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IMPLEMENTINGRULESANDREGULATIONS(IRR)OFQUEZONCITYORDINANCENO.SP‐2336,S‐2014,QUEZONCITYCODEPURSUINGA

PUBLIC‐PRIVATEPARTNERSHIP(PPP)CODEAPPROACHTOWARDSTHEDEVELOPMENT,FORTHEPURPOSEOFPRESCRIBINGTHENECESSARY

RULESANDREGULATIONSFORSELECTINGPRIVATESECTORPROPONENTANDADOPTINGACONTRACTMANAGEMENTFRAMEWORK

INPROVIDINGAPPROPRIATIONSANDFOROTHERPURPOSES

RULEIGENERALPROVISIONS

SECTION 1. Purpose and General Coverage ‐ This IRR is hereby

approvedpursuanttoQuezonCityOrdinanceNo.SP‐2336,S‐2014otherwiseknownas“QuezonCityCodePursuingAPublic‐PrivatePartnership(PPP)CodeApproach Towards The Development, For The Purpose Of Prescribing TheNecessaryRulesAndRegulationsForSelectingPrivateSectorProponentAndAdopting A Contract Management Framework In Providing AppropriationsAndForOtherPurposes”.

SECTION2.DeclarationofPolicya. It isherebydeclaredasapolicy thatQuezonCityGovernmentshall

advancethepublicgoodandgeneralwelfare,andpromotetheinterestof thecommunityandtheCitywithinthe frameworkofsustainableand integrateddevelopment,andeffectiveconstructiveengagementandmeaningfulpeople’sparticipationinlocalgovernance.

b.PPPsshallbepursuedbytheCityconsistentwithandinfurtherance

of its goals as contained in its Comprehensive Development Plan(CDP), Comprehensive Land Use Plan (CLUP), The Revised QuezonCityComprehensiveZoningOrdinanceSP‐2200,Series‐2013,TourismDevelopment Plan (TDP), and all other development planningdocumentsoftheCityGovernment.

SECTION3.OperativePrinciples–Theaccomplishmentofthestated

policyshallbeguidedbythefollowingprinciples:a. The City, pursuant to Section 1, 2 and 5, Article X of the 1987

Constitution, is a territorial and political subdivision which enjoyslocalautonomyandfiscalautonomy.UnderSection3,ArticleXofthesame Constitution, local autonomy means a more responsive andaccountablelocalgovernmentstructureinstitutedthroughasystemof decentralization. Fiscal autonomymeans that local governmentshavethepowertocreatetheirownsourcesofrevenueinadditiontotheir equitable share in the national taxes released by the nationalgovernment, as well as the power to allocate their resources inaccordancewiththeirownpriorities.

  

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b. Thegeneralwelfareandthepublicgoodshallalwaysbepromotedandthat transparency, public accountability and social accountabilitymechanisms and approaches shall be integrated in PPPs frominceptiontoimplementation.

c. The City exists and operates in its governmental and proprietarycapacities thereby making the City an agent of and is thereforeaccountabletotheState and its community. The role of the Citybothasaregulatorofabusinessandasimplementerofaproprietaryundertakingmustbeclearlydelineated.

d. TheCitymustdevelopintoaself‐reliantcommunity,andassuch,isinabetterpositiontoaddressandresolvemattersthatarelocalinscope.The City in under the supervision of the President and under thecontrolofCongress.

e. UnderSection18ofRepublicActNo.7160,otherwiseknownastheLocal Government Code of 1991 (1991 LGC), the Citymay acquire,develop, lease,encumber,alienate,orotherwisedisposeofrealorpersonalpropertyheldbythemintheirproprietarycapacityandtoapply their resources and assets for productive, developmental, orwelfarepurposes.

f. UnderSection22(c)ofthe1991LGC,nocontractmaybeenteredintobytheMayoronbehalfoftheCitywithoutpriorauthorizationbytheSangguniang Panlungsod. The participation of the Sanggunian isindispensable in the adoption and implementation of a PPParrangement.

g. UnderSection22(d)ofthe1991LGC,theCityenjoysfullautonomyintheexerciseofitsproprietaryfunctionsandshallexercisethepowersexpressly granted, those necessarily implied there from, aswell aspowers necessary, appropriate, or incidental for its efficient andeffectivegovernance,thosenototherwiseprohibitedbylawandthosewhichareessentialtothepromotionofthegeneralwelfare.

h. Under Section 25 (b) of the 1991 LGC, the Citymay collaborate orcooperate with other governments, national government agencies,government‐owned and controlled corporations, governmentinstrumentalities and government corporate entities for theimplementationoflocalprojects.

i. UnderthecharteroftheCity,Sections16,17,19and129of1991LGC

and other statutes, the City has been given the responsibility andmandatetoexercisedevolvedanddelegatedpowers.

j. TheCity,underSection106of1991LGC,ismandatedtodrawupandimplementa comprehensivemulti‐sectoraldevelopmentplan.PPPs

  

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shall be pursued by the City consistent with its infrastructure,development,investment,environmentalandgovernanceframeworkembodiedinrelevantpolicies,plans,ordinancesandcodes.

k. The City, as a partner in a PPP arrangement, may provide equity,subsidyorguaranteeanduselocalfunds;andtheusagethereofforaPPPprojectshallbeconsideredforpublicuseandpurpose.

l. UnderSections34,35and36ofthe1991LGCandintheexerciseofitspowers, the City may enter into joint ventures and such othercooperativearrangementswith people’s and non‐governmentalorganizations to engage in the delivery of certain basic services,capability‐building and livelihood projects, and to develop localenterprisesdesigned to improveproductivityand income,diversityagriculture,spurruralindustrialization,promoteecologicalbalance,andenhancetheeconomicandsocialwell‐beingofthepeople;provideassistance, financial or otherwise, to such people’s and non‐governmental organizations for economic, socially‐oriented,environmental,orculturalprojectstobeimplementedwithin itsterritorialjurisdiction.

m. TheCity,underSection3(I)ofthe1991LGC,isdutyboundtoensuretheactiveparticipationoftheprivatesectorinlocalgovernance.

n. Therightofthepeopletoinformationonmattersofpublicconcernisguaranteed under Section 7, Article III of the 1987 Constitution.Furthermore,itisthepolicyoftheStatetoallowfullpublicdisclosureof all its transactions involving public interest such as PPPs underSection28,ArticleIIofthe1987Constitution.

o. Thepeople’srighttoeffectiveandreasonableparticipationandpublictrustprovisionunderSection16,ArticleXIIIandSection1,ArticleXI,respectively,of the1987Constitutionguaranteeandempowercivilsocietygroupstohaveeffectiveandmeaningfulparticipation intheregulationandmanagementofPPPprojects.

SECTION4.Rationale forPPP – PPPs shall be promoted to provide

more, better, affordable and timely services to the community. In pursuingPPPs,theCityshallbeguidedbythefollowingreasonsanddrivers:

a. PPPsshallbeundertakeninfurtheranceoftheCity’sComprehensiveDevelopment Plan, Comprehensive Land Use Plan and physicalframeworkplan.

b. PPPisanessentialpartoftheoverallinfrastructurereformpolicyofthe City. By encouraging performance‐based management of thedelivery of public services applying commercial principles andincentiveswheneverpossible,byintroducingcompetitioninandfor

  

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themarket,andbyinvolvingusersandstakeholdersinthedecision‐making process, infrastructure and regulatory reform shall beachieved.

c. PPPsshouldbeadoptedtoaddressapressingandurgentorcriticalpublic need. Under the principle of “Additionality,” the increasedeconomic benefits to consumer welfare of having needed publicservicesandinfrastructureaccessiblenowbecauseofthePPP,ratherthanhaving towaituntil theCity couldprovide thepublic servicesmuch later. PPP would also encourage the acceleratedimplementationoflocalprojects.

d. PPPs can be adopted to avoid costs and public borrowing. Bycontactingwiththeprivatesectortoundertakeanewinfrastructureproject,scarceCitycapitalbudgetscanbedirectedtootherprioritysectorssuchassocialservices,education,andhealthcare.

e. PPPs allow for technology transfer and improved efficiency andqualityofservice.Thesecouldbevaluablecontributionoftheprivatesectorinlocalgovernance.

f. PPPsshouldbe feasibleandaffordable,demonstrating theneed forthe project, broad level projects costs estimation, and indicativecommercial viability. The assessment of the affordability shall becornerstone for all PPP projects, both to the City and the generalpublic.

g. PPP Projects should be bankable. High participation costs,unreasonable risk transfer or lengthy and complex contractnegotiationsmustbeavoided.Acostrecoverypricingpolicyattractivetotheprivatesectormustbeinplace;provided thatthesamewillnotbedisadvantageoustogovernmentandpublicinterest.

h. PPP Projects should provide value‐for‐money and good economicvalueas faraspracticable, includingallocationof risks to thepartybest able to control, manage, mitigate or insure these risks, andmaximizationofthebenefitsof private sector efficiency, expertise,flexibilityandinnovation.

i. PPPProjectsmustprovideeconomicandsocialbenefitsandshouldbeevaluatedonthisbasisratherthanonpurelyfinancialconsiderations.The City remains responsible for services provided to the public,withoutnecessarilybeingresponsibleforcorrespondinginvestment.

j. PPP Projectsmust give consideration for empowerment of Filipinocitizensasastrategyforeconomicgrowthandsustainabilityandmustprovidefortheparticipationoflocalinvestorstothefurthestextent

  

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practicablegiventhenatureoftheproject.TheCityshallalsoensurethehiringandemploymentoflocallaborinthePPPventure.

k. Procurement of PPP Projects must be competitive and must beundertakenthroughopencompetitivebidding.Competitionmustbelegitimate,fairand honest.Inthefieldofgovernmentcontractlaw,competition requires,notonlybiddingupona commonstandard, acommonbasis,uponthesamething,thesamesubjectmatter,thesameundertaking, but also that it be legitimate, fair andhonest; andnotdesigned to injure or defraud the government. Where competitivebidding cannot be applied, a competitive process ensuring bothtransparencyandeconomicallyefficientoutcomemustbeemployed.

l. TheregulationofthePPPshallbepursuanttothePPPcontractandexercised by the appropriate regulatory authority. A duly executedandlegalPPPContractshallberespectedandnotimpaired,andshallbebindingonthesuccessoradministrationpursuanttotheprovisiononcorporatesuccession.

m. To provide efficient public service, the City must ensure, throughstronger performance management and guidance, properimplementationofPPPcontractsthatwillresultinvalueformoney,on‐time delivery of quality services to the public, achievement ofgovernment policy goals, all within sustainable and integrateddevelopment.

SECTION5.DefinitionofTerms–AsusedinthisCode,thefollowing

termsshallmean:A. Bidder–Referstoaprivatesectorentity,competingfortheawardof

acontractwiththeCity.

B. Build‐Operate‐TransferLawScheme‐UnderRepublicActNo.6957,as amended by Republic Act No. 7718, the following are the BOTvariants:

1. Build‐and‐Transfer(BT)‐Acontractualarrangementwhereby

the Private Sector Proponent (PSP) undertakes the financingand construction of a given infrastructure of developmentfacility,andafteritscompletion,turnsitovertotheCity,whichshallpay thePSP,onanagreedschedule, its total investmentexpended on the project, plus a Reasonable Rate of Returnthereon.

Thisarrangementmaybeemployedintheconstructionofanyinfrastructure or development project, including criticalfacilities which, for security or strategic reasons, must beoperateddirectlybytheCity.

  

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2. Build‐Lease‐and‐Transfer(BLT) ‐ A contractual arrangement

whereby a PSP is authorized to finance and construct aninfrastructureordevelopmentfacilityanduponitscompletion,turns it over to the City on a lease arrangement for a fixedperiod, after which ownership of the facility is automaticallytransferredtotheCity.

3. Build‐Operate‐and‐Transfer (BOT) ‐ A contractual

arrangementwhereby the PSP undertakes the construction,including financingofagiven infrastructure facility, and theoperation and maintenance thereof. The PSP operates thefacilityoverafixedterm,duringwhichitisallowedtochargefacilityusersappropriatetolls, fees,rentals,andchargesnotexceeding those proposed in its bid, or as negotiated andincorporatedinthecontract,toenablethePSPtorecoveritsinvestment, and its operating andmaintenance expenses intheproject.ThePSPtransfersthefacilitytotheCityattheendofthefixedtermwhichshallnotexceedfifty(50)years.Thisbuild, operate and transfer contractual arrangement shallincludeasupply‐and‐operatescheme,whichisacontractualarrangement whereby the supplier of equipment andmachineryforagiveninfrastructurefacility,iftheinterestofthe City so requires, operates the facility, providing, in theprocess,technologytransferandtrainingtoFilipinonationals.

4. Build‐Own‐and‐Operate (BOO) ‐ A contractual arrangementwhereby a PSP is authorized to finance, construct, own,operate and maintain an infrastructure or developmentfacility from which the PSP is allowed to recover its totalinvestment, operating and maintenance costs plus areasonablereturnthereonbycollectingtolls, fees,rentalsorother charges from facility users. Under this project, theproponentwhoownstheassetsofthefacilitymayassignitsoperation and maintenance to a facility operator. Thedivestiture or disposition of the asset or facility shall besubjecttorelevantrulesoftheCommissiononAudit.

5. Build‐Transfer‐and‐Operate (BTO) ‐ A contractualarrangementwherebytheCitycontractsouttheconstructionofaninfrastructurefacilitytoaPSPsuchthatthecontractorbuildsthefacilityonaturnkeybasis,assumingcostoverruns,delays, and specified performance risks. Once the facility iscommissionedsatisfactorily,titleistransferredtotheCity.ThePSP,however,operatesthefacilityonbehalfoftheCityunderanagreement.

  

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6. Contract‐Add‐and‐Operate(CAO)‐Acontractualarrangementwhereby the PSP adds to an existing infrastructure facilitywhich it is renting fromtheCityandoperates theexpandedprojectoveranagreedfranchiseperiod.Theremayormaynotbe a transfer arrangementwith regard to the added facilityprovidedbythePSP.

7. Develop‐Operate‐and‐Transfer (DOT) ‐ A contractualarrangementwherebyfavourableconditionsexternaltoanewinfrastructureprojecttobebuiltbyaPSPareintegratedintothe arrangement by giving that entity the right to developadjoiningproperty, and thus, enjoysomeof thebenefits theinvestmentcreates,suchashigherpropertyorrentvalues.

8. Rehabilitate‐Operate‐and‐Transfer (ROT) ‐ A contractualarrangementwherebyanexistingfacilityisturnedovertothePSPtorefurbish,operateandmaintainforafranchiseperiod,attheexpiryofwhichthelegaltitletothefacilityisturnedovertotheCity.

9. Rehabilitate‐Own‐and‐Operate (ROO) ‐ A contractualarrangementwherebyanexistingfacilityisturnedovertothePSPtorefurbishandoperate,withnotimelimitationimposedonownership.Aslongastheoperatorisnotinviolationofitsfranchise,itcancontinuetooperatethefacilityinperpetuity.

10. City‐ReferstotheQuezonCityGovernment.

11. Competitive Challenge or Swiss Challenge ‐ An alternative

selectionprocesswhereinthirdpartiesorchallengersshallbeinvited to submit comparative proposals to an unsolicitedproposal.Accordingly, thePSPwhosubmitted theunsolicitedproposal, or the original proponent, is accorded the right tomatchanysuperioroffersgivenbyacomparativePSP.

12. Competitive Selection or Bidding or Open Competition ‐

Refers to amethodof selectionor procurement initiated andsolicitedby theCity,basedona transparentcriteria,which isopentoparticipationbyanyinterestedparty.

