energy regulatory commission bac resolution no. … reso...a resolution denying the motion for...

Pacific Center Building, San Miguel Avenue, Pasig City Trunk line: 689-5-372 (ERC)

Website: http://www.erc.gov.ph Fax Nos. 633-32-53 / 634-86-41

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Republic of the Philippines ENERGY REGULATORY COMMISSION

BAC RESOLUTION NO. 120, SERIES OF 2020 CB1 A Resolution Denying the Motion for Reconsideration filed by Reyes Tacandong & Co. for the Procurement for the Technical Assistance

for the Evaluation and Approval of the Reserve Market in the Wholesale Electricity Spot Market (WESM) as Embodied in the

Application for the Approval of the Price Determination Methodology of the WESM

WHEREAS, Republic Act (R.A.) No. 9184, otherwise known as the “Government Procurement Reform Act” provides that each procuring entity shall establish a single Bids and Awards Committee (BAC) for its procurement and that all procurement of the national government, its departments, bureaus, offices and agencies, including state universities and colleges, government-owned and/or controlled corporations, government financial institutions and local government units, shall, in all cases be conducted in accordance therewith and its 2016 Revised Implementing Rules and Regulations (Revised IRR); WHEREAS, on 11 February 2020, the Honorable Commission, as the Head of Procuring Entity (HoPE), approved the Annual Procurement Plan (APP) for Fiscal Year (FY) 2020 – Supplement No. 1 for the purpose of procuring projects, activities, and programs, as contained therein, of the Energy Regulatory Commission (ERC); WHEREAS, the said APP for FY 2020 – Supplement No. 1 includes a procurement project entitled “Technical Assistance for the Evaluation and Approval of the Price Determination Methodology (PDM) of the Wholesale Electricity Spot Market (WESM)” to be procured through Competitive Bidding with an Approved Budget for the Contract (ABC) in the amount of Four Million Eight Hundred Thousand (PhP4,800,000.00.), inclusive of all government taxes, other fees and charges; WHEREAS, on 28 February 2020, the ERC Bids and Awards Committee (ERC BAC) received from the Market Operations Service (MOS) a Purchase Request (PR) with PR No. 2020-08-125 requesting for the Procurement of “Technical Assistance for the Evaluation and Approval of the Price Determination Methodology (PDM) of the Wholesale Electricity Spot Market (WESM)”. In support of the PR, the MOS submitted the final Terms of Reference (“TOR”) for the said project on 25 July 2020; WHEREAS, on 04 August 2020, the Request for Expression of Interest (REI) and the Philippine Bidding Documents (PBD) for the subject procurement under Lot No. 2020-05 were posted on the websites of the Philippine Government Electronic Procurement System (PhilGEPS) and the ERC as well as in the latter’s conspicuous place reserved for the purpose consistent with Section 21 Rule VII of the 2016 Revised Implementing Rules and Regulations (R-IRR) of the Republic Act (RA) No. 9184; 1 Competitive Bidding

http://www.erc.gov.ph/

BAC RESOLUTION NO. 120, SERIES OF 2020 CB A Resolution Denying the Motion for Reconsideration filed by Reyes Tacandong & Co. for the Procurement for the Technical Assistance for the Evaluation and Approval of the Reserve Market in the Wholesale Electricity Spot Market (WESM) as Embodied in the Application for the Approval of the Price Determination Methodology of the WESM

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WHEREAS, the said REI and PBD indicated that the deadline for submission of Eligibility documents for the subject procurement is on 13 August 2020 at nine o’clock in the morning (09:00 A.M.);

WHEREAS, on 13 August 2020, the ERC BAC issued Bid Bulletin No.

01 extending the deadline for submission of Eligibility documents for the subject procurement to 17 August 2020 at nine o’clock in the morning (09:00 A.M.) due to the temporary closure of the ERC Main Office for disinfection and preventive quarantine;

WHEREAS, on 17 August 2020, the ERC BAC issued Bid Bulletin No. 04 extending further the deadline for submission of Eligibility documents for the subject procurement to 28 August 2020 at nine o’clock in the morning (09:00 A.M.) due to the continued temporary closure of the ERC Main office for disinfection and preventive quarantine;

WHEREAS, on the said deadline for submission of Eligibility documents,

the BAC did not receive any submission from any prospective bidder; WHEREAS, on 08 September 2020, the ERC BAC issued BAC

Resolution No. 59, Series of 2020, declaring the First (1st) Bidding for the Technical Assistance for the Evaluation and Approval of the Price Determination Methodology (PDM) of the Wholesale Electricity Spot Market (WESM) under Lot No. 2020-05 a FAILURE as no bids/eligibility documents submissions were received;

WHEREAS, on 11 September 2020, the REI and the PBD for the Second (2nd) bidding under Lot No. 2020-16 of the subject procurement were posted on the websites of the PhilGEPS and the ERC as well as in the latter’s conspicuous place reserved for the purpose consistent with Section 21 Rule VII of the R-IRR of RA No. 9184;

