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Joint Venture Guidelines 1.0 Legal Basis 2.0 Principles 3.0 Purpose 4.0 Coverage 5.0 Definition of Terms 6.0 General Guidelines 7.0 Process for Entering into JV Agreements 8.0 Reporting Requirement 9.0 Amendments 10.0 Separability 11.0 Effectivity 12.0 Transitory Provision Annex A Annex B

Joint Venture Guidelines · 5.7 Joint Venture (JV). An arrangement whereby a private sector entity or a group of private sector entities on one hand, and a Government Entity or a

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Page 1: Joint Venture Guidelines · 5.7 Joint Venture (JV). An arrangement whereby a private sector entity or a group of private sector entities on one hand, and a Government Entity or a

JointVentureGuidelines

1.0LegalBasis2.0Principles3.0Purpose4.0Coverage5.0DefinitionofTerms6.0GeneralGuidelines7.0ProcessforEnteringintoJVAgreements8.0ReportingRequirement9.0Amendments10.0Separability11.0Effectivity12.0TransitoryProvisionAnnexAAnnexB

Page 2: Joint Venture Guidelines · 5.7 Joint Venture (JV). An arrangement whereby a private sector entity or a group of private sector entities on one hand, and a Government Entity or a

JointVentureGuidelines

1.0LegalBasis.TheserevisedGuidelinesarebeingissuedpursuanttoSection8(JointVentureAgreements)ofExecutiveOrder(EO)No.423dated30April2005,whichmandatestheNationalEconomicandDevelopmentAuthority(NEDA),inconsultationwiththeGovernmentProcurementPolicyBoard(GPPB),toissuethenecessaryguidelinesonJointVentures(JVs).

TheOfficeoftheGovernmentCorporateCounsel(OGCC)andtheGovernanceCommissionforGovernment-Ownedand/orControlledCorporations(GCG)werelikewiseconsultedintherevisionoftheGuidelines.TheproposedrevisionsweredeliberatedandsubsequentlyapprovedbytheNEDABoardCommitteeonInfrastructure(INFRACOM)andtheEconomicDevelopmentCluster(EDC).

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Page 3: Joint Venture Guidelines · 5.7 Joint Venture (JV). An arrangement whereby a private sector entity or a group of private sector entities on one hand, and a Government Entity or a

JointVentureGuidelines

2.0Principles.TheGovernmentshallenterintoaJVarrangementconsistentwiththefollowingprinciples:

2.1ThecreationoftheJVshouldnotpreventpotentialplayersfromprofitablyenteringintobusinessventure/market;

2.2Thecostofproducingtheparticularproduct,activity,orserviceshouldbeefficientorpotentiallyefficienttowardsearningpotentialprofitsforgovernmentandthemarketplayer/privatesectorpartner;

2.3TheroleofgovernmentasregulatorofthebusinessoftheJVshouldbeclearlyandexplicitlydelineatedfromitsroleasimplementerofthebusinesstoavoidconflictsofinterest;

2.4AsdifferentiatedfromprojectsprocuredunderOfficialDevelopmentAssistance(ODA),GovernmentProcurementReformAct(GPRA),andBuild-Operate-and-Transfer(BOT)LawexceptfortheBuild-Operate-and-Own(BOO)schemeandsimilarschemesundertheBOTLaw,wheregenerallyownershipoftheasset/businesswillstaywiththegovernment,JVAgreementsallowtheprivatesectortotakeovertheundertakingoftheprojectsinitsentiretyafterthegovernmentdivestsitselfofanyinterestintheJV;and

2.5AccountabilityfortheJVprojectultimatelydevolvesontheHeadoftheGovernmentEntityinvolvedintheJVAgreementsandtheimplementationoftheJVproject.TheprivatepartiesdealingwiththeGovernmentaresimilarlyheldaccountableforalltheiractionsrelativethereto.

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Page 4: Joint Venture Guidelines · 5.7 Joint Venture (JV). An arrangement whereby a private sector entity or a group of private sector entities on one hand, and a Government Entity or a

JointVentureGuidelines

3.0Purpose.

3.1Toprescribetherules,guidelinesandproceduresforgingJVAgreementsbetweengovernmentcorporationsasdefinedunderSection4.0below,andprivateentities;

3.2ToencouragepoolingofresourcesandexpertisebetweengovernmentandprivatesectorentitiesthroughJVsasaviable,efficient,andpracticalalternativeinpursuingdevelopmentgoalsofthegovernment;and

3.3ToensurethatallJVAgreementsareenteredintounderthepolicythatallgovernmentcontractsshallbeawardedthroughatransparentprocess.

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Page 5: Joint Venture Guidelines · 5.7 Joint Venture (JV). An arrangement whereby a private sector entity or a group of private sector entities on one hand, and a Government Entity or a

JointVentureGuidelines

4.0Coverage.

4.1Theseguidelinesshallapplytoallgovernment-ownedand/orcontrolledcorporations(GOCCs),governmentcorporateentities(GCEs),governmentinstrumentalitieswithcorporatepowers(GICPs),governmentfinancialinstitutions(GFIs),stateuniversitiesandcolleges(SUCs),asdefinedunderSection5.0.

4.2TheseGuidelinesshallnotapplytothefollowing:

1. TransactionsofGFIsintheordinarycourseofbusinessaspartoftheirnormalandordinarybanking,financialorportfoliomanagementoperations;

2. JVactivitiesofgovernmentcorporateentitiesintheexerciseoftheirprimarymandatetodisposegovernmentassetsorproperties;and

3. JVactivitiesorundertakingsoftheLocalGovernmentUnits(LGUs).

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Page 6: Joint Venture Guidelines · 5.7 Joint Venture (JV). An arrangement whereby a private sector entity or a group of private sector entities on one hand, and a Government Entity or a

JointVentureGuidelines

5.0DefinitionofTerms.

5.1CompetitiveChallenge5.2CompetitiveSelection5.3ContractualJV5.4CostofJVActivity/Project5.5GovernmentEntity5.6HeadofGovernmentEntity5.7JointVenture(JV)5.8JVCompany5.9InfrastructureorDevelopmentProjects5.10NegotiatedJV5.11PublicUtility

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Page 7: Joint Venture Guidelines · 5.7 Joint Venture (JV). An arrangement whereby a private sector entity or a group of private sector entities on one hand, and a Government Entity or a

5.0DefinitionofTerms.

5.1CompetitiveChallenge.AnalternativeselectionprocesswhereinthirdpartiesshallbeinvitedtosubmitcomparativeproposalstoanegotiatedJVeitherinitiatedbyaprivatesectorproponentor,bythegovernmentincaseithasfailedtoidentifyaneligibleprivatesectorpartnerforadesiredactivityaftersubjectingthesametoacompetitiveselectionasprovidedunderSectionVIII.9ofAnnex"A"hereof.

Accordingly,theprivatesectorentitythatsubmittedthenegotiatedproposalisaccordedtherighttooutbid,throughasuperiorfinancialbid,anycomparativefinancialoffersgivenbycomparativeprivatesectorparticipantswhohavemettheeligibilityrequirementsandhavepassedthetechnicalqualificationprocess.

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Page 8: Joint Venture Guidelines · 5.7 Joint Venture (JV). An arrangement whereby a private sector entity or a group of private sector entities on one hand, and a Government Entity or a

5.0DefinitionofTerms.

5.2CompetitiveSelection.ReferstoaprocessofselectionbyaGovernmentEntityofaJVPartner(s),basedontransparentcriteria,whichshouldnotconstrainorlimitcompetition,andisopentoparticipationbyanyinterestedandqualifiedprivateentity.

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Page 9: Joint Venture Guidelines · 5.7 Joint Venture (JV). An arrangement whereby a private sector entity or a group of private sector entities on one hand, and a Government Entity or a

5.0DefinitionofTerms.

5.3ContractualJV.AlegalandbindingagreementunderwhichtheJVPartnersshallperformtheprimaryfunctionsandobligationsundertheJVAgreementwithoutformingaJVCompany.

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Page 10: Joint Venture Guidelines · 5.7 Joint Venture (JV). An arrangement whereby a private sector entity or a group of private sector entities on one hand, and a Government Entity or a

5.0DefinitionofTerms.

5.4CostofJVActivity/Project.ReferstothetotalamountofthecontributionsofthepartiestotheJVactivity/projectinpresentvaluewithdiscountrateasprescribedbytheappropriateApprovingAuthority.

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Page 11: Joint Venture Guidelines · 5.7 Joint Venture (JV). An arrangement whereby a private sector entity or a group of private sector entities on one hand, and a Government Entity or a

5.0DefinitionofTerms.

5.5GovernmentEntity.ReferstoGOCCs,GCEs,GICPs,SUCs,andGFIs,createdbylaw,executiveissuances,orpursuanttoBatasPambansaBilang68,otherwiseknownastheCorporationCodeofthePhilippines,asamended,anddefinedunderRepublicAct(RA)No.10149,otherwiseknownastheGOCCGovernanceActof2011,amongothers.

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Page 12: Joint Venture Guidelines · 5.7 Joint Venture (JV). An arrangement whereby a private sector entity or a group of private sector entities on one hand, and a Government Entity or a

5.0DefinitionofTerms.

5.6HeadofGovernmentEntity.ReferstothegoverningboardoritsdulyauthorizedofficialforGOCCs,GCEs,GICPs,SUCs,andGFIs..

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Page 13: Joint Venture Guidelines · 5.7 Joint Venture (JV). An arrangement whereby a private sector entity or a group of private sector entities on one hand, and a Government Entity or a

5.0DefinitionofTerms.

5.7JointVenture(JV).Anarrangementwherebyaprivatesectorentityoragroupofprivatesectorentitiesononehand,andaGovernmentEntityoragroupofGovernmentEntitiesontheotherhand,contributemoney/capital,services,assets(includingequipment,land,intellectualpropertyoranythingofvalue),oracombinationofanyoralloftheforegoingtoundertakeaninvestmentactivity.

Theinvestmentactivityshallbeforthepurposeofaccomplishingaspecificgoalwiththeendviewoffacilitatingprivatesectorinitiativeinaparticularindustryorsector,andeventuallytransfertheactivitytoeithertheprivatesectorundercompetitivemarketconditionsortothegovernment.

TheJVinvolvesacommunityorpoolingofinterestsintheperformanceoftheinvestmentactivity,andeachpartyshallhavetherighttodirectandgovernthepoliciesinconnectiontherewithwiththeintentiontosharebothprofitsand,risksandlossessubjecttoagreementbytheparties.AJVmaybeaContractualJVoraCorporateJV(JVCompany).

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Page 14: Joint Venture Guidelines · 5.7 Joint Venture (JV). An arrangement whereby a private sector entity or a group of private sector entities on one hand, and a Government Entity or a

5.0DefinitionofTerms.

5.8JVCompany.AstockcorporationincorporatedandregisteredinaccordancewiththeprovisionsofBatasPambansaBilang68,otherwiseknownastheCorporationCodeofthePhilippines,asamended,andbasedontheprevailingrulesandregulationsoftheSecuritiesandExchangeCommission(SEC)ofwhichfiftypercent(50%)orlessoftheoutstandingcapitalstockisownedbythegovernment.

TheJVCompanyshallberegisteredbytheJVpartnersthatshallperformtheprimaryfunctionsandobligationsoftheJVasstipulatedundertheJVAgreement.TheJVCompanyshallpossessthecharacteristicsstipulatedundertheseGuidelines.

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Page 15: Joint Venture Guidelines · 5.7 Joint Venture (JV). An arrangement whereby a private sector entity or a group of private sector entities on one hand, and a Government Entity or a

5.0DefinitionofTerms.

5.9InfrastructureorDevelopmentProjects.Include,butnotlimitedto,powerplants,highways,ports,airports,canals,dams,hydropowerprojects,watersupply,irrigation,telecommunications,railroadandrailways,transportsystems,landreclamationprojects,industrialestatesortownships,commercial/realestates,housing,governmentbuildings,tourismprojects,publicmarkets,slaughterhouses,warehouses,solidwastemanagement,informationtechnologynetworksanddatabaseinfrastructure,educationandhealthfacilities,sewerage,drainage,dredgingandotherinfrastructureanddevelopmentprojectsasmaybeauthorizedbytheGovernmentEntitypursuanttotheseGuidelines.

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Page 16: Joint Venture Guidelines · 5.7 Joint Venture (JV). An arrangement whereby a private sector entity or a group of private sector entities on one hand, and a Government Entity or a

5.0DefinitionofTerms.

