Download pdf - 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


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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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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3.0Purpose.

3.1Toprescribetherules,guidelinesandproceduresforgingJVAgreementsbetweengovernmentcorporationsasdefinedunderSection4.0below,andprivateentities;

3.2ToencouragepoolingofresourcesandexpertisebetweengovernmentandprivatesectorentitiesthroughJVsasaviable,efficient,andpracticalalternativeinpursuingdevelopmentgoalsofthegovernment;and

3.3ToensurethatallJVAgreementsareenteredintounderthepolicythatallgovernmentcontractsshallbeawardedthroughatransparentprocess.

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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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5.0DefinitionofTerms.

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

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

Accordingly,theprivatesectorentitythatsubmittedthenegotiatedproposalisaccordedtherighttooutbid,throughasuperiorfinancialbid,anycomparativefinancialoffersgivenbycomparativeprivatesectorparticipantswhohavemettheeligibilityrequirementsandhavepassedthetechnicalqualificationprocess.

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

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5.3ContractualJV.AlegalandbindingagreementunderwhichtheJVPartnersshallperformtheprimaryfunctionsandobligationsundertheJVAgreementwithoutformingaJVCompany.

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5.4CostofJVActivity/Project.ReferstothetotalamountofthecontributionsofthepartiestotheJVactivity/projectinpresentvaluewithdiscountrateasprescribedbytheappropriateApprovingAuthority.

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

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

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

Theinvestmentactivityshallbeforthepurposeofaccomplishingaspecificgoalwiththeendviewoffacilitatingprivatesectorinitiativeinaparticularindustryorsector,andeventuallytransfertheactivitytoeithertheprivatesectorundercompetitivemarketconditionsortothegovernment.

TheJVinvolvesacommunityorpoolingofinterestsintheperformanceoftheinvestmentactivity,andeachpartyshallhavetherighttodirectandgovernthepoliciesinconnectiontherewithwiththeintentiontosharebothprofitsand,risksandlossessubjecttoagreementbytheparties.AJVmaybeaContractualJVoraCorporateJV(JVCompany).

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

TheJVCompanyshallberegisteredbytheJVpartnersthatshallperformtheprimaryfunctionsandobligationsoftheJVasstipulatedundertheJVAgreement.TheJVCompanyshallpossessthecharacteristicsstipulatedundertheseGuidelines.

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

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

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6.0GeneralGuidelines.

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

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6.1JVAgreementsenteredintobytheGovernmentEntityconcernedwiththeprivatesectorpartner,whetherthroughcontractualagreementorthroughtheformationofaJVCompany(CorporateJV)asprovidedintheseGuidelines,shouldbeclearinitsintenttoundertakeaspecificactivitythatisresponsivetonationaldevelopmentgoalsandobjectives.

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

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

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

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6.6AJVactivityshallbesubjecttoauditexaminationunderexistinglaws,rulesandregulations,andotherlegalissuances.

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

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

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6.9ConsistentwithEONo.79dated06July2012,JVsundertheminingsectorshallbeundertakenthroughcompetitivepublicbidding.

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7.0ProcessforEnteringintoJVAgreements.

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

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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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7.2ApprovalofJVProposals.TheapprovalofJVproposalsshallbeinaccordancewiththefollowing:

a.PriortoSubmissionofaJVProposalb.NEDABoardICCasApprovingAuthorityforSpecifiedProjectsc.HeadofGovernmentEntityConcernedasApprovingAuthorityforSpecifiedProjectsd.ContentsofProjectProposalstobesubmittedtoNEDAICCe.EnactmentuponJVProposal

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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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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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c.Forthefollowingprojects,theApprovingAuthorityshallbetheHeadoftheGovernmentEntityconcerned:

1. ProjectsthatarerelatedtoprimarycorporatemandateandnotinvolvinginfrastructureprojectsasdefinedunderSection5.9oftheseGuidelines;and

2. ProjectsnotcoveredunderSection7.2.boftheseGuidelines.

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d.ProjectproposalsthatshallbesubmittedtoNEDAICCforapprovalasindicatedinthisSectionshouldincludethefollowing:

(i)endorsementoftheJVproposalbytheHeadoftheGovernmentEntityconcerned;

(ii)projectdetails;

(iii)draftJVAgreement;and

(iv)otherdocumentsandrequirementsasmaybedeterminedbytheNEDAICCpursuanttoitsguidelines.TheGovernmentEntityconcernedshallfurnishtheDepartmentofFinance(DOF)allthedocumentssubmittedtotheNEDAICCfortheapprovalofaJVproposal;

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e.TheApprovingAuthorityshallactontheJVproposalwithinaperiodofthirty(30)calendardaysuponsubmissionofcompletedocuments.

