Construction Procurement Process (UP Diliman)

UP DILIMAN INSTITUTE OF CIVIL ENGINEERING CE 123 CONSTRUCTION ENGINEERING & 1 MANAGEMENT 1 UP DILIMAN INSTITUTE OF CIVIL ENGINEERING CE 123 CONSTRUCTION ENGINEERING & 2 MANAGEMENT 1 UP DILIMAN INSTITUTE OF CIVIL ENGINEERING The owner must procure the services of these...

UP DILIMAN INSTITUTE OF CIVIL ENGINEERING CE 123 CONSTRUCTION ENGINEERING & 1 MANAGEMENT 1 UP DILIMAN INSTITUTE OF CIVIL ENGINEERING CE 123 CONSTRUCTION ENGINEERING & 2 MANAGEMENT 1 UP DILIMAN INSTITUTE OF CIVIL ENGINEERING The owner must procure the services of these entities. Procurement is a process by which the owner identifies, selects and hires a team to contribute to the design and/ or construction phases of a project. The modes of procuring services are listed above, and it is noted that for Government projects, a special procurement process must be followed. CE 123 CONSTRUCTION ENGINEERING & 3 MANAGEMENT 1 UP DILIMAN INSTITUTE OF CIVIL ENGINEERING The client/ customer is an individual or organization that legally possessed the constructed facility. They also determine the form and purpose of the structure to be built. Within the public sector there are two main clients: government agencies and public works departments. Within the public works departments handle projects that are predominantly accessible or used by the public (e.g. roads, ports, bridges, drainage, etc). Projects within government agencies typically involve structures like government buildings, plants, pumping stations, testing facilities intended for use by that specific government agency. The Private sector is divided between private individuals and private groups. Among private groups, there are institutions that usually commission less complex structures, like churches and schools, and another group that requires specialized skills and equipment to produce their assembly lines. The client determines the type of project to be built, the timeline, and allocated budget. This information is then used to solicit bids from contractors interested in the project. The bids are then evaluated based on a set of criteria, typically resulting in the contractor with the highest score being awarded the contrat. CE 123 CONSTRUCTION ENGINEERING & 4 MANAGEMENT 1 UP DILIMAN INSTITUTE OF CIVIL ENGINEERING The chart on this slide illustrates the distribution of construction work attributed to either the public or private clients or initiatives. CE 123 CONSTRUCTION ENGINEERING & 5 MANAGEMENT 1 UP DILIMAN INSTITUTE OF CIVIL ENGINEERING Government projects should be fair and open to all contractors who are eligible and qualified to bid. This law provides a system of accountability where both the public officials directly or indirectly involved in the procurement process, as well as in the implementation of procurement contracts, and the private parties dealing with the government are, when warranted by circumstances, investigated and held liable for their actions relative hereto. This act also encourages public monitoring of the procurement process and the implementation of awarded contracts with the end in view of guaranteeing that these contracts are awarded pursuant to the provisions of this Act. This is to ensure that the bidding is fair and unbiased. CE 123 CONSTRUCTION ENGINEERING & 6 MANAGEMENT 1 UP DILIMAN INSTITUTE OF CIVIL ENGINEERING The following are the key and governing principles of RA 9184: Transparency in the procurement process and in the implementation of procurement contracts. Competitiveness by extending equal opportunity to enable private parties (who are eligible and qualified) to participate in public bidding. Streamlined procurement process that will uniformly apply to all government procurement. System of accountability where both public officials directly or indirectly involved in the procurement process are held liable for their actions Public monitoring of the procurement process and the implementation of awarded contracts CE 123 CONSTRUCTION ENGINEERING & 7 MANAGEMENT 1 UP DILIMAN INSTITUTE OF CIVIL ENGINEERING Above are the important terms that need recognition in both the appreciation and participation in Government procurement. CE 123 CONSTRUCTION ENGINEERING & 8 MANAGEMENT 1 UP DILIMAN INSTITUTE OF CIVIL ENGINEERING Above are the continuation for the important terms in Government procurement. CE 123 CONSTRUCTION ENGINEERING & 9 MANAGEMENT 1 UP DILIMAN INSTITUTE OF CIVIL ENGINEERING Article IV of the law stipulates that, “all procurement should be done through competitive bidding”. Except as provided for in article XVI A bids and awards committee shall be instituted by a procuring entity-PE and shall have the following functions: advertise, post invitation to bid, conduct pre-procurement & pre-bid conferences, determine eligibility of prospective bidders, receive bids, conduct the evaluation of bids, undertake post-qualification, recommend award of contracts to the Head of the procuring entity. Each procuring entity shall establish a single BAC for its procurement and shall have at least 5- members and not more than 7. The BAC shall be chaired by a 3rd ranking permanent official. Additionally, its members shall have a fixed term of one year (renewable). A BAC secretariat shall serve as the main support of the BAC. During public activities such as bid opening, two external observers are required to sit in the proceedings. One should be from a duly recognized private group in a sector or discipline relevant to the procurement at hand., and the other should be from an NGO. CE 123 CONSTRUCTION ENGINEERING & 10 MANAGEMENT 1 UP DILIMAN INSTITUTE OF CIVIL ENGINEERING The implementing rules and regulation, or IRR of RA 9184 guide both the procurement entity and the prospective