NPM No. 022-2018
Requesting Entity: Department of Budget and Management (DBM)
Issues Concern: Effect of Misrepresentation or Change in Capability
1. What is the effect if a bidder misrepresented its eligibility or there has been change in its capability and the same is discovered after the contract has already been awarded?
Section 23.6 of the 2016 revised Implementing Rules and Regulations (IRR) of Republic Act (RA) No. 9184 reserves the right of the Procuring Entity (PE) to review the qualifications of the bidder at any stage of the procurement process, notwithstanding the eligibility of bidder on the grounds of misrepresentation or change in the bidder`s capability to undertake the project, thus:
“Notwithstanding the eligibility of a bidder, the Procuring Entity concerned reserves the right to review the qualifications of the bidder at any stage of the procurement process if the Procuring Entity has reasonable grounds to believe that a misrepresentation has been made by the said bidder, or that there has been a change in the 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 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 bidder as ineligible and shall disqualify it from obtaining an award or contract, in accordance with Rules XXI, XXII, and XXIII of this IRR.”
The cited provision mentioned that misrepresentation or change in the bidder`s capability to undertake the project shall cause the ineligibility of the bidder and disqualification from obtaining award or contract in accordance with the rules on penal, civil and administrative sanctions prescribed in Rules XXI, XXII, and XXIII of the IRR.
2. May a bidder which was already awarded with the contract be replaced by the bidder with the second lowest calculated responsive bid after the former has been discovered to have misrepresented its eligibility?
[O]n the premise that a previous award of contract has been cancelled and there is one remaining bidder that has to go through the process of bid evaluation and post-qualification, we refer to Section 40 of RA No. 9184 and its 2016 IRR, which can be applied suppletorily in the application of the cited provision of Section 23.6 of the IRR of RA No. 9184, thus:
If, for justifiable causes, the bidder with the Lowest Calculated Responsive Bid or Highest Rated Responsive Bid fails, refuses or is otherwise unable to enter into contract with the Procuring Entity, or if the bidder fails to post the required performance security within the period stipulated in the Bidding Documents, the BAC shall disqualify the said bidder and shall undertake post-qualification for the next-ranked Lowest Calculated Bid or Highest Rated Bid. This procedure shall be repeated until an award is made. However, if no award is possible, the contract shall be subjected to a new bidding. (Emphasis supplied)
Based on the foregoing, the cancellation of award necessarily makes the bidder previously declared as having submitted the Lowest Calculated Responsive Bid (LCRB) unable to enter into a contract with the Procuring Entity, and it is disqualified to obtain the contract award. Accordingly, post-qualification may be undertaken for the next Lowest Calculated Bid, and if award is not possible, the contract shall be subjected to re-advertisement and rebid.