NPM No. 169-2015
Requesting Entity: Bacolod City Water District (BCWD)
Issues Concern: Performance Security
Which between the five percent (5%) performance security for delivery of goods and the ten percent (10%) performance security for infrastructure projects shall be used, in case it is necessary for the winning bidder to undertake an infrastructure component before it can the delivery of the goods for Bulk Water Supply Project
[I]t is not clear whether the project Bulk Water Supply Project Injection points 1 and 2 is a procurement of goods or infrastructure projects. In case of projects involving mixed procurements, we wish to clarify, however, that the nature of the procurement, i.e., goods, infrastructure projects, or consulting services, shall be determined based on the primary purpose of the contract. This means that if the project Bulk Water Supply Project Injections points 1 and 2 includes both goods and infrastructure component, BCWD should determine the nature of the project early on, i.e., whether the project is categorized as goods or infrastructure project, based on the primary purpose of the contract.
[T]he amount of performance security, if the form used is either cash, cashier's/manager's check, bank draft/guarantee or irrevocable letter of credit issued by a Universal or Commercial Bank, depends on the nature of procurement project as determined by the PE, that is, five percent (5%) of the total contract price if the nature of the project is either goods or consulting services, or ten percent (10%) of the total contract price if infrastructure projects.