Requesting Entity: Omniworx, Inc.
Issues Concern: Hold-out Provision for Cash Deposit Certificate
Request for clarification on the removal of the "hold-out" provision for the cash deposit certificate as an eligibility document.
[D]uring the GPPB deliberations, it was propounded, among others, that requiring a hold-out provision on the cash deposit certificate would not serve the purpose of ensuring the contractor's liquidity, and could, seemingly be inconsistent with certain banking and commercial rules and practices.
In consideration of the foregoing, the GPPB resolved to revisit the requirement to submit a cash deposit certificate as one of the eligibility documents for bidding. in the interim, the GPPB has agreed to revise the sample form of cash deposit certificate, and come up with a standard format whereby all references to a hold-out provision are removed, in order to be consistent with the provisions of R.A. 9184 and its IRR-A, among others. x x x.
Nevertheless, the GPPB noted that the revised sample cash deposit certificate format, as an eligibility requirement, must still contain the following elements:
- Issued by a licensed bank;
- Cash deposited with the bank must not lower than that set by the Procuring Entity, which amount should be at least ten percent (10%) of the ABC; and
- Depositor commits not to withdraw said amount within the period of the prospective bidder's bid validity which is one hundred twenty (120) calendar days or until the contract has been awarded, whichever comes first.