NPM 126-2013

Requesting Entity: Local Government Unit of the Island Garden City of Samal (Samal City)

Issues Concern: Discount on Bid Price



Whether Samal City may consider and apply the five percent (5%) discount offered by a bidder to its bid price.

Republic Act No. (RA) 9184 and its revised Implementing Rules and Regulations (IRR), including its associated issuances, such as the PBDs, recognize offering of discounts to bid offers. Section 32.2.4 of the IRR recognizes the consideration of bid modifications in the computation of the bid price. Bid modifications may be in the form of discounts offered either as part of the financial document or through the Bid Form. Thus, as explained in an earlier opinion, although Section 32.2.4 of the IRR does not mention the word "discount", it does not mean that discounts are not to be considered in the computation of the bidder's total calculated bid price. ITB Clause 27.4 of the PBDs for the Procurement of Infrastructure Projects provides that the determination of the Lowest Calculated Bid requires the evaluation and correction for computational errors, discounts and other modifications.

Based on this, an offer of discount in the Bid Form can be validly considered in the computation of the total calculated bid price. For your guidance, since the offered discount does not qualify the methodology of its application, it can be presumed that the discount will apply to the whole amount of the identified bid price. Thus, the total calculated bid will be determined by deducting five percent (5%) from the bid price.