Republic of the Philippines

HOUSE OF REPRESENTATIVES : 07 an 112 :
FIFTEENTH CONGRESS 7 Spe
Second Regular Session ~
HOUSE BILL 6337

Introduced by Hon. Erico B, Aumentada

EXPLANATORY NOTE

It has been observed that contractors jockeying for government
projects tend to understate the price of the project in their bid proposal to
comer juicy projects. Some even venture to propose bid prices costing
less than fifty percent of the approved ABC just to ensure that they will
get the project, This may sound advantageous to the government as it
would translate to substantial savings on the part of the implementing
agency. However, the result is not at all advantageous to the government
since the project suffers in terms of poor quality, the terms of reference in

the project not being followed and, worse, projects are not completed for’

lack of finances.

In the present set up, the law on the government procurement only
provides for a maximum ceiling of bid prices for bidders to observe,
while there is no cap or minimum limit of bid prices that shall be
awarded. Thus, unscrupulous contractors venture to propose a
considerably lowered price in their bids compared to the actual approved
ABC.

Take for example the projects implemented in the Second District
of Bohol, namely:

(1)Sagbayan-Danao Road Project. with an
appropriations of P200 Million Pesos, an
Approved Budget for the Contract (ABC) of P189
Million, and the Winning Bid of P139 Million; and


(2)Loay-Interior Road Trinidad Section Re-blocking
with an appropriations of P65 Million Pesos, an
Approved Budget for the Contract (ABC) of P 65
Million, and the Winning Bid of P 39 Million.

These projects are in danger of not being completed despite the
huge approved budget. It was known that the contractors are complaining
that they suffered financial setback affecting the construction work. And
yet, this representation learned that the contractors have almost consumed
their budget according to their bid,

This is the dilemma that the passage of this bill seeks to address by

amending the Government Procurement Law to introduce a cap ot Floor
Limit on bid prices of winning bidders for government projects.

The approval of this measure is being sought for.



Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

FIFTEENTH CONGRESS
Second Regular Session

HOUSE BILL NO. _ 633 ?

Introduced by Hon. Erico B. Aumentado

AN ACT
SETTING A CAP FOR FLOOR BID PRICE OF WINNING BIDDER.
AMENDING FOR THE PURPOSE SECTION 31 OF REPUBLIC ACT NO.
9184, OTHERWISE KNOWN AS THE “GOVERNMENT PROCUREMENT
REFORM ACT”

Be it enacted by the Senate and House of Representatives of the Philippines m
Congress assembled:

SECTION 1. Section 31 of Republic Act No. 9184 shall be amended to read
as follows:
“Section 31. Ceiling AND FLOOR for Bid Prices. - The

Approved Budget for the Contract (ABC) shall be the upper limit or
ceiling for the Bid prices. PROVIDED: THAT THE FLOOR BID
FOR WINNING BIDDER SHALL NOT BE LOWER BY
TWENTY FIVE (25) PERCENT OF THE APPROVED ABC. Bid
ptives that exceed [this] THE UPPER LIMIT OR ceiling, OR
BELOW THE FLOOR LIMIT shall be disqualified outright from
further participating in the bidding. {There shall be no lower limit to the
amount of the award]

SEC. 2. Separability Clause. - If aay part ot provision of this Act shall be
held unconstitutional or invalid, other provisions, which are not affected thereby,
shall continue to be in full force and effect.

SEC. 3. Repealing Clause. - All laws, presidential decrees, executive orders
rules and regulations or parts thereof which are inconsistent with the provisions of
this Act are hereby repealed, amended or modified accordingly

SEC. 4, Effectivity Clause. - This Act shail take effect fiiteen (15) days after
its publication in at least (2) national newspapers of general circulation.

Approved,