Local Government Procurement

Manual (LGPM)

Standardized Bidding Procedures

for Infrastructure Projects
Engr. DANTE M. JABUTAY
Supervising Technical Audit Specialist
Commission on Audit, Region XIII, Butuan City
Mobile No.: 09192593999 / 09332731333

1
Infrastructure Projects:
Include the constn, imprvt, rehab,
demolation, repair, restoration or maint. of
roads & bridges, railways, airports,
seaports, comm. facilities, civil works
components of IT projects. Irrigation, flood
control & drainage, water supply,
sanitation, sewerage & solid waste mngt.
systems, shore protection, energy/power
& electrification facilities, national/school/
hospital buildings & other related const.
projects of the govt.
 Detailed Engineering for the
Procurement of Infrastructure
Projects (Annex A)
No bidding and award of contract for infrastructure
projects shall be made unless the detailed engineering
investigations, surveys and designs, including the
acquisition of the ROW for the project have been
sufficiently carried out and duly approved in
accordance with the standards and specifications
prescribed by the head of the procuring entity
concerned or his duly authorized representative.

3
Detailed Engineering
Shall proceed only on the basis of the
feasibility or preliminary engineering
study made which establishes the technical
viability of the project.

No POW for any project shall be

approved without Detailed Engg.
No construction work on any project
be started before the POW is approved.
4
Procurement Process Flow

Procurement Pre- Advertisement

Pre-bid
Planning procurement and/or
Posting Conference
Conference

Opening and Opening and

Detailed Submission
Evaluation of Evaluation of
Evaluation of and Receipt
Second First
Bids of Bids
Envelope Envelope

Post- Award of Notice to Contract

qualification Contract Proceed Implementation

5
Pre-procurement Conference (Sec. 20)
Prior to the advertisement or the issuance of the
Invitation to Bid, the BAC, through its Secretariat,
shall call for a pre-procurement conference, to;
A. Confirm the description & scope of the contract, the
ABC & contract duration;
B. Ensure that the procurement is in accordance with
the project and Annual Procurement Plan;
C. Determine the readiness of the procurement at hand;
D. Review, modify and agree on the criteria for
eligibility screening, evaluation & post
qualification;
6
E. Clarify that the specifications and other terms in the
bidding documents are minimum requirements;
F. Review & adopt the procurement schedule,
including deadlines & timeframes for the different
activities; and
G. Reiterate and emphasize the importance of
confidentiality (in accordance w/ section19), and
the applicable sanctions and penalties;
The holding of a pre-procurement conference may
not be required for projects costing P5M and below;

7
Advertisement / Posting
All contracts regardless of amount:
1. Posted continuously in the Phil-GEPS website;
2. Posted continuously in the website of the
procuring entity concerned, if available;
3. Posted at any conspicuous place reserved for
this purpose in the premises of the procuring
entity, as certified by the Head of BAC
Secretariat of the procuring entity concerned.
Non-compliance of posting requirement is a
material defect in the procurement process.
8
Advertised at least once in a (1)
newspaper of general nationwide
circulation which have been regularly
published for at least two (2) years before
the date of issue of the advertisement;

9
For infrastructure projects, the following
maximum periods from the last day of posting of
the Invitation to Bid up to the last day of
submission of bids shall be observed:

Approved Budget for the Period

Contract (in pesos)
Fifty (50) million and below 50 calendar days

Above fifty (50) million 65 calendar days

10
Eligibility Screening (Sec. 23.5.2)
A. Eligibility Criteria
1. The following persons/entities shall be
allowed to participate in the bidding for
infrastructure project:
a. Duly licensed Filipino citizens/sole
proprietorships;
b. Partnership 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;

11
2. Must have a PCAB license.
3. Must have experience of having completed at
least one (1) contract that is similar to the
contract to be bid, and whose value adjusted to
current prices using the NSO consumer price
indices, should be at least fifty (50%) percent of
the ABC. (GPPB Res. 11-2012)

12
4. The Constructors Performance Evaluation
System (CPES) rating and/or certificate of
completion and owners acceptance of the
contract must be satisfactory. (Annex-E)
5. The prospective bidders NFCC must be at
least equal to the ABC, calculated as follows:
NFCC = [(Current assets minus current
liabilities) multiplied by (K)] minus the value
of all outstanding works or projects under
ongoing contracts, including awarded contracts
yet to be started. (CLC no longer acceptable per GPPB Res.
20-2013)

13
Section 23.7
Notwithstanding the eligibility of a prospective
bidder, the procuring entity concerned reserves
the right to review its qualifications at any stage
of the procurement process if it has reasonable
grounds to believe that a misrepresentation has
been made by the said prospective bidder, or
that there has been a change in the prospective
bidders situation from the time it submitted its
eligibility requirements.

