Overview:

Processing of Projects
Under the BOT Law
What is BOT?
• Contractual arrangement between the government
and the private sector whereby the latter finances,
constructs, and in some cases, maintains a facility or
project

• The private proponent is allowed to charge user fees

to recover its investments

• Government and private proponents share project

risks

• Other general terms: public-private partnership (PPP),

public sector participation (PSP)
Legal Basis

BOT LAW or Republic Act 7718

Title
An Act Amending Certain Sections of RA 6957,
Entitled “An Act Authorizing the Financing,
Construction, Operation and Maintenance of
Infrastructure Projects by the Private Sector, and for
Other Purposes.”
BOT Law

Declaration of Policy

• Recognition of private sector’s role in development

• Provision of incentives to mobilize private resources

• Climate of minimum government intervention

• Specific GOP undertakings to support private sector

BOT Law

Project Types
power plants, highways, ports, airports, canals, dams,
hydropower projects, water supply, irrigation,
telecommunications, railroads and railways, transport
systems, land reclamation projects, industrial estates or
townships, housing, government buildings, tourism
projects, markets, slaughterhouses, warehouses, solid
waste management, information technology networks
and database infrastructure, education and health
facilities, sewerage, drainage, dredging, and other
infrastructure and development projects
BOT Law

Authorized Variants
Build-Operate-Transfer (BOT)
Build and Transfer (BT)
Build-Own-and-Operate (BOO)
Build-Lease-and-Transfer (BLT)
Build-Transfer-and-Operate (BTO)
Contract-Add-and-Operate (CAO)
Develop-Operate-and-Transfer (DOT)
Rehabilitate-Own-and-Transfer (ROT)
Rehabilitate-Own-and-Operate (ROO)
Other variations: approved by the President
Basic Framework (Philippine Setting)

Development Project
Development
Private Sector Agency LGU

Contractual Arrangement NEDA ICC Local

Rate of Return
Risk Allocation/Incentives
Development
Approval Undertakings, etc. NEDA Board Council

Tariff Setting Independent Regulator

Competition Solicitation of Comparative Proposals/Bidding

Award/Construction/Development of Facility
Cooperation
Concession/Cooperation Period Facility Users/Public
Processing of BOT Projects

Solicited Mode
• Agency/LGU prepares/develops the project and
contract (may provide guarantee, subsidy, equity)

• Project is in the list of priority projects of

government

• Private sector partner is identified through formal

solicitation of proposals/public bidding
Processing of BOT Projects

Unsolicited Mode
• Private sector prepares/develops the project and
contract; submits to Agency/LGU

• Must have new concept or technology and/or not in

the list of priority projects

• No direct government guarantee, subsidy, equity

• Private sector partner is identified through formal

solicitation of comparative proposals
(Swiss Challenge)
 Process for Solicited Proposals 1/4

PRIVATE SECTOR PROCESS FLOW GOVERNMENT

PROJECT ID AND
PREPARATION Agency/LGU prepares feasibility study and contract. Submits to
Approving Body

APPROVAL OF THE Approving Body is given 30 calendar days to approve the project
PROJECT PROPOSAL and contract.
AND CONTRACT BY THE
APPROVING BODY

Secure pre-qualification (PQ) documents and

ADVERTISEMENT/ Upon approval of project and contract, Agency/LGU PBAC
instructions from the Agency/LGU
publishes PQ invitation.
INVITIATION TO PRE-
QUALIFY AND TO BID

Prepare PQ documents at least 30 calendar PREPARATION OF PQ

days from last date of publication of invitation. DOCUMENTS
For projects of at least PhP 300M,
preparation period is at least 45 calendar
days from last date of publication of invitation.

A
 Process for Solicited Proposals 2/4

PRIVATE SECTOR PROCESS FLOW GOVERNMENT

A
Agency/LGU PBAC shall pre-qualify bidders
Disqualified bidders may appeal within 15 within 30 calendar days from the deadline of
working days from receipt of notice of PRE-QUALIFICATION OF BIDDERS
submission of PQ documents. PBAC shall inform
disqualification. pre-qualified and disqualified bidders within 7
calendar days after approval of PQ results.

Pre-qualified bidders are given: The PBAC shall hold a pre-bid conference:
a) 90 days to prepare proposals for projects ISSUANCE OF REQUEST FOR a) 30 calendar days before deadline of
costing less than PhP 300M PROPOSAL (RFP)/BID PREPARATION submission of bids for projects costing less than
b) 120 days for projects costing PhP 300M and PhP 300M
above.
b) 60-120 calendar days for projects costing PhP
300M and above.

