2013 REVISED NEDA
GUIDELINES
2 May 2014
2013 Revised NEDA
Guidelines (Sec. 1.0)
Revised the 2008 NEDA Guidelines.
Issued by National Economic
Development Authority (NEDA), in
consultation with:
− GPPB - Gov’t Procurement Policy Board;
− OGCC – Office of the Gov’t Corporate
Counsel; and
− GCG – Governance Commission for
Gov’t-Owned and/or Controlled
Corporations (GOCC).
Published on 11 May 2013 and
became effective on 26 May 2013
Basic Principles (Sec. 2.0)
Allows private sector to take over
the project after the government
divests itself of any interest in the
JV.
Accountability for the JV project
ultimately devolves on the Head of
the GE Board/Authorized Official.
Purpose (Sec. 3.0)
Prescribe guidelines in forming JV
between Gov’t and private entities
Encourage pooling of resources and
expertise
Ensure that all JV Agreements are
entered into under transparent
process
Coverage (Sec. 4.0)
Guidelines apply to:
− Government owned and controlled
Corporations (GOCC), e.g. Water
Districts;
− Gov’t Corporate Entities (GCE), e.g.
MIAA;
− Gov’t instrumentalities with corporate
powers (GICPs), e.g. MWSS, LWUA and
LLDA;
− Gov’t Financial Institutions (GFIs), e.g.
Landbank, DBP;
− State Universities and Colleges (SUCs),
e.g. UP.
Guidelines do not apply to LGU
Definitions (Sec. 5.0)
Competitive Selection (Bidding)
− Process of selection by GE of a JV Partner (s)
based on transparent criteria, which should
not constrain, limit competition, and
− Open to participation by any interested and
qualified private entity
Competitive Challenge (Unsolicited
Proposal/Negotiated)
− Third parties invited to submit comparative
proposals to a negotiated JV
− Private Proponent given the right to
outbid any comparative proposal
Types of Joint Venture (JV)
Contractual JV
− JV partners perform the primary
functions and obligations under JV
Agreement without forming a JV
company
JV Company
− incorporated under Corporation Code
with the SEC
− 50% or less of its outstanding capital
is owned by the GE
Joint Venture (JV)
− Contractual arrangement whereby a
Private Entity and the GE contribute any
or combination of money/ capital,
services, assets (including equipment,
land, intellectual property or anything of
value), and technology, or a combination
of any or all of the foregoing
− JV may be a Contractual JV or a
Corporate JV (JV Company)
Infrastructure or Development
Projects
− Include but not limited to:
Water Supply
Sewerage
Power plants
Canals
Dams
Hydropower Projects
Irrigation
Drainage
General Guidelines Sec. 6.0
Formation of JV Company
− Incorporated and registered as stock
corporation
− Compliance with ownership and
nationality requirements
− Government entity’s equity contribution
shall be 50% or less of the outstanding
capital stock – asset contribution
subject to third party independent
valuation
− As long as GE is involved in JV
undertaking, private entity shall not
sell/transfer its interest in JV Company
without the express written consent of
GE
Formation of JV (cont.)
− The GE shall be represented in the Board in
proportion to its investment
− Partners entitled to receive dividends each
year from the net profits that would
constitute portion of the unrestricted
retained earnings
− Withdrawal of GE’s capital contribution
before the expiration of the period of its
existence is encouraged
− Divestment is made through competitive
selection, initial public offering (IPO) or
other means that promote competition
fairness and transparency
Formation of JV (cont.)
If formation of JV Company is not the best
mode to implement a JV activity, the GE
may opt to implement the JV project
through Contractual JV.
Ownership of JV project/facility may be
transferred to either the GE or private
proponent after the expiration of JV
Agreement.
Formation of JV (cont.)
A JV activity shall be subject to audit
examination under existing laws.