bidders. Therefore, listed above are the forms and documents needed to be established (by a BAC) or accomplished (by prospective bidders) for bidding purposes. It should be noted to the BAC that there are additional restrictions with regards to a project, and they are: oReference to Brand Names is NOT allowed oSpecifications for the procurement of Goods shall be based on relevant characteristics and performance requirements. oAccess to Information shall be assured equal to all bidders CE 123 CONSTRUCTION ENGINEERING & 11 MANAGEMENT 1 UP DILIMAN INSTITUTE OF CIVIL ENGINEERING There are two preliminary major activities before the involvement of prospective bidders to a bidding process, and they are pre-procurement and advertisement of the bidding and Invitation to bid. A Pre-Procurement Conference is held prior to the issuance of the Invitation to Bid. A BAC shall hold a pre-procurement conference for each procurement. This conference assesses the readiness of the procurement, in terms of confirming the certification of availability of funds, as well as reviewing all relevant documents in relation to their adherence to law. It is attended by the BAC, the unit or officials who prepared the bidding documents and the draft Invitation to Bid, as well as consultants hired by the agency concerned and the representative of the end-user All Invitation to Bid-ITB shall be advertised by the Procuring Entity in such a manner and for such length of time as may be necessary. The contents of an ITB is listed above. CE 123 CONSTRUCTION ENGINEERING & 12 MANAGEMENT 1 UP DILIMAN INSTITUTE OF CIVIL ENGINEERING All Invitation to Bid-ITB shall be advertised by the Procuring Entity in such manner and for such length of time as may be necessary. Listed above is the continuation of the list. After the conduct of a procurement advertisement, a Pre-Bid Conference shall be held. Its main purpose is to provide an overview to prospective bidders of the project at hand. It also serves to clarify any items in the issued bidding documents by a procuring entity. It also has the following characteristics. o At least one pre-bid conference for each procurement o May be conducted upon the written request of any prospective bidder o Pre-bid conference/s are schedule within a reasonable period before the deadline for receipt of the bids to allow prospective bidders to prepare their bids (shall be specified in the ITB) CE 123 CONSTRUCTION ENGINEERING & 13 MANAGEMENT 1 UP DILIMAN INSTITUTE OF CIVIL ENGINEERING The eligibility requirements shall provide for fair and equal access to all prospective bidders. The prospective bidder shall certify under oath as to the correctness of the statements made, and the completeness and authenticity of the documents submitted. There are two main types of eligibility requirements corresponding to the type of procurement being made. First is the cluster of procurement for goods and infrastructure projects, while the second is for consulting services. The short descriptions for each are provided on the slides above. A prospective bidder may be allowed to submit his eligibility requirements electronically. However, said bidder shall later on certify under oath as to correctness of the statements made and the completeness and authenticity of the documents submitted. Under the succeeding step of bid submission (Receipt of Bids) and Bids opening, the format required should be strictly followed. Generally, RA 9184 and its IRR demand for a two component/ envelope system. One envelop contains the eligibility and technical requirements while, the other envelope contain the financial documents. CE 123 CONSTRUCTION ENGINEERING & 14 MANAGEMENT 1 UP DILIMAN INSTITUTE OF CIVIL ENGINEERING As specified in the IRR of RA 9184, the following are the eligible persons to participate in consulting services bidding: 1. Duly licensed Filipino citizens/sole proprietorships; 2. Partnerships duly organized under the laws of the Philippines and of which at least seventy-five percent (60%) of the interest belongs to citizens of the Philippines; 3. Corporations duly organized under the laws of the Philippines and of which at least seventy-five percent (60%) of the interest belongs to citizens of the Philippines; 4. Cooperatives duly organized under the laws of the Philippines, 5. Persons/entities forming themselves into a joint venture, i.e., a group of two (2) or more persons/entities that intend to be jointly and severally responsible or liable for a particular contract: Provided, however, That Filipino ownership or interest thereof shall be at least sixty percent (60%). For this purpose, Filipino ownership or interest shall be based on the contributions of each of the members of the joint venture as specified in their JVA.( CE 123 CONSTRUCTION ENGINEERING & 15 MANAGEMENT 1 UP DILIMAN INSTITUTE OF CIVIL ENGINEERING Above are the types of consulting services recognized under the Government Procurement. CE 123 CONSTRUCTION ENGINEERING & 16 MANAGEMENT 1 UP DILIMAN INSTITUTE OF CIVIL ENGINEERING Above details how foreign consultants may be hired in the event that Filipino consultants do not have the sufficient expertise and capability to render the services required under a certain project. CE 123 CONSTRUCTION ENGINEERING & 17 MANAGEMENT 1 UP DILIMAN INSTITUTE OF CIVIL ENGINEERING The BAC shall recommend the short list of consultants to the Head of the Procuring Entity for consideration and approval. The entire process of eligibility check and short listing shall not exceed twenty (20) calendar days. Procuring entity concerned reserves the right to review the qualifications at any stage of the procurement process if it has reasonable grounds to believe that a misrepresentation has been made by a consultant, or that there has