SOP Exhibits

Title:

Guidelines on the Conduct of Bidding for the Purchase
of Supplies/Materials and Services Rqmts. of NFA

SOP Number : GS-PD15

I. OBJECTIVE

To establish a standard procedure on the conduct of bidding for the procurement of supplies/ materials and services requirements of the NFA which shall serve as a guide to the personnel involved in such activity.

II. SCOPE

These guidelines shall apply to all contracts of the NFA for the acquisition of goods/supplies/materials and for the procurement of the following services for either project-related or normal/regular operations and maintenance activities done through public bidding and sealed canvass bidding including negotiated procurement:

1. Office Equipment Repair/Maintenance

2. Vehicle repair and maintenance

3. Building/Office Maintenance/Beautification

4. Employees’ Uniform/Draperies Making

5. Carpet Shampooing

6. Upholstery

Procurement of services such as janitorial or security services is not covered by these guidelines. However, procurement of materials and supplies provided by the NFA for such services shall be governed by these guidelines.

III. BASIS

Executive Order No. 302 dated March 1, 1997 and its Implementing Rules and Regulations.

IV. IMPLEMENTING GUIDELINES

GENERAL POLICIES

1. The Pre-qualification, Bids and Awards Committees (PBACs) shall be responsible for the conduct of bidding, evaluation of bids and recommending award of contracts for purchases amounting to P1M and above which shall be done through public bidding.

2. Likewise, the Committees on Sealed Bids (CSBs) shall undertake the same functions as the PBAC for purchases amounting to P50,000 to less than P1M which shall be done through sealed canvass bidding.

3. Each PBACs and CSBs shall be supported by a Technical Committee and a Secretariat which shall be created to provide technical and administrative assistance to the committees.

4. A quorum of the PBAC/CSB shall be composed of the Chairman or his designated alternate plus two (2) of its members. The Chairman may call meetings at any time as required to expedite work presented to the Committee. Decisions shall be made by a simple majority vote of members except the Chairman, who shall cast his vote only in the case of a tie.

5. The decisions of the PBACs/CSBs shall be recommendatory subject to the final approval/authority of the authorized official based on the established levels of authority.

6. The Property Supply and Management Division (PSMD), GSD which shall act as Secretariat to the PBACs/CSBs shall prepare and keep on file detailed reports on the evaluation and comparison of bids setting forth the specific reasons on which the recommendations are based for the award of the contract.

SPECIFIC POLICIES

BIDDING PROCESS

1. PREPARATION OF BID/TENDER DOCUMENTS

The Secretariat of the concerned PBAC/CSB shall be responsible for the preparation of the bid/tender documents which shall basically include the following:

The Instruction to Bidders

, which establishes the rules of the bidding. This shall describe clearly and precisely the following information:

General Description of the items to be supplied, including site location and other pertinent information.

Scope of Bids, whether bidders are required to bid for the entire contract or are permitted to bid for parts of it.

Bid Submission Procedures and Requirements which shall include information on the language to be used in the preparation of bids, the manner of submission, the number of copies to be submitted, the deadline for submission and the place where the bids are to be submitted, permissible mode of transmission of bid proposals, the exact place, date and time of opening of bids, except in the case of the two (2) stage bidding where the exact place, date and time of bid opening shall be announced as prescribed by the PBAC/CSB.

Terms of Delivery which shall refer to the basis/currencies and applicable exchange rates on which the bid prices are to be quoted and on what terms the contract is to be awarded.

Bid and Bid Bond Validity Period,. The bid proposal including bid bonds must be valid and firm for a period of not more than four (4) months. It shall be fully understood that the prices quoted for all items has taken into account the time that will be required for the evaluation of bids, selection of the successful bidder, award of contract and the stipulated delivery period.

Method and Criteria for Bid Evaluation that will be adopted.

· Pre-bid Conference schedule

Disclaimers such as the cost of bid preparation and submission to be borne solely by the bidder, the rights of the NFA to reject any or all bids, to declare a bidding a failure, to waive any required formality in the bids received among others.

The Conditions of Contract

which clearly defines the basic and legal responsibilities of and relationships between the parties involved. Provisions for bonds, guarantee, warranty obligations, form of warranty and warranty period, insurance, liquidated damages, taxes and duties, force majeure or fortuitous events, contract termination and resolution of disputes and other conditions should also be included.

