Requesting Entity: Development Bank of the Philippines

Issues Concern: Forfeiture of Bid Security under Section 34 of the IRR

Details

Whether it is discretionary on the part of the Development Bank of the Philippines (DBP) to forfeit the bid security submitted by the bidder for failure to comply with the requirements within the timeframe stated in Section 34 of Republic Act (RA) 9184 and its Implementing Rules and Regulations.

The documents enumerated under Section 34.2 of the IRR would have to be complied with to be post-qualified. Based on this provision, the inability of the bidder to submit the requirements on time or if there is a finding against the veracity of the submitted documents would necessarily result to forfeiture and disqualification. Applying the same principle, the mandate of the law is to forfeit the bid security and disqualify the bidder from receiving the award if there is non-compliance with Section 34.2.

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[T]he rule in Section 34.2 is mandatory, and not discretionary, as this is quite clear from the wordings of the provision.

Clearly, suffering damage or loss is not a pre-requisite for forfeiture of bid security. Nonetheless, it is our view that a bidder’s non-compliance with Section 34.2 results in damage or loss on the part of the government in the form of days lost; delay in the delivery of essential public service; resources expended; an, cost incurred in evaluating the lowest offer.

Based on the foregoing, it is our opinion that forfeiture of bid security grounded on non-compliance with the requirements under Section 34.2 of the IRR is mandatory and is not subject to the discretion of the procuring entity.