Section 10Sec./Art. 10

Unsolicited Proposals. -

(a) General - Unsolicited Proposals shall be submitted to the PPP Center for determination of completeness and determination of the appropriate Approving Body, within ten (10) calendar days from receipt thereof. If the Unsolicited Proposal is determined to be complete, such Unsolicited Proposal shall thereafter be endorsed by the PPP Center to the appropriate Implementing Agency.

All Unsolicited Proposals that are determined to the incomplete shall be returned to the Private Proponent by the PPP Center.

Upon receipt of the Unsolicited Proposal endorsed by the PPP Center, an Implementing Agency may:

(1) Continue processing the Unsolicited Proposal in accordance with Subsection (d) of this section; or

(2) Reject the proposal if such proposal is deemed not aligned with the development plans of the Implementing Agency, or if the Implementing Agency is already developing a project with similar scope and/or similar objective.

In all the cases contemplated above, the Implementing Agency shall state in writing with corresponding justification the action it decides to take on the Unsolicited Proposal.

If the Implementing Agency fails to act on an Unsolicited Proposal ninety (90) calendar days after the end of the detailed evaluation period pursuant to Subsection (d)(2) of this section, the project proposal shall be deemed approved, without prejudice to any liability that the erring or negligent officials or employees may incur under this Code and/or exiting laws.

The decision of the Implementing Agency on the Unsolicited Proposal shall be final and non-appealable.

(b) Special Requirements -

(1) An Unsolicited Proposal involving ROW acquisition, whether owned or not owned by the Original Proponent, may be considered: provided, That the submission includes a ROW and resettlement plan: Provided, further, That in no case shall the Implementing Agency be obliged to make an advance payment for such ROW acquisition and related costs.

(2) Any change in the composition of the Original Proponent that will affect its majority ownership shall be strictly prohibited.

(c) Limitations - Unsolicited Proposals may be allowed for projects included in the list of PPP Projects referred to in Section 6 of this Code. In case the Implementing Agency has already incurred any development costs for projects subject of an Unsolicited Proposal, such as the conduct of feasibility study, business case, and surveys, among others, for the last three (3) years from the submission of the Unsolicited Proposal, the Private Proponent shall reimburse the Implementing Agency of such documented development costs notwithstanding whether it is funded through government appropriations, grants, and/or other sources: Provided, That such reimbursement shall be in an amount not exceeding six percent (6%) of the Project Cost, excluding the cost of ROW acquisition.

The procedures for such reimbursement shall be determined by the Implementing Agency.

An Unsolicited Proposal shall not contain any of the following Government Undertakings:

(1) VGF and other forms of subsidy;

(2) Payment of ROW related costs;

(3) Performance undertaking;

(4) Additional exemptions from any tax other than those provided for by law;

(5) Guarantee on Demand;

(6) Guarantee on Loan Repayment;

(7) Guarantee on Private Sector Return;

(8) Government equity; and

(9) Contribution of assets, properties, and rights.

As an exception, items (2) and (9) herein may be allowed if the government receives appropriate compensation, which shall in no way be lower than the value of the costs of ROW to be acquired and the usufruct of assets, properties, and rights contributed: Provided, That taxes, handback values of government assets, and cashflows incidental for the usufruct of assets, properties, and rights contributed: Provided, further, That such compensation shall be subject to fair valuation by a third-party appraiser. In the case of JV arrangements, items (8) and (9) may be allowed.

(d) Processing of an Unsolicited Proposal -

(1) Within ten (10) calendar days from receipt of the first Unsolicited Proposal, the Implementing Agency may entertain similar proposals subject to Subsection (1) of this Section.

(2) Detailed Evaluation of an Unsolicited Proposal and of the Qualifications of the Private Proponent - If the Implementing Agency decides to continue processing an Unsolicited Proposal found to be complete, it shall complete a detailed evaluation of the Unsolicited proposal or similar proposals, and of the qualifications of the Private Proponent/s, within ninety (90) calendar days. After such detailed evaluation, the Implementing Agency may:

(i) Accept the proposal and proceed to negotiation pursuant to Subsection (d)(3) of this section: Provided, That in case there are more than one (1) complete Unsolicited Proposal for the same or similar project, the Implementing Agency shall determine the most advantageous proposal for the government and the public among the submitted proposals, considering, among others, economic and financial viability of the project, proposed project scope and terms, investment recovery scheme, risk proposed to be assumed by the government, and the qualifications of the Private Proponent: Provided, further, That other Private Proponents shall have the opportunity to submit a comparative proposal during the comparative challenge period; or

(ii) Reject the Unsolicited Proposal or all similar proposals in writing with the corresponding justification.

The decision of the Implementing Agency shall be communicated to the Private Proponent/s in writing no later than three (3) calendar days from the end of the detailed evaluation period. Such decision by the Implementing Agency following the conclusion of the detailed evaluation shall be final and non-appealable.

(3) Negotiation - The Implementing Agency and the Private Proponent of the accepted Unsolicited Proposal shall negotiate the PTCs of the proposed PPP Project in good faith, with the assistance of the PPP Center, pursuant to the guidelines to be issued by the PPP Governing Board: Provided, That such negotiations shall conclude within a period not exceeding one hundred fifty (150) calendar days.

If the Implementing Agency and the Private Proponent reach a successful negotiation, the Implementing Agency shall grant the Private Proponent an OPS, which shall be valid for a period not exceeding one (1) year from such conferment. The Implementing Agency shall submit the Unsolicited Proposal, including the negotiated PTCs, for approval by the appropriate Approving Body pursuant to Section 7 of this Code.

For PPP Projects wherein the Approving Body is the Head of the Implementing Agency, conferment of the OPS shall be deemed an approval of the Unsolicited Proposal, subject to compliance with the conditions states in Section 7 of this Code.

(e) Comparative Challenge - Once an Unsolicited Proposal is approved by the appropriate Approving Body, the Unsolicited Proposal shall be subjected to a comparative challenge. The Implementing Agency shall, within seven (7) calendar days upon approval by the appropriate Approving Body, publish an invitation for the submission of comparative proposals.

The comparative challenge shall be conducted, either manually or electronically, by the Implementing Agency within the period proposed by it and approved by the appropriate Approving Body, taking into consideration the nature and complexity of the PPP Project: Provided, That the period shall not be less than ninety (90) calendar days and shall not exceed one (1) year: Provided, further, That the posting of invitation to submit comparative proposals shall be through the official website and/or any official digital platforms of the Implementing Agency and the PPP Center with the objective of promoting competition.

The comparative challenge shall be conducted using the right-to-match mechanism. Under such mechanism, the Original Proponent shall have the right to match the proposal submitted by a challenger during the comparative challenge: Provided, That the Original Proponent shall have thirty (30) calendar days to match the said proposal put forth by the challenger.

If the Original Proponent is able to match the proposal of the challengers, the PPP Project shall be awarded to the Original Proponent. Otherwise, the PPP Project shall be awarded to the winning challenger.

(f) All PPP contracts shall require a period within which Financial Close shall be achieved by the Private Partner. Failure to achieve Financial Close within such period shall be subject to penalties to be provided for in the signed contract: Provided, That such failure to achieve Financial Close is not due to the fault of the government.