14
B. Eligibility Check for Infrastructure Projects
The determination of eligibility shall be based on
the submission of the following:
1. Class A Documents
Legal Documents:
a. DTI /SEC/CDA registration or as stated in the
Bidding Documents.
b. Mayors Permit, issued by the City or Municipality
where the principal place of business of the
prospective bidder is located. (GPPB Res. 02-2015, allows
submission of the bidders recently expired mayors permit & Official
Receipt as proof that the bidder has applied for renewal w/in the prescribed
period; Provided that the current & valid mayors permit be submitted prior
to award of contract)
c. Tax Clearance, per EO 398, series of 2005, as finally
reviewed & approved by the BIR, (GPPB Res# 21-2013) 15
 Technical Documents:
a. Statement of all on-going and completed contracts. (GPPB
Res. 29-2012, states that failure to include an immaterial on-going contract
or failure to disclose complete information in the statement of contracts
shall result to dis-qualification, under Section 23.1 or blacklisting under
Section 65.3 (a) or (b) of the revised IRR.
b. PCAB License and Registration

Finanacial Documents:
a. Audited Financial Statement stamped received by the
BIR.
b. NFCC computation, (values of current assets &
liabilities shall be based on the data submitted to the BIR
through eFPS) (No CLC per GPPB Res# 20-2013)

16
2. Class B Documents: If Joint
Venture-
a. Joint Venture Agreement;
b. If no JVA, sworn statements
by each partner that they
will abide by provisions of
the JVA if awarded the
contract.
17
Pre-Bid Conference (Sec. 22)
For contracts to be bid with an approved budget of
P1M or more, the BAC shall convene at least one (1)
pre-bid conference to clarify and/or explain any
requirements, terms, conditions and specifications
stipulated in the bidding documents.
For contracts to be bid costing less than P1M pre-bid
conferences may be conducted at the discretion of the
BAC. Subject to the approval of the BAC, a pre-bid
conference may also conducted upon written request of
any prospective bidder.

18
The pre-bid conference shall be held at least 12 cd
before the deadline for the submission and receipt of
bids. However, attendance of the bidders shall not be
mandatory.

The pre-bid conference shall discuss, among other

things, the technical and financial components of the
contract to be bid. The minutes of the pre-bid
conference shall be recorded and made available to all
participants not later than 3 cd after the pre-bid
conference.

19
Request for clarification(s) must be in writing and
submitted to the BAC at least 10 cd before the deadline
set for the submission and receipt of bids. The BAC
shall respond to the said request by issuing a
Supplemental/Bid Bulletin, at least 7 cd before the
deadline for the submission and receipt of bids.
Any Supplemental/Bid Bulletin issued by the BAC
shall also be posted on the website of the procuring
entity concerned, if available, and on the Phil-GEPS.

20
Submission and Receipt of Bids (Sec. 25)
Bidders shall submit their bids through their authorized
representative (i) in the prescribed Bid Form, including
its annexes, as specified in the bidding documents, (ii)
on or before the specified deadline, and (iii) in two (2)
separate sealed bid envelopes, the FIRST shall
contain the Technical Component of the bid,
including the Eligibility requirements and the
SECOND shall contain the Financial Component of
the bid.
Bids submitted after the deadline shall not be
accepted by the BAC.
21
 The FIRST envelope shall contain the
following technical information/documents,
at the least:
1. Eligibility requirements under Section 23 of this IRR
2. Bid Security as to form, amount and validity period;
3. Project requirements;
Organizational chart for the contract to be bid
List of Contractors personnel, to be assigned to the contract
to be bid
List of Contractors equipment units

22
4. Sworn Statement by the Bidder as to the ff;
Not included in the list of Blacklisted Contractors
Authenticity of documents submitted
Authorizing the HOPE to verify all the documents submitted
Authority of the signatory
Compliance with disclosure provision
Compliance with Bidders responsibility
Compliance with existing Labor Laws & Standards
It did not give or pay, directly or indirectly, any commission,
amount, fee or any form of consideration, pecuniary or
otherwise, to any person of official, personnel or
representative of the govt in relation to any procurement
project or activity, (GPPB Res# 22-2013)