A JV activity may be entitled to investment
incentives as may be approved by Board of
Investments (BOI)
JVs under the mining industry shall be
undertaken through competitive public
bidding
Process for Entering into JV
Agreement – Sec. 7.0
Approval of JV Proposals (sec 7.2)
Prior to submission to the Approving
Authority, approval from concerned
entities shall be secured:
− Privatization Council (PC) – projects with
divestment or transfer of Gov’t assets to
private sector
− GCG – projects which involve the
formation of JV company or involve
divestment of Gov’t equity that is not in
the form of assets or property
Approval of JV Proposal
(cont.)
Approving Body is the NEDA Board
Investment Coordination Committee
(ICC) - Sec 7.2.b
1. Infrastructure Projects with Gov’t contribution
of P150M and above
2. Projects that are Public Utilities with Gov’t
contribution of P150M and above
3. Negotiated JVs initiated by the Private Sector
with Gov’t contribution of P150M and above
4. Project not related to the primary corporate
mandate with Gov’t contribution of P150M
and above
Approval of JV Proposal
(cont.)
Approving authority is the Head
of GE (Board)
1. Projects that are related to the primary
corporate mandate and not involving
infrastructure projects
2. Projects not covered under Sec 7.2.b
Approving Authority shall act on the JV
proposal within 30 days from submission of
complete documents
Approval of JV Proposal
(cont.)
Clearance/Approval of DOF and DBM
− Projects that require National Gov’t
undertakings, subsidies or guarantees
Approval for Registration of JV
Company
− All JV proposals which involve the pursuit
of the project through JV company shall
be submitted to the GCG for review and
recommendation to the President for
approval before registering with the SEC
Reporting Requirement
(Sec. 8.0)
Submit Annual Report on the status
of its implementation during a
current year to the DOF and CGC
Submit to NEDA, DOF and CGC the
salient features and copy of JV
Agreements
Transitory Provision – Sec
12.0
Governed by 2008 JV Guidelines
1. JV Agreements which has been
executed prior to the effectivity of the
2013 Revised JV Guidelines
2. All JVs undertaken through competitive
selection wherein the bids have already
been opened prior to the effectivity of
the 2013 Revised JV Guidelines
3. When the 2013 Revised Guidelines
shall, in any manner, operate to impair
vested rights already accruing to a
party
ANNEX A – COMPETITIVE
SELECTION/BIDDING
Joint Venture Selection Committee (JVSC)
Created by the Board of the GE
Composition
− (5) Regular Members (voting)
Chairman
Secretary
1 officer knowledgeable in finance
1 officer knowledgeable in management
1 officer knowledgeable in technical aspect
− (5) Provisional Members (non-voting)
1 technical officer from a regulatory body
(4) Observers
− 1 representative from Gov’t entity’s statutory
counsel
− 2 representatives from private sector
− 1 representative from COA
− Quorum is simple majority of regular members
− Chairman shall vote in case of a tie.
Observers notified at least two (2)
calendar days before the following
stages: pre-selection conference,
opening of technical and financial
proposals, evaluation of technical
and financial proposals, contract
award, and special meetings of the
JV-SC.
The absence of observers will not
nullify the JV-SC proceedings,
provided that they have been
duly invited in writing.
Responsibilities:
− responsible for all aspects of the pre-
selection and selection process
− the preparation of the
selection/tender documents
− publication of the invitation to apply
for eligibility and to submit a
proposal
− pre-qualification of prospective
private sector participants
− conduct of pre-selection conferences
and issuance of supplemental notices
Responsibilities:
− interpretation of the rules regarding
the selection process
− conduct of the selection process
− evaluation of the financial and
technical proposals
− resolution of disputes between
private sector participants
− recommendation for the
acceptance of the proposal
and/or for the award of the
contract
Selection/Tender Docs
Tender docs shall include the
following:
− Instructions to Private Sector
participants
− Minimum Design, Performance Standards
and other Financial and Economic
parameters
− Feasibility Study or a Business Case/Pre-
Feasibility Project
− Draft Contract
− Selection Form reflecting the required
information to properly evaluate the
technical and financial aspect
Selection/Tender Docs
(cont.)
− Form of technical and financial proposals
and securities
− Other documents as may be required by
Gov’t Entity
− The documents enumerated are just
for guidance/reference.