13. Concession ‐ A contractual arrangement whereby the

financing and construction of a new facility and/orrehabilitationof an existing facility is undertakenby thePSPafter turnover thereof to it, and includes the operation,maintenance, management and improvement, if any, of thefacilityforafixedtermduringwhichthePSPgenerallyprovidesservicedirectly to facilityusersand is allowed to chargeandcollecttheapprovedtolls,fees,tariffs,rentalsorchargesfrom

  

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them.TheCitymayreceiveaconcessionorfranchisefeeduringthe term of the contract and/or other consideration for thetransfer,operationoruseofanyfacility.TheremaybeatransferofownershipoftheassetorfacilityaftertheconcessionperiodhasendedsubjecttorulesoftheCommissiononAudit.

14. Corporatization‐Referstotransformationofapublicentity

orquasi‐municipalcorporationestablishedbytheCityintoonethat has the structure and attributes of private corporation,such as board of directors, officers, and shareholders, andhaving it registered with the Securities and ExchangeCommissionas a stock corporation.Theprocess involves theestablishmentofadistinctlegalidentityforthecompanyunderwhichtheCity'sroleisclearlyidentifiedasowner;segregationofthecompany'sassets,finances,and operations from otherCityoperations;anddevelopmentofacommercialorientationandmanagerialindependencewhileremainingaccountabletothegovernmentorelectorate.

15. CostSharing–ReferstotheCityportionofcapitalexpenses

associated with the establishment of an infrastructuredevelopmentfacilitysuch as the provision of accessinfrastructure,right‐of‐way,andanypartialfinancing oftheproject.

16. CreditEnhancement‐Referstodirectandindirectsupport

toadevelopmentfacilitybythePSPand/orCity,theprovisionofwhich is contingent upon the occurrenceof certain eventsand/or risks, as stipulated in the PPP contract. Creditenhancements are allocated to the party that is best able tomanage and assume the consequences of the risk involved.Credit enhancements may include but are not limited togovernmentguaranteesontheperformanceortheobligationoftheCityunderitscontractwiththePSP,subjecttoexistinglawsonindirectguarantees.

17. IndirectGuarantees ‐Refers toanagreementwhereby theCity assumes full or partial responsibility for or assists inmaintaining the financial standing of the PSP or projectcompany in order that the PSP/project company avoidsdefaulting on the project loans, subject to fulfilment of thePSP/projectcompanyofitsundertakingsandobligationsunderthePPPcontract.

18. Development Projects ‐ Projects normally financed and

operatedby theCity,butwhichwillnowbywhollyorpartlyfinanced, constructed and operated by the PSP; projects that

  

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will advance and promote the general welfare; and otherinfrastructureanddevelopmentprojectsasmaybeauthorizedbytheCity.

19. DirectCityEquity‐ReferstothesubscriptionbytheCityof

sharesofstockorothersecuritiesconvertibletosharesofstockof the special purpose vehicle or single‐purpose projectcompany,whethersuchsubscriptionwillbepaidbymoneyorassets.

20. DirectCityGuarantee‐Referstoanagreementwherebythe

CityguaranteestoassumeresponsibilityfortherepaymentofdebtdirectlyincurredbythePSPinimplementingtheprojectincaseofaloandefault.

21. DirectCitySubsidy ‐Refers to anagreementwhereby the

City shall: (a) defray, pay or shoulder a portion of the PPPproject cost or the expenses and costs in operating andmaintaining the project; (b) condone or postpone anypayments due from the PSP; (c) contribute any property orassets to theproject; (d)waiveorgrantspecial ratesonrealpropertytaxesontheprojectduringthe term of thecontractual arrangement; and/or (e) waive charges or feesrelative to the business permits or licenses that are to beobtained for the construction of the project, all withoutreceivingpaymentorvaluefromthePSPoroperatorforsuchpayment,contributionorsupport.

22. DivestmentorDisposition‐Referstothemannerorscheme

of taking away, depriving, withdrawing of title to a propertyownedbytheCityandvestingownershipthereoftoaPSP.

23. Feasibility or Project Study (FS) ‐ A study, full or

prefeasibilitystudyorbusinesscasepreparedbytheCityinacompetitiveselectionoraPSPwhensubmittinganunsolicitedproposal,containingorindicatinganeedanalysis,affordabilityassessment, value for money assessment, preliminary riskassessment, stakeholder assessment, human resourceassessment,bankabilityassessment,legalviabilityassessment,PPP mode selection, market testing if relevant, indicativetransaction implementationplan,anddraftPPPcontract.Thestudy may be supported by the results of the appropriate"willingness‐and‐ability‐to‐pay"survey.

24. Franchise ‐ Refers to the right or privilege affected with

publicinterestwhichisconferreduponaPSP,undersuchtermsandconditionsastheCitymayimpose,intheinterestofpublicwelfare,securityandsafety.

  

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25. IRR‐ Shall mean these Revised Implementing Rules and

Regulations.

26. JointVenture(JV)–AcontractualarrangementwherebyaPSPoragroupofprivatesectorentitiesononehand,andtheCity on the other hand, contribute money/ capital, services,assets (including equipment, land, intellectual property oranything of value), or a combination of any or all of theforegoing. TheCity shall be aminority equity or shareholderwhile the PSP shall be majority equity or shareholder. Eachpartyshallbeentitledtodividends,incomeandrevenuesandwill bear the corresponding losses and obligations inproportion to its share. Parties to a JV share risks to jointlyundertake an investment activity in order to accomplish aspecific,limitedorspecialgoalorpurposewiththeendviewoffacilitatingprivate sector initiative inaparticular industryorsector,andeventuallytransferringownershipoftheinvestmentactivity to the PSP under competitive market conditions. Itinvolvesacommunityorpoolingofinterestsintheperformanceof the service, function, business or activity, with each partyhaving a right to direct and govern the policy in connectiontherewith,andwithaviewofsharingbothprofitsandlosses,subjectto agreementbytheparties.

27. Lease or Affermage‐ A contractual arrangement providing

for operation,maintenance, andmanagement services by thePSP, including working capital and/or improvements to anexistinginfrastructureordevelopmentfacilityleasedbythePSPfrom theCity for a fixed term.Under a lease, thePSP retainsrevenuecollectedfromcustomersandmakesaspecifiedleasepayment to the City. Under an affermage, the parties sharerevenuefromcustomerswhereinthePSPpaysthecontractingauthorityanaffermagefee,whichvariesaccordingtodemandand customer tariffs, and retains the remaining revenue. TheCitymayprovidea purchase option at the end of the leaseperiodsubjecttorulesoftheCommissiononAudit.

28. ManagementContract‐Acontractualarrangementinvolving

the management or provision by the PSP of operation andmaintenanceorrelatedservicestoanexistinginfrastructureordevelopmentfacilityownedoroperatedbytheCity.Theprojectproponentmay collect tolls/ fees/ rentals and chargeswhichshallbeturnedovertotheCityandshallbecompensatedintheformofafixedfeeand/orperformance‐basedmanagementorservicefeeduringthecontractterm.

  

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29. Negotiated Projects ‐ Refer to instanceswhere the desiredproject is theresultofanunsolicitedproposal fromaPSPor,where theCityhas failed to identifyaneligibleprivatesectorpartner for a desired PPP activity when there is only onequalified bidder after subjecting the same to a competitiveselectionorbidding.

30. NewTechnology‐Referstohavingatleastoneofthefollowingattributes:

a. A recognizedprocess,design,methodologyorengineering

conceptwhichhasdemonstrated its ability to significantlyreducetheimplementationofconstructioncosts,accelerateproject execution, improve safety, enhance projectperformance, extend economic life, reduce costs of facilitymaintenance and operations, or reduce negativeenvironmental impactor social/economicdisturbancesordisruptions during either the projectimplementation/constructionphaseortheoperationphase;

b. Aprocessforwhichtheprojectproponentoranymemberoftheproponentjointventure/consortiumpossessesexclusiverights,eitherworld‐wideorregionally;or

c. Adesign,methodologyorengineeringconceptforwhichthe

proponent or a member of the proponent consortium orassociationpossessesintellectualpropertyright.

31. PrivateSectorProponent(PSP)‐Referstotheprivatesector

entitywhichshallhavecontractualresponsibilityfortheprojectandwhichshallhaveanadequatetrackrecordintheconcernedindustry, as well as technical capability and financial baseconsisting of equity and firm commitments from reputablefinancial institutions, toprovide,uponaward,sufficientcreditlines to cover the total estimated cost of the project toimplementthesaidproject.

32. Public‐PrivatePartnerships(PPP)‐PPPisaformoflegally

enforceablecontractbetweentheCityandaPSP,requiringnewinvestmentsfromthePSPandtransferringkeyriskstothePSPinwhichpaymentsaremadeinexchangeforperformance,forthepurposeofdeliveringaserviceprovidedorintendedtobeprovidedbytheCity.PPPshallalso includedispositionsofanasset,facility,projectowned,orentitycreatedbytheCitytoaPSP; procurement of a service; assumption by a PSP of aproprietary function of the City; grant of a concession orfranchise to a PSP by the City; or usage by the PSP of public

  

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propertyownedorpossessedbytheCity.Alternatively,aPPPisa legally enforceable contract where each party assumesspecifiedfunctions,bearscertainrisks,providescontributionorrenderssomeobligation,andearnsbenefitsandrevenuesfromthePPParrangement.

33. PPPContract‐Wheneverappropriate,thePPPContractshall

contain thePreambulatoryClausesorWhereasClauses,PartyClause,RulesofInterpretation,NatureofthePPP,TermoftheProject, Contract Objective, Performance Bonds, KeyPerformanceIndicators,RiskAllocation,Rights,PaymenttoPSEor PSP, Tariff Scheme, Subsidy or Support Mechanism,Insurance Requirements, Delay Provisions, Force Majeure,Governmental Action, Government and Public Sector Entity(PSE) Warranties, PSP Warranties, Change in the Law,RegulatoryRegime,Variations,Termination, Indemnification,Intellectual Property, Claims, Financial security, DisputeResolution, Step‐inRights, Changes in theCompositionof thePSP/Service Provider, Partnership Management, CompliancewithallLaws,Personnel,ConditionsPrecedent,amongothers.

34. Reasonable Rate of Return (RROR) ‐ Refers to the rate of

returnthataPSPshallbeentitledto,asdeterminedbythePPPRegulatory Authority taking into account, among others, theprevailing cost of capital (equity and borrowings) in thedomesticandinternationalmarkets,risksbeingassumedbythePSP and the level of City undertakings and contributionsextendedfortheproject.

35. ServiceContract ‐A contractual arrangementwhereby the

PSPshallprovideaparticularservicetotheCityinvolvingtheCity'sproprietaryauthorityortoentitiesorcorporationcreatedbytheCity.ThePSPshallbeentitledtobepaidafeeperunitofworkdoneduringthetermofthecontract.

36. UnsolicitedProposal‐Referstoprojectproposalssubmitted

by a PSP to the City to undertake a Development ProjectswithoutaformalsolicitationissuedbytheCity.

37. ValueforMoney(VfM)‐Referstotheconceptthatoverthe

whole‐lifeofaprojectfinance‐PPPproject,government'stotalexpenditures(i.e.,itspaymentstotheprivatesector),adjustedfor the risks thathavebeen transferred to theprivate sector,will be less, on a Net Present Value (NPV) basis, than if thegovernment will perform the services itself. VfM considersmonetaryandnon‐monetary factorssuchas: (i)risk transfer;

  

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(ii)reducedwholelifecosts;(iii)speedofimplementation;and(iv)qualityandreliabilityofservice.

38. ViabilityGapFunding(VGF) ‐Refers toanexplicitsubsidy

that is performance‐driven (i.e., based on private partyachieving measurable outputs) and targeted to socioeconomically disadvantaged users or groups of users; or anyfinancialsupportintheformofgrantsorassistance,onetimeordeferred, to infrastructure projects undertaken throughPPPswithaviewtomakethemcommerciallyviable.

SECTION6.RulesofInterpretation–TheprovisionsofthisIRRshall

be liberally interpreted to accomplish the policy and objectives set forth inSections2,3and4hereof.

SECTION7.Authoritiesa.ThisIRRisbeingadoptedpursuanttotheCity'sconstitutionalandstatutoryauthoritiesenumeratedunderSection3hereof;andwhennot inconsistent with the relevant laws aforementioned, shallgoverntheadoptionandimplementationofthePPPModalities.

b.InpursuingBOTanditsVariants,theCityshallcomplywithRepublicActNo.6957,asamendedbyRepublicActNo.7718(BOTLaw),anditsImplementingRulesandRegulations.

c. Inentering intoManagementandServiceContracts, theCity shallcomplywithRepublicActNo.9184ortheGovernmentProcurementReformAct(GPRA)anditsImplementingRulesandRegulations.

d.ForDispositions,CommissiononAuditCircularNo.89‐296(January27,1989)shallgovern.

e.ForCorporatization, the incorporationof thecorporationmustbedoneinaccordancewiththeCorporationCodeofthePhilippines.

f.ForJointVentures,theLawonPartnershipsoftheCivilCodeofthePhilippinesshallbeapplicable.

g.ForLeasesandAffermages,theLawonLeasesoftheCivilCodeofPhilippinesmaybereferredto.

RULEII

PPPPROJECTSANDPPPMODALlTIES

SECTION8.PPPProjects

  

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The City, through the appropriate and viable PPP mode, mayundertakeDevelopmentProjects, includingbutnot limited to,powerplants,highways, ports, airports, canals, dams, hydropower projects,water supply,sewerage, irrigation, telecommunications, railroad and railways, transportsystems, landreclamationprojects, industrialestatesor townships,housing,government buildings, tourism projects, public markets, slaughterhouses,warehouses,solidwastemanagement, informationtechnologynetworksanddatabase infrastructure, education and health facilities, social services,sewerage,drainage,dredging,mining,prisons,andhospitals.TheCitycanalsoundertakePPPsforanyofthedevolvedactivitiesunderSection17ofthe1991LGC.

Thedeterminationof the appropriateness and viability of thePPP

mode shall be specified, explained and justified in the feasibility or projectstudyweighingalltherelevantvaluedriversandreasonsforpursuingaPPPproject.

Parties toPPParrangement shall undertake an activity inorder to

accomplisheitheranintegratedormulti‐usearrangementorspecificgoalorpurposewiththeendviewofservingthepublicgoodorgeneratingrevenues.

SECTION9.ListofPriorityProjects ‐TheCityshall identifyspecific

priority projects that may be undertaken under any of the PPPModalitiesdefinedunderSection10hereof.

The List of Priority Projects shall be consistent with the PhilippineDevelopmentPlan(PDP).

AnyupdatestothelistsofPriorityProjects,shallbesubmittedtothePPPCenter within five (5) days from approval of the Approving Body forinformationandforpostinginthePPPCenterwebsite.

The City shall provide wide publicity of the List of Priority Projectsproposedforimplementationunderthecontractualarrangementsorschemesas authorized under Ordinance SP‐2336, S‐2014 and this IRR to keepinterested/concernedpartiesinformedthereof.Forthispurpose,theCityshallcause its List ofPriorityProjects tobepublishedat least once every six (6)monthsinanationalorlocalnewspaperofgeneralcirculation.SaidListshouldalsobepostedcontinuouslyintheQuezonCitywebsites.