23
 The SECOND Envelope (Financial
Proposal) shall contain the financial
information/documents as specified in
the Bidding Documents, the least;
Bid Form
Detailed Estimates in Bill of Quantities
Bidders Back-up Computation/Unit Price
Analysis

24
Bid Modification (Sec. 26)
A bidder may modify its bid, provided that this
is done before the deadline for the submission
and receipt of bids. Where a bidder modifies
its bid, it shall not be allowed to retrieve its
original bid, but shall only be allowed to send
another bid equally sealed, properly identified,
marked as a modification.
Bid modifications received after deadline
shall not be considered and shall be returned to
the bidder unopened.
25
Withdrawal of Bids (Sec. 26)
A bidder may, through a letter, withdraw its bid before
the deadline for the receipt of bids. Withdrawal of bids
after the applicable deadline shall be subject to
appropriate sanctions. A bidder may also express its
intention not to participate in the bidding through a
letter which should reach and be stamped received by
the BAC before the deadline for the receipt of bids.
A bidder that withdraws its bids shall not be
permitted to submit another bid, directly or indirectly,
for the same contract.

26
Bid Security (Sec. 27)
The Bid security shall be in an
amount at least equal to, and not
lower than, a percentage of the
Approved Budget for the Contract to
be bid, in accordance with the
following schedule;

27
 Amount of Bid
Form of Bid Security Security (Equal to
Percentage of the ABC)
1. Cash, cashiers/ managers check, bank
draft/guarantee confirmed by a Universal Two percent (2%)
or Commercial bank.
2. Irrevocable L/C issued by a Universal
or Commercial Bank, if issued by a Two percent (2%)
foreign bank, it shall be confirmed by a
universal or commercial bank
3. Surety bond callable upon demand
issued by a surety or ins. co. duly certified Five percent (5 %)
by the Insurance Commission as
authorize to issue such surety
4. Any combination of the foregoing Proportionate to
share of form28
5. Bid Securing Declaration (GPPB Res. 03-2012)

It is an undertaking by a prospective
bidder, committing to pay the
corresponding fine and be
suspended for a period of time from
being qualified to participate in any
govt procurement activity in the
event it violates any of the conditions
stated therein.

29
PENALTIES:
1. Automatic Blacklisting for two (2)
years in all govt procurement
activities.
2. Payment of fine equivalent to the
amount as determined.

30
Forms of Bid Security that Bidders
may submit during Public Bidding
GPPB Circular 01-2014:
States that Procuring Entities are
given the option to limit the Bid Security to
two (2) acceptable forms in the Bidding
Documents, one of which shall be the Bid
Securing Declaration and the other
maybe chosen from at least one (1) of the
forms previously mentioned.

31
 Bid Opening (Sec. 29)
The BAC shall open the bids at the time, date
and place specified in the Bidding Documents.
The bidders or their duly authorized
representatives may attend the opening of bids.
The BAC shall adopt a procedure for ensuring
the integrity, security and confidentiality of all
submitted bids. The minutes of the bid opening
shall be made available to the public upon
written request and payment of a specified fee to
recover cost of materials.
32
Bid Evaluation (Sec. 32)
The purpose of bid evaluation is to determine
the Lowest Calculated Bid. This bid shall be
subject to post-qualification to determine its
responsiveness to the eligibility and bid
requirements. If after post-qualification the
Lowest Calculated Bid is determined to be
post-qualified it shall be considered the Lowest
Calculated Responsive Bid and the contract
shall be awarded to the bidder.
33
Detailed Evaluation of Bids (Sec. 32.2)
To determine the Lowest Calculated Bid, the BAC
shall immediately conduct a detailed evaluation of
all bids rated passed using a non-discretionary
criteria, which shall include a consideration of the
following:
a.) Completeness of the Bid: 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, but
specifying a 0 (zero) for the said item would mean
that its being offered for free to the Government; and
34
b). Arithmetical Corrections:

Consider computational errors,

omissions and other bid modifications is
allowed in the Bidding Documents, to
enable proper comparison of all eligible
bids. Any adjustment shall be calculated
in monetary terms to determined the
calculated prices.