been a change in the consultant’s capability to undertake the project from the time he/she submitted eligibility requirements. CE 123 CONSTRUCTION ENGINEERING & 18 MANAGEMENT 1 UP DILIMAN INSTITUTE OF CIVIL ENGINEERING 1. bid security in the prescribed form, amount and validity period; 2. Organizational chart for the contract to be bid; 3. List of completed and on-going projects 4. Approach, work plan, and schedule: Provided, however, That for architectural design, submission of architectural plans and designs shall not be required during the consultant’s selection process 5. List of key personnel to be assigned to the contract to be bid, with their complete qualification and experience data; and 6. Sworn statement by the prospective bidder or its duly authorized representative in the form prescribed by the GPPB as to the following: It is not “blacklisted” or barred from bidding by the GOP or any of its agencies, offices, corporations, or LGUs, foreign government/foreign or international financing institution whose blacklisting rules have been recognized by the GPPB; Each of the documents submitted in satisfaction of the bidding requirements is an authentic copy of the original, complete, and all statements and information provided therein are true and correct; It is authorizing the Head of the Procuring Entity or his duly authorized representative/s to verify all the documents submitted; The signatory is the duly authorized and designated representative of the prospective bidder, and granted full power and authority to do, execute and perform any and all acts necessary and/or to represent the prospective bidder in the bidding, with the duly notarized Secretary’s Certificate attesting to such fact, if the prospective bidder is a corporation, partnership or joint venture; It complies with the disclosure provision under Section 47 of the Act in relation to other provisions of R.A. 3019; It complies with the responsibilities of a prospective or eligible bidder provided in the PBDs; and It complies with existing labor laws and standards.(a) CE 123 CONSTRUCTION ENGINEERING & 19 MANAGEMENT 1 UP DILIMAN INSTITUTE OF CIVIL ENGINEERING As specified in the IRR of RA 9184, the following persons or entities are eligible to participate in a Infrastructure project bidding/procurement: 1. Duly licensed Filipino citizens/sole proprietorships; 2. Partnerships duly organized under the laws of the Philippines and of which at least seventy-five percent (75%) of the interest belongs to citizens of the Philippines; 3. Corporations duly organized under the laws of the Philippines and of which at least seventy-five percent (75%) of the interest belongs to citizens of the Philippines; 4. Cooperatives duly organized under the laws of the Philippines, 5. Persons/entities forming themselves into a joint venture, i.e., a group of two (2) or more persons/entities that intend to be jointly and severally responsible or liable for a particular contract: Provided, however, That, in accordance with Letter of Instructions No. 630 (LOI 630), Filipino ownership or interest of the joint venture concerned shall be at least seventy-five percent (75%): Provided, further, That joint ventures in which Filipino ownership or interest is less than seventy-five percent (75%) may be eligible where the structures to be built require the application of techniques and/or technologies which are not adequately possessed by a person/entity meeting the seventy-five percent (75%) Filipino ownership requirement: Provided, finally, That in the latter case, Filipino ownership or interest shall not be less than twenty-five percent (25%). For this purpose, Filipino ownership or interest shall be based on the contributions of each of the members of the joint venture as specified in their JVA.( Foreign bidders may be eligible to participate in the procurement of infrastructure projects when provided for under any Treaty or International or Executive Agreement as provided in Section 4 of the Act and this IRR. CE 123 CONSTRUCTION ENGINEERING & 20 MANAGEMENT 1 UP DILIMAN INSTITUTE OF CIVIL ENGINEERING Shown above are the general anticipated contents of the two component for the bidding documents. There are two broad classes for the technical components, Class A and Class B. Class A includes: legal documents , technical documents and financial documents of the prospective bidders. The supporting documents, with a few more details are listed above, the succeeding slides further list the required contents. CE 123 CONSTRUCTION ENGINEERING & 21 MANAGEMENT 1 UP DILIMAN INSTITUTE OF CIVIL ENGINEERING As part of the first envelop, an assessment of the overall & current financial status of a prospective bidder is shown and assessed through the submission of three sets of documents, namely : Income tax return-(ITR), Audited financial statement-(AFS) and a Net financial Contracting capacity –(NFCC) of the prospective bidder. The NFCC, derived from the ITR ,AFS and updated progress list of existing projects, shall serve as the measure of a prospective bidder’s ability to participate in a bidding. The existing NFCC of a prospective bidder should exceed the Approved Budget for the Contract- (ABC) of the project to be bid. The formula in calculating NFCC is provided on this panel, with the accepted K factor (dependent on project duration) which primarily considers the flow of resources or assets over the period of a project duration. CE 123 CONSTRUCTION ENGINEERING & 22 MANAGEMENT 1 UP DILIMAN INSTITUTE OF CIVIL ENGINEERING The last set of documents for the first envelope are classified as Class B documents. The different forms and documents are listed above. In comparison with most of the class A documents previously presented, this set is bid