged, numbered and tabbed as enumerated below.
Eligibility Documents –
Class “A” Documents:
1. Registration certificate from the Securities and Exchange Commission (SEC),
including articles of incorporation, Department of Trade and Industry (DTI) for
sole proprietorship, or Cooperative Development Authority (CDA) for
cooperatives, or any proof of such registration;
2. Mayor’s permit issued by the city or municipality where the principal place of
business of the prospective bidder is located.
3. Statement of all its ongoing and completed government and private contracts
within the last ten (10) years, including contracts awarded but not yet started, if
any. The statement shall include, for each contract, the following:
a. name of the contract;
b. date of the contract;
c. contract duration;
d. owner’s name and address;
e. nature of work;
f. contractor’s role (whether sole contractor, subcontractor, or partner in a JV)
and percentage of participation;
g. total contract value at award;
h. date of completion or estimated completion time;
i. total contract value at completion, if applicable;
j. percentages of planned and actual accomplishments, if applicable;
k. value of outstanding works, if applicable;
The statement shall be supported by the notices of award and/or notices
to proceed issued by the owners; and
The statement shall be supported by the Constructors Performance
Evaluation System (CPES) rating sheets, and/or certificates of completion
and owner’s acceptance, if applicable;
4. Valid Philippine Contractors Accreditation Board (PCAB) license and registration
for the type and cost of the contract for this Project – Small B License Category C
& D, General Building
5. Audited financial statements, stamped “received” by the Bureau of Internal
Revenue (BIR) or its duly accredited and authorized institutions, for the preceding
calendar year, which should not be earlier than two (2) years from bid
submission;
6. NFCC computation or Credit Line Certificate (CLC) From a Universal or
Commercial Bank in accordance with ITB Clause 5.5;
In lieu of 1, 2,4 and 5 the Bidder may submit a certified true copy of valid and
current SSRS Certificate issued by the DOH.
Class “B” Document:
7. If applicable, the JVA in case the joint venture is already in existence, or duly
notarized statements from all the potential joint venture partners stating that they
will enter into and abide by the provisions of the JVA in the instance that the bid is
successful; and
Technical Documents
8. The bid security in the form amount, and one hundred twenty 120 calendar days
validity period in accordance with ITB Clause 18 and in BDS 18.2.
191
MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

9. Project Requirements, which shall include the following:

a. Organizational chart for the contract to be bid;
b. List of contractor’s personnel (viz, Project Manager, Project Architect and
Engineers), to be assigned to the contract to be bid, with their complete
qualification and experience data, thus, will include submission of :
 Curriculum vitae; and
 PRC license, if applicable ; and
 Other proof to gauge compliance to requirement for at least one for
the following technical personnel in the Pre-detailed Design and
Detailed Design Preparation. The following list is however
comprehensive, the prospective bidders shall input the necessary
expertise and number of personnel required to complete the project
and stages from Pre-detailed Design and Detailed Design
Preparation then implementation. To wit:
Personnel Minimum qualification
Project Coordinator Licensed Architect or Engineer
At least 10 years experience in overall project
management
Excellent oral and written communication and
organization skills and administrative abilities.
Architect Licensed Architect
At least 5 years licensed and preferably with training
and/or experience in Design and Build Project
Proficient in Autocad software
Civil/Structural Licensed Civil Engineer
Engineer Preferably at least 5 years licensed and preferably with
training and/or experience on Design and Build Project
Proficient in Autocad software
Mechanical Licensed Professional Mechanical Engineer
engineer Preferably at least 5 years licensed preferably with
training and/or experience in Design and Build Project
Proficient in Autocad softwares
Electrical Engineer Licensed Professional Electrical Engineer
Preferably at least 5 years licensed and preferably with
training and/or experience in Design and Build Project
Proficient in Autocad software
Sanitary Engineer Licensed Sanitary Engineer
Preferably at least 3 years licensed and preferably with
training and/or experience in Design and Build Project
Proficient in Autocad software
CADD Operator At least Bachelor’s Degree in Architecture or
Engineering
Proficient in Autocad software
c. List of contractor’s equipment units, which are owned, leased, and/or
under purchase agreements, supported by certification of availability of
equipment from the equipment lessor/vendor for the duration of the
project;
192
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

d. Construction schedule and S-Curve;

e. Manpower Schedule;
f. Construction Method in narrative form;
g. Equipment Utilization Schedule;
h. Construction Safety and Health Program;
i. PERT/CPM;
j. Affidavit of Site Inspection;
k. Summary of Works;
10. Sworn statement in accordance with Section 25.2(b)(iv) of the IRR of RA
9184 and using the form prescribed in Section IX Bidding Forms
11. Authority of the signatory
12. Certification of least one single similar contract (BDS 5.4) of whose cost it
at least 50% of the project’s ABC with the CPES rating and/or certificate of
completion and owner’s acceptance of the contract must be satisfactory, if
already finished.
Failure to observe any of the above responsibilities shall be at the risk of the
prospective bidder or eligible bidder concerned. For this purpose, a bidder shall
execute a sworn statement attesting to the foregoing responsibilities, to be
submitted by the bidder as an annex to its technical proposal.
13.1 The Bidder shall submit the following Financial Documents arranged, numbered
and tabbed as enumerated below.
a. Financial Bid Form in accordance with the form prescribed in Section IX, Bidding
Form;
b. Bid prices in Bill of Quantities in the prescribed Bid Form; Bid Prices should be
supported by signed detailed estimates with corresponding prices.
c. Detailed estimates of project including a summary sheet indicating the unit
prices of construction materials, labor rates and equipment rentals or other cost
items computed in coming up with the Bid;
d. Cash Flow by quarter and payments schedule;
13.2 The ABC is Nine Million, Nine Hundred Thirty Three Thousand, Two Hundred Fifty
Two Pesos and Sixty Seven Centavos (PhP 9,933,252.67).

Any bid with a financial component exceeding the TOTAL amount shall not be
accepted.
14.2 “No further instructions.”
15.4 Bid Prices shall be fixed. Adjustable price proposals shall be treated as non-
responsive and shall be rejected.
Price escalation may be allowed in extraordinary circumstances as may be
determined by the National Economic and Development Authority in accordance
with the Civil Code of the Philippines, and upon the recommendation of the
Procuring Entity.
16.1 The bid prices shall be quoted in Philippine Pesos.
16.3 No further instructions.
17.1 Bids will be valid for one hundred twenty (120) calendar days from the Opening of
Bids.
18.1 The bid security shall be in the following amount:
1. 2% of ABC, if bid security is in cash, cashier’s/manager’s check, bank
draft/guarantee or irrevocable letter of credit;
193
MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

2. 5% of the ABC, If bid security is in the form of a surety bond callable upon
demand issued by a surety or insurance company duly certified by the
Insurance Commission as authorized to issue such security.
3. Any combination of the foregoing proportionate to the share of form with
respect to total amount of security.
18.2 The bid security shall be valid until one hundred twenty (120) calendar days from the
Opening of bids.
18(a)(iv) The following as additional grounds for forfeiture of bid security:
1. Submission of eligibility requirements containing false information or falsified
documents.
2. Submission of bids that contain false information or falsified documents, or
the concealment of such information in the bids in order to influence the
outcome of eligibility screening or any other stage of the public bidding.
3. Allowing the use of one’s name, or using the name of another for purposes
of public bidding.
4. Withdrawal of a bid, or refusal to accept an award, or enter into contract with
the Government without justifiable cause, after the Bidder had been
adjudged as having submitted the Lowest Calculated and Responsive Bid.
5. Refusal or failure to post the required performance security within the
prescribed time.
6. Refusal to clarify or validate in writing its bid during post-qualification within
a period of seven (7) calendar days from receipt of the request for
clarification.
7. Any documented unsolicited attempt by a bidder to unduly influence the
outcome of the bidding in his favor.
8. Failure of the potential joint venture partners to enter into the joint venture
after the bid is declared as successful.
9. 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.
18(b)(iii) No further instructions.
20.1 No further instructions.
20.3 Each Bidder shall submit one (1) original and two (2) copies of the first and second
components of its bid.
21 The address for submission of bids is:
BAC Conference Room, Ground Floor, Building 6
Department of Health, San Lazaro Compound , Sta. Cruz, Manila
The deadline for submission of bids is:
September 27, 2010 @ 11:00 am
24.1 The place of bid opening is:
Department of Health
BAC Conference Room, Ground Floor, Building 6
San Lazaro Compound, Sta. Cruz, Manila

The date and time of bid opening is September 27, 2010 @ 11:00 am
25.1 No further instructions.
27.3 No further instructions.
194
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

27(d) Bid modification is not allowed.

27.5 No further instructions.
28(b) Bidders have option to submit manually filed tax returns or tax returns filed through
the Electronic Filing and Payments System (EFPS).
NOTE: The latest income and business tax returns are those within the last six (6)
months preceding the date of bid submission.
28(d) The LCB shall submit the following documentary requirements within a non-
extendible period of three (3) calendar days from receipt of the notification:
a. Tax clearance certificate issued by BIR main office Collection Enforcement
Division (per Executive Order 398, Series of 2005);
b. Latest Annual Tax Return filed thru Electronic Filing and Payment System
(EFPS) and must be duly validated with the tax payments made thereon for the
preceding Tax Year be it on a calendar or fiscal year income (per Revenue
Regulations 3-2005);
c. Latest Business Tax Return filed thru Electronic Filing and Payment System
(EFPS) duly validated with the tax payments made thereon also refers to the
Value Added Tax (VAT) or Percentage Tax Returns covering the previous six
(6) months (per Revenue Regulations 3-2005);
d. Valid and current Certificate of PhilGEPS Registration;
31(g) “No additional Requirements.”
33.2 The effective date of the Contract is the date of the Contractor’s receipt of the Notice
to Proceed.

195
MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

I. GENERAL CONDITIONS OF THE CONTRACT

1. Definitions

For purposes of this Clause, boldface type is used to identify defined terms.

1.1 The Arbiter is the person appointed jointly by the Procuring Entity and the Contractor to resolve
disputes in the first instance, as provided for in GCC Clause 21.

1.2 Bill of Quantities refers to a list of the specific items of the Work and their corresponding unit prices,
lump sums, and/or provisional sums.

1.3 The Completion Date is the date of completion of the Works as certified by the Procuring Entity’s
Representative, in accordance with GCC Clause 49.

1.4 The Contract is the contract between the Procuring Entity and the Contractor to execute, complete, and
maintain the Works.

1.5 The Contract Price is the price stated in the Letter of Acceptance and thereafter to be paid by the
Procuring Entity to the Contractor for the execution of the Works in accordance with this Contract.

1.6 Contract Time Extension is the allowable period for the Contractor to complete the Works in addition to
the original Completion Date stated in this Contract.

1.7 The Contractor is the juridical entity whose proposal has been accepted by the Procuring Entity and to
whom the Contract to execute the Work was awarded.

1.8 The Contractor’s Bid is the signed offer or proposal submitted by the Contractor to the Procuring Entity
in response to the Bidding Documents.

1.9 Days are calendar days; months are calendar months.

1.10 Dayworks are varied work inputs subject to payment on a time basis for the Contractor’s employees
and Equipment, in addition to payments for associated Materials and Plant.

1.11 A Defect is any part of the Works not completed in accordance with the Contract.

1.12 The Defects Liability Certificate is the certificate issued by Procuring Entity’s Representative upon
correction of defects by the Contractor.

1.13 The Defects Liability Period is the one year period between project completion and final acceptance
within which the Contractor assumes the responsibility to undertake the repair of any damage to the
Works at his own expense.

1.14 Drawings are graphical presentations of the Works. They include all supplementary details, shop
drawings, calculations, and other information provided or approved for the execution of this Contract.

1.15 Equipment refers to all facilities, supplies, appliances, materials or things required for the execution and
completion of the Work provided by the Contractor and which shall not form or are not intended to form
part of the Permanent Works.

196
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

1.16 The Intended Completion Date refers to the date specified in the SCC when the Contractor is expected
to have completed the Works. The Intended Completion Date may be revised only by the Procuring
Entity’s Representative by issuing an extension of time or an acceleration order.

1.17 Materials are all supplies, including consumables, used by the Contractor for incorporation in the
Works.

1.18 The Notice to Proceed is a written notice issued by the Procuring Entity or the Procuring Entity’s
Representative to the Contractor requiring the latter to begin the commencement of the work not later
than a specified or determinable date.

1.19 Permanent Works all permanent structures and all other project features and facilities required to be
constructed and completed in accordance with this Contract which shall be delivered to the Procuring
Entity and which shall remain at the Site after the removal of all Temporary Works.

1.20 Plant refers to the machinery, apparatus, and the like intended to form an integral part of the Permanent
Works.

1.21 The Procuring Entity is the party who employs the Contractor to carry out the Works stated in the SCC.

1.22 The Procuring Entity’s Representative refers to the Head of the Procuring Entity or his duly
authorized representative, identified in the SCC, who shall be responsible for supervising the execution
of the Works and administering this Contract.

1.23 The Site is the place provided by the Procuring Entity where the Works shall be executed and any other
place or places which may be designated in the SCC, or notified to the Contractor by the Procuring
Entity’s Representative as forming part of the Site.

1.24 Site Investigation Reports are those that were included in the Bidding Documents and are factual and
interpretative reports about the surface and subsurface conditions at the Site.

1.25 Slippage is a delay in work execution occurring when actual accomplishment falls below the target as
measured by the difference between the scheduled and actual accomplishment of the Work by the
Contractor as established from the work schedule. This is actually described as a percentage of the
whole Works.

1.26 Specifications means the description of Works to be done and the qualities of materials to be used, the
equipment to be installed and the mode of construction.

1.27 The Start Date, as specified in the SCC, is the date when the Contractor is obliged to commence
execution of the Works. It does not necessarily coincide with any of the Site Possession Dates.

1.28 A Subcontractor is any person or organization to whom a part of the Works has been subcontracted by
the Contractor, as allowed by the Procuring Entity, but not any assignee of such person.

1.29 Temporary Works are works designed, constructed, installed, and removed by the Contractor that are
needed for construction or installation of the Permanent Works.

1.30 Work(s) refer to the Permanent Works and Temporary Works to be executed by the Contractor in
accordance with this Contract, including (i) the furnishing of all labor, materials, equipment and others
incidental, necessary or convenient to the complete execution of the Works; (ii) the passing of any tests
before acceptance by the Procuring Entity’s Representative; (iii) and the carrying out of all duties and
obligations of the Contractor imposed by this Contract as described in the SCC.

197
MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

2. Interpretation

2.1 In interpreting the Conditions of Contract, singular also means plural, male also means female or neuter,
and the other way around. Headings have no significance. Words have their normal meaning under the
language of this Contract unless specifically defined. The Procuring Entity’s Representative will provide
instructions clarifying queries about the Conditions of Contract.

2.2 If sectional completion is specified in the SCC, references in the Conditions of Contract to the Works, the
Completion Date, and the Intended Completion Date apply to any Section of the Works (other than
references to the Completion Date and Intended Completion Date for the whole of the Works).

3. Governing Language and Law

3.1 This Contract has been executed in the English language, which shall be the binding and controlling
language for all matters relating to the meaning or interpretation of this Contract. All correspondence
and other documents pertaining to this Contract which are exchanged by the parties shall be written in
English.

3.2 This Contract shall be interpreted in accordance with the laws of the Republic of the Philippines.

4. Communications

Communications between parties that are referred to in the Conditions shall be effective only when in writing. A
notice shall be effective only when it is received by the concerned party.

5. Possession of Site

5.1 On the date specified in the SCC, the Procuring Entity shall grant the Contractor possession of so much
of the Site as may be required to enable it to proceed with the execution of the Works. If the Contractor
suffers delay or incurs cost from failure on the part of the Procuring Entity to give possession in
accordance with the terms of this clause, the Procuring Entity’s Representative shall give the Contractor
a Contract Time Extension and certify such sum as fair to cover the cost incurred, which sum shall be
paid by Procuring Entity.

5.2 If possession of a portion is not given by the date stated in the SCC Clause 5.1, the Procuring Entity will
be deemed to have delayed the start of the relevant activities. The resulting adjustments in contact time
to address such delay shall be in accordance with GCC Clause 47.

5.3 The Contractor shall bear all costs and charges for special or temporary right-of-way required by it in
connection with access to the Site. The Contractor shall also provide at his own cost any additional
facilities outside the Site required by it for purposes of the Works.

5.4 The Contractor shall allow the Procuring Entity’s Representative and any person authorized by the
Procuring Entity’s Representative access to the Site and to any place where work in connection with this
Contract is being carried out or is intended to be carried out.

6. The Contractor’s Obligations

6.1 The Contractor shall carry out the Works properly and in accordance with this Contract. The Contractor
shall provide all supervision, labor, Materials, Plant and Contractor's Equipment, which may be required.
All Materials and Plant on Site shall be deemed to be the property of the Procuring Entity.

198
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

6.2 The Contractor shall commence execution of the Works on the Start Date and shall carry out the Works
in accordance with the Program of Work submitted by the Contractor, as updated with the approval of
the Procuring Entity’s Representative, and complete them by the Intended Completion Date.

6.3 The Contractor shall be responsible for the safety of all activities on the Site.

6.4 The Contractor shall carry out all instructions of the Procuring Entity’s Representative that comply with
the applicable laws where the Site is located.

6.5 The Contractor shall employ the key personnel named in the Schedule of Key Personnel, as referred to
in the SCC, to carry out the supervision of the Works. The Procuring Entity will approve any proposed
replacement of key personnel only if their relevant qualifications and abilities are equal to or better than
those of the personnel listed in the Schedule.

6.6 If the Procuring Entity’s Representative asks the Contractor to remove a member of the Contractor’s
staff or work force, for justifiable cause, the Contractor shall ensure that the person leaves the Site
within seven (7) days and has no further connection with the Work in this Contract.

6.7 During Contract implementation, the Contractor and his subcontractors shall abide at all times by all
labor laws, including child labor related enactments, and other relevant rules.

6.8 The Contractor shall submit to the Procuring Entity for consent the name and particulars of the person
authorized to receive instructions on behalf of the Contractor.

6.9 The Contractor shall cooperate and share the Site with other contractors, public authorities, utilities, and
the Procuring Entity between the dates given in the schedule of other contractors particularly when they
shall require access to the Site. The Contractor shall also provide facilities and services for them during
this period. The Procuring Entity may modify the schedule of other contractors, and shall notify the
Contractor of any such modification thereto.

6.10 Should anything of historical or other interest or of significant value be unexpectedly discovered on the
Site, it shall be the property of the Procuring Entity. The Contractor shall notify the Procuring Entity’s
Representative of such discoveries and carry out the Procuring Entity’s Representative’s instructions in
dealing with them.

7. Performance Security

7.1 Unless otherwise specified in the SCC, within ten (10) calendar days from receipt of the Notice of Award
from the Procuring Entity but in no case later than the signing of the contract by both parties, the
Contractor shall furnish the performance security in any the forms prescribed in ITB Clause 32.2.

