NPM 017-2006

Requesting Entity: Philippine Navy

Issues Concern: Cash Deposit Certificate



Whether a cash deposit certificate which contains a conditional commitment to hold out a required amount complies with Section 25.3 of the Implementing Rules and Regulations Part A (IRR-A) of Republic Act No. (R.A.) 9184.

The very purpose of this submission is to establish the bidder's liquidity and its capacity to financially shoulder the additional obligations that may be incurred in the contract to be bid. Either instrument safeguards the interest of the procuring entity by ensuring that the bidder has sufficient resources to successfully implement and complete the project to be bid.

Mindful of the rationale behind this requirement, it is our considered opinion that a commitment to hold out a particular sum which at any time may be withdrawn by the bidder unduly defeats the objective of the rules and, therefore, does not constitute sufficient compliance with Section 25.3 of the IRR-A.