Scope of Guidelines
- These guidelines apply to procurements involving foreign-denominated bids, contract prices in foreign and local currencies, and payments through Letters of Credit (LCs).
Purpose of the Guidelines
- To implement the fixed pricing policy under Section 61 of Republic Act No. 9184.
- To provide procedural details for submission and evaluation of bids involving foreign or mixed bidders.
- To address expenditure changes due to foreign exchange fluctuations arising from bids through LC payments.
Preparation of Bidding Documents
- The procuring entity must include a provisional sum for potential costs due to foreign exchange fluctuations from bid opening to LC negotiation.
- The provisional sum is fixed, not exceeding 10% of the Approved Budget for the Contract (ABC), and must be included in the Annual Procurement Plan.
- The LC face value is determined based on the foreign exchange rate at LC opening, with detailed procedures to address fluctuations:
- If peso equivalent is lower at LC opening, the face value is the full foreign bid amount.
- If peso equivalent is higher, the provisional sum covers the difference.
- If fluctuations exceed provisional sum, excess costs are borne by the bidder.
- All charges related to the LC opening and incidental expenses are for the supplier's account.
Submission and Evaluation of Bids
- Bids may be in local currency, foreign currency, or a combination, but foreign currency bids must be supported by import documents.
- For evaluation, all foreign currency bids are converted to Philippine peso using the exchange rate on bid opening day.
Contract Prices
- Contracts are generally in Philippine peso, except by agreement for other currencies with conditions.
- In competitive bidding, foreign currency bids are converted to peso by the exchange rate on bid opening.
- For alternative procurement methods not requiring bidding, foreign currency contracts are computed based on exchange rate on contract signing.
- Repeat orders must have prices no higher than the original contract and remain advantageous to the government.
Payments Using Letters of Credit
- Procuring entities may open LCs for both local and foreign suppliers in fully domestically funded projects.
- Additional expenses from LC opening and foreign exchange risks are charged against the provisional sum.
Effectivity of Guidelines
- These guidelines or any amendments take effect 15 days after publication in the Official Gazette or a nationwide newspaper and upon filing certified copies with the University of the Philippines Law Center.