5.10NegotiatedJV.Referstoaproposalinitiatedbyaprivatesectorproponentor,bythegovernmentincaseithasfailedtoidentifyaneligibleprivatesectorpartnerforadesiredactivityaftersubjectingthesametoacompetitiveselectionasprovidedunderSectionVIII.9ofAnnex"A"hereof.TheprocedurefornegotiatedproposalsisprovidedunderAnnex"B"oftheseGuidelines.

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Page 17: Joint Venture Guidelines · 5.7 Joint Venture (JV). An arrangement whereby a private sector entity or a group of private sector entities on one hand, and a Government Entity or a

5.0DefinitionofTerms.

5.11PublicUtilityProjects.ReferstoprojectsorfacilitiesthatprovidepublicservicesasdefinedundertheCommonwealthActNo.146(PublicServiceLaw),asamended,andforwhichafranchiseisrequired.

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Page 18: Joint Venture Guidelines · 5.7 Joint Venture (JV). An arrangement whereby a private sector entity or a group of private sector entities on one hand, and a Government Entity or a

JointVentureGuidelines

6.0GeneralGuidelines.

6.1JVAgreements6.2JVCompany6.3JVActivityImplementation6.4OwnershipoftheJVProject/Facility6.5ComplianceofProcurementActivities6.6JVActivitySubjecttoAuditExaminations6.7JVActivityEntitlementtoInvestmentIncentives6.8JVsInvolvingGovernmentAssetsorProperties6.9JVsunderMiningSector

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Page 19: Joint Venture Guidelines · 5.7 Joint Venture (JV). An arrangement whereby a private sector entity or a group of private sector entities on one hand, and a Government Entity or a

6.0GeneralGuidelines.

6.1JVAgreementsenteredintobytheGovernmentEntityconcernedwiththeprivatesectorpartner,whetherthroughcontractualagreementorthroughtheformationofaJVCompany(CorporateJV)asprovidedintheseGuidelines,shouldbeclearinitsintenttoundertakeaspecificactivitythatisresponsivetonationaldevelopmentgoalsandobjectives.

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Page 20: Joint Venture Guidelines · 5.7 Joint Venture (JV). An arrangement whereby a private sector entity or a group of private sector entities on one hand, and a Government Entity or a

6.0GeneralGuidelines.

6.2TheJVCompanyshallbeformedbytheGovernmentEntityandtheprivatesectorentityunderthefollowingparameters:

1. TheJVCompanyshallbeincorporatedandregisteredasastockcorporationinaccordancewiththeprovisionsofBatasPambansaBilang68,otherwiseknownastheCorporationCodeofthePhilippines,asamended,andtheprevailingandapplicablerulesandregulationspromulgatedbytheSEC;

2. OwnershipandnationalityrequirementsundertheConstitutionandotherpertinentlawsshouldbecompliedwith;provided,thattheGovernmentEntitysequitycontributionintheJVCompanyshallbefiftypercent(50%)orlessoftheoutstandingcapitalstockofthelatter.Governmentscontributionmaybethroughassets(includingmoney,equipment,land,intellectualpropertyoranythingofvalue)whichshallbesubjecttoathirdpartyindependentvaluation.ForaslongastheGovernmentEntityisinvolvedintheJVundertaking,theprivatesectorpartyshallnotsell/transferitsinterestintheJVCompanywithouttheexpresswrittenconsentoftheGovernmentEntity;

3. TheGovernmentEntityshallberepresentedintheBoardoftheJVCompanyinproportiontoitsinvestment;

4. TheJVCompanyshallbepermittedtoderiveincomefromtheactivitiesauthorizedundertheJVAgreementduringthetermthereof.TheGovernmentEntityandtheprivatesectorpartnershallbeentitledtoreceivedividendseachyearfromthenetprofitsthatwouldconstituteportionoftheunrestrictedretainedearningsofthecompanyineachyearinaccordancewiththeJVAgreement;

5. TheJVCompanyshouldstipulateafixedperiodfortermofexistencenottoexceedamaximumoffifty(50)yearspursuanttotheCorporationCodeofthePhilippines,asamended,fortheparticipationoftheGovernmentEntityasdeterminedbytheattainmentoftheGovernmentEntitysobjectiveinpursuingtheinvestment,uponwhichtheGovernmentEntitymaydivestitsinterestintheJVCompanybasedonexistinglaws,rulesandregulations.Further,thewithdrawaloftheGovernmentEntityscapitalcontributionbeforetheexpirationofthesaidperiodislikewiseencouraged;provided,thatthedivestmentismadethroughcompetitiveselection,initialpublicoffering(IPO),oranyothermeansthatpromotecompetition,fairnessandtransparency;and

6. IndraftingtheincorporationdocumentsoftheJVCompanyandothercontractsgoverningtherelationshipbetweentheGovernmentEntityandtheprivatesectorparticipant,thepartiesshouldconsiderthefollowingguidelines,amongothers:(1)clearlydefinedbusinessobjectives;(2)specifieddegreeofparticipationandthemanagementrolesofeachpartyintheJVactivity;(3)definedcontributionofcapitalandownershiprightstoproperty;(4)specifieddivisionoftheprofits,risksandlosses;(5)identifieddisputemechanismtoavoidmanagementimpassesthatmayproducedeadlockorlitigation;(6)specifiedtermination/liquidationoftheJVCompanyandindicatebuy-outprovisions;(7)specifiedconfidentialityterms;and(8)stipulatedindemnificationmechanisms.

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Page 21: Joint Venture Guidelines · 5.7 Joint Venture (JV). An arrangement whereby a private sector entity or a group of private sector entities on one hand, and a Government Entity or a
Page 22: Joint Venture Guidelines · 5.7 Joint Venture (JV). An arrangement whereby a private sector entity or a group of private sector entities on one hand, and a Government Entity or a

6.0GeneralGuidelines.

6.3IftheformationofaJVCompanyisnotthebestmodetoimplementaJVactivityasdeterminedbytheGovernmentEntity,itmayopttoimplementtheJVprojectthroughacontractualagreement.PriortoenteringintoaContractualJV,theparameterssimilartothosegoverningJVCompaniesunderSection6.2.fhereinaretobeobserved.

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Page 23: Joint Venture Guidelines · 5.7 Joint Venture (JV). An arrangement whereby a private sector entity or a group of private sector entities on one hand, and a Government Entity or a

6.0GeneralGuidelines.

6.4TheownershipoftheJVproject/facilitymaybetransferredtoeithertheGovernmentEntityortheprivatesectorpartneraftertheexpirationoftheJVAgreementdependingonthetermsstatedtherein;providedthat,pursuanttoSection7.2.aoftheseGuidelines,JVprojectswhichinvolvefulldivestmentortransferofownershipofgovernmentassetsorpropertiestoaprivatesectorpartneroraprivatesector/entityshallbeapproved/clearedbythePrivatizationCouncil(PC),andJVprojectswhichinvolvedivestmentofgovernmentequitythatisnotintheformofassetorpropertyshallbeapproved/clearedbytheGCG.

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Page 24: Joint Venture Guidelines · 5.7 Joint Venture (JV). An arrangement whereby a private sector entity or a group of private sector entities on one hand, and a Government Entity or a

6.0GeneralGuidelines.

6.5Asmaybeapplicable,theprocurementactivitiesfinancedbytheGovernmentEntityorGovernmentofthePhilippines(GOP)regardlessofsourceoffunds,whetherlocalorforeign,shallcomplywithRANo.9184,otherwiseknownastheGPRAanditsRevisedImplementingRulesandRegulations(IRR).TheJVactivityshallalsocomplywithotherlaws,rulesandregulations,guidelines,andlegalissuancesonprocurement,asmaybeapplicable.

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Page 25: Joint Venture Guidelines · 5.7 Joint Venture (JV). An arrangement whereby a private sector entity or a group of private sector entities on one hand, and a Government Entity or a

6.0GeneralGuidelines.

6.6AJVactivityshallbesubjecttoauditexaminationunderexistinglaws,rulesandregulations,andotherlegalissuances.

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Page 26: Joint Venture Guidelines · 5.7 Joint Venture (JV). An arrangement whereby a private sector entity or a group of private sector entities on one hand, and a Government Entity or a

6.0GeneralGuidelines.

6.7AJVactivitymaybeentitledtoinvestmentincentivesasmaybeapprovedbytheBoardofInvestments(BOI)asprovidedforunderEONo.226,otherwiseknownas"TheOmnibusInvestmentCodeof1987".Asmaybeapplicable,aJVactivitymayalsobeentitledtoinvestmentincentivesunderotherexistinglaws.

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Page 27: Joint Venture Guidelines · 5.7 Joint Venture (JV). An arrangement whereby a private sector entity or a group of private sector entities on one hand, and a Government Entity or a

6.0GeneralGuidelines.

6.8ForJVsinvolvinggovernmentassetsorproperties,theJVcontract/agreementmaybeterminated/rescindediftheprivatesectorpartnerfailstodeliverorperformanymajorobligation/sprescribedintheJVcontract/agreement,e.g.,constructionoftheproposedbuilding/swithintheperiodspecifiedintheJVcontract/agreement.Insuchcases,theGovernmentEntityconcernedmaylikewiseforfeittheperformancesecurityoftheprivatesectorpartner.

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Page 28: Joint Venture Guidelines · 5.7 Joint Venture (JV). An arrangement whereby a private sector entity or a group of private sector entities on one hand, and a Government Entity or a

6.0GeneralGuidelines.

6.9ConsistentwithEONo.79dated06July2012,JVsundertheminingsectorshallbeundertakenthroughcompetitivepublicbidding.

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Page 29: Joint Venture Guidelines · 5.7 Joint Venture (JV). An arrangement whereby a private sector entity or a group of private sector entities on one hand, and a Government Entity or a

JointVentureGuidelines

7.0ProcessforEnteringintoJVAgreements.

7.1Requirements/ConditionsforJVProposals7.2ApprovalofJVProposals7.3Clearance/ApprovalofDOFandDBM7.4ApprovalforRegistrationofJVCompany7.5ModesofSelectingaJVPartner7.6ApprovaloftheJVAgreement7.7DeviationsandAmendmentstotheJVAgreement

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Page 30: Joint Venture Guidelines · 5.7 Joint Venture (JV). An arrangement whereby a private sector entity or a group of private sector entities on one hand, and a Government Entity or a

7.0ProcessforEnteringintoJVAgreements.

7.1Requirements/ConditionsforJVProposals.JVproposalsshallcomplywiththefollowingrequirements/conditions:

1. TheJVactivityiswithinthemandateandcharteroftheGovernmentEntityconcerned;

2. TheJVactivityisresponsiveinmeetingnationalorspecificdevelopmentgoalsandobjectives;

3. TheJVproposalclearlydescribestheproposedinvestment,includingitstotalcost,activities,objectives,sourcesoffunding,extentandnatureoftheproposedparticipationoftheGovernmentEntityconcerned,andtherelevanttermsandconditions;

4. TheJVproposalestablishesallthecomponentsindeterminingtheover-allfeasibilityoftheJVproposalwhichinclude,amongothers,thetechnical,financial,economic,andlegalaspects;and

5. ThetermsandconditionsoftheapprovalofthePC,ifapplicable.

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Page 31: Joint Venture Guidelines · 5.7 Joint Venture (JV). An arrangement whereby a private sector entity or a group of private sector entities on one hand, and a Government Entity or a

7.0ProcessforEnteringintoJVAgreements.

7.2ApprovalofJVProposals.TheapprovalofJVproposalsshallbeinaccordancewiththefollowing:

a.PriortoSubmissionofaJVProposalb.NEDABoardICCasApprovingAuthorityforSpecifiedProjectsc.HeadofGovernmentEntityConcernedasApprovingAuthorityforSpecifiedProjectsd.ContentsofProjectProposalstobesubmittedtoNEDAICCe.EnactmentuponJVProposal

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Page 32: Joint Venture Guidelines · 5.7 Joint Venture (JV). An arrangement whereby a private sector entity or a group of private sector entities on one hand, and a Government Entity or a

7.2ApprovalofJVProposals.

a.PriortosubmissionofaJVproposaltotheApprovingAuthorityasindicatedinthisSection,approvalfromconcernedentitiesshallbesecuredasindicatedbelow:

1. Projectswhichinvolvedivestmentortransferofgovernmentassetsorpropertiestotheprivatesectorpartneroraprivatesector/entityshallberequiredtosecureapproval/clearancefromthePCpursuanttoEONo.12dated14August1998,asamendedbyEONo.323dated06December2000;

2. ProjectswhichinvolvetheformationofaJVcompanyshallberequiredtosecureapprovalfromGCGpursuanttoRANo.10149,otherwiseknownastheGOCCGovernanceActof2011;and

3. ProjectswhichinvolvedivestmentofgovernmentequitythatisnotintheformofassetorpropertyshallberequiredtosecureapprovalfromGCGpursuanttoRANo.10149,otherwiseknownastheGOCCGovernanceActof2011.

