2004-03-17

NPM 028-2004

Requesting Entity: Light Rail Transit Authority

Issues Concern: Submission of a Bank Commitment in Lieu of the Net Financial Contracting Capacity

 

Details

Whether or not the submission by a bidder of a commitment from a licensed bank extending to it a credit line is sufficient to satisfy the financial qualification regardless of the calculated value of its NFCC.

From the above-quoted provision (Section 23.11.3, IRR-A, R.A. 9184), it is clear that a prospective bidder may choose to submit a bank commitment, a cash deposit certificate, or a computation of its NFCC. The submission and compliance with one is sufficient ground to declare a bidder "passed" for that particular requirement. It should be noted, however, that a bank commitment should be specifically issued for the project for which the bidder is participating, otherwise, such bank commitment will not satisfy the eligibility criterion for contracting capacity.

It is also worth mentioning that the eligibility requirements set forth in the IRR-A of R.A. 9184 are only minimum requirements which procuring entities are obliged to observe. Thus, a procuring entity is not prohibited from prescribing an amount of more than ten percent (10%) of the approved budget for the contract to be bid for a bank commitment that may be submitted by a prospective bidder in lieu of its NFCC for eligibility.

In view of the foregoing, the submission by a bidder of a commitment from a licensed bank to extend to it a credit line satisfies the eligibility criterion for contracting capacity. Regardless of the calculated value of its NFCC, a procuring entity has the discretion to set the amount of such bank commitment equivalent to at least ten percent (10%) of the approved budget for the contract to be bid.