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Processing Unsolicited PPPs under the PPP Code and its IRR

  1. What is an Unsolicited Proposal?
    An Unsolicited Proposal (USP) refers to a project proposal made by a Private Proponent to undertake a PPP Project pursuant to Section 10 of Republic Act No. 11966 or the PPP Code of the Philippines, and Title V of its IRR (Section 3(ii) of the PPP Code and Section 4(jjj) of its IRR).
  2. I am a Private Proponent interested to submit a new Unsolicited Proposal under the PPP Code. Where do I submit my Proposal?
    Interested Private Proponents may submit their USP to the PPP Center through https://usp-completeness-check.ppp.gov.ph/. Any other form of submission shall not be accepted and shall not be considered for completeness check.
  3. What is considered a complete Unsolicited Proposal?
    The Procedures for the Submission of Unsolicited Proposals to the PPP Center for Determination of Completeness and Appropriate Approving Body pursuant to Section 10(a) of Republic Act No. 11966 and Sections 52 and 53 of its Implementing Rules and Regulations published on April 6, 2024 provide the checklist for assessing the completeness of USPs, as well as the forms to be filled out as part of the requirements for completeness check:

    1. Completeness Checklist for Unsolicited PPP Proposals
    2. Completeness Check Forms 1-5
    3. Private Proponent Information and Qualification Form
  4. Upon submission to the PPP Center, how will a new Unsolicited Proposal be processed?
    1. Unsolicited Proposals submitted between 8:00AM to 5:00PM, from Monday to Friday, shall be acknowledged via email on the same day, copy furnished the identified Implementing Agency/ies. Unsolicited Proposals received outside of business hours shall be considered submitted, and shall be acknowledged, on the following working day.
    2. Once the submission is acknowledged by the PPP Center, no supplementary submissions or documents from the Private Proponent shall be accepted and considered.
    3. Within ten (10) calendar days from the issuance of the official acknowledgement, the PPP Center shall then determine the completeness of the Unsolicited Proposal and the appropriate Approving Body.
      In computing the period for the ten (10)-calendar day completeness check, the first day shall be excluded and the last day included. If the last day of the completeness check falls on a non-working day (i.e., Saturday and Sunday), legal holiday, special non-working holiday, or other non-working days duly declared by the President or the Mayor of the city where the PPP Center office is located, it is understood that the last day shall be the next working day.
    4. The PPP Center may call for a meeting with the Private Proponent to clarify details about the submitted documents and/or to discuss initial findings on the Unsolicited Proposal.
    5. If the Unsolicited Proposal is determined to be complete by the PPP Center, it shall endorse the proposal to the appropriate Implementing Agency/ies in writing. Said official endorsement, copy furnished the Private Proponent, shall indicate the PPP Center’s: (a) confirmation of the completeness of the submitted Unsolicited Proposal, and (b) determination of the appropriate Approving Body for the proposed project.
    6. If the Unsolicited Proposal is determined to be incomplete by the PPP Center:
      1. it shall notify the Private Proponent in writing, clearly listing down the lacking information or requirement and returning all the documents submitted by the Private Proponent. The decision of the PPP Center to return the Unsolicited Proposal shall be final and non-appealable.
      2. the Private Proponent whose submission is determined to be incomplete shall not be precluded from resubmitting another Unsolicited Proposal for the same project, which shall be considered as a new submission and shall be reviewed following the stated period. The resubmission shall address all the deficiencies identified by the PPP Center.
    7. If the PPP Center fails to render a final decision within the prescribed ten (10) calendar days, the Unsolicited Proposal shall be deemed incomplete.

  5. What happens to an Unsolicited Proposal under the PPP Code once it is declared complete?
    5.1 Endorsement of the USP to the IA (Section 53 of the IRR)
    Once a USP is declared complete by the PPP Center for purposes of evaluation by the IA, such USP shall be endorsed by the PPP Center to the IA. The endorsement shall include (1) the determined appropriate Approving Body and (2) PPP Center’s confirmation that the USP does not contain any Government Undertaking (GU) based on the certification and valuation report submitted by the Private Proponent.
    5.2 Initial Processing of the USP by the IA (Section 54 of the IRR)
    Upon receipt of the complete USP endorsed by the PPP Center, the IA will have 10 calendar days to decide whether to continue processing the USP as endorsed by the PPP Center or reject the USP, in accordance with the following processes:

    1. If the IA is not developing a Solicited Project with similar scope and/or objective as the USP, the IA shall either:
      1. continue processing the USP and proceed to detailed evaluation of the USP (see item 5.3); OR
      2. reject the USP if such proposal is deemed not aligned with the development plans of the IA.
    2. If the IA is already developing a solicited proposal with similar scope and/or objective as the USP, the IA shall either:
      1. continue processing the USP and proceed to detailed evaluation; and cease processing the Solicited Project with similar scope and/or objective already being developed, subject to reimbursement of development costs (see item 6(a)); OR
      2. continue processing the Solicited Project and reject the USP.
    The decision of the IA shall be made in writing and submitted to the Private Proponent and the PPP Center. In case the decision of the IA is to reject the USP ((a)(ii) or (b)(ii)), the written decision of the IA shall include the corresponding justification for its rejection.