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Page 33: Joint Venture Guidelines · 5.7 Joint Venture (JV). An arrangement whereby a private sector entity or a group of private sector entities on one hand, and a Government Entity or a

7.2ApprovalofJVProposals.

b.Forthefollowingprojects,theApprovingAuthorityshallbetheNEDABoardInvestmentCoordinationCommittee(ICC):

1. InfrastructureprojectsasdefinedunderSection5.9oftheseGuidelineswithgovernmentcontributionamountingOneHundredFiftyMillionPesos(PhP150Million)andabove;

2. ProjectsthatarepublicutilitiesasdefinedunderSection5.11oftheseGuidelineswithgovernmentcontributionamountingOneHundredFiftyMillionPesos(PhP150Million)andabove;

3. NegotiatedJVsthatareinitiatedbyaprivatesectorproponentwithgovernmentcontributionamountingOneHundredFiftyMillionPesos(PhP150Million)andabove;and

4. ProjectsthatarenotrelatedtoprimarycorporatemandatewithgovernmentcontributionamountingOneHundredFiftyMillionPesos(PhP150Million)andabove.

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Page 34: Joint Venture Guidelines · 5.7 Joint Venture (JV). An arrangement whereby a private sector entity or a group of private sector entities on one hand, and a Government Entity or a

7.2ApprovalofJVProposals.

c.Forthefollowingprojects,theApprovingAuthorityshallbetheHeadoftheGovernmentEntityconcerned:

1. ProjectsthatarerelatedtoprimarycorporatemandateandnotinvolvinginfrastructureprojectsasdefinedunderSection5.9oftheseGuidelines;and

2. ProjectsnotcoveredunderSection7.2.boftheseGuidelines.

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Page 35: Joint Venture Guidelines · 5.7 Joint Venture (JV). An arrangement whereby a private sector entity or a group of private sector entities on one hand, and a Government Entity or a

7.2ApprovalofJVProposals.

d.ProjectproposalsthatshallbesubmittedtoNEDAICCforapprovalasindicatedinthisSectionshouldincludethefollowing:

(i)endorsementoftheJVproposalbytheHeadoftheGovernmentEntityconcerned;

(ii)projectdetails;

(iii)draftJVAgreement;and

(iv)otherdocumentsandrequirementsasmaybedeterminedbytheNEDAICCpursuanttoitsguidelines.TheGovernmentEntityconcernedshallfurnishtheDepartmentofFinance(DOF)allthedocumentssubmittedtotheNEDAICCfortheapprovalofaJVproposal;

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Page 36: Joint Venture Guidelines · 5.7 Joint Venture (JV). An arrangement whereby a private sector entity or a group of private sector entities on one hand, and a Government Entity or a

7.2ApprovalofJVProposals.

e.TheApprovingAuthorityshallactontheJVproposalwithinaperiodofthirty(30)calendardaysuponsubmissionofcompletedocuments.

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Page 37: Joint Venture Guidelines · 5.7 Joint Venture (JV). An arrangement whereby a private sector entity or a group of private sector entities on one hand, and a Government Entity or a

7.0ProcessforEnteringintoJVAgreements.

7.3Clearance/ApprovalofDOFandDepartmentofBudgetandManagement(DBM).ForJVactivitythatwillrequirenationalgovernmentundertakings,subsidiesorguarantees,clearance/approvaloftheDOFand/ortheDBM,asthecasemaybe,shallbesecured.

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Page 38: Joint Venture Guidelines · 5.7 Joint Venture (JV). An arrangement whereby a private sector entity or a group of private sector entities on one hand, and a Government Entity or a

7.0ProcessforEnteringintoJVAgreements.

7.4ApprovalforRegistrationofJVCompany.AllJVproposalswhichinvolvethepursuitoftheprojectthroughaJVCompanyshallbesubmittedtotheGCGforreviewandrecommendationtothePresidentofthePhilippinesforapprovalbeforeregisteringthesamewiththeSECpursuanttoSection27ofRANo.10149.

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Page 39: Joint Venture Guidelines · 5.7 Joint Venture (JV). An arrangement whereby a private sector entity or a group of private sector entities on one hand, and a Government Entity or a

7.0ProcessforEnteringintoJVAgreements.

7.5ModesofSelectingaJVPartner

a.CompetitiveSelection-TheprocessfortheconductofCompetitiveSelection,contractawardandapprovalshallbestipulatedunderAnnex"A"oftheseGuidelines.IntheconductoftheCompetitiveSelectionprocess,theGovernmentEntityshallensurethefollowing:

1. Allactivitiesduringthecompetitiveselection,award,andapprovalareconductedinatransparentandcompetitiveprocessthatpromotesaccountabilityandefficiency;and

2. ThecompetitiveselectionparametersareclearlydefinedandshallincludetheparametersasapprovedbytheApprovingAuthority.

b.NegotiatedJVs-NegotiatedJVsmaybeenteredunderthecircumstancesstatedunderAnnex"B"oftheseGuidelines.

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Page 40: Joint Venture Guidelines · 5.7 Joint Venture (JV). An arrangement whereby a private sector entity or a group of private sector entities on one hand, and a Government Entity or a

7.0ProcessforEnteringintoJVAgreements.

7.6ApprovaloftheJVAgreement.UponapprovaloftheJVproposalbytheApprovingAuthority,theHeadoftheGovernmentEntityconcernedshallapprovethedraftcontractorJVAgreement.TheHeadoftheGovernmentEntityconcernedshallberesponsibleforensuringtheconsistencyofthetender/bidparametersandthedraftcontractorJVagreementwiththeparameters,termsandconditionssetforthbytheApprovingAuthority.

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Page 41: Joint Venture Guidelines · 5.7 Joint Venture (JV). An arrangement whereby a private sector entity or a group of private sector entities on one hand, and a Government Entity or a

7.0ProcessforEnteringintoJVAgreements.

7.7DeviationsandAmendmentstotheJVAgreement.TheconcernedGovernmentEntityshallnotproceedwiththeawardandsigningofthecontractiftherearematerialdeviationsfromtheparametersandtermsandconditionssetforthintheproposal/tenderdocumentsthattendtoincreasethefinancialexposure,liabilitiesandrisksofgovernmentoranyotherfactorsthatwouldcausedisadvantagetogovernmentandanydeviationthatwillcauseprejudicetolosingprivatesectorparticipants.

SaidmaterialdeviationsandamendmentsshallbesubjectedtotheapprovalrequirementsunderSections7.2,7.3,and7.4hereof.TheHeadoftheGovernmentEntityconcernedshallberesponsibleforcompliancewiththispolicy.Violationofthisprovisionshallrendertheawardand/orthesignedJVAgreementinvalid.

AnyamendmenttoaJVAgreementafterawardandsigningofcontractshallundergoapprovalbytheappropriateApprovingAuthorityasprovidedinSections7.2,7.3,and7.4oftheseGuidelines.Noncompliancewiththecorrespondingapprovalprocessstatedshallrendertheamendmentnullandvoid.

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JointVentureGuidelines

8.0ReportingRequirement.DuringthecourseofimplementationoftheJVAgreement,theconcernedGovernmentEntityshallsubmitanannualreportonthestatusofitsimplementationduringacurrentyeartotheDOFandGCGformonitoringpurposes.Theannualreportshallbesubmittedwithinthefirstquarterofthesucceedingyearandmaybeinanyformat,electronic/digitalcopyorhardcopy,asmayberequiredbyDOFandGCG.

ThereportshallusecurrentstandardsintheproductionofcorporateannualreportsandshallincludetheauditedfinancialstatementsoftheJV.Inaddition,thereportshallalsocontaintheJVsworkprogramforaperiodasspecifiedandrequiredbyDOFstartingfromtheyeartheannualreportisissued.

TheheadsofgovernmententitiesasdefinedinSection5oftheseGuidelines,shallsubmittoNEDA,DOFandGCGthesalientfeaturesandacopyofJVAgreementstogetherwithalldocumentsrequiredtheretoformonitoringofcompliancewithrelevantpolicies,proceduresandconditionsforapprovaloftheJVundertaking.

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JointVentureGuidelines

9.0Amendments.TheseGuidelinesmaybeamendedand/ormodifiedfromtimetotimebyNEDAthroughitsDirector-General,inconsultationwiththeGPPB,theOGCC,andtheGCG.

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JointVentureGuidelines

10.0Separability.IfanyprovisionoftheseGuidelinesisheldordeclaredvoidorunenforceablebyfinaljudgmentofacourtofcompetentjurisdiction,theotherprovisionsunaffectedtherebyshallremaininfullforceandeffect.

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JointVentureGuidelines

11.0Effectivity.TheseRevisedGuidelinesandanysubsequentamendmentormodificationshalltakeeffectfifteen(15)calendardaysfromthedateofitspublicationinanewspaperofgeneralcirculationortheOfficialGazetteorothermodeslegallyacceptable,andacopyofitshallbesubmittedtotheOfficeoftheNationalAdministrativeRegistry(ONAR)andtheUniversityofthePhilippines(UP)LawCenter.

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JointVentureGuidelines

12.0TransitoryProvision.ThefollowingshallbegovernedbytheoldGuidelines(2008JVGuidelines):(a)AllnegotiatedJVswhereinaJVcontract/agreementbetweenthewinningprivatesectorparticipantandtheGovernmentEntityconcernedhasbeenexecutedpriortoeffectivityoftheRevisedJVGuidelines;and,(b)AllJVsundertakenthroughcompetitiveselectionwhereinthebid/shavealreadybeenopenedpriortotheeffectivityoftheseRevisedJVGuidelines.

ForJVsnotcoveredunderitems(a)and(b)above,theseRevisedJVGuidelinesshallgovern,providedthattheRevisedGuidelinesshallnot,inanymanner,operatetoimpairvestedrightsalreadyaccruingtoaparty.

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Page 47: Joint Venture Guidelines · 5.7 Joint Venture (JV). An arrangement whereby a private sector entity or a group of private sector entities on one hand, and a Government Entity or a

ANNEXADETAILEDGUIDELINESANDPROCEDURESFORCOMPETITIVESELECTIONFORPUBLIC-PRIVATEJOINTVENTURES

I.TheJointVentureSelectionCommittee(JV-SC)II.Selection/TenderDocumentsIII.PublicationofInvitationtoApplyforEligibilityandtoSubmitaProposal(IAESP)IV.QualificationofPrivateSectorParticipantsV.SupplementalCompetitiveSelectionBulletinsandPre-SelectionConferencesVI.SubmissionandReceiptofProposalsVII.OpeningandEvaluationofProposalsVIII.AwardandApprovalofContractIX.AppealsMechanism

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Page 48: Joint Venture Guidelines · 5.7 Joint Venture (JV). An arrangement whereby a private sector entity or a group of private sector entities on one hand, and a Government Entity or a

I.TheJointVentureSelectionCommittee(JV-SC)

1.Composition2.Responsibilities3.Quorum

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Page 49: Joint Venture Guidelines · 5.7 Joint Venture (JV). An arrangement whereby a private sector entity or a group of private sector entities on one hand, and a Government Entity or a

1.Composition

RegularMembers(voting):

a.Chairman-AtleastathirdrankingofficeroftheGovernmentEntity;

b.Secretary-AnylegalofficeroftheconcernedGovernmentEntity;

c.One(1)officerknowledgeableinfinance;

d.One(1)officerknowledgeableinmanagement/operationoftheJV;and

e.One(1)officerknowledgeablewiththetechnicalaspectsorrequirementsoftheproject,dulydesignatedbytheHeadoftheGovernmentEntityconcernedonaproject-to-projectbasis.

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1.Composition

ProvisionalMembers(non-voting):

f.One(1)technicalofficerfromaconcernedregulatorybody,whenapplicable,knowledgeablewiththeprojectathand,tobeinvitedbytheGovernmentEntityconcernedonaproject-to-projectbasis;and

g.Observers:

1. One(1)representativefromtheGovernmentEntitysstatutorycounsel(OGCCortheOfficeoftheSolicitor-General[OSG]orasdesignatedbytheDepartmentofJustice[DOJ]);

2. Two(2)representativesfromtheprivatesector-one(1)representativefromadulyrecognizedassociationrelatedtotheprojectathand,andone(1)representativefromeitherthefacilityusers,ifapplicable,ordulyrecognizedaccountingassociations;and

3. One(1)representativefromtheCommissiononAudit(COA).

Observerswillbenotifiedatleasttwo(2)calendardaysbeforethefollowingstages:pre-selectionconference,openingoftechnicalandfinancialproposals,evaluationoftechnicalandfinancialproposals,contractaward,andspecialmeetingsoftheJV-SC.TheabsenceofobserverswillnotnullifytheJV-SCproceedings,providedthattheyhavebeendulyinvitedinwriting.

