BIR Rules on Confidential Info and Informer Rewards

Policy and priority project system

The State policy is to encourage the private sector as the “main engine for growth and development” to finance, construct, operate, and maintain private sector infrastructure and development projects.
Government support includes appropriate incentives, including financial incentives provided by law, a climate of minimum regulations and procedures, and specific government undertakings in support of the private sector.
Concerned Agencies/LGUs must prepare infrastructure/development programs that include a List of Priority Projects for private sector implementation.
The List of Priority Projects requires approval of either the NEDA Board, the Investment Coordination Committee (ICC), or local development councils as set out in Sections 2.6 and 2.7, before bids may be called.
Approved priority lists must be publicized by publication once every six (6) months in a national newspaper of general circulation.

Definitions and project forms

“Act” means Republic Act No. 6957, as amended by Republic Act No. 7718.
“Agency/Agencies” refers to national government departments, bureaus, offices, commissions, authorities, agencies, including GOCCs authorized by law or charter to undertake infrastructure or development projects.
“Contractual Arrangements” refers to the authorized schemes, including variations approved/authorized by the President, under which projects may be undertaken.
The IRR define these contractual arrangements:
- Build-and-transfer (BT): proponent finances and constructs, then turns over to government; government pays total investment plus a reasonable rate of return on an agreed schedule.
- Build-lease-and-transfer (BLT): proponent finances and constructs; turns over upon completion under a lease for a fixed period; ownership automatically transfers to government at the end of the lease.
- Build-operate-and-transfer (BOT): proponent finances and constructs and operates/maintains for a fixed term; allowed to charge tolls/fees/rentals/charges not exceeding those proposed in the bid or negotiated into the contract; proponent transfers the facility to government at the end of a term not exceeding fifty (50) years.
- Build-own-and-operate (BOO): proponent finances, constructs, owns, operates, and maintains; recovers investment and costs plus a reasonable return via charges to users; operation and maintenance may be assigned to a facility operator.
- Build-transfer-and-operate (BTO): agency/LGU contracts turnkey building with cost/overrun/delay/performance risk assumed by the contractor; title is transferred upon satisfactory commissioning; private entity operates on behalf of implementing agency under an agreement.
- Contract-add-and-operate (CAO): proponent adds to an existing facility it is renting from government and operates the expanded project over an agreed franchise period; transfer of the added facility may or may not exist.
- Develop-operate-and-transfer (DOT): external favorable conditions are integrated by granting the right to develop adjoining property, allowing benefits created by the investment.
- Rehabilitate-operate-and-transfer (ROT): existing facility turned over to private sector to refurbish, operate, and maintain for a franchise period, then turned over to government.
- Rehabilitate-own-and-operate (ROO): existing facility turned over to private sector to refurbish and operate with no time limitation on ownership as long as franchise is not violated.
“Construction” includes new construction, rehabilitation, improvement, expansion, alteration, and related works/activities including necessary supply of equipment, materials, labor, and services.
“Private sector infrastructure or development projects” include—among others—power plants, highways, ports, airports, canals, dams, hydropower projects, water supply, irrigation, telecommunications, railroads, transport systems, land reclamation, industrial estates/townships, housing, government buildings, tourism projects, public markets, slaughterhouses, warehouses, solid waste management, information technology networks and database infrastructure, education and health facilities, sewerage, drainage, dredging, and other authorized infrastructure/development projects.

Priority approvals and publication deadlines

The approving authority for the List of Priority Projects must be applied for and secured before the call for bids.
National priority lists require approval as follows:
- Projects costing up to 300 million: submitted to the ICC for approval.
- Projects costing more than 300 million: submitted to the NEDA Board for approval upon the recommendation of the ICC.
Local priority lists implemented by LGUs require confirmation as follows:
- Municipal development council: projects costing up to 20 million
- Provincial development council: 20 up to 50 million
- City development council: up to 50 million
- Regional development council or Metro Manila Authority: above 50 up to 200 million
- ICC of the NEDA Board: above 200 million
BOO projects require Presidential approval.
For Presidential approval, the Head of Agency/LGU submits the proposed BOO project to the ICC, which evaluates and forwards it to the Office of the President with recommendations.
The ICC and the concerned local development council must act on the lists within 30 working days upon satisfactory compliance; failure to act within that period allows the Agency/LGU to proceed with solicitation of proposals if not notified otherwise in writing.
Approved lists must be published once every six (6) months in a national newspaper of general circulation, and publication may be supplemented in an international newspaper at the discretion of the Agency/LGU.

