Election Series #1: PPPs and public works ban

Election Series #1: PPPs and public works ban

Last Wednesday, October 17, candidates vying for national and local positions filed their certificates of candidacy. Soon, they will be covered by prohibitions and bans, which, if convicted, could bar them from voting and running for elective office, and even land them in jail.

This new series is dedicated to those running in the 2019 midterm elections, desirable and otherwise, and most especially, the electorate and students of public-private partnerships (PPPs), who will hold the former accountable.

Of late, I have been asked, can government agencies, i.e., national government agencies, government-owned and -controlled corporations (GOCCs), government instrumentalities and local government units (LGUs), enter into PPP contracts during the so-called public works ban? What activities are being banned and if there are exceptions, especially for PPPs? When will the ban commence and how long will it last? Can PPP funds be expended during the period?

What is this ban? Actually, there are two. The May 13, 2019 Election Calendar, per Resolution  10429 of the Commission on Elections, prohibit the “Construction of public works, delivery of materials for public works and issuance of treasury warrant or similar devises for a future undertaking chargeable against public funds” and “Release, disbursement or expenditure of public funds.” These election offenses are defined under Section 261 (w) and (v), respectively, of the Omnibus Election Code (OEC).

Who are covered? The ban on the release of public funds extends to public officials and employees including barangay officials and those of GOCCs and their subsidiaries, while the ban on the construction of public works covers any person, public or private, including the PPP-private sector proponent (PSP).

When is the ban? The period spans 45 days from any regular election. Next year, the ban is from March 29 to May 12. This coincides with the campaign period for members of the House of Representatives and LGU officials.

Why the ban? The reason behind these two bans is plain—the people’s money in the hands of the government and government works should not be used for partisan purposes and to advance the interests of a few.

What are not covered under the ban? Not all releases of public funds and construction of public works are proscribed. The two bans do not extend to, subject to certain conditions: (1) maintenance of existing and/or completed public works project; (2) work undertaken by contract through public bidding held, or by negotiated contract awarded before the ban; (3) payment for the usual cost of preparation for working drawings, specifications, bills of materials, estimates and other procedures preparatory to actual construction; and (4) emergency work necessitated by the occurrence of a public calamity.

What are the exempted PPP activities? PPP-related processes, regardless of the modality, governing regulation and selection scheme, consists of six basic steps: (a) project identification and preparation of studies; (b) selection of the PSP through a competitive and transparent process; (c) issuance of the notice of award and signing of the PPP contract; (d) regulatory approvals and issuance of notice to proceed; (e) construction; and (f) operations and maintenance.

Juxtaposing these within the scope of the bans, the acts that are not penalizable are: (1) disbursing private funds by the PSP; (2) undertaking steps (a) to (d), and (e) for completed projects; and (3) release of public funds for PPP projects, if the government will contribute cash into the project, and/ or construction of the PPP project, which may be considered a public works, provided the PPP award was made before March 29.

So to everyone, know your law and tread carefully, responsibly and intelligently.

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