project- specific. Meaning, these documents and forms are unique for a particular bid project. The Omnibus Sworn Statement, according to the Government Procurement Policy Board-GPPB includes the following: It is not “blacklisted” or barred from bidding by the GOP or any of its agencies, offices, corporations, or LGUs, including foreign government/foreign or international financing institution whose blacklisting rules have been recognized by the GPPB; Each of the documents submitted in satisfaction of the bidding requirements is an authentic copy of the original, complete, and all statements and information provided therein are true and correct; It is authorizing the Head of the Procuring Entity or his duly authorized representative/s to verify all the documents submitted; The signatory is the duly authorized and designated representative of the prospective bidder, and granted full power and authority to do, execute and perform any and all acts necessary and/or to represent the prospective bidder in the bidding, with the duly notarized Secretary’s Certificate attesting to such fact, if the prospective bidder is a corporation, partnership or joint venture; It complies with the disclosure provision under Section 47 of the Act in relation to other provisions of R.A. 3019; It complies with the responsibilities of a prospective or eligible bidder provided in the PBDs; and It complies with existing labor laws and standard CE 123 CONSTRUCTION ENGINEERING & 23 MANAGEMENT 1 UP DILIMAN INSTITUTE OF CIVIL ENGINEERING The general and typical contents of the second envelop for the bidding documents are: Financial Bid Form; detailed estimates with a summary sheet, duly signed cash flow and payment schedule; and, duly signed day work schedule. The RA and its IRR specifies the currencies to be used (in Philippine pesos) and the bid validity which is 120 calendar days. Procuring entities may specify formats regarding payment schedule and cash flow. In some instances, the S-curve (construction progress chart) would be the accepted form for this requirement. The day work schedule, as a common format, itemizes the individual work items and their corresponding unit costs. This document shall be the basis for cost updating in consideration of variation orders. CE 123 CONSTRUCTION ENGINEERING & 24 MANAGEMENT 1 UP DILIMAN INSTITUTE OF CIVIL ENGINEERING During bid preparation , after pre-bid conference, clarifications and amendments of bidding documents shall only be accepted 10 days before bid submission and the response from the BAC should be given 7-days prior bid submission deadline. The deadline for the receipt of bids shall be fixed by the BAC, giving it sufficient time to complete the bidding process and giving the prospective bidders sufficient time to study and prepare their bids. The deadline shall also consider the urgency of the procurement involved. Prospective bidders are also given the opportunity to withdraw or modify the bid and the stipulations are given below: this is done before the deadline for the receipt of bids. The modification shall be submitted in a sealed envelope duly identified as a modification of the original bid and stamped received by the BAC. In such a case, they shall no longer be allowed to submit another Bid for the same contract ,either directly or indirectly. CE 123 CONSTRUCTION ENGINEERING & 25 MANAGEMENT 1 UP DILIMAN INSTITUTE OF CIVIL ENGINEERING All bids shall be accompanied by a bid security, payable to the procuring entity concerned as a guarantee that the successful bidder shall, within ten (10) calendar days or less, as indicated in the Instructions to Bidders, from receipt of the notice of award. Bid securities shall be returned only after the bidder with the Lowest Calculated Responsive Bid or Highest Rated Responsive Bid, as the case may be, has signed the contract and furnished the performance security, except to those declared by the BAC as failed or post-disqualified in accordance with this IRR. Bid security may be forfeited in favor of the Procuring entity due to several conditions written in the Philippine Bidding Documents-PBD, in relation to the ITB of a particular bidding. CE 123 CONSTRUCTION ENGINEERING & 26 MANAGEMENT 1 UP DILIMAN INSTITUTE OF CIVIL ENGINEERING Prospective consultants shall be evaluated based on the following criteria and using the corresponding numerical weights indicated in the Bidding Documents. 1. Quality of personnel to be assigned to the project which covers suitability of key staff to perform the duties of the particular assignments and general qualifications and competence including education and training of the key staff; 2. Experience and capability of the consultant which include records of previous engagement and quality of performance in similar and in other projects; relationship with previous and current clients; and, overall work commitments, geographical distribution of current/impending projects and attention to be given by the consultant. The experience of the consultant to the project shall consider both the overall experiences of the firm and the individual experiences of the principal and key staff including the times when employed by other consultants; and 3. Plan of approach and methodology with emphasis on the clarity, feasibility, innovativeness and comprehensiveness of the plan approach, and the quality of interpretation of project problems, risks, and suggested solutions. All participating shortlisted consultants shall be furnished with the results (ranking and total scores only) of the evaluation after the approval by the Head of the Procuring Entity of the ranking. CE 123 CONSTRUCTION ENGINEERING & 27 MANAGEMENT 1 UP DILIMAN INSTITUTE OF CIVIL ENGINEERING I. A two-stage procedure shall be adopted whereby each