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It depends #2: Unsolicited proposals

It depends #2: Unsolicited proposals

THE phrase “it depends” is becoming more and more a popular response to questions on public-private partnerships. For those who recognize the host of PPP laws, regulations and guidelines, “it depends” is the appropriate initial reply.

The definite answer, however, largely depends on the PPP modality and applicable law. These are: (a) nine variants listed in the build-operate-transfer (BOT) law; (b) joint ventures under the 2013 Guidelines for Government-Owned and -Controlled Corporations, etc., issued by the National Economic and Develop-ment Authority (Neda); (c) 24+ modalities per the Department of the Interior and Local Government Memorandum Circular 120-2016, issued to guide local government units; (d) Special JV Guidelines by the Philippine Reclamation Authority (PRA) and Bases Con-version Development Authority (BCDA); and (e) Special PPP Guidelines of the Metropolitan Manila Development Authority (lease, lease-to-own, real property swap, design-finance-build), and Philippine National Oil Co. (lease and concession).

Here are some of those questions pertaining to unsolicited proposals (UPs) where this trite reply calls for a detailed discussion.

(1) What type of study is required to be submitted as part of a UP? It depends. Under (a), the study must be in the form a feasibility study. Under (b), (c), (d-BCDA) and (e), the supporting document may be a feasibility study, pre-feasibility study or business case. For (d-PRA), it must either be a feasibility or pre-feasibility study.

(2) When does the private sector proponent (PSP) become the original proponent (OP)? It depends. Under (a), (c) and (e), the PSP becomes the OP, whereby no other proposal for the same project can be entertained, upon acceptance of the UP. For JVs in accordance with (b) and (d), OP status is conferred after successful negotiations under Stage 2.

(3) What if there is more than one UP? It depends. For (a), (b) and (d-BCDA), the first-in-time approach is applied whereby subsequent proposals are only considered if the first/earlier complete UP is rejected. Under (c), (d-PRA) and (e), the UP that offers the best terms is the one accepted.

(4) What is the right of the OP at Stage 3/Challenge Stage? It depends. For (a), (c) and (e), the OP has the right to match the best offer from a challenger, if any. Under (b), the OP has the opportunity to submit, in a sealed bid, a better financial offer. For PRA and BCDA in (d), the OP must outbid the superior offer from a challenger.

(5) What is the role of the Neda? It depends. Under (a), for national projects regardless of the project cost and for local projects exceeding P200 million, the Neda Board and Neda-Investment Coordinating Committee, respectively, must approve the project prior to award. For JVs under (b) where the government contribution is P150 million or more, the Neda-ICC must pass upon the project.  For (d), (e), non-BOT law projects under (c) and lower-than-P150 million JVs under (b), the Neda has no role in the award process.

So, know your PPP law and defend “it depends.” To the Batch 1 candidates for Certified PPP Advocate, study well.

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