Question & AnswerQ&A (GPPB Resolution NO. 20-2013)
Under Section 63.1(b) of RA No. 9184, the GPPB is authorized to formulate public procurement policies, rules and regulations, and to amend, whenever necessary, the Implementing Rules and Regulations (IRR) of RA 9184.
The NFCC is a financial capacity measure used to determine the eligibility of prospective bidders. It is computed based on the formula: NFCC = [(Current assets minus current liabilities) x K] minus the value of all outstanding or uncompleted portions of ongoing or awarded contracts coinciding with the contract to be bid, where K is a multiplier based on contract duration.
The multiplier K is 10 for a contract duration of one year or less, 15 for more than one year up to two years, and 20 for more than two years.
The Commitments to Extend a Credit Line (CLC) from a Universal or Commercial Bank is no longer accepted as an alternative to the NFCC computation for determining financial eligibility.
Prospective bidders must submit their computation of NFCC supported by their Income Tax Return and Audited Financial Statement submitted to the Bureau of Internal Revenue (BIR) through its Electronic Filing and Payment System (EFPS).
The GPPB adheres to the policy that the government should contract only with bidders who are contributing to government coffers through the payment of correct taxes, thus requiring the use of Income Tax Returns with the Audited Financial Statements.
These sections provide the formula for computing NFCC, defining how current assets and liabilities are accounted for along with the multiplier K, and adjustments for ongoing contracts.
No, after deliberations, the GPPB resolved to retain the current NFCC formula but with modifications such as disallowing the CLC alternative and using BIR-submitted financial data.
The GPPB will review the efficiency and accuracy of the Factor K multipliers 10, 15, and 20 at some future time.
The resolution took effect immediately upon its approval on July 30, 2013.