7.2 The performance security posted in favor of the Procuring Entity shall be forfeited in the event it is
established that the Contractor is in default in any of its obligations under the Contract.

7.3 The performance security shall remain valid until issuance by the Procuring Entity of the Certificate of
Final Acceptance.

7.4 The performance security may be released by the Procuring Entity and returned to the Contractor after
the issuance of the Certificate of Final Acceptance subject to the following conditions:

a. There are no pending claims against the Contractor or the surety company filed by the Procuring
Entity;

199
MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

b. The Contractor has no pending claims for labor and materials filed against it; and

c. Other terms specified in the SCC.

7.5 The Contractor shall post an additional performance security following the amount and form specified in
ITB Clause 32.2 to cover any cumulative increase of more than ten percent (10%) over the original
value of the contract as a result of amendments to order or change orders, extra work orders and
supplemental agreements, as the case may be. The Contractor shall cause the extension of the validity
of the performance security to cover approved contract time extensions.

7.6 In case of a reduction in the contract value or for partially completed Works under the contract which are
usable and accepted by the Procuring Entity the use of which, in the judgment of the implementing
agency or the Procuring Entity, will not affect the structural integrity of the entire project, the Procuring
Entity shall allow a proportional reduction in the original performance security, provided that any such
reduction is more than ten percent (10%) and that the aggregate of such reductions is not more than fifty
percent (50%) of the original performance security.

7.7 The Contractor, by entering into the Contract with the Procuring Entity, acknowledges the right of the
Procuring Entity to institute action pursuant to Act 3688 against any subcontractor be they an individual,
firm, partnership, corporation, or association supplying the Contractor with labor, materials and/or
equipment for the performance of this Contract.

8. Subcontracting

8.1 Unless otherwise indicated in the SCC, the Contractor cannot subcontract Works more than the
percentage specified in ITB Clause 8.1.

8.2 Subcontracting of any portion of the Works does not relieve the Contractor of any liability or obligation
under this Contract. The Contractor will be responsible for the acts, defaults, and negligence of any
subcontractor, its agents, servants or workmen as fully as if these were the Contractor’s own acts,
defaults, or negligence, or those of its agents, servants or workmen.

8.3 Subcontractors disclosed and identified during the bidding may be changed during the implementation of
this Contract, subject to compliance with the required qualifications and the approval of the Procuring
Entity.

9. Liquidated Damages

9.1 The Contractor shall pay liquidated damages to the Procuring Entity at the rate per day stated in the
SCC for each day that the Completion Date is later than the Intended Completion Date. The total
amount of liquidated damages shall not exceed the amount defined in the SCC. The Procuring Entity
may deduct liquidated damages from payments due to the Contractor. Payment of liquidated damages
shall not affect the Contractor. Once the cumulative amount of liquidated damages reaches ten percent
(10%) of the amount of this Contract, the Procuring Entity shall rescind this Contract, without prejudice
to other courses of action and remedies open to it.

9.2 If the Intended Completion Date is extended after liquidated damages have been paid, the Engineer of
the Procuring Entity shall correct any overpayment of liquidated damages by the Contractor by adjusting
the next payment certificate. The Contractor shall be paid interest on the overpayment, calculated from
the date of payment to the date of repayment, at the rates specified in GCC Clause 40.1.

200
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

10. Site Investigation Reports

The Contractor, in preparing the Bid, shall rely on any Site Investigation Reports referred to in the SCC
supplemented by any information obtained by the Contractor.

11. The Procuring Entity, Licenses and Permits

The Procuring Entity shall, if requested by the Contractor, assist him in applying for permits, licenses or
approvals, which are required for the Works.

12. Contractor’s Risk and Warranty Security

12.1 The Contractor shall assume full responsibility for the Works from the time project construction
commenced up to final acceptance by the Procuring Entity and shall be held responsible for any
damage or destruction of the Works except those occasioned by force majeure. The Contractor shall be
fully responsible for the safety, protection, security, and convenience of his personnel, third parties, and
the public at large, as well as the Works, Equipment, installation, and the like to be affected by his
construction work.

12.2 The defects liability period for infrastructure projects shall be one year from project completion up to final
acceptance by the Procuring Entity. During this period, the Contractor shall undertake the repair works,
at his own expense, of any damage to the Works on account of the use of materials of inferior quality
within ninety (90) days from the time the Head of the Procuring Entity has issued an order to undertake
repair. In case of failure or refusal to comply with this mandate, the Procuring Entity shall undertake
such repair works and shall be entitled to full reimbursement of expenses incurred therein upon demand.

12.3 In case the Contractor fails to comply with the preceding paragraph, the Procuring Entity shall forfeit its
performance security, subject its property (ies) to attachment or garnishment proceedings, and
perpetually disqualify it from participating in any public bidding. All payables of the GOP in his favor shall
be offset to recover the costs.

12.4 After final acceptance of the Works by the Procuring Entity, the Contractor shall be held responsible for
“Structural Defects”, i.e., major faults/flaws/deficiencies in one or more key structural elements of the
project which may lead to structural failure of the completed elements or structure, or “Structural
Failures”, i.e., 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:

a. Contractor – Where Structural Defects/Failures arise due to faults attributable to improper

construction, use of inferior quality/substandard materials, and any violation of the contract plans
and specifications, the contractor shall be held liable;

b. Consultants – Where Structural Defects/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;

c. Procuring Entity’s Representatives/Project Manager/Construction Managers and Supervisors – The

project owner’s representative(s), project manager, construction manager, 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;

201
MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

d. Third Parties - Third Parties shall be held liable in cases where Structural Defects/Failures are
caused by work undertaken by them such as leaking pipes, diggings or 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 construction 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.

12.5 The warranty against Structural Defects/Failures, except those occasioned on force majeure, shall cover
the period specified in the SCC reckoned from the date of issuance of the Certificate of Final
Acceptance by the Procuring Entity.

12.6 The Contractor shall be required to put up a warranty security in the form of cash, bank guarantee, letter
of credit, GSIS or surety bond callable on demand, in accordance with the following schedule:

Minimum Amount in Percentage (%)

Form of Warranty
of Total Contract Price
Cash or letter of credit issued by Universal
or Commercial bank: provided, however,
that the letter of credit shall be confirmed or
Five Percent (5%)
authenticated by a Universal or
Commercial bank, if issued by a foreign
bank
Bank guarantee confirmed by Universal or
Commercial bank: provided, however, that the letter
of credit shall be confirmed or authenticated by a Ten Percent (10%)
Universal or Commercial bank, if issued by a foreign
bank
Surety bond callable upon demand issued by GSIS
or any surety or insurance company duly certified by Thirty Percent (30%)
the Insurance Commission

12.7 The warranty security shall be stated in Philippine Pesos and shall remain effective for one year from the
date of issuance of the Certificate of Final Acceptance by the Procuring Entity, and returned only after
the lapse of said one year period.

12.8 In case of structural defects/failure occurring during the applicable warranty period provided in GCC
Clause12.5, the Procuring Entity shall undertake the necessary restoration or reconstruction works and
shall be entitled to full reimbursement by the parties found to be liable for expenses incurred therein
upon demand, without prejudice to the filing of appropriate administrative, civil, and/or criminal charges
against the responsible persons as well as the forfeiture of the warranty security posted in favor of the
Procuring Entity.

13. Liability of the Contractor

Subject to additional provisions, if any, set forth in the SCC, the Contractor’s liability under this Contract shall be
as provided by the laws of the Republic of the Philippines.

202
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

14. Procuring Entity’s Risk

14.1 From the Start Date until the Certificate of Final Acceptance has been issued, the following are risks of
the Procuring Entity:

a. The risk of personal injury, death, or loss of or damage to property (excluding the Works, Plant,
Materials, and Equipment), which are due to:

i. Any type of use or occupation of the Site authorized by the Procuring Entity after the
official acceptance of the works; or

ii. Negligence, breach of statutory duty, or interference with any legal right by the
Procuring Entity or by any person employed by or contracted to him except the
Contractor.

b. The risk of damage to the Works, Plant, Materials, and Equipment to the extent that it is due to a
fault of the Procuring Entity or in the Procuring Entity’s design, or due to war or radioactive
contamination directly affecting the country where the Works are to be executed.

15. Insurance

15.1 The Contractor shall, under his name and at his own expense, obtain and maintain, for the duration of
this Contract, the following insurance coverage:

a. Contractor’s All Risk Insurance;

b. Transportation to the project Site of Equipment, Machinery, and Supplies owned by the Contractor;

c. Personal injury or death of Contractor’s employees; and

d. Comprehensive insurance for third party liability to Contractor’s direct or indirect act or omission
causing damage to third persons.

15.2 The Contractor shall provide evidence to the Procuring Entity’s Representative that the insurances
required under this Contract have been effected and shall, within a reasonable time, provide copies of
the insurance policies to the Procuring Entity’s Representative. Such evidence and such policies shall
be provided to the Procuring Entity’s through the Procuring Entity’s Representative.

15.3 The Contractor shall notify the insurers of changes in the nature, extent, or program for the execution of
the Works and ensure the adequacy of the insurances at all times in accordance with the terms of this
Contract and shall produce to the Procuring Entity’s Representative the insurance policies in force
including the receipts for payment of the current premiums.

15.4 The above insurance policies shall be obtained from any reputable insurance company approved by the
Procuring Entity’s Representative.

15.5 If the Contractor fails to obtain and keep in force the insurances referred to herein or any other
insurance which he may be required to obtain under the terms of this Contract, the Procuring Entity may
obtain and keep in force any such insurances and pay such premiums as may be necessary for the
purpose. From time to time, the Procuring Entity may deduct the amount it shall pay for said premiums
including twenty five percent (25%) therein from any monies due, or which may become due, to the
Contractor, without prejudice to the Procuring Entity exercising its right to impose other sanctions
against the Contractor pursuant to the provisions of this Contract.

203
MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

15.6 In the event the Contractor fails to observe the above safeguards, the Procuring Entity may, at the
Contractor’s expense, take whatever measure is deemed necessary for its protection and that of the
Contractor’s personnel and third parties, and/or order the interruption of dangerous Works. In addition,
the Procuring Entity may refuse to make the payments under GCC Clause 40 until the Contractor
complies with this Clause.

15.7 The Contractor shall immediately replace the insurance policy obtained as required in this Contract,
without need of the Procuring Entity’s demand, with a new policy issued by a new insurance company
acceptable to the Procuring Entity for any of the following grounds:

The issuer of the insurance policy to be replaced has:

a. become bankrupt;

b. been placed under receivership or under a management committee;

c. been sued for suspension of payment; or

d. been suspended by the Insurance Commission and its license to engage in business or its authority
to issue insurance policies cancelled; or

e. Where reasonable grounds exist that the insurer may not be able, fully and promptly, to fulfill its
obligation under the insurance policy.

16. Termination for Default of Contractor

16.1 The Procuring Entity shall terminate this Contract for default when any of the following conditions attend
its implementation:

16.2 Due to the Contractor’s fault and while the project is on-going, it has incurred negative slippage of fifteen
percent (15%) or more in accordance with Presidential Decree 1870, regardless of whether or not
previous warnings and notices have been issued for the Contractor to improve his performance;

16.3 Due to its own fault and after this Contract time has expired, the Contractor incurs delay in the
completion of the Work after this Contract has expired; or

16.4 The Contractor:

a. Abandons the contract Works, refuses or fails to comply with a valid instruction of the Procuring
Entity or fails to proceed expeditiously and without delay despite a written notice by the Procuring
Entity;

b. Does not actually have on the project Site the minimum essential equipment listed on the Bid
necessary to prosecute the Works in accordance with the approved Program of Work and
equipment deployment schedule as required for the project;

c. Does not execute the Works in accordance with this Contract or persistently or flagrantly neglects to
carry out its obligations under this Contract;

d. Neglects or refuses to remove materials or to perform a new Work that has been rejected as
defective or unsuitable; or

e. Sub-lets any part of this Contract without approval by the Procuring Entity.

204
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

16.5 All materials on the Site, Plant, Equipment, and Works shall be deemed to be the property of the
Procuring Entity if this Contract is rescinded because of the Contractor’s default.

17. Termination for Default of Procuring Entity

The Contractor may terminate this Contract with the Procuring Entity if the works are completely stopped
for a continuous period of at least sixty (60) calendar days through no fault of its own, due to any of the
following reasons:

a. Failure of the Procuring Entity to deliver, within a reasonable time, supplies, materials, right-of-way,
or other items it is obligated to furnish under the terms of this Contract; or

b. The prosecution of the Work is disrupted by the adverse peace and order situation, as certified by
the Armed Forces of the Philippines Provincial Commander and approved by the Secretary of
National Defense.

18. Termination for Other Causes

18.1 The Procuring Entity may terminate this Contract, in whole or in part, at any time for its convenience.
The Head of the Procuring Entity may terminate this Contract for the convenience of the Procuring Entity
if he has determined the existence of conditions that make Project Implementation economically,
financially or technically impractical and/or unnecessary, such as, but not limited to, fortuitous event(s)
or changes in law and National Government policies.

18.2 The Procuring Entity or the Contractor may terminate this Contract if the other party causes a
fundamental breach of this Contract.

18.3 Fundamental breaches of Contract shall include, but shall not be limited to, the following:

a. The Contractor stops work for twenty eight (28) days when no stoppage of work is shown on
the current Program of Work and the stoppage has not been authorized by the Procuring
Entity’s Representative;

b. The Procuring Entity’s Representative instructs the Contractor to delay the progress of the
Works, and the instruction is not withdrawn within twenty eight (28) days;

c. The Procuring Entity shall terminate this Contract if the Contractor is declared bankrupt or
insolvent as determined with finality by a court of competent jurisdiction. In this event,
termination will be without compensation to the Contractor, provided that such termination will
not prejudice or affect any right of action or remedy which has accrued or will accrue thereafter
to the Procuring Entity and/or the Contractor. In the case of the Contractor's insolvency, any
Contractor's Equipment which the Procuring Entity instructs in the notice is to be used until the
completion of the Works;

d. A payment certified by the Procuring Entity’s Representative is not paid by the Procuring Entity
to the Contractor within eighty four (84) days from the date of the Procuring Entity’s
Representative’s certificate;

e. The Procuring Entity’s Representative gives Notice that failure to correct a particular Defect is a
fundamental breach of Contract and the Contractor fails to correct it within a reasonable period
of time determined by the Procuring Entity’s Representative;

f. The Contractor does not maintain a Security, which is required;

205
MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

g. The Contractor has delayed the completion of the Works by the number of days for which the
maximum amount of liquidated damages can be paid, as defined in the GCC Clause 9; and

h. In case it is determined prima facie by the Procuring Entity that the Contractor has engaged,
before or during the implementation of the contract, in unlawful deeds and behaviors relative to
contract acquisition and implementation, such as, but not limited to, the following:

i. Corrupt, fraudulent, collusive and coercive practices as defined in ITB Clause 3.1 (a);

ii. Drawing up or using forged documents;

iii. Using adulterated materials, means or methods, or engaging in production contrary to

rules of science or the trade; and

iv. Any other act analogous to the foregoing.

18.4 The Funding Source or the Procuring Entity, as appropriate, will seek to impose the maximum civil,
administrative and/or criminal penalties available under the applicable law on individuals and organizations
deemed to be involved with corrupt, fraudulent, or coercive practices.

18.5 When persons from either party to this Contract gives notice of a fundamental breach to the Procuring
Entity’s Representative in order to terminate the existing contract for a cause other than those listed under
GCC Clause 18.3, the Procuring Entity’s Representative shall decide whether the breach is fundamental or
not.

18.6 If this Contract is terminated, the Contractor shall stop work immediately, make the Site safe and secure, and
leave the Site as soon as reasonably possible.

19. Procedures for Termination of Contracts

19.1 The following provisions shall govern the procedures for the termination of this Contract:

a. Upon receipt of a written report of acts or causes which may constitute ground(s) for termination as
aforementioned, or upon its own initiative, the Implementing Unit shall, within a period of seven (7)
calendar days, verify the existence of such ground(s) and cause the execution of a Verified Report,
with all relevant evidence attached;

b. Upon recommendation by the Implementing Unit, the Head of the Procuring Entity shall terminate this
Contract only by a written notice to the Contractor conveying the termination of this Contract. The
notice shall state:

i. That this Contract is being terminated for any of the ground(s) afore-mentioned, and a
statement of the acts that constitute the ground(s) constituting the same;

ii. Extent of termination, whether in whole or in part;

iii. An instruction to the Contractor to show cause as to why this Contract should not be
terminated; and

iv. Special instructions of the Procuring Entity, if any.

v. The Notice to Terminate shall be accompanied by a copy of the Verified Report;

206
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

c. Within a period of seven (7) calendar days from receipt of the Notice of Termination, the Contractor
shall submit to the Head of the Procuring Entity a verified position paper stating why the contract
should not be terminated. If the Contractor fails to show cause after the lapse of the seven (7) day
period, either by inaction or by default, the Head of the Procuring Entity shall issue an order
terminating the contract;

d. The Procuring Entity may, at anytime before receipt of the Bidder’s verified position paper to withdraw
the Notice to Terminate if it is determined that certain items or works subject of the notice had been
completed, delivered, or performed before the Contractor’s receipt of the notice;

e. Within a non-extendible period of ten (10) calendar days from receipt of the verified position paper, the
Head of the Procuring Entity shall decide whether or not to terminate this Contract. It shall serve a
written notice to the Contractor of its decision and, unless otherwise provided in the said notice, this
Contract is deemed terminated from receipt of the Contractor of the notice of decision. The
termination shall only be based on the ground(s) stated in the Notice to Terminate; and

f. The Head of the Procuring Entity may create a Contract Termination Review Committee (CTRC) to
assist him in the discharge of this function. All decisions recommended by the CTRC shall be subject
to the approval of the Head of the Procuring Entity.

19.2 Pursuant to Section 69(f) of RA 9184 and without prejudice to the imposition of additional administrative
sanctions as the internal rules of the agency may provide and/or further criminal prosecution as provided by
applicable laws, the procuring entity shall impose on contractors after the termination of the contract the
penalty of suspension for one (1) year for the first offense, suspension for two (2) years for the second
offense from participating in the public bidding process, for violations committed during the contract
implementation stage, which include but not limited to the following:

a. Failure of the contractor, due solely to his fault or negligence, to mobilize and start work or
performance within the specified period in the Notice to Proceed (“NTP”);

b. Failure by the contractor to fully and faithfully comply with its contractual obligations without valid
cause, or failure by the contractor to comply with any written lawful instruction of the procuring entity
or its representative(s) pursuant to the implementation of the contract. For the procurement of
infrastructure projects or consultancy contracts, lawful instructions include but are not limited to the
following:

i. Employment of competent technical personnel, competent engineers and/or work supervisors;

ii. Provision of warning signs and barricades in accordance with approved plans and
specifications and contract provisions;

iii. Stockpiling in proper places of all materials and removal from the project site of waste and
excess materials, including broken pavement and excavated debris in accordance with
approved plans and specifications and contract provisions;

iv. Deployment of committed equipment, facilities, support staff and manpower; and

v. Renewal of the effectivity dates of the performance security after its expiration during the
course of contract implementation.

c. Assignment and subcontracting of the contract or any part thereof or substitution of key personnel
named in the proposal without prior written approval by the procuring entity.

