2005-03-17

NPM 020-2005

Requesting Entity: Home Development Mutual Fund

Issues Concern: Evaluation of the Eligibility Requirement for Largest Single Contract of Joint Ventures

 

Details

Whether the largest single contract of all parties to a joint venture may be combined and considered as one contract for purposes of complying with Section 23.11.1.2.

This criterion (Section 23.11.1.2, IRR-A) is so provided in order to ensure that the Government is contracting with an entity that has accomplished at least one project with a value no less than fifty percent (50%) of the contract to be bid. In this regard, the Government is assured that it is not the first time that the prospective bidders will be required to accomplish such an undertaking, and therefore provides the Government a level of security that such bidder, if awarded the contract, will be able to fulfill the contract requirements.

Thus, interpreting the above-quoted eligibility criteria to mean that parties to a joint venture may add each of their largest single contract for purposes of complying with the requirement under Section 23.11.1.2 of the IRR-A will undeniably defeat the purpose for which such provision has been included in the law. It is in this same vein that the years of experience of each party to a joint venture cannot be added to comply with the minimum required experience of a firm set by the procuring entity.

In view of the foregoing, we are of the opinion that although parties to a joint venture share in the profits and losses that may result from the contract, the eligibility criterion for a largest single contract of at least fifty percent (50%) of the approved budget for the contract to be bid should be complied with by at least one of the parties to the joint venture for purposes of determination of its eligibility.