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I.TheJointVentureSelectionCommittee(JV-SC)

2.Responsibilities.TheJV-SCshallberesponsibleforallaspectsofthepre-selectionandselectionprocess,including,amongothers,thepreparationoftheselection/tenderdocuments,publicationoftheinvitationtoapplyforeligibilityandtosubmitaproposal,pre-qualificationofprospectiveprivatesectorparticipants,conductofpre-selectionconferencesandissuanceofsupplementalnotices,interpretationoftherulesregardingtheselectionprocess,theconductoftheselectionprocess,evaluationofthefinancialandtechnicalproposals,resolutionofdisputesbetweenprivatesectorparticipants,andrecommendationfortheacceptanceoftheproposaland/orfortheawardofthecontract.

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Page 52: Joint Venture Guidelines · 5.7 Joint Venture (JV). An arrangement whereby a private sector entity or a group of private sector entities on one hand, and a Government Entity or a

I.TheJointVentureSelectionCommittee(JV-SC)

3.Quorum.AquorumoftheJV-SCshallbecomposedofasimplemajorityofallvotingmembers.TheChairmanshallvoteonlyincaseofatie.

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II.Selection/TenderDocuments

1.Selection/TenderDocuments2.InstructionstoPrivateSectorParticipants3.MinimumDesigns,PerformanceStandards/SpecificationsandEconomicParameters4.DraftContract

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Page 54: Joint Venture Guidelines · 5.7 Joint Venture (JV). An arrangement whereby a private sector entity or a group of private sector entities on one hand, and a Government Entity or a

II.Selection/TenderDocuments

1.Selection/TenderDocuments.TheGovernmentEntityconcernedshallpreparetheselection/tenderdocumentswhichshallincludethefollowing:

1. InstructionstoPrivateSectorParticipants;

2. MinimumDesign,PerformanceStandards/Specifications,andotherFinancialandEconomicParameters,whereapplicable,amongothers;

3. FeasibilityStudyoraBusinessCase/Pre-feasibilityStudyoftheProject;

4. DraftContract(asapprovedinaccordancewithSection7.6oftheseGuidelines)reflectingthetermsandconditionsinundertakingtheJVactivityincluding,amongothers,thecontractualobligationsofthecontractingpartiesandtheownershipoftheJVactivity,project,orpropertyaftertheterminationoftheJVAgreement;

5. SelectionFormreflectingtherequiredinformationtoproperlyevaluatethetechnicalandfinancialproposal;

6. Formsoftechnicalandfinancialproposalsandperformancesecurities;and

7. OtherdocumentsasmayberequiredbytheGovernmentEntityconcernedandotherrequirementsofconcernedregulatoryagenciesasmaybepertinentorapplicabletotheJVactivity.Thedocumentsenumeratedabovearejustforguidance/reference.TheGovernmentEntityconcernedisgivenfulldiscretiontoselecttheappropriateprovisionsastheymaydeemsuitableforaparticularcontract/project.

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Page 55: Joint Venture Guidelines · 5.7 Joint Venture (JV). An arrangement whereby a private sector entity or a group of private sector entities on one hand, and a Government Entity or a

II.Selection/TenderDocuments

2.InstructionstoPrivateSectorParticipants.Theinstructionstoprivatesectorparticipants,whichestablishtherulesoftheselectionprocess,shallbeclear,comprehensiveandfairtoallprivatesectorparticipantsandshall,asfarasnecessaryandpracticable,includethefollowinginformation:

1. GeneraldescriptionandobjectivesoftheJVactivity;

2. Proposalsubmissionproceduresandrequirements,whichshallincludeinformationonthemannerofproposalsubmission,thenumberofcopiesofthetechnicalandfinancialproposaltobesubmitted,wheretheproposalsaretobesubmitted,thedeadlineforthesubmissionofproposals,permissiblemodeoftransmissionoftechnicalandfinancialproposals,etc.;

3. Amountandformofproposalsecurityandproposalsecurityvalidityperiod;

4. Milestones;

5. Method,parametersandcriteriafortheevaluationoftheproposals;

6. MinimumamountofequityoftheprospectiveJVPartner;

7. Requirementsofconcernedregulatorybodies/agenciesasmaybepertinentorapplicabletotheJVactivity;

8. Revenuesharingarrangement,ifany;and

9. Nationalityandownershiprequirementsasrequiredbylaw.

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Page 56: Joint Venture Guidelines · 5.7 Joint Venture (JV). An arrangement whereby a private sector entity or a group of private sector entities on one hand, and a Government Entity or a

II.Selection/TenderDocuments

3.MinimumDesigns,PerformanceStandards/SpecificationsandEconomicParameters.Minimumdesignandperformancestandards/specifications,includingappropriateenvironmentalstandardsbytheDepartmentofEnvironmentandNaturalResources(DENR),andstandardsbyconcernedregulatoryagenciesasmaybepertinentorapplicabletotheJVactivity,shallbeclearlydefinedandshallrefermoretothedesiredquantityandqualityoftheoutputsoftheJVactivityandshouldstatethatnon-conformitywithanyoftheseminimumrequirementsshallrendertheproposalsasnon-responsive.

Likewise,forthepurposeofevaluatingproposals,thefollowingeconomicparameters,amongothersandwhereapplicable,shallbeprescribed:

1. Discountrate,foreignexchangerateandinflationfactor;

2. Maximumperiodofprojectconstruction;

3. Fixedtermandpriceindicestobeusedintheadjustmentsoftolls/fees/rentals/charges,ifapplicable;and

4. Minimumperiodofrepayment,ifapplicable.

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Page 57: Joint Venture Guidelines · 5.7 Joint Venture (JV). An arrangement whereby a private sector entity or a group of private sector entities on one hand, and a Government Entity or a

II.Selection/TenderDocuments

4.DraftContract.ThedraftcontractshouldclearlydefinethebasicandlegalrelationshipbetweenthepartiesandtheirrightsandresponsibilitiesincludingspecificGovernmentUndertakingstobeprovidedbytheGovernmentEntityrelativetotheJVactivity,ifany.Specifically,thedraftcontractshallalsocontainprovisionsonthefollowingmatters,asfaraspracticable:

a.Thedateonwhichtheagreementisestablished,executed,andconsideredeffective;

b.Thenames,addressesandidentificationoftheparties,includingthetypeofbusinessofeachmemberoftheJV;

c.ThenameunderwhichtheJVwilldobusiness;

d.TheprincipalplaceofbusinessoftheJV;

e.Clearlydefinedpurposeandobjective/s,contractual/agreementmode(whetherJVCompany/CorporateJVorcontractualJV),termandscopeoftheJV.Thetermshouldbeafixedperiodnottoexceedamaximumoffifty(50)yearsfortheparticipationoftheGovernmentEntityasdeterminedbytheattainmentoftheGovernmentEntitysobjectiveinpursuingtheinvestment;

f.TotalcostoftheJVactivity,projectspecificationsandfeatures;

g.Therelationshipbetweentheparties,managementrolesofeachpartyintheJVactivity,andastatementthatthepartiesareactuallyco-venturersfortheproject,whetherornotthecontractisinthenameofallmembers;

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III.PublicationofInvitationtoApplyforEligibilityandtoSubmitaProposal(IAESP)

1.Priortoissuance/publicationoftheIAESP,theGovernmentEntityconcernedshallsubmitacopyofthedraftJVagreement,instructionstoprivatesectorparticipants,andminimumdesigns,performancestandards/specificationsandeconomicparameterstoNEDA,DOFandGCGforinformation.

2.TheIAESPsshallbeadvertisedonceinanewspaperofgeneralnationwidecirculation,andpostedcontinuouslyforaperiodofseven(7)calendardays,startingondateofadvertisement,atthefollowing:

1. WebsiteoftheGovernmentEntityconcerned,ifavailable;2. WebsiteoftheGovernmentEntitysserviceprovider,ifany;and3. Anyconspicuousplacewithinthepremisesoftheprocuringentity.

3.Privatesectorparticipantsshallbegivenatleastthirty(30)calendardaysfromthelastdateofpublicationoftheIAESPtoapplyforeligibilityandtosubmitaproposal.Notwithstanding,theGovernmentEntityconcernedmayadjustsaidperiodasmaybeappropriateforthenature,scope,sizeandcomplexityoftheproposedJVactivity.Provided,thattheprinciplesoftransparency,competitionandaccountabilityareobserved.

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Page 59: Joint Venture Guidelines · 5.7 Joint Venture (JV). An arrangement whereby a private sector entity or a group of private sector entities on one hand, and a Government Entity or a

IV.QualificationofPrivateSectorParticipants

1.WhomayParticipate2.EligibilityRequirements3.EligibleandIneligible4.IssuanceofTenderDocuments

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IV.QualificationofPrivateSectorParticipants

1.WhomayParticipate.Anyindividual,partnership,corporationorfirm,orconsortium,whetherlocalorforeign,subjecttothelimitssetherein.

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Page 61: Joint Venture Guidelines · 5.7 Joint Venture (JV). An arrangement whereby a private sector entity or a group of private sector entities on one hand, and a Government Entity or a

IV.QualificationofPrivateSectorParticipants

2.EligibilityRequirements.

a.LegalRequirementsb.TechnicalRequirementsc.FinancialCapabilityd.Consortiae.AcceptanceofCriteriaandWaiverofRightstoEnjoinJVActivity

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Page 62: Joint Venture Guidelines · 5.7 Joint Venture (JV). An arrangement whereby a private sector entity or a group of private sector entities on one hand, and a Government Entity or a

2.EligibilityRequirements

a.LegalRequirements.IftheJVactivityrequiresapublicutilityfranchise,theprivatesectorparticipantmustbedulyregisteredwiththeSECandbeatleastsixtypercent(60%)Filipino-owned.Forprojectsotherthanthese,prospectiveprivatesectorparticipantshallcomplywithnationalityandownershiprequirementsundertheConstitutionandotherapplicablelawsandissuances.

ForJVactivitiestobeoperatedbytheprospectiveJVPartnerorafacilityoperatorwhereoperationofthefacilitydoesnotrequireapublicutilityfranchise,theJVpartnerorfacilityoperatororconcessionairemaybeFilipinoorforeign-owned,asmaybeallowedunderapplicablelaws,rules,andregulations.

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2.EligibilityRequirements

b.TechnicalRequirements.TheprospectiveJVPartnermusthavecompletedaprojectsimilarorrelatedtotheJVactivitywhosevalue,adjustedtocurrentpricesusingtheNationalStatisticsOffice(NSO)ConsumerPriceIndex(CPI),mustbeatleastfiftypercent(50%)ofthecostoftheJVactivitysubjectoftheselectionprocesswithintherelevantperiodasdeterminedbytheGovernmentEntity.

TheprospectiveJVPartnershallsubmitastatementofallitsongoingandcompletedgovernmentandprivatecontractssimilarorrelatedtotheJVactivitysubjectoftheselectionprocess,includingcontractsawardedbutnotyetstarted,ifany.

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2.EligibilityRequirements

c.FinancialCapability.TheGovernmentEntityshalldeterminebeforeevaluationofeligibility,theminimumamountofequityneededfortheJVactivity.

ThefollowingdocumentsshallbesubmittedbytheprospectiveJVPartner:

1. Auditedfinancialstatementsforthepastthree(3)calendaryears.IftheprospectiveJVPartnerisFilipino,theauditedfinancialstatementstobesubmittedmustbestamped"received"bytheBureauofInternalRevenue(BIR)oritsdulyaccreditedandauthorizedinstitutions;and

2. Latesttaxreturns,iftheJVPartnerisFilipino.

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2.EligibilityRequirements

d.Incaseofconsortia,allmember-entitiesoftheprospectiveJVPartnershallalsosubmittheabovelegal,technicalandfinancialeligibilityrequirementstodeterminetheoverallcapabilityoftheconsortiafortheJVundertaking

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Page 66: Joint Venture Guidelines · 5.7 Joint Venture (JV). An arrangement whereby a private sector entity or a group of private sector entities on one hand, and a Government Entity or a

2.EligibilityRequirements

e.AcceptanceofCriteriaandWaiverofRightstoEnjoinJVActivity.Inadditiontotheabove,allprospectiveprivatesectorparticipantsshallberequiredtosubmit,aspartoftheirqualificationdocuments,astatementstipulatingthattheprivatesectorparticipant:

(i)hasacceptedthequalificationcriteriaestablishedbytheJV-SCoftheGovernmentEntityconcerned;and

(ii)waivesanyrightitmayhavetoseekandobtainawritofinjunctionorprohibitionorrestrainingorderagainsttheconcernedGovernmentEntityoritsJV-SCtopreventorrestrainthequalificationproceedingsrelatedthereto,theawardofthecontracttoasuccessfulprivatesectorparticipant,andthecarryingoutoftheawardedcontract.Suchwaivershall,howeverbe,withoutprejudicetotherightofadisqualifiedorlosingprivatesectorparticipanttoquestionthelawfulnessofitsdisqualificationortherejectionofitsproposalbyappropriateadministrativeorjudicialprocessesnotinvolvingtheissuanceofawritofinjunctionorprohibitionorrestrainingorder.