Technical Specification

which describes all the essential features of the items to be procured and should state that non-conformity with these features would render the bids as substantially non-responsive. Drawings should be consistent with the text of the technical specifications.

As a general rule , reference to brand names shall be avoided except when deemed necessary to ensure inclusion of certain essential features. In such case, the reference should be followed by the words "or equivalent" and the specifications should permit offers of alternative goods which provide performance and quality at least equal to those specified.

PUBLICATION OF INVITATIONS TO PRE-QUALIFY AND TO BID

a) For procurements done through Public Bidding, invitations to pre-qualify and to bid shall be publicly advertised for at least three (3) times within at least two (2) consecutive weeks in at least two (2) newspapers of general circulation which have been regularly published for at least two (2) years prior to the date of issuance of such invitations.

b) For Sealed Canvass Bidding, invitations to submit sealed bids shall be directly distributed to accredited suppliers/contractors.

c) The Invitation to Pre-qualify and to Bid shall include the following:

i. the general description and nature of the goods to be procured;

ii. the deadline set for securing pre-qualification statement forms/documents including the place where such documents could be obtained;

iii. the P 500.00 cost of the pre-qualification statement forms/documents which shall be payable in cash;

iv. the deadline set for the submission of bidders' pre-qualification statements, including the place/office where the same shall be submitted;

v. the method/criteria to be adopted in the evaluation/assessment of bidders pre-qualification statements;

vi. the contact person, complete name, address, telephone, telex and fax numbers of the NFA

3. PRE-QUALIFICATION OF BIDDERS

Bidders Eligibility

- the following suppliers, whether 100% local - or at most 40% foreign-owned, may participate in the bidding for the supply of goods to be bid out by the NFA:

i. Duly Licensed Individuals/Sole Proprietorship

ii. Partnerships or Corporations

iii. Manufacturers/suppliers/distributors forming themselves into a joint venture, i.e., a group of two or more manufacturers/suppliers/distributors that intend to be jointly and severally liable for a particular contract;

iv. Cooperatives duly registered with the Cooperatives Development Authority (CDA).

Pre-qualification Requirements

- the PBAC/CSB may set certain pre-qualification requirements which may include but not limited to the following:

i. Photocopy of Current Year Mayor's Permit or Municipal License

ii. Photocopy of Certificate of Registration

For Corporations

Articles of Incorporation/By-Laws and Amendments

Certificate of Registration with the Securities & Exchange Commission (SEC)

Board Resolution authorizing the person representing the corporation

b) For Partnerships:

Articles of Company Partnership and Amendments, if any

Certificate of Registration with the SEC

By-Laws

iii. Audited Financial Statements for the last two (2) fiscal years (BIR or SEC stamped)

iv. Income Tax Return for the last two (2) years

v. VAT Registration Number

vi. Regional Trial Court (RTC) Clearance issued at principal place of business

vii. Address of Main Office and branches

viii. List of existing clients/projects completed/on-going projects

ix. For distributors/dealers

Contract of Distributorship/Dealership from Manufacturer/Mother Company

x. For Importer/Exporter

Bureau of Customs Clearance (specifying that the importer/exporter has no outstanding obligations with the Bureau of Customs)

xi . List/Resume of Key Personnel

c) The capabilities and resources of prospective bidders should be assessed to determine if the same could satisfactorily perform the contract requirements. The pre-qualification should take into account the bidders' financial, technical and production capabilities based on documents submitted. Other relevant factual information including previous experiences on the product should also be considered.

ach prospective bidder shall be assessed vis-a-vis the pre-qualification requirements of the NFA and shall be determined as either “Pre-qualified” or “Predisqualified”. All pre-qualified bidders shall be informed within seven (7) calendar days from approval thereof through official notices. Pre-disqualified bidders shall also be informed within the same period of time of the grounds for their disqualification and shall be allowed seven (7) calendar days from receipt of such notice to appeal for reconsideration.

e) The NFA reserves the right to review the qualifications of a selected bidder before actual award of contract is made. Any misrepresentations of any information or concealment of any material fact in the bidder's pre-qualification statements and/or bids, or any other acts of the manufacturer/supplier/distributor which directly or indirectly tend to defeat the purpose of competitive bidding shall be subject to the administrative sanctions prescribed herein.