− GE is given full discretion to select
appropriate provisions as may deem
suitable.
Publication of Invitation to
Apply for Eligibility and to
Submit a Proposal (IAESP)
Prior to issuance/publication of the IAESP,
GE shall submit a copy of the draft of JV
Agreement to NEDA, DOF and GCG for
information
IAESPs shall be advertised once in a
newspaper of general circulation and posted
continuously for a period of seven (7) calendar
days, starting on date of advertisement, at the
following:
Website of Government Entity concerned, if
available
Website of Government Entity’s service
provider, if any
Any conspicuous place within the premises of
the procuring entity
IAESP (cont.)
Private sector participants shall be given at
least 30 calendar days from the last date of
publication to apply for eligibility and to
submit a proposal.
GE may adjust period based on the nature,
scope, size and complexity of the proposed
JV activity.
Qualification of Private
Sector Participants
Eligibility Requirements
− Legal Requirements
If public utility, duly registered with
SEC and at least 60% Filipino-owned.
− Technical Requirements
Must have completed a project similar or
related to JV activity
Value, adjusted to current prices using
NSO Consumer Price Index, must at least
be 50% of the cost of JV activity
Submit a statement of all its ongoing and
completed Gov’t and private contracts
similar or related to the JV activity,
including contracts awarded but not yet
started
Qualification of Private
Sector Participants (cont.)
− Financial Capability
Audited Financial Statements for the
past 3 years
Latest tax returns
Measured in terms of
1. proof of ability to provide minimum
amount of equity requirement - 50% of
the equity to be provided should as much
as possible come from its own resources
and not borrowed
2. a letter from a bank JV Partner is in good
financial standing
Qualification of Private
Sector Participants (cont.)
Consortia – each member-entities
shall submit:
− Legal
− Technical, and
− Financial eligibility requirements
Eligible and Ineligible
− Eligible
• Gov’t entity to complete the evaluation of
eligibility documents within 15 days after the
deadline for its submission
• JVSC to inform the eligible to JV Partners within 7
calendar days after approval
− Ineligible
• Appeal may be taken to the Head of Gov’t entity
within 7 calendar days from receipt of notice of
ineligibility
Issuance of Tender
Documents
Period from last day of issuance of tender
documents to the date of opening of the
proposal shall not exceed:
− 60 calendar days (Facility/Project – Php500
Million and above)
− 30 calendar days, if less than Php500 Million
Parameters should be transparent and fair.
It should not, in any way, be tailor-made for
or meant to favor or give advantage to a
particular private sector participant.
Submission and Receipt of
Proposals
Requirements
− Proposals shall be submitted in 2
separate sealed envelopes
Technical Proposal (1st envelope)
− Proposal Security in the form of cash,
certified check, letter of credit, bank draft
or surety bond
− Total contribution is less than Php5.0
Billion, the required proposal security
shall be 2.0% of Private Proponent’s
contribution
Financial Proposal (2nd envelope)
− Proposed cost of the JV activity
− Financial Proposal corresponding to the
parameters set
Submission and Receipt of
Proposals (cont.)
The GE concerned is not precluded
from specifying other requirements
for the technical and financial
proposals that are best suited for the
specific JV activity
Opening and Evaluation of
Proposals
Simultaneous evaluation of technical
and financial proposals
− Completed within 30 days from the date
the proposals are opened
Prescriptive Periods
− Period stated for the evaluation of the
technical and financial proposals.
− GE concerned may adjust said periods as
may be appropriate for the nature,
scope, size, and complexity of the
proposed JV activity. Provided, that the
principles of transparency, competition
and accountability are observed.
Opening and Evaluation of
Proposals (cont.)
Withdrawal and/or modification of
proposals
- Upon written notice by private sector
participant prior to the time and date set
for the opening of the 1st envelope.
Right to Reject All Proposals
− GE reserves the right to reject any and
all proposals, waive any minor defects
therein and accept the offer it deems
most advantageous to the GE.