WHEREAS, the said REI and PBD indicated that the deadline for

submission of eligibility documents for the subject procurement is on 22 September 2020 at nine o’clock in the morning (09:00 A.M.);

WHEREAS, on the said deadline, the BAC did not receive any submission

of eligibility documents from any prospective bidder; WHEREAS, on 22 September 2020, the ERC BAC issued BAC

Resolution No. 68, Series of 2020, declaring the Second (2nd) Bidding for the Technical Assistance for the Evaluation and Approval of the Price Determination Methodology (PDM) of the Wholesale Electricity Spot Market (WESM) under Lot No. 2020-16 a FAILURE as no bids/eligility documents submissions were received;

WHEREAS, Section 35.5 Rule X of the 2016 R-IRR of R.A. No. 9184 states that “should there occur a second failure of bidding, the Procuring Entity may resort to negotiated procurement” as provided for in Section 53.1 of the said IRR.

WHEREAS, Section 53.1 Rule XVI of the 2016 R-IRR of R.A. No.

9184 provides:


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Section 53. Negotiated Procurement Negotiated Procurement is a method of procurement of Goods, Infrastructure Projects and Consulting services, whereby the Procuring Entity directly negotiates a contract with a technically, legally and financially capable supplier, contractor or consultant in any of the following cases:

53.1. Two Failed Biddings. Where there has been failure of competitive bidding or Limited Source Bidding for the second time as provided in Section 35 of the Act and this IRR. (underscoring supplied)

WHEREAS, Section 48.3, Rule XVI of the 2016 R-IRR of R.A. No. 9184 states that:

48.3. The method of procurement to be used shall be as indicated in the approved APP. If the original method of procurement recommended in the APP was competitive bidding but cannot be ultimately pursued, the BAC, through a resolution, shall justify and recommend the change in the method of procurement to be approved by the HoPE. Such changes must be reflected in the APP to be submitted to the GPPB, pursuant to Section 7.4 of this IRR. (Underscoring supplied)

WHEREAS, the engagement of a Consultant that will provide the required technical assistance and perform the specific tasks provided in the Terms of Reference developed by the end-user is indispensable for the Commission to effectively and efficiently perform its functions under Republic Act No. 9513, (Renewable Energy Act of 2008)2 and Republic Act No. 9136 (EPIRA);

WHEREAS, on 12 October 2020, the ERC BAC issued BAC

Resolution No. 85, Series of 2020, recommending to the HoPE, through its duly authorized signatory, ERC Chairperson and CEO AGNES VST DEVANADERA, the approval of the change in the method of procurement for said project from Competitive Bidding to Negotiated Procurement in view of the two (2) consecutive failed competitive biddings, and to reflect the said change in the APP for Fiscal Year 2020; WHEREAS, on 15 October 2020, the HoPE approved the Annual Procurement Plan (APP) for Fiscal Year (FY) 2020 – Amendment No. 08, which changed the mode of procurement of the project entitled “Technical Assistance for the Evaluation and Approval of the Reserve Market in the Wholesale Electricity Spot Market (WESM) as Embodied in the Application for the Approval of the Price Determination Methodology of the WESM” from Competitive Bidding to Negotiated Procurement with an Approved Budget for the Contract (ABC) in the amount of Four Million Eight Hundred Eighty Thousand Pesos (P4,800,000.00.), inclusive of all government taxes, other fees and charges;

2 Section 7 of RA 513 reads: SEC. 7. Feed-In Tariff System. – To accelerate the development of emerging renewable energy resources, a feed-in tariff system for electricity produced from wind, solar, ocean, run-of-river hydropower and biomass is hereby mandated. Towards this end, the ERC in consultation with the National Renewable Energy Board (NREB) created under Section 27 of this Act shall formulate and promulgate feed-in tariff system rules x x x


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WHEREAS, on 05 November 2020, the ERC BAC received from the MOS, PR No. 2020-12-223 requesting for the Negotiated Procurement for the Technical Assistance for the Evaluation and Approval of the Reserve Market in the Wholesale Electricity Spot Market (WESM) as Embodied in the Application for the Approval of the Price Determination Methodology of the WESM. In support of the PR, the MOS submitted the TOR for the subject procurement on the same date; WHEREAS, on 11 November 2020, the Invitation for Negotiations and the PBD for the subject negotiated procurement project under Lot No. 2020-31 were posted on the websites of the PhilGEPS and the ERC, as well as in the latter’s conspicuous place reserved for the purpose; WHEREAS, on the same date, the ERC BAC sent Invitations for Negotiations to three consultants, namely: a) Energy Market Company., b) Potomac Economics, LTD./PE Software Analytics, and c) Pterra Consulting.;