Financialcapabilityshallbemeasuredintermsof:

i)proofofabilityoftheprospectiveJVPartnertoprovideaminimumamountofequitytotheJVactivity,measuredintermsofthenetworthofthecompany,oradepositequivalenttotheminimumequityrequiredsetasideorear-markedfortheproposedJVactivity;and

ii)aletterfromadomesticuniversal/commercialbank,oraninternationalbankwithasubsidiary/branchinthePhilippines,oranyinternationalbankrecognizedbytheBangkoSentralngPilipinas(BSP),attestingthattheprospectiveJVPartnerisoneofitscurrentclients,andisingoodfinancialstanding.

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Page 67: Joint Venture Guidelines · 5.7 Joint Venture (JV). An arrangement whereby a private sector entity or a group of private sector entities on one hand, and a Government Entity or a

IV.QualificationofPrivateSectorParticipants

3.EligibleandIneligible.TheGovernmentEntity,throughitsJV-SC,shallwithinaperiodoffifteen(15)calendardaysafterthedeadlinesetforthesubmissionoftheeligibilitydocuments,completetheevaluationoftheeligibilitydocumentsoftheprospectiveJVPartners,anddeterminewhichamongthemare"eligible"and"ineligible".Accordingly,theJV-SCshalldulyinformtheeligibleJVPartnerswithinseven(7)calendardaysafterapprovalthereof.Ineligibleprivatesectorparticipantsshallbesimilarlygivennoticeofsuchineligibility,statingthereinthegroundsforineligibilitywithinthesameperiod.

ThoseineligiblemayappealtheirineligibilitytotheHeadoftheGovernmentEntityorhisauthorizedrepresentative,withinseven(7)calendardaysfromreceiptofthenoticeofineligibility.Theselectionprocesswillbesuspendedforamaximumperiodofthirty(30)calendardayswhiletheappealisbeingevaluated.TheHeadoftheGovernmentEntityorhisauthorizedrepresentativeshallactontheappealwithinthethirty(30)-calendardayperiodofsuspensionoftheselectionprocess.

ThedecisionoftheHeadoftheGovernmentEntity,orhisauthorizedrepresentative,ontheappealshallbefinalandimmediatelyexecutory.Iftheappealisnotresolvedwithinsaidperiod,theappealisdeemeddenied,andtheselectionprocesswillproceed.

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IV.QualificationofPrivateSectorParticipants

4.IssuanceofTenderDocuments.TheGovernmentEntityconcernedshallmakeavailabletherelatedcompetitiveselectiondocumentstoalleligibleprivatesectorparticipantsassoonaspracticabletoproviderespectiveprivatesectorparticipantsampletimetoexaminethesameandtopreparetheirrespectiveproposalspriortothedateofopeningoftheproposals.

Thetimeperiodfromthelastdayoftheissuanceoftenderdocumentstothedateofopeningoftheproposalshallnotexceedsixty(60)calendardaysforJVfacility/projectcostingFiveHundredMillionPesos(PhP500Million)andabove,andthirty(30)calendardaysforJVfacility/projectcostinglessthanFiveHundredMillionPesos(PhP500Million).

TheproposalparametersfortheproposedJVactivityshouldbetransparentandfair.Itshouldnot,inanyway,betailor-madeforormeanttofavororgiveadvantagetoaparticularprivatesectorparticipant.

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V.SupplementalCompetitiveSelectionBulletinsandPre-SelectionConferences

1.ResponsibilityofthePrivateSectorParticipant2.SupplementalNotices3.Pre-SelectionConference

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V.SupplementalCompetitiveSelectionBulletinsandPre-SelectionConferences

1.ResponsibilityofthePrivateSectorParticipant.Theprospectiveprivatesectorparticipantshallbesolelyresponsibleforhavingtakenallthenecessarystepstocarefullyexamineandacquainthimselfwiththerequirementsandtermsandconditionsoftheselectiondocumentswithrespecttothecost,durationandexecution/operationoftheprojectasitaffectsthepreparationandsubmissionofitsproposal.

TheGovernmentEntityconcernedshallnotassumeanyresponsibilityregardingerroneousinterpretationsorconclusionsbytheprospectiveprivatesectorparticipantoutofdatafurnishedorindicatedinthecompetitiveselectiondocuments.

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V.SupplementalCompetitiveSelectionBulletinsandPre-SelectionConferences

2.SupplementalNotices.AprospectiveprivatesectorparticipantmaysubmitawrittenrequesttotheGovernmentEntityconcernedonorbeforethepre-selectionconferenceastothemeaningofanydataorrequirementsoranypartoftheselectiondocuments.AnysubstantiveinterpretationgivenbytheconcernedGovernmentEntityshallbeissuedintheformofaSupplementalNotice,andfurnishedtoallprospectiveprivatesectorparticipants.

TheGovernmentEntityconcernedmayalsoissueSupplementalNoticestoallprospectiveprivatesectorparticipantsatanytimeforpurposesofclarifyinganyprovisionsoftheselectiondocuments,providedthatthesameareissuedwithinareasonableperiodtoallowallprivatesectorparticipantstoconsiderthesameinthepreparationoftheirproposals.

ReceiptofallSupplementalNoticesshallbedulyacknowledgedbyeachprivatesectorparticipantspriortothesubmissionofhisproposalandshallbesoindicatedintheproposal.

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V.SupplementalCompetitiveSelectionBulletinsandPre-SelectionConferences

3.Pre-SelectionConference.ForJVactivitieswithfacility/projectcostamountingtolessthanFiveHundredMillionPesos(PhP500Million),pre-selectionconferenceshallbeconductedbytheGovernmentEntityatleastfifteen(15)calendardaysbeforethedeadlineforthesubmissionofproposals.

ForJVactivitieswithfacility/projectcostamountingtoFiveHundredMillionPesos(PhP500Million)andabove,thepre-selectionconferenceshallbeconductedatleastthirty(30)calendardaysbeforethedeadlineforthesubmissionofproposals.Notwithstanding,theGovernmentEntityconcernedmayadjustsaidperiodasmaybeappropriateforthenature,scope,size,andcomplexityoftheproposedJVactivity.Provided,thattheprinciplesoftransparency,competitionandaccountabilityareobserved.

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VI.SubmissionandReceiptofProposals

1.RequirementsforSubmissionofProposalsa.TechnicalProposalb.FinancialProposalc.SubmissionofLateProposals

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VI.SubmissionandReceiptofProposals

1.RequirementsforSubmissionofProposals.Privatesectorparticipantsshallberequiredtosubmittheirproposalsonorbeforethedeadlinestipulatedinthe"InstructionstoParticipants".Foreligibleparticipants,proposalsshallbesubmittedintwo(2)separatesealedenvelopes,thefirstbeingthetechnicalproposalandthesecondthefinancialproposal.

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1.RequirementsforSubmissionofProposals

a.Thetechnicalproposalshallcontainthefollowing,asapplicable:

1. Compliancestatementswithregardtothetechnicalparametersasstatedinthetenderdocuments;

2. Operationalfeasibility;

3. Technicalsoundness,includingproposedprojecttimeline;

4. Preliminaryenvironmentalassessment;

5. CostandfinancingplanoftheJVactivity;

6. Proposalsecurityintheformasrequiredbythegovernmententityconcernedwhichmaybeincash,certifiedcheck,manager scheck,letterofcredit,orbankdraft/guaranteeissuedbyareputablelocal/foreignbank,orasuretybondcallableondemandissuedbytheGovernmentServiceInsuranceSystem(GSIS)oranentitydulyregisteredandrecognizedbytheOfficeoftheInsuranceCommissioner,oranycombinationthereofpayabletotheGovernmentEntityconcernedinaccordancewiththefollowingschedule:

TotalContributionofthePrivateSectorParticipantAsEstimatedbytheGovernment

EntityRequiredProposalSecurity

LessthanPhP5.0Billion2.0%oftheprivatesectorparticipant's

contributionasestimatedbytheGovernmentEntity

PhP5.0BilliontolessthanPhP10.0Billion1.5%oftheprivatesectorparticipant's

contributionasestimatedbytheGovernmentEntity

PhP10.0Billionandmore1.0%oftheprivatesectorparticipant's

contributionasestimatedbytheGovernmentEntity

7. Otherdocumentstosupporttheprivatesectorparticipantstechnicalproposal,asmayberequiredbytheconcernedGovernmentEntity.

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1.RequirementsforSubmissionofProposals

b.Thefinancialproposalshallcontainthefollowing,asthecasemaybe:

1. Compliancestatementswithregardtothefinancialparametersstatedinthetenderdocuments;

2. ProposedcostoftheJVactivity,operationandmaintenancecost,theamountofequitytobeinfusedanddebttobeobtainedfortheproject,sourcesoffinancing,andallotherrelatedcosts;and

3. FinancialproposalcorrespondingtotheparameterssetbytheconcernedGovernmentEntity.

Fiftypercent(50%)oftheequitytobeprovidedbytheprivatesectorentityshouldasmuchaspossiblecomefromitsownresourcesandnotborrowed.TheGovernmentEntityconcernedisnotprecludedfromspecifyingotherrequirementsforthetechnicalandfinancialproposalsthatarebestsuitedforthespecificJVactivity.

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1.RequirementsforSubmissionofProposals

c.Submissionoflateproposals.Proposalssubmittedafterthedeadlineforsubmissionprescribedinthe"InstructionstoPrivateSectorParticipants"shallbeconsideredlateandshallbereturnedunopened.

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VII.OpeningandEvaluationofProposals

1.OpeningoftheenvelopefortheTechnicalProposal2.EvaluationoftheTechnicalProposal3.OpeningoftheEnvelopefortheFinancialProposal4.EvaluationoftheFinancialProposal5.SimultaneousevaluationoftheTechnicalandFinancialProposals6.PrescriptivePeriods7.RejectionofProposals8.Withdrawaland/orModificationofProposals9.RighttoRejectAllProposals10.BreakingTieBids

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Page 79: Joint Venture Guidelines · 5.7 Joint Venture (JV). An arrangement whereby a private sector entity or a group of private sector entities on one hand, and a Government Entity or a

VII.OpeningandEvaluationofProposals

1.Openingoftheenvelopeforthetechnicalproposal.Atthedateandtimeoftheproposalopeningstipulatedinthe"InstructionstoPrivateSectorParticipants",theJV-SCshallopenonlythefirstenvelopecontainingtechnicalproposalandascertain:

(a)whetherthesameiscompleteintermsofthedata/informationrequiredunderSectionVI.1(a)above;and

(b)whetherthesameisaccompaniedbytherequiredproposalsecurityintheprescribedform,amount,andperiodofvalidity.

Allprivatesectorparticipants,ortheirrepresentatives,presentattheopeningoftheenvelopescontainingthetechnicalproposalshallsignaregisteroftheproposalopening.

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VII.OpeningandEvaluationofProposals

2.Evaluationofthetechnicalproposal.Theevaluationofthefirstenvelopecontainingthetechnicalproposalshallinvolvetheassessmentofthetechnical,operational,environmental,andfinancingviabilityoftheproposal,vis-ŕ-vistheprescribedrequirementsandcriteria/minimumstandards,andbasicparametersprescribedinthecompetitiveselectiondocuments.

TheJV-SCoftheGovernmentEntityconcernedshallcompletetheevaluationofthetechnicalproposalwithinthirty(30)calendardaysfromthedatetheproposalsareopened.Onlythoseproposalsthathavebeendeterminedtohavepositivelypassedtheevaluationofthetechnicalproposalshallbequalifiedandconsideredfortheevaluationofthefinancialproposal.

