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Case Study Infrastructure Projects

The document describes a case study for the procurement of an infrastructure project. Twenty contractors expressed interest in the project, but only ten were deemed eligible. Contractor A had the lowest bid at P8.5 million, but after corrections the bid increased to P9 million. During post-qualification, Contractor B notified officials that Contractor A had an outstanding P40 million project that was not reported. Contractor A then posted a credit line to address the financial capacity issue. The BAC must now decide whether to award the contract to Contractor A, which has political backing, or Contractor B, whose owner is related to the BAC chairman.

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500 views1 page

Case Study Infrastructure Projects

The document describes a case study for the procurement of an infrastructure project. Twenty contractors expressed interest in the project, but only ten were deemed eligible. Contractor A had the lowest bid at P8.5 million, but after corrections the bid increased to P9 million. During post-qualification, Contractor B notified officials that Contractor A had an outstanding P40 million project that was not reported. Contractor A then posted a credit line to address the financial capacity issue. The BAC must now decide whether to award the contract to Contractor A, which has political backing, or Contractor B, whose owner is related to the BAC chairman.

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Anton_Young_1962
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.

Case Study: Procurement of Infrastructure Projects

A concrete road project with an approved budget for the contract (ABC) of P10.0
million was advertised for bidding. Twenty (20) contractors expressed interest in the
project by submitting a letter of intent on or before the deadline specified in the
Invitation to Apply for Eligibility and to Bid (IAEB). On the day of the eligibility
check/screening, only ten (10) contractors were found to be eligible.

On or before the day of bid opening, all of the ten (10) eligible contractors
submitted their bids. All their technical bids were rated “passed” during the
preliminary examination of bids. Further, their financial bids were likewise complying.
After reading all the financial bids, Contractor A, which submitted a bid of P8.5
million, was declared the bidder with the lowest calculated bid (LCB), subject to bid
evaluation. The second lowest bid was P9.1 million, submitted by Contractor B.

During bid evaluation, the bid of Contractor A was corrected for arithmetical errors.
The recalculated bid of Contractor A went up to P 9.0 million.

During post-qualification, Contractor B wrote to the BAC Chairman and informed


him that Contractor A has an on-going project with outstanding works of about P40
million. This project was apparently not taken into consideration in Contractor A’s
submitted calculation of its Net Financial Contracting Capacity (NFCC), a
requirement for eligibility.

The BAC called the attention of Contractor A on the matter of the deficient NFCC.
In reply, Contractor A posted a credit line in an amount which is more than enough
to cover for the difference between its real NFCC and the ABC. The bid of
Contractor A seemed to be responsive, especially since it has all the required
personnel and equipment needed for the project, and has done all its previous
projects satisfactorily with no negative slippage at all. Further, there is political
pressure on the BAC to award the contract to Contractor A as it is being endorsed
by the Congresswoman in the locality of the project.

In comparison, the bidder with the second lowest bid, Contractor B, has completed
all its previous projects satisfactorily, suffering only a slippage of –12%. Further, its
legal, technical and financial requirements would have passed post-qualification.
The BAC is wary of it though as its owner is the first cousin of the BAC Chairman.

The BAC will meet to deliberate on the award of the project.

Capacitating Civil Society Organizations’ Procurement Trainers, Observers, and Monitors


Training of Trainers

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