    5.3 Detailed Evaluation of the USP by the IA (Section 55 of the IRR)

    If the IA decides to continue processing the USP found to be complete by the PPP Center, the IA shall conduct a detailed evaluation within 90 calendar days from the issuance of the written decision to continue processing the USP. In case the PPP Center endorsed more than one USP for the same or similar project, the IA shall conduct a detailed evaluation of all endorsed complete USPs and determine the most advantageous proposal for the government and the public among the submitted proposals.

    After conducting the detailed evaluation, the IA shall either:

    1. accept the proposal and proceed to negotiation pursuant to Section 58 of the IRR;
    2. accept the most advantageous USP, in case of multiple USP for the same or similar project, and proceed to negotiation pursuant to Section 58 of the IRR;
    3. reject the USP or all similar USPs; OR
    4. reject the USP or all similar USPs and bid out the project as a Solicited Project.
    The IA shall inform the Private Proponent, copy furnished the PPP Center, in writing of the action it decides to take on the USP, no later than 3 calendar days from the end of the detailed evaluation.

    If the IA accepts the USP or the most advantageous USP, the written decision of the IA shall include the (1) notice that the negotiation for the subject USP will commence, (2) commencement date of the negotiation, (3) mechanics of the negotiation, and the (4) representatives of the IA to the negotiation committee.

    If the IA rejects the USP, all documents submitted shall be returned to the Private Proponent.

    If the IA fails to act on the USP 90 calendar days after the end of the detailed evaluation period, the project proposal shall be deemed approved to proceed to negotiation. If the IA fails to act on multiple similar proposals, the first submitted proposal deemed complete shall be the USP considered as approved to proceed to negotiation.

    5.4 Negotiation (Section 58 of the IRR)

    If the IA proceeds to accept the USP or the most advantageous USP, the IA and the Private Proponent shall negotiate in good faith within a period of at least 80 calendar days, but not less than 30 calendar days, based on the complexity of the USP, from the commencement date of the negotiation. The period may be extended to a maximum of 150 calendar days. A negotiation committee shall be established for the conduct of the negotiation.

    1. If the IA and the Private Proponent reach a successful negotiation, the IA shall grant an Original Proponent Status (OPS) to the Private Proponent, which shall be valid for a period of 1 year from conferment. If the Approving Body for the PPP project is the Head of the IA, the Head of IA shall also confirm that all requirements have been met and approve the negotiated PTCs, before conferring the OPS. Conferment of the OPS in such cases shall mean approval of the PPP project.
    2. If the IA and the Private Proponent failed to reach successful negotiation, the IA shall reject the USP in writing within 7 calendar days from the lapse of the negotiation period or the declaration of the failure of negotiation.
    3. If the IA fails to act during the negotiation period, such shall be deemed a failure of negotiation.
    The IA shall inform the PPP Center if the negotiation succeeded or failed and furnish copies of the relevant documents in case of successful negotiation.
    5.5 Approval of the USP by the appropriate Approving Body (Title IV of the IRR)

    If the IA and the Private Proponent reached a successful negotiation, they shall submit the complete set of requirements for approval, including the negotiated parameters, terms, and conditions (PTCs), to the appropriate Approving Body pursuant to Section 7 of the PPP Code and Title IV of the IRR.

    5.6 Procurement of the USP / Comparative Challenge Process (Title VI of the IRR)

    Once the USP is approved by the appropriate Approving Body, the USP shall be subjected to comparative challenge.

    The IA shall, within 7 calendar days upon approval by the appropriate Approving Body, publish an invitation for the submission of comparative proposals. Thereafter, the IA shall prepare and issue the comparative challenge documents within 20 calendar days after the said 7 calendar days. The IA shall propose the length of the challenge period to the appropriate Approving Body; the period of which shall not be less than 90 days and not exceed a period of 1 year from the issuance of comparative challenge documents.

    A right-to-match mechanism is provided; the period of which shall be 30 calendar days. The Original Proponent (OP) shall have the right to match or better the financial proposal of the most superior comparative proposal. If the OP is able to match the proposal of the challenger or if there are no challengers during the comparative challenge period, the IA shall award the PPP Project to the OP. Otherwise, the PPP Project shall be awarded to the winning challenger.

    If tie proposals occur, the IA shall award the PPP Project to the OP.

    To download the flowchart of the USP process under the PPP Code and its IRR, please click here.