4. ISSUANCE OF BID/TENDER DOCUMENTS

To give ample time to pre-qualified bidders to examine the Bid/Tender Documents and to prepare their respective bids, the concerned PBAC/CSB shall make available the related Bid/Tender Documents in accordance with the following schedule:

Estimated Project Cost Issuance of Bid/Tender

(in Pesos)

Documents

up to 15M 15 days before date of bid opening

above 15M to 50M 30 days before date of bid

opening

above 50M to 100M 45 days before date of bid

opening

above 100M 60 days before date of bid

opening

The above schedule may be extended depending on the complexity of the requirements to be bid out.

5. PRE-BID CONFERENCES

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Pre-bid conferences may be conducted at the discretion of the PBACs/CSBs or upon written request of any pre-qualified bidder to clarify and/or explain any of the requirements, terms, conditions and specifications stipulated in the bidding documents.

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oAny modifications in the terms in the bidding documents that may be agreed upon in the pre-bid conference shall be made as a written amendment. Each amendment/addendum issued shall be distributed to each party to whom the bid documents have been issued. The recipient shall acknowledge receipt of each amendment/addendum by signing and returning the receipt form distributed with the amendment/addenda. All amendment/addenda shall become part of the contract documents.

6. SUBMISSION, RECEIPT AND OPENING OF BIDS

a) Bidders shall be required to submit bids in accordance with the procedure prescribed by the PBACs/CSBs which might be any of the following:

1. Single Stage bidding - bidders shall be required to submit both the technical and financial proposals in one (1) sealed envelope only. Evaluation and comparison of bids in terms of their financial and technical offers shall be undertaken simultaneously.

2. Single Stage bidding variation - a variation to the above procedure wherein bidders are required to submit the technical and financial proposals in separate sealed envelopes. The technical proposal shall be opened first and evaluated to determine compliance with the technical specifications/requirements. After the technical evaluation, only the price tenders of those bidders found to be substantially complying with the technical specifications shall be opened and evaluated further.

3. Two Stage bidding - this is used in cases wherein the required technical specifications/requirements of the contract cannot be precisely defined in advance of bidding, or where the problem of technically unequal bids is likely to occur. In these cases, the technical specification is in the form of performance criteria only.

i. Under this procedure, bidders shall be required at the first stage to submit their technical proposals only (no price tenders). The concerned PBAC/CSB shall then evaluate the technical merits of the proposals received vis-a-vis the required performance standards. A meeting/discussion shall then be held by the PBAC/CSB with the bidders whose technical tenders meet the minimum required standards for purposes of drawing up the final revised technical specifications/requirements of the contract.

ii. Once the final revised technical specifications are completed and approved by the concerned PBAC/CSB, copies of the same shall be issued to the bidders who participated in the first stage. The bidders shall then be required to submit their revised technical tenders and their price proposals in two (2) separate sealed envelopes at a specified deadline, afterwhich no bids shall be received.

iii. The concerned PBAC/CSB shall then proceed with the bidding process in accordance with applicable procedures prescribed in the Single Stage Bidding variation.

b) Bid proposals shall be sealed in an envelope, endorsed and addressed as required in the Invitation to Bid and delivered in sufficient time to the place of bid submission as designated. Bids received after the time set for submission shall not be considered and shall be returned unopened. The NFA shall have no responsibility for the premature opening of bids not properly addressed and identified.

c) Bid Bond - each bid shall be accompanied by a bid bond equivalent to five percent (5%) of the total bid price either in cash, Bank/ Manager's Check payable to the NFA or a GSIS Surety Bond which must be valid for at least four (4) months from the date of opening of bids.

d) Withdrawal of bids - upon written request of bidders, bids may be withdrawn or modified prior to the deadline set for the submission of bids (for single-stage bidding and its variation) or before the time and date set for the opening of bids (for two-stage bidding).

Withdrawal of bids after the applicable deadline shall be subject to appropriate sanctions prescribed in these guidelines.

7. EXAMINATION AND EVALUATION OF BIDS

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Prior to bid evaluation and comparison, bids received shall be examined with respect to the following:

bid bonds as to form and amount

responsibilities/compliance with the bidding documents and technical specifications, eligibility requirements

authority of signatory - bids must be signed by the duly authorized representative of the bidder supported by a Board Resolution in case of a corporation/partnership or by a Special Power of Attorney in case of a single proprietorship, if not signed by the owner, to bind the bidder.

any material computational errors in preparing the bid - the PBAC/CSB concerned may be allowed to waive any minor informalities in a bid which are matter of forms rather than substance evident from the bid document, or insignificant mistakes which has negligible effects on the price, quantity, quality, delivery or contract conditions. Examples of these may include failure of bidder to return the number of copies of signed bids required, typographical errors, errors in extending unit prices, transposition errors and arithmetical errors.