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Page 81: Joint Venture Guidelines · 5.7 Joint Venture (JV). An arrangement whereby a private sector entity or a group of private sector entities on one hand, and a Government Entity or a

VII.OpeningandEvaluationofProposals

3.Openingoftheenvelopeforthefinancialproposal.OnlythefinancialproposalsofprivatesectorparticipantswhopassedtheevaluationdescribedunderSectionVII.2hereof,shallbeopenedforfurtherevaluation.ThefinancialproposalstenderedbyprivatesectorparticipantswhofailedthetechnicalproposalevaluationunderSectionVII.2hereof,shallnotbeconsideredfurther,andshallbereturnedunopened,togetherwithanoticestatingthereasonsfordisqualificationfromfurtherconsideration.

TheJV-SCshallnotifytheprivatesectorparticipantsqualifyingforthesecondstageofevaluationofthedate,timeandplaceoftheopeningoftheenvelopesforthefinancialproposal.Theopeningthereofshallfollowthesameprocedureprescribedfortheopeningoftheenvelopescontainingtechnicalproposals.

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VII.OpeningandEvaluationofProposals

4.Evaluationofthefinancialproposal.TheevaluationofthefinancialproposalshallinvolvetheassessmentandcomparisonofthefinancialproposalsagainstthefinancialparametersstatedinthetenderdocumentsandproposalparameterssetbytheGovernmentEntityconcerned.

TheproposedfinancingplanmustshowthatthesameadequatelymeetsthecostsrelativetotheJVactivity.TheevaluationoffinancialproposalsshallbecompletedbytheJV-SCoftheconcernedGovernmentEntitywithinfifteen(15)calendardays.

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Page 83: Joint Venture Guidelines · 5.7 Joint Venture (JV). An arrangement whereby a private sector entity or a group of private sector entities on one hand, and a Government Entity or a

VII.OpeningandEvaluationofProposals

5.Simultaneousevaluationofthetechnicalandfinancialproposals.SubjecttothedeterminationoftheHeadoftheGovernmentEntitywhereinthenatureoftheJVactivityshallwarranttheappreciationofboththetechnicalandfinancialproposalsasawholeinordertodeterminethebestproposal,simultaneousevaluationofthetechnicalandfinancialproposalsmayberesortedto.

Provided,that,saidevaluationprocedureshallbeexplicitlystatedintheproposaldocuments.Simultaneousevaluationofthetechnicalandfinancialproposalsshallbecompletedwithinthirty(30)calendardaysfromthedatetheproposalsareopened.

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VII.OpeningandEvaluationofProposals

6.Prescriptiveperiods.Theperiodsstatedfortheevaluationofthetechnicalandfinancialproposalsareprescriptive.

TheGovernmentEntityconcernedmayadjustsaidperiodsasmaybeappropriateforthenature,scope,size,andcomplexityoftheproposedJVactivity.Provided,thattheprinciplesoftransparency,competitionandaccountabilityareobserved.

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VII.OpeningandEvaluationofProposals

7.Rejectionofproposals.Non-compliancetotheinformationrequiredoneitherthefirstorsecondenvelopeshallbegroundsforrejectionofproposals.

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Page 86: Joint Venture Guidelines · 5.7 Joint Venture (JV). An arrangement whereby a private sector entity or a group of private sector entities on one hand, and a Government Entity or a

VII.OpeningandEvaluationofProposals

8.Withdrawaland/ormodificationofproposals.Withdrawaland/ormodificationofproposalsmaybealloweduponwrittennoticebytheprivatesectorparticipantconcerned,totheGovernmentEntitypriortothetimeanddatesetfortheopeningoftheenvelopecontainingthetechnicalproposalasspecifiedinthe"InstructionstoPrivateSectorParticipants".

Noproposalsshallthereafterbemodifiedorwithdrawn.Proposalmodificationsreceivedaftersaidperiodshallbeconsideredlateandwillbereturnedunopened.Withdrawalofproposalsaftertheproposalopeningdateshallcausetheforfeitureoftheprivatesectorparticipantsproposalsecurity.

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VII.OpeningandEvaluationofProposals

9.RighttoRejectAllProposals.TheGovernmentEntityconcernedreservestherighttorejectanyorallproposals,waiveanyminordefectsthereinandaccepttheofferitdeemsmostadvantageoustothegovernment.

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VII.OpeningandEvaluationofProposals

10.BreakingTieBids.Incasetiebidsoccurundercompetitiveselectionorcompetitivechallenge,theprocedureforbreakingtiebidsshallbedonethroughdrawingoflotsorsimilarmethodsthatarenon-discretionaryandnon-discriminatorysuchthatitisbasedonsheerluckorchance.

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VIII.AwardandApprovalofContract

1.RecommendationtoAward2.DecisiontoAward3.NoticeofAward4.ValidityandReturnofProposalandPerformanceSecurities5.ExtensionofValidityofProposals6.SingleResponsiveBid7.ProspectiveBidder/sCompliantwiththeTechnicalRequirements8.NegotiationontheFinancialTerms/ProposalundertheCompetitiveSelectionProcess9.FailureofCompetitiveSelection10.Execution/ApprovaloftheJVAgreement11.OtherApprovalsforContract12.PresidentialApproval,whenRequired13.ContractEffectivity

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Page 90: Joint Venture Guidelines · 5.7 Joint Venture (JV). An arrangement whereby a private sector entity or a group of private sector entities on one hand, and a Government Entity or a

VIII.AwardandApprovalofContract

1.RecommendationtoAward.Withinseven(7)calendardaysfromthedatetheevaluationprocedureadoptediscompleted,theJV-SCshallsubmittherecommendationofawardtotheHeadoftheGovernmentEntityconcerned.

TheJV-SCshallincludeaspartofitsrecommendation,adetailedevaluation/assessmentreportonitsdecisionregardingtheevaluationoftheproposals,andexplainincleartermsthebasisofitsrecommendations.

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VIII.AwardandApprovalofContract

2.DecisiontoAward.Withinseven(7)calendardaysfromthesubmissionbyJV-SCoftherecommendationtoaward,theHeadoftheGovernmentEntityshallapproveorrejectthesame.Theapprovalshallbemanifestedbysigningandissuingthe"NoticeofAward"tothewinningprivatesectorparticipantwithinseven(7)calendardaysfromapprovalthereof.

Allparticipatingprivatesectorparticipantsshallbeinformedoftheawardinwriting.Suchdecisionshallbemadeavailabletothepublicuponrequest.

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VIII.AwardandApprovalofContract

3.NoticeofAward.The"NoticeofAward"tobeissuedbytheHeadofGovernmentEntityconcerned,shallcontainamongothers,aninstructiontothewinningprivatesectorparticipanttocomplywithconditionsprecedentfortheexecutionoftheJVAgreementandtosubmitcompliancestatementswithregardthereto,withinthirty(30)calendardaysfromreceiptofthe"NoticeofAward"unlessotherwisespecifiedorextendedbytheappropriateApprovingAuthority.ConditionsprecedentfortheexecutionofthecontractshallincludeamongothersthepostingofaperformancesecurityinfavoroftheGovernmentEntityconcerned.

TheGovernmentEntityconcernedshalldeterminewhichformofperformancesecurityitwillrequirewhichmaybeintheformofcash,bankdraftorguaranteeconfirmedbyalocalbank(inthecaseofforeignbiddersbondedbyaforeignbank),letterofcreditissuedbyareputablebank,suretybondcallableondemandissuedbyGovernmentServiceInsuranceSystem(GSIS)orbyasuretyorinsurancecompaniesdulyaccreditedbytheOfficeoftheInsuranceCommissioner,oracombinationthereof,inaccordancewiththefollowingschedules:

1. Cash,manager scheck,irrevocableletterofcredit,bankdraft-aminimumoftwopercent(2%)oftheprivatesectorparticipantscontributiontotheJVactivity.

2. BankGuarantee-aminimumoffivepercent(5%)oftheprivatesectorparticipantscontributiontotheJVactivity.

3. SuretyBond-aminimumoftenpercent(10%)oftheprivatesectorparticipantscontributiontotheJVactivity.

Failuretocomplywiththeconditionsprecedentfortheexecutionofthecontractwithintheprescribedthirty(30)-calendardayperiodorasspecifiedorextendedbytheappropriateApprovingAuthoritywillresultinconfiscationoftheproposalsecurity.

Withinseven(7)calendardaysfromreceiptofthecompliancestatementsfromthewinningprivatesectorparticipant,theHeadoftheGovernmentEntityshalldeterminethesufficiencyofthesame,andnotifythewinningprivatesectorparticipantaccordingly.

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VIII.AwardandApprovalofContract

4.ValidityandReturnofProposalandPerformanceSecurities.TheexecutionoftheJVAgreementshallbemadewithintheperiodofthevalidityoftheproposalsecurity.Therequiredproposalsecurityshallbevalidforareasonableperiod,butinnocasebeyondonehundredeighty(180)calendardaysfollowingtheopeningoftheproposals.ProposalsecuritiesshallbereturnedtothewinningbidderandunsuccessfulprivatesectorparticipantsuponsigningoftheJVAgreementbythewinningprivatesectorparticipant.

Theperformancesecurityshallbevalidwithintheperiodofone(1)yearaftertheexpirationoftheJVagreementorendoftheJVperiod,orasmaybestipulatedintheJVagreement.UponcertificationbytheHeadofGovernmentEntityconcernedthattherearenoclaimsfiledagainsttheprivatesectorpartneraftertheexpirationoftheJVagreementorendoftheJVperiod,theperformancesecurityshallbereleasedbytheformer.

AsmaybeagreeduponintheJVagreement,aportionoftheperformancesecurityshallbereleaseduponcompliancewithcorrespondingmilestones.

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VIII.AwardandApprovalofContract

5.ExtensionofValidityofProposals.Whenanextensionofvalidityofproposalsisconsiderednecessary,thosewhosubmittedproposalsshallberequestedinwriting,toextendthevalidityoftheirproposalsbeforetheexpirationdateofthesame.However,privatesectorparticipantsshallnotbeallowedtomodifyorrevisethepriceorothersubstantialaspectoftheirproposals.

Privatesectorparticipantsshallhavetherighttorefusesuchanextensionwithoutforfeitingtheirproposalsecurity.Asaconditionoftheextensionofthevalidityoftheirproposals,participatingprivatesectorparticipantsmustcorrespondinglyextendthevalidityoftheirproposalsecurity.

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VIII.AwardandApprovalofContract

6.SingleResponsiveBid.Asingleandresponsivebidshallbeconsideredforawardifitfallsunderanyofthefollowingcircumstances:

1. Ifafteradvertisement,onlyasinglepartysubmitseligibilitydocumentswithinthedeadlinestipulatedintheIAESP,anditmeetstheeligibilityrequirements,afterwhichitsubmitsabidwhichisresponsivetothetechnicalandfinancialrequirements;

2. Ifafteradvertisement,morethanoneprivatesectorparticipantorprospectivebiddersubmitseligibilitydocumentsinaccordancewiththeprovisionsoftheseGuidelines,butonlyonebiddermeetstheeligibilityrequirements,afterwhichitsubmitsabidwhichisresponsivetothetechnicalandfinancialrequirements;

3. Ifaftertheeligibilitycheck,morethanonebiddermeetstheeligibilityrequirementsbutonlyonebiddersubmitsabid,anditsbidisfoundtoberesponsivetothetechnicalandfinancialrequirements;or

4. Ifafterqualification/evaluationofproposals,onlyonebiddermeetsthetechnicalrequirementsbutisnotabletocomplywithfinancialrequirements,afterwhichanegotiationonthefinancialterms/proposalinaccordancewithSection8hereofisconductedandissuccessful.

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VIII.AwardandApprovalofContract

7.ProspectiveBidder/sCompliantwiththeTechnicalRequirements.Incaseofasingletechnicallyqualifiedprospectivebidderbutisnotabletocomplywithfinancialrequirementsor,incaseoftechnicallyqualifiedprospectivebiddersbutarenotabletocomplywithfinancialrequirements,theconcernedGovernmentEntitymayconductnegotiationonthefinancialterms/proposalinaccordancewithSection8hereof.

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VIII.AwardandApprovalofContract

8.NegotiationontheFinancialTerms/ProposalundertheCompetitiveSelectionProcess.Incasetheprivatesectorparticipantsorprospectivebidders,whosetechnicalproposalsarerated"passed",arenotabletocomplywiththefinancialrequirements,theconcernedGovernmentEntityshallrequestsaidprospectivebidderstosubmittheirnewfinancialproposals.Thereafter,concernedGovernmentEntityshallnotifyandnegotiatewiththeproponentonthefinancialproposal/termswiththemostadvantageousfinancialproposal.

Thetechnicalproposalshallremainvalidandbinding.IntheeventtheconcernedGovernmentEntityfailstosuccessfullynegotiatewithsaidproponentwithinthirty(30)calendardaysreckonedfromthedateofnotification,theGovernmentEntityshallnegotiatewiththenextrankedmostadvantageousfinancialproposal,andsoonandsoforth,untilasuccessfulnegotiationhasbeenconcluded.

