Government Procurement Policy Board Technical Support Office(GPPB)

September 29, 2018 Dear Ms. Latagan, We sincerely apologize for the delay in responding to your query. We have just recently designated a new focal person to address Freedom of Information related requests. As one of the eligibility documents to be submitted by the bidders, the NFCC is a financial eligibility document which establishes the bidder's liquidity and capacity to absorb the additional obligations in connection with the contract, and ensures that the bidder has the necessary resources to successfully implement and complete the project to be bid. The NFCC must cover the total ABC. The K factor should be equal to the number of months covering the contract duration, which in effect should vary depending on the length of the contract. In order to standardize the computations for NFCC, the K factor varied only from 10, 15 or 20 depending on the contract duration. However, in order to simplify NFCC computation and to even out the “distortions” for extreme cases (i.e. short periods of less than a year or longer periods of more than two years) the average of the three was determined to be a workable compromise considering that government infrastructure projects allow for requests for advance payment. Please note that the use of the K Factor at 15 was a proposal from the Department of Public Works and Highways (DPWH) which was adopted by the Government Procurement Policy Board with due deference to the study provided by the DPWH as the engineering and construction arm of the Government tasked to continuously develop its technology for the purpose of ensuring the safety of all infrastructure facilities and securing for all public works and highways the highest efficiency and quality in construction. We hope that the above sufficiently addresses your concern. Thank you. Respectfully, GPPB-TSO FOI Officer