Only bids that are determined to be complete, valid, eligible and substantially responsive and complying shall be considered for evaluation and comparison.

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Evaluation of bids shall be completed not later than thirty (30) calendar days from the date of the opening of bids. The PBACs/CSBs may employ any of the following specific evaluation guidelines to determine a bid’s evaluated cost that it deems appropriate for the requirement of a particular contract:

i. Lowest Price Analysis- this is used in procuring ordinary/regular supplies, materials and equipment or where there is a strong possibility that offers will be identical or comparable materials.

ii. Price plus other factor analysis - in the procurement of durable goods such as vehicles, computers, and other equipment, it is more appropriate to evaluate each bid on the basis of the price quoted and other relevant factors that are intrinsic to the purpose for which the goods are intended. The probable costs of these factors shall, where possible and appropriate, be quantified in monetary terms to facilitate comparison. Among the major factors that may be considered are the following:

· Extra features, options, accessories, etc.

· Cost of inland transportation and insurance

· Delivery schedules.

· Cost of spare parts.

iii. Life Cycle Cost Analysis -this involves the assessment of the initial cost of the acquisition plus the follow-on cost of ownership. This is most suitable for equipment and other items where the follow-on costs for operation and maintenance are substantial.

iv. Merit Point System - bids are evaluated by assigning points or weights for price and other relevant factors. The allocation of points or weights must be in accordance with the relative relevance of the different factors to be considered.

8. FAILURE OF BIDDING

If only one (1) bidder is found to be pre-qualified, or that only one bidder responded to the Invitation to Pre-qualify and to Bid, the PBAC/CSB shall cease to proceed with the bidding process and shall re-advertise the invitation. The previously pre-qualified bidder shall automatically be considered as pre-qualified during the second advertisement. Should the same condition occur after the second advertisement, the PBAC/CSB shall declare the bidding a failure and resort to negotiated procurement with the lone pre-qualifying bidder provided that his bid is substantially responsive and complying with the technical requirements/specifications of the contract, that his price offer is fair and reasonable, and that other prospective bidders were given equal opportunity to respond.

B. CONTRACT AWARD AND IMPLEMENTATION

1. AWARD OF CONTRACT

a) The decision whether or not to award the contract shall be made after thirty (30) calendar days after the completion of bid evaluation. If the decision is to award the contract, the Letter of Award/Acceptance of Bid Offer should be signed by the Chairman of the concerned PBAC/CSB as the case may be and issued within seven (7) calendar days from the date the decision to award is made.

b) The contract shall be awarded to the bidder whose bid has been determined to be the lowest evaluated responsive bid and who meets the appropriate standards of capability and financial resources.

c) The successful bidder should execute the contract with the PBAC/CSB within fifteen (15) calendar days upon receipt of the Notice of Award. Each unsuccessful bidder shall also be notified of the award through official notices/communications.

d) Contract award shall be made within the bid validity period, and should it become necessary to extend the validity of bids, the PBAC/CSB shall request in writing all the participating bidders for such extension before the bid expiration date. Bidders, however, shall have the right to refuse to grant such an extension without forfeiting their bid bonds.

2. PERFORMANCE BOND

The successful bidder shall within five (5) working days from the date of receipt of the approved PO/JO/contract post a Performance Bond according to the following schedule:

Acceptable Form

Required Amount

(in Percent of total contract price)

a. Cash 5%

b. Manager’s Check 5%

c. Cashier’s Check 5%

d. Surety Bond callable on demand issued

by the GSIS 30%

The performance bond serves as a guarantee to assure faithful compliance of the supplier with the terms and conditions of the contract and to answer for any damages or penalties that may be suffered by the NFA by reason of any violation/s in the terms and conditions of the contract.

3. WARRANTIES

To assure that manufacturing defects (including installation services) will be corrected by the successful bidder, a minimum warranty (free labor and parts) is required for a period of one (1) year from the date of issuance of the Certificate of Acceptance by the NFA.

The supplier's obligation for the warranty shall be covered by a retention money equivalent to ten percent (10%) of the total contract. The retention money shall only be released after the warranty period provided that the goods supplied are free from defects and all the conditions imposed under the contract are met.