consultant shall be required to submit his technical and financial proposals simultaneously in separate sealed envelopes. II. After receipt of bids, the technical proposals shall first be opened and evaluated. The BAC shall rank the consultants in descending order based on the numerical ratings of their technical proposals and identify the Highest Rated Bid: Provided, however, that the Highest Rated Bid shall pass the minimum score indicated in the Bidding Documents. III. The Head of the Procuring Entity shall approve or disapprove the recommendations of the BAC within two (2) calendar days after receipt of the results of the evaluation from the BAC. After approval by the Head of the Procuring Entity of the Highest Rated Bid, its financial proposal shall then be opened. The BAC shall, within three (3) calendar days, notify and invite the consultant with the Highest Rated Bid for the opening of financial proposal for the purpose of conducting negotiations with the said consultant. In the letter of notification, the BAC shall inform the consultant of the issues in the technical proposal the BAC may wish to clarify during negotiations. Negotiations shall be made, provided that the amount indicated in the financial envelope shall be made as the basis for negotiations and the total contract amount shall not exceed the amount indicated in the envelope and the approved budget for the contract as stated in the Bidding Documents.(a) CE 123 CONSTRUCTION ENGINEERING & 28 MANAGEMENT 1 UP DILIMAN INSTITUTE OF CIVIL ENGINEERING The technical proposal together with the financial proposal shall be considered in the evaluation of consultants. The technical proposals shall be evaluated first using the criteria. The financial proposals of the consultants who meet the minimum technical score shall then be opened. The financial and technical proposals shall be given corresponding weights with the financial proposal given a minimum weight of fifteen percent (15%) up to a maximum of forty percent (40%). The weight of the technical criteria shall be adjusted accordingly such that their total weight in percent together with the weight given to the financial proposal shall add to one hundred percent (100%). The exact weights shall be approved by the Head of the Procuring Entity upon the recommendation of the BAC and indicated in the Bidding Documents. The BAC shall rank the consultants in descending order based on the combined numerical ratings of their technical and financial proposals and identify the Highest Rated Bid. The Head of the Procuring Entity shall approve or disapprove the recommendations of the BAC within two (2) calendar days after receipt of the results of the evaluation from the BAC. After approval by the Head of the Procuring Entity of the Highest Rated Bid, the BAC shall, within three (3) calendar days, notify and invite the consultant with the Highest Rated Bid for negotiation The Negotiations at this point involves the following Discussion and clarification of the TOR and Scope of Services; Discussion and finalization of the methodology and work program proposed by the consultant; Consideration of appropriateness of qualifications and pertinent compensation, number of man-months and the personnel to be assigned to the job, taking note of over-qualified personnel, to be commensurate with the compensation of personnel with the appropriate qualifications, number of man-months and schedule of activities (manning schedule); Discussion on the services, facilities and data, if any, to be provided by procuring entity concerned; Discussion on the financial proposal submitted by the consultant; and Provisions of the contract. The entire evaluation process, including the submission of the results thereof to the Head of the Procuring Entity for approval, shall be completed in not more than twenty-one (21) calendar days after the deadline for receipt of proposals. Except for meritorious reasons, negotiations with any one consultant shall be completed within ten (10) calendar days.(a) CE 123 CONSTRUCTION ENGINEERING & 29 MANAGEMENT 1 UP DILIMAN INSTITUTE OF CIVIL ENGINEERING As stipulated in RA 9184, a public opening of bids to check for completeness & correctness of the technical components shall be administered. A pass or fail criteria shall be used. Only bids satisfying this check shall be considered for opening and evaluation of their financial component. Passing bids from the preliminary check shall be ranked from lowest to highest in terms of calculated prices. The bid with the lowest calculated price shall be referred to as the “lowest calculated bid.” CE 123 CONSTRUCTION ENGINEERING & 30 MANAGEMENT 1 UP DILIMAN INSTITUTE OF CIVIL ENGINEERING BAC shall evaluate all bids on an equal footing to ensure fair and competitive bid comparison. For this purpose, all bidders shall be required to include the cost of all taxes, such as, but not limited to, value added tax (VAT), income tax, local taxes, and other fiscal levies and duties which shall be itemized in the bid form and reflected in the detailed estimates. Such bids, including said taxes, shall be the basis for bid evaluation and comparison. The descriptions for completeness evaluation and arithmetical corrections from the Philippine Bidding Docs-PBD are shown below: Completeness of the bid. Unless the Instructions to Bidders specifically allow partial bids, bids not addressing or providing all of the required items in the Bidding Documents including, where applicable, bill of quantities, shall be considered non-responsive and, thus, automatically disqualified. In this regard, where a required item is provided, but no price is indicated, the same shall be considered as non-responsive, but specifying a “0” (zero) for the said item would mean that it is being offered for free to the Government; and Arithmetical corrections. Consider computational errors and omissions to enable proper comparison of all eligible bids. It may also consider bid modifications if expressly allowed in the Bidding Documents. Any adjustment shall be calculated in monetary terms to determine the calculated prices.