NPM 008-2006

Requesting Entity: Cebu Rose Motors

Issues Concern: Requirement for a Commitment from a Licensed Bank and Submission of Bids for Two Suppliers



1. Whether a bidder may use its foreign supplier's bank certificate issued by a foreign country for purposes of complying with the requirement for a commitment from a licensed bank to extend to the bidder a credit line if awarded the contract to be bid.

We wish to clarify at the outset that distributors, sole or otherwise, are considered separate and distinct from its suppliers. Their compliance with the legal, technical, and financial requirements is evaluated based on their own qualifications, and not founded on the qualifications of their suppliers. Thus, unless they are participating as a Joint Venture entity, no document or qualification of one entity will be considered in favor of the other.

We highlight Item 7, Section 25.3 of the Implementing Rules and Regulations Part A (IRR-A) of Republic Act 9184 (R.A. 9184), which requires as part of the Technical Documents a "commitment from a licensed bank to extend to the bidder a credit line if awarded the contract to be bid." Undeniably couched in very clear and unambiguous language, a simple construction would immediately reveal the application of this provision. Concomitantly, for purposes of compliance, the commitment by a licensed bank should have been issued in favor of the bidder and not its supplier.

2. Whether an entity may submit bids for two (2) different foreign suppliers.

One of the governing principles on Government Procurement enunciated in R.A. 9184 is competitiveness. The competition contemplated herein is actual, inherent and is not feigned or superficial. For this reason, the IRR-A under Section 65.2(4) thereof prohibits a bidder, by himself or in connivance with others, from employing schemes which tend to restrain the competitive rivalry of the parties or operates to stifle or suppress competition and thus result to a disadvantage to the public.

A scheme which tends to restrain the natural rivalry of parties is best exemplified exactly by the situation being raised for clarification - when one entity submits two (2) separate bids, on its own or for another's instance. Thus, despite the fact that your company is the sole distributor for two (2) different suppliers, you cannot submit two (2) separate bids in a procurement activity, representing both your supplier, or one (1) of them or representing and allowing another entity to bid for your other supplier to secure to yourselves a sure win or award.