BY ATTY. JULIUS GREGORY B. DELGADO
VALIDITY OF AN ORIGINAL PROPONENT STATUS (OPS) UNDER THE PPP CODE OF THE PHILIPPINES
On 05 December 2023, President Ferdinand R. Marcos, Jr. signed into law Republic Act No. 11966, otherwise known as the Public-Private Partnership (PPP) Code of the Philippines. Its Implementing Rules and Regulations (IRR) was issued on 21 March 2024 and became effective on 06 April 2024. Prior to the enactment of the PPP Code, various Local Government Units (LGUs) enacted their own PPP Ordinances. In fact, LGUs all over the country entered PPP arrangements or contracts with private entities.
Usually, PPP has so many modalities, but the common or prevalent modality is the so-called Unsolicited Proposal. A private project proponent submits an unsolicited proposal wherein the LGU evaluates the proposal in terms of technical and financial viability. The second stage is the negotiation of the PTCs or parameters, terms, and conditions. The third stage is comparative challenge or proposal to invite other entities to match or submit a better proposal.
Prior to the enactment of the PPP Code, PPP Ordinances usually provide the grant of Original Proponent Status upon the end of the first stage and signals the beginning of the second stage which is the negotiation stage. Under the PPP Code, the OPS is granted upon successful negotiation and has a validity of one (1) year.
Section 10 (d) (3) of the PPP Code provides that once the Implementing Agency and the Private Proponent reach a successful negotiation, the Implementing Agency shall grant the Private Proponent an OPS which shall be valid for one (1) year from conferment:
“(3) Negotiation – The Implementing Agency and the Private Proponent of the accepted Unsolicited Proposal shall negotiate the PTCs of the proposed PPP Project in good faith with the assistance of the PPP Center, pursuant to the guidelines to be issued by the PPP Governing Board: Provided, That such negotiations shall conclude within a period not exceeding one hundred fifty (150) calendar days.
If the Implementing Agency and the Private Proponent reach a successful negotiation, the Implementing Agency shall grant the Private Proponent an OPS, which shall be valid for a period not exceeding one (1) year from such conferment. The Implementing Agency shall submit the Unsolicited Proposal, including the negotiated PTCs, for approval by the appropriate Approving Body pursuant to Section 7 of this Code.”
Section 60 of the IRR provides that all OPS shall automatically expire or become invalid after one (1) year from conferment:
“Section 60. Original Proponent Status. All OPS shall automatically expire or become invalid after one (1) year from conferment. The Implementing Agency shall inform the Private Proponent in writing about the expiration of the OPS. The letter is not a prerequisite before the OPS shall be deemed invalid or expired.”
There is a question, however, as to the retroactivity of the law, particularly, regarding OPS granted prior to the effectivity of the PPP Code. It is best to seek an authoritative opinion from the PPP Center, which by virtue of the PPP Code, has been institutionalized as the clearing house of all PPP transactions, both national or local.