Bidders submit proposals in two envelopes:

First envelope-Technical proposal and bid BID SUBMISSION AND Agency/LGU PBAC evaluates the following:
security EVALUATION a) Technical Proposal-within 30 calendar days
Second envelope-Financial proposal
b) Financial Proposal-within 15 calendar days
from date of completion of the evaluation of
technical proposals
B
 Process for Solicited Proposals 3/4

PRIVATE SECTOR PROCESS FLOW GOVERNMENT

B
PBAC submits to the Head of Agency/LGU recommendation for
contract award within 7 calendar days after completion of
APPROVAL OF CONTRACT financial evaluation. Head of Agency/LGU approves the PBAC
AWARD recommendation of award within 7 calendar days after receipt.

All unsuccessful bidders will be informed in writing of the bid

results.

Winning Proponent receives NOA and shall Head of Agency/LGU signs and issue NOA indicating the
comply within 30 calendar days with all ISSUANCE OF NOTICE OF requirements to be submitted within 30 calendar days from
conditions stated therein. AWARD official receipt of NOA.

Within 7 calendar days upon receipt of requirements of award,

Head of Agency/LGU shall determine and notify winning
Proponent of its compliance of all conditions stated in NOA.

If deadline is not met and unless extended, the Agency/LGU

could confiscate bid security.

C
 Process for Solicited Proposals 4/4

PRIVATE SECTOR PROCESS FLOW GOVERNMENT

C
The authorized signatory of the winning The authorized signatory of the Agency/LGU is required
Proponent is required to sign the contract EXECUTION / APPROVAL OF to sign the contract within 7 calendar days from receipt of
within 7 calendar days from receipt of advice CONTRACT winning proponent of the advice from Agency/LGU that
from the Agency/LGU that it has complied the former has complied with all conditions stated in NOA.
with all conditions stated in the NOA.
The contract shall be effective upon signing by the Head
of the Agency/LGU and unless another date is stipulated
therein.

An original signed copy of the contract shall be submitted

to the Approving Body within 7 calendar days after
signing.

Agency/LGU shall issue the Notice to Commence

Complies with all conditions precedent for ISSUANCE OF NOTICE TO Implementation of the project to the winning proponent
contract implementation. COMMENCE IMPLEMENTATION not later than 7 calendar days from the date of
& CONTRACT IMPLEMENTATION approval/signing of the contract by the Head of
Agency/LGU.

Agency/LGU complies with conditions precedent for

contract implementation.
 Process for Unsolicited Proposals 1/5

PRIVATE SECTOR PROCESS FLOW GOVERNMENT

Proponent prepares and submits to the Agency/LGU acknowledges receipt and advises the proponent
SUBMISSION OF A
Agency/LGU a complete proposal: F/S, within 7 calendar days from submission, if proposal is complete,
company profile and the draft contract COMPLETE PROPOSAL
or if incomplete what additional information is necessary.

If proposal is complete, Agency/LGU, within 30 calendar days,

EVALUATION OF THE
evaluates the project proposal, qualify the proponent and advises
PROPOSAL
whether it accepts or rejects the proposal. Acceptance gives the
proponent the “Original Proponent” status.

Agency/LGU shall negotiate with the Project Proponent. The

NEGOTIATION WITH Agency/LGU shall secure confirmation of the indicative
APPROVAL BY
ORIGINAL PROPONENT Reasonable Rate of Return from the Approving Body prior to
APPROPRIATE BODY
negotiation. Negotiations should be concluded within 90 calendar
days.

APPROVAL OF THE Head of Agency/LGU endorses the proposal and the contract to
PROJECT PROPOSAL the Approving Body. It shall be accompanied by an evaluation by
AND CONTRACT BY THE the Agency/LGU of the project’s merits as justification for
APPROVING BODY accepting the project. Decision on the approval of the project and
contract should be concluded within 30 calendar days.