SECTION10.PPPModalities‐InundertakingaspecificPPPProject,theCitymayadoptandpursueanyofthefollowingsixteen(16)PPPModalitiesandprovideforothermodalitiesnotinconsistentwithlaw:

a. Build‐and‐Transfer(BT);b. Build‐Lease‐and‐Transfer(BLT); c. Build‐Operate‐and‐Transfer(BOT);d. Build‐Own‐and‐Operate(BOO);

  

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e. Build‐Transfer‐and‐Operate(BTO); f. Contract‐Add‐and‐Operate(CAO); g. Develop‐Operate‐and‐Transfer(DOT); h. Rehabilitate‐Operate‐and‐Transfer(ROT); i. Rehabilitate‐Own‐and‐Operate(ROO); j. ConcessionArrangement; k. JointVenture(JV); l. LeaseorAffermage; m. ManagementContract; n. ServiceContract; o. DivestmentorDisposition; p. Corporatization;and

q. Anyothermodalityakin toanyof theaboveor features thereofwhichfallsunderthealternativedefinitionofaPPPunderSection5(u)hereof.

SECTION 11. General Requirements ‐ These are the general

requirementsfortheCityinenteringintoPPPs:

A. UndertakingaPPPforaDevelopmentProjectmustbepremisedonanyorallof thereasonsanddriversmentioned inSection4hereof.

B. ThelistofprojectstobeimplementedbytheCityunderanyoftheBOT variants shall be submitted for confirmation to the CityDevelopmentCouncilforprojectscostingaboveTwenty uptoFiftyMillionPesos;aboveFiftyMillionuptoTwoHundredMillionPesos to the Regional Development Councils; and those aboveTwo Hundred Million Pesos to the Investment CoordinationCommitteeoftheNationalEconomicDevelopmentAuthority.

C. Projects included in the List of Priority Projects shall not be

eligibleforunsolicitedproposalsunderanyoftheBOTvariants,unlessinvolvinganewconceptortechnology;provided,thatforany of the other PPPModalities, unsolicited proposals may beaccepted even if the project is included in the List of PriorityProjects or whether the same features a new concept ortechnologyornot.

D. Theprohibition forextendingDirectCityGuarantee,DirectCity

Subsidy and Direct City Equity only applies to unsolicitedproposals for BOT variants under Republic Act No. 6957, asamendedbyRepublicActNo.7718.

E. For BOT variants thatwill be subjected to bidding, Concession

Arrangements,Leasesor Affermage, Management andServiceContracts,andJointVentures,theCitymayprovideDirect

  

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CityGuarantee,DirectCitySubsidy,DirectCityEquity,orViabilityGap Funding; provided, that the City can use a portion of itsgeneral fund, its development fund comprising twenty percent(20%) of its annual share in the Internal Revenue Allotment,and/oritsequitableshareintheproceedsoftheutilizationanddevelopmentofthenationalwealthfoundwithinitsterritoryforthispurpose;providedfurther,thatanyamountusedforsubsidyor equity for a PPP project shall be deemed for developmentpurposesandforthedirectbenefitsoftheinhabitantspursuanttoSections287and294ofthe1991LGCrespectively.

F. ForallPPPModalities,theCitymayprovideCreditEnhancements

andCost‐Sharingschemes.

G. OfficialDevelopmentAssistance(ODA)asdefinedinRepublicActNo.8182,otherwiseknownastheODAActof1996,asamendedby Republic Act No. 8555, may be availed of for PPP Projectswhere there if difficulty in sourcing funds; provided, that ODAfinancingshallnotexceedfiftypercent(50%)oftheprojectcost,withthebalancetobeprovidedbythePSP.

H. AnysubsidytotheconstituentsthatwillbeextendedbytheCity

willbetargetedtransparentandefficientlyadministered.

I. Each PPP Modality adopted for a specific PPP project mustspecificallyprovideandadoptatariff‐mechanismsuchasbutnotlimited to cash‐needs, price cap, revenue cap, rate of return,hybridoftheforegoing,oranyotherappropriatescheme.

J. For negotiated contracts for BOT variants for public utility

projectswhich aremonopolies, the rate of return on rate baseshallbedeterminedbyexistinglaws,whichinnocaseshallexceedtwelvepercentum[12%].

K. Incaseofaprojectrequiringafranchiseorlicensetooperate,the

winning PSP shall automatically be granted by the City thefranchiseorlicenseorpermittooperateandmaintainthefacility,includingthecollectionoftolls,fees,rentals,andotherchargesinaccordance with the schedules stipulated in the approved PPPcontract. The original franchise period as stipulated in thecontractagreementmaybeextended,asmaybeauthorizedbytheCity,providedthatthetotalfranchiseperiodshallnotexceed(50)years.

L. TheCityshallhavetheoptiontoformorallowtheformationofa

special purpose vehicle or single‐purpose project company to

  

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implement the PPP project as may be appropriate under thechosenPPPmodality.

M. InparticipatinginPPPs,theCitymay,subjecttoSections16,17,

18,19and20of the1991LGC, exercisepolicepower,performdeveloped powers, power to apply and generate resources,expropriate and reclassify and enact or integrate zoningordinances.

N. TheCityprescribeandimposeProcurementEthicstobefollowed

by the City and all bidders based on the principles of honesty,integrity, probity, diligence, fairness, trust, respect andconsistencyforallPSPsandbidders.

O. InaJVorappropriatemodality,theco‐venturersorpartiestoaJV

shall contribute money, capital, services, personnel, assetsincluding equipment, land intellectual property or anything ofvalue, or a combination of any or all of the foregoing to the JVarrangement.ThecontributionoftheCityshallbesubjecttothirdpartyindependentvaluation.Further:

a. The City may allocate a portion of its Internal Revenue

Allotment, development fund, regular funds, proceedsfrom the utilization and development of its nationalwealth, Special Education Fund when the JV project iseducation‐related, Calamity Fundwhen the JV project iscalamity‐ or reconstruction‐related, and special funds, ifappropriate,asitscontributionorshareintheJVactivity.

b. TheCitymaycontractaloan,availofOfficialDevelopment

Assistance, secure grants, issue bonds, debentures,securities,collaterals,andnotestheproceedsofwhichcanbeearmarkedfortheJVactivity.

c. On the part of the City, in addition to the foregoing

contributions it may extend goodwill, grant a franchise,concession, usufruct, right‐of‐way, equity, subsidy orguarantee,provide cost‐sharingand credit enhancementmechanisms,exercisepolicepower,givetaxincentivesortax holidays, performdevolved powers, expropriate andreclassifyandenactorintegratezoningordinances.

d. TheCityshallbeaminorityequityorshareholderwhile

thePSPshallbemajorityequityorshareholder,exceptinthe case where fifty percent (50%) of the outstandingcapitalstockorcontributionisownedormadebytheCity.

  

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e. Subjecttothetermsofthecompetitiveselectionprocessandagreementoftheparties,theCitymaybeentitledtoasharegreaterthanitscontributionorequity.

f. Eachpartyshallbeentitledtodividends,profits, income

andrevenuesandwillbearthecorrespondingrisks,lossesand obligations in proportion to its share, unless thepartiesagreethattheCitywillhaveagreatershareinthedividends,profits,incomeandrevenues.

g. ForaslongastheCityisinvolvedintheJVundertaking,the

PSPshallnotsell/transferitsinterest intheJVCompanywithouttheexpresswrittenconsentoftheCity.

h. TheshareorequityoftheCityintheJVarrangementmay

beadvanced,infullorinpart,bythePSPwherethePSPshallbepaidfromthefuturerevenuesduetheCityeitherbyset‐offoractualpayment.

i. TheJVactivitymay,subjecttothetermsofthecompetitiveselection process, include the divestment, disposition ortransfer of ownership of the JV activity, equity, asset orproject to the PSP or JV partner. The divestment ordispositionmaytakeplaceattheendoftheJVperiodorbeforethetermends.

j. JVAgreementsenteredintobytheCitywiththePSPshouldbeclearinitsintenttoundertakeaspecificactivitythatisresponsive to national and local development goals andobjectives.

k. ForJVsinvolvinggovernmentassetsorproperties,theJVcontract/agreementmay be terminated/rescinded if thePSP fails to deliver or perform any major obligation/sprescribedintheJVcontract/agreement,e.g.,constructionof theproposedbuilding/swithintheperiodspecifiedintheJVcontract/agreement.Insuchcases,theQuezonCityGovernmentmaylikewiseforfeittheperformancesecurityoftheprivatesectorpartner.

l. Requirements/Conditions for JV Proposals. JV proposalsshallcomplywiththefollowingrequirements/conditions:

a. TheJVactivityiswithinthemandateandcharter

oftheCity;

  

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b. The JV activity is responsive inmeetingnational

andlocaldevelopmentgoalsandobjectives;TheJVproposal clearly describes the proposedinvestment, including its total cost, activities,objectives,sourcesoffunding,extentandnatureofthe proposed participation of the City and therelevanttermsandconditions;

c. TheJVproposalestablishesallthecomponentsin

determining the over‐all feasibility of the JVproposal which include, among others, thetechnical,financial,economic,andlegalaspects.

m. Approval of the JV Agreement. The PPP‐SC shall be

responsibleforensuringtheconsistencyofthetender/bidparameters and the draft JV agreement. The Mayor shallapprovethedraftJVAgreement.

n. DeviationsandAmendmentstotheJVAgreement.TheCity

shall not proceed with the awarding and signing of thecontract if there are material deviations from theparameters, terms and conditions set forth in theproposal/tender documents that tend to increase thefinancialexposure,liabilitiesandrisksofgovernmentoranyotherfactorsthatwouldcausedisadvantagetogovernmentandanydeviationthatwillcauseprejudicetolosingPSPs.The PPP‐SC shall be responsible for compliancewith thispolicy. Violation of this provision shall render the awardand/orthesignedJVAgreementinvalid.

P. ProcurementmadebytheCityusingpublic/cityfundsshallbesubjectto the GPRA and its Revised Implementing Rules and Regulations.Procurement made by the PSP using private funds shall not becoveredbysaidstatute.

Q. Therevenues,funds,expendituresandcontributionsoftheCityshall

be subject to the audit examination by the Commission on Audit(COA). Revenues, funds, expenditures and contributions of the PSPshallbesubjecttoauditbyaprivateauditingfirm.

R. Any subsidy, guarantee, equity or contingent liability assumed or

givenbytheCitymustbereflected,disclosedandrecognized intheannualappropriationsoftheCity.

SECTION12. DisclosureofRelations – All PSP’s and bidders shall

submit a sworn affidavit of the bidder that he or she or any officer of theircorporationisnotrelatedtotheHeadoftheCitybyconsanguinityoraffinityup

  

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tothethirdcivildegree.Failuretocomplywiththeaforementionedprovisionshallbeagroundfortheautomaticdisqualification.

OnthepartoftheCity,thisprovisionshallalsoapplytoanyofitsofficersoremployeeshavingdirectaccesstoinformationthatmaysubstantiallyaffecttheresultofthebidding,suchas,butnotlimitedto,themembersofthePPPSelectionCommittee,membersPPPRegulatoryAuthorityandPPPsecretariat.

On thepartof thePSPand/orbidder, thisprovisionshallapply to thefollowingpersons:

a. IfthePSPorbidderisanindividualorasoleproprietorship,tothebidderhimself;

b. If the PSP or bidder is a partnership, to all its officers andmembers;

c.IfthePSPorbidderisacorporation,toallitsofficers,directors,

andcontrollingstockholders;andd.IfthePSPorbidderisajointventure,theprovisionsofitems

(a), (b) or (c) of this Section shall correspondingly apply toeach of the members of the said joint venture, as may beappropriate.

SECTION13.ProhibitedActs‐Itshallbeunlawfulforanypublicofficial

to unduly influence or exert undue pressure on any member of the PPPSelectionCommitteeoranyofficeroremployeeoftheCitytotakeaparticularactionwhichfavors,ortendstofavoraparticularbidder.

When any of the foregoing acts is done in collusion with privateindividuals,theprivateindividualsshalllikewisebeliablefortheoffense.

It shall be unlawful for any private individuals to commit any of thefollowingacts,andanypublicofficerwhoconspireswiththemtowit:

a. A PSP or bidder, by himself or in connivancewith others, employsschemeswhich tend torestrain thenatural rivalryof thepartiesoroperatestostifleorsuppresscompetitionandthusproducearesultdisadvantageoustothepublic;

b. Submittingeligibilityrequirementsofwhateverkindandnaturethatcontain false information or falsified documents calculated toinfluencetheoutcomeoftheeligibilityscreeningprocess.

c. SubmittingDocumentsofwhateverkindandnaturethatcontainfalseinformationorfalsifieddocumentsorconcealsuchinformationinthe

  

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BiddingDocuments, inorder to influence theoutcomeof thepublicbidding.

SECTION14.Government‐to‐GovernmentJointPPPUndertakings‐

TheCitybymutualagreementinaGovernment‐to‐Governmentarrangementwith other local governments, national government agencies, government‐owned and controlled corporations, government instrumentalities andgovernment corporate entities, may implement PPP Projects for projectslocatedwithintheCity'sterritoryorthoseprojectsthatwillbenefit theCityand its community even if the project site is outside the City's territory;provided, that the collaborating or partnerQuezonCityGovernment jointlyundertakeswiththeCity theselectionof thePSPusingtheappropriatePPPModality.

RULEIII

Public‐PrivatePartnership(PPP)‐SelectionCommitteeSECTION15.Composition–There is hereby created aPPP Selection

Committee(PPP‐SC)forpurposesofselectingaPSPforaspecificPPPProject.ThePPP‐SCshallbecomposedofthefollowing:

Chairperson‐ TheMayorortheCityAdministrator ifsodesignatedbytheMayor;Secretary ‐ CityLegalOfficer;

Member ‐ CityTreasurer;

Member ‐ CityPlanningandDevelopmentOfficer;Member ‐ MajorityFloorLeader;andMember ‐ Two(2)representativesfromandchosenbythe

accredited civil society groups, people's andnon‐governmental organizations who aremembersoftheCityDevelopmentCouncil.

ThePPP‐SCwiththeapprovaloftheCityMayor,mayinviteprovisional

non‐voting members from the national government agencies, regulatoryagencies, National Economic Development Authority, Department of theInterior and Local Government, and the private sector to observe in theproceedingsofthePPP‐SC;andformasupportstaffcomposedofemployeesandstaffoftheCity.

Section 16. Functions and Responsibilities ‐ The PPP‐SC shall be

responsibleforallaspectsofthepre‐selectionandselectionprocess,including,among others, the preparation of the Feasibility or Project Study andselection/tender documents; determination of the minimum designs,

  

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performancestandards/specifications,economicparametersandreasonablerate of return or tariff‐settingmechanism appropriate to the PPPModality;draftingorevaluationofthePPPcontract;publicationoftheinvitationtoapplyforeligibilityandsubmissionofproposalsorcomparativeproposals;definingthe eligibility requirements, appropriate form and amount of proposalsecurities, and schedules of the selection and challenge processes;prequalificationofprospectivePSPs,biddersor challengers; conductofpre‐selectionconferencesandissuanceofsupplementalnotices;interpretationoftherulesregardingtheselectionprocess;conductoftheselectionorchallengeprocess;evaluationofthelegal,financialandtechnicalaspectsoftheproposals;resolution of disputes between PSPs and challengers; defining the appealsmechanisms;andrecommendationfortheacceptanceoftheproposaland/orfortheawardofthecontract.

