2006-11-07

NPM 014-2006

Requesting Entity: PGMC Marketing Corporation

Issues Concern: Eligibility Requirements for Joint Venture

 

Details

Clarification on the proper interpretation of the statement -- "[e]ach member of the joint venture shall submit the required eligibility documents".

This statement was added to Section 23.6 of the Implementing Rules and Regulations Part A (IRR-A) of Republic Act No. 9184 (R.A. 9184) by virtue of Memorandum Order (M.O.) No. 176 dated 27 June 2006.

[T]he eligibility documents referred to under Section 23.6 of the IRR-A of R.A. 9184, as amended by M.O. 176, refer to Class "A" legal eligibility requirements. The intent behind this amendment is to ensure that each member of the joint venture is legally qualified to conduct business in the Philippines. Hence, to limit the meaning of "eligibility documents" to Class "B" documents -- which merely refer to the joint venture agreement and the letter authorizing the Bids and Awards Committee to verify documents submitted by the joint venture -- would unduly defeat the purpose behind the amendment.

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Under NPM No. 018-2005, we stated that the "eligibility documents" referred to under Section 23.6 do not apply to Class "A" technical and financial documents but that it applies to Class "A" legal requirements. It recognizes that one of the main reasons why bidders form joint ventures is to enable them to combine their resources and, thus, offer more competitive rates.

Consequently, while submission by any joint venture partner of the technical and financial documentary requirements enumerated under Section 23.6 constitutes sufficient compliance for all, each member of the joint venture must still be able to individually prove that it has the legal personality to engage in business.