Opening and Evaluation of
Proposals (cont.)
Breaking of Tie Bids
- In case of tie bids, the procedure for
breaking a tie shall be done by
drawing of lots or similar methods
that are non-discretionary and non-
discriminatory such that it is based on
sheer luck or chance.
Failure of Competitive Selection
1. No prospective bidder/s is/are
eligible
2. No bids or proposals are received
3. No prospective bidder/s is/are able
to comply with technical
requirements
4. No successful negotiation on the
financial terms/proposal
In the event of a failed competitive
selection, GE to review the Terms of
Reference (TOR) and conduct
another competitive selection.
In case of second failure, Government Entity may
resort to negotiated JV under Annex “B”.
Award of Contract
Recommendation to Award
− JVSC shall submit the recommendation
of Award to the Head of GE within 7
calendar days from the date of
evaluation procedure.
Decision to Award
The Head of the GE shall approve or
reject the recommendation to award
within 7 calendar days from submission
by JVSC.
Award of Contract (cont.)
Notice to Award
− Issued by the Head of the GE within 7
calendar days from approval.
− Shall contain instruction to the winning
private sector to submit compliance
statements within 30 days from receipt
of the notice, unless extended
Award of Contract (cont.)
Conditions Precedent for the
execution of contract
1. Compliance Statement
2. Performance Bond
• Cash, manager’s check, irrevocable
letter of credit, bank draft – minimum
of 2% of the private proponent’s
contribution to JV Activity.
• Bank guarantee – minimum of 5% of
the private proponent’s contribution
to JV Activity.
• Surety Bond – minimum of 10% of
the private proponent’s contribution
to JV Activity
3. Counsel’s Opinion (OGCC, DOJ or
statutory counsel)
Award of Contract
(cont.)
Within seven (7) calendar days from
receipt, GE shall determine
compliance with Conditions
Precedent and notify Private
Proponent.
Non-compliance with Conditions
Precedent results in confiscation of
the proposal security
Execution/Approval of the
JV Agreement
Authorized signatories of winning private
sector participant and GE shall execute and
sign the JV Agreement within 7 calendar
days after the GE notifies the winning
private sector of its compliance with the
Conditions Precedent
Original signed copy of the contract shall be
submitted to
− Office of the President
− NEDA
− GCG
− Statutory Counsel
− DOF in cases of GOCCs and GFIs or DBM for
other entities
Presidential Approval
No further higher approval is
necessary, unless the same is
required by law to be acted upon by
the President of the Philippines,
subject to the charter of the GE
concerned
Appeals Mechanism
− Appeal in writing to the Head of the
GE provided a prior Motion for
Reconsideration have been filed with
JVSC
− Appeal must be filed within 7 days
from receipt of the resolution denying
the Motion for Recon
− Non-refundable appeal fee shall be in
an amount equivalent to no less than
½ of 1% of the project cost
ANNEX “B” -Negotiated JVs
When a GE receives a proposal from
the private sector
After a failed competitive selection,
the Government Entity conducts
another competitive selection which
again fails
Three-Stage Framework
Stage One
Initial Evaluation of Proposals by
Concerned Gov’t Entity
shall be completed within 60 calendar
days upon submission of complete
documents
GE to issue Letter of Acceptance or
Non-Acceptance
Letter of Acceptance – authority to
proceed to Negotiation
Three-Stage Framework
(cont.)
Stage Two
Conduct of Negotiation between
Concerned Gov’t Entity and Private
Sector Entity/ies
completed within thirty (30) calendar
days upon acceptance by the GE.
In case similar proposals are received
prior to acceptance of the proposal as
the original proponent, the GE may
reject all such proposals or instead,
subject it to competitive selection.
Three-Stage Framework
(cont.)
Stage Two (cont.)
Within seven (7) days after the
successful negotiation, GE shall issue
a signed certification that an
agreement has been reached
Certification shall confer to the
proponent the Original Proponent
status
Approving Authority shall approve the
proposal within thirty (30) calendar
days from submission
Preparation of Draft Contract and
Selection Documents
Three-Stage Framework
(cont.)