Section17.SecretariatA. Composition ‐ The PPP Selection Committee Secretariat shall be

composedofthefollowingmembers:1. SecretaryGeneral–TheLegalOfficeroftheOfficeoftheCityMayor

(or Any Division Chief or Department Headwhomust be amember of theIntegratedBarofthePhilippines(IBP)ingoodstanding);

2. Two(2)memberswhomusthaveatleastaplantillapositionwith

theCityGovernmentdulyappointedbytheCityMayor.B.FunctionsandResponsibilities‐PPPSelectionCommitteeSecretariatshallhavethefollowingfunctionsandresponsibilities:

1. ProvideadministrativesupporttothePPPSelectionCommittee;

2. OrganizeandmakethenecessaryarrangementsforthePPPSelectionCommitteemeetings;

3. AttendallPPPSelectionCommitteemeetingsandprepareminutesthereof;

4. KeepallrecordsofmeetingsanddecisionsmadebythePPPSelectionCommittee;and

5. Perform such other functions as may be provided by the PPPSelectionCommittee.

Section 18. CommitteeMeetings andQuorum ‐ The PPP SelectionCommitteeshallmeetat leastonceeveryquarterorasoftenasnecessary.Asimple majority shall constitute a quorum. Decisions by the PPP SelectionCommittee shall be by consensuswhenever possible; otherwise, the simple

  

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majority will suffice. The Chairperson shall be allowed to vote only for thepurposeofbreakingatie.

All decisions of thePPP SelectionCommittee shall be in the formof aresolution.ThePPPSelectionCommitteeSecretariatshallberesponsible fortheframingoftheresolutions,whichshallbenumberedconsecutivelyeveryfiscalyearindicatingthenumberoftheresolutionandtheyeartheresolutionwaspassed.

Thechairpersonmaydesignateanymembertopresideatmeetings, in

his/herabsence.

RULEIVBID/TENDERDOCUMENTS

SECTION19.TenderDocuments‐ThePPP‐SCshallpreparethetender

documents,whichshallincludethefollowing:

A.“Instructionstobidder”.Theinstructionstobidderswhichestablishtherulesofthebiddingshallbeclear,comprehensiveandfairtoallbiddersandshall,asfarasnecessaryandpracticable,includethefollowinginformation:

1. Generaldescriptionandobjectivesof theproject, includingastatementthattheprojectshallbeproposedunderOrdinanceSP‐2336,S‐2014,andthisIRR;

2. Contractual arrangement under which the project shall be

undertaken;3. Bid submission procedures and requirements, which shall

include information on the manner of bid submission, thenumberofcopiesofbidproposal tobesubmitted,wherethebids are to be submitted, the deadline for the submission ofbids,permissiblemodeoftransmissionofbidproposals,etc.;

4. Bidsecurityandbidsecurityvalidityperiod;5. Method and criteria for the evaluation of the technical

componentofthebids;6. Parametersandcriteriaforevaluationoffinancialcomponent

ofthebids;Anyoneormoreofthefollowingcriteriamaybeusedinthe

evaluationofthefinancialcomponentofthebidfordeterminingthemostadvantageousbidfortheGovernment;

  

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a. Lowest proposed toll, fee, rental or charge at the start of

project operation, if a pre‐agreed parametric tariff adjustmentformulaisprescribedinthebiddocument;7. Minimum amount of equity as prescribed by the Approving

BodyorthePPP‐SC,asthecasemaybe;8. Formulaandappropriateindicestobeusedintheadjustments

of tolls/fees/rentals/charges, when applicable. Said formulashalltakeintoaccountthereasonablenessofthesametousersoftheproject/facilityunderbidding;

9. Requirementsofconcernedregulatorybodies,suchas,butnot

limited to, the Department of Environment and NaturalResources (DENR) for the issuance of an EnvironmentalComplianceCertificate(ECC),NationalWaterResourcesBoard(NWRB) for the issuanceof theWaterPermit, thePhilippineContractors Accreditation Board (PCAB) for the registrationrequirements of Contractors, and, the Toll Regulatory Board(TRB)forthereviewoftollratesandadjustmentformula;

10. Requirementsandtimelines/milestonesoftheCityingranting

offranchise,ifapplicable;11. CurrentrulesandregulationsoftheBangkoSentralngPilipinas

(BSP);12. Revenuesharingarrangements,ifany;13. Expectedcommissioningdate;and14. Nationalityandownershiprequirementsasrequiredbylaw.

B. “Minimum Design, Performance Standards/ Specifications, andEconomic Parameters” Minimum design and performance standards/specifications, including appropriate environmental standards as prescribedby the DENR, shall be clearly defined and shall refer more to the desiredquantityandqualityof theoutputsof the facilityandshould state thatnon‐conformitywithanyoftheseminimumrequirementsshallrenderthebidsasnon‐responsive. Likewise, for the purpose of evaluating bids, the followingeconomicparameters,amongothers,shallbeprescribed:

1. Discount rate, foreign exchange rate and inflation factor as

prescribedby theApprovingBodyor thePPP‐SC as the casemaybe,ifapplicable;

  

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2. MaximumperiodofprojectConstruction;3. Fixedtermforprojectoperationandcollectionoftheproposed

tolls/fees/rentals/charges,ifapplicable;4. Formula and price indices to be used in adjustments to

tolls/fees/rentals/charges,ifapplicable;5. Minimumperiodofrepaymentunderthescheme

C. PPPContract1. ThePPPContractshallbesignedbytheMayoronbehalfoftheCity

with the prior authorization or ratification by the SangguniangPanlungsod,andthedulyauthorizedrepresentativeofthePSP.

2. ThedirectandultimatebeneficiaryofanyPPPContractshallbetheconstituentsoftheCity.

3. TheprincipalPPPContractshalldescribethePPPProject,therights,

functions,obligationsandresponsibilitiesofandrisksassumedbyeach of the contracting party, dispute mechanisms and all otherprovisionsenumeratedunderSection5(v)hereof.

4. Theotherancillarycontractsmayincludeinsurancecontracts;loan

agreements;bonds;guaranteearrangements;equityarrangements;operations and maintenance contracts; and engineering,procurementandconstruction(EPC)contracts.

“PPPContract”reflectingthecontractualarrangementunderwhichthe

projectshallbeundertaken,andtherespectiveundertakingsofthecontractingparties.

ThedraftcontractshouldclearlydefinethebasicandlegalrelationshipbetweenthepartiesandtheirrightsandresponsibilitiesincludingthespecificGovernmentUndertakingstobeprovidedbytheCityrelativetotheproject.Thedraftcontractshallhavethefollowingmandatorytermsorconditions:

1. Specificcontractualarrangement,term,andscopeofwork;2. Projecttechnicalspecificationsandsystemfeatures;3. Implementation milestones including those for securing other

approvals,projectcompletiondate;

  

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4. Costrecoveryschemeviaproposedtolls,fees,rentalsandcharges,asthecasemaybe;

5. Liquidateddamages6. Performanceandwarrantybonds7. Minimuminsurancecoverageasmayberequiredfortheproject,such

as Contractor’s all risk, motor vehicle, workmen’s compensation,thirdpartyliability,orcomprehensivegeneralliabilityinsurance;

8. Acceptancetestsandprocedures;9. Warrantyperiodandprocedures(aftertransfer);10. Grounds forandeffectsof contract termination includingmodes

forsettingdisputes;11. Themannerandproceduresfortheresolutionofwarrantyagainst

corruption,and12. Compliancewithallotherapplicablelaws,rules,andregulations.

D. “BidForm”reflectingtherequired informationtoproperlyevaluate

theproposal;

E. Formsofbidandperformancesecurities;

F. Requirements and timelines/milestones of concerned Agencies ingrantingoffranchise,ifapplicable;and

G. OtherdocumentsasmaybedeemednecessarybytheCity.

RULEV

QUALIFICATIONOFBIDDERS/PRE‐QUALIFICATIONPROCESS

SECTION 20. Who May Participate.‐ Any individual, partnership,corporation or firm, whether local or foreign, including joint venture orconsortiaoflocal,foreignorlocalandforeignfirms,subjecttothelimitshereinset,mayparticipateorapplyforpreorsimultaneousqualificationforprojectscoveredundertheprovisionsoftheCodeandthisIRR.

Section 21.Publication of Invitation to Pre‐qualify and Bid.‐ ThePPP‐SC shall upon the approval of the priority projects ready forimplementation under the provisions of these IRR, forthwith cause to bepublished,onceeveryweekforthree(3)consecutiveweeks,inatleasttwo(2)

  

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newspaper of general circulation and in at least one (1) local newspaper ofgeneralcirculationintheCity,anoticeinvitingallprospectiveinfrastructureordevelopment project proponents to pre‐qualify and bid for the projects soapproved.Likewise,thePPP‐SCshallissueofficialnotificationofthesametoprojectproponentsregisteredwiththem.

ThepublishedInvitationtoPre‐qualifyandBidshallcontaininformation,among others, whether the contractor to be employed to undertake theconstructionworksneedstobepre‐identifiedforpre‐qualificationpurposesornot.

Section 22. Period to Prepare Pre‐qualificationDocuments.‐ TheCityshallallowprospectivebiddersatleastthirty(30)calendardaysfromthelastdateofpublicationoftheInvitationtoPre‐qualifyandBidtopreparetheirrespective pre‐qualification documents. For projects costing at least P300million,theperiodofpreparationshallatleastbeforty‐five(45)calendardaysfromthelastdateofpublicationoftheInvitationtoPre‐qualifyandBid.Inanyevent, the deadline for submission of pre‐qualification statements shall beindicatedinthepublishedInvitationtoPre‐qualifyandBid.

Section23.Pre‐qualificationRequirements.‐Topre‐qualify,aprojectproponentmustcomplywiththefollowingrequirements:

A.LegalRequirements:

1.Forprojectstobe implementedundertheBOTschemewhoseoperations require a public utility franchise, the projectproponentand the facilityoperatormustbeaFilipinoor, ifacorporation, must be duly registered with the Securities andExchange Commission (SEC) and owned up to at least sixtypercent(60%)byFilipinos.

2.ForprojectstobeimplementedthroughaschemeotherthantheBOTandrequiringapublicutilityfranchise,thefacilityoperatormustbeaFilipinoor,ifacorporation,mustbedulyregisteredwiththeSecuritiesandExchangeCommission(SEC)andowneduptoatleastsixtypercent(60%)byFilipinos.

Consistent with existing laws, the proponent may be theoperator but it may be allowed to enter into a managementcontractwithanotherentity,whomaybe100%foreignowned,for the day to day operation of the facility, provided that theproponentwillassumeallattendantliabilitiesofanoperator.

  

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3.Incasetheprojectproponentisajointventureorconsortium,themembers or participants shall submit a sworn statementundertaking that if awarded the contract, they shall bindthemselves tobe jointly severallyandsolidarily liable for theobligations of the project proponent under the contract.However, if members of the joint venture or consortiumorganize themselves as a corporation registered underPhilippine laws, the liabilities of such members under thecontractshallbeinaccordancewithsaidlaws.

4. Forprojects tobeoperatedby theprojectproponent itself orowned by the proponent but operated through a facilityoperator where operation of the facility does not require apublic utility franchise, the project proponent or the facilityoperatormaybeFilipinoorforeign‐owned.

5. If the contractor to be engaged by the project proponent toundertaketheconstructionworksoftheprojectunderbiddingneeds to be pre‐identified as prescribed in the publishedInvitationtoPre‐qualifyandBidandisaFilipino,itmustbedulylicensed and accredited by the Philippine ContractorsAccreditation Board (PCAB). However, if the contractor is aforeigner, PCAB registration will not be required at pre‐qualification stage, rather it will be one of the contractmilestones.

B.ExperienceorTrackRecord:Theproponent‐applicantmustpossessadequateexperience

FirmExperience:Byitselforthroughthemember‐firmsincaseofajointventure/consortiumorthroughacontractor(s)whichtheprojectproponent may have engaged for the project, the project proponentand/oritscontractor(s)musthavesuccessfullyundertakenaproject(s)similarorrelatedtothesubject infrastructure/developmentproject tobebid.Theindividualfirmsand/ortheircontractor(s)mayindividuallyspecialize on any or several phases of the project(s). A jointventure/consortium proponent shall be evaluated based on theindividual or collective experience of the member‐firms of the jointventure/consortiumandofthecontractor(s)thatithasengagedfortheproject.

Forpurposesoftheabove,jointventures/consortiashallsubmitaspartofitspre‐qualificationstatementabusinessplanwhichshall,amongothers,identifyitsmembersanditscontractor(s),iftheexperienceofits

  

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contractor(s)arenecessaryforthedeterminationofthecapacityofthejointventure/consortiumtoundertaketheprojectandthedescriptionofthe respective roles saidmembers and contractors, if necessary, shallplayorundertakeintheproject.Ifundecidedonaspecificcontractor,theproponentmaysubmitashort listofcontractors fromamongwhich itwill select the finalcontractor.Short listedcontractorsarerequiredtosubmit a statement indicatingwillingness to participate in the projectandcapacitytoundertaketherequirementsoftheproject.Thebusinessplanshalldisclosewhichofthemembersofthejointventure/consortiumshallbetheleadmemberthefinancingarm,and/orfacilityoperator(s),andthecontractor(s)ifrequiredtobepre‐identifiedasprescribedinthepublished Invitation to Pre‐qualify and Bid or if thequalifications/experience of their contractor(s) are necessary for thedetermination of the capacity of the joint venture/consortium toundertaketheproject.

KeyPersonnelExperience:Thekeypersonneloftheproponentand/oritscontractor(s)musthavesufficientexperienceintherelevantaspectofschemessimilarorrelatedtothesubjectproject,asspecifiedbythecity.

FinancialCapability:Theprojectproponentmusthaveadequatecapability to sustain the financing requirements for the detailedengineering design, construction and/or operation and maintenancephases of the project, as the case may be. For purposes of pre‐qualification,thiscapabilityshallbemeasuredintermsof:

1.proofoftheabilityoftheprojectproponentand/ortheconsortiumtoprovideaminimumamountofequitytotheprojectmeasuredintermsof thenetworthof thecompanyor in thecaseof jointventuresorconsortiathecombinednetworthofmembersoraset‐asidedepositequivalenttotheminimumequityrequired,and

2. a letter testimonial from reputable banks attesting that the projectproponentand/ormembersoftheconsortiumarebankingwiththem,andthattheyareingoodfinancialstanding.TheCityshalldetermineon a project‐to‐project basis, and before pre‐qualification, theminimumamountofequityneeded.Inaddition,thecitywill informthe proponents of the minimum debt‐equity ratio required by themonetaryauthorityforprojectstobefinancedbyforeignloans.

The PPP‐SC shall complete the evaluation of the pre‐qualificationdocumentsoftheproponentswithinthirty(30)calendardaysfromsubmissionofcompleterequireddocuments.

  

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SECTION 24.Pre‐qualified and Disqualified Proponents.‐ Afterundertaking the above process, the PPP‐SC shall mark the pre‐qualificationdocuments of each prospective proponent as either "Pre‐qualified" or"Disqualified",asthecasemaybe,countersignedbytheChairman,forreviewand approval by the PPP‐SC. Accordingly, the PPP‐SC shall duly inform theprospectiveproponentswhohavebeenpre‐qualifiedwithinseven(7)calendardaysafterapprovalthereof.Disqualifiedproponentsshalllikewisebeinformedstating therein the grounds for their disqualification. They may move forreconsiderationwithin ten (10) calendar days from receipt of the notice ofdisqualificationwiththePPP‐SC. Incaseofadverseresolution,appeal to theOfficeoftheCityMayormaybefiledwithinten(10)daysfromreceiptthereof.

Thebiddingprocesswillbesuspendedwhiletheappealisbeingevaluated.ThedecisionoftheOfficeoftheCityMayororhisauthorizedrepresentativeontheappealshallbefinalandimmediatelyexecutory.

