NPM No. 163-2015
Requesting Entity: Road Board
Issues Concern: Registration of Joint Venture
1. Whether a Joint Venture is required to be registered with the Securities and Exchange Commission (SEC) prior to award of contract.
[A] Joint Venture need not be registered with the SEC in order for it to be eligible to participate in bidding activities. For purposes of the procurement process what is important is the determination of the responsibilities and liabilities of each co-venturer and not the creation of a separate legal entity. Hence, it is sufficient that the bidder submits a valid JVA in the case of procurement of civil works; or, in the case of procurement of Goods and Consulting Services, a valid JVA or a duly notarized statement from all the potential co-venturers stating that they will enter into and abide by the provisions of the JVA in the instance that the bid is successful.
2. If a Joint Venture has been registered, what document shall be required as proof of such registration.
Once a Joint Venture has been registered with the SEC, it shall have a distinct and separate legal personality from its co-venturers. Hence, the registered Joint Venture shall submit the appropriate Certificate of Registration issued by the SEC as part of its eligibility documents pursuant to Sections 23.1(a) and 24.1(a) of the IRR of RA 9184, including all the legal, technical and financial requirements relevant to the newly created Joint Venture entity.
3. What is the liability of the Procuring Entity (PE) if the contract has been awarded to a registered Joint Venture which failed to submit the appropriate SEC Certificate of Registration.
A Certificate of Registration issued by the SEC is one of the eligibility documents required to be submitted by a prospective bidder registered as a partnership or a corporation. Hence, if it fails to submit the appropriate Certificate of Registration, it shall be declared ineligible upon determination by the BAC using the non-discretionary "Pass/Fail" criterion. Accordingly, an award made to an ineligible bidder shall be null and void with the concerned BAC officials bearing full responsibility of the failed bidding and award.