MANILA, Philippines - The National Food Authority (NFA) declared yesterday a failure of bidding for the importation of 500,000 metric tons of rice for use as buffer stock for the remainder of the year.
All four importers submitted bids that were way above the approved budget for the contract (ABC) of $456.60 per metric ton (MT). As such, the special bids and awards committee declared all bids “unresponsive.”
“Based on the bid responses of the four bidders, we declare this bidding a failure,” said Efren Sabong, NFA special bids and awards committee chairman, after the opening of bids.
“Based on the findings of the technical working group, the offers of all bidders are not responsive because their bid offers are beyond the ABC. It is clear in the bid documents that the bid price higher than the ABC shall automatically be disqualified,” he added.
The result of yesterday’s bidding would be reported to NFA administrator Arthur Juan, who will defer to the NFA Council for decision if the contract will be rebid.
Bids submitted by LG International, Vietnam Northern Food Corp. (Vinafood 1), Louis Dreyfus Corp., and Vietnam Southern Food Corp. (Vinafood 2) ranged from $460 per MT to as high as $496.75 per MT.
None of the bidders are prepared to supply the full volume. Only Vinafood 2 is prepared to supply as much as 400,000 MT. The three others were only prepared to supply up to 200,000 MT.
NFA spokesman Rex Estoperez said the NFA special bids and awards committee may re-bid the supply contract by amending the ABC in the terms of reference and, possibly the period of delivery because the first tranche of deliveries are scheduled for the end of September.
“That is very possible,” said Estoperez of the possibility of a re-bid, noting that the volume is needed for buffer stock even if only to drive down prices of commercial rice in Metro Manila which is vulnerable to price spikes. “We need the 500,000 MT. We need to protect our buffer stock.”
Even if farmers are expected to start harvesting rice by September, the NFA needs to bolster its buffer stock, said Estoperez.
The high bids submitted by importers imply that they are unwilling to sell supplies at low prices because of prevailing high prices in the world market.
The prevailing lean season for rice cultivation in Southeast Asia is believed as a factor for the rise in prices, along with demand after the onslaught of typhoons.
“That’s why we have to report formally to the NFA Council to review the ABC if it is still realistic,” he said. “International prices has rise in the weeks leading up to the bidding. Prices may change in two days,” Estoperez said.
Once the rebidding for the contract is open, new suppliers may join the tender.
Food security chief Francis Pangilinan, who has authority over the NFA, said the government would strive to complete the importation this year either through rebidding or a government-to-government tender.
“We will either re-bid or do government-to- government importation. But I am requesting for a special meeting of the NFA Council to tackle the matter,” he said.
Pangilinan said the government would strive to bring in stocks by the end of September.