SECTION25.SimultaneousQualification.‐Intheexigencyofservice,the PPP‐SC may opt to do a simultaneous qualification instead of a pre‐qualification of proponents. In case of simultaneous qualification, thepublication of the invitation, shall be for the submission of qualificationrequirements andbidproposals. Thebidders shall be asked to submit theirproposal in three envelopes, the first being the qualification documentscorrespondingtotherequirementssostatedinSection23herein,thesecondthetechnicalproposalandthethirdthefinancialproposal.Therequirementsforbid submissionare coveredunderRule7of this IRR.Theperiod for thepreparationofthequalificationdocumentsshallbesubsumedunderthetimeallottedforbidpreparation.

RULEVI

PPPSELECTIONPROCESS

SECTION26.PPPProcedures‐Thefollowingproceduresshallapply:

a. For BOT variants, the City must comply with the procedure setforthinRepublicActNo.6957,asamendedbyRepublicActNo.7718,anditsImplementingRulesandRegulations.

b.ForManagementandServiceContracts, theCity shall complywithRepublicActNo.9184or theGovernmentProcurementReformActanditsImplementingRulesandRegulations.

  

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c. For Concessions, Joint Ventures, and Leases or Affermage, theproceduresspecifiedhereinshallgovern.

d.ForDivestmentorDispositionofaproperty,CommissiononAuditCircularNo.89‐296(January27,1989)shallbeapplicable.

e.FortheDivestitureofasubsidiaryorcorporationincorporatedbytheCity under Corporatization, the sale may be pursued via a publicofferingorthroughapublicauctionorotherrelevantschemesunderCommissiononAuditCircularNo.89‐296(January27,1989).

f.IftheCityoptstoselectaPSPusingeitherCompetitiveSelectionorCompetitiveChallenge,theCityintheCompetitiveSelectionandthePSPintheCompetitiveChallengeapproachmustprepareandsubmitaFeasibilityorProjectStudy.ThecostsofpreparingtheFeasibilityorProjectStudymaybereimbursedbythewinningPSPtotheCityundertheCompetitiveSelectionmode.

g.All recommendations of the PPP Selection Committee shall besubmittedtotheMayorforconsiderationandapproval.

h.All PPP contracts must be signed by the Mayor with priorauthorizationbytheSangguniangPanlungsod.

i. During the consideration of the PPP Contract by the SangguniangPanlungsod,apublicconsultationshallbeconductedexplainingthePPPProject,PPPContract,accountabilitymechanismsbuiltintothePPParrangement, thebenefitsandcostsof thePPPProject,amongotherrelevantmatters.

j. AfterthesigningofthePPPContractbytheMayor,thePPP‐SCshallissuetheNoticeofAwardtothePSP.

k.JointlyorattheInstanceoftheCityorthePSP,thePPPContractmaybe submitted for judicial, executive or administrative confirmationfromthecourtsorappropriategovernmentinstitution.

SECTION 27. The PPP selection process may either be through (a)competitiveselectionor(b)competitivechallenge.

A. Competitive Selection. The Competitive Selection procedure shall

consistsofthefollowingsteps:

1.Advertisement – In line with principle of transparency andcompetitiveness, all invitations toBid for contracts under competitivebiddingshallbeadvertisedbythePPP‐SCinsuchmannerandforsuchlengthoftimeasmaybenecessaryunderthecircumstances,inorderto

  

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ensurethewidestpossibledisseminationthereof,suchas,butnotlimitedtoposting in theprocuring entity’spremises, innewspaperof generalcirculationandintheQuezonCitywebsite.

Theinvitationtobidshallcontain,amongothers:

a. Abriefdescriptionofthesubjectmatteroftheproposal;b. AgeneralstatementonthecriteriatobeusedbythePPP‐SCfor

theeligibilitycheck,theshortlistingofPSPs,theexaminationandevaluationofbids,andpost‐qualification.

c. Thedate,timeandplaceofthedeadlineforthesubmissionand

receiptoftheeligibilityrequirements,thepre‐bidconferenceifany, the submissionand receiptsofbids, and theopeningofbids;

d. Projectcoste. Thesourceoffunds;f. Theperiodofavailabilityof theBiddingDocuments, and the

placewherethesemaybesecured;g. Thecontractduration;andh. Such other necessary information deemed relevant by the

ProcuringEntity

2.IssuanceofInstructionsandTenderDocuments.‐ThePPP‐SCshallmakeavailabletherelatedbiddocumentstoallpre‐qualifiedbiddersassoonaspracticabletoproviderespectivebiddersampletimetoexaminethesameandtopreparetheirrespectivebidspriortothedateofopeningofbids.

3.ConductofPre‐bidConferences–At leastonepre‐bidconference

shallbeconducted foreachproject.Subject to theapprovalof thePPP‐SC,asubsequentpre‐bidconferencemayalsobeconducteduponwrittenrequestofanyprospectivePSPs.

Forprojects costing less thanPhP300million, thepre‐bid conferenceshallbeconductedbythePPP‐SCatleastthirty(30)calendardaysbeforethedeadline for the submission of bids to clarify any provisions, requirementsand/or terms and conditions of the bidding documents and/or any othermatter that the prospective PSPs may raise. For projects costing PhP 300millionandabove,thepre‐bidconferenceshallbeconductednolaterthansixty

  

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(60)calendardaysbeforethesubmissionofbids.Nothingstatedatthepre‐bidconferenceshallmodifyanyprovisionsortermsandconditionsofthebiddingdocumentsunlesssuchismadeasawrittenamendmenttheretobythePPP‐SC.Any amendments shall be issued by the PPP‐SC to all bidders within areasonabletimetoallowthemtoconsiderthesameinthepreparationoftheirbidsandshallbedulyacknowledgedbyeachbidderpriortothesubmissionofhisbidandshallbesoindicatedinhisbid.Asummaryofthepre‐bidconferenceproceedings shall also be issued to all prospective PSPs by the PPP‐SC.Attendance to the pre‐bid conference by prospective PSPs shall not bemandatory.

Responsibility of Bidder. The prospective bidder shall be solely

responsibleforhavingtakenallthenecessarystepstocarefullyexamineandacquaint himself with the requirements and terms and conditions of thebiddingdocumentswithrespecttothecost,durationandexecution/operationoftheprojectasitaffectsthepreparationandsubmissionofhisbids.ThePPP‐SCshallnotassumeanyresponsibilityregardingerroneousinterpretationsorconclusions by the prospective interpretations or conclusions by theprospectivebidderoutofdatafurnishedorindicatedinthebiddingdocuments.

SupplementalNotices.Ifabidderisindoubtastothemeaningofany

dataorrequirementsoranypartof thebiddingdocuments,writtenrequestmaybe submitted to thePPP‐SC for an interpretationof the same, allowingsufficienttimeforthePPP‐SCtoreplybeforethesubmissionofhis/herbid.AnysubstantiveinterpretationgivenbythePPP‐SCshallbeissuedintheformofaSupplementalNotice,andfurnishedtoallprospectivebidders.ThePPP‐SCmayalso issue Supplemental Notices to all prospective bidders at any time forpurposesofclarifyinganyprovisionsofthebiddingdocumentsprovidedthatthesameisissuedwithinareasonableperiodtoallowallbidderstoconsiderthesameinthepreparationoftheirbids.ReceiptofallSupplementalNoticesshallbedulyacknowledgedbyeachbidderpriortothesubmissionofhisbidandshallbesoindicatedinthebid.

4. Submission, receiptandopeningofbids shallbe conducted

pursuanttoRuleVIIofthisIRR.5. Postingofproposalsecurities(Section30,RuleVII)6. Evaluationofbids(Section41,RuleVIII)7. Post‐qualification(Section43,RuleVIII)8. Awardofcontract(RuleX)

B.CompetitiveChallenge‐TheCompetitiveChallengeprocessshallbe

dividedintothree(3)Stages,describedas:1.StageOne/UnsolicitedProposal‐Thestepsare:a. A PSP submits an unsolicited proposal accompanied by a

FeasibilityorProjectStudytothePPP‐SCforaprojectedPPPProject.

  

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ForanunsolicitedproposaltobeconsideredbythePPP‐SC,

the proponent has to submit a complete proposal, which shallinclude a cover letter, feasibility study which should indicaterelevantassumptions,companyprofile, the draft contract, andotherdocumentsthatareneededevenifproprietaryinnature. The cover letter shall indicate thebasic information on theUnsolicited Proposal such as its expected output and outcome,implementation period, and general description of the newconcept or technology. The feasibilitystudy,draft contract, andother documents that are needed even if proprietary in natureshallbesubmittedinasealedenvelope.

 

b. ThePPP‐SCshallmakeaninitialevaluationoftheproposalanddeterminationoftheeligibilityofthePSP.

The PPP‐SC shall acknowledge receiptof theproposalwithinseven(7)calendardaysandadvisetheproponentwhethertheproposaliscompleteorincompletewithinthirty(30)calendardays from submissionthereof. If incomplete, the PPP‐SCshallreturntotheproponentitssubmissionindicatingwhatinformationislackingornecessaryandthePPP‐SCmay entertain thereafterother sameor similar project proposal.

c. Upon the completionof the initial evaluationof the proposal.

The PPP‐SC shall: 1) appraise the merits of the project:2)qualifytheproponentbasedontheprovisionshereof;3)assessthe appropriateness of the contractual arrangement andreasonableness of the risk allocation; 4) recommend areasonablerateofreturn(ROR);and5)informtheICCandthePPPCenterofitsreceiptofanUnsolicitedProposal.

ThePPP‐SCshallevaluatetheproposal,qualifytheproponent,andadvisewhether itacceptsorrejectstheproposalwithinonehundredtwenty(120)calendardaysuponreceiptofthecompleteproposal. The CityMayor, upon recommendation of the PPP‐SC,shalleitherissueacertificateofacceptanceornon‐acceptanceofthe proposal for purposes of detailed negotiations. The PPP‐SCshall indicate in its letter of acceptance the confirmation of theproponent as “original proponent”. Non‐issuance of certificatewithin thirty (30) days from the transmittal of therecommendationshallmeanrejectionthereof.

In case of acceptance, the PPP‐SC shall endorse theunsolicitedproposalandsubmitallpertinentdocumentationtotheApprovingBodyasthecasemaybe.Atthispoint,thePPP‐SCwill

  

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nolongerentertainothersimilarproposalsunlessthepartiesareunabletoagreeduringtheperiodfornegotiationspecifiedbelow,ortheoriginalproponentisunabletocomplywiththeparameterssetbytheapprovingbodyor,untilthesolicitationofcomparativeproposalshasbeencompleted.

d. Ifthereismorethanoneunsolicitedproposalsubmittedfor

thesamePPPProject,theCityMayor,uponrecommendationofthePPP‐SC,may:i. rejectallproposalsandpursuecompetitiveselection,

ii. accept the unsolicited proposal that is complete andprovides the greater advantage and benefits to thecommunityandrevenuestotheCity.

iii. evaluatetheproposalsusingaFirstInTimeApproach.Underthisapproach,thefirstcompleteproposalisevaluated

and decided upon. The second complete proposal will only beentertained if the first one is rejected. Otherwise, the secondcompleteproposalwillbeconsideredonlyifthereisafailureinthenegotiationofthefirstproposalorduringthe“invitationforcomparativeproposals”asdefinedbelow.

Under the First In Time Approach, the PPP‐SC shall

acknowledge the submissionofotherunsolicitedproponent forthe same or similar project concept, and advise the unsolicitedproponent on existence of similar project concept and itsrank/position based on date of submission of unsolicitedproposals.Ifacontractisawardedtoaproponent,theunopenedenvelope/sshallbereturnedtotherespectiveproponents.

2.StageTwo/DetailedNegotiations‐Thestepsare:

a. The Parties shall negotiate and agree on the terms andconditionsof thePPPProjectconcerning its technicalandfinancialaspects.

Negotiations shall focus on the project scope,

implementationarrangements,ReasonableRateofReturn(RROR)andotherparametersdeterminedby theApprovingBodyas thecasemaybe,andthetermsandconditionsofthedraftcontractforthe Unsolicited Proposal, among others. The PPP‐SC and theoriginalproponentshallconcludenegotiationswithinaperiodof

  

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eighty(80)calendardaysfromreceiptbytheproponentofwrittennoticefromthePPP‐SCtocommencenegotiation.Shouldtherebeirreconcilabledifferencesduringthenegotiationperiod,thePPP‐SChas theoption to reject theproposalbyadvising theoriginalproponent in writing stating the grounds for rejection andthereaftermayaccept anewunsolicitedproposal orbidout theprojectasasolicitedproposal,orundertaketheprojectonitsown.If negotiation is successful, the PPP‐SC and the authorizedsignatoryoftheoriginalproponentshallissueasignedcertificationthat an agreement has been reached by both parties. Saidcertification shall also state that thePPP‐SC shall commence theactivitiesforthesolicitationofcomparativeproposals.

b. Oncenegotiationsaresuccessful,thePartiesshallissueajoint

certificationstatingthatanagreementhasbeenreachedandspecifying the eligibility of the PSP and the technical andfinancialaspectsofthePPPProjectasagreedupon.

c. Theissuanceofthecertificationcommencestheactivitiesforthesolicitationforcomparativeproposals.In the event that the Original Proponent has an exclusivefranchise, right or concession, such as a power servicecontract, water rights, or mining contracts/rights vested,grantedorawardedbytheresponsiblenationalgovernmentagency, or ownership over real, personal or intellectualproperty,withoutwhichtheJVprojectoractivitycannotbeundertaken without the participation or consent of theOriginal Proponent‐Franchise Holder, subjecting theunsolicited proposal to challenge under Stage Three hereofneednotbeundertaken.Inwhichcase,theCompetitive/SwissChallengeprocessisdeemedcomplete.

d. However, should negotiations not result to an agreementacceptabletobothparties,thePPP‐SCshallhavetheoptiontorejecttheproposalbyinformingthePSPinwritingstatingthegrounds for rejection and thereafter may accept a newproposal from other PSPs, decide to pursue the proposedactivity through other PPP Modalities or subject the PPPProjecttoaCompetitiveSelection.

3. StageThree/CompetitiveorSwissChallengeProper‐Thesteps

are:

  

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a. The PPP‐SC shall prepare the tender documents. The eligibilitycriteria used in determining the eligibility of the private sectorentityshallbethesameasthosestatedinthetenderdocuments.Proprietary information shall, however, be respected andprotected, and treatedwith confidentiality. As such, it shall notformpartofthetenderandrelateddocuments.

Thequalificationand tenderdocuments shallbepreparedalongthelinesspecifiedunderRuleIV.ThedraftcontractasagreeduponbythePPP‐SCandtheoriginalproponentandasapprovedbythePPP‐SC, which shall be part of the tender documents, will beconsidered final and non‐negotiable by the comparativeproponents.

b. TheMayor,uponfavourablerecommendationbythePPP‐SCshall

approvealltenderdocumentsincludingthedraftcontractbeforethepublicationoftheinvitationforcomparativeproposals.

c. Withinseven(7)calendardaysuponissuanceofthecertification

ofasuccessfulnegotiation,thePPP‐SCshallpublishtheinvitationfor comparative proposals and after receipt of the notificationfromtheoriginalproponentthat the latteracceptsall thetermsand conditions. The invitation for comparative or competitiveproposalsshouldbepublishedatleastonceeveryweekforthree(3) consecutiveweeks in at least one (1) newspaper of generalcirculation.SaidinvitationshouldalsobepostedcontinuouslyinthewebsiteoftheCity,ifavailable,withintheperiodstatedabove.FortheprojectscostingatleastPhp500million,theinvitationmayalsobepublishedatleastonce(1)inatleastone(1)internationalpublication.Itshallindicatethetime,whichshouldnotbeearlierthanthelastdateofpublication,andplacewheretender/biddingdocumentscouldbeobtained.Itshalllikewiseexplicitlyspecifyatimeofsixty(60)workingdaysreckonedfromthedateofissuanceofthetender/biddingdocumentsuponwhichproposalsshallbereceived.Beyondsaiddeadline,noproposalsshallbeaccepted.Apre‐bid conference shall be conducted thirty (30)workingdaysaftertheissuanceofthetender/biddingdocuments.d. The PSP or Original Proponent shall post the proposalsecurity at the date of the first day of the publication in thenewspaper of general circulation stated in the precedingparagraph, of the invitation for comparative proposals in theamountandformstatedinthetenderdocuments.

e. In the evaluation of proposals, the best offer shall bedeterminedtoincludetheoriginalproposalofthePSP.