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

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7.4ApprovalforRegistrationofJVCompany.AllJVproposalswhichinvolvethepursuitoftheprojectthroughaJVCompanyshallbesubmittedtotheGCGforreviewandrecommendationtothePresidentofthePhilippinesforapprovalbeforeregisteringthesamewiththeSECpursuanttoSection27ofRANo.10149.

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

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

ThereportshallusecurrentstandardsintheproductionofcorporateannualreportsandshallincludetheauditedfinancialstatementsoftheJV.Inaddition,thereportshallalsocontaintheJVsworkprogramforaperiodasspecifiedandrequiredbyDOFstartingfromtheyeartheannualreportisissued.

TheheadsofgovernmententitiesasdefinedinSection5oftheseGuidelines,shallsubmittoNEDA,DOFandGCGthesalientfeaturesandacopyofJVAgreementstogetherwithalldocumentsrequiredtheretoformonitoringofcompliancewithrelevantpolicies,proceduresandconditionsforapprovaloftheJVundertaking.

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

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10.0Separability.IfanyprovisionoftheseGuidelinesisheldordeclaredvoidorunenforceablebyfinaljudgmentofacourtofcompetentjurisdiction,theotherprovisionsunaffectedtherebyshallremaininfullforceandeffect.

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

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

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

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ANNEXADETAILEDGUIDELINESANDPROCEDURESFORCOMPETITIVESELECTIONFORPUBLIC-PRIVATEJOINTVENTURES

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

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I.TheJointVentureSelectionCommittee(JV-SC)

1.Composition2.Responsibilities3.Quorum

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

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3.Quorum.AquorumoftheJV-SCshallbecomposedofasimplemajorityofallvotingmembers.TheChairmanshallvoteonlyincaseofatie.

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II.Selection/TenderDocuments

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

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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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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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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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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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IV.QualificationofPrivateSectorParticipants

1.WhomayParticipate2.EligibilityRequirements3.EligibleandIneligible4.IssuanceofTenderDocuments

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

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2.EligibilityRequirements.

a.LegalRequirementsb.TechnicalRequirementsc.FinancialCapabilityd.Consortiae.AcceptanceofCriteriaandWaiverofRightstoEnjoinJVActivity

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2.EligibilityRequirements

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

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

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

TheprospectiveJVPartnershallsubmitastatementofallitsongoingandcompletedgovernmentandprivatecontractssimilarorrelatedtotheJVactivitysubjectoftheselectionprocess,includingcontractsawardedbutnotyetstarted,ifany.

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c.FinancialCapability.TheGovernmentEntityshalldeterminebeforeevaluationofeligibility,theminimumamountofequityneededfortheJVactivity.

ThefollowingdocumentsshallbesubmittedbytheprospectiveJVPartner:

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

2. Latesttaxreturns,iftheJVPartnerisFilipino.

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d.Incaseofconsortia,allmember-entitiesoftheprospectiveJVPartnershallalsosubmittheabovelegal,technicalandfinancialeligibilityrequirementstodeterminetheoverallcapabilityoftheconsortiafortheJVundertaking

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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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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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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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1.ResponsibilityofthePrivateSectorParticipant.Theprospectiveprivatesectorparticipantshallbesolelyresponsibleforhavingtakenallthenecessarystepstocarefullyexamineandacquainthimselfwiththerequirementsandtermsandconditionsoftheselectiondocumentswithrespecttothecost,durationandexecution/operationoftheprojectasitaffectsthepreparationandsubmissionofitsproposal.

TheGovernmentEntityconcernedshallnotassumeanyresponsibilityregardingerroneousinterpretationsorconclusionsbytheprospectiveprivatesectorparticipantoutofdatafurnishedorindicatedinthecompetitiveselectiondocuments.

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

TheGovernmentEntityconcernedmayalsoissueSupplementalNoticestoallprospectiveprivatesectorparticipantsatanytimeforpurposesofclarifyinganyprovisionsoftheselectiondocuments,providedthatthesameareissuedwithinareasonableperiodtoallowallprivatesectorparticipantstoconsiderthesameinthepreparationoftheirproposals.

ReceiptofallSupplementalNoticesshallbedulyacknowledgedbyeachprivatesectorparticipantspriortothesubmissionofhisproposalandshallbesoindicatedintheproposal.