Incaseofasingletechnicallyqualifiedprospectivebidder,concernedGovernmentEntitymayconductnegotiationonthefinancialtermsoronthefinancialproposalandshallconcludesaidnegotiationwithinthirty(30)calendardays.

Thetechnicalproposalshallremainvalidandbinding.Intheeventthatthereisnosuccessfulnegotiation,theconcernedGovernmentEntityshallconductanothercompetitiveselection.Incaseofsecondfailureofcompetitiveselection,theconcernedGovernmentEntitymayresorttonegotiatedJVpursuanttoAnnex"B"oftheseGuidelines.

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VIII.AwardandApprovalofContract

9.FailureofCompetitiveSelection.Thereshallbeafailureofcompetitiveselectioninanyofthefollowinginstances:

1. Noprospectivebidder/sis/areeligible;

2. Nobidsorproposalsarereceived;

3. Noprospectivebidder/sis/areabletocomplywithtechnicalrequirements;or

4. Nosuccessfulnegotiationonthefinancialterms/proposalasprovidedunderSection8hereof.

Intheeventofafailedcompetitiveselectionbroughtaboutbyinstancesstipulatedabove,theconcernedGovernmentEntityshallreviewtheTermsofReference(TOR)/biddingdocumentsandconductanothercompetitiveselection.Incaseofsecondfailureofcompetitiveselection,theconcernedGovernmentEntitymayresorttonegotiatedJVpursuanttoAnnex"B"oftheseGuidelines.

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VIII.AwardandApprovalofContract

10.Execution/ApprovaloftheJVAgreement.Theauthorizedsignatory(ies)ofthewinningprivatesectorparticipantandtheGovernmentEntityconcerned,shallexecuteandsigntheJVAgreement,withinseven(7)calendardaysaftertheHeadoftheGovernmentEntitynotifiesthewinningprivatesectorparticipantofitscompliancetotheconditionsorrequirementsprecedenttotheexecutionofthecontractasreferredtoinSectionVIII.3above.

ConsistentwithArticle1159oftheNewCivilCode,saidJVAgreementisconsideredthelawbetweentheparties,andthepartiesshallperformtheirrespectiveprestations,obligations,andundertakingsthereunderwithutmostgoodfaith,withaviewtoattainingtheobjectivethereof.

Anoriginalsignedcopyofthecontractshallbesubmittedto:

1. TheOfficeofthePresident(OP);

2. NEDA;

3. GCG;

4. StatutoryCounsel;and

5. DOFincaseofGOCCsandGFIs,andDBMincaseofotherentities.

Intheeventofrefusal,inabilityorfailureofthewinningprivatesectorparticipanttoenterintocontractwiththeGovernmentEntityconcerned,withinthetimeprovidedtherefore,saidGovernmentEntityshallforfeititsproposalsecurity.Insuchevent,theGovernmentEntityconcernedshallconsidertheprivatesectorparticipantwiththenextrankedcomplyingproposalasthewinningprivatesectorparticipant,andnotifysaidprivatesectorparticipantaccordingly.

IfthenextrankedcomplyingprivatesectorparticipantshalllikewiserefuseorfailtoenterintocontractwiththeGovernment,itsproposalsecurityshalllikewisebeforfeitedandtheGovernmentEntityconcernedshallconsiderthenextrankedcomplyingproposal,andsoon,untilacontractshallhavebeenenteredinto.

IntheeventthattheconcernedGovernmentEntityisunabletoexecutethecontractwithanyofthecomplyingprivatesectorparticipants,afailureofcompetitiveselectionwillbedeclaredandtheJVmaybesubjectedtoacompetitiveselectionagain.

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VIII.AwardandApprovalofContract

11.OtherApprovalsforContract.TheentitytaskedundertheJVAgreementshall,asmayberequiredunderexistinglaws,rulesandregulations,secureanyandallotherapprovalsforthecontract,ortheimplementationthereof,fromgovernmentagenciesorbodiesincludingtheregulator,inthecaseofpublicutilityprojects.ThisincludessecuringthenecessaryandappropriateenvironmentalclearancesfromtheDENRpriortoactualprojectimplementation.

TheDENRshallactontheenvironmentalclearanceoftheJVactivitywithinthetimeframeprescribedandfollowingtheguidelinesoftheDENRAdministrativeOrderNo.96-37andsubsequentguidelinesasmaybeissuedfromtimetotime.TheGovernmentEntitymayprovidethenecessaryassistancetoitsJVPartnerinsecuringalltherequiredclearances.

Thecontractshallprovidemilestonesinsecuringsuchotherapprovalsrequiredfortheimplementationofthecontract.PriortotheexecutionoftheJVAgreement,theOGCC,DOJ,orotherentityprescribedbylaw/issuancesasthestatutorycounselofGOCCs,GCEsandGICPs,shallissuethecorrespondingCounselsOpinion.

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VIII.AwardandApprovalofContract

12.PresidentialApproval,WhenRequired.SubjecttothecharteroftheGovernmentEntityconcerned,nofurtherhigherapprovalisnecessary,unlessthesameisrequiredbylawtobeacteduponbythePresidentofthePhilippines.Inwhichcase,asdeemedapplicable,theprovisionsofexistinglaws,guidelines,rulesandregulationsshallbefollowedandadheredtobytheGovernmentEntityconcerned.

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VIII.AwardandApprovalofContract

13.ContractEffectivity.ThecontractshallbeeffectiveuponsigningthereofbytheHeadofGovernmentEntityunlessanotherdateisstipulatedtherein.

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IX.AppealsMechanism

DecisionsoftheJV-SCwithrespecttoconductofthecompetitiveselectionprocessmaybeappealedinwritingtotheHeadoftheGovernmentEntityconcerned:Provided,however,thatapriormotionforreconsiderationshouldhavebeenfiledbythepartyconcerned,andthesamehasbeenresolvedbytheJV-SC.Theappealmustbefiledwithinseven(7)calendardaysfromreceiptbythepartyconcernedoftheresolutionoftheJV-SCdenyingitsmotionforreconsideration.

AnappealmaybemadebyfilingaverifiedpositionpaperwiththeHeadoftheGovernmentEntityconcerned,accompaniedbythepaymentofanon-refundableappealfee.Thenon-refundableappealfeeshallbeinanamountequivalenttonolessthanone-half(1/2)ofonepercent(1%)oftheprojectcost.

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ANNEXBDETAILEDGUIDELINESFORNEGOTIATEDJVANDCOMPETITIVECHALLENGEFOR

PUBLIC-PRIVATEJOINTVENTURES

I.NegotiatedJVsII.CompetitiveChallengeProcedureIII.Three-StageFramework

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I.NegotiatedJVs

I.NegotiatedJVs-AnyGovernmentEntitymaydirectlynegotiateaJVactivitywithaprivatesectorentityunderanyofthefollowingcircumstances:

1. WhenaGovernmentEntityreceivesaproposalfromtheprivatesectorforaproject;or2. WhenafterafailedcompetitiveselectionasprovidedunderSectionVIII.9ofAnnexAhereof,

theconcernedGovernmentEntityconductsanothercompetitiveselectionwhichagainfails.Inthiscase,theconcernedGovernmentEntitymayseekoutaJVPartnerandrequestthelattertosubmitaproposalfortheJVactivitymanifestlyadvantageoustogovernment,providedthatnegotiationsmustbeconcludedwithinone(1)yearfromdateofsubmissionofbidsforwhichtherewasasecondfailureofcompetitiveselection,andthatnegotiationshallonlybeonthefinancialtermsoraspect.

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II.CompetitiveChallengeProcedure

II.CompetitiveChallengeProcedure-InallcaseswheretheGovernmentEntitydirectlynegotiateswithaprivatesectorparticipantforaproposedJVundertaking,thenegotiatedtermsshallbesubjectedtoacompetitivechallengewhereinotherprivatesectorentitiesshallbeinvitedtosubmitcomparativeproposals,toensurethatJVAgreementsareenteredintounderatransparentandcompetitiveprocessthatpromotesaccountabilityingovernmenttransactions.

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III.Three-StageFramework

III.Three-StageFramework-NegotiatedJVshallbesubjectedtoathree-stageprocesssummarizedasfollows:

1.StageOne2.StageTwo3.StageThree

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III.Three-StageFramework

StageOne-InitialEvaluationofProposalsbyConcernedGovernmentEntityTheinitialevaluationshallbecompletedbytheconcernedGovernmentEntitywithinsixty(60)calendardaysuponsubmissionofcompletedocumentsbytheprivatesectorentity/iesincludingtheeligibilityrequirementsasprovidedunderSectionIVofAnnex"A"oftheseGuidelines.

Uponcompletionoftheinitialevaluation,theHeadoftheGovernmentEntityshalleitherissuealetterofacceptanceornon-acceptanceoftheproposal.AnacceptanceshallnotbindtheGovernmentEntitytoenterintotheJVactivity,but,shallmeanthatauthorizationisgiventoproceedwithdetailednegotiationsonthetermsandconditionsoftheJVactivity.

Incaseofnon-acceptance,theprivatesectorentityshallbeinformedofthereasons/groundsfornon-acceptance.

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III.Three-StageFramework

StageTwo-ConductofNegotiationbetweenConcernedGovernmentEntityandPrivateSectorEntity/ies,ConfermentofOriginalProponentStatus,andEvaluationbytheApprovingAuthorityThepartiesshallnegotiateonthetermsandconditionsoftheJVactivity.Thefollowingrulesshallbeadheredtointheconductofdetailednegotiations,andevaluationbytheApprovingAuthorityincaseofsuccessfulnegotiations:

1.Negotiation2.CompletionofNegotiation3.Compliance4.SimilarProposals5.GovernmentEntity6.HeadofGovernmentEntityasApprovingAuthority7.NEDABoardICCasApprovingAuthority8.AfterApproval

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StageTwo

Negotiation1.Bothpartiesshallnegotiateonthetermsandconditions,scope,aswellasalllegal,technical,andfinancialaspectsoftheJVactivity.

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StageTwo

CompletionofNegotiation2.Thenegotiationshallbecompletedwithinthirty(30)calendardaysuponacceptancebytheGovernmentEntityconcernedoftheproposalasprovidedinStageOneabove.

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StageTwo

Compliance3.Negotiationsshallcomplywiththeprocess,requirementsandconditionsasstipulatedunderSections6(GeneralGuidelines)and7(ProcessforEnteringintoJVAgreements)oftheseGuidelines.

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StageTwo

SimilarProposals4.Incasesimilarproposalsarereceivedpriortoacceptanceoftheproposalastheoriginalproponent,theGovernmentEntitymayrejectallsuchproposalsorinstead,subjectittocompetitiveselectionpursuanttoAnnex"A"oftheseGuidelines.Otherwise,theGovernmentEntityshallevaluatetheproposalsusingafirstintimeapproach.Underthisapproach,thefirstcompleteproposalisevaluatedanddecidedupon.

Thesecondcompleteproposalwillonlybeentertainedifthefirstoneisrejected.Otherwise,thesecondproposalwillbeconsideredonlyifthereisafailureinthenegotiationofthefirstproposal,orwhentheproponentofthesecondproposalappliesforeligibilityandsubmitsitscomparativeproposalbasedontheselection/tenderdocumentsduringtheinvitationtoapplyforeligibilityandtosubmitacomparativeproposalasprovidedinStageThreebelow.

Underthefirstintimeapproach,theHeadofGovernmentEntityconcernedshallacknowledgethesubmissionofotherprivatesectorproponentforthesameorsimilarprojectconcept,andadvisetheproponentonexistenceofsimilarprojectconceptanditsrank/positionbasedondateofsubmissionoftheproposals.

Ifacontractisawardedtoaprivatesectorproponent,theunopenedenvelope/sshallbereturnedtotherespectiveproponents.TheGovernmentEntityshallconductaninitialevaluationoftheproposalasprovidedinStageOneaboveandnegotiatewiththerespectiveproponent.

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StageTwo

GovernmentEntity5.Withinseven(7)daysafterthesuccessfulnegotiation,theHeadoftheGovernmentEntityandtheauthorizedrepresentativeoftheprivatesectorentityshallissueasignedcertificationthatanagreementhasbeenreachedbybothpartiesandbothagreetosubmittheproposaltocompetitivechallenge.SaidcertificationshallalsostatethattheGovernmentEntityhasfoundtheprivatesectorparticipanteligibletoenterintotheproposedJVactivityandshallconfertotheproponenttheoriginalproponentstatus.