Stage Three
Competitive Challenge and
Reimbursement to the Original
Proponent the Cost Incurred for
Producing the JV Proposal
Head of GE, through the JV-SC, shall
approve all tender documents
including the draft contract before the
publication of the IAESP.
Three-Stage Framework
(cont.)
Stage Three (cont.)
Within seven (7) calendar days upon
approval by the Approving Authority,
JV-SC shall publish the IAESP
Original proponent shall post the
proposal security on the first day of
the publication of IAESP.
Three-Stage Framework
(cont.)
Stage Three (cont.)
Challengers shall be given at least
one hundred twenty (120) calendar
days or as may be approved by
the appropriate Approving
Authority from the issuance of
tender/bidding documents to develop
and submit comparative proposals
If no comparative proposal is received
by the GE, the JV activity shall be
immediately awarded to the original
proponent
Three-Stage Framework
(cont.)
Stage Three (cont.)
Modified Competitive Challenge
The original proponent may opt to
submit on or before the date of the
opening of financial proposals its
second financial proposal
Proposals shall be opened at the
same time during the scheduled
opening of financial proposals
Three-Stage Framework
(cont.)
Stage Three (cont.)
Modified Competitive Challenge
− In case of tie bids, the JV contract
shall be awarded to the original
proponent
− In case highest tie bids occur
between the challengers, breaking of
tie bids done by drawing of lots or
similar methods that are non-
discretionary and non-discriminatory
such that it is based on sheer luck or
chance
Three-Stage Framework
(cont.)
Stage Three (cont.)
− Within seven (7) calendar days from
the date of completion of the
Competitive Challenge, the JV-SC
shall submit the recommendation of
award to the Head of the GE.
NEDA TIMELINES
Annex A – Competitive
Bidding
Publication of IAESP
(7 days)
Application and Submission of
eligibility
(30 days)
Evaluation of Eligibility
(15 days)
GE to inform of eligibility of
participants
(7 days)
Timelines (cont.)
Appeal of Ineligibility Suspension while
(7 days from receipt of Evaluating Appeal
notice) (30 days)
Provide Tender Documents
to Eligible
Opening of proposal
(last day of issuance of
Tender Docs)
500M and above Less than 500M
(60 days) (30 days)
Timelines (cont.)
Pre-qualification Selection
conference before deadline
Less than 500M More than 500M
(15 days) (30 days)
Evaluation of Technical Proposal
(30 days)
Evaluation of Financial Proposal
(15 days)
Simultaneous Evaluation
(30 days from opening)
Timelines (cont.)
JVSC recommendation to
Award
(7 days from evaluation)
Board of Directors approves recommendation
(7 days)
Issue Notice of Award
(7 days)
Comply with CP
(30 days, unless extended)
Timelines (cont.)
BOD to determine
compliance
(7 days)
Signing of JVA
(180 days from opening of proposals)
After notice or CP Compliance, sign the JVA
(7 days)
Annex B – Negotiated JVA
1. Unsolicited
2. Two failed bids
Stage 1 – Initial Evaluation of
Proposals by Concerned
Government Entity
Evaluation of Proposal –
complete documents
(60 days)
Upon completion, issue
Letter of Acceptance
Stage Two - Conduct of Negotiation
between concerned Government Entity and
Private Sector Entity/ies, Conferment of
Original Proponent Status and Evaluation by
the Approving Authority
Negotiation
(30 days from acceptance)
Head of GE issue signed Certificate
of Negotiation
- Also as original proponent status
(7 days from successful
negotiation)
Approving Authority approves
JV Proposal
(30 days)
Stage Three – Competitive Challenge
and Reimbursement to the Original
Proponent the Cost Incurred from Producing
the JV Proposal.
GE prepares and Approves
Tender Documents and Draft
Contract
Within 7 days from Approval,
publish IAESP
Publication - IAESP
(7 days)
Develop and submit
comparative proposals
(120 days)
Follow Annex “A”
END.