  

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f. IftheCitythruthePPP‐SC,determinesthatanoffermadebyacomparativePSPorchallengerotherthanthenegotiatedtermswithoriginalproponentissuperiorormoreadvantageoustotheCitythantheoriginalproposal,thePSPwhosubmittedtheoriginalproposalshallbegiventherighttomatchsuchsuperiorormoreadvantageousoffer.Shouldnomatchingofferbereceivedwithinthe stated period set by the PPP‐SC, the PPP Project shall beawarded to the comparative PSP submitting the mostadvantageousproposal.Ifamatchingofferisreceivedwithintheprescribedperiod,thePPPProjectshallbeawardedtotheoriginalproponent.IfnocomparativeproposalisreceivedbytheCity,thePPP Project shall be immediately awarded to the originalproponent.

Proposals shall be evaluated in three stages: Stage 1,

qualificationdocuments;Stage2,thetechnicalproposal.Onlythosebidswhichpass the firststagewillbeconsidered for thesecondstageandsimilarly,onlythosewhichpassthesecondstagewillbeconsideredforthethirdstageevaluation.ThePPP‐SCwillreturntothe disqualified bidders the remaining envelopes unopened,togetherwithaletterexplainingwhytheyweredisqualified.Thecriteriaforevaluationwillfollowthequalificationofbiddersandtechnicalandfinancialproposals.Thetimeframesshalllikewisebefollowed.g. IntheeventthattheOriginalProponentisnotabletomatchthesuperiorofferof thechallenger, thewinningchallengershallreimburse,withinthirty(30)daysfromissuanceofthenoticeofaward, the original proponent the cost of preparing the projectstudy,provided,thatthisreimbursementarrangementandthecostofpreparingoftheprojectstudyareexpresslystatedinthetermsofreferenceforthecompetitivechallenge,andthatthePPP‐SChasdeterminedthatthecostisreasonable.

RULEVIISUBMISSION,RECEIPTANDOPENINGOFBIDS

SECTION28.Requirements forBid Submission.– Bidders shall berequired to submit their bids on or before the deadline stipulated in theInstructionstoBidders.Forpre‐qualifiedbidders,theirbidsshallbesubmittedintwo(2)separatesealedenvelopes,thefirstbeingthetechnicalproposalandthesecondthefinancialproposal.Incaseofsimultaneousqualification,threeenvelopes shall be submitted. The first envelope shall be the qualificationrequirements, the second the technical proposal and the third the financialproposal.Allenvelopesshallbearthenameofthebidderandprojecttobebid

  

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outincapitallettersandaddressedtothePPP‐SC.Theyshallbemarked"DoNotOpenBefore(dateandtimeofopeningofbids)".TheenvelopesshallbeappropriatelylabelledasQualificationRequirements,TechnicalProposalandFinancialProposal.

Section 29. Qualification Requirements ‐The envelope forqualificationofthebiddershallcontainrequirementsasstatedinSection23hereof.

Section30.TechnicalProposal–Thetechnicalproposalshallcontainthefollowing:

a)Operationalfeasibilityoftheproject,whichshallindicatetheproposedorganization,methodsandprocedures fortheoperationandmaintenanceoftheprojectunderbidding;

b) Technical soundness/preliminary engineering design, includingproposedprojecttimeline;

c) Preliminary environmental assessment, which shall indicate theprobable adverse effects of the project on the environment and thecorrespondingmitigatingmeasurestobeadopted;

d)Projectcostincludingoperatingandmaintenancecostrequirementsandproposedfinancingplan(proposedequitycontribution,debt,etc.);

e)Bidsecurityintheformofcash,certifiedcheck,manager'scheck,letterofcredit,orbankdraft/guaranteeissuedbyareputablelocal/foreignbank,orasuretybondcallableondemandissuedbytheGovernmentServiceInsuranceSystem(GSIS)oranentitydulyregisteredandrecognizedbytheOfficeoftheInsuranceCommissionerandacceptabletotheCity,oranycombinationthereofpayabletotheCityinaccordancewiththefollowingschedules.

PROJECTCOST (as estimated bytheCityorproposedbytheProjectProponent)

REQUIREDBIDSECURITY

lessthanPhp5.0billion 2.0%oftheProjectCost

AtleastPhp5.0billiontolessthanPhp10.0billion

1.5% of the Project Cost or PhP100million,whicheverishigher

PhpP10.0Bandmore 1.0% of the Project Cost or PhP150million,whicheverishigher

  

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TheCityshalldeterminewhetherthebidsecurityshallbeissuedbyalocalbank,aninternationalbank,orboth.Incasethebidsecurityissuedbyan internationalbank,saidsecurityhas tobeconfirmedandvalidatedbyitslocalbranchinthePhilippinesorbyabankthatisdulyregisteredandauthorizedbytheBSP.

ThepostingofthebidsecurityisforthepurposeofguaranteeingthattheproposedcontractawardeeshallenterintocontractwiththeCitywithinthetimeprescribedtherefor.Itshallserveastheguaranteethat,afterreceiptofthenoticeofaward,thewinningbiddershallenterintocontractwiththeCitywithinthestipulatedtimeandfurnishtherequiredperformancesecurity.

Bidsandbidsecuritiesshallbevalidforaperiodtobeprescribedby the PPP‐SC in the bidding documents but in no case beyond onehundredandeighty(180)calendardaysfromthedateofopeningofbids.TheactualamountofbidsecuritytobepostedbythebidderswillbefixedbythePPP‐SCpriortobidding.Saidactualamountshallnotbelessthantheamountprescribedintheaboveschedule.

f)OtherdocumentsasmayberequiredbythePPP‐SCtosupportthebidder'stechnicalproposal.

Section31.FinancialProposal–thefinancialproposalshallcontainthefollowing,asthecasemaybe.

a) ProposedProjectCost,operationandmaintenancecost,andallotherrelatedcosts;

b) Project financing scheme, which may include the amount ofequity to the infused,debt tobeobtained for theproject,andsourcesoffinancing;and

c) FinancialbidcorrespondingtotheparameterssetbytheCityinaccordancewithSection19.A(par.6).

SECTION 32. Submission of Late Bids. ‐Bids submitted after the

deadline for submission prescribed in the “Instructions toBidders” shall beconsideredlateandshallbereturnedunopened.

SECTION 33.Receipt andOpening of Bids ‐ The proposal shall be

receivedbythePPP‐SConsuchdate,timeandplacespecifiedintheinvitationtobid.ThedeadlinesforthereceiptoftheproposalsshallbefixedbythePPP‐SC,givingitsufficienttimetocompletethebiddingprocessandgivingthePSPs

  

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sufficient time to studyandprepare theirproposals.Thedeadline shall alsoconsidertheurgencyoftheprojectinvolved.Bidssubmittedafterthedeadlineshallnotbeaccepted.

ThePPP‐SCshallpubliclyopenallproposalsatthetime,date,andplacespecified in thebiddingdocuments.Theminutesof thebidopeningshallbemadeavailabletothepublicuponwrittenrequestandpaymentofaspecifiedfee.

SECTION34.OpeningoftheEnvelopeforQualificationofBidder.–

AtthedateandtimestipulatedintheInstructionstoBidders,thePPP‐SCshallopentheenvelopeandascertainwhetherthesameiscompleteintermsoftheinformation required under Section 23 hereof. Such information shall berecordedatthetime,includingthenamesandaddressesofrequiredwitnesses.Allbiddersortheirrepresentativespresentattheopeningofthefirstenvelopesshallsignaregisteroftheopeningofthequalificationenvelope.

SECTION 35. Evaluation of Qualification Requirements.‐ Thequalification documents will first be evaluated prior to the opening of thetechnicalproposal.TheCityshallinformbidderswhethertheyarequalifiedordisqualified,andforthelatterthereasonsfordisqualification,withinten(10)calendardaysfromopeningoftheenvelopeofqualificationsofbidders.Onlyqualified bidders shall be allowed to participate in the bid evaluation.Disqualifiedbiddersshallbe informedof thegroundsofdisqualificationandtheirtechnicalandfinancialproposalsreturnedunopened.

SECTION36.‐OpeningoftheEnvelopefortheTechnicalProposal.‐At the date and time of bid opening, as stipulated in the “Instructions toBidders”, the PPP‐SC shall open only the technical proposal and ascertainwhetherthesameiscompleteintermsofthedata/informationrequiredaboveand whether the same is accompanied by the required bid security in theprescribed form, amount and period of validity. Such information shall berecordedatthetime,includingthenamesandaddressesofrequiredwitnesses.Allbiddersortheirrepresentativespresentattheopeningofthefirstenvelopesshallsignaregisterofthebidopening.

SECTION37.RejectionofBids.‐Incompleteinformationonanyoftheenvelopesand/ornon‐compliancewiththebidsecurityprescribedinSection30(par.e)shallbeagroundforautomaticrejectionofbids.

SECTION38.OpeningoftheEnvelopefortheFinancialProposal.‐Onlythosebidderswhosetechnicalproposalpassedtheevaluationcriteriaasprescribed hereof shall have their financial proposal opened for furtherevaluation.Thosewhofailedtheevaluationofthetechnicalproposalshallnot

  

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be considered further and the PPP‐SC shall return their financial proposalsunopenedtogetherwiththereasonsfortheirdisqualificationfromthebidding.

Oncethebidderswhohavequalifiedfortheevaluationofthefinancialproposalhavebeendetermined,thePPP‐SCshallnotifysaidbiddersofthedate,timeandplaceoftheopeningoftheenvelopesforthefinancialproposal.Theopeningthereofshallfollowthesameproceduresprescribedfortheopeningofthepreviousenvelopes.

SECTION39.Withdrawaland/orModificationofBids.‐Withdrawaland/ormodificationofbidsmaybeallowedonlyuponwrittennoticebythebiddertoPPP‐SCpriortothetimeanddatesetfortheopeningofbids(openingoffirstenvelopes)asspecifiedinthe“InstructionstoBidders”.Nobidsshallbemodified or withdrawn after the time prescribed to open bids. Bidmodifications receivedafter saidperiodshallbe considered lateandwillbereturnedunopened.Withdrawalofbidsafterthebidopeningdateshallcausetheforfeitureofthebidder'sbidsecurity.

RULEVIIIEVALUATIONOFBIDS

SECTION40.EligibilityScreeningofProspectivePSPs–Theeligibility

requirementsforPSPsshallprovideforfairandequalaccesstoallprospectivePSPs.TheprospectivePSPshallcertifyunderoathastothecorrectnessofthestatementsmade, and the completeness and authenticity of the documentssubmitted.

TheeligiblePSPsshallthenbeevaluatedusingnumericalratingsonthebasis of short listing requirements for the Competitive Bidding concerned,withintheperiodstatedintheInvitationtoBidtodeterminetheshortlistofPSPswhoshallbeallowedtosubmittheirrespectiveproposal.

SECTION 41. Evaluation of Bids‐ The evaluation of bids shall be

undertaken in two (2) stages, in accordancewith the procedures describedbelow:

A.FirstEnvelopeEvaluation‐Thefirstenvelopeevaluationshall

involvetheassessmentofthetechnical,operational,environmentalandfinancing viability of the proposal as contained in the PSPs’ firstenvelopesvis‐à‐vistheprescribedrequirementsandcriteria/minimumstandards andbasic parameters prescribed in the biddingdocuments.Only those proposals that have been determined to have positivelypassedthefirststageofevaluationshallbequalifiedandconsideredforthesecondstageofevaluation.

  

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ThePPP‐SCshall evaluate the technicalproposalsof thePSPs inaccordancewiththefollowingcriteria:

1)TechnicalSoundness(PreliminaryEngineeringDesign)‐Thebasicengineeringdesignoftheproject should conform to theminimumdesignandperformancestandardsandspecificationssetby the PPP‐SC as prescribed in the bidding documents. Theengineering surveys, plans and estimates should be undertakenwithin+/‐20%ofthefinalquantities.TheConstructionmethodsandschedules should also be presented and shown to be feasible or“doable”.

2)Operational Feasibility ‐Theproposedorganization,methods, andproceduresforoperatingandmaintainingthecompletedfacilitymustbe well‐defined, should conform to the prescribed performancestandards, andshouldbe shown tobeworkable.Where feasible, itshouldprovideforthetransferoftechnologyusedineveryphaseoftheproject.

3)EnvironmentalStandards‐Theproposeddesignandthetechnologyof the project to be used must be in accordance with theenvironmentalstandardssetforthbytheDepartmentofEnvironmentandNaturalResources (DENR), as indicated in the bid documents.Any adverse effects on the environment as a consequence of theproject as proposed by the prospective PSP must be properlyidentified, including the corresponding corrective/mitigatingmeasurestobeadopted.

4) Project Financing ‐ The proposed financing plan should positivelyshowthatthesamecould adequatelymeettheConstructioncostaswell as the operating and maintenance costs requirements of theproject.ThePPP‐SCshallassessthefinancingproposalsofthebiddersifthesamematchesandadequatelymeetsthecostrequirementsoftheprojectunderbidding.ThePPP‐SCshallcompletetheevaluationofthetechnicalproposalwithintwenty(20)calendardaysfromthedatethebidsareopened.B.The Second Envelope Evaluation.‐ The second envelope

evaluationshallinvolvetheassessmentandcomparisonofthefinancialproposalsofthebiddersbasedontheparametersstatedinSection19.A(par.6)hereof.ThesecondstageevaluationshallbecompletedbythePPP‐SCwithin fifteen (15) calendar days from the date the first stageevaluationshallhavebeencompleted.

  

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SECTION42.RighttoRejectAllBids.‐ThePPP‐SCreservestherighttorejectanyorallbids,waiveanyminordefectsthereinandaccepttheoffermostadvantageoustotheCity.

SECTION43.Post‐Qualification ‐TheLowestCalculatedBid/HighestRatedBidshallundergopost‐qualificationinordertodeterminewhetherthebidderconcernedcomplieswithandisresponsivetoalltherequirementsandconditionsasspecifiedintheBiddingDocuments.Withinthree(3)calendardaysfromreceiptbythePSPsofthenoticefromthePPP‐SCthatthebidderhastheLowestCalculatedBidorHighestRatedBid,thebiddershallsubmitthefollowingdocumentaryrequirementstothePPP‐SC:

a. Latestincomeandbusinesstaxreturns;

b. Other appropriate licenses andpermits requiredby lawandstatedintheBiddingDocuments;and

c. OtherdocumentsasmayberequiredbythePPP‐SC.

Failuretosubmittheaboverequirementsontimeorafindingagainstthe

veracity of such shall be ground for the forfeiture of the bid security anddisqualifythebidderforaward.

