What the PACT?!
In public-private partnerships (PPPs), there are the two “PACTs”. The first one refers to the arrangement itself and the second one pertains to the manner by which the parties to the arrangement are determined.
Every PPP project must be embodied in a pact or formal agreement. The parties to a PPP—the public entity and the private-sector proponent (PSP)—consensually enter into a
The PPP contract discusses the role of each party, the nature of the project and its performance targets, the appropriate PPP modality, and the contractual obligations and contributions. This pact governs the present and the future of the partnership, i.e., what happens after the effectivity date.
What the first pact does not cover, but is mentioned in the whereas or preambulatory clauses, is another pact. The second pact refers to the past or the necessary antecedents and prerequisites that led to the execution of the first pact. The legality of the PPP, the first pact, is determined, among others, through the legality of the process by which the PSP is chosen. In order to be valid, the selection of the PSP must comply with four core requirements—the P-A-C-T—where P stands for Public Advantage, A for Accountability, C for Competition and T for Transparency.
- Public Advantage. The PSP selection process is anchored on the purpose of PPPs. All PPPs must advance the true north of all development initiatives, i.e., the public good. The procedure cannot be dissociated from the substance. The “P” is the tie that binds the “A”, “C” and “T”.