  6. What are the special rules on Unsolicited Proposals under the PPP Code?
    Special rules on USPs are as follows:

    1. USPs are allowed for projects in the List of PPP Projects, subject to Private Proponent’s reimbursement of the government’s documented development costs for the last 3 years from submission of the USP; not exceeding six percent (6%) of the Project Cost excluding the cost of right-of-way (ROW) acquisition (Section 10(c) of the PPP Code and Section 49 of the IRR). The reimbursement shall be made by the winning bidder as a condition for award, or by the Private Proponent who submitted the USP in case the USP did not proceed due to failure of negotiation.
    2. Any change in the composition of the OP that will affect its majority ownership shall be strictly prohibited (Section 10(b)(2) of the PPP Code).
    3. Pursuant to Section 10(c) of the PPP Code and Section 50 of the IRR, the following GUs are prohibited for USPs:
      Prohibited GUs for Unsolicited Proposals Definition /related provision under the PPP Code and the IRR
      i. VGF and other forms of Subsidy Subsidy refers to an agreement where the IA will: (1) defray, pay for, or shoulder a portion of the Project Cost or the expenses and costs in operating or maintaining the project; (2) bear a portion of capital expenditures associated with the establishment of an infrastructure or development project and services; (3) contribute any property or assets to the project; and/or (4) waive charges or fees relative to business permits or licenses that are to be obtained for the Construction of the project: Provided, That items (1) to (4) shall not be considered as Subsidy if the government receives payment or remuneration from the Private Partner for such: Provided, further, That subsidy falling under items (1) and (2) shall not exceed fifty percent (50%) of the Project Cost: Provided, finally, That in the case of solicited proposals, the expenses for existing ROW or ROW to be acquired shall not be included in the said cap. Subsidy shall also include Viability Gap Funding (VGF) which refers to a type of Subsidy that may be extended by the government to make an economically viable revenue-based PPP Project financially viable: Provided, That government payments for ROW, and resettlement shall not be considered as VGF. VGF may also be extended to revenue-based PPP Projects having an element of Availability-based PPP.
      ii. Payment of ROW-related costs Payment of ROW-related costs may be allowed if the government receives appropriate compensation, which shall in no case be lower than the value of the costs of ROW to be acquired; Provided, That the Private Partner must submit a ROW acquisition and resettlement plan, which shows the extent of ROW that has been acquired and ROW necessary to be acquired for the PPP Project; Provided, further, That the Private Partner shall advance the payment for such ROW acquisition and related costs.
      iii. Performance undertaking Performance Undertaking refers to an undertaking of a department, bureau, office, commission, authority, agency, GOCC, LGU, or by the Republic of the Philippines, other than the Implementing Agency, in assuming responsibility for the performance of the Implementing Agency’s obligations under the contractual arrangement including the payment of monetary obligations, in case of default. These undertakings may be subject to payment of risk premium to the government or LGU, or any other authorized agency.
      iv. Additional exemptions from any tax other than those provided for by law Additional exemptions from any tax specifically provided for the PPP Project through a legal issuance, other than those provided for by applicable laws
      v. Guarantee on Demand Guarantee on Demand refers to an agreement where the IA undertakes to assume the market demand risks associated with the PPP Project: Provided, That the adoption of availability-based schemes and Availability Payments shall not be considered as Guarantee on Demand.
      vi. Guarantee on Loan Repayment Guarantee on Loan Repayment refers to an agreement where the IA guarantees to assume responsibility for the repayment of debt directly incurred by the Private Partner in implementing the PPP Project in case of a loan default. As an exception, government repayment of debt as part of Termination Payments shall not be considered as Guarantee on Loan Repayment.
      vii. Guarantee on Private Sector Return Guarantee on Private Sector Return refers to an agreement where the IA guarantees to provide a predetermined rate of return on the investment of the Private Partner. This shall not cover Termination Payments arising from government events of default.
      viii. Government equity Government Equity refers to the subscription by the Implementing Agency of shares of stock or other securities convertible to shares of stock of the project company, whether such subscription will be paid by money or assets.
      ix. Contributions of assets, properties, and rights Contributions of the usufruct of assets, properties, and/or rights may be allowed if the government receives appropriate compensation, which shall in no case be lower than the value of the usufruct of assets, properties and/or rights contributed, subject to fair valuation by a Third-party Appraiser. In determining such compensation, taxes, handback value of government assets, and cash flows incidental to the PPP Project shall not form part of the compensation for the usufruct of assets, properties, and rights contributed.
      For JV arrangements, GUs viii and ix may be allowed.
  7. I have further inquiries regarding the completeness check and/or the submission process of Unsolicited Proposals. Where should I direct my questions?
    You may address your queries to evaluation@ppp.gov.ph.

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