ADJUSTMENTS OF Prior to bidding, the Agency/LGU shall secure either the advice of
TOLLS / FEES / RENTALS the Regulator or the approval of the Approving Body or both, as
/ CHARGES the case maybe, for the pre-determined formula and official price
indices for the adjustment of tolls, fees, rentals and charges that
A may be granted during contract implementation.
 Process for Unsolicited Proposals 2/5

PRIVATE SECTOR PROCESS FLOW GOVERNMENT

A
Within 45 calendar days from receipt of the
Notice of Approval issued by the Approving Body,
the Original Proponent shall notify the ACCEPTANCE OF TERMS AND
Agency/LGU in writing of its acceptance of all CONDITIONS BY THE ORIGINAL
terms and conditions of the approval of the PROPONENT
Approving Body. Failure to accept in writing
means rejection of the unsolicited proposal. The Agency/LGU PBAC shall publish the invitation
for comparative proposals after receipt of the
The Original Proponent posts a bid bond on the ISSUANCE OF INVITATION FOR notification from the Original Proponent that the
first date of the publication of the solicitation of COMPARATIVE PROPOSAL latter accepts all the terms and conditions
comparable proposals. indicated in the Notice of Approval. The invitation
shall be published in :
a) At least, once/week for 3 consecutive
weeks in at least 1 newspaper of general
circulation;
b) If available, said invitation should also be
posted in the website of the Agency/LGU
concerned during the stated period; and
c) For projects costing USD 10 million, the
invitation may also be published at least
once in at least 1 international publication.

Comparative Proponents have 60 working days PREPARATION AND SUBMISSION

The PBAC shall hold a pre-bid conference 10
to submit proposals OF COMPARATIVE PROPOSALS
working days after the issuance of the tender
documents
B
 Process for Unsolicited Proposals 3/5

PRIVATE SECTOR PROCESS FLOW GOVERNMENT

B
The PBAC evaluates the following:
a) 1st envelope within 30 calendar days from the deadline set for
EVALUATION OF PROPOSALS the submission of bids;
b) 2nd envelope of qualified comparative proponents shall be
evaluated within 30 calendar days; and
c) 3rd envelope of technically complying comparative proponents
shall be evaluated within 15 calendar days.

If the price of the Original Proponent was not disclosed in the

tender documents, it shall be revealed upon the opening of
the financial proposals of the technically complying
comparative proponent.
The Original Proponent shall have the right to
If the price of the winning comparative proponent is not
match the best proposal within 30 working DETERMINATION OF THE matched, then its price shall be considered for award. In the
days upon the official notification by the WINNING PROPONENT event of its refusal, inability or failure to enter into contract
Agency/LGU of the most advantageous
with the Agency/LGU, the latter shall consider for award the
financial proposal.
bidder with the next-ranked complying comparative bid which
is better the offer of the Original Proponent. The Original
Proponent shall then again be given to right to match the
comparative proponent’s bid. If no comparative bid offer then
it will be awarded to the Original Proponent.
C
 Process for Unsolicited Proposals 4/5

PRIVATE SECTOR PROCESS FLOW GOVERNMENT

C
PBAC submits to the Head of Agency/LGU recommendation for
contract award within 7 calendar days after completion of
APPROVAL OF CONTRACT financial evaluation. Head of Agency/LGU approves the PBAC
recommendation of award within 7 calendar days after receipt.

All unsuccessful bidders will be informed in writing of the bid

results.

Head of Agency/LGU signs and issue NOA indicating the

Winning Proponent receives NOA and shall ISSUANCE OF NOTICE OF requirements to be submitted within 30 calendar days from official
comply within 30 calendar days with all AWARD (NOA) receipt of NOA.
conditions stated therein.
Within 7 calendar days upon receipt of requirements of award,
Head of Agency/LGU shall determine and notify winning
Proponent of its compliance of all conditions stated in NOA.

If deadline is not met and unless extended, the Agency/LGU

D could confiscate bid security.
 Process for Unsolicited Proposals 5/5

PRIVATE SECTOR PROCESS FLOW GOVERNMENT

D
The authorized signatory of the winning The authorized signatory of the Agency/LGU is required
Proponent is required to sign the contract EXECUTION / APPROVAL OF to sign the contract within 7 calendar days from receipt of
within 7 calendar days from receipt of advice CONTRACT winning proponent of the advice from Agency/LGU that
from the Agency/LGU that it has complied the former has complied with all conditions stated in NOA.
with all conditions stated in the NOA.
The contract shall be effective upon signing by the Head
of the Agency/LGU and unless another date is stipulated
therein.

An original signed copy of the contract shall be submitted

to the Approving Body within 7 calendar days after
signing.

Agency/LGU shall issue the Notice to Commence

Complies with all conditions precedent for ISSUANCE OF NOTICE TO Implementation of the project to the winning proponent
contract implementation. COMMENCE IMPLEMENTATION not later than 7 calendar days from the date of
& CONTRACT IMPLEMENTATION approval/signing of the contract by the Head of
Agency/LGU.

Agency/LGU complies with conditions precedent for

contract implementation.
Thank you

Overview:
Processing of Projects
Under the BOT Law