Executive
Order No. 278
PRESCRIBING
GUIDELINES FOR PROJECT LOAN NEGOTIATIONS AND PACKAGING OF GOVERNMENT
FOREIGN-ASSISTED INFRASTRUCTURE PROJECTS
WHEREAS,
the 1987 Constitution
and existing laws such as Commonwealth Act Nos. 138 & 541, Republic Act (RA)
No. 5183, the Official Development
Assistance (ODA) Act of 1967, as amended, and Republic Act (RA) No. 9184 (otherwise known
as the Government Procurement Reform Act)
mandate the government to give preference to qualified Filipinos in the grant of rights, privileges, and
concessions covering the national economy and patrimony, including the purchase
of materials, supplies, goods, and equipment as well as in the hiring of
consultants, contractors, architects, engineers and other professionals
necessary for a project’s implementation;
WHEREAS,
for recent
foreign-assisted infrastructure projects bid out by various government
agencies, there have been concerns raised by the Philippine Constructors
Association (PCA) and the Confederation of Filipino
Consulting Organizations (COFILCO) that Filipino
constructors and consultants are experiencing difficulty in participating in
the bidding of such projects due to various reasons such as, among others, that
the contracts have been packaged in sizes too large or beyond local financial
capabilities or that the criteria and requirements for participation have been
set above local capabilities and experience, or the criteria are set beyond the
requirements of the project;
WHEREAS,
there is a need to
prescribe guidelines in the areas of preparation and packaging of
projects/contracts and loan negotiations for government foreign-assisted
infrastructure projects which will provide Filipino constructors and
consultants with better market opportunities and allow them to upgrade their
capabilities and compete internationally;
NOW,
THEREFORE, I, GLORIA MACAPAGAL-ARROYO, President of the Republic of the
SECTION
1. General Policy on
Consultancy Services for Government Infrastructure Projects.
– As
a general rule, the government should, as much as possible, fund consultancy
services for government infrastructure projects with local funds and
using local resources and expertise. Consultancy services shall be proposed for
foreign assistance only where foreign funding is indispensable or
local funds are insufficient. For this
purpose, the concerned government units shall provide funds in
their respective investment programs for the following
consultancy services:
a.
Pre-investment
components which shall include feasibility studies and related surveys and
special studies;
b.
Detailed
engineering design and related activities (where the project is determined to
be feasible); or
c.
Project
Management/Supervision
Where Filipino
capability is determined by appropriate authorities to be insufficient,
Filipino consultants may hire or associate themselves with foreign consultants,
provided that the Filipino shall be the lead consultant.
Where
foreign funding is indispensable, foreign consultants for the project must
enter into joint venture with Filipino consultants.
SEC. 2. Packaging of Government Infrastructure
Projects
The
following basic principles shall govern the work packaging of government
infrastructure projects, irrespective of the funding source:
2.1. Large
government infrastructure projects, when feasible, shall be packaged into
separable work components without sacrificing the technical integrity of the
structure to be built and taking into account Filipino capabilities. Complex and/or multi-disciplinary
infrastructure projects covering works of a different nature requiring varied
competencies shall be packaged into separate work components to be defined in
the Implementing Rules and Regulations (IRR) of this
Order.
2.2. The
packaging of such projects shall take into account the technical and financial
capabilities and experience of Filipinos in the domestic and international
market, as well as the most logical and practical scope of work to complete a
project or any part thereof.
2.3. In
the criteria for determining eligible or pre-qualified bidders, the successful
completion of a single project whose value is at least fifty percent of the
value of the contract to be bid shall be acceptable as work experience
requirement.
2.4. Clustering
of small and medium projects may be adopted, provided that the resulting
cluster or package is within the capabilities of Filipino contractors.
2.5. However,
packaging of projects that is tantamount to or will result in contract
splitting as defined under Section 11 of Executive Order No. 109-A, for the
purpose of evading or circumventing the requirements of law and/or existing
rules and regulations, shall not be allowed.
SEC.
3. Pre-Loan Negotiations.
– Prior
to loan negotiations, the negotiating panel shall convene a technical working
group to include at least one (1) representative from the private sector to
provide inputs and ensure transparency.
The
DOF
shall invite the representative(s) upon recommendation by the Construction
Industry Authority of the Philippines (CIAP), in case
of infrastructure projects, and upon recommendation by the private sector
concerned in case of goods and consulting services.
SEC.
4. Projects Preparation and Loan Negotiation Parameters.
– In
the preparation of projects or negotiation of foreign loans for these projects, the government
negotiating panels shall strictly observe the provisions of this EO including the following parameters:
4.1. Where
special tax privileges are granted to a particular class/nationality by virtue of
the government’s international commitments, such tax privileges shall be
included in the bid offers / financial proposals for purposes of evaluation and
the basis of contract award.
4.2. To
ensure the sustained promotion of Filipino talents in all fields, effect
technology transfer, and adoption of measures that will help them become
competitive, the loan agreement shall, whenever economically viable, provide
for joint venture associations between Filipino and foreign firms.
4.3. The
government negotiating panel shall ensure that the loan agreement, including
exchanges of notes and other documents made integral parts thereof, do not
contain provisions which discriminate against Filipinos and limit their
participation in the project to be funded under the loan agreement.
SEC.
5. Implementing Rules and Regulations (IRR).
– The
NEDA Infrastructure Committee (INFRACOM)
shall pro promulgate the IRR for this Order within
sixty (60) days from date hereof.
SEC.
6. Repealing Clause.
– All
executive issuances, orders, rules and regulations, department orders,
circulars of parts thereof, inconsistent with this Order are hereby repealed,
amended and/or modified accordingly.
SEC.
7. Separability Clause.
– If any provision of this Order is declared invalid or
unconstitutional, the other provisions not affected thereby shall remain valid
and subsisting.
SEC.
8. Effectivity.
– This
Order shall take effect fifteen (15) days after its publication in the Official Gazette or in a newspaper of
general circulation.
Done in the City of
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