207
MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

d. Poor performance by the contractor or unsatisfactory quality and/or progress of work arising from his
fault or negligence as reflected in the Constructor's Performance Evaluation System (“CPES”) rating
sheet. In the absence of the CPES rating sheet, the existing performance monitoring system of the
procuring entity shall be applied. Any of the following acts by the constructor shall be construed as
poor performance:

i. Negative slippage of 15% and above within the critical path of the project due entirely to the
fault or negligence of the contractor; and

ii. Quality of materials and workmanship not complying with the approved specifications arising
from the contractor's fault or negligence.

e. Willful or deliberate abandonment or non-performance of the project or contract by the contractor

resulting to substantial breach thereof without lawful and/or just cause.

f. In addition to the penalty of suspension, the performance security posted by the contractor shall also
be forfeited.

20. Force Majeure, Release From Performance

20.1 For purposes of this Contract the terms “force majeure” and “fortuitous event” may be used interchangeably.
In this regard, a fortuitous event or force majeure shall be interpreted to mean an event which the Contractor
could not have foreseen, or which though foreseen, was inevitable. It shall not include ordinary unfavorable
weather conditions; and any other cause the effects of which could have been avoided with the exercise of
reasonable diligence by the Contractor.

20.2 If this Contract is discontinued by an outbreak of war or by any other event entirely outside the control of
either the Procuring Entity or the Contractor, the Procuring Entity’s Representative shall certify that this
Contract has been discontinued. The Contractor shall make the Site safe and stop work as quickly as
possible after receiving this certificate and shall be paid for all works carried out before receiving it and for
any Work carried out afterwards to which a commitment was made.

20.3 If the event continues for a period of eighty four (84) days, either party may then give notice of termination,
which shall take effect twenty eight (28) days after the giving of the notice.

20.4 After termination, the Contractor shall be entitled to payment of the unpaid balance of the value of the Works
executed and of the materials and Plant reasonably delivered to the Site, adjusted by the following:

a. Any sum to which the Contractor is entitled under GCC Clause 28;

b. The cost of his suspension and demobilization;

c. Any sum to which the Procuring Entity is entitled.

20.5 The net balance due shall be paid or repaid within a reasonable time period from the time of the notice of
termination.

21. Resolution of Disputes

21.1 If any dispute or difference of any kind whatsoever shall arise between the parties in connection with the
implementation of the contract covered by the Act and this IRR, the parties shall make every effort to resolve
amicably such dispute or difference by mutual consultation.

208
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

21.2 If the Contractor believes that a decision taken by the PROCURING ENTITY’s Representative was either
outside the authority given to the PROCURING ENTITY’s Representative by this Contract or that the
decision was wrongly taken, the decision shall be referred to the Arbiter indicated in the SCC within fourteen
(14) days of the notification of the PROCURING ENTITY’s Representative’s decision.

21.3 Any and all disputes arising from the implementation of this Contract covered by the R.A. 9184 and its IRR
shall be submitted to arbitration in the Philippines according to the provisions of Republic Act No. 876,
otherwise known as the “ Arbitration Law” and Republic Act 9285, otherwise known as the “Alternative
Dispute Resolution Act of 2004”: Provided, however, That, disputes that are within the competence of the
Construction Industry Arbitration Commission to resolve shall be referred thereto. The process of arbitration
shall be incorporated as a provision in this Contract that will be executed pursuant to the provisions of the
Act and its IRR-A: Provided, further, That, by mutual agreement, the parties may agree in writing to resort to
other alternative modes of dispute resolution. Additional instructions on resolution of disputes, if any, shall
be indicated in the SCC.

22. Suspension of Loan, Credit, Grant, or Appropriation

22.1 In the event that the Funding Source suspends the Loan, Credit, Grant, or Appropriation to the Procuring
Entity, from which part of the payments to the Contractor are being made:

22.2 The Procuring Entity is obligated to notify the Contractor of such suspension within seven (7) days of having
received the suspension notice.

22.3 If the Contractor has not received sums due it for work already done within forty five (45) days from the time
the Contractor’s claim for payment has been certified by the Procuring Entity’s Representative, the
Contractor may immediately issue a suspension of work notice in accordance with SCC Clause 45.2.

23. Procuring Entity’s Representative’s Decisions

23.1 Except where otherwise specifically stated, the Procuring Entity’s Representative will decide contractual
matters between the Procuring Entity and the Contractor in the role representing the Procuring Entity’s

23.2 The Procuring Entity’s Representative may delegate any of his duties and responsibilities to other people,
except to the Arbiter, after notifying the Contractor, and may cancel any delegation after notifying the
Contractor.

24. Approval of Drawings and Temporary Works by the Procuring Entity’s Representative

24.1 All Drawings prepared by the Contractor for the execution of the Temporary Works, are subject to prior
approval by the Procuring Entity’s Representative before its use.

24.2 The Contractor shall be responsible for design of Temporary Works.

24.3 The Procuring Entity’s Representative’s approval shall not alter the Contractor’s responsibility for design of
the Temporary Works.

24.4 The Contractor shall obtain approval of third parties to the design of the Temporary Works, when required by
the Procuring Entity.

25. Acceleration and Delays Ordered by the Procuring Entity’s Representative

25.1 When the Procuring Entity wants the Contractor to finish before the Intended Completion Date, the Procuring
Entity’s Representative will obtain priced proposals for achieving the necessary acceleration from the

209
MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

Contractor. If the Procuring Entity accepts these proposals, the Intended Completion Date will be adjusted
accordingly and confirmed by both the Procuring Entity and the Contractor.

25.2 If the Contractor’s Financial Proposals for acceleration are accepted by the Procuring Entity, they are
incorporated in the Contract Price and treated as a Variation.

26. Extension of the Intended Completion Date

26.1 The Procuring Entity’s Representative shall extend the Intended Completion Date if a Variation is issued
which makes it impossible for the Intended Completion Date to be achieved by the Contractor without taking
steps to accelerate the remaining work, which would cause the Contractor to incur additional costs. Unless
specified in the SCC, no payment shall be made for any event which may warrant the extension of the
Intended Completion Date.

26.2 The Procuring Entity’s Representative shall decide whether and by how much to extend the Intended
Completion Date within twenty one (21) days of the Contractor asking the Procuring Entity’s Representative
for a decision thereto after fully submitting all supporting information. If the Contractor has failed to give early
warning of a delay or has failed to cooperate in dealing with a delay, the delay by this failure shall not be
considered in assessing the new Intended Completion Date.

27. Right to Vary

27.1 The Procuring Entity’s Representative with the prior approval of the Procuring Entity may instruct Variations,
up to a maximum cumulative amount of ten percent (10%) of the original contract cost.

27.2 Variations shall be valued as follows:

a. At a lump sum price agreed between the parties;

b. where appropriate, at rates in this Contract;

c. in the absence of appropriate rates, the rates in this Contract shall be used as the basis for valuation;
or failing which

d. at appropriate new rates, equal to or lower than current industry rates and to be agreed upon by both
parties and approved by the Head of the Procuring Entity.

28. Contractors Right to Claim

If the Contractor incurs cost as a result of any of the events under GCC Clause 13, the Contractor shall be
entitled to the amount of such cost. If as a result of any of the said events, it is necessary to change the Works,
this shall be dealt with as a Variation.

29. Dayworks

29.1 Subject to GCC Clause 43 on Variation Order, and if applicable as indicated in the SCC, the Dayworks rates
in the Contractor’s Bid shall be used for small additional amounts of work only when the Procuring Entity’s
Representative has given written instructions in advance for additional work to be paid for in that way.

29.2 All work to be paid for as Dayworks shall be recorded by the Contractor on forms approved by the Procuring
Entity’s Representative. Each completed form shall be verified and signed by the Procuring Entity’s
Representative within two days of the work being done.

29.3 The Contractor shall be paid for Dayworks subject to obtaining signed Dayworks forms.
210
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

30. Early Warning

30.1 The Contractor shall warn the Procuring Entity’s Representative at the earliest opportunity of specific likely
future events or circumstances that may adversely affect the quality of the work, increase the Contract Price,
or delay the execution of the Works. The Procuring Entity’s Representative may require the Contractor to
provide an estimate of the expected effect of the future event or circumstance on the Contract Price and
Completion Date. The estimate shall be provided by the Contractor as soon as reasonably possible.

30.2 The Contractor shall cooperate with the Procuring Entity’s Representative in making and considering
proposals for how the effect of such an event or circumstance can be avoided or reduced by anyone involved
in the work and in carrying out any resulting instruction of the Procuring Entity’s Representative.

31. Program of Work

31.1 Within the time stated in the SCC, the Contractor shall submit to the Procuring Entity’s Representative for
approval a Program of Work showing the general methods, arrangements, order, and timing for all the
activities in the Works.

31.2 An update of the Program of Work shall the show the actual progress achieved on each activity and the
effect of the progress achieved on the timing of the remaining work, including any changes to the sequence
of the activities.

31.3 The Contractor shall submit to the Procuring Entity’s Representative for approval an updated Program of
Work at intervals no longer than the period stated in the SCC. If the Contractor does not submit an updated
Program of Work within this period, the PROCURING ENTITY’s Representative may withhold the amount
stated in the SCC from the next payment certificate and continue to withhold this amount until the next
payment after the date on which the overdue Program of Work has been submitted.

31.4 The Procuring Entity’s Representative’s approval of the Program of Work shall not alter the Contractor’s
obligations. The Contractor may revise the Program of Work and submit it to the Procuring Entity’s
Representative again at any time. A revised Program of Work shall show the effect of any approved
Variations; and if allowed, any Compensation Event.

31.5 When the Program of Work is updated, the Contractor shall provide the Procuring Entity’s Representative
with an updated cash flow forecast. The cash flow forecast shall include different currencies, as defined in
the Contract, converted as necessary using the Contract exchange rates.

31.6 All Variations shall be included in updated Program of Work produced by the Contractor.

32. Management Conferences

32.1 Either the Procuring Entity’s Representative or the Contractor may require the other to attend a Management
Conference. The Management Conference shall review the plans for remaining work and deal with matters
raised in accordance with the early warning procedure.

32.2 The Procuring Entity’s Representative shall record the business of Management Conferences and provide
copies of the record to those attending the Conference and to the Procuring Entity. The responsibility of the
parties for actions to be taken shall be decided by the PROCURING ENTITY’s Representative either at the
Management Conference or after the Management Conference and stated in writing to all who attended the
Conference.

211
MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

33. Bill of Quantities

33.1 The Bill of Quantities shall contain items of work for the construction, installation, testing, and commissioning
of work to be done by the Contractor.

33.2 The Bill of Quantities is used to calculate the Contract Price. The Contractor is paid for the quantity of the
work done at the rate in the Bill of Quantities for each item.

33.3 If the final quantity of any work done differs from the quantity in the Bill of Quantities for the particular item
and is not more than twenty five percent (25%) of the original quantity, provided the aggregate changes for
all items do not exceed ten percent (10%) of the Contract price, the Procuring Entity’s Representative shall
make the necessary adjustments to allow for the changes subject to applicable laws, rules, and regulations.

33.4 If requested by the Procuring Entity’s Representative, the Contractor shall provide the Procuring Entity’s
Representative with a detailed cost breakdown of any rate in the Bill of Quantities.

34. Instructions, Inspections and Audits

34.1 The Procuring Entity’s personnel shall at all reasonable times during construction of the Work be entitled to
examine, inspect, measure and test the materials and workmanship, and to check the progress of the
construction.

34.2 If the Procuring Entity’s Representative instructs the Contractor to carry out a test not specified in the
Specification to check whether any work has a defect and the test shows that it does, the Contractor shall
pay for the test and any samples. If there is no defect, the test shall be a Compensation Event.

34.3 The Contractor shall permit the Funding Source named in the SCC to inspect the Contractor’s accounts and
records relating to the performance of the Contractor and to have them audited by auditors appointed by the
Funding Source, if so required by the Funding Source.

35. Identifying Defects

The Procuring Entity’s Representative shall check the Contractor’s work and notify the Contractor of any defects
that are found. Such checking shall not affect the Contractor’s responsibilities. The Procuring Entity’s
Representative may instruct the Contractor to search uncover defects and test any work that the Procuring
Entity’s Representative considers below standards and defective.

36. Cost of Repairs

Loss or damage to the Works or Materials to be incorporated in the Works between the Start Date and the end of
the Defects Liability Periods shall be remedied by the Contractor at the Contractor’s cost if the loss or damage
arises from the Contractor’s acts or omissions.

37. Correction of Defects

37.1 The Procuring Entity’s Representative shall give notice to the Contractor of any defects before the end of the
Defects Liability Period, which begins at Completion Date up to final acceptance by the Procuring Entity’s
unless otherwise specified in the SCC. The Defects Liability Period shall be extended for as long as defects
remain to be corrected.

37.2 Every time notice of a defect is given, the Contractor shall correct the notified defect within the length of time
specified in the Procuring Entity’s Representative’s notice.

212
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

37.3 The Contractor shall correct the defects which he notices himself before the end of the Defects Liability
Period.

37.4 The Procuring Entity shall certify that all defects have been corrected. If the Procuring Entity considers that
correction of a defect is not essential, he can request the Contractor to submit a quotation for the
corresponding reduction in the Contract Price. If the Procuring Entity accepts the quotation, the
corresponding change in the SCC is a Variation.

38. Uncorrected Defects

38.1 The Procuring Entity shall give the Contractor at least fourteen (14) days notice of his intention to use a third
party to correct a Defect. If the Contractor does not correct the Defect himself within the period, the Procuring
Entity may have the Defect corrected by the third party. The cost of the correction will be deducted from the
Contract Price.

38.2 The use of a third party to correct defects that are uncorrected by the Contractor will in no way relieve the
Contractor of its liabilities and warranties under the Contract.

39. Advance Payment

39.1 The Procuring Entity shall, upon a written request of the contractor which shall be submitted as a contract
document, make an advance payment to the contractor in an amount not exceeding fifteen percent (15%) of
the total contract price, to be made in lump sum or, at the most two, installments according to a schedule
specified in the SCC.

39.2 The advance payment shall be made only upon the submission to and acceptance by the Procuring Entity of
an irrevocable standby letter of credit of equivalent value from a commercial bank, a bank guarantee or a
surety bond callable upon demand, issued by a surety or insurance company duly licensed by the Insurance
Commission and confirmed by the Procuring Entity.

39.3 The advance payment shall be repaid by the Contractor by an amount equal to the percentage of the total
contract price used for the advance payment.

39.4 The contractor may reduce his standby letter of credit or guarantee instrument by the amounts refunded by
the Monthly Certificates in the advance payment.

39.5 The Procuring Entity will provide an Advance Payment on the Contract Price as stipulated in the Conditions
of Contract, subject to the maximum amount stated in SCC Clause 39.1.

40. Progress Payments

40.1 The Contractor may submit a request for payment for Work accomplished. Such request for payment shall
be verified and certified by the Procuring Entity’s Representative/Project Engineer. Except as otherwise
stipulated in the SCC, materials and equipment delivered on the site but not completely put in place shall not
be included for payment.

40.2 The Procuring Entity shall deduct the following from the certified gross amounts to be paid to the contractor
as progress payment:

a. Cumulative value of the work previously certified and paid for.

b. Portion of the advance payment to be recouped for the month.

c. Retention money in accordance with the condition of contract.

213
MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

d. Amount to cover third party liabilities.

e. Amount to cover uncorrected discovered defects in the works.

40.3 Payments shall be adjusted by deducting there from the amounts for advance payments and retention. The
Procuring Entity shall pay the Contractor the amounts certified by the Procuring Entity’s Representative
within twenty eight (28) days from the date each certificate was issued. Unless otherwise indicated in the
SCC, no payment of interest for delayed payments and adjustments shall be made by the Procuring Entity.

40.4 The first progress payment may be paid by the Procuring Entity to the Contractor provided that at least
twenty percent (20%) of the work has been accomplished as certified by the Procuring Entity’s
Representative.

40.5 Items of the Works for which a price of “0” (zero) has been entered will not be paid for by the Procuring Entity
and shall be deemed covered by other rates and prices in the Contract.

41. Payment Certificates

41.1 The Contractor shall submit to the Procuring Entity’s Representative monthly statements of the estimated
value of the work executed less the cumulative amount certified previously.

41.2 The Procuring Entity’s Representative shall check the Contractor’s monthly statement and certify the amount
to be paid to the Contractor.

41.3 The value of Work executed shall:

a. be determined by the Procuring Entity’s Representative;

b. comprise the value of the quantities of the items in the Bill of Quantities completed; and

c. include the valuations of approved variations.

41.4 The Procuring Entity’s Representative may exclude any item certified in a previous certificate or reduce the
proportion of any item previously certified in any certificate in the light of later information.

42. Retention

42.1 The Procuring Entity shall retain from each payment due to the Contractor an amount equal to a percentage
thereof using the rate as specified in SCC Clause 42.2.

42.2 Progress payments are subject to retention of ten percent (10%), unless otherwise specified in the SCC,
referred to as the “retention money.” Such retention shall be based on the total amount due to the
Contractor prior to any deduction and shall be retained from every progress payment until fifty percent (50%)
of the value of Works, as determined by the Procuring Entity, are completed. If, after fifty percent (50%)
completion, the Work is satisfactorily done and on schedule, no additional retention shall be made;
otherwise, the ten percent (10%) retention shall again be imposed using the rate specified therefor.

42.3 The total “retention money” shall be due for release upon final acceptance of the Works. The Contractor
may, however, request the substitution of the retention money for each progress billing with irrevocable
standby letters of credit from a commercial bank, bank guarantees or surety bonds callable on demand, of
amounts equivalent to the retention money substituted for and acceptable to the Procuring Entity, provided
that the project is on schedule and is satisfactorily undertaken. Otherwise, the ten (10%) percent retention
shall be made. Said irrevocable standby letters of credit, bank guarantees and/or surety bonds, to be posted
in favor of the Government shall be valid for a duration to be determined by the concerned implementing
214
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

office/agency or Procuring Entity and will answer for the purpose for which the ten (10%) percent retention is
intended, i.e., to cover uncorrected discovered defects and third party liabilities.

42.4 On completion of the whole Works, the Contractor may substitute retention money with an “on demand”
Bank guarantee in a form acceptable to the Procuring Entity.

43. Variation Orders

43.1 Variation Orders may be issued by the Procuring Entity to cover any increase/decrease in quantities,
including the introduction of new work items that are not included in the original contract or reclassification of
work items that are either due to change of plans, design or alignment to suit actual field conditions resulting
in disparity between the preconstruction plans used for purposes of bidding and the “as staked plans” or
construction drawings prepared after a joint survey by the Contractor and the Procuring Entity after award of
the contract, provided that the cumulative amount of the Variation Order does not exceed ten percent (10%)
of the original project cost. The addition/deletion of Works should be within the general scope of the project
as bid and awarded. The scope of works shall not be reduced so as to accommodate a positive Variation
Order. A Variation Order may either be in the form of a Change Order or Extra Work Order.

