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[ PPA MEMORANDUM ORDER NO. 04-97, February 20, 1997 ]



Following the instructions of President Fidel V. Ramos, the administration and operation of the Pan Philippine Highways Ferry Terminals was turned over to the Philippine Ports Authority by the Department of Transportation and Communications. This was effected through a Memorandum of Agreement signed last 25 September 1996 (copy attached as Annex 1).

In consonance with the policy of encouraging private sector participation in the management, operation and maintenance of government ports and facilities, the Pan Philippine Highways Ferry Terminals shall be privatized. The privatization shall be implemented under the lease, manage, operate and maintain scheme through public bidding. This Order covers the bidding guidelines for the purpose.


This Order shall govern the prequalification and bidding procedures for the privatization of the Pan Philippine Highways Ferry Terminals.


3.1       To procure the required services only from qualified competent operators.

3.2       To allow fair and equitable treatment of prospective bidders.

3.3       To choose a bidder which will offer the highest advantage to the PPA.


The terms of reference which defines the scope of the undertakings, rights and obligations that are expected from both the PPA and the winning bidder as described in Annex "A".


5.1       The process of privatizing the ferry terminals shall be done through open competitive bidding.

5.2       Negotiated procurement may be resorted to only where there have been two failures of prequalification or two failures of bidding. The procedures to follow in case of negotiated procurement are described in Annex "B".


6.1       The PBAC shall declare a failure of prequalification under the following conditions and shall readvertize anew for prequalification:

a.       none or only one (1) bidder responded to the prequalification, or

b.       none or only one (1) bidder is prequalified.

6.2       Notwithstanding the prequalification of a bidder, PPA reserves the right to review the qualifications of the selected bidders before or during the bidding or before actual award of the contract is made.

Should such review uncover any misrepresentation made in the prequalification statements or in violation of Section 8 of this Order or any changes in the situation of the bidder to materially downgrade the substance of such statements, PPA shall disqualify the bidder from submitting a bid or from obtaining an award of contract.

6.3       Should there still be a failure of prequalification after the readvertisement, PPA may resort to negotiated procurement pursuant to the provisions as contained in Annex B.


7.1       The existing PBAC under the Port District Offices shall be responsible for the conduct of the prequalification and bidding evaluation of the bids. It shall likewise be responsible for recommending award of the contract.

7.2       The Managers of POSD, CSD and LSD or their respective representatives shall act as official observers in the PDO PBAC.


8.1       Only Filipino citizens or firms duly organized, registered or licensed under the laws of the Philippines with at least sixty percent (60%) capital stock owned by Filipino citizens shall be allowed to participate in the prequalification and in the bidding process.

8.2       The firms referred to under Section 8.1 may either be a partnership or corporation or a joint venture of two or more business organizations that intend to jointly and severally assume the contract if they become successful bidder.

Likewise, natural persons may bind themselves by appropriate contract to form partnership or corporation for the purpose of operating the ferry terminal if they become successful bidder.

8.3       A duly prequalified joint venture of business organization or group of natural persons is not allowed to reduce or to replace any member; however, additional member may be allowed with prior approval of PPA.

8.4       A foreign firm can become a member of a joint venture provided the total foreign interest shall not exceed 40%. Foreign nationals combining with Filipino citizens to organize a partnership or corporation for the purpose of operating the terminal if they become successful bidder shall also be limited to hold 40% interest in the partnership or corporation to be established.

8.5       Only eligible bidders as defined above may be awarded the contract provided the same bidders are found qualified in accordance with the pertinent provisions of these guidelines.

8.6       Firms whose existing contract have been preterminated due to their own fault, or those under suspension, or those with arrears with PPA and DOTC as of the submission of the prequalification document, are not eligible to participate in the bidding and shall, therefore, be disqualified.

8.7       Only one of the applicant firms with interlocking interest, directors and/or whose major principals and/or stockholders are one and the same, is eligible to participate in the bidding. The rest shall be disqualified.


9.1       The prospective bidder shall be responsible for having taken steps to carefully examine all the prequalification and bid documents. Failure to do so shall be at the bidder's risk.

9.2       It shall be the sole responsibility of the prospective bidder to determine and to satisfy himself by such means as are necessary or desirable as to all matters pertaining to the services, including the location of the ferry terminal and the extent of the services, the climatic conditions of the area, the availability of labor, transportation and communications and other factors that may affect his costs and his price.

The prospective bidder, by the act of submitting his bid, acknowledges that he has inspected the ferry terminal location and determined the general conditions of the same. An affidavit of such port inspection from the prospective bidder is required to be submitted with the Bid.

9.3       Prior to submittal of bids, the prospective bidders are considered to have become familiar with all existing laws, decrees, ordinances and regulations of the Philippines and of the locality where the ferry terminal is located.

9.4       The Authority shall not assume any responsibility regarding erroneous interpretations or conclusions by the prospective bidder out of the information and data furnished by the Authority.

9.5       The Authority has the right to reject any or all bids or to declare a failure of prequalification or bidding pursuant to the provisions of these guidelines and the right to verify the statements submitted.