WHEREAS, the said Invitation for Negotiations and PBD indicated that the deadline for submission of Eligibility Requirements, Technical Proposal and Financial Proposal for the subject procurement is on 01 December 2020 at eight o’clock in the morning (08:00 A.M.);

WHEREAS, on 01 December 2020, the ERC BAC received two (2)

sealed bid envelopes, one from Reyes Tacandong & Co. at fifty-two minutes past six o’clock in the morning (06:52 A.M.) and the other from Potomac Economics, LTD./PE Software Analytics at thirty-seven minutes past seven o’clock in the morning (07:37 A.M.), which were both within the deadline set for submission of eligibility documents and proposals;

WHEREAS, during the scheduled opening of eligibility documents and

Technical Proposals on 01 December 2020 at nine o’clock in the morning (09:00 A.M.), Reyes Tacandong & Co. was declared “INELIGIBLE” to be considered for short listing because of failure to comply with Section 2.2.1(a)(iii) of the PBD, which reads:

2. Eligibility Requirements

2.1. The following eligibility requirements, together with the Eligibility Documents Submission Form, shall be submitted on or before the date of the eligibility check specified in the Request for Expression of Interest and Clause 5 for purposes of determining eligibility of prospective bidders:

(a) Class “A” Documents –

xxx xxx xxx

Technical Documents

xxx xxx xxx

(iii) Statement of the consultant specifying its nationality and confirming that those who will actually perform the service are


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registered professionals authorized by the appropriate regulatory body to practice those professions and allied professions in accordance with Clause 1.2, including their respective curriculum vitae.

WHEREAS, on 03 December 2020, which is within the reglementary period for filing a request for reconsideration of any decision of the ERC BAC, Reyes Tacandong & Co. filed a Motion for Reconsideration on the ERC BAC’s declaration of its ineligibility. Reyes Tacandong & Co. offered the following explanations/justifications:

1. The ineligibility cited was the non-identification of the Firm’s proposed Power Sector Consultant for Policy and Market Competition. We wish to highlight that the specific proposal to secure this Consultant for the abovementioned project was made in the spirit of negotiated procurement and represented an offer by the Firm for exceptional value adding. This feature is neither specified nor suggested in the Terms of Reference for the negotiated procurement and was intended to distinguish our singular capabilities as a professional services Firm in serving the best interests of the Commission.

2. We are confident that this specific proposal for a Power Sector Consultant for Policy and Market Competition is not present in the eligibility documents of other proponents and, as a such, is a tenuous basis for our Firm’s disqualification.

3. To bolster our assertion that this specialist qualification is a “nice-to-have” rather than a “need-to-have”, our list of technical staff already includes a Consultant for the Power Sector Finance and Economics in addition to a Corporate Finance Consultant, a Quality Assurance Partner, a Subject Matter Expert on Transactions Advisory, and a Subject Matter Expert for IT Assurance and Consulting.

4. In order to demonstrate our earnest effort to serve the best interests of ERC and take the extra mile, please be informed that we have tapped Atty. Cyril del Callar, former President of National Power Corporation and former Undersecretary of the Department of Energy as our Power Sector Consultant for Policy and Market Competition.

5. Finally, allow us to reiterate that the inclusion of this specialist qualification demonstrates our appreciation that the role of the Consultant in this project goes beyond mastery of the statutes and of the underlying technology-based market tools but most importantly, the need for WESM to demonstrate market transparency and fairness to all the energy market stakeholders as it expands into more sophisticated ancillary services.

WHEREAS, on 04 December 2020, during the Special BAC Meeting,

the ERC BAC found that the explanation given by Reyes Tacandong & Co. has no merit since the complete name of one of the proposed expert/consultant was not submitted by the latter, but simply marked as “To be announced”. Likewise, the proposed expert/consultant’s name was belatedly submitted by Reyes Tacandong & Co. only upon filing of its Motion for Reconsideration and without submitting a copy of the CV; hence, the ERC BAC could not properly assess said expert/consultant’s qualifications and/or expertise on the subject matter;


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(TOOK NO PART)

JOSE ROMULO L. CASTRO†

BAC Member

NOW, THEREFORE, We, the Members of the Bids and Awards Committee, hereby resolve to DENY the Motion For Reconsideration filed by Reyes Tacandong & Co. for the Negotiated Procurement for the Technical Assistance for the Evaluation and Approval of the Reserve Market in the Wholesale Electricity Spot Market (WESM) as Embodied in the Application for the Approval of the Price Determination Methodology of the WESM.

RESOLVED at the ERC Main Office, Pasig City, this 4th day of December

2020.

SHARON O. MONTAÑER BAC Vice Chairperson

kphsa/asg/abc -BAC Resolution No. 120, Series of 2020 CB

HEIDDI VENECIA R. BARROZO BAC Chairperson

MARINA C. BUGAYONG

BAC Member

AUGUST ANTHONY N. BALUTE

BAC Member