(a) Staying through to the purpose of bid evaluation which is to determine the Lowest Calculated Bid the following succeeding steps are or maybe taken: In case of discrepancies between: (a) bid prices in figures and in words, the latter shall prevail; (b) total price per item and unit price for the item as extended or multiplied by the quantity of that item, the latter shall prevail; (c) stated total price and the actual sum of prices of component items, the latter shall prevail; (d) unit cost in the detailed estimate and unit cost in the bill of quantities, the latter shall prevail. Bids shall then be ranked in the ascending order of their total calculated bid prices, as evaluated and corrected for computational errors, and other bid modifications, to identify the Lowest Calculated Bid. Total calculated bid prices, as evaluated and corrected for computational errors, and other bid modifications, which exceed the ABC shall be disqualified. CE 123 CONSTRUCTION ENGINEERING & MANAGEMENT 1 31 UP DILIMAN INSTITUTE OF CIVIL ENGINEERING Objective: determine whether the bidder concerned complies with and is responsive to all the requirements and conditions as specified in the Bidding Documents.(a) Failure to submit the above requirements on time or a finding against the veracity of such shall be ground for the forfeiture of the bid security and disqualify the bidder for award Verification and validation of the bidder’s stated competence and experience, and the competence and experience of the bidder’s key personnel to be assigned to the project, for the procurement of infrastructure projects and consulting services; If lowest calculated bid fails the post qualification, the second ranked bidder will be considered. CE 123 CONSTRUCTION ENGINEERING & 32 MANAGEMENT 1 UP DILIMAN INSTITUTE OF CIVIL ENGINEERING The BAC shall declare the bidding a failure when: No bids are received; All prospective bidders are declared ineligible; All bids fail to comply with all the bid requirements or fail post-qualification, or, in the case of consulting services, there is no successful negotiation; or The bidder with the Lowest Calculated Responsive Bid/Highest Rated Responsive Bid refuses, without justifiable cause, to accept the award of contract, and no award is made in accordance with Section 40 of the Act and this IRR. CE 123 CONSTRUCTION ENGINEERING & 33 MANAGEMENT 1 UP DILIMAN INSTITUTE OF CIVIL ENGINEERING CE 123 CONSTRUCTION ENGINEERING & 34 MANAGEMENT 1 UP DILIMAN INSTITUTE OF CIVIL ENGINEERING To facilitate the approval of the award, the BAC shall submit the following supporting documents to the Head of the Procuring Entity: Resolution of the BAC recommending award; Abstract of Bids; Duly approved program of work or delivery schedule, and Cost Estimates; Document issued by appropriate entity authorizing the procuring entity to incur obligations for a specified amount; and Other pertinent documents required by existing laws, rules, and/or the procuring entity concerned.(a) Within a period not exceeding seven (7) calendar days from the date of receipt of the recommendation of the BAC, the Head of the Procuring Entity shall approve or disapprove the said recommendation. In the signing of contract, the above listed documents would form part of the contract documents. CE 123 CONSTRUCTION ENGINEERING & 35 MANAGEMENT 1 UP DILIMAN INSTITUTE OF CIVIL ENGINEERING The procuring entity shall issue the Notice to Proceed together with a copy of the approved contract to the successful bidder within seven (7) calendar days from the date of approval of the contract by the appropriate government approving authority. The contract effectivity date shall be provided in the Notice to Proceed by the procuring entity, which date shall not be later than seven (7) calendar days from its issuance. CE 123 CONSTRUCTION ENGINEERING & 36 MANAGEMENT 1 UP DILIMAN INSTITUTE OF CIVIL ENGINEERING Objective: To guarantee the faithful performance by the winning bidder of its obligations under the contract in accordance with the Bidding Documents, it shall post a performance security prior to the signing of the contract. The performance security may be released by the procuring entity after the issuance of the Certificate of Acceptance, subject to the following conditions: CE 123 CONSTRUCTION ENGINEERING & 37 MANAGEMENT 1 UP DILIMAN INSTITUTE OF CIVIL ENGINEERING Objective: To guarantee the faithful performance by the winning bidder of its obligations under the contract in accordance with the Bidding Documents, it shall post a performance security prior to the signing of the contract. The performance security may be released by the procuring entity after the issuance of the Certificate of Acceptance, subject to the following conditions: CE 123 CONSTRUCTION ENGINEERING & 38 MANAGEMENT 1 UP DILIMAN INSTITUTE OF CIVIL ENGINEERING The warranty against Structural Defects and Failures shall cover the following periods from final acceptance, Permanent Structures: Fifteen (15) years -structures made of steel, iron, or concrete which comply with relevant structural code, Buildings of types 4 and 5 (NBCP) Semi-Permanent Structures: Five (5) years -Buildings of types 1, 2, and 3 as classified under the National Building Code of the Philippines, concrete/asphalt roads, concrete river control, drainage, irrigation lined canals, river landing, deep wells, rock causeway, pedestrian overpass; CE 123 CONSTRUCTION