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The following post does not create a lawyer-client relationship between Alburo Alburo and Associates Law Offices (or any of its lawyers) and the reader. It is still best for you to engage the services of a lawyer or you may directly contact and consult Alburo Alburo and Associates Law Offices to address your specific legal concerns, if there is any.
Also, the matters contained in the following were written in accordance with the law, rules, and jurisprudence prevailing at the time of writing and posting, and do not include any future developments on the subject matter under discussion.
AT A GLANCE:
Without prejudice to criminal and civil liabilities under applicable laws, including their accessory penalties, if any, administrative liability attaches to private entities, such as suppliers, contractors or consultants that are subject to any of the following penalties:
- Any appropriate corrective measure, depending on the severity of the offense considering its disadvantages to the Government of the Philippines (GOP), shall be imposed in accordance with the guidelines of the Government Procurement Policy Board (GPPB);
- Suspension shall be imposed for offenses committed under the New Government Procurement Act. The entity is prohibited from participating in any procurement of the Procuring Entity concerned for a given period; or
- Blacklisting shall be imposed in case offenses occur under this Act. The entity shall be disqualified from participating in all government procurements for a given period or perpetually, as the case may be.
Imposition of Suspension
The Head of the Procuring Entity (HoPE), subject to the authority delegated to the Bids and Awards Commission (BAC), if any, shall impose the penalty of suspension for one (1) year for the first offense, and suspension of two (2) years for the second offense, for any of the following offenses:
- Refusing or failing to post the required performance security within the prescribed time;
- Withdrawing a bid, or refusing to accept an award, refusing or failing to enter into contract with the Procuring Entity without justifiable cause, after the approval of the HoPE for having been declared Lowest Calculated Responsive Bid (LCRB), Most Economically Advantageous and Responsive Bid (MEARB), or Highest Rated Responsive Bid (HRRB), as the case may be;
- Refusing to clarify or validate in writing its bid during post-qualification within a period of seven (7) calendar days from receipt of the request for clarification;
- Causing the delay, without justifiable cause, of the screening for eligibility, opening of Bids, evaluation and post evaluation of Bids, and awarding of contracts;
- For the renewal of contracts for regular and recurring services, refusal of the service provider to accept the notice of renewal or failure to submit its updated documentary requirements for the renewal of contract without any justifiable reason:
- Delivering goods of unsatisfactory or inferior quality as may be provided in the contract;
- Rendering poor performance by the consultant of one’s service. Poor performance shall be as follows:
- Defective design resulting in substantial corrective works in design and/or construction;
- Failure to deliver critical output due to the fault or negligence of the consultant;
- Specifying materials which are inappropriate, substandard, or way above acceptable standards; and
- Allowing defective workmanship or works by the winning bidder being supervised by the consultant; or
- Rendering poor performance by the winning bidder or unsatisfactory quality and/or progress of work. Prior performance shall be as follows:
- Negative slippage of fifteen percent (15%) and above within the critical path of the project due entirely to the fault or negligence of the winning bidder; and
- Quality of materials and workmanship not complying with the approved specifications arising from the fault or negligence of the winning bidder.
Moreover, the bid security or performance security posted by the entity concerned shall also be forfeited.
