NPM 015-2009

Requesting Entity: Office of the District Engineer - 2nd Engineering District

Issues Concern: Conflict of Interest between Related Bidders



Whether or not persons related by consanguinity or affinity up to the third (3rd) civil degree, who own and operate separate and independent construction firms may join a public bidding at the same time and for the same project.

A perusal of the provision cited above (Clause 1.5, Eligibility Document, Philippine Bidding Documents for Works, 2nd Edition) reveals that the circumstance of bidders being related to one another, per se, does not automatically give rise to a conflict of interest. However, if it is established that such relationship places them in a position to either (1) have common controlling shareholders; (2) receive or have received any direct or indirect subsidy; or (3) have access to information about or influence on the bid of another bidder, notwithstanding the claim that they are separate and independent construction firms, then said related bidders, whether within the third civil degree of consanguinity or affinity or beyond, shall be disqualified.

It is therefore incumbent upon the BAC to make a definitive finding of conflict of interest between and among the related bidders before any disqualification is made in the process of bidding. This function is essentially and primarily lodged with the BAC, and our office, being a policy-making body, cannot make that determination in behalf of the procuring entity.