43.2 A Change Order may be issued by the implementing official to cover any increase/decrease in quantities of
original Work items in the contract.

43.3 An Extra Work Order may be issued by the implementing official to cover the introduction of new work
necessary for the completion, improvement or protection of the project which were not included as items of
Work in the original contract, such as, where there are subsurface or latent physical conditions at the site
differing materially from those indicated in the contract, or where there are duly unknown physical conditions
at the site of an unusual nature differing materially from those ordinarily encountered and generally
recognized as inherent in the Work or character provided for in the contract.

43.4 Any cumulative Variation Order beyond ten percent (10%) shall be subject of another contract to be bid out if
the works are separable from the original contract. In exceptional cases where it is urgently necessary to
complete the original scope of work, the Head of the Procuring Entity may authorize a positive Variation
Order go beyond ten percent (10%) but not more than twenty percent (20%) of the original contract price,
subject to the guidelines to be determined by the GPPB: Provided, however, That appropriate sanctions shall
be imposed on the designer, consultant or official responsible for the original detailed engineering design
which failed to consider the Variation Order beyond ten percent (10%).

43.5 In claiming for any Variation Order, the Contractor shall, within seven (7) calendar days after such work has
been commenced or after the circumstances leading to such condition(s) leading to the extra cost, and within
twenty-eight (28) calendar days deliver a written communication giving full and detailed particulars of any
extra cost in order that it may be investigated at that time. Failure to provide either of such notices in the time
stipulated shall constitute a waiver by the contractor for any claim. The preparation and submission of
Variation Orders are as follows:

a. If the Procuring Entity’s representative/Project Engineer believes that a Change Order or Extra
Work Order should be issued, he shall prepare the proposed Order accompanied with the notices
submitted by the Contractor, the plans therefore, his computations as to the quantities of the
additional works involved per item indicating the specific stations where such works are needed, the
date of his inspections and investigations thereon, and the log book thereof, and a detailed estimate
of the unit cost of such items of work, together with his justifications for the need of such Change
Order or Extra Work Order, and shall submit the same to the Head of the Procuring Entity for
approval.

b. The Head of the Procuring Entity or his duly authorized representative, upon receipt of the proposed
Change Order or Extra Work Order shall immediately instruct the technical staff of the Procuring
215
MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

Entity’s to conduct an on-the-spot investigation to verify the need for the Work to be prosecuted. A
report of such verification shall be submitted directly to the Head of the Procuring Entity or his duly
authorized representative.

c. The, Head of the Procuring Entity or his duly authorized representative, after being satisfied that
such Change Order or Extra Work Order is justified and necessary, shall review the estimated
quantities and prices and forward the proposal with the supporting documentation to the Head of
Procuring Entity for consideration.

d. If, after review of the plans, quantities and estimated unit cost of the items of work involved, the
proper office of the procuring entity empowered to review and evaluate Change Orders or Extra
Work Orders recommends approval thereof, Head of the Procuring Entity or his duly authorized
representative, believing the Change Order or Extra Work Order to be in order, shall approve the
same.

e. The timeframe for the processing of Variation Orders from the preparation up to the approval by the
Head of the Procuring Entity concerned shall not exceed thirty (30) calendar days.

44. Contract Completion

Once the project reaches an accomplishment of ninety five (95%) of the total contract amount, the Procuring
Entity may create an inspectorate team to make preliminary inspection and submit a punch-list to the Contractor
in preparation for the final turnover of the project. Said punch-list will contain, among others, the remaining
Works, Work deficiencies for necessary corrections, and the specific duration/time to fully complete the project
considering the approved remaining contract time. This, however, shall not preclude the claim of the Procuring
Entity for liquidated damages.

45. Suspension of Work

45.1 The Procuring Entity shall have the authority to suspend the work wholly or partly by written order for such
period as may be deemed necessary, due to force majeure or any fortuitous events or for failure on the part
of the Contractor to correct bad conditions which are unsafe for workers or for the general public, to carry out
valid orders given by the Procuring Entity or to perform any provisions of the contract, or due to adjustment
of plans to suit field conditions as found necessary during construction. The Contractor shall immediately
comply with such order to suspend the work wholly or partly.

45.2 The Contractor or its duly authorized representative shall have the right to suspend work operation on any or
all projects/activities along the critical path of activities after fifteen (15) calendar days from date of receipt of
written notice from the Contractor to the district engineer/regional director/consultant or equivalent official, as
the case may be, due to the following:

a. There exist right-of-way problems which prohibit the Contractor from performing work in accordance
with the approved construction schedule.

b. Requisite construction plans which must be owner-furnished are not issued to the contractor
precluding any work called for by such plans.

c. Peace and order conditions make it extremely dangerous, if not possible, to work. However, this
condition must be certified in writing by the Philippine National Police (PNP) station which has
responsibility over the affected area and confirmed by the Department of Interior and Local
Government (DILG) Regional Director.

d. There is failure on the part of the Procuring Entity to deliver government-furnished materials and
equipment as stipulated in the contract.
216
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

e. Delay in the payment of Contractor’s claim for progress billing beyond forty-five (45) calendar days
from the time the Contractor’s claim has been certified to by the procuring entity’s authorized
representative that the documents are complete unless there are justifiable reasons thereof which
shall be communicated in writing to the Contractor.

45.3 In case of total suspension, or suspension of activities along the critical path, which is not due to any fault of
the Contractor, the elapsed time between the effective order of suspending operation and the order to
resume work shall be allowed the Contractor by adjusting the contract time accordingly.

46. Payment on Termination

46.1 If the Contract is terminated because of a fundamental breach of Contract by the Contractor, the Procuring
Entity’s Representative shall issue a certificate for the value of the work done and Materials ordered less
advance payments received up to the date of the issue of the certificate and less the percentage to apply to
the value of the work not completed, as indicated in the SCC. Additional Liquidated Damages shall not apply.
If the total amount due to the Procuring Entity exceeds any payment due to the Contractor, the difference
shall be a debt payable to the Procuring Entity.

46.2 If the Contract is terminated for the Procuring Entity’s convenience or because of a fundamental breach of
Contract by the Procuring Entity, the Procuring Entity’s Representative shall issue a certificate for the value
of the work done, Materials ordered, the reasonable cost of removal of Equipment, repatriation of the
Contractor’s personnel employed solely on the Works, and the Contractor’s costs of protecting and securing
the Works, and less advance payments received up to the date of the certificate.

46.3 The net balance due shall be paid or repaid within twenty eight (28) days from the notice of termination.

46.4 If the Contractor has terminated the Contract under GCC Clauses 17 or 18, the Procuring Entity shall
promptly return the Performance Security to the Contractor.

47. Extension of Contract Time

47.1 Should the amount of additional work of any kind or other special circumstances of any kind whatsoever
occur such as to fairly entitle the contractor to an extension of contract time, the Procuring Entity shall
determine the amount of such extension; provided that the Procuring Entity is not bound to take into account
any claim for an extension of time unless the Contractor has, prior to the expiration of the contract time and
within thirty (30) calendar days after such work has been commenced or after the circumstances leading to
such claim have arisen, delivered to the Procuring Entity notices in order that it could have investigated them
at that time. Failure to provide such notice shall constitute a waiver by the Contractor of any claim. Upon
receipt of full and detailed particulars, the Procuring Entity shall examine the facts and extent of the delay
and shall extend the contract time completing the contract work when, in the Procuring Entity’s opinion, the
findings of facts justify an extension.

47.2 No extension of contract time shall be granted the Contractor due to (a) ordinary unfavorable weather
conditions and (b) inexcusable failure or negligence of Contractor to provide the required equipment,
supplies or materials.

47.3 Extension of contract time may be granted only when the affected activities fall within the critical path of the
PERT/CPM network.

47.4 No extension of contract time shall be granted when the reason given to support the request for extension
was already considered in the determination of the original contract time during the conduct of detailed
engineering and in the preparation of the contract documents as agreed upon by the parties before contract
perfection.

217
MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

47.5 Extension of contract time shall be granted for rainy/unworkable days considered unfavorable for the
prosecution of the works at the site, based on the actual conditions obtained at the site, in excess of the
number of rainy/unworkable days pre-determined by the Procuring Entity in relation to the original contract
time during the conduct of detailed engineering and in the preparation of the contract documents as agreed
upon by the parties before contract perfection, and/or for equivalent period of delay due to major calamities
such as exceptionally destructive typhoons, floods and earthquakes, and epidemics, and for causes such as
non-delivery on time of materials, working drawings, or written information to be furnished by the Procuring
Entity, non-acquisition of permit to enter private properties within the right-of-way resulting in complete
paralysis of construction activities, and other meritorious causes as determined by the Procuring Entity’s
Representative and approved by the Head of the Procuring Entity. Shortage of construction materials,
general labor strikes, and peace and order problems that disrupt construction operations through no fault of
the Contractor may be considered as additional grounds for extension of contract time provided they are
publicly felt and certified by appropriate government agencies such as DTI, DOLE, DILG, and DND, among
others. The written consent of bondsmen must be attached to any request of the Contractor for extension of
contract time and submitted to the Procuring Entity for consideration and the validity of the Performance
Security shall be correspondingly extended.

48. Price Adjustment

Except for extraordinary circumstances as determined by NEDA and approved by the GPPB, no price adjustment
shall be allowed unless otherwise specified in the SCC.

49. Completion

The Contractor shall request the Procuring Entity’s Representative to issue a certificate of Completion of the
Works, and the Procuring Entity’s Representative will do so upon deciding that the work is completed.

50. Taking Over

The Procuring Entity shall take over the Site and the Works within seven (7) days from the date the Procuring
Entity’s Representative issues a certificate of Completion.

51. Operating and Maintenance Manuals

51.1 If “as built” Drawings and/or operating and maintenance manuals are required, the Contractor shall supply
them by the dates stated in the SCC.

51.2 If the Contractor does not supply the Drawings and/or manuals by the dates stated in the SCC, or they do
not receive the Procuring Entity’s Representative’s approval, the Procuring Entity’s Representative shall
withhold the amount stated in the SCC from payments due to the Contractor.

218
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

J. SPECIAL CONDITIONS OF THE CONTRACT

GCC
Clause
1.16 The Intended Completion Date is Three Hundred (300) calendar days upon receipt of the Notice
to Proceed.
1.21 The Procuring Entity is Department of Health, San Lazaro Compound, Rizal Avenue, Sta. Cruz,
Manila
1.22 The Procuring Entity’s Representative are:
Ms. A
Director IV Office A
Department of Health
San Lazaro, Compound, Rizal Avenue, Sta. Cruz,
Manila

Mr. B
Director III Office B
Department of Health
San Lazaro, Compound, Rizal Avenue, Sta. Cruz,
Manila
1.23 The Site is located in Compound A, Quezon City
1.27 The Start Date is Seven (7) calendar days upon receipt of Notice to Proceed
1.30 The Works consists of Concrete & Masonry, Structural & Architectural Metals, Thermal &
Moisture, Site Clearing, Demolition Works, Finishes, Concrete Works, Roofing Works,
Plumbing Works, Masonry Works and Others
2.2 There is no sectional completion. The project will be completed within Three Hundred (300)
calendar days.
2.3(h) None.
5.1 The Procuring Entity shall give possession of all parts of the Site to the Contractor on the actual
start date.
6.5 The Contractor shall employ the following Key Personnel:
Project Manager, Project Architect, Project Engineers, Materials Engineers, and Foremen
7.1 At the Contractor’s option the performance security is to be in any of the
following form:
a. Cash, cashier’s/manager’s check, bank draft/guarantee confirmed by a Universal or
Commercial bank in the amount of Two Million Three Hundred Ninety-nine Thousand
Five Hundred Forty-five Pesos Only (P 198,665.05).
b. Irrevocable letter of credit issued by a Universal or Commercial bank: provided, however,
it shall be confirmed or authenticated by a Universal or Commercial bank, if
issued by a foreign bank Five Million Nine Hundred Ninety-eight Thousand Five
Eight Hundred Sixty-two Pesos (P 496,662.63)
c. Any combination of the foregoing proportionate to share of form with respect to total
amount of security.

The Performance Security shall be valid until a date one hundred twenty (120) days from the date
of issue of the Certificate of Completion.
7.4(c) No further instructions.
219
MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

8.1 No further instructions

9.1 The applicable liquidated damages is at least one tenth (1/10) of one percent of the cost of the
unperformed portion for every day of delay.

The maximum deduction shall be ten percent (10%) of the amount of the contract, the Procuring
Entity shall rescind the contract, without prejudice to other courses of action and remedies open to
it.
10 The site investigation reports are: None
12.5 Fifteen (15) years.
13 All partners to the joint venture shall be jointly and severally liable to the
Procuring Entity.
21.2 The Arbiter is:
A
Makati City, Philippines
21.3 No further instructions.
26.1 No further instructions.
29.1 Dayworks are applicable at the rate shown in the Contractor’s original Bid.
31.1 The Contractor shall submit the Program of Work to the Procuring Entity’s Representative within
seven (7) calendar days of delivery of the Letter of Acceptance.
31.3 The period between Program of Work updates is fifteen days.

The amount to be withheld for late submission of an updated Program of

Work is ten percent (10%) of the Progress Billing.
34.3 The Funding Source is the Government of the Philippines.
37.1 No further instructions.
39.1 The amount of the advance payment is not to exceed fifteen percent (15%) of the total contract
price to be made in lump sum or at the most two (2) installments to be paid by the respective
hospitals.
40.1 No further instructions.
40.30 No further instructions.
42.2 No further instructions.
48 No further instructions.
51.1 The date by which operating and maintenance manuals are required is five (5) days upon
completion.

The date by which “as built” drawings are required is five (5) days upon completion.
51.2 The amount to be withheld for failing to produce “as built” drawings and/or operating and
maintenance manuals by the date required is two percent (2%) of contract price.

220
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

K. TECHNICAL SPECIFICATIONS/TERMS OF REFERENCE

Project Title: Construction of DOH (MMD) Warehouse Extension and

Repair/Renovation/Elevation of Existing DOH (MMD) Warehouse,
DOH Compound, Manila

Project Components:

Site and Space planning were governed by the standards, rules and regulations on the design
of buildings as prescribed by the Department of Health and other concerned agencies. Building
design shall conform to the provisions of the National Building Code of the Philippines (PD
1096), Accessibility Law (BP 344), National Building Code of the Philippines, Electrical
Engineering Law (RA 184), Mechanical Engineering Law (RA 5336), Plumbing Code (RA 1378,
1993-1994 Revisions), Fire Code (PD 1185) and other laws and regulations covering
environmental concerns and local ordinances and regulations.
A. Pre-Detailed Design
1. Engineering Surveys and Investigations

1.1 Surveys and investigations of the site includes boundaries of the property,
elevations and contours (at 0.5m interval), soil tests, location, dimension, floor
elevations and other pertinent data on existing buildings and improvements
(roads, marking areas) and existing utility lines (e.g. water, power, telephone).

2. Design Development Drawings

2.2 Preparation of the following drawings for design development based on the
schematic plans prepared by the DOH.
2.2.1 Perspective View
2.2.2 Floor plans, two (2) sections (scale 1:100m minimum) and four (4)
elevations (scale 1:100m minimum), including complete space allocation.

B. Detailed Design
1. Preparation of the following Detailed Design Drawings (enumerated below) based on
the Design Development Drawings including any revisions and refinements as approved
and required by the DOH:

1.1 Architectural Drawings (as applicable):

1.1.1 Perspective, Site Development Plan, Vicinity Map/Location Plan (2.00kms
Radius) Table of Contents
1.1.2 Floor Plans (scale 1:100m minimum) including furniture lay-out (when
necessary)
1.1.3 Roof Plan/s showing downspouts (scale 1:100m minimum) including
detail of gutter, downspout, etc.
1.1.4 Reflected ceiling plan/s (scale 1:100m minimum) including details
1.1.5 Details of Stairs, fire escapes/exits, accessible ramps, etc. (scale 1:50m)
including details of railings, treads, risers, etc. in the form of plans,
elevation/section
1.1.6 Details of Toilets (1:50m) including accessible toilets in the form of
plans, elevation/section
1.1.7 Details of specialized design features (scale 1:50m) such as partitions,
cabinets, etc. and accessible design features
1.1.8 Detail of typical bay section from ground to roof (scale 1:50m)

221
MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

1.1.9 Details of special rooms (1:50m) in the form of plans, elevations/section

1.1.10 Schedule of doors, gates, emergency exits, etc. (scale 1:50m) including
specifications for materials and hardware
1.1.11 Schedule of windows (scale 1:50m) including specifications for materials
and hardware
1.1.12 Schedule of finishes for interior and exterior floors, walls and ceilings

1.2 Structural Drawings (as applicable):

1.2.1 Foundation Plan/s (scale 1:100m minimum), Floor Framing (scale
1:100m minimum) and Roof Framing Plans (scale 1:100m minimum)
1.2.2 Schedule and Details of Footings and Columns
1.2.3 Schedule and Details of Beams and Floor Slabs
1.2.4 Detail of Trusses, Purlins and Rafters
1.2.5 Details of stairs, Ramps, Fire Exits
1.2.6 Other Spot Details

1.3 Electrical Drawings (as applicable):

1.3.1 Location and Site Plan
1.3.2 Lighting Lay-out (scale 1:100m minimum) including details
1.3.3 Power Lay-out (scale 1:100m minimum) including details
1.3.4 Auxiliary System Lay-out (scale 1:100m minimum) including details
1.3.5 Schedule and Detail of Loads
1.3.6 Other Details

1.4 Plumbing/Sanitary Drawings (as applicable):

1.4.1 Location and Site Plan
1.4.2 Storm Drainage Lay-out (scale 1:100m minimum) including actual length
of tapping line to Main Drainage Line
1.4.3 Waterline Lay-out (scale 1:100m minimum) including actual length of
tapping line from main water source when applicable
1.4.4 Sewerline Lay-out (scale 1:100m minimum) including actual length of
tapping line to septic tank or existing sewerline
1.4.5 Isometric Lay-out, showing waterline, sewerline and drainage line
1.4.6 Detail of connections, catch basins, downspouts, etc.
1.4.7 Detail of Septic Tank

1.5 Mechanical Drawings (as applicable):

1.5.1 Floor plans/Isometric drawings of Air-Conditioning Systems
1.5.2 Details of Machinery/equipments, etc. (if applicable)

2. Preparation of other Documents

2.1 Structural Computations, including Soil Boring Test Results and Seismic Analysis
& Electrical Design Computations.

2.2 General Notes & Technical Specifications describing type and quality of materials
and equipment to be used, manner of construction and the general conditions
under which the project is to be constructed.

2.3 Detailed Bill of Quantities, Cost Estimates including a summary sheet indicating
the unit prices of construction materials, labor rates and equipment rentals.

2.4 Summary of Works

222
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

As a rule, contract implementation guidelines for procurement of infrastructure projects shall

comply with Annex “E” of IRR-A, RA 9184. The following provisions shall supplement these
procedures:
1. No works shall commence unless the contractor has submitted the prescribed
documentary requirements and the DOH has given written approval. Work execution
shall be in accordance with reviewed and approved documents.