35
In the evaluation of bids, the BAC shall
evaluate all bids on an equal footing to
ensure fair and competitive bid
evaluation. 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. 36
For Cooperative Bidders: (GPPB Circular 02-2010)
To ensure all bids shall be evaluated on
an equal footing, all taxes itemized by
non-cooperatives in their bids w/c
cooperatives are exempt from shall be
added to the bids of cooperatives strictly
for purposes of evaluation &
comparison.
Award of contract shall be based on the
original bid price (less the added taxes).

37
Ranking of Total Bid Prices
Based on the detailed evaluation of
bids, those that comply with the
above-mentioned requirements shall
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.
38
Ceiling of Bid Prices (Sec. 31)
The approved budget for the contract under
bidding shall be the upper limit or ceiling for
acceptable bid prices. If a bid price, as evaluated
and calculated in accordance with this IRR, is
higher than the approved budget for the contract
under bidding, the bidder submitting the same
shall be automatically disqualified.
There shall be no lower limit or floor on the
amount of the award.

39
Post- Qualification (Sec. 34)
The determination whether the
Lowest Calculated Bidder complies
with and is responsive to all the
requirements & conditions as
specified in the Bidding Documents.

40
Post- Qualification
Three (3) days from notice of lowest
calculated bid, the bidder shall submit the
following documentary requirements to
the BAC:
1. Latest Income & Business Tax returns (only
tax returns filed & taxes paid through the BIR eFPS shall be
accepted, GPPB Res. 11-2013)
2. Certificate of Phil-GEPS Registration
3. Other appropriate Licenses & permits
required by law & stated in the bidding
documents
41
The Post-Qualification shall:
Ascertain, Validate and Verify, all
statements made and documents
submitted by the bidder with the
Lowest Calculated Bid, using non-
discretionary criteria. These criteria
shall consider, but shall not be limited
to, the following:
42
a. Legal Requirements. To verify,
validate and ascertain licenses,
certificates and permits & agreements
submitted by the bidder and the fact
that he is not included in any
Government blacklist
b. Technical Requirements. To
determine compliance with the
requirements.

43
c. Financial Requirements. To
verify, validate and ascertain the
bid price proposal of the bidder
and, whenever applicable, the
required NFCC

44
Infra Exercise:
From the list of documents given to you, identify which
document are needed or belong to the following;

1. Eligibility Documents, 1st Envelope

2. Technical documents, 1st Envelope
3. Financial Proposal. 2nd Envelope
4. Post-qualification Documents or results of post-
qualification process

45
Failure of Bidding (Sec. 35)
The BAC shall declare the bidding a
failure and conduct a re-bidding with
re-advertisement and/or posting, after a
re-evaluation of the terms, conditions
and specifications of the first bidding,
when:
1. No bids are received;

46
Failure of Bidding
2. All prospective bidders are
declared ineligible;
3. All bids fail to comply with all the
bid requirements or fail post-
qualification.

47
Failure of Bidding

4. The bidder with the Lowest

Calculated Responsive Bid
refuses, without the justifiable
cause, to accept the award of
contract, and no award is made.

48
Failure of Bidding
The BAC shall conduct a mandatory review and
evaluation of the terms, conditions and
specifications in the Bidding Documents, including
its cost estimates and if necessary, adjust the ABC
subject to the required approvals, and conduct a
re-bidding with re-advertisement and/or posting. All
bidders who have been declared eligible in the first
bidding shall be allowed to submit new bids. The
BAC shall observe the same process and set the new
periods according to the same rules followed during
the first bidding.
49
Failure of Bidding

Should there occur a second

failure of bidding, the Procuring
Entity concerned may enter into
a Negotiated Procurement. (Sec.
53)

50
Contract Award
The BAC shall recommend to the
HOPE the award of contract to the
bidder with the Lowest Calculated
Responsive Bid after the Post
Qualification process has been
completed, as its submitted bid price
or calculated bid price whichever is
lower.
51
Performance Security (Sec. 39)
Amount of Performance
Form of Performance Security (Equal to
Security Percentage of the Total
Contract Price)
1. Cash,cashiers/managers check
issued by a Univ. or Comml bank Ten percent (10%)
2. Bank draft/guarantee or
Irrevocable LC issued by a Ten percent (10 %)
Universal or Comml bank
3. Surety bond callable on demand
issued by a surety or ins. co. duly Thirty percent
certified by the Ins. Commission to (30 %)
issue such security
4. Any combinations of the Proportionate to share of
foregoing form 52
The Performance
Security shall remain
valid until issuance by
the Procuring Entity of
the Final Certificate of
Acceptance
53
Warranty Security: (Sec. 62)
Amt of Warranty
Form of Warranty Security Security
(% of Contract Price)

a) Cash or LC from a Universal/Commercial 5%

Bank

b) Bank guarantee from 10%

Universal/Commercial Bank

c) Surety bond callable upon demand 30%

issued by GSIS or a surety/insurance
company certified by the Insurance
Comm.

