2004-05-25

NPM 076-2004

Requesting Entity: Mactan Cebu International Airport Authority

Issues Concern: Amount of Bid Security and Eligibility Requirements for Joint Venture under the IRR-A of R.A. 9184

 

Details

1. Whether or not a procuring entity may prescribe a higher amount for the Bid Security to be furnished by bidders, over and above the percentage of the approved budget for the contract (ABC) set by Section 27.2 of the IRR-A.

The IRR-A of R.A 9184 only prescribes the minimum amount for Bid Security that a bidder should furnish with their bid. Thus, procuring entities may require a higher amount of Bid Security from its bidders, over and above the percentage of the approved budget for the contract (ABC) prescribed by Section 27.2 of the IRR-A of R.A. 9184. In other words, procuring entities have the discretion to specify in its bidding documents the form, amount and validity period of the Bid Security as long as such satisfies the minimum requirements of the law.

Accordingly, we find no irregularity in requiring the bidders for projects of the Mactan Cebu International Airport Authority (MCIAA) to accompany their bids with a Bid Security either in the form of Cash, Certified Check, Cashier’s Check, Manager’s Check, Bank Draft or Irrevocable Letter of Credit equivalent to five percent (5%) of the ABC. Evidently, this requirement satisfies the minimum amount for Bid Security prescribed by the IRR-A of R.A. 9184.


2. Whether or not entities forming themselves into a joint venture need a separate license from the Philippine Contractors Accreditation Board (PCAB) to be eligible to participate as a bidder.

Based on the aforequoted provision (Sec. 23.6, IRR-A), it can be observed that although entities under a joint venture participating in a particular procurement as prospective bidders are required to submit a valid Joint Venture Agreement as part of its Class “B” eligibility documents, they are still required to submit as part of their Class “A” eligibility documents a valid PCAB license and registration for the type and cost of the contract to be bid. Thus, aside from their separate individual license and registration with the PCAB, contractors forming themselves into a joint venture must have obtained a license and registered with the PCAB as early as the time when they submit their eligibility documents, considering that such contractors shall be treated a single entity for such project under the name of the joint venture.