Nfcc computation example 2025

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The document outlines the financial requirements for an eligibility check for suppliers, distributors, or manufacturers. It details the necessary financial documents, including a summary of assets and liabilities based on income tax returns and audited financial statements. It also explains how to calculate the Net Financial Contracting Capacity (NFCC) and mentions the need for a commitment from a bank or a cash deposit certificate. Additionally, it specifies that if there is a partnership or joint venture, each partner must submit the required documents.

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What is NFCC in accounting?

The Net Financial Contracting Capacity (NFCC) of prospective bidders. may not comply with the requirement that the same should be at least fifty. percent of the approved budget for the contract (ABC); and. 2. The available remedy should three (3) bidders submit identical-offers for an item.

What is the formula for computation of NFCC?

NFCC = [(Current assets minus current liabilities) (K)] minus the value of all outstanding or uncompleted portions of the projects under ongoing contracts, including awarded contracts yet to be started coinciding with the contract to be bid.

What does NFCC mean?

Government agencies use Net Financial Contracting Capacity (NFCC) during bidding to ensure contractors have the capacity to complete an infrastructure project. However, challenges arise after the project has been awarded when the contractor simultaneously gets other projects with no monitoring of the NFCC.

What is the value of K in NFCC computation?

K = 10 for a contract duration of one year or less, 15 for a contract duration of more than one year up to two years, and 20 for a contract duration of more than two years.

What should the NFCC be?

The NFCC should at least be equal to the Approved Budget for the Contract (ABC). If a contractor lacks the necessary NFCC, he can use either the Credit Line Commitment from a licensed bank or a Bank Deposit of at least 10% of the ABC, both dedicated for the project.

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