2. The contractor shall be responsible for obtaining all necessary information as to risks,
contingencies and other circumstances on which may affect the works and shall
prepare and submit all necessary documents specified by the concerned Building
Officials to meet all regulatory approvals as specified in the contract documents.

3. The contractor shall submit a detailed program of works within fourteen (14) calendar
days after the issuance of the Notice to Commence for approval by the procuring entity
that shall include, among others:

The order in which it intends to carry out the work including anticipated timing for each
stage of design/detailed engineering and construction;

3.1 Periods for review of specific outputs and any other submissions & approvals;

3.2 Sequence of timing for inspection and tests;

3.3 General description of the design and construction methods to be adopted;

3.4 Number and names of personnel to be assigned for each stage of work;

3.5 List of equipment required on site for each stage of work; and

3.6 Description of the quality control system to be utilized for the project.

4. Any errors, omissions, inconsistencies, inadequacies, or failure submitted by the

contractor that will not comply with the requirements with the requirements shall be
rectified, resubmitted and reviewed at the contractor’s cost. The contractor shall notify
the DOH within a reasonable period of time if it wishes to modify/change the design
and document that has been previously submitted, reviewed and approved. The
contractor shall shoulder the cost of such changes.
5. As a rule, changes in design and construction requirements shall be limited only to
those that have not been anticipated in the contract documents prior to contract
signing and approval. The following guidelines shall govern approval for change or
variation orders:

Change Orders resulting from design errors, omissions, or non-conformance with the
performance specifications and parameters and the contract documents by the contractor, the
said Orders shall be implemented by the contractor at no additional cost to the DOH.

Provided that the contractor suffers delay and/or incurs costs due to changes or errors in the
DOH performance specifications and parameters, the contractor shall be entitled to either one
of the following:

223
MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

An extension of time for any such delays under Section 10 of Annex “E” of IRR-A (RA 9184);
or Payment for such costs as specified in the contract documents provided that the cumulative
amount of the variation order does not exceed ten percent (10%) of the original project cost.

The contract documents shall include the manner and schedule of payment specifying the
estimated contract amount and installments in which the contract will be paid.

The contractor shall be entitled to advance payment subject to the provisions of Section 4 of
Annex “E”, IRR-A (RA 9184).

The DOH shall define the quality control procedures for the design and construction in
accordance with the DOH guidelines and shall issue the proper certificates of acceptance for
sections or whole of the works as provided for in the contract documents.

The contractor shall provide all necessary equipment, personnel, instruments, documents and
others to carry out specified tests.

This design and build projects shall have minimum Defects Liability Period of one (1) year
after contract completion or as provided for in the contract documents. This is without
prejudice to the liabilities imposed upon the engineer/architect who drew up the plans and
specifications for building sanctioned under Section 1723 of the New Civil Code of the
Philippines.

The contractor shall be held liable for design and structural defects and/or failure of the
completed project within the warranty period of 15 years for permanent structures/buildings
as specified in Section 62.2.2 of the IRR-A (RA 9184).

Implementation Arrangement:

1. Reporting Protocol

1.1 Contact Person at DOH Central Office

Overall Contact Person:
MS. ABC
Director lll, Administrative Service
G/F Bldg. No. 25, DOH, San Lazaro Compound, Sta. Cruz, Manila

1.2 Contact Person for Technical Concerns

Ms. STU
Chief, General Services Division

1.3 Contact Persons at General Services Division

Engr. XYZ
Chief, Materials Management Division
G/F Bldg. No. 25, DOH, San Lazaro Compound, Sta. Cruz, Manila

Eligibility Requirements:

1. For the Detailed Design and Detailed Design portion of the contract, the Bidder is
required to hire the minimum number of people as shown below. However, should the
Bidder opine that the required number would be insufficient to complete the
works/services within the specified time frame; the bidder can hire additional staff
which method deserves to be detailed or explained in the Bidder’s Technical Proposal.

224
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

Likewise, the Bidder shall remunerate this additional staff all within the Bidder’s
financial Proposal.

1.1 Project Coordinator(s)

1.2 Licensed Architect or Engineer

1.2.1 At least 10 years experience in construction
1.2.2 Excellent in communication skills, oral or written, also in administrative abilities

1.3 Civil/Structural Engineer

1.3.1 Licensed Civil Engineer
1.3.2 (Preferably) with at least 5 yrs. experience in building construction
1.3.3 Proficient on AutoCad software

1.4 Electrical Engineer

1.4.1 Licensed Electrical Engineer, preferably a Professional electrical Engineer
1.4.2 (Preferably) with at least 5 years experience in building projects
1.4.3 Proficient in AutoCad software

1.5 Mechanical Engineer

1.5.1 Licensed Mechanical Engineer, preferably Professional Mechanical Engineer
1.5.2 (Preferably) with at least 5 years experience in building projects
1.5.3 Proficient in AutoCad software

1.6 Sanitary Engineer

1.6.1 Licensed Sanitary Engineer
1.6.2 (Preferably) with at least 5 years experience in building projects.
1.6.3 Proficient in AutoCad software

1.7 CADD Operator

1.7.1 At least Bachelor’s Degree in Architecture or Engineering
1.7.2 Proficient in AutoCad software

225
MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

L. SAMPLE BLUEPRINT OF A FLOOR PLAN

226
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

M. MINUTES OF THE PRE-BID CONFERENCE

Republic of the Philippines
Department of Health
BIDS AND AWARDS COMMITTEE

MINUTES OF THE MEETING

PRE-BIDDING CONFERENCE
Construction of DOH (MMD) Warehouse Extension and Repair/Renovation/Elevation of Existing DOH
(MMD) Warehouse, DOH Compound, Manila
03 NOVEMBER 2009

1. BAC Vice-Chairperson
2. BAC Member
3. BAC Member
4. BAC Secretariat
5. Infrastructure Representative
6. End-User Representative
7. Infrastructure Representative
8. Infrastructure Representative
9. Infrastructure Representative
10. BAC Secretariat
11. BAC Secretariat

CONTRACTOR

1. Company A 12. Company L

2. Company B 13. Company M
3. Company C 14. Company N
4. Company D 15. Company O
5. Company E 16. Company P
6. Company F 17. Company Q
7. Company G 18. Company R
8. Company H 19. Company S
9. Company I 20. Company T
10. Company J 21. Company U
11. Company K 22. Company V

Pre- Bidding Conference:

1) The Pre-Bidding Conference was presided over by BAC Vice-Chairperson.

2) The bidding document was checked by the BAC in the presence of the Infrastructure Division,
Office A Representatives, End-user Representative and contractors and the following discrepancies
were rectified:

227
MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

SECTION III. BID DATA SHEET (BDS)

ITB
Clause
12.1 The Bidder shall submit the following Eligibility and Technical Documents arranged,
numbered and tabbed as enumerated below:
A) Eligibility Documents
Class “A” Documents:
1. Registration certificate from the Securities and Exchange Commission (SEC) including
Articles of Incorporation, Department of Trade and Industry (DTI) for sole
proprietorship, or Cooperative Development Authority (CDA) for cooperatives, or any
proof of such registration.

2. Mayor’s permit issued by the city or municipality where the principal place of business
of the prospective bidder is located.

3. Statement of all its ongoing and completed government and private contracts within
the ten (10) years from submission of bids, including contracts awarded but not yet
started, if any. The statement shall include, for each contract, the following:

a. name of the contract;

b. date of the contract;
c. contract duration;
d. owner’s name and address;
e. nature of work;
f. contractor’s role whether sole contractor, subcontractor, or partner in a JV and
percentage of participation;
g. total contract value at award;
h. date of completion or estimated completion time;
i. total contract value at completion, if applicable;
j. percentages of planned and actual accomplishments, if applicable;
k. value of outstanding works, if applicable;

• the statement shall be supported by the notices of award and/or notices to

proceed issued by the owners; and
• the statement shall be supported by the Constructors Performance
Evaluation System (CPES) rating sheets, and/or certificates of
completion and owner’s acceptance, if applicable;

4. A Valid Philippine Contractors Accreditation Board (PCAB) license and registration for
Size Range – Medium B, License Category – A, General Building;

5. Audited financial statements, stamped “received” by the Bureau of Internal Revenue

(BIR) or its duly accredited and authorized institutions, for the preceding calendar
year, which should not be earlier than two (2) years from bid submission;

6. NFCC computation or CLC in accordance with ITB Clause 5.5;

228
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

Class “B” Document:

7. If applicable, the JVA in case the joint venture is already in existence, or duly
notarized statements from all the potential joint venture partners stating that they
will enter into and abide by the provisions of the JVA in the instance that the bid
is successful;

B) Technical Documents
8. The bid security in the following forms:

Amount of Bid
Form of Bid Security
Security (Equal to Percentage of the ABC)
a. Cash or cashier’s/manager’s check
issued by a Universal or Commercial
Bank.
b. Bank draft/guarantee or irrevocable
letter of credit issued by a Universal Two percent (2%)
or Commercial Bank: Provided,
however, that it shall be confirmed or
authenticated by a Universal or
Commercial Bank, if issued by a
foreign bank.
c. Surety bond callable upon demand
issued by a surety or insurance
company duly certified by the Five percent (5%)
Insurance Commission as
authorized to issue such security.
Proportionate to
d. Any combination of the foregoing. share of form with respect to total amount of
security

9. DULY SIGNED Project Requirements, which shall include the following:

(a) Organizational chart for the contract to be bid;

(b) List of contractor’s personnel (viz., Project Manager, Architect, Engineers,

Materials Engineers, and Foremen) to be assigned to the contract to be Bid, with
their complete qualification and experience data, shown in matrix with CV
including copy of updated licenses or proof of renewal of their licenses, if
expired. The list must contain the name, educational attainment, training,
professional license and work experience of personnel;

(c) List of contractor’s equipment units, which are owned, leased, and/or under
purchase agreements, with a Certification of availability of equipment from the
equipment lessor/vendor for the duration of the project;

(d) Construction schedule and S-Curve;

(e) Manpower Schedule;

229
MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

(f) Construction Method in narrative form;

(g) Equipment Utilization Schedule;

(h) Construction Safety and Health Program;

(i) PERT/CPM;

(j) Affidavit of Site Inspection;

(k) Plans (Blueprint);

(l) Summary of Works;

10. Sworn statement by the Bidder or its duly authorized representative in accordance
with Section 25.2(b) (iv) of the revised IRR of RA 9184 and using the form in Section
IX. Bidding Form as to the following:

It is not “blacklisted” or “barred” from bidding by the GOP or any of its agencies, offices,
corporations or LGUs, including foreign government/foreign international financing institution
whose blacklisting rules have been recognized by the GPPB;

(a) Each of the documents submitted in satisfaction of the bidding requirements is an

authentic copy of the original, complete, and all statements and information
provided therein are true and correct;

(b) Each of the documents submitted in satisfaction of the bidding requirements is an

authentic copy of the original, complete, and all statements and information
provided therein are true and correct;

(c) It is authorizing the HOPE or his duly authorized representative/s to verify all the
documents submitted;

(d) The signatory is the duly authorized representative of the prospective bidder, 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 the prospective bidder is a corporation,
partnership, cooperative or joint venture;
(e) It complies with the disclosure provision under Section 47 of the Act in relation to other
provisions of RA3019;

(f) It complies with the responsibilities of a prospective or eligible bidder;

(g) It complies with the existing labor laws and standards, in the case of procurement of
services;

(h) Attesting compliance to the responsibilities of a Prospective or Eligible Bidder;

230
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

i. Having taken steps to carefully examine all of the bidding documents;

ii. Having acknowledge all conditions, local or otherwise, affecting the
implementation of the contract;
iii. Having made an estimate of the facilities available and needed for the
contract to be bid, if any; and
iv. Having complied with his responsibility as provided for under Section 22.5.1;
Failure to observe any of the above responsibilities shall be at the risk of the
prospective bidder or eligible bidder concerned. For this purpose, a bidder shall
execute a sworn statement attesting to the foregoing responsibilities, to be
submitted by the bidder as an annex to its technical proposal.

11. Authority of the signatory based on 10.d above.

13.1 From “No additional Requirements” to “The Bidder shall submit the Financial
Proposal documents arranged, numbered and tabbed as enumerated below”:

(1) Financial Bid Form in accordance with the form prescribed in Section IX, Bidding
Form;

(2) Bid prices in Bill of Quantities in the prescribed Bid Form; Bid Prices should be
supported by signed detailed estimates with corresponding prices

(3) Detailed estimates of project including a summary sheet indicating the unit prices of
construction materials, labor rates and equipment rentals or other cost items
computed in coming up with the Bid;

(4) Cash Flow by quarter and payments schedule;

28.2 Within a non-extendible period of three (3) calendar days from receipt by the Bidder of the
notice from the BAC that it submitted the LCB, the Bidder shall submit the following
documentary requirements:

a. Tax clearance certificate issued by BIR main office Collection Enforcement Division
(per Executive Order 398, Series of 2005);
b. Latest Annual Tax Return filed thru Electronic Filing and Payment System (EFPS)
and must be duly validated with the tax payments made thereon for the preceding
Tax Year be it on a calendar or fiscal year income (per Revenue Regulations 3-2005);
c. Latest Business Tax Return filed thru Electronic Filing and Payment System (EFPS)
duly validated with the tax payments made thereon also refers to the Value Added
Tax (VAT) or Percentage Tax Returns covering the previous six (6) months (per
Revenue Regulations 3-2005);
d. Valid and current Certificate of PhilGEPS Registration;
21 Submission of Bids shall be on November 23, 2010; 10:00am

231
MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

1. Soft copy of documents to be emailed to prospective contractors. If no e-mail, prospective

bidder shall provide a CD to the BAC Secretariat:

a. Bill of Quantities (Annex A)

i. Structural
ii. Architectural
• Power House
• Pump House
• Garbage House
• Maintenance Building
• Main Building
iii. Electrical
iv. Mechanical
v. Sanitary

b. Summary of Works (Annex B)

2. Site Visit will be on 06 November 2010, 9:00 am.

3. Payment for Safety Officer shall be put in the overhead.

4. Tax to be imposed shall be seven percent (7%).

5. It was agreed that the Summary of Work/plan shall prevail if there are conflicts among Bill of
Quantities, Summary of works and Plan.

6. Special Condition of the Contract

GCC
Clause
1.30 To include the word “ or as indicated in the SUMMARY OF WORKS”
6.1 The Contractor shall carry out the Works properly in accordance with
the Summary of Works and with this Contract.
8.1 Contractor shall include the name of the company who will supply and
install equipments of the elevator.

7. Having no other matters to be discussed, the aforesaid Pre-Procurement Conference was adjourned
at 11:00 A.M.

Prepared:

(SIGNATURE OVER PRINTED NAME

BAC Secretariat

Approved:

(SIGNATURE OVER PRINTED NAME)

BAC Member
232
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

M. SUPPLEMENTAL BID BULLETINS

Republic of the Philippines
Department of Health
BIDS AND AWARDS COMMITTEE
BID BULLETIN NO. 1
03 November 2010
Construction of DOH (MMD) Warehouse Extension and Repair/Renovation/Elevation of Existing DOH
(MMD) Warehouse, DOH Compound, Manila

This Bid Bulletin is being issued to supplement and/or rectify discrepancies in the Bill and Quantities (BOQ) and
plan for the Construction of DOH (MMD) Warehouse Extension and Repair/Renovation/Elevation of Existing DOH
(MMD) Warehouse, DOH Compound, Manila. Indicated below are the additional information and amendments
that shall form as integral part of the Bidding Document:
1. Reference Number of the Project shall be ”IB 2010-12-01 (X)”
2. No missing pages of blueprints. Number of pages was minimized since DOH is using sub pages.
3. Contractors shall submit a computation of its Net Financial Contracting Capacity (NFCC) or a commitment
from a Universal or Commercial bank to extend a credit line in its favor, pursuant to Section 23.5.1.4 of
IRR of RA 9184.
4. Construction shall be completed in three hundred (300) calendar days.
5. Technical Queries:
Issues/ comments Response
1. Specific colors/type of tiles It shall be premium color.
2. Bill of Quantities (BOQ) of Pump House Revised BOQ was given to all contractors.
(structural works) was not included in the
soft copy of BOQ sent
3. Materials for trusses of the power, Refer to Plan and BOQ.
garbage collection & pump houses,
Engineering and maintenance structures
4. Door and windows designation for PBC main Door and window pass-through are integrated
building, room walk in blood bank refrigerator system for a walk-in refrigerator, therefore, suppliers
specification driven.
5. Schedule of doors hardware Indicated in the schedule of doors, else locksets are
cylindrical type, mid-priced.
6. Electrical Works-Primary/ secondary The proposed 3-333 KVA transformer bank
metering-If the proposed 3-333 KVA including associated pole hardware (such as lighting
transformer bank including associated pole arresters, suspension insulators, air break
hardware such as lighting arresters, switches, fuse cut outs, primary metering instrument
suspension insulators, air break switches, transformers, metering, concrete poles, cross
fuse cut-outs, primary metering transformer, arms, guys, secondary cables from the transformers
metering, concrete poles, cross arms, guys, up to the concrete pedestals and other necessary
secondary cables from the transformers up equipment to complete and utilize the electrical
to the concrete pedestal shall be system of Building X including the four (4) support
contractor’s scope of work. structures are included in the contractor’s scope of
work as indicated in the submitted electrical plans,
summary of works and bill of quantities.
233
MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

7. Mounting scheme of transformer banks, H- The contractor shall use H-Frame scheme for the
frame or single pole. mounting of the 3-333 KVA Distribution
Transformer.
8. Location of PLDT and High Tension Lines Location of PLDT shall be along Quezon Avenue
tapping point. and shall be coordinated with PLDT. The location
of high tension lines tapping point shall be at the
Agham Road near Quezon Avenue, Quezon City.
9. No rating of fusible/non-fusible Switch for There are no fusible/non-fusible switches for ACU
ACU units units but there shall be breaker types with
enclosure for individual split type ACU units.
Please refer to the following Load Schedules
(PP ACU1, PP ACU2, PP ACU3, PP ACU4,
and PP ACU5) for ACU units regarding the
rating of circuit breakers.
10. Is the main distribution Panel a part of the LV The main distribution paneboard shall part of the
Switch gear or a separate Panel low-voltage switch gear.
11. The use of the two(2) generators There shall be only one (1) generator set to be
installed but the contractor shall provide, install
and complete the electrical feeder layout and
other necessary controls and equipment for the
two (2) generator sets.
12. Grounding Layout Follow the standard grounding system
requirements for buildings and power house.
13. Fire alarm annunciator dimensional The contractor shall submit for approval
appearance dimensional appearance of Fire Alarm
Annunciators as proposed by the fire detection
and alarm suppliers for approval by the
implementing agency.
14. Voice and Data Riser Diagram – the telephone Voice and Data Riser Diagram provide and install
line on the riser diagram and LAN server in cat 6e UTP cables to individual works stations as
the riser diagram indicated in the auxiliary layout plan.
15. Floor finish of Component Separation room at The area is part of processing room; refer to the
Ground Floor. schedule of finishes.
16. Floor finish and steps at Dollies wash area. Refer to Schedule of Finish.
rd
17. Floor finish at Media Room 3 floor Same as that of Microbiology Laboratory

All other provisions of the bidding documents which are not affected shall remain in effect. For guidance and
information of all concerned.