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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


PhP10.0Billionandmore1.0%oftheprivatesectorparticipant's


7. Otherdocumentstosupporttheprivatesectorparticipantstechnicalproposal,asmayberequiredbytheconcernedGovernmentEntity.

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b.Thefinancialproposalshallcontainthefollowing,asthecasemaybe:

1. Compliancestatementswithregardtothefinancialparametersstatedinthetenderdocuments;

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

3. FinancialproposalcorrespondingtotheparameterssetbytheconcernedGovernmentEntity.

Fiftypercent(50%)oftheequitytobeprovidedbytheprivatesectorentityshouldasmuchaspossiblecomefromitsownresourcesandnotborrowed.TheGovernmentEntityconcernedisnotprecludedfromspecifyingotherrequirementsforthetechnicalandfinancialproposalsthatarebestsuitedforthespecificJVactivity.

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

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

(b)whetherthesameisaccompaniedbytherequiredproposalsecurityintheprescribedform,amount,andperiodofvalidity.

Allprivatesectorparticipants,ortheirrepresentatives,presentattheopeningoftheenvelopescontainingthetechnicalproposalshallsignaregisteroftheproposalopening.

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

TheJV-SCoftheGovernmentEntityconcernedshallcompletetheevaluationofthetechnicalproposalwithinthirty(30)calendardaysfromthedatetheproposalsareopened.Onlythoseproposalsthathavebeendeterminedtohavepositivelypassedtheevaluationofthetechnicalproposalshallbequalifiedandconsideredfortheevaluationofthefinancialproposal.

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

TheJV-SCshallnotifytheprivatesectorparticipantsqualifyingforthesecondstageofevaluationofthedate,timeandplaceoftheopeningoftheenvelopesforthefinancialproposal.Theopeningthereofshallfollowthesameprocedureprescribedfortheopeningoftheenvelopescontainingtechnicalproposals.

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4.Evaluationofthefinancialproposal.TheevaluationofthefinancialproposalshallinvolvetheassessmentandcomparisonofthefinancialproposalsagainstthefinancialparametersstatedinthetenderdocumentsandproposalparameterssetbytheGovernmentEntityconcerned.

TheproposedfinancingplanmustshowthatthesameadequatelymeetsthecostsrelativetotheJVactivity.TheevaluationoffinancialproposalsshallbecompletedbytheJV-SCoftheconcernedGovernmentEntitywithinfifteen(15)calendardays.

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5.Simultaneousevaluationofthetechnicalandfinancialproposals.SubjecttothedeterminationoftheHeadoftheGovernmentEntitywhereinthenatureoftheJVactivityshallwarranttheappreciationofboththetechnicalandfinancialproposalsasawholeinordertodeterminethebestproposal,simultaneousevaluationofthetechnicalandfinancialproposalsmayberesortedto.

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

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6.Prescriptiveperiods.Theperiodsstatedfortheevaluationofthetechnicalandfinancialproposalsareprescriptive.

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

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7.Rejectionofproposals.Non-compliancetotheinformationrequiredoneitherthefirstorsecondenvelopeshallbegroundsforrejectionofproposals.

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

Noproposalsshallthereafterbemodifiedorwithdrawn.Proposalmodificationsreceivedaftersaidperiodshallbeconsideredlateandwillbereturnedunopened.Withdrawalofproposalsaftertheproposalopeningdateshallcausetheforfeitureoftheprivatesectorparticipantsproposalsecurity.

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9.RighttoRejectAllProposals.TheGovernmentEntityconcernedreservestherighttorejectanyorallproposals,waiveanyminordefectsthereinandaccepttheofferitdeemsmostadvantageoustothegovernment.

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

TheJV-SCshallincludeaspartofitsrecommendation,adetailedevaluation/assessmentreportonitsdecisionregardingtheevaluationoftheproposals,andexplainincleartermsthebasisofitsrecommendations.

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

Allparticipatingprivatesectorparticipantsshallbeinformedoftheawardinwriting.Suchdecisionshallbemadeavailabletothepublicuponrequest.

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

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

AsmaybeagreeduponintheJVagreement,aportionoftheperformancesecurityshallbereleaseduponcompliancewithcorrespondingmilestones.

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

Privatesectorparticipantsshallhavetherighttorefusesuchanextensionwithoutforfeitingtheirproposalsecurity.Asaconditionoftheextensionofthevalidityoftheirproposals,participatingprivatesectorparticipantsmustcorrespondinglyextendthevalidityoftheirproposalsecurity.

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

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

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

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

Incaseofnon-acceptance,theprivatesectorentityshallbeinformedofthereasons/groundsfornon-acceptance.

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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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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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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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