Requesting Entity: Department of Health (DOH)

Issues Concern: Procedural and Substantive Defects in the Procurement Process


1. What is the nature of government procurement contracts?

Government procurement contracts are regarded as Special Contracts due to the particular and specific requirements as to forms and solemnities that need be complied with prior to its execution. Section 37.1.4 of the 2016 revised Implementing Rules and Regulations (IRR) of Republic Act (RA) No. 9184, the Government Procurement Reform Act, provides that the award of contract is subject to compliance with the conditions enumerated therein; the issuance of the Notice of Award (NOA) and its receipts by the winning bidder must be accompanied by the actual execution and signing of the contract, including the posting of the performance security, among others. Hence, even if the NOA was duly issued, communicated to and received by the winning bidder, the latter must comply with all the requirements provided for under the procurement law and its associated rules for the contract to become legally enforceable.

2. How may a bidder be disqualified?

A bidder may be disqualified during Eligibility Screening, and Post-Qualification under Sections 23 and 34 of RA No. 9184 and its 2016 IRR, respectively.

During Eligibility Screening, the submission of the eligibility documents enumerated in Section 23.1 of the 2016 IRR of RA No. 9184 is a mandatory requirement that must be complied with by prospective bidders, such that failure to submit any of the documents or the submission of an otherwise incomplete or patently insufficient document, will disqualify the bidder based on the non-discretionary “pass/fail” criterion under Section 30.1 of the 2016 IRR.

Disqualification during the Post-Qualification stage is covered by Section 34 of the 2016 IRR, where the Bids and Awards Committee (BAC) verifies, validates and ascertains all statements made and the documents submitted by the bidder with the Lowest Calculated Bid (LCB) or Highest rated bid (HRB), as the case may be, using non-discretionary pass/fail criteria. [T]he verification under the post-qualification stage is not limited to the examination of documents submitted by the bidder, but also includes inspection of the subject equipment vis-à-vis the technical specifications specified in the bidding documents.

In the event that the verification, validation, and ascertainment conducted by the Procuring Entity (PE) yield a negative result; or on the scheduled date of inspection, the bidder fails to present the sample good or equipment for examination or evaluation, the BAC has the prerogative to declare the bidder post-disqualified for failure to comply with the requirements. Additionally, in case the BAC determines that the bidder with the LCB or HRB fails the criteria for post-qualification, it shall immediately notify the said bidder in writing of its post-disqualification and the grounds therefor pursuant to Sections 34.3 and 34.5 of the 2016 IRR.

Moreover, Section 23.6 of the 2016 IRR states that if the PE uncovers any misrepresentation made in the eligibility requirements, statements or documents, it shall consider the prospective bidder as ineligible and shall disqualify it from obtaining an award of contract. In connection with this, Section 4.1.1 of the Uniform Guidelines for Blacklisting of Manufacturers, Suppliers, Distributors, Contractors, and Consultants provides that the submission of eligibility documents containing false information or false documents during the competitive bidding stage shall render the suspension/blacklisting of such bidder from participating in government procurement activities.

3. May the Head of the Procuring Entity (HoPE) declare a Failure of Bidding?

The HoPE may invoke his or her right to declare a failure of bidding in accordance with the Reservation Clause under Section 41 of RA No. 9184 and its 2016 IRR.

The procurement project which was cancelled based on the Reservation Clause may again be submitted for bids provided that the PE complies with the advertisement, posting and other requirements of the procurement law and its associated rules.