9.6       The Authority assumes no obligation whatsoever to compensate or indemnify the bidders for any expense or loss that they may incur in the preparation of their bids nor does the Authority guarantee that an award will be made.


10.1    Invitation to Prequalify and to Bid — The invitation to prequalify and to bid shall be published for three (3) times within a period of at least two (2) consecutive weeks in two (2) newspapers of general circulation. At the same time, copies of the invitation shall be posted at any conspicuous place at the Head Office, PMO/PDO and concerned ferry terminals.

10.2    The PBAC shall provide interested bidders with the application for prequalification using the attached PHFT Form-1, for a fee of One Thousand Pesos (P1,000) and the following pre-bidding support information:

10.2.1            Fees, rates and charges collectible by the operator.

10.2.2            Actual cargo and vessel traffic for the last  three (3) years.

10.2.3            Physical description and value of the terminal.

10.2.4            Guidelines for the privatization of the Pan Philippine Highways ferry terminals.

10.2.5            Copy of Pro-forma Lease Contract.

10.3    The PBAC shall prepare a short listing of responding applicants by evaluating and comparing their prequalifications. In this regard, the following factors shall be the basis:

10.3.1            Completeness of documents required for submission;

10.3.2            Authenticity of required/submitted documents;

10.3.3            Minimum capitalization as determined by PBAC;

10.3.4            Minimum experience of firm as determined by PBAC; and

10.3.5            Minimum working capital as determined by PBAC.

10.4    Notices shall be sent by the PBAC to short listed applicants to discuss the relevant matters and information necessary for the bidding.


11.1    The shortlisted applicants shall be required to submit two separate sealed envelopes for the "Technical Offer" using attached PHFT Form-2 with all its document requirements, and the "Financial Offer" using attached PHFT Form-3 hereof, on the date and place prescribed for submission.

11.2    After the prescribed date of submitting bid documents, the PBAC shall open the sealed envelopes for the Technical Offer, process/evaluate them and determine whether the legal, financial, technical and other parameters/factors shall warrant qualification to the next stage of the bidding process.

There must be at least two (2) bids received to allow opening of the bids; otherwise the bidding shall be declared a failure by the PBAC. Two failures of bidding may allow the PBAC to procure the services through negotiation.

To determine qualification in the technical phase of the bidding process, a prequalified bidder shall have an overall score of at least sixty (60) points.

11.3    After processing/evaluation at the technical phase, the PBAC shall mark the prequalification documents with "PASSED" or "FAILED", as the case may be, countersigned by the PBAC Members. The PBAC shall duly inform the prequalified bidders of the result of the prequalification process and shall return unopened the sealed envelopes for Financial Offer of predisqualified bidders within five (5) working days after approval/confirmation by the PBAC Chairman of the prequalification evaluation result.

11.4    The bid security in the form of cash or manager's/cashier's check in the name of the Philippine Ports Authority must be included in the envelope containing the financial offer. This is to guarantee that the bidder, if awarded, shall enter into a contract with the Authority under its port leasing scheme. The bidder's bond shall be subject to the following prescriptions:

11.4.1            For a qualified applicant bidding in one ferry terminal, the bond shall be equal to TEN PERCENT (10%) of the financial bid offer.

11.4.2            For a qualified applicant bidding in more than one ferry terminal, the bond shall be TEN PERCENT (10%) of the average financial bids of the offeror.

11.5    Prior to the time of opening the financial bids of the prequalified bidders, the PBAC shall announce in the meeting scheduled for the purpose, and in the presence of all or majority of the bidders end/or their representatives who have been allowed by the committee to attend, the PPA pre-determined "floor" and "ceiling" estimates for the financial obligation to PPA. Similarly, the PBAC shall announce the bidding selection criteria and the mechanics of the evaluation for the financial offer.

11.6    The PBAC shall evaluate and compare the financial bid offers, in the presence of the prequalified bidders and/or their representatives, immediately after the opening of the bids and that the former shall determine the winner within 24 hours after the day of opening thereof. Thereafter, the PBAC shall prepare a formal resolution embodying its final decision and recommendation of the winning bidder.

11.7    The PBAC shall formally notify all the prequalified bidders of the results of the bidding. Bid bonds who ranked 2nd and 3rd shall be returned only after the winning bidder has entered into the contract. The bid security of other bidders may be returned immediately after the bidding.

11.8    The PBAC shall then advise CSD to prepare the corresponding port lease contract. The draft contract shall be coordinated with POSD and LSD, and together with all the committee actions, resolutions and other matters in relation to the bidding process, be forwarded to the Office of the General Manager for indorsement to the PPA Board for final approval.

11. 9   The declared winning bidder shall be advised by the Port District Manager through the Port Manager concerned of the other documentary requirements necessary for then contract processing and signing.

11.10  The AGM for Operations shall, on the basis of the PPA Board approval of the contract, formally advise the winning operator of the date, venue and time of contract signing.

For compliance.

Adopted: 20 Feb. 1997

General Manager
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