NPM 151-2012

Requesting Entity: Adlib International Sales (AIS)

Issues Concern: Surety Bond Callable on Demand



Whether the surety bond required under Section 27.2 of the IRR of RA 9184 should explicitly specify the phrase "callable on demand".

Although the phrase "Callable Upon Demand" appearing on the face of the Surety Bond is preferred, there is no requirement that the exact/same phrase should appear on the face of the Surety Bond, as this phrase simply provides the caveat to the obligee, obligor and the surety that the surety contract facility may be called only upon a proper demand - "callable upon demand" - to establish default, and to trigger the liability under the surety contract.

Based on the foregoing, we are of the opinion that it is sufficient that the Surety Bond is "callable upon demand" based on the stipulations, agreements and covenants in the surety contract; and although ideal or preferred, it is not a requirement that the Surety Bond should expressly contain the phrase "callable on demand". However, demand must be made by the obligee to the obligor, to perform its obligation, before delay or default is recognized; and demand to the surety is likewise necessary to make a claim against the Surety Bond.

Whether supporting documents not submitted during bid opening should not be considered by the Bids and Awards Committee (BAC) in deciding the request for reconsideration as these already constitute enhancement of the bid.

Section 26.1 of the IRR, x x x, prohibits bidders from modifying their bid, through the submission of new or additional documents after the deadline for submission, receipt and opening of bids, to support its eligibility or qualification as this constitutes an improvement of bids; and is violative of the rule that bids must be submitted complete on the date, time and place for the submission of bids.

[D]uring the pendency of the request for reconsideration, the movant-bidder is barred from submitting new or additional documents as this action constitutes modification, enhancement or improvement of the bids.

Whether the BAC could not seek confirmation of the facts and issues raised in the request for reconsideration from any other source as verification of submitted documents can only be done during post-qualification.

Initial verification of the documentary submissions may, however, be allowed as an exercise of due diligence by the BAC. This is borne by the rule that in the performance of its functions, duties, and obligations, the BAC shall perform such other related functions as may be necessary, particularly in the eligibility screening, evaluation of bids, and post-qualification. After all, the BAC shall be responsible for ensuring that the PE abides by the standards set forth by the Act and the IRR.