Requesting Entity: Department of Public Works and Highways (DPWH)
Issues Concern: Procurement of Foreign Consultants
Whether the DPWH may validly and legally procure the services of foreign consultants who entered into a Joint Venture with local consultants as Independent Consultant (IC) for the NAIA Expressway Project (Project) under the Public-Private Partnership (PPP) regime.
Section 24.3.1(e) of the revised Implementing Rules and Regulations (IRR) of Republic Act (RA) No. 9184 provides that persons/entities forming themselves into a JV, i.e., a group of two or more persons/entities that intend to be jointly and severally responsible or liable for a particular contract, shall be allowed to participate in the bidding for consulting services, provided that Filipino ownership shall be at least sixty percent (60%), which shall be based on the contributions of each of the members of the JV as specified in the JV Agreement (JVA).
Foreign consultants who formed a JV with Filipino consultants could validly and legally participate in the procurement for the Project under such JV vehicle for as long their ownership or interest in the JV does not exceed forty percent (40%).
Whether Republic Act No. 9184 and its Implementing Rules and Regulations shall apply in procurement activities wherein the funding source is based on a 50-50 share between the government and the winning concessionaire.
The mere fact that the procurement of the IC is partly funded by private funds (i.e. 50% from the winning concessionaire) does not change the nature of the procurement nor take it outside the coverage of RA 9184 and its IRR, specifically so when the transaction involves the expenditure of public funds. As long as public fund is utilized or contemplated to be spent for any procurement activity, it shall by force, fall within the ambit of the present procurement law.