4. REFUSAL TO ENTER INTO CONTRACT

Should the lowest evaluated responsive and complying bidder refuse, fail or is unable to enter into contract with the NFA and/or post the required performance security within the prescribed time, he shall be meted with appropriate sanctions as provided in these guidelines and the PBAC/CSB may consider for award the second lowest evaluated responsive bidder at his bid price provided it does not exceed the total amount of the lowest evaluated responsive bid including the amount of the bid bond posted. In case of another refusal or failure, appropriate sanctions shall likewise be imposed and the PBAC/CSB may consider the next ranked bidder and so on until an award is made.

5. SUSPENSION OF WORK

The NFA may suspend the work wholly or partly by written order for a certain period of time as it deems necessary due to force majeure or any fortuitous events. Appropriate adjustments shall be made in the delivery schedule or contract price, or both, and the contract shall be modified accordingly.

6. CONTRACT TERMINATION - the NFA may terminate the contract for reasons of default and/or convenience:

Termination for Default

. If the supplier refuses or fails to perform any of the provisions of the contract with such diligence as will ensure its completion within the time specified in the contract, or any extension thereof, or otherwise fails to timely satisfy the contract provisions, or commits any other substantial breach of the contract, the PBAC/CSB concerned shall notify the supplier in writing of the delay or non-performance and if no remedial action was taken by the supplier within the time prescribed in the written notice, the NFA may terminate the supplier's right to proceed with the contract or such part of the contract as to which there has been a delay or a failure to properly perform.

In the event that such termination applies to the remainder of the contract, the NFA shall impose the appropriate administrative sanctions prescribed herein and may proceed to contract out the remaining works/items through negotiated procurement. In case the termination applies only to portions of the remaining works/items, the NFA may likewise resort to negotiated procurement to acquire the terminated portions of the contract and the original suplier shall be held liable for the excess in the costs to be incurred by NFA for the portions terminated.

Termination for Convenience

. The concerned PBAC/CSB, when the interest of the NFA so require, may terminate the contract in whole or in part, for the convenience of the Government. The PBAC/CSB shall issue a Notice of Termination to the supplier specifying the part(s) of the contract terminated and the date when termination becomes effective.

The supplier should incur no further obligations in connection with the terminated work and on the date set in the notice of termination will stop work to the extent specified. The supplier should also terminate outstanding orders and subcontracts related to the terminated work and shall settle liabilities and claims arising out thereto. The supplier, however, must still complete the work not terminated and incur obligations as may be deemed necessary.

7. LIQUIDATED DAMAGES

When the supplier fails to satisfactorily deliver goods under the contract within the specified delivery schedule, inclusive of duly granted time extensions, if any, the supplier shall be liable for damages for the delay and shall pay the NFA for liquidated damages, not by way of penalty, an amount equal to one-tenth (1/10) of one percent (1%) of the cost of the delayed goods scheduled for delivery for every day of delay until such goods are finally accepted by the NFA.

Such amount shall be deducted from any money due or which may become due to the supplier ,or collect the same from any securities or warrantees posted by the supplier whichever is convenient to the NFA. In no case shall the total sum of the liquidated damages exceed fifteen percent (15%) of the total contract price in which case , the NFA may terminate the contract and impose appropriate sanctions over and above the liquidated damages to be paid.

8. ADMINISTRATIVE SANCTIONS

The following sanctions shall be imposed on suppliers for offenses/violations committed as indicated herein:

Offense/Violation Sanction

1. Misrepresentations of any information or First Offense -Suspension for one (1) year concealment of any material fact in the

bidder's qualification statements or bids Second Offense- Disqualification to bid

for two (2) years

2. Other acts of the supplier which directly
or indirectly tend to defeat the purpose of Third Offense - Perpetual disqualification
competitive bidding
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3. Refusal or failure of the selected bidder First Offense - Forfeiture of Bid bond

4. Failure to post the required performance Second Offense - Forfeiture of bid bond & bond within the prescribed time suspension for one year
5. Withdrawal of bid after the applicable Third Offense - Forfeiture of bid bond and

deadline perpetual disqualification

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6. Contract termination due to supplier's First Offense - Forfeiture of default Performance bond
Second Offense - Forfeiture of performance bond and suspension for
one (1) year

Third Offense - Forfeiture of performance
bond and suspension for
two (2) years