bidding

• Bidding


  An offer to pay a particular amount of money for a product or service by an individual, sector, company or firm
• Competitive Bidding


  • A process of issuing a public bid with the intent that companies will put together their best proposal and compete for a specific project
  • Required by law for every government agency that issues a bid to create a transparent environment that is open and fair
• Bidding Process


  1. Advertisement

  2. Issuance of Bidding Documents

  3. Pre-bid conference

  4. Receipt of eligibility documents and bids

  5. Evaluation of Bids

  6. Post-qualification

  7. Awarding of Contract

  8. Contract Signing and issuance of Notice to Proceed
• Contract


  A legally binding document between two or more parties that defines and governs the rights and duties of the parties to an agreement
• PD 1594 - Prescribing Policies, Guidelines, Rules and Regulations for Government Infrastructure Contracts
• PD 1594 Regulations


  • No award of contract shall be made to a bidder whose bid price is higher than the Allowable Government Estimate (AGE) or the Approved Agency Estimate (AAE) whichever is higher or lower than 70% of the AGE
  • The AGE is defined as one half the sum of the AAE and the average of all responsive bids
  • For the purpose of determining the average bids of all responsive bidders, bids higher than 120% of the AAE or lower than 60% of the AAE shall not be considered
  • No negotiation will be allowed to bring down the bid to the level of the AAE/AGE
• Illustrative Example


  • Contractor A = Php 354 Million
  • Contractor B = Php 639 Million
  • Contractor C = Php 483 Million
  • Contractor D = Php 583 Million
  • Contractor E = Php 295 Million
  • Contractor F = Php 385 Million
• Steps to Identify Responsive Bidders

  Check if bid is between 60% and 120% of the AAE
• Conditions for Awarding Contract

  • Maximum bid = AAE or AGE, whichever is higher
  • Minimum bid = 70% of AGE
• An unbalanced bid is defined as a bid containing one or more pay items that are 30% higher than the unit AGE in respect to major items whereas other pay items are priced lower that the unit AGE
• Major Items


  • Items representing at least 0.20 of the total AAE
• Bid B is considered a balanced bid for the two major items