(SIGNATURE OVER PRINTED NAME)

BAC CHAIRPERSON

234
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

N. CHECKLIST FOR ELIGIBILITY AND TECHNICAL DOCUMENTS

Project: Construction of DOH (MMD) Warehouse Extension and Repair/Renovation/Elevation of Existing

DOH (MMD) Warehouse, DOH Compound, Manila

COMPANY: _______________________________________

ITEM
NO. PASSED FAILED
REQUIREMENTS
A Eligibility and Technical Documents
1 Registration certificate from the Securities and Exchange Commission
(SEC), Department of Trade and Industry (DTI) for sole proprietorship, or
Cooperative Development Authority (CDA) for cooperatives, or any proof of
such registration.

2 Mayor’s permit issued by the city or municipality where the principal place
of business of the prospective bidder is located.

3 Statement of all its ongoing and completed government and private contracts
within ten (10) years from the submission of bids, including contracts awarded
but not yet started, if any. The statement shall include, for each contract, the
following:
(a) name of the contract;
(b) date of the contract;
(c) contract duration;
(d) owner’s name and address;
(e) nature of work;
(f) contractor’s role whether sole contractor, subcontractor, or partner in
a JV and percentage of participation;
(g) total contract value at award;
(h) date of completion or estimated completion time;
(i) total contract value at completion, if applicable;
(j) percentages of planned and actual accomplishments, if applicable;
(k) value of outstanding works, if applicable;
• the statement shall be supported by the notices of award and/or
notices to proceed issued by the owners; and
• the statement shall be supported by the Constructors Performance
Evaluation System (CPES) rating sheets, and/or certificates of
completion and owner’s acceptance, if applicable

235
MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

4 A Valid Philippine Contractors Accreditation Board (PCAB) license and

registration for Size Range – Small B, License Category – C and D, General
Building.
5 Audited financial statements, stamped “received” by the Bureau of Internal
Revenue (BIR) or its duly accredited and authorized institutions, for the
preceding calendar year, which should not be earlier than two (2) years from
bid submission.
6 NFCC computation or CLC of at least 10% of ABC.
7 If applicable, the JVA in case the joint venture is already in existence, or duly
notarized statements from all the potential joint venture partners stating that
they will enter into and abide by the provisions of the JVA in the instance that
the bid is successful.
8 The bid security
Cash, casher’s/manager’s check, bank draft/guarantee, irrevocable letter of
credit – 2% of ABC
Form of Bid Security:
Name of Bank:
Amount of Bid Security:
Validity Period:
9 DULY SIGNED Project Requirements, which shall include the following:
(a) Organizational chart for the contract to be bid;
(b) List of contractor’s personnel (viz., Project Manager, Architect,
Engineers, Materials Engineers, and Foremen) to be assigned to the
contract to be Bid, with their complete qualification and experience
data, shown in matrix with CV including copy of updated licenses or
proof of renewal of their licenses, if expired. The list must contain the
name, educational attainment, training, professional license and work
experience of personnel.
(c) List of contractor’s equipment units, which are owned, leased,
and/or under purchase agreements, with a Certification of availability
of equipment from the equipment lessor/vendor for the duration of the
project;
(d) Construction schedule and S-Curve;
(e) Manpower Schedule;
(f) Construction Method in narrative form;
(g) Equipment Utilization Schedule;
(h) Construction Safety and Health Program;
(i) PERT/CPM;
(j) Affidavit of Site Inspection;
(k) Plans (Blueprint); and,
(l) Summary of Works.

236
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

10 Sworn statement by the Bidder or its duly authorized representative in accordance

with Section 25.2(b)(iv) of the revised IRR of RA 9184 and using the form in
Section IX. Bidding Form as to the following:
(a) It is not “blacklisted” or “barred” from bidding by the GOP or any of its
agencies, offices, corporations or LGUs, including foreign
government/foreign international financing institution whose blacklisting
rules have been recognized by the GPPB;
(b) Each of the documents submitted in satisfaction of the bidding requirements
is an authentic copy of the original, complete, and all statements and
information provided therein are true and correct;
(c) It is authorizing the HOPE or his duly authorized representative/s to verify
all the documents submitted;
(d) The signatory is the duly authorized representative of the prospective
bidder, 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 the prospective bidder is a corporation, partnership,
cooperative or joint venture;
(e) It complies with the disclosure provision under Section 47 of RA 9184 in
relation to other provisions of RA3019;
(f) It complies with the responsibilities of a prospective or eligible bidder;
(g) It complies with the existing labor laws and standards, in the case of
procurement of services;
(h) Attesting compliance to the responsibilities of a Prospective or Eligible
Bidder;
i. Having taken steps to carefully examine all of the bidding documents;
ii. Having acknowledge all conditions, local or otherwise, affecting
the implementation of the contract;
iii. Having made an estimate of the facilities available and needed
for the contract to be bid, if any; and
iv. Having complied with his responsibility as provided for under
Section 22.5.1;
11. Authority of the signatory based on 10.d above.

[ ] Eligible
BAC/TWG Member [ ] Non-Eligible

237
MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

O. CHECKLIST FOR FINANCIAL DOCUMENTS

CHECKLIST FOR FINANCIAL PROPOSALS
(To be submitted by the bidders in the following orders and tabbed by numbers)
Project: Construction of DOH (MMD) Warehouse Extension and Repair/Renovation/Elevation of Existing DOH
(MMD) Warehouse, DOH Compound, Manila
IB No: 2010-12-01(X)
COMPANY: _______________ BIDDER NO.: ____

ITEM REQUIREMENTS COMPLYING NON-

NO. COMPLYING
1 Lump sum bid price, which shall include the detailed
engineering cost, in the prescribed Bid Form
2 Bid prices in Bill of Quantities in the prescribed Bid
Form; (Bid Prices should be supported by signed detailed
estimates with corresponding prices).
3 Detailed estimates per project including summary
sheet indicating the unit prices of construction materials,
labor rates and equipment rentals used in coming up with the
bid
4 Cash flow by the quarter and payments schedule.

Note: Any missing document in the above-mentioned checklist is a ground for outright rejection of the bid.

CHECKED BY: BAC MEMBER

DATE:

REMARKS: ( ) Complying ( ) Non-Complying

238
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

P. ABSTRACT OF BIDS AS READ

ABSTRACT OF BIDS AS READ

ABSTRACT OF BIDS
Construction of DOH (MMD) Warehouse Extension and Repair/Renovation/Elevation of Existing DOH (MMD)
Warehouse, DOH Compound, Manila
IB No. 2010-12-01(X)

Approved Budget for the Contract (ABC): Php 9,933,252.67

Submission and Opening of Bid Proposals: March 23, 2010 @ 10:30 A.m., Venue:
Ground Floor, Bldg. 6, San Lazaro Compound, Sta. Cruz, Manila

SIGNATURE OF
AUTHORIZED
REPRESENTATIVE
NAME OF Company A Company B Company C
COMPANY
Total Amount of Bid 7,962,368.28 8,170,252.33 8,264,987.23
Form of Bid Security MANAGER'S BANK BANK
CHECK GUARANTEE GUARANTEE
Bank/Company Bank A Bank B Bank C
Validity Period 120 DAYS 120 DAYS 120 DAYS
Bid Security P 199,000.00 P 200,000.00 P 200,000.00
Required Bid Security 00
P 198,665.05 P 198,665.05 P 198,665.05
Sufficient/Insufficient Sufficient Sufficient Sufficient

CENTRAL OFFICE BIDS AND AWARDS COMMITTEE

(SIGNATURE OVER PRINTED NAME) (SIGNATURE OVER PRINTED NAME)

BAC Member (End-user Representative) BAC Member

(SIGNATURE OVER PRINTED NAME) (SIGNATURE OVER PRINTED NAME)

BAC Member BAC Member

(SIGNATURE OVER PRINTED NAME) (SIGNATURE OVER PRINTED NAME)

BAC Vice- Chairperson BAC Chairperson

239
MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

Q. MINUTES OF BID OPENING

Republic of the Philippines

Department of Health
BIDS AND AWARDS COMMITTEE
Minutes of Meeting
SUBMISSION AND OPENING OF BIDS
Construction of DOH (MMD) Warehouse Extension and Repair/Renovation/Elevation of Existing DOH
(MMD) Warehouse, DOH Compound, Manila
IB 2010 -12-01 (X)
03 November 2009
DOH
1. COBAC Vice-Chairperson
2. COBAC Member
3. COBAC Member
4. COBAC Secretariat
5. Infrastructure Representative
6. End-User Representative
7. Infrastructure Representative
8. Infrastructure Representative
9. Infrastructure Representative
10. COBAC Secretariat
11. COBAC Secretariat

CONTRACTOR

1. Company A
2. Company B
3. Company C

ISSUES AND CONCERNS:

The Pre-Bidding Conference was presided over by BAC Vice-Chairperson.

The Submission and Opening of Bids took place as scheduled at the BAC Conference Room, Ground Floor,
Building 6, Department of Health, San Lazaro Compound, Sta. Cruz, Manila;

Out of the twenty four (24) prospective contractors who procured the bidding documents only three (3)
prospective contractors submitted their respective proposals, namely:

a. Company A
b. Company B
c. Company C

On the same date, letters were received from the remaining nineteen (19) prospective
contractors stating that their estimated bid amount will exceed the Approved Budget for the Contract
(ABC), thus, they refrained to submit bids.
240
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

The first envelope containing the Eligibility and Technical Documents was opened and the
presence, completeness and correctness of the required documents were checked and verified by the
BAC in the presence of the prospective bidders’ representative.

Upon checking, the three (3) prospective contractors were found “ELIGIBLE” and were allowed to open
the second envelope containing the “Financial Requirements.”

The second envelope containing the Financial Document was opened and the presence,
completeness and correctness of all the documents were checked and verified by the BAC.

Upon checking, the three (3) “ELIGIBLE” contractors were rated “PASSED” and subsequently their
respective bid proposals were read publicly and posted in the Abstract of Bids, to wit;
SIGNATURE OF
AUTHORIZED
REPRESENTATIVE
NAME OF COMPANY Company A Company B Company C
Total Amount of Bid P 7,962,368.28 P 8,170,252.33 P 8,264,987.23
Form of Bid Security MANAGER'S CHECK BANK GUARANTEE BANK GUARANTEE
Bank/Company Bank A Bank B Bank C
Validity Period 120 DAYS 120 DAYS 120 DAYS
Bid Security P 199,000.00 P 200,000.00 P 200,000.00
Required Bid Security P 198,665.05 P 198,665.05 P 198,665.05
Required Bid Security Sufficient Sufficient Sufficient
Sufficient/Insufficient

Having no other matters to be discussed, the aforesaid Pre-Procurement Conference was adjourned at
11:00 am.

Prepared:

(SIGNATURE OVER PRINTED NAME)

BAC Secretariat

Approved:

(SIGNATURE OVER PRINTED NAME)

BAC Member

241
MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

R. BID EVALUATION REPORT

BID EVALUATION REPORT

1.0 PROJECT IDENTIFICATION

Narrative description of project to be bid:

The Department of Health (Procuring Entity) invited bids for the Construction of DOH (MMD)
Warehouse Extension and Repair/Renovation/Elevation of Existing DOH (MMD) Warehouse, DOH
Compound, Manila with an Approved Budget for the Contract of PhP 9,933,252.67 from the
Government of the Philippines (GOP) through General Appropriations Act 2009. Bidding was
conducted through open competitive bidding procedures using non-discretionary passed/failed
criterion as specified in the Revised Implementing Rules and Regulations (IRR) of Republic Act 9184
(RA 9184), otherwise known as the “Government Procurement Reform Act”. A modified set of
requirements integrating eligibility documents and criteria for infrastructure projects and consulting
services were adopted in accordance with Annex G. The project requirements include preliminary
information/studies for design and construction. The project components include pre-detailed design,
detailed design and construction.

Table 1. Identification

1.1 Procuring Entity Department of Health

(a) Name Rizal Avenue, Sta. Cruz
(b) Address Manila, Philippines

Design and Build for the Construction of Material

1.2 Name of the Contract Management Division Warehouse Extension and
Repair/Renovation/Elevation of MMD Warehouse

Building No. 25 , Department of Health, San

1.3 Location of the Contract
Lazaro Compound Sta. Cruz Manila

1.4 Approved Budget of Contract Php 9,933,252.67

1.5 Method of Procurement Public Bidding

242
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

2.0 INITIAL STEPS IN THE BIDDING PROCESS

Table 2. Initial Steps in the Bidding Process

2.1 Pre-Procurement Conference August 24, 2010

a) Date of Conference
2.2 Invitation to Apply for Eligibility and to Bid IB 2010-09-27(08)
a) Date of first publication September 04, 2010
b) Name of Newspaper The Philippine Star
c) Date of final publication N/A
d) Name of newspaper N/A
2.3 Letter of Intent (LOI)
a) Deadline for the LOI submission October 05, 2010
b) Number of LOIs received Twelve (12)
2.4 Eligibility check
a) Date of eligibility check N/A
b) Number of eligibility envelopes received N/A
c) Date of Notices sent to bidders N/A
d) Motion for Reconsideration, if any N/A
2.5 Issuance of Bidding Documents
a) Period of availability of Bid Documents August 25, 2010 up to
October 05, 2010
b) Number of Bidding Documents issued NINE(9)
2.6 Amendments to Bidding, if any
a) List all issue dates (Bid Bulletin) September 24, 2010
September 27, 2010
September 30, 2010

2.7 Pre-bid Conference, if any

a) Date of Conference September 13, 2010

b) Date of Bid Bulletin issued September 24, 2010

September 27, 2010
September 30, 2010

3.0 SUBMISSION AND OPENING OF BIDS AND PRELIMINARY EXAMINATION

Narrative description of bid receipt and bid opening

The submission and opening of bids was held on October 6, 2010, 10:30 a.m. at the BAC Conference
Room, G/F Building 6, Department of Health, San Lazaro Compound, Sta. Cruz Manila. Four (4) bidders
submitted their bid proposals, namely; 1. Company A, 2. Company B, 3. Company C and 4. Company D.
Company D was declared ineligible due to submission of expired Philippine Contractors Accreditation
Board (PCAB).

243
MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

Table 3. Bid Submission and Opening

3.1 Bid Submission Deadline

(a) Original date, time September 27, 2010; 11:00 A.M.
(b) Extensions, if any October 06, 2010; 10:30 P.M.
3.2 Bid Opening date, time October 06, 2010; 10:30 P.M.
3.3 Minutes of Bid Opening, date sent to bidders Available
3.4 Number of Bids Submitted Four (4) prospective contractors
3.5 Bid validity period (days or weeks)
(a) Originally specified One Hundred Twenty (120) calendar
days
(b) Extensions/Revisions, if any NONE

Table 4. Bid Prices (as Read Out)

Name of Bidder Identification/Name Bid as Read

Amount (Php)

Company A 8,713,528.41
Company B 9,148,068.03
Company C 9,237,263.22
Company D 9,538,639.28

4.0 BID EVALUATION

Bids were carefully examined based on the submitted documents. There was no correction found on
the bid offered.

Bidder: Company A

I. ELIBILITY AND TECHNICAL REQUIREMENTS

A Eligibility and Technical Documents Findings/Comments

1 Registration certificate from the Securities and To verify with SEC the amended
Exchange Commission (SEC), Department of Trade and certificate of incorporation for the new
Industry (DTI) for sole proprietorship, or Cooperative corporate name. Attached herewith is the
Development Authority (CDA) for cooperatives, or any letter dated November 26, 2009 addressed
proof of such registration to SEC for reference.
2 Mayor’s permit issued by the city or municipality where the The mayor’s permit refers to the original
principal place of business of the prospective bidder corporate name.
is located

244
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

3 Statement of all its ongoing and completed Government The contract agreement with other entities
and private contracts within ten (10) years from the refers to the original corporate name of the
submission of bids, including contracts awarded but not prospective bidder.
yet started, if any. The statement shall include, for each
contract, the following:
a. date of the contract;
b. contract duration;
c. owner’s name and address;
d. nature of work;
e. contractor’s role whether sole contractor,
subcontractor, or partner in a JV and percentage of
participation;
f. total contract value at award;
g. date of completion or estimated completion time;
h. total contract value at completion, if applicable;
i. percentages of planned and actual
accomplishments, if applicable;
j. value of outstanding works, if applicable;
the statement shall be supported by the notices
of award and/or notices to proceed issued by
the owners; and the statement shall be
supported by the Constructors Performance
Evaluation System (CPES) rating sheets,
and/or certificates of completion and owner’s
acceptance, if applicable
4 A Valid Philippine Contractors Accreditation Board (PCAB) The PCAB license refers to the original
license and registration for Size Range – Medium B, Corporate name. License: General
License Category A, General Building Engineering “AAA” valid up to June
2010.
5 Audited financial statements, stamped “received” by the Based on the submitted financial
Bureau of Internal Revenue (BIR) or its duly accredited statements, the company has a good
and authorized institutions, for the preceding calendar current ratio. Net worth is adequate. Net
year which should not be earlier than two (2) years from Income increased from P3,386,436.00 in
bid submission 2007 to P67,701,052 in 2008 or 1899%
increased. Breakdown of account
receivable has a discrepancy of P
57,580,880.00 (P127,237,328.00 –
184,818,202.00). See attached evaluation
of financial statements

6 NFCC computation or CLC of at least 10% of ABC NFCC was evaluated based on the
documents submitted (P1.1 Billion). See
attached evaluation of financial statements

7 If applicable, the JVA in case the joint venture is already in Not applicable
existence, or duly notarized statements from all the
potential joint venture partners stating that they will enter
into and abide by the provisions of the JVA in the instance
that the bid is successful.
245
MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