RULEIXLIMITEDNEGOTIATIONS

SECTION44.LimitedNegotiations ‐Where thePPP‐SC has failed toidentify an eligible PSP for a desired PPP activity when there is only onequalifiedbidderaftersubjectingthesametoacompetitiveselectionorbiddingorwherethedesiredPPPprojectisthesubjectofanunsolicitedproposalfromaPSP,LimitedNegotiationsmaytakeplace.ThenegotiationswillcoverallthetechnicalandfinancialaspectsofthePPPprojectoractivity;provided,thattheminimum designs, performance standards/ specifications and economicparametersstatedintheFeasibilityorProjectStudyandTermsofReferencefortheCompetitiveSelectionarecompliedwith.TheMayorshallapprovethetermsoftheLimitedNegotiationspriortotheawardofthecontracttothePSP.

RULEX

AWARDANDSIGNINGOFCONTRACTSECTION45.AwardofContract‐Withinthree(3)calendardaysfrom

thedate the financial evaluation shallhavebeencompleted, thePPP‐SCwillsubmitadetailedevaluation/assessmentreportonitsdecisionregardingthe

  

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evaluation of the bids and explain in clear terms the basis of itsrecommendations.

Within three (3) calendar days from the submission by PPP‐SC of therecommendation to award, the City Mayor shall decide on the award. Theapprovalshallbemanifestedbysigningandissuingthe“NoticeofAward”tothewinning Project Proponentwithin five (5) calendar days from approvalthereof.

AllunsuccessfulPSPsshallbeinformedinwritingofthedecisionofthePPP‐SCtoawardtheprojecttothewinningProjectProponent.Suchdecisionshallbemadeavailabletothepublicwhenrequested.

Section46.The“NoticeofAward”,whichisissuedbyCityMayor,shallindicate,amongothers,thatthewinningProjectProponentmustsubmitwithintwenty (20) calendardays fromofficial receiptof the “NoticeofAward” thefollowing:

A. PrescribedPerformanceSecurity;1. PerformanceSecurity forConstructionWorks– toguaranteethe

faithful performance by the Project Proponent of its obligationsunderthecontract,includingtheprosecutionoftheConstructionworks related to the project, the Project Proponent shall post aperformanceguaranteeinfavoroftheCityconcerned,withintheperiod and in the form and amount stipulated in the Notice ofAward. The City shall determine which form of performancesecurity it will require which may be in cash, bank draft orguaranteeconfirmedbyalocalbank(inthecaseofforeignbiddersbondedbya foreignbank), letterof credit issuedbya reputablebank, surety bond callable on demand issued by the GSIS or bysuretyorinsurancecompaniesdulyaccreditedbytheofficeoftheInsuranceCommissioner,oracombinationthereof,inaccordancewiththefollowingschedules:

a. Cash,irrevocableletterofcredit,bankdraft–aminimumoftwo

percent(2%)ofthetotalProjectCost.b. BankGuarantee–aminimumoffivepercent(5%)ofthetotal

ProjectCost.

c. Surety Bond – a minimum of ten percent (10%) of the totalProject Cost. The performance guarantee shall be valid up toacceptancebytheCityofthefacility.

2. Performance Security for Operations – For projects where the

proponentorotherthirdpartiesshalloperatetheproject,theCity

  

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shall determine whether the Project Proponent will post aperformance security for operations, simultaneously with theacceptanceofthefacility.Theperformancesecurityforoperationswillbeissuedtoguaranteetheproperoperationoftheprojectinaccordance with the operating parameters and specificationsunder thecontract.TheCity shalldetermine theamountbut theform shall be in accordance with the preceding section. Thisperformance security for operations shall be valid ninety (90)calendardaysaftertheturn‐overofthefacility,ascontemplatedinSection 65, or asmay be provided in the contract whichever islonger.

B. Proofofcommitmentoftherequiredequitycontribution,asspecifiedbythePPP‐SC:

1. in the casewhere the PSP is a corporation ‐ e.g., treasurer’s

affidavitattestingtoactualpaid‐up capital, subscriptionagreement(s)betweenashareholder(s)ofthePSPandthePSPitself covering said equity contribution, or shareholdersagreementbetweenandamongst2ormoreshareholdersoftheProject Proponent undertaking to contribute/subscribe therequiredequitycontribution;or

2. in the case of a consortium ‐ an undertaking of themembers

thereoftoinfusetherequiredequity contribution to theconsortium.

C. Proof of firm commitments from reputable financial institution toprovidesufficientcreditlinestocoverthetotalestimatedcostoftheproject;

D. In the case of a consortium, the agreement indicating that the

membersarejointlyandseverallyliablefortheobligationsofthePSPunderthecontract;or

E. Incasea specialpurposecompany (SPC) is formed forpurposesof

undertaking the project, proof of registration in accordance withPhilippinelaws.

F. SuchotherconditionsimposedbythePPP‐SC.Failuretosubmitthe

requirementswithintheprescribedtwenty(20)‐calendardayperiodwillresultinconfiscationofthebidsecurity.Withinfive(5)calendardaysuponreceiptoftheforegoingrequirementsforaward,thePPP‐SCshalldetermineandnotifythewinningPSPofitscomplianceofalltheconditionsstatedinthesaidnotice.

  

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SECTION47.PublicDisseminationofBiddingResults‐(a)ThePPP‐SCshallpostthenoticeofawardand/orbiddingresultsinthewebsitesofPPPCenterandQuezonCity,withinseven(7)calendardaysfromtheissuanceofNoticeofAward.

SECTION 48. Schedules and Timelines ‐ The City shall have the

authoritytoadoptandprescribetheappropriateschedulesandtimelinesforeachPSPselectionprocess:provided,thattheperiodsarereasonableandwillnotunderminefreecompetition,transparencyandaccountability.

RULEXIREGULATIONANDCONTRACTMANAGEMENT

SECTION 49. PPP Regulatory Authority's Mandate ‐ The PPP

RegulatoryAuthority(PPP‐RA)createdunder thisCodeshallbe taskedwithperformingcontractmanagementfunctions,suchaspartnershipmanagement(i.e., corporate governance, communication and information sharing, anddispute resolution), performance or service delivery management (i.e., riskmanagementandperformancemanagement),andcontractadministration(i.e.,variationmanagement,contractmaintenanceandfinancialadministration),forallPPParrangementsenteredintobytheCity.Asidefromthese, thePPP‐RAshallberesponsibleforsettingandmonitoringthetariff,andadministeringthesubsidypursuanttothePPPcontract.

SECTION 50. Composition of the PPP RegulatoryAuthority–A.ThemembershipofthePPP‐RAshallbecomposedofthefollowing:

Chairperson ‐ TheMayor or the CityAdministrator if sodesignatedbytheMayor;

Vice‐Chairperson‐Vice‐MayororrepresentativefromtheSangguniangPanlungsoddesignatedbytheVice‐Mayor;

Members‐

1. Two (2) representatives of the Sanggunian

belongingtotwo(2)distinctregisteredpoliticalpartiestowhichtheMayordoesnotbelong,tobechosen on the basis of proportionalrepresentation of all parties represented in theSangguniangPanlungsod;

2. CityLegalOfficer;

3. CityTreasurer;

  

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4. CityPlanningandDevelopmentOfficer;and

5. Two(2)representativesfromandchosenbytheaccreditedcivilsocietygroups,people'sandnon‐governmentalorganizationswhoaremembersofthe City Development Council. Theserepresentatives shall not be the samerepresentativesinthePPP‐SC.

B. For projects covered by government‐to‐government joint PPPundertakings, the collaborating or partner government entity shallhave one (1) representative in the PPP‐ RA, provided that suchrepresentative shall only sit inmeetings of the PPP‐RA, or portionsthereof, and have a vote only onmatters directly affecting the PPPproject covered by such joint PPP undertaking. For this purpose,government‐to‐government joint PPP undertakings means suchmutual agreement entered into by the City with other localgovernments,nationalgovernmentagencies,government‐ownedandcontrolled corporations, government instrumentalities andgovernmentcorporateentities,fortheimplementationofPPPprojectsthatwillbenefittheCityanditscommunityeveniftheprojectsiteisoutsidetheCity'sterritory.

SECTION51.ContractManager‐ThePPP‐RAmayappointacontractmanagerforaPPPprojectdependingonthePPPcontractvalue,complexityandassociatedrisks.Thecontractmanagershallhavethenecessarymanagementskillsandtechnicalknowledgeofthegoods,servicesorworkstobeprovidedunderthePPPcontract.ThePPP‐RAshalldeterminethemannerandsourceofpaymentforthecontractmanager'scompensation,providedthatifaregularemployeeoftheCityisappointedascontractmanager,he/sheshallnotreceiveadditional compensation for such appointment. The contract manager shallhave a vote on matters directly affecting the PPP project that he/she ismanaging.

SECTION52.Quorum‐AquorumofthePPP‐RAshallbecomposedofa

simplemajorityofallvotingmembers.Thechairpersonshallvoteonlyincaseofatie.

SECTION53.AdvisersandObservers‐ThePPP‐RAwiththeapproval

of theMayormay invite thirdparty experts to attend itsmeetings to act asadvisors and observers. Such third party experts may represent nationalgovernment agencies, regulatory agencies, the National EconomicDevelopmentAuthority,thePPPCenter,theDepartmentofInteriorandLocalGovernments, private sector, non‐governmental organizations and civicgroups.

  

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SECTION 54. Support Staff ‐ The PPP‐RA may form a support staffcomposedofemployeesandpersonneloftheCity.ThePPP‐RAmayalsoengageconsultantshiredpursuanttolaw.

SECTION55.ContractManagementManual

a. The City Legal Officer, City Treasurer and City Planning andDevelopmentOfficerandoneofthecivilsocietyrepresentativesof thePPP‐RA,actingasthePPP‐RAManualCommittee(PPP‐RA‐MC), shall jointly prepare a contractmanagementmanualforeachexecutedPPPcontract,whichshallserveasaguidetotheCityanditspersonnelinensuringaconsistenthighqualitycontract monitoring process that is specific for such PPPcontract.

b. The contract management manual shall be submitted to the

PPP‐RA for approval within twenty‐one (21) days from theexecutionofaPPPcontract,providedthat,foroutstandingPPPcontracts concluded prior to the effectivity of the Code, thecontractmanagementmanualshallbesubmittedtothePPP‐RAwithinonehundredtwentydays(120)daysfromtheeffectivityoftheCodeandtheprovisionsoftheCodeshallapplymutatismutandis.

c. The PPP‐RA may accept, reject, or order the revision of thecontract management at any time during the life of the PPPproject, provided that any revision subsequent to the firstacceptanceofthecontractmanagementmanualattheinceptionof thePPPprojectshall requirewrittennotice to thePSPandopportunitytobeheard.

d. Ifthecontractmanagementmanualhasnotbeenapprovedby

the PPP‐RA within seven (7) days from its submission asprovidedinparagraph(b),thesameshallbedeemedissuedandapprovedbythePPP‐RAforallpurposes.

e. ThePPP‐RAshallevaluateeachcontractmanagementmanual

quarterly,which shall be amended asmay be necessary. Anyamendment to the contract management manual shall beeffectiveupontheapprovalofthePPP‐RA.

f. ThePPP‐RA, all throughout the life of thePPPContract, shall

present, make available and explain, before and after anymaterialactionistaken,allrelevantinformationregardingtheimplementationofthePPPContract,thesubmissionsofthePSPand actions taken by the PPP‐RA, to the City DevelopmentCouncil.

  

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SECTION56.Contentsof theContractManagementManual ‐Each

contractmanagementmanualshallincludethefollowinginformation:

a. adescriptionofthePPPprojectanditshistory;b. asummaryofthekeytermsofthePPPcontract;c. rolesandresponsibilitiesofeachmemberofthePPP‐RAandotherCitypersonnelandcontractors,asapplicable,whoareinvolvedinthePPPproject;

d. rolesandresponsibilitiesofkeypersonnelofthePSP;

e. detailsofthepost‐awardconference;

f. partnershipmanagementprocedures;

g. performanceorservicedeliverymanagement;

h. contractadministration;and

i. projectcloseoutprocedures.

SECTION57.Post‐AwardConference

a. Immediately after the PPP contract is awarded, the PPP‐RAChairpersonshallcallapost‐awardconferencetoensurethattheCityand PSP have a clear and mutual understanding of the terms andconditionsofthePPPcontract,andtodeterminetheresponsibilitiesofparties.Noticeof thepost‐awardconferenceshallbesentby thePPP‐RA Chairperson at least five (5) working days before thescheduleddatethereof.

b. Thepost‐awardconferenceshallbeattendedbythemembersofthe

PPP‐RA,suchemployeesandcontractorsoftheCitywhoareinvolvedinthemanagementofthePPPcontract,andkeypersonnelofthePSP.

c. ThePPP‐RAChairpersonshallpresideatthepost‐awardconference,

and shall appoint a secretary of the conference from the Citypersonnelpresent.

d. Theminutesoftheconferenceshallbesenttoeachparticipantwithin

five(5)daysoftheadjournmentoftheconference. SECTION58.PersonnelandTrainingRequirements

  

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A. The contractmanagementmanual shall identify the City personnelinvolved in contract management, the specific roles andresponsibilities of each, and the skills and technical knowledgerequiredtoperformtheirfunctions.

B. Independent contractors may be engaged in the absence of the

qualifiedCitypersonnel,providedthat,exceptinthecaseofcontractmanagers engaged in accordancewith Section 51, contractorsmayonlybeengagedforaperiodnotexceedingthree(3)yearsfromtheeffectivedateofthePPPcontract.

Suchcontractorshall:

1. haveatleasttwo(2)understudies;and

2. provide a training program forCitypersonnel in hisfield of specialization, with such training being doneregularlyduringregularofficehours.

C. During the contract life, the City personnel shall undergo

suchcontinuoustrainingoncontractmonitoringtoensurethat the City is equipped to monitor reliably the PSP'sperformanceovertheentirelifeofthePPPcontract.

SECTION59.PartnershipManagement ‐Each contractmanagement

manual shall identify processes to ensure accountability and manage therelationshipbetweentheCityandthePSP,andshalldescribe:

a. each party's governance structure, including the overall

system of institutional structures, operating rules,compliancemechanismsandaccountabilityprocedures;

b. guidelines on communication and information sharing

between the City and the PSP, including reportingrequirements,frequencyandpurposeofregularmeetings,record‐keepingofallexchanges,andtheacceptablemodesofcorrespondencebetweenthem;and

c. the process for resolving disputes between the parties,

identifying, among others, the different levels of disputeresolution, offices and officials involved, timetable forresolvingsuchdisputes,andpossibleactionstocompelapartytoadequatelycomplywithcontractualterms.