Imposition of Blacklisting
The HoPE may impose the penalty of blacklisting consisting of one (1) year prohibition for the first offense, or two (2) years prohibition for the second offense for any of the following offenses:
- Committing three (3) or more of any of the acts imposed with suspension, as provided under this Act;
- Using force, fraudulent machinations, coercion, undue influence or pressure on any member of the BAC or any officer or employee of the Procuring Entity to take a particular action for its own favor or gain, or to the disadvantage of a particular bidder;
- Agreeing with two (2) or more bidders and submitting different bids as if they are bonafide, when they knew that one or more of them was so much higher than the other that it could not be honestly accepted and that the contract will surely be awarded to the pre-arranged lowest bid;
- Using the name of another for purposes of participating in any procurement activity;
- Submitting eligibility requirements and bids containing false information or falsified documents or the concealment such information that will materially alter the outcome of eligibility screening or any stage of the procurement process;
- Maliciously submitting different bids through two (2) or more persons, corporations, partnerships, or any other business entity in which it has interest, to create the appearance of competition that does not in fact exist so as to be declared as the winning bidder;
- Submission of beneficial ownership information containing false entries;
- Unauthorized accessing of the contents of any Bid submitted to the Procuring Entity before the opening of bids;
- Entering into an agreement with other bidder/s which call upon one to refrain from bidding for procurement contracts, or which are otherwise intended to secure an undue advantage to any of the bidders;
- Failing to faithfully disclose its relationship, regardless of the time of its discovery, with the HoPE, members of the BAC, the TWG, and the BAC Secretariat, the head of the Project Management Office or the end-user unit or implementing unit, and the project consultants of the Procuring Entity, or of the procurement agent, whichever is applicable, by consanguinity or affinity up to the third civil degree;
- Terminating the contract due to the default or unlawful acts of the bidder supplier, contractor or consultant;
- Engaging in any documented unsolicited attempt to unduly influence the outcome of the bidding;
- Employing schemes which stifle or suppress any procurement activity;
- Assigning or subcontracting the contract or any part thereof or substituting key personnel named in the proposal; without prior written approval by the Procuring Entity;
- Willful or deliberate abandonment or non-performance of the project or contract by the winning bidder resulting in substantial breach thereof without lawful and/or just cause; or
- In case it is determined prima facie that the winning bidder has engaged, before or during implementation of the contract, in the following unlawful deeds and behaviors relative to contract acquisition and implementation:
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- Corrupt, fraudulent, collusive and coercive practices;
- Drawing up or using forged documents; or
- Using adulterated materials, means or methods, or engaging in production contrary to rules of science or the trade.
Moreover, the bid security or the performance security posted by the entity concerned shall be forfeited.
Imposition of Blacklisting with Perpetual Disqualification
The HoPE shall impose blacklisting with perpetual disqualification based on any of the following grounds:
- Committing a third offense imposed with blacklisting under this Act by the same Procuring Entity, or a combination of three (3) violations imposed with blacklisting by the Procuring Entity and other Procuring Entities, as posted on the GPPB portal; or
- Failing to comply with the provision on warranty that requires to repair any noted defect or damage to the Infrastructure Project due to the use of materials of inferior quality within ninety (90) calendar days from the issuance of the order by the HoPE to undertake such repairs.
Moreover, the bid security or the performance security posted by the entity concerned shall be forfeited.
Suspension Pending Blacklisting Proceedings
During the pendency of the blacklisting proceedings, the bidder shall be automatically suspended from participating in the current procurement activity being undertaken by the Procuring Entity concerned.
The suspension order shall be immediately lifted in case the HoPE dismisses the case.
Status of Suspended or Blacklisted Person
Before the issuance of a blacklisting order, the erring bidder may participate in the procurement of any government project except in the Procuring Entities where it is suspended: Provided, That if the blacklisting order is issued prior to the date of the Notice of Award, the blacklisted person shall not be qualified for award and such contract shall be awarded to another bidder.
It is the responsibility of the Procuring Entity to upload to the portal of the GPPB the corrective measure, suspension, or blacklisting order, as the case may be, within seven (7) calendar days after its respective issuance.
The issuance of a suspension or blacklisting order shall not prejudice any contract awarded prior thereto: Provided, That the offenses which brought about the suspension or blacklisting are not connected to the awarded contract.
Initiation of Action
The BAC or the HoPE may, motu proprio, commence the administrative proceedings for corrective measures, suspension or blacklisting, at any stage of the procurement or contract implementation, upon prima facie determination that a bidder or prospective bidder has committed any of the grounds provided under this Act. Any bidder or prospective bidder may also initiate the suspension and blacklisting proceedings.
At the option of the Procuring Entities, a reasonable fee may be required for initiating the suspension and blacklisting proceedings.
Extent of Adminastrative Sanctions
The penalties of suspension and blacklisting shall be applied against (a) any entity in which the suspended or blacklisted person has a controlling interest; and (b) any beneficial owner of the suspended or blacklisted person.
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Alburo Alburo and Associates Law Offices specializes in business law and labor law consulting. For inquiries regarding legal services, you may reach us at info@alburolaw.com, or dial us at (02)7745-4391/ 0917-5772207/ 09778050020.
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