8 The bid security Cash, casher’s/manager’s check, bank Validated and was verified and found in order.
draft/guarantee, irrevocable letter of credit – 2% of ABC Form of Bid Security : Manager’s Check
Form of Bid Security: Name of Bank: Name of Bank: Bank A, Ortigas Center
9 DULY SIGNED Project Requirements, which shall include
the following:
Organizational chart for the contract to be bid;
a. List of contractor’s personnel (viz. Project Manager, Verified the LCB’s competence and
Architect, Engineers, Materials Engineers, and experience as well as the competence
Foremen) to be assigned to the contract to be bid, and experience of the key personnel.
with their complete qualification and experience To request for the photocopy of PRC
data, shown in matrix with CV including copy of license of the Materials Engineer.
updated licenses or proof of renewal of their licenses,
if expired. The list must contain the name, educational
attainment, training, professional license and work
experience of personnel.
b. List of contractor’s equipment units, which are owned, As per submitted documents, contractor’s
leased, and/or under purchase agreements, with a equipment units are adequate for the project
Certification of availability of equipment from the subject for actual verification and inspection.
equipment lessor/vendor for the duration of the
project;
c. Construction schedule and S-Curve;
d. Manpower Schedule;
e. Construction Method in narrative form;
f. Equipment Utilization Schedule;
g. Construction Safety and Health Program;
h. PERT/CPM;
i. Affidavit of Site Inspection;
j. Plans (Blueprint);
k. Summary of Works
10 Sworn statement by the Bidder or its duly authorized Submitted documents were duly notarized.
representative in accordance with Section 25.2(b)(iv) of
the revised IRR of RA 9184 and using the form in Section
IX. Bidding Form as to the following:
a. It is not “blacklisted” or “barred” from bidding by LCB was not blacklisted as verified with CIAP
the GOP or any of its agencies, offices, and PCAB websites (see attached CIAP
corporations or LGUs, including foreign consolidated list of blacklisted constructors
government/ foreign international financing as of October 31, 2009).
institution whose blacklisting rules have been
recognized by the GPPB;
b. Each of the documents submitted in satisfaction
of the bidding requirements is an authentic copy
of the original, complete, and all statements and
information provided therein are true and correct;

246
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

c. It is authorizing the HOPE or his duly authorized

representative/s to verify all the documents
submitted;
d. The signatory is the duly authorized
representative of the prospective bidder, 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 the prospective bidder is
a corporation, partnership, cooperative or joint
venture;
e. It complies with the disclosure provision under
Section 47 of the Act in relation to other
provisions of RA3019;
f. It complies with the responsibilities of a
prospective or eligible bidder;
g. It complies with the existing labor laws and
standards, in the case of procurement of
services;
h. Attesting compliance to the responsibilities of a
Prospective or Eligible Bidder;
i. Having taken steps to carefully examine all of
the bidding documents;
ii. Having acknowledge all conditions, local or
otherwise, affecting the implementation of the
contract;
iii. Having made an estimate of the facilities
available and needed for the contract to be
bid, if any; and
iv. Having complied with his responsibility as
provided for under Section 22.5.1
11. Authority of the signatory based on 10.d above. Duly notarized

II. FINANCIAL PROPOSAL

B FINANCIAL REQUIREMENTS
Lump sum bid price, which shall include the detailed No discrepancy between Bid Amount in
1 engineering cost, in the prescribed Bid Form words and figures. One Hundred Seven
Million Nine Hundred Sixty Two
Thousand Three Hundred Sixty Eight &
28/100 (Php 107,962,368.28)

247
MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

Bid prices in Bill of Quantities in the prescribed Bid

The variance between the ABC and bidder’s
2 detailed bid price is fluctuating. The
Form; (Bid Prices should be supported by signed detailed
estimates with corresponding prices). contractor’s bid for most of the architectural
works are way above the ABC while other
trades like electrical, mechanical, sanitary
Detailed estimates per project including summary and structuralexample
One specific are wayisbelow
in thethe ABC.
electrical
3 sheet indicating the unit prices of construction works, there is one item in our plan that
materials, labor rates and equipment rentals used in requires 162 units 14 watts pinlight with ABC
coming up with the bid of Php144,000.00 but the contractor bided
for only 12 units with bid price of
4 Cash flow by the quarter and payments schedule. Php5,184.00.

5.0 FINDINGS

Upon post-qualification examination, validation and verification of the eligibility, technical and
financial requirements, submitted by the lowest bidder (Company A) failed to comply re: completed
similar project as required under ITB Clause 5.4 of Bid Data Sheet (BDS). The submitted similar
project is on-going and not yet completed.

The bid proposal of the second lowest bidder (Company B) was opened and found to be complying.
Therefore, the Technical Working Group (TWG) recommended awarding the said project to
Company B in the amount of Php9,148,068.03

Prepared by:

(SIGNATURE OVER PRINTED NAME) (SIGNATURE OVER PRINTED NAME)

TWG – Member TWG – Member

(SIGNATURE OVER PRINTED NAME) (SIGNATURE OVER PRINTED NAME)

TWG – Member TWG – Member

(SIGNATURE OVER PRINTED NAME) (SIGNATURE OVER PRINTED NAME)

TWG – Vice Chairperson TWG – Chairperson

248
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

S. MINUTES OF TWG BID EVALUATION

Republic of the Philippines
Department of Health
BIDS AND AWARDS COMMITTEE

Minutes of the TWG Bid Evaluation

Construction of DOH (MMD) Warehouse Extension and Repair/Renovation/Elevation of Existing DOH (MMD)
Warehouse, DOH Compound, Manila
Kimberly Hotel, Tagaytay City
November 24 – 27, 2010

Attendees:

1. TWG Chairperson
2. TWG Vice-Chairperson
3. TWG Member
4. TWG Member
5. TWG Member
6. TWG Member
7. NCHFD Representative
8. NCHFD Representative
9. BAC Secretariat
10. BAC Secretariat
11. BAC Secretariat

Evaluation:

This evaluation was called to order at 1:00 P.M., 24, November 2009. Using non-discretionary criteria as stated
in the Bidding Documents, the TWG for the Construction of DOH (MMD) Warehouse Extension and
Repair/Renovation/Elevation of Existing DOH (MMD) Warehouse, DOH Compound, Manila verified, validated
and ascertained all statements made and documents submitted by the bidder with the Lowest Calculated Bid
(LCB), Company A. These criteria were considered, but were not limited to, the following:

1. LEGAL REQUIREMENTS

a. Licenses, permits, certificates submitted by the LCB were verified and validated.

b. LCB was not blacklisted as verified with CIAP and PCAB websites (see attached CIAP
consolidated list of blacklisted constructors as of October 31, 2009).

c. Verified submitted SEC and subject for further verification with Security and Exchange Commission
(SEC) the amended certificate of incorporation for the new corporate name which is “Company A”.
Attached herewith is the letter dated November 26, 2009 addressed to SEC for reference.

d. The submitted mayor’s permit verified and referred to the original corporate name which is “China State
(Phils) Construction Engineering Corporation.”

e. The PCAB license verified and referred to the original corporate name. License: General Engineering
“AAA” valid up to June 2011.
249
MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

2. TECHNICAL REQUIREMENTS

a. Verified and validated LCB’s competence and experience, as well as the competence and
experience of the key personnel. To request further for the photocopy of PRC license of the Materials
Engineer.

b. Availability and commitment verified.

c. Checked the performance of LCB:

Its on-going government and private contracts found negative slippage of at least 15%

Substandard quality of work as per contract plan and specification. None.

Unsatisfactory performance as per contract terms and conditions. None.

d. Verified and ascertained the sufficiency of the bid security as to type, amount, form and wording and
validity period.
Form of Bid Security: Manager’s Check
Name of Bank: Bank A, Ortigas Center
Amount of Bid Security: P 2,399,545.09
Bid Validity: 120 days

e. The contract agreement with other entities referred to the original corporate name of the bidder.

f. As per submitted documents, contractor’s equipment units are adequate for the project subject for
actual verification and inspection.

g. Submitted documents were duly notarized.

3. FINANCIAL REQUIREMENTS

a. Verified, validated and ascertained the bid price proposal of the LCB.

b. Based on the submitted financial statements, the company has a good current ratio. Net worth is
adequate. Net Income increased from P3,386,436 in 2007 to P67,701,052 in 2008 or 1899% increased.
Breakdown of account receivable has a discrepancy of P 57,580,880.00 (P127,237,328.00 –
184,818,202.00).

c. NFCC was evaluated based on the documents submitted (P 1.1 Billion). See attached evaluation of
financial statements.

d. The required Certification of Letter of Credit (CLC) with the specified amount of the bidder can sustain
the operating cash flow of the transaction.

e. No discrepancy between Bid Amount in words and figures. One Hundred Seven Million Nine Hundred
Sixty Two Thousand Three Hundred Sixty Eight & 28/100 (Php 107,962,368.28).

f. The variance between the ABC and bidder’s detailed bid price is fluctuating. The contractor’s bids for
most of the architectural works are way above the estimated amount while other trades like electrical,
mechanical, sanitary and structural are way below the estimated amount.

250
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

4. The following additional requirements were found complying:

a. Tax clearance certificate issued by BIR main office Collection Enforcement Division (per Executive
Order 398, Series of 2005);

b. Latest Annual Tax Return filed thru Electronic Filing and Payment Systems (EFPS) and must be
duly validated with the tax payments made thereon for the preceding Tax Year be it on a calendar or
fiscal year income (per Revenue Regulations 3-2005);

c. Latest Business Tax Return filed thru Electronic Filing and Payment System (EFPS) duly validated with
the tax payments made thereon also refers to the Value Added Tax (VAT) or Percentage Tax Returns
covering the previous six (6) months (per Revenue Regulations 3-2005);

d. Valid and current Certificate of PhilGEPS Registration;

6. CONCLUSION:

The LBC’s offer is found to be acceptable since the bid conforms to the required technical specifications.

7. RECOMMENDATION:

In view of the above, the TWG recommends the following:

a. To conduct ocular inspections to verify further some submitted legal and technical requirements.

b. To inform the Company A Corporation regarding the correction of bids as stated above and if
amenable, subsequently, determined to be responsive and post- qualified and recommended for the
award of contract.

Submitted By:

(SIGNATURE OVER PRINTED NAME) (SIGNATURE OVER PRINTED NAME)

TWG Member TWG Member

(SIGNATURE OVER PRINTED NAME) (SIGNATURE OVER PRINTED NAME)

TWG Member TWG Member

(SIGNATURE OVER PRINTED NAME) (SIGNATURE OVER PRINTED NAME)

TWG Vice-Chairperson TWG Chairperson

251
 MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

T. POST-QUALIFICATION EVALUATION REPORT

POST-QUALIFICATION EVALUATION REPORT

DESIGN AND BUILD FOR THE CONSTRUCTION OF MATERIAL MANAGEMENT DIVISION (MMD)
WAREHOUSE EXTENSION AND REPAIR/RENOVATION/ELEVATION OF MMD WAREHOUSE DOH, MANILA
IB No: 2010-09-27(08)

1. Name of Bidder: Company B

2. Rank in the List of Bids: 2
3. Bid Price: Php 9,148,068.03
4. Period of Post-Qualification:
5. Results of Post-Qualification: RESPONSIVE
Requirements: Parties Consulted Findings
Bid Eligibility & Technical Documents
1. Registration certificate from the Securities and SEC Certificate Complied
Exchange Commission (SEC) including Articles of Company Reg. No.
Incorporation, Department of Trade and Industry (DTI) CS200513109
for sole proprietorship or Cooperative Development
Authority (CDA), or any proof of such registration as
stated in the Bid Data Sheet (BDS)
2. Mayor’s permit issued by the city or municipality where Mayor’s Permit No: Complied
the principal place of business is located. 2010-39176 dated
03/16/2010, Manila
3. Statement of all its on-going and completed Submitted List of all Complied
government and private contracts within the period of On-going projects.
ten (10) years including contract awarded but not yet
started, if any. The statement shall include, for each 1. Repair/Renovation of
contract , the following: Valenzuela Medical
Center, 98%
a) name of the contract; completed
b) date of the contract; (Php3,838,186.77)
c) contract duration; 2. Retrofitting Works at
d) owner’s name and address; Main and OPD
e) nature of work; Building, Jose Reyes
f) contractor’s role (whether sole contractor, Memorial Medical
subcontractor, or partner in a JV) and percentage Center, 100%
of participation; completed
g) total contract of value at award; (Php8,109,484.86)
h) date of completion or estimated completion time; Complied
i) total contract value at completion, if applicable; More than 50%
j) percentages of planned and actual Submitted List of all of the ABC
accomplishments, if applicable; completed similar projects.
k) value of outstanding works, if applicable; 1. Construction of 2 –
the statement shall be supported by the Storey School
notices of award and/ or notices to proceed Building, OB
issued by the owners; and Montessori Center,
the statement shall be supported by the Inc., 100% completed
Constructors Performance Evaluation (PhP 39,008,954.04)
System (CPES) rating sheets, and /or
certificates of completion and owner’s
acceptance, if applicable;
4. A Valid Philippine Contractors Accreditation Board General Building – D Complied
(PCAB) license and registration for Size Range-Small Validity Period: July 01,
B, License Category C & D, General Building 2010 to June 30, 2011

252
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

5. Audited financial statements, stamped “received” by 2009/2008 Audited Complied

the Bureau of Internal Revenue (BIR) or its duly Financial Statement
accredited and authorized institutions, for the
preceding calendar year, which should not be earlier
than two (2) years from submission
6. NFCC computation of CLC of at least 10% of ABC NFCC: Php45,202,764.34 Complied

In lieu of 1,2 and 5, the Bidder may submit a certified

true copy of valid and current SSRS Certificate
issued by DOH.

7. If. Applicable, the JVA in case the joint venture is Submitted documents N/A
already in existence, or duly notarized statements reviewed by the TWG
from all the potential joint venture partners stating
that they will enter into and abide by the provisions of
the JVA in the instance that the bid is successful;
8. The Bid Security Submitted documents Complied
Cash, cashier’s /manager’s check, bank reviewed by the TWG
draft/guarantee. Irrevocable letter of credit -2% of
ABC

Form of Bid Security – MANAGER’S CHECK

Name of Bank - Bank A
Amount of Bid Security – Php 198,670.00
Validity Period - SEPTEMBER 23, 2010
9. DULY SIGNED Project Requirements, which shall Submitted documents
include the following: reviewed by the TWG

a) Organizational Chart for the contract to be Complied

bid
Ms. A
b) List of contractors and joint venture Complied
Project Engineer
contractor’s personnel (viz., Project
PRC ID of Civil
Manager. Architect. Engineers, Material
Engineer
Engineers, and Foremen) to be assigned to
the contract to be Bid, with their complete
Ms. B
qualification and experience data, shown in
Architect/Designer
a matrix. The List must contain the name,
PRC ID of Architect
educational attainment, training, professional
license and work experience of personnel
The following documents must also be Mr. C
submitted with the matrix for , with: Project Engineer
PRC ID of Electrical
Curriculum vitae; and
Engineer
Copy of updated licenses or proof of
renewal of their licenses, if expired if
applicable for the position.
c) Certification of availability of equipment Complied
from the equipment project; Complied
d) Construction schedule and S-Curve; Complied
e) Manpower Schedule; Complied
f) Construction Method in Narrative form; Complied
g) Equipment Utilization Project; Complied
h) Construction Safety and Health Program; Complied
i) PERT/CPM;
Complied
j) Affidavit of Site Inspection;
Complied
k) Plans (Signed Blue Prints);
l) Summary of Works Complied

253
MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

10. Omnibus Sworn statement by the Bidder and joint Submitted documents Sworn Statement
venture Contractor or their duly authorized reviewed by the TWG submitted
representative in accordance with Section 25.2 (b)
(iv) of the revised IRR of RA 9184 and using the
form in Section IX. Bidding Form as to the
following;
a) It is not “blacklisted” or “barred” by the GOP Complied
or any of its agencies, offices, corporations or
LGUs, including foreign government/foreign
international financing institution whose
blacklisting rules have been recognized by
the GPPB;
b) Each of the documents submitted in
satisfaction of the bidding requirements is an
authentic copy of the original, complete, and
all statements and information provided
therein are true and correct;
c) It is authorizing the HOPE or his duly Ms. D – Corporate Complied
authorized representative/s to verify all the Secretary
documents submitted;
d) The signatory is the duly authorized
representative of the prospective bidder, 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 the prospective
bidder is a corporation, partnership,
cooperative or joint venture;
e) It complies with the disclosure provisions
under Section 47 of the Act in relation to
other provisions of RA 3019;
f) It complies with the responsibilities of a
prospective or eligible bidder;
g) It complies with the existing labor laws and
standards, in the case of procurement of
services;
h) Attesting compliance to the responsibilities of
a Prospective or Eligible Bidder;
i. Having taken steps to carefully examine all of
the bidding documents;
ii. Having acknowledge all conditions, local or
otherwise affecting the implementation of
the contract;
iii. Having made an estimate of the facilities
available and needed for the contract to be
bid, if any, and;
vi. Having complied with his responsibility as
provided for under Section 22.5.1;
11. Duly notarized authority of the signatory based on Complied
the 10. above
a) Tax clearance certificate issued by BIR main office Submitted documents Complied
Collection Enforcement Division (per Executive reviewed by the TWG
Order 398 Series of 2005);
b) Latest Annual Tax Return filed thru Electronic Complied
Filing and Payment System (EFPS) and must be
duly validated with the tax payment made thereon
for the preceding Tax Year be it on a calendar or
254
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

fiscal year income (per Revenue Regulations 3-

2005);
c) Latest Business Tax Return filed thru Electronic Complied
Filing and Payment System (EFPS) duly validated
with the tax payments made thereon also refers to
the Value Added Tax (VAT) or Percentage Tax
Returns covering the previous six (6) months (per
Revenue Regulations 3-2005);
d) Valid Current Certificate of PhilGEPs Complied
Registration;
Financial Requirements Parties Consulted
Financial Envelope Submitted documents
reviewed by the TWG
a) Financial Bid Form in accordance with form Complied
prescribed in Section IX, Bidding Form;.
b) Bid Prices in Bill of Quantities in the prescribed Complied
Bid Form; Bid Prices should be supported by
signed detailed estimates with corresponding
prices.
c) Detailed Estimates of project including a Complied
summary sheet indicating the unit prices of
construction materials, labor rates and
equipment rentals or other cost items computed
in coming up with the Bid;
d) Cash Flow by quarter and payments schedule Complied

6. Findings: () Responsive ( ) Non-Responsive

Submitted By:

(SIGNATURE OVER PRINTED NAME) (SIGNATURE OVER PRINTED NAME)

TWG Member TWG Member

(SIGNATURE OVER PRINTED NAME) (SIGNATURE OVER PRINTED NAME)

TWG Member TWG Member

(SIGNATURE OVER PRINTED NAME) (SIGNATURE OVER PRINTED NAME)

TWG Vice-Chairperson TWG Chairperson

255
MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

U. RESOLUTION DECLARING LOWEST CALCULATED

RESPONSIVE BID (LCRB) AND AWARD OF CONTRACT

Republic of the Philippines

Department of Health
BIDS AND AWARDS COMMITTEE

BAC RESOLUTION NO. 2010 –

13 November 2010

APPROVING THE AWARD OF CONTRACT FOR THE DESIGN AND BUILD FOR THE CONSTRUCTION OF MATERIAL
MANAGEMENT DIVISION WAREHOUSE EXTENSION AND REPAIR/RENOVATION/ELEVATION OF MMD WAREHOUSE,
DOH COMPOUND, MANILA
IB NO. 2010-09-27 (08)

WHEREAS, the Department of Health (DOH) intends to engage the services of a qualified contractor to undertake the project
Design and Build for the Construction of Material Management Division Warehouse Extension and Repair/Renovation/Elevation
of MMD Warehouse with an Approved Budget for the Contract (ABC) of Nine Million Nine Hundred Thirty Three Thousand Two
Hundred Fifty Two Philippine Pesos and Sixty Seven Centavos (PhP9,933,252.67);