SECTION 60. Performance or Service Delivery ‐ The contract

managementmanual shall identifymeasures to ensure that the services orgoodsprovidedby thePSPare inaccordancewith thestandardsandpricesagreedinthePPPcontract.Suchmeasureshallinclude:

  

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A. an identification of risks under the PPP contract, the

timetable for resolving such risks when they arise,contingency plans that ensure immediate resumption ofservicesintheeventofaninterruptionofservicedeliverybythePSP,andpenaltiesforfailingorrefusingtoresolvethem,provided that a separate risk mitigation plan shall bedeveloped and periodically reviewed and updatedthroughout the life of the contract for contracts withsignificantrisks;

B. clear and demonstrable key performance indicators that

demonstrate evidence of poor, satisfactory or non‐performance by the PSP, taking into consideration the costandvalueobtained,performanceandcustomersatisfaction,delivery improvement, delivery capability, benefits realizedandrelationshipstrengthandresponsiveness;

C. a performance management plan and performance

monitoring system thatwill beusedby theCity tomonitoraffordability, servicedelivery,value formoney,quality, andperformanceimprovement,whichshallinallcasesinclude:

1. atimetableandstartandenddateforeachperformance

component, including milestones with accompanyingtimeframes,dependencies,requiredordesiredoutcomes,andacceptableperformancelevels;

2. requirements and standards to be used tomonitor PSP

performance;

3. procedures and guidelines for measuring customersatisfactionandmechanismstosolicitenduserfeedback;

4. submissionofregular,accurateandtimelyreportsbythe

PSP,Citypersonnelorthecontractmanager,asapplicable,to the PPP‐RA detailing performancemonitoring effortsand the types of information that should be included insuchreports;

5. CityaccesstoPSPrecordstoallowCitypersonneltoverify

theinformationthatthePSPreportstothemandtoensurethatfundsareexpendedproperly;

6. randominspectionsofPSPrecordsandon‐sitemonitoring

visits;and

  

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7.regularmeetingswiththePSPtoreviewprogress,discussproblemsandconsidernecessarychanges;and

D. aperformancereviewandcorrectiveactionssystemthatapplyto non‐compliance or breach of contract, and penalties for non‐performanceandbonusesforgoodperformance.

SECTION 61. Contract Administration ‐ The contract managementmanualshalllaydownacontractadministrationsystem,whichshallinclude:

a. systemsandproceduresforvariationmanagement,theroles

and responsibilities of City personnel, and reportorial requirements for each event of proposed or successful contractvariation;

b. asystemforcontractmaintenance,identifyingkeycontract

deliverablesandschedules,aswellastriggerevents;and

c. systems and procedure for financial administration,including anestimateoftheresourcesthattheCitywilldevotethereto, systemsandprocedurestomakeandreceivefinancial payments, and rules for keeping records of financial transactions in accordance with the requirements of the contract.

SECTION62.ContractTermination ‐PPPContracts implementedunder

anyofthemodalitiesprescribedbytheBOTLawmayonlybeterminatedinthefollowingevents:

A. If the City fails to comply with any major obligationprescribed in the approved contract, and such failure is notremediable or if remediable shall remain unremedied for anunreasonablelengthoftime,thePSPmay,withpriornoticetotheCity,andspecifyingtheturn‐overdate,terminatethecontract.Insuch an event, the Project Proponent shall be reasonablycompensatedby theCity for actual expensesplus aReasonableRateofReturnthereonnotexceedingthatstatedinthecontractasofthedateofcontracttermination.B. IfthePSPrefusesorfailstoperformanyoftheprovisionsofthe approved contract with such diligence as will ensure theproject’s completion, operation andmaintenance in accordancewith the prescribed technical and performance standards orotherwisefailstosatisfyanyofthecontractprovisionsincludingcompliance with the prescribed/agreedmilestone activities, orcommitsanysubstantialbreachoftheapprovedcontract,theCityshall notify thePSP inwritingof the sameand if not correctedwithinthetimespecified,theCitymayterminatethecontract.In

  

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suchanevent,theCitymay:

1. Takeoverthefacility;2. AllowthePSP'slenders/creditors/bankstoexercisetheir

rights and interests under the loan and collateraldocumentswithrespecttotheproject;or

3. TakemeasuresasexplicitlyprovidedinthePPPcontract

Inanycase,theCityshallforfeittheperformancesecurityofthedefaultingPSP.

C. In the event that the contract is revoked, cancelled orterminatedby(i)theCityinaccordancewiththecontractthroughnofaultoftheProjectProponentor(ii)bymutualagreement,theCity shall compensate the said Project Proponent for its actualexpensesincurredintheprojectplusaReasonableRateofReturnthereonnotexceedingthatstatedinthecontractasofthedateoftermination.

D.Intheeventthatthecontractisrevokedorcancelledbyacourtbyfinaljudgment.

Inthecasesreferredtoin(A)and(C)above,anindependentappraiser,

mutuallyacceptabletotheCityandthePSP,shalldeterminetheamounttobepaidtothePSP,whichdeterminationshallbemadewithinaperiodnotmorethanonehundredeighty(180)calendardaysfromcontracttermination.TheamountdeterminedbytheindependentappraisershallbebindingtoboththePSPandtheCity.

For contracts implemented under any of the three (3) additionalmodalities,namelyJVs,MCs,andLease/Affermagecontracts,rulesoncontractterminationshallbegovernedbyprovisionsonterminationstipulatedunderthePPPContract.

SECTION63. Venue forLitigation ‐The venue for the resolution ofdisputes,arbitrationorlitigationshallbeexclusivelyinQuezonCity.

SECTION 64. Closeout Procedures ‐ Formal, written closeoutproceduresshallbe includedincontractmanagementplantoensurethatallgoods and services have been delivered satisfactorily, all properties aredisposed accordingly, all City properties are returned, and all amounts dueunderthePPPcontracthavebeenpaid.

SECTION 65. Expiring BOT/PPP Contracts and Transfer of and

Warranty Over the Facility – Under Contractual Arrangements involvingtransfer of the facility to the City, the transfer or turnover will necessarily

  

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include the transfer of full legal ownership over the project, all documents,propertyrights,sourcecodes,equipment,amongotherswhicharerelatedtotheprojectinfavoroftheCity,subjecttoanyexistingliensasmaybeagreeduponinthecontract.Thefacility,upontransfertoCity,shallbeoperableandingood condition. The performance indicators for the project/facility andfrequencyofmonitoring the indicators shall be stipulated in the contract.Athird‐partyshallbecommissionedtoassess theresidualvalueof the facilityupontransferorturnoverofthefacilitytotheCity.TheProjectProponentshallprovide warranty that the facility meets the project technicalspecifications/agreedsystemfeatures,performancestandardsandservicesinconnectiontherewithforaperiodnotlessthanone(1)yearfromtheturnoverofthefacility.Forthispurpose,theProjectProponentshallputupawarrantysecurity ina formtobespecifiedbytheCitywhichmaybe incash, letterofcredit, or bankdraft/guarantee issuedby a reputable local/foreignbank, orsuretybondissuedbytheGSISoranentitydulyregisteredandrecognizedbytheofficeoftheInsuranceCommissioner,callableondemandandacceptabletotheCity,oranycombinationthereofpayabletotheCity,theamountofwhichshall be determined by the City and shall be stipulated in the contract. Thewarranty security shall bemade effective immediately upon transfer of fulllegalownershipovertheprojectinfavoroftheCity,asdescribedabove.

SECTION66.Post‐ContractReview ‐Apost‐contract reviewshall be

conductedattheendofacontractperiod,whichshallincludeapost‐contractanalysis,evaluationandreportingofthePPPproject,thePSP'sperformance,and the City's contractmanagement system. The post‐contract review shalllikewiseincludeafinancialauditoftheentirePPPprojectanddeterminationoflessonslearned.Citypoliciesandproceduresshallbeupdatedwhererequired.Notwithstanding the requirement herein, if the PPP contract is subject torenewal or extension, the post‐contract review shall be conductedwithin areasonabletimebeforethedeadlineforsuchrenewalorextension.

SECTION 67. Document Control ‐ The PPP‐RA shall act as theadministratorof documents and correspondence relating to thePPPprojectandPPPcontract.Thecontractmanagementmanualshall:

a. identify the documents and correspondences that must be

retainedbythePPP‐RA;b. requirethatallsuchdocumentsbekeptinbothelectronicand

paperformatduringcontractlifeorsuchlongerperiodasmayberequiredunderapplicablelaw;and

c. lay down the protocol for document storage, logging,

accountability, disclosure and access by the parties and thepublic.

RULEXII

ACCOUNTABILITY,INFORMATION,EDUCATIONANDMONITORING

  

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SECTION68.CodeofConduct‐Beforecommencingtheirfunctions,each

memberofthePPP‐SCandPPP‐RAandthecontractmanagershallsignaCodeofConduct,whichshallguideeachmemberintheperformanceoftheirdutiesassuch.

SuchCodeofConductshallrequireeachmemberto,amongothers:

a. act at all times in accordance with relevant legislation and

regulations;

b. act at all timeswith fidelity, honesty, integrity and in the bestinterestsoftheCityanditsconstituents;

c. recognizethepublic'srighttoaccesstoinformationinaccordance

withlaw;

d. notmisusehisorherpositionandprivilegesasamemberofthePPP‐SC and PPP‐RA, whether or not such will prejudice theinterestofthepublic,thePSP,oranythirdperson;

e. totaketheutmostcareinensuringreasonableprotectionofthe

recordsofeachPPPproject,andtonotdiscloseanyconfidentialandproprietaryinformation,e.g.tradesecretsandthelike,orinviolation of any non‐disclosure requirements under law orcontract;

f. carryouthisorherdutieswiththeskillandcareexpectedofa

person of knowledge and experience, and to exercise prudentjudgment;

g. forthwith report to the appropriate authorities any act of

negligence,fraud,corruption,misuseofgovernmentfunds,failureorrefusaltoperformduties,oranyotheractwhichmayconstituteacrimeoroffense,orwhichisprejudicialtothepublicinterest,intheselectionofthePSPandimplementationofaPPPcontract;

h. forthwithdeclareanypersonalorbusinessinterestthatheorshe,

or any of his or her relatives within the fourth degree ofconsanguinityoraffinity,mayhave inanybusinessofaPSP, inwhich case, the official or representative shall no longer be amemberofthePPP‐SCandPPP‐RA;

i. forthwith declare any conflict of interest, insofar as the PPP

Project is concerned, that he or shemay have orwill have, inwhich case, the official or representative shall no longer be amemberofthePPP‐SCandPPP‐RA;

  

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j. notvoteoractinaparticularwayonanymatterinconsiderationofanyoffer,promise,giftorpresent,fromamemberofthepublic,government,apoliticalparty,socialgroupornon‐governmentalorganization,oranystakeholderorpotentialstakeholder;

k. notreceiveanygiftoranythingelseofvaluewhichisormaybeviewed as aimed at influencing or directing his or her vote oractions;and

l. todiscloseimmediatelytothePPP‐SCorPPP‐RAasthecasemay

be,anyattemptedinducementthatmaybeconstruedasaimedatinfluencingordirectinghisorheractsasamemberofthePPP‐SCandPPP‐RA.

SECTION69.DisciplinaryAction‐ViolationoftheCode,thisIRRand

the Code of Conduct insofar as City elective officials are concerned shallconstitute a ground for disciplinary action or amount to loss of confidenceunderthe1991LGCandrelevantlaws.PenaltiesmaybeimposedbythePPP‐SC and PPP‐RA through joint resolution on the erring or negligentmemberdepending on the gravity of the offense or negligence committed/omittedprovided that due process has been accorded to the latter. As regards localappointiveofficials,suchviolationshallrenderthemadministrativelyliable.

Officialsmayalsoberenderedcriminallyliableunderapplicablelawsand

ordinances. Representatives of the PSP shall be held liable for damages,offenses and crimes depending on the nature of their participation andinvolvementintheunlawfulactoromission.

SECTION70.SocialAccountability‐TheCityshallensureandpromote

socialaccountabilityandeliminateallobstacleshurdlingthereto,toallowandenhance constructive engagement between citizens' groups, academe,consumers, rate‐payers, general public, City, national government agencies,regulatoryagencies,andPSP.

SECTION 71. Transparency and Right to Information ‐ The PPP

Contract,feasibilityorprojectstudies,biddingdocuments,termsofreference,resultsof thePSP selectionprocess,CodeofConduct,ContractManagementManual,minutesofthepost‐awardconference,PPP‐RA,andPPP‐RA‐MC,andotherrelevantdocumentsandinstrumentsshallbepostedintwoconspicuousplacesoftheCityanduploadedinadedicatedwebsiteofthePPP‐RAwhichcanbe freely accessed by the public. The City shall also implement a strategiccommunicationplanaddressedtoallstakeholders.

SECTION72.Capability‐BuildingProgram

a. TheCity shall design and implement a continuing education andcapacity‐buildingprogramonPPPsforitsofficials,andthemembersofthePPP‐SCandPPP‐RA.

  

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b. The City shall also undertake a comprehensive and sustainededucation and governance campaign aimed at informing allstakeholdersandcivilsocietyorganizationsaboutPPPventuresoftheCityandallowingthemtoparticipateintheoverallPPPprogramoftheCity.Theprogramshallincludestrategicandannualevaluationand planning sessions, workshops, seminars, focus‐groupdiscussionsonPPPs,marketopportunities,projects,managementofcontractsandregulationofPPPsandotherPPP‐relatedtopics.c.TheCitymaytapconsultantstoassisttheminimplementingPPPsandinbuildingcapabilityforPPPs.

SECTION73.MonitoringandGovernanceAuditProgram‐TheCity,

in order to ensure transparency and accountability, shall encourage civilsocietyorganizations,people'sandnon‐governmentalorganizationandcivicaggrupationstoestablishaPPPmonitoring,evaluationandgovernanceauditbodyfunctionallyandfiscallyindependentfromtheCityandothergovernmentinstitutions.

SECTION74.TechnicalandFinancialAssistance‐TheDepartmentof

the Interior and Local Government, Department of Finance, Department ofBudgetandManagement,NationalEconomicandDevelopmentAuthorityandthePPPCentershallextendtechnicalandfinancialassistancetotheCityandsuch assistance shall be embodied in a memorandum of understanding oragreement.

RULEXII

FINALPROVISIONS

SECTION75.Appropriation‐NecessaryfundsareherebyappropriatedfromtheGeneralFundandotheravailablefundsoftheCityGovernmentfortheimplementationoftheCodeandthisIRR,subjecttolimitationsprovidedundertheLocalGovernmentCodeandotherpertinentlaws.

SECTION 76. Honoraria of PPP‐SC, PPP‐RA andMembers of the

Secretariat–TheCityshallgrantpaymentofhonorariatothePPP‐SC,PPP‐RAandmembersoftheSecretariatinanamountnottoexceedtwentyfivepercent(25%)oftheirrespectivebasicmonthlysalarysubjecttoavailabilityoffunds.For this purpose, the Guidelines on the grant of Honoraria to governmentpersonnel involved ingovernmentprocurementunderDBMBudgetCircularNo.2004‐5AissuedonOctober,2005shallapply.

SECTION 77. Application of Other PPP Laws and Regulations–

Whenever relevant andappropriate asdeterminedby theMayorand in theabsenceofaspecificprovisiontothecontrary,uponrecommendationofthePPP‐SCandPPP‐RAasthecasemaybe,theprovisionsofRepublicActNo.6957,asamendedbyRepublicActNo,7718ortheBOTLaw,RepublicActNo.9184

  

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ortheGovernmentProcurementReformAct,ExecutiveOrderNo.301(26July1987),CommissiononAuditCircularNo.89‐296(January27,1989),andtheirapplicablerulesandregulations,andtheJointVentureGuidelinesadoptedbythe National Economic Development Authority shall apply in a suppletorymanner.

SECTION78.IRRCommittee‐TheCityMayormayconveneacommitteetoformulateandprescribeamendmentsorrevisionstothisIRRconsistentwiththeletterandspiritofOrdinance2336Series2014.

SECTION79. SeparabilityClause ‐ If, for any reason, any section orprovision of this IRR or any part hereof, or the application of such section,provision or portion is declared invalid or unconstitutional, the remainderthereofshallnotbeaffectedbysuchdeclaration.

SECTION80.RepealingClause‐Allordinancesandresolutionsorpartsthereof inconsistentwith the provisions of this IRR are hereby repealed ormodifiedaccordingly.

SECTION81.Effectivity ‐This IRR,andanyamendmentsorrevisions

thereto,shalltakeeffectfifteen(15)daysafteritspostingintwoconspicuousplaceswithintheCity.