GPPB on NFCC Amendments

Section 63.1(b) of Republic Act No. 9184 authorizes the GPPB to formulate public procurement policies, rules, and regulations, and to amend the IRR when necessary.
The resolution targets eligibility documentary requirements tied to Net Financial Contracting Capacity (NFCC) under Republic Act No. 9184 and its Revised IRR.
The resolution also amends the Instructions to Bidders (ITB) embedded in the Philippine Bidding Documents (PBDs) for Goods and Infrastructure Projects.

Government procurement policy requires that government contracts be awarded only to prospective bidders who contribute to government coffers through payment of correct taxes.
The GPPB considered prior work in which the Income Tax Return and Audited Financial Statement (AFS) were proposed for determining bidder financial eligibility.
The GPPB reviewed an alternative approach involving credit line support (CLC) and examined proposals submitted by the Bureau of Internal Revenue (BIR).
The GPPB decided to retain the current NFCC formula while making targeted modifications on permitted alternatives, source of financial data, and review timing of the Factor K multipliers.

The GPPB amends Section 23.1(a)(vi) of the Revised IRR of Republic Act No. 9184.
The GPPB amends Sections 23.5.1.4 and 23.5.2.6 of the Revised IRR of Republic Act No. 9184.
The NFCC framework uses the NFCC formula based on current assets minus current liabilities, adjusted for outstanding or uncompleted portions of ongoing projects.
The resolution adopts the decision that CLC shall no longer be accepted as an alternative to the prospective bidder’s NFCC computation.

The GPPB amends Clause 5.5 and Clause 12.1(a)(v) of the Instructions to Bidders for Goods (PBDs).
The GPPB amends Clause 5.5 and Clause 12.1(a)(vi) of the Instructions to Bidders for Infrastructure Projects (PBDs).
These amendments align the PBD ITB eligibility requirements with the amended NFCC approach under the Revised IRR of Republic Act No. 9184.

The resolution retains the NFCC formula structure: NFCC = [(Current assets minus current liabilities) (K)] minus the value of all outstanding or uncompleted portions of the projects under ongoing contracts, including awarded contracts yet to be started that coincide with the contract to be bid.
The resolution retains the Factor K multipliers for contract duration as follows: K = 10 for a contract duration of one year or less, K = 15 for more than one year up to two years, and K = 20 for more than two years.
The resolution requires that the values of the bidder’s current assets and current liabilities be based on data submitted to the BIR, using the BIR Electronic Filing and Payment System (EFPS).
The resolution confirms that CLC is no longer accepted as an alternative eligibility mechanism for computing the prospective bidder’s NFCC.

The GPPB directs a future review of the efficiency and accuracy of the Factor K multipliers 10, 15 and 20 in relation to NFCC.
The review is to be conducted at some future time as stated in the resolution.

The amendments take immediate effect upon issuance.
The resolution is signed by representatives of: Department of Budget and Management, Department of Education, Department of Energy, Department of Finance, Department of the Interior and Local Government, Department of National Defense, Department of Public Works and Highways, Department of Transportation and Communications, and a Private Sector Representative.
The resolution is attested by Dennis S. Santiago, Board Secretary, GPPB and Executive Director, GPPB-TSO.