NPM 051-2009

Requesting Entity: Metropolitan Waterworks and Sewerage System

Issues Concern: Bidding for security services



1. Whether a certification by the bidder that it shall abide by the labor laws and it shall accept sanctions that may be imposed, would satisfy its compliance with the legal requirement of a certification that the bidder has complied with all pertinent labor laws.

[The] eligibility of a bidder depends on the completeness of the bidder's eligibility documents against those required by the procuring entity. If the procuring entity required a certification that the prospective bidder has complied with all pertinent labor laws, then the bidder must accordingly issue such instrument, and not merely state that it shall comply with the abovementioned laws. If, however, the procuring entity attached and/or prescribed the use of the sworn statement as appears in the Sample Forms issued by the GPPB, it must dutifully accept the certificate submitted by the bidder based thereon.

2. Whether the procuring entity can proceed to award the contract despite the existence of a pending appeal on a labor case. What will be the effect of an adverse decision rendered against the bidder in case it is granted the notice of award.

As a general policy, imposition of additional eligibility or technical documents is discouraged because it increases transaction cost and reduces competition. Corollary, the requirement that a clearance or certificate from an appropriate government authority that the bidder has no pending administrative or labor case filed against it runs contrary to the basic tenet that every person is presumed innocent until proven guilty. In lieu of such additional requirements, the procuring entity may, during post-qualification, verify, validate and ascertain the statements whether the bidder:
(i) Complies with the minimum wage mandated by law;
(ii) Regularly remits mandated premiums to SSS, PhilHealth, and Pag-IBIG; or
(iii) Has been finally adjudged by a court of competent jurisdiction to have violated any labor law or social legislation.

The procuring entity may proceed with the award of contract to a bidder pending appeal subject, among others, to the immediately preceding conditions. A decision rendered against the bidder shall not affect the award provided that the adverse resolution was issued after the vested rights of the bidder to the contract have been conferred, and, provided, however, that the said offense committed by the bidder is not connected with the awarded contract.

3. Whether the revocation of the Securities and Exchange Commission (SEC) registration of a bidder registered with the Department of Trade and Industry as a single proprietor a ground not to award the contract for security services.

The determination of eligibility of the bidder shall be based on the submission of the documents specified under R.A. 9184 and its IRR-A using a non-discretionary "pass/fail" criterion. If a bidder submits the required documents, it shall be rated "passed" for that particular requirement. In this regard, failure to submit a requirement, or an incomplete or patently insufficient submission, shall be considered "failed." Hence, submission by the bidder of a DTI Registration in lieu of a SEC Certificate shall be a tantamount to substantial compliance for the specific requirement notwithstanding the revocation of its previous certificate of incorporation, unless the doctrine of piercing the veil of corporate fiction may be availed of under the circumstances.