54
 Warranty
Defects/Liability Period Warranty Period

1 - Year
Project Final
Completion Acceptance

55
 Contract Implementation
(Annex E)

Variation Orders - Change Order/Extra

Work Order
Change Order - may be issued by the
procuring entity to cover
any increase/decrease in
quantities

56
Extra Work Order
May be issued by the Procuring Entity to
cover the introduction of new work
necessary for the completion,
improvement or protection of the project
which were not included as items of work
in the Original Contract.
Provided that the cumulative amount of
Variation Order does not exceed ten
percent (10%) of the project cost.
57
Extra Work Order
In exceptional cases where it is urgently
necessary to complete the original scope of
work, the Head of the Procuring Entity (HOPE)
may authorize the Variation Order beyond ten
percent (10%) but not more than twenty percent
(20%) subject to the guidelines to be
determined by the GPPB.
Provided, however, that appropriate sanctions
shall be imposed on the designer, consultant or
official responsible for the original detailed
engineering design which failed to consider the
Variation Order beyond ten percent. 58
Extra Work Order
For Extra Work involving work items
which are exactly the same or similar
to those in the original contract. The
applicable unit prices of work items in
the original contract shall be used.

59
Extra Work Order
For extra work duly covered by Extra
Work Orders involving new work items
that are not in the original contract. The
unit prices of the new work items shall be
used in the direct unit costs used in the
original contract (e.g. unit cost of cement,
rebars, form lumber, labor rate,
equipment rental, etc.). All components of
the new work items shall be fixed prices,
provided the same is acceptable to both
the government and the contractor,
60
Extra Work Order
And provided further that the direct unit
costs of new components shall be based on
the contractors estimate as validated by the
procuring entity concerned via documented
canvass in accordance with existing rules
and regulations. The cost of the new work
items shall then be combined with mark-up
factor (i.e. taxes and profit) used by the
contractor in his bid to determine the unit
price of the new work item.

61
Advance Payment:

equivalent to 15% of the total

contract price
shall be recouped from
progress billings

62
RETENTION MONEY:
Progress payments are subject to
10% retention
Based on total amount due prior
to any deduction
Shall be retain from every
progress payment until 50% of
the value of works are completed.
If after 50% completion,
63
The work is satisfactorily done and on
schedule, no additional retention shall be
made, otherwise, the 10% retention shall
be imposed.
Retention Money shall be due for
release upon final acceptance of the work.
The contractor may, however, request the
substitution of the retention money for
each progress billing with irrevocable
standby letter of credit, bank guarantee
or surety bond callable on demand.

64
Liquidated Damages:
All contracts executed shall
contain a provision on Liquidated
Damages (LD) w/c shall be payable by
the contractor in case of breach thereof.
The amount of (LD) shall be at
least equal to one-tenth of one percent
(0.1%) of the cost of un-performed
portion for every day of delay.

65
A project or a portion thereof
may be deemed completed
and usable when it starts to
provide the desired benefits
as certified by the targeted
end-users and the concerned
procuring entity.

66
 In case that the delay in the
completion of the work exceeds a time
duration equivalent to ten percent
(10%) of the specified contract time
plus any time extension duly granted to
the contractor, the procuring entity
may rescind the contract, forfeit the
contractors performance security and
takeover the prosecution of the project
or award the same to a qualified
contractor through negotiated contract.
67
In no case, however, shall the total sum of
liquidated damages exceed ten percent
(10%) of the total contract price, in which
event the contract shall automatically taken
over by the Procuring Entity or award the
same to a qualified contractor through
negotiation and the erring contractors
performance security shall be forfeited. The
amount of the forfeited performance security
shall be aside from the amount of the
liquidated damages that the contractor shall
pay the government under the provision of
this clause and impose other sanctions.
68
Supplemental Agreement is no
longer allowed.

Liquidated Damages shall be

imposed for delays in
completion of work but
Incentive Bonus shall not
be allowed.

69
THANK YOU!

70