ENGINEERING & 39 MANAGEMENT 1 UP DILIMAN INSTITUTE OF CIVIL ENGINEERING Panel above shows the key components of Articles 12 to 15 of RA 9184. CE 123 CONSTRUCTION ENGINEERING & 40 MANAGEMENT 1 UP DILIMAN INSTITUTE OF CIVIL ENGINEERING For justifiable conditions within RA 9184, the alternative modes of procurement mentioned above are recognized and allowed. CE 123 CONSTRUCTION ENGINEERING & 41 MANAGEMENT 1 UP DILIMAN INSTITUTE OF CIVIL ENGINEERING Negotiated Procurement is a method of procurement of goods, infrastructure projects and consulting services, whereby the procuring entity directly negotiates a contract with a technically, legally and financially capable supplier, contractor or consultant in any of the following cases: Emergency Cases- In case of imminent danger to life or property during a state of calamity, or when time is of the essence arising from natural or man-made calamities or other causes where immediate action is necessary to prevent damage to or loss of life or property, or to restore vital public services, infrastructure facilities and other public utilities. Take-Over of contracts- Take-over of contracts, which have been rescinded or terminated for causes provided for in the contract and existing laws, where immediate action is necessary to prevent damage to or loss of life or property, or to restore vital public services, infrastructure facilities and other public utilities. Adjacent or Contiguous- Where the subject contract is adjacent or contiguous to an on-going Infrastructure Project or Consulting Service where the consultants have unique experience and expertise to deliver the required service. Agency-to-Agency - Procurement of infrastructure projects, consulting services, and goods from another agency of the GOP CE 123 CONSTRUCTION ENGINEERING & 42 MANAGEMENT 1 UP DILIMAN INSTITUTE OF CIVIL ENGINEERING Negotiated Procurement is a method of procurement of goods, infrastructure projects and consulting services, whereby the procuring entity directly negotiates a contract with a technically, legally and financially capable supplier, contractor or consultant in any of the following cases: Procurement Agent-. In order to hasten project implementation, Procuring Entities which may not have the proficiency or capability to undertake a particular procurement, as determined by the Head of the Procuring Entity concerned, may request other GOP agencies to undertake such procurement for them, or at their option, recruit and hire consultants or procurement agents to assist them directly and/or train their staff in the management of the procurement function. Highly Technical Consultants- In the case of individual consultants hired to do work that is (i) highly technical or proprietary; or (ii) primarily confidential or policy determining, where trust and confidence are the primary consideration for the hiring of the consultant Defense Cooperation Agreement- Upon prior approval by the President of the Philippines, and when the procurement for use by the AFP involves major defense equipment or material and/or defense-related consultancy services, when the expertise or capability required is not available locally, and the Secretary of National Defense has determined that the interests of the country shall be protected by negotiating directly with an agency or instrumentality of another country with which the Philippines has entered into a defense cooperation agreement or otherwise maintains diplomatic relations CE 123 CONSTRUCTION ENGINEERING & 43 MANAGEMENT 1 UP DILIMAN INSTITUTE OF CIVIL ENGINEERING CE 123 CONSTRUCTION ENGINEERING & 44 MANAGEMENT 1 UP DILIMAN INSTITUTE OF CIVIL ENGINEERING CE 123 CONSTRUCTION ENGINEERING & 45 MANAGEMENT 1 UP DILIMAN INSTITUTE OF CIVIL ENGINEERING CE 123 CONSTRUCTION ENGINEERING & 46 MANAGEMENT 1 UP DILIMAN INSTITUTE OF CIVIL ENGINEERING CE 123 CONSTRUCTION ENGINEERING & 47 MANAGEMENT 1 UP DILIMAN INSTITUTE OF CIVIL ENGINEERING This panel summarizes the key differences between procurement of Infrastructure projects and that of consultancy services. CE 123 CONSTRUCTION ENGINEERING & 48 MANAGEMENT 1 UP DILIMAN INSTITUTE OF CIVIL ENGINEERING As a guide for the general conditions of contracts, we will be using the CIAP Document 102. CIAP stands for the Construction Industry Authority of the Philippines. CIAP 102 basically outlines the responsibilities and liabilities of both the contractor and owner throughout a project. Within this document are the uniform general conditions of a contract for private construction. It discusses the necessary documents needed for construction to commence, and the laws and regulations that the contractor and the owner must abide by. It also outlines the permits and taxes, how the labor, equipment and materials involved in the work are to be paid for. The relationship between the main contractor, a separate contractor and/or a subcontractor is also described in this document, helping guide the contractors and owners in identifying the responsibilities of each entity. This document also outlines when suspension of work is valid, and when the contract can be terminated. Because a project is time-bound, any delays could cause the contractor more money. This could be due to penalty fees which could be included in the contract, or it could cause them money to hire more people for another shift so that construction is round the clock. Certain conditions discussed in this document allow a contractor to suspend work and ask for an extension from the client (i.e. Force majeure –extreme flooding/ flash floods (this is something no one would have been able to foresee), health concerns (COVID-19), etc. ). A delay in the delivery of materials does not fall under these conditions for contract extension. CE 123 CONSTRUCTION