Contracting committees and bidder process

The Head of the concerned Agency/LGU must create a Prequalification, Bids and Awards Committee (PBAC) for infrastructure/development projects to be bid.
For Agencies, PBAC composition includes:
- Chairman (at least a third ranking officer)
- Member-Secretary (legal officer)
- Project technical member (technical officer, project-to-project)
- Provisional technical member from a concerned regulatory body when applicable
- Finance officer member
- Management/operation officer member
- Two private sector representatives (one from recognized contractors association; one from facility users or a duly recognized accounting association)
- Observers: Commission on Audit and CCAP case-by-case (both non-voting)
For LGUs, PBAC composition is in the manner provided under Republic Act No. 7160 (Local Government Code of 1991).
PBAC is responsible for all pre-bidding and bidding processes, including preparation of bidding/tender documents, publication and invitation, prequalification, pre-bid conferences, supplemental notices, bidding rules interpretation, bid evaluation, dispute resolution between bidders, and recommendation for acceptance and/or award.
A PBAC quorum is a simple majority of all voting members, with the Chairman voting only in case of a tie.

Bid documents, prequalification, and notices

The Agency/LGU must prepare bid/tender documents containing:
- Instructions to Bidders
- Minimum designs and performance standards/specifications and economic parameters
- Draft contract
- Bid form
- Forms of bid and performance securities
- Other documents the Agency/LGU deems necessary
Instructions to Bidders must include, among others:
- Statement that the project is prosecuted under Republic Act No. 6957 as amended by Republic Act No. 7718
- Contractual arrangement under which the project is undertaken
- Bid submission procedures and requirements (including submission mechanics, number of bid proposal copies, where bids are submitted, bid submission deadline, and permissible bid transmission modes)
- Government undertakings (including access to ODA and/or direct government appropriations) and investment incentives under Rule 13
- Bid and bid security validity period
- Milestone bonding
- Evaluation method and criteria, including minimum equity for technical and financial components
- Formulas/indices for tolls/fees/rentals/charges adjustments, when applicable
- Requirements of concerned regulatory bodies, monetary rules for foreign exchange remittances, revenue sharing arrangements, and expected commissioning date
Minimum designs and performance standards/specifications must clearly define desired outputs and environmental standards; non-conformity with minimum requirements renders bids non-responsive.
Minimum economic parameters must include, among others:
- Discount rate and foreign exchange rate as prescribed by the ICC
- Maximum period of project construction
- Fixed term for project operation and collection of charges for BOT, BOO, CAO, DOT, ROT, ROO and other authorized/approved variations
- Formula and price indices for tolls/fees/rentals/charges adjustments for those schemes
- Minimum repayment period for BT, BLT, BTO and other authorized/approved variations
The draft contract must define basic legal relationship and rights/responsibilities and include, where applicable, bonds, guarantees, insurance, liquidated damages, taxes and duties, milestone bonding schedule/amounts, price indices, governing law, force majeure, effects of changes in circumstances (including new laws/regulations and policy changes affecting viability), contract termination, and dispute resolution procedures including arbitration.
Prequalification participation is open to any individual, partnership, corporation, or firm, local or foreign, including joint ventures/consortia, subject to the IRR limits.
The Head of the Agency/LGU must publish an invitation to prequalify and bid:
- Once every week for three (3) consecutive weeks in at least two (2) newspapers of general circulation and at least one (1) local newspaper in the implementation region/province/city/municipality.
- The invitation must also indicate whether the contractor needs pre-identification for prequalification or not.
The Agency/LGU must allow at least thirty (30) calendar days from the last publication d