However,shouldnegotiationsnotresulttoanagreementacceptabletobothparties,theGovernmentEntityshallhavetheoptiontorejecttheproposalbyinformingtheprivatesectorparticipantinwritingstatingthegroundsforrejectionandthereaftermayacceptanewproposalfromprivatesectorparticipants,ordecidetopursuetheproposedactivitythroughalternativeroutesotherthanJV.

Afterconfermentoftheoriginalproponentstatus,theconcernedGovernmentEntityshallendorsetheJVproposalandsubmitpertinentdocumentationtotheappropriateEntityandApprovingAuthoritypursuanttoSection7.2oftheseGuidelinesforapproval.TheappropriateApprovingAuthority,asprovidedinSections7.2.band7.2.coftheseGuidelines,shallapprovetheproposalwithinthirty(30)calendardays.TheconcernedGovernmentEntityshallnotentertainanyotherproposalaftersuchendorsementandsubmissiontotheApprovingAuthority.

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StageTwo

HeadofGovernmentEntityasApprovingAuthority6.ForprojectswhereintheApprovingAuthorityistheHeadoftheGovernmentEntityconcernedpursuanttoSection7.2.coftheseGuidelines,confermentoftheoriginalproponentstatusshallbedeemedanapprovaloftheprojectproposalsubjecttocomplianceoftheproposalwiththeconditionsstatedinSection7oftheseGuidelines.

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StageTwo

NEDABoardICCasApprovingAuthority7.ForprojectswhereintheApprovingAuthorityistheNEDABoardICCpursuanttoSection7.2.boftheseGuidelines,incasetheJVproposalisdisapprovedbytheNEDABoardICC,theconcernedGovernmentEntityshallinformtheoriginalproponentofsuchdisapprovalandthattheoriginalproponentstatusshallbewithdrawn.TheconcernedGovernmentEntitymayacceptotherproposals.

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StageTwo

AfterApproval8.AfterapprovalbytheApprovingAuthority,thedraftcontractincludingtheselectiondocumentsforthecompetitivechallengeareprepared.

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III.Three-StageFramework

StageThree-CompetitiveChallengeandReimbursementtotheOriginalProponenttheCostIncurredfromProducingtheJVProposalOncetheJVproposalisapprovedbytheApprovingAuthority,theJVactivityshallbesubjectedtoacompetitivechallengeasfollows:

1.PreparationofTenderDocuments2.ApprovalofTenderDocuments3.PublicationofInvitation4.InterestedPrivateProponents5.ProprietaryInformation6.ProposalSecurity7.ProspectiveComparativePrivateSectorParticipants8.DeterminationofEligibility9.ModifiedCompetitiveChallenge10.TieBidsbetweentheOriginalProponent&theChallenger(s)11.TieBidsbetweenChallengers12.SubmissionoftheRecommendationofAward

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StageThree

PreparationofTenderDocuments1.TheGovernmentEntityshallpreparethetenderdocumentsconsistentwiththetermsandconditionsapprovedbytheApprovingAuthorityandpursuanttoSectionII(Selection/TenderDocuments)ofAnnex"A"oftheseGuidelines.

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StageThree

ApprovalofTenderDocuments2.TheHeadofGovernmentEntity,throughtheJV-SC,shallapprovealltenderdocumentsincludingthedraftcontractbeforethepublicationoftheinvitationtoapplyforeligibilityandtosubmitacomparativeproposal.

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StageThree

PublicationofInvitation3.Withinseven(7)calendardaysuponapprovalbytheApprovingAuthorityoftheJVproposalasreferredtoinStageTwoabove,theJV-SCshallpublishtheinvitationtoapplyforeligibilityandtosubmitacomparativeproposalinaccordancewiththeproceduresunderSectionIIIofAnnex"A"oftheseGuidelines.

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StageThree

InterestedPrivateProponents4.InterestedprivateproponentsshallbequalifiedinaccordancewithSectionIV.2(EligibilityRequirements)underAnnex"A"oftheseGuidelines.ThetenderdocumentswhichshallbepreparedbytheGovernmentEntityshallonlybeissuedtoeligibleprivateproponents.

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StageThree

ProprietaryInformation5.Proprietaryinformationshall,however,berespectedandprotected,andtreatedwithconfidentiality.Assuch,itshallnotformpartofthetenderandrelateddocuments.

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StageThree

ProposalSecurity6.Theoriginalproponentshallposttheproposalsecurityatthedateofthefirstdayofthepublicationoftheinvitationtoapplyforeligibilityandtosubmitacomparativeproposalintheamountandformstatedinthetenderdocuments.

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StageThree

ProspectiveComparativePrivateSectorParticipants7.Prospectivecomparativeprivatesectorparticipantsorchallengersshallbegivenatleastonehundredtwenty(120)calendardaysorasmaybeapprovedbytheappropriateApprovingAuthorityfromtheissuanceoftender/biddingdocumentstodevelopandsubmitcomparativeproposals.

IfnocomparativeproposalisreceivedbytheGovernmentEntity,theJVactivityshallbeimmediatelyawardedtotheoriginalproponent.

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StageThree

DeterminationofEligibility8.Theprocedureforthedeterminationofeligibilityofcomparativeproponents/privatesectorparticipants,issuanceofsupplementalcompetitiveselectionbulletinsandpre-selectionconferences,submissionandreceiptofproposals,openingandevaluationofproposalsshallfollowtheprocedurestipulatedunderAnnex"A"oftheseGuidelines.Intheevaluationofthefinancialproposals,themodifiedcompetitivechallengeprocedureasdefinedhereundershallbeapplied.

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StageThree

ModifiedCompetitiveChallenge9.Underthemodifiedcompetitivechallenge,theoriginalproponentmayopttosubmitonorbeforethedateoftheopeningoffinancialproposalsitssecondfinancialproposal.Thefinancialproposal(s)ofthecomparativeprivatesectorparticipant(s)orthechallenger(s)whohavebeendeterminedtohavepassedthetechnicalevaluationandthesecondfinancialproposal,ifapplicable,oftheoriginalproponentshallbeopenedatthesametimeduringthescheduledopeningoffinancialproposals.

IftheGovernmentEntity,uponrecommendationoftheJV-SC,determinesthatanoffermadebythechallengerissuperiorormoreadvantageoustothegovernmentthanthefinancialproposaloftheoriginalproponent,theJVcontractshallbeawardedtothechallengerofferingthemostadvantageousprice.

Incasethechallenger(s)fail(s)tooutbidthefinancialproposaloftheoriginalproponentorincasethereis/arenochallenger/s,theJVcontractshallbeawardedtotheoriginalproponent.

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StageThree

TieBidsbetweentheOriginalProponent&theChallenger(s)10.Incasetiebidsoccurbetweentheoriginalproponentandchallenger(s),theJVcontractshallbeawardedtotheoriginalproponent.

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StageThree

TieBidsbetweenChallengers11.Incasetiebidsoccurbetweenthechallengersofferingbetterfinancialproposalsthanthesecondfinancialproposaloftheoriginalproponent,theprocedureforbreakingtiebidsshallbedonethroughdrawingoflotsorsimilarmethodsthatarenon-discretionaryandnon-discriminatorysuchthatitisbasedonsheerluckorchance.

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StageThree

SubmissionoftheRecommendationofAward12.Withinseven(7)calendardaysfromthedateofcompletionoftheCompetitiveChallenge,theJV-SCshallsubmittherecommendationofawardtotheHeadoftheGovernmentEntity.SucceedingactivitiesshallbeinaccordancewithSectionVIII(AwardandApprovalofContract)ofAnnex"A"oftheseGuidelines.

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I.TheJointVentureSelectionCommittee(JV-SC)

1.Composition.TheHeadoftheGovernmentEntityshallcreateaJV-SCforpurposesofselectingaprivatepartnerforaproposedJV.TheJV-SCshallbecomposedofthefollowing:

1.1RegularMembers(voting)1.2ProvisionalMembers(non-voting)

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h.Theestablishmentofafundbythepartiestofinancethework,togetherwiththeamount,type(cash,assets,etc.),andvaluationofcommittedcontributionsofeachpartyandwhensuchcontributionswillbemade,withthefundbeingdepositedinaspecialbankaccountunderdualcontrolandallprogresspaymentsandotherrevenuesbeingdepositedinsuchaccount.Iftheequity/contributionoftheprivatesectoristobeborrowed,astatementthatthereshallbenogovernmentguaranteeforsaidloan;

i.Procedureforadditionalcapitalinfusions,ifrequired,andastatementthatthereshallbenogovernmentguaranteeforloanstobeincurredbytheprivatesectorincasetheadditionalcontributionoftheprivatesectoristobeborrowed;

j.Adeclarationoftheparticipationofthepartiesandpercentageinwhichprofitsandlossesareshared,inproportiontothecontributionsofthepartytotheworkingfund.Theamountofcontributionoffundsbythepartiescanbeincreasedordecreased,dependingonthecontributionsofequipmentorexpertise;

k.Specifiedtermination/liquidationoftheJVCompany,buy-outprovisions,anddetailsonthetransferofownershipoftheJVactivity/facilitypursuanttoSection6.4oftheseGuidelinesincludingprovisionsonwhathappenstotheJVsassetsaftertheexpirationoftheJVagreementorendoftheJVperiod.Ifequityotherthancashistobecontributed,astatementastohowthepropertywillbevaluatedandtheownershipofthepropertyduringandaftertheeffectivityoftheJVAgreement;

l.Designationofoneofthepartiesasgeneralmanageroftheproject,withauthoritytobindtheJVCompany/Partnership/Parties;or,inthealternative,theconstitutionofamanagementcommittee,withaprovisionforremuneration.Managementduties,otherdutiesoftheco-venturersandprocedurestobefollowedindealingwithunusualsituationsorproblemsthatmaydevelopshouldbespecified;

m.Implementationmilestones,regularmeetingschedules,financialandperiodicJVandprogressreportingprocedure;

n.EstablishmentofaJVbankaccount,andtheappointmentofacharteredaccountantandlawyer;

o.ProvidefortheacquisitionoflicensesinthenameoftheJVoreachco-venturer,asrequired;

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p.TypeofinsurancecarriedbytheJVandclearlydefinedliabilitiestobeinsuredagainstbyeachparticipant;

q.DefinitionofitemswhicharetobeconsideredascoststotheJVforthepurposeofdeterminingprofitorlossandadescriptionofitemswhicharenotreimbursabletomembersoftheJVandspecifieddivisionoftheprofitsand,risksandlosses;

r.Confidentialityoftradeinformationpassedbetweentheco-venturers;

s.Ownershiporretentionofpatents,technology,andconsultantreports;

t.Performancesecurityrequirementsoftheprojectandthebondingobligationsoftheco-venturers;

u.Undividedpro-ratainterestsheldbytheco-venturersonallassetsoftheJV;

v.Restrictionregardingassignmentofprivatesectorparticipantsundividedpro-ratainterestsinassetsoftheJV;

w.Costrecoveryscheme,includingpaymenttothegovernmentofroyalties/rights,theform/descriptionandamountofearnings(cash,asset,etc.),whetheritisinabsoluteamountsorvariable,andtheperiodandtimingsuchearningsorpaymentshallbereceived.Incaseofnon-cashpaymentorpaymentinformofasset,astatement/provisiononhowitwillbevaluated,theminimumvalueoftheasset,andthedetermination/selectionofassetsuchashowandwhowilldetermine/selecttheasset;

x.Indemnificationandliquidateddamages;

y.Performanceandwarrantybonds;

z.Minimuminsurancecoverage;

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aa.Acceptancetestsandprocedures;

bb.Validityoftheperformancesecurity,warrantyperiodandprocedures;

cc.Groundsforandeffectsofcontracttermination/defaultincludingmodesforsettlingdisputes,procedureforhandlingguarantees,defectsandinsuranceaftertermination,andthreshold(intermsofamount,time/period,orboth)forwhichnon-paymentordelayinpaymentanddelayinstartingtheproject/sshallbegroundsfortermination/rescissionoftheJVcontract/agreement;

dd.Themannerandproceduresfortheresolutionofwarrantyagainstcorruption;

ee.Compliancewithallotherlaws,rulesandregulations;

ff.Procedureand/orperiodforwithdrawalbythegovernmententityofitscontributiontotheJV,orexitdivestmentbytheGovernmentEntityofitsinterestintheJV,andSubstitutionoradditionofparties;

gg.Payoutoffunds;

hh.AlternativeDisputeResolution(ADR)mechanismspursuanttoEONo.78dated04July2012toavoidmanagementimpassesthatmayproducedeadlockorlitigation;and

ii.Disputesarbitrationclause.

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