ENGINEERING & 49 MANAGEMENT 1 UP DILIMAN INSTITUTE OF CIVIL ENGINEERING Above shows the rules for interpretation of contracts. Rule 1: Both parties must fully understand the contract BEFORE they sign it. Should there be clauses that are unclear or vague, either party can ask that it be clarified and changed before they sign it. Rule 2: Should the contract be questioned (and it leads to a court case), the contract will be evaluated based on the provisions of the Civil Code as of the date of the contract. (i.e. If the Civil code was amended in 1992, 2005, 2018 but the contract was dated in 2012, the court will follow the Civil code of 2005.) CE 123 CONSTRUCTION ENGINEERING & 50 MANAGEMENT 1 UP DILIMAN INSTITUTE OF CIVIL ENGINEERING Above shows the continuation for the rules for interpretation of contracts. CE 123 CONSTRUCTION ENGINEERING & 51 MANAGEMENT 1 UP DILIMAN INSTITUTE OF CIVIL ENGINEERING Above shows the continuation for the rules for interpretation of contracts. Rule 4: Where the conflict can not be resolved by applying Rule 3 or where Rule 3 does not apply, the conflict shall be resolved by giving precedence to the Agreement or to provisions of the Contract Document higher in order of priority among the various documents which comprise the Contract. The order of priority is given on top. CE 123 CONSTRUCTION ENGINEERING & 52 MANAGEMENT 1 UP DILIMAN INSTITUTE OF CIVIL ENGINEERING Above shows the continuation for the rules for interpretation of contracts. Rule 5: When a material or equipment or work has been removed from one document but is present in other documents, it is assumed that though not explicitly stated, the “missing” work is still applicable in all contract documents. CE 123 CONSTRUCTION ENGINEERING & 53 MANAGEMENT 1 UP DILIMAN INSTITUTE OF CIVIL ENGINEERING Above shows the continuation for the rules for interpretation of contracts. Rule 6: This basically means that if there is no special mention of the work, then it is assumed that the work will be done in accordance with the standards and local regulations of the areas. CE 123 CONSTRUCTION ENGINEERING & 54 MANAGEMENT 1 UP DILIMAN INSTITUTE OF CIVIL ENGINEERING Within the contract are the material specifications that must be approved by the client and contractor, usually before they are used. For steel and concrete, tests are done to ensure that the material to be used is at par with the local standards. The contractor shall submit to the Owner as many samples as may be needed for purposes of testing. Testing of all samples shall comply with the Specifications and government standards. Note: This applies not only to finishing materials (e.g. tiles, railings, glass, paint, etc) but also applied to load bearing materials like rebars, concrete, timber, etc.. Samples for concrete are taken from the transit mixer just before concrete is placed, usually enough for atleast 6 cylinders (28th day, 56 day strengths) or as agreed upon in the contract. If the concrete fails to meet the minimum strength after a specified period, the client may request removal and replacement at the contractor’s expense or redesign and reinforcement of the section to ensure that it still meets the minimum design strength requirement, also at the contractor’s expense. The types of rebars to be used in the project are usually tested before they are used on site. CE 123 CONSTRUCTION ENGINEERING & 55 MANAGEMENT 1 UP DILIMAN INSTITUTE OF CIVIL ENGINEERING CE 123 CONSTRUCTION ENGINEERING & MANAGEMENT 1 UP DILIMAN INSTITUTE OF CIVIL ENGINEERING CE 123 CONSTRUCTION ENGINEERING & MANAGEMENT 1 UP DILIMAN INSTITUTE OF CIVIL ENGINEERING CE 123 CONSTRUCTION ENGINEERING & MANAGEMENT 1 UP DILIMAN INSTITUTE OF CIVIL ENGINEERING CE 123 CONSTRUCTION ENGINEERING & 59 MANAGEMENT 1 UP DILIMAN INSTITUTE OF CIVIL ENGINEERING CE 123 CONSTRUCTION ENGINEERING & 60 MANAGEMENT 1 UP DILIMAN INSTITUTE OF CIVIL ENGINEERING As provided in the amended BOT law and its Implementing Rules and Regulations (IRR), collaborative partnerships between the government and the private sector can be made possible through a broad spectrum of modalities. The BOT law identifies a number of variants and includes a catch all provision for other variants that may be identified later. However project implemented using new variants are subject to the approval of the President of the Philippines. BOT: Includes a supply-and-operate scheme, a contractual arrangement whereby the supplier of equipment and machinery for a given infrastructure facility, if the interest of the Government so requires, operates the facility. BT: May be employed in any project, including critical facilities which, for security or strategic reasons, must be operated by the Government. BOO: All BOO projects upon recommendation of the NEDA-Investment Coordination Committee (ICC) shall be approved by the President of the Philippines. CE 123 CONSTRUCTION ENGINEERING & 61 MANAGEMENT 1 UP DILIMAN INSTITUTE OF CIVIL ENGINEERING CAO: There may or may not be a transfer arrangement with regard to the added facility provided by the project proponent CE 123 CONSTRUCTION ENGINEERING & 62 MANAGEMENT 1 UP DILIMAN INSTITUTE OF CIVIL ENGINEERING DOT: Project proponent enjoys some benefits the initial investment creates such as higher property or rent values; akin to BOT with the option to develop adjoining property. ROT: Also used to describe the purchase of facility from abroad, importing, refurbishing, erecting and consuming it within the host country. ROO: Period to operate is dependent on franchise agreement. CE 123 CONSTRUCTION ENGINEERING & 63 MANAGEMENT 1 UP DILIMAN INSTITUTE OF CIVIL ENGINEERING CE 123 CONSTRUCTION ENGINEERING & MANAGEMENT 1 UP DILIMAN INSTITUTE OF CIVIL ENGINEERING CE 123 CONSTRUCTION ENGINEERING & MANAGEMENT 1