WHEREAS, Open Competitive Bidding for the above-cited package was conducted in accordance with the Republic Act 9184
(RA 9184) and its Revised Implementing Rules and Regulations;

WHEREAS, on 24 August 2010, Pre-Procurement was conducted as scheduled at the BAC Conference Room, Ground Floor,
Bldg. 6, San Lazaro Compound, Sta. Cruz, Manila;

WHEREAS, on 04 September 2010, the Invitation to Bid (IB) was advertised in one (1) national newspaper of general
circulation, The Philippine Star, in its issue dated September 04, 2010 and was posted in the PhilGEPS and DOH Websites;

WHEREAS, thirteen (13) contractors attended the Pre-bidding Conference conducted on 13 September 2010, 2:00 p.m. at the
BAC Conference Room, Ground Floor, Building 6, DOH, San Lazaro Compound, Sta. Cruz, Manila;

WHEREAS, Bid Bulletin No.1 dated 24 September 2010, was issued to announce the postponement of the Submission and
Opening of Bid Proposals for the Design and Build for the Construction of Material Management Division Warehouse Extension
and Repair/Renovation/Elevation of MMD Warehouse from September 27, 2010, 11:00 a.m. at the BAC Conference Room,
Ground Floor, Bldg. 6, DOH, San Lazaro Compound, Sta. Cruz, Manila to October 04, 2010, 11:30 a.m at the same venue;

WHEREAS, Bid Bulletin No.2 dated September 27, 2010 was issued to clarify the issues and questions raised during the Pre-
bid Conference held last September 13, 2010;

WHEREAS; Bid Bulletin No. 3 dated September 30, 2010 was issued to announce the postponement of the Submission and
Opening of Bid Proposals from October 04, 2010, 11:30 am. at the BAC Conference Room, Ground Floor, Bldg. 6, DOH, San
Lazaro Compound, Sta. Cruz, Manila to October 06, 2010,10:30 a.m. at the same venue;

WHEREAS, on 06 October 2010, the Submission and Opening of Bids took place as re-scheduled;

WHEREAS, Nine (9) contractors procured the bidding documents, namely:

1. Company A
2. Company B

256
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

3. Company C
4. Company D
5. Company E
6. Company F
7. Company G
8. Company H
9. Company I

WHEREAS, out of nine (9) contractors who secured bidding documents only four (4) submitted their bid proposals, namely:

1. Company A
2. Company B
3. Company C
4. Company D

WHEREAS, the first envelope containing the Eligibility and Technical Documents was opened individually in the presence of
bidder’s representative. The presence, completeness and correctness of the required documents were checked and verified by
the BAC using a non-discretionary passed/failed criterion;

WHEREAS, Company D was declared “INELIGIBLE” due to submission of expired Philippine Contractors Accreditation Board
(PCAB);

WHEREAS, the following bidders were declared “ELIGIBLE”, namely:

1. Company A
2. Company B
3. Company C

WHEREAS, the second envelope containing the Financial Proposal (Lump Sum Bid Price, Bill of Quantities, Detailed Estimates
and Cash Flow and Payment Schedules) was opened and the presence completeness of the document was verified by BAC;

WHEREAS, upon checking, the three (3) “ELIGIBLE” bidders were rated “PASSED” and subsequently their respective
proposals were read publicly and posted in the Abstract of Bids, to wit;

NAME OF COMPANY Company A Company B Company C

Bid Security 198,665.06 198,700.00 198,670.00

Form of Bid Security Cashier’s Check Manager’s Check Manager’s Check

Bank/Company Bank A Bank B Bank C

Total Amount of Bid 8,713,528.41 9,237,263.22 9,148.068.03

WHEREAS, BAC announced that the “INELIGIBLE” can file a motion for reconsideration within three (3) days from the opening
of bids. The representative of the Company D signified his intention to file a motion for reconsideration, hence, the BAC
instructed the Secretariat to reseal the documents. The representative of Company D affixed his signature on the top flap of the
documents;

WHEREAS, on 08 October 2010, Company D filed a motion for reconsideration with attached renewed

257
MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

WHEREAS, on 08 October 2010 a notification was issued to the Lowest Calculated Bidder (LCB), Company A, to submit the
additional documentary requirements, to wit:

a) Tax clearance certificate issued by BIR main office Collection Enforcement Division (per Executive Order 398,
Series of 2005);

b) Latest Annual Tax Return filed thru Electronic Filing and Payment System (EFPS) and must be duly validated
with the tax payments made thereon on for the preceding Tax Year be it on a calendar or fiscal year income
(per Revenue Regulations 3-2005);

c) Latest Business Tax Return filed thru Electronic Filing and Payment System (EFPS) duly validated with the
tax payments made thereon also refers to the Value Added Tax (VAT) or Percentage Tax Returns covering
the previous six (6) months (per Revenue Regulations 3-2005;

d) A valid and current Certificate of PhilGEPS Registration;

WHEREAS, on the same date Company A submitted the cited documents;

WHEREAS, on 11 October 200, Company D filed its motion for reconsideration with attached Temporary License Renewal from
PCAB;

WHEREAS, upon verification with Ms. A of PCAB, it was confirmed that the Board has not convened yet so a temporary license
was issued to the abovementioned contractor;

WHEREAS, on 13 October 2010, a letter was sent to Company D informing that their request for reconsideration was granted
and they are invited to witness the opening their bid on the same date;

WHEREAS, on the same date, the proposal of Company D was opened, witnessed by Company A and Company D who
objected the opening but the BAC advised them to put their objection in to writing;

WHEREAS, upon checking, Company D’s bid was read publicly and was incorporated in the abstract of bids of previous
“ELIGIBLE” bidders;
NAME OF COMPANY Company A Company B Company C Company D

Bid Security 198,665.06 198,700.00 198,670.00 200,000.00

Form of Bid Security Cashier’s Check Manager’s Check Manager’s Check Manager’s Check
Bank/Company Bank A Bank B Bank C Bank D
Total Amount of Bid 8,713,528.41 9,237,263.22 9,148.068.03 9,538,639.28

WHEREAS, on 18 October 2010, the TWG convened to evaluate the eligibility, technical and financial documents of Company
A;

WHEREAS, on 19 October 2010, the TWG submitted the Bid Evaluation and Post-qualification reports indicating therein the
results of the technical evaluation and specific findings on the submitted documents, and their recommendations, to wit:

1. The similar project submitted is not a complete project as required under ITB Clause 5,4 of the Bid Data
Sheet but an ongoing project as entered into the statement of ongoing projects matrix.
2. Expired Philippine Contractors Accreditation Board (PCAB) as of 09 August 2010 and no attached proof of
renewal.
3. The Organization Chard does not include the minimum required technical personnel for pre-design and
design work as listed on page 34 of the BDS.

258
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

4. No complete qualifications, curriculum vitae, updated licenses of stated key positions to be assigned for the
project to be bid (Architect, Professional Electrical Engineer, Professional Mechanical Engineer, Material
Engineer, CADD Operator)
5. List of equipment for pre-design and design works were not identified.
6. Manpower schedule does not include the minimum required technical personnel for pre-design and design
work listed on page 34 of the BDS.
7. Pert/CPM does not show design and pre-design activities.
8. Bid prices on Bill of Quantities have no costing for pre-design and design works.
9. Detailed estimates have no costing for pre-design and design works.

WHEREAS, on 27 October 2010, the BAC sent a letter to Company A requesting it to submit the abovementioned documents

WHEREAS, on 29 October 2010, Company A submitted the documentary requirements;

WHEREAS, 09 November 2010, the TWG re-convened to further evaluate the documentary requirements submitted by
Company A;

WHEREAS, on 10 November 2010, the TWG submitted the evaluation report upholding its previous decision to disqualify
Company A for failure to comply to submit a completed similar project as required under ITB Clause 5.4 of the BDS. The
submitted similar project is ongoing and not completed yet;

WHEREAS, on 15 November 2010, the BAC sent a letter to Company A informing the latter that its bid was post-disqualified
based on the reason cited above;

WHEREAS, on 17 November 2010, a notification was issued to the 2nd LCB to submit the additional documentary requirements,
to wit:

a) Tax clearance certificate issued by BIR main office Collection Enforcement Division (per Executive Order 398,
Series of 2005);

b) Latest Annual Tax Return filed thru Electronic Filing and Payment System (EFPS) and must be duly validated
with the tax payments made thereon on for the preceding Tax Year be it on a calendar or fiscal year income
(per Revenue Regulations 3-2005);

c) Latest Business Tax Return filed thru Electronic Filing and Payment System (EFPS) duly validated with the
tax payments made thereon also refers to the Value Added Tax (VAT) or Percentage Tax Returns covering
the previous six (6) months (per Revenue Regulations 3-2005;

d) A valid and current Certificate of PhilGEPS Registration;

WHEREAS, on the same date, Company B submitted the abovementioned additional documentary requirements;

WHEREAS, on the same date, the TWG convened to evaluate the eligibility, technical and financial proposals of Company B;

WHEREAS, on 23 November 2010, the TWG re-convened to further evaluate the abovementioned documents of
Company B;

WHEREAS, on the same date, the BAC received the technical evaluation report from the TWG with the following observations
and recommended the submission of the following documents, to wit:

1. Identification of all projects under the Design and Build Scheme;

2. Certificate of Acceptance and Turn-over of all concerned projects;

259
MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

3. Completed similar contract of Design and Build project of at least 50% of the Approved Budget for the
Contract (ABC).

WHEREAS, on 24 November 2010, a notification was sent to Company B requesting to submit the additional
documents;

WHEREAS, on 26 November 2010, Company B submitted the requested documents;

WHEREAS, on 02 December 2010, the TWG re-convened to evaluate the additional documents;

WHEREAS, on 09 December 2010, the TWG submitted the evaluation report for Company B stating that that the firm complied
to the requirements, hence, was recommended for the award of contract;

WHEREAS, upon deliberation, the BAC concurred with the recommendation of the TWG to award the contract to Company B;

NOW THEREFORE, on the basis of the above, the herein members of the BAC HEREBY RESOLOVE to award the contract to
Company B as determined to be the LCRB for the Design and Build for the Construction of Material Management Division
Warehouse Extension and Repair/Renovation/Elevation of MMD Warehouse with a total contract price of Nine Million One
Hundred Forty-eight Thousand Sixty-eight Philippine Pesos and 03/100 (PhP9,148,068.03).

Signed this ________ day of _____ 2010 at the Department of Health, San Lazaro Compound, Sta. Cruz, Manila.

CENTRAL OFFICE BIDS AND AWARDS COMMITTEE

(SIGNATURE OVER PRINTED NAME) (SIGNATURE OVER PRINTED NAME)

BAC Member (End-user Representative) BAC Member

(SIGNATURE OVER PRINTED NAME) (SIGNATURE OVER PRINTED NAME)

BAC Member BAC Member

(SIGNATURE OVER PRINTED NAME) (SIGNATURE OVER PRINTED NAME)

BAC Vice- Chairperson BAC Chairperson

APPROVED BY:

(SIGNATURE OVER PRINTED NAME)

\HEAD OF PROCURING ENTITY/AUTHORIZED REPRESENTATIVE

260
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

V. NOTICE OF AWARD
Republic of the Philippines
Department of Health
BIDS AND AWARDS COMMITTEE
NOTICE OF AWARD
22 December 2010

ABC
General Manager
Company B
Address

Dear Mr. ABC,

This is to inform you that as a result of the Open Competitive Bidding for the Construction of Design and Build for the
Construction of Material Management Division Warehouse Extension and Repair/Renovation/Elevation of MMD under IB
No. 20100-09-27 (08), as per BAC Resolution 2010-265, your proposal was found to be the Lowest Calculated Responsive
Bid with the total Contract Price of Nine Million One Hundred Forty-eight Thousand Sixty-eight Pesos and 03/100
(PhP9,148,068.03).

You are hereby requested to post your Performance Security equivalent to the percentage of the total Contract Price of the
acceptable forms as listed below within ten (10) calendar days from receipt of the Notice of Award (NOA) and further to
confer with the Director of the Procurement Service, for instructions regarding the execution of this award:

Form of Performance Security Amount of Performance Security (Equal to

Percentage of the Total Contract price)
1. Cash, Cashier’s Check, Manager’s Check, Bank Draft/ Guarantee
confirmed by Universal or Commercial Bank duly licensed in the
Philippines
2. Irrevocable Letter of Credit issued by a Universal or Commercial Ten Percent (10%)
Bank: Provided, however, that it shall be confirmed or
authenticated by a Universal or Commercial Bank duly licensed in
the Philippines if used by a foreign bank
3. Surety Bond callable upon demand issued by a surety or
insurance company duly certified by the Insurance Commission as Thirty Percent (30)
authorized to issue such security.
4. Any combination of the foregoing Proportionate to share of form with respect to total
amount of security

The original NOA with signature on “CONFORME” shall be returned within two (2) working days upon receipt of the approved NOA.

Please bear in mind that failure to provide the performance security shall constitute sufficient ground for recession of the award.

(SIGNATURE OVER PRINTED NAME)

Head of Procuring Entity/Authorized Representative

Conforme:

Printed Name and Signature of Representative

Name of Bidder:________________________________
Date:____________________________________

261
 MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

W. SAMPLE CONTRACT
(SIGNATURE OVER PRINTED NAME)

CONTRACT AGREEMENT

This CONTRACT AGREEMENT made on the 5th day of January 2011 between:
WITNESS 2

The DEPARTMENT OF HEALTH with postal address at San Lazaro Compound, Rizal Avenue, Sta. Cruz, Manila,
Philippines, duly represented by the Administrative Office, Secretary of Health, hereinafter referred to as the
PROCURING ENTITY
And

COMPANY B, a company incorporated under the laws of the Philippines, with postal address at 18 San Miguel Street,
Barrio Magsinag, Pasay City, duly represented by MR. ABC, General Manager, hereinafter called The Contractor.

WHEREAS, the Procuring Entity is desirous that the Contractor executes the Construction of Design and Build for the
(SIGNATURE OVER PRINTED NAME)

Construction of Material Management Division Warehouse Extension and Repair/Renovation/Elevation of MMD under IB
No. 2010-09-27 (08), conducted on 06 October 2010, as per BAC Resolution No. 2010-265, hereinafter called The Works
SECOND PARTY

and the Procuring Entity has accepted the price proposal amounting to Nine Million One Hundred Forty-eight Thousand
Sixty-eight Pesos and 03/100 (PhP9,148,068.03) by the Contractor for the execution and completion of such Works and
the remedying of any defect therein.

NOW THIS AGREEMENT WITNESSETH AS FOLLOWS:

1. In this Agreement, words and expressions shall have the same meanings as are respectively assigned to them in
the Conditions of Contract hereinafter referred to.
2. The following documents shall be attached, deemed to form and be read and construed as part of this agreement, to
wit:
a. General and Specific Conditions of the Contract;
(SIGNATURE OVER PRINTED NAME)

b. Drawings/Plans;
c. Specifications;
d. Invitation to Bid;
FIRST PARTY

e. Bid Form (Duly signed bid prices in the Bill of Quantities, Detailed Estimates, and Cash Flow by Quarter and
Payment);
f. Eligibility Requirements, Documents, and/or Statements;
g. Performance Security;
h. Cash Deposit Certification issued by a licensed bank;
i. Notice of Award of Contract and winning bidder’s “Conforme” thereto.

3. In consideration of the payments to be made by the Procuring Entity to the Contractor as hereinafter mentioned, the
Contractor hereby covenants with the Procuring Entity to execute and complete the Works and remedy any defects
therein in conformity with the provisions of the Contract all respects.
(SIGNATURE OVER PRINTED NAME)

4. The Procuring Entity hereby covenants to pay the Contractor in consideration of the execution and completion of the
Works and the remedying of defects wherein, the Contract Price or such other sum as may become payable under
the provisions of this contract at the time and in the manner prescribed in the contract.

IN WITNESS whereof the parties thereto have caused this Agreement to be executed the day and year first before
written:
WITNESS 1

Signed, sealed and delivered by (Representative of the Procuring Entity).

Signed, sealed and delivered by Mr. A, General Manager, Company A (for the Contractor).

SIGNATURE OVER PRINTED NAME SIGNATURE OVER PRINTED NAME

Assistant Secretary of Health General Manager
DOH End-user Company A

262
 DOH CUSTOMIZED PROCUREMENT MANUAL VOLUME 3 2010

WITNESSES

SIGNATURE OVER PRINTED NAME SIGNATURE OVER PRINTED NAME

DOH Representative Representative, Company A
(SIGNATURE OVER PRINTED NAME)

Witness 1 Witness 2

ACKNOWLEDGMENT
WITNESS 2

Republic of the Philippines)

City of Manila) s.s

At the place abovementioned this 5th day of January 2011 personally appeared before me.

DOH End-user (1st Party) Company A Representative (2nd Party)

Comm. Tax Cert. ______________________________________ Comm. Tax Cert. ______________________________________
Issued at: ____________________________________________ Issued at: ____________________________________________
On: _________________________________________________ On: _________________________________________________
(SIGNATURE OVER PRINTED NAME)

Known to me to be the same person who executed the foregoing instrument and who acknowledged to me that the same
SECOND PARTY

is their free act and deed and that of the office they respectively represent.

This foregoing instrument consisting of two (2) pages including this page on which this acknowledgement is written, are
signed by the parties and their instrumental witnesses on the left hand margin of each and every page thereof.

WITNESS MY HAND AND SEAL, on the date and place first above-written.

Doc. No. ____________

Page No. ____________
Book No. ____________
Series of ____________
(SIGNATURE OVER PRINTED NAME)
FIRST PARTY
(SIGNATURE OVER PRINTED NAME)
WITNESS 1

263
MANUAL PROCEDURES FOR THE PROCUREMENT OF CIVIL WORKS

X. NOTICE TO PROCEED

Republic of the Philippines

Department of Health
BIDS AND AWARDS COMMITTEE

NOTICE TO PROCEED

Date

General Manager
Company Name
Company Address

Dear Sir/Madame,

The attached Contract Agreement No.2010-010 having been approved, notice is hereby given to Company
A that work may commence on the Construction of Design and Build for the Construction of Material
Management Division Warehouse Extension and Repair/Renovation/Elevation of MMD under IB
No. 20100-09-27 (08) effective within Two Hundred Forty (240) calendar days upon receipt of
Notice to Proceed.

Upon receipt of this notice, you are responsible for performing the services under the terms and conditions
of the Agreement and in accordance with the Implementation Schedule.

Please acknowledge receipt and acceptance of this notice by signing both copies on the space below. Keep
the original copy and return the other copy to the Procurement Service, Department of Health, San Lazaro
Compound, Rizal Avenue, Sta. Cruz, Manila within two (2) working days upon receipt.

(SIGNATURE OVER PRINTED NAME)

HOPE/AUTHORIZED REPRESENTATIVE

I acknowledge receipt of this Notice on

Name of Representative of the Bidder:

Authorized Signature:_____________________________________________________________________

264