2005-03-08

NPM 018-2005

Requesting Entity: Land Bank of the Philippines

Issues Concern: Eligibility Documents of Joint Ventures

 

Details

1. Whose Class “A” Documents (Legal, Technical and Financial) shall be submitted by the Joint Venture – that of the entities comprising the Joint Venture or the Joint Venture itself?

2. How will the deficiency of one participant affect the eligibility of the Joint Venture?

3. Whose financial statements shall be used as basis in computing the Net Financial Contracting Capacity?


[T]he entities comprising the joint venture should be able to individually prove to the satisfaction of the government that it has the personality to engage in business undertakings. For this reason, the requirement for submission of legal documents should mean the individual submission of all the entities comprising the joint venture. On the other hand, because usually joint ventures have become a remedy to augment the capability of smaller enterprises to participate in competition and to eventually perform the contract, the submission of technical and financial documentary requirements by any of the entities constitute compliance.

Thus, the extent of the effect of the deficiency by one of the comprising entities to a joint venture depends on whether the deficiency refers to the legal, technical and financial requirements. In the same manner, the determination as to whose financial statement shall be used for purposes of the joint venture’s Net Financial Contracting Capacity lies on the parties constituting the joint venture. This proceeds from the rule that submission by any of the parties to a joint venture shall be sufficient satisfaction of the requirements.