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Frequently Asked Questions - #60

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FAQ-60

A Qualified Bidder is asked to certify in the Part 2 Application and uphold that it is not associated with another Qualified Bidder.  It seems possible that a situation would arise where a Qualified Bidder is not associated with another Qualified Bidder at the time it makes the certification in the Part 2 Application, but that an association arises between the two Qualified Bidders as a result of a merger or other combination that occurs after the Part 2 Application.

If the Qualified Bidder knows that this possibility exists, can the Qualified Bidder be registered to participate in a BGS Auction if it explains that it can certify that it is not associated with another Qualified Bidder at the time of the Part 2 Application but that its circumstances may change during the Auction Process?


With possible exceptions that will be discussed later in this answer, in general a Qualified Bidder cannot be registered to participate in a BGS Auction unless either it can state affirmatively that it is not associated with any other Qualified Bidder, or it can name the other Qualified Bidder(s) with which it is associated and explain the nature of the association as defined in the Association and Confidential Information Rules.

Although the Association and Confidential Information Rules are designed to accommodate many different circumstances, and although the certifications and disclosures from each Qualified Bidder are examined on a case-by-case basis, the Auction Manager must be able to completely determine whether a Qualified Bidder that has submitted a Part 2 Application is or is not associated with other Qualified Bidders.  The Auction Manager must be able to make this determination because Qualified Bidders that are associated are treated differently under the Association and Confidential Information Rules.  For example, associated Qualified Bidders may be jointly subject to load caps.  Information with respect to associations must be known with certainty at the time of the Part 2 Application, so that the Auction Manager can request additional information, and so that the Auction Manager can impose any required restrictions on those Qualified Bidders that are associated with each other.  The Association and Confidential Information Rules do not provide for this to occur after the Part 2 Application should an association be newly created during the Auction Process.

In general, two Qualified Bidders that may become associated but are unsure whether they will become associated during that period would not both be able to register and bid based on a disclosure that they “could” become associated.  There may be exceptions.  First, if a Qualified Bidder (Party A) submits a Part 2 Application disclosing that it could become associated with another Qualified Bidder (Party B) but Party B has not elected to submit a Part 2 Application, the Auction Manager may ask for additional information.  The Auction Manager could conclude that Party A could register to participate in the auction.  Second, if applicants had, in their Part 1 Application, declared a bidding agreement, joint venture for the purpose of bidding in the auction, bidding consortium, or other arrangement pertaining to bidding in the auction, and if they disclose the fact that they may become associated at the Part 2 Application stage, the Auction Manager could conclude that the Qualified Bidders can register to bid in the auction.  In this case, the Auction Manager explicitly considers the fact that the restrictions placed on members of a bidding consortium or members of a bidding arrangement are likely to be sufficient for those that would apply to Qualified Bidders that are associated with one another.

Please note that this answer only examines the possibility that Qualified Bidders may become associated with one another while each Qualified Bidder continues to stand alone and conduct its business independently; for example, the parents of the Qualified Bidders could merge or combine in some manner, so that the Qualified Bidders would become sister companies, but the Qualified Bidders would not themselves combine or merge.  This answer does not directly contemplate cases where, for example, the Qualified Bidders themselves would merge or combine.  If Qualified Bidders themselves combined or merged, one or both of these Qualified Bidders would likely be unable to uphold the certification that the Qualified Bidder would not substitute another entity in its place, transfer its rights to another entity, or otherwise assign its status as a bidder to another entity.  This certification is required in the Part 1 and Part 2 Applications.  These certifications ensure that the entity that submits to the qualification process, that certifies its agreement to the Supplier Master Agreement and the Auction Rules, and that certifies its compliance to the Association and Confidential Information Rules is the same entity that bids and that would sign the Supplier Master Agreement should that entity become a winner in the auction.



11/15/2021, in Association and Confidential Information Rules.

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