Recent corruption scandals in infrastructure and election-related procurements have highlighted deep systemic weaknesses in the regulation of joint venture (JV) participation under our procurement laws. Our analysis shows that minimalist Joint Venture Agreement (JVA) requirements, permissive eligibility rules, and limited post-qualification capacity assessments have allowed opportunities for manipulation, concealment, and eligibility “renting.” These gaps have not been substantively addressed by RA 12009 or its IRR, even as the new law expands flexible and discretion-based procurement modalities, thereby increasing the need for stronger JV oversight.
R2KRN submitted to GPBB and ICI a paper that outlines three key reform directions that we respectfully urge the GPPB to consider:
- Strengthen the Substantive Disclosures in Joint Venture Agreements
A core weakness of the current system is the treatment of the JVA as a largely private commercial document, even when it governs participation in public contracts of large financial, operational, and governance significance. This is inappropriate for public procurement, where the State must be able to evaluate how a joint venture will function in practice. To correct this, the regulatory framework should require JVAs to contain substantive provisions that enable procuring entities and the public to understand how the joint venture intends to deliver the contract.
- Align Eligibility Contributions with Actual Performance Responsibilities
A second reform aspect to address is the problem of “eligibility renting,” in which a JV partner provides the SLCC, NFCC, or other eligibility credentials but performs little or none of the actual work. This practice defeats the purpose of eligibility requirements, distorts competition, and exposes projects to significant implementation risks. To mitigate this problem, the regulatory framework should require that any JV partner whose credentials supply a critical eligibility component must perform a reasonably proportional share of the corresponding contractual obligations. This ensures that documented experience, financial capacity, and technical qualifications translate into real and measurable participation in project delivery. It also curbs the formation of instrumental or nominal partnerships designed solely to circumvent eligibility barriers.
- Enhance Capacity Assessment and Post-Qualification Verification of Joint Ventures
A recurring challenge in the current system is that eligibility checks and post-qualification collapse into mere document verification, without examining whether the JV structure translates into real capacity to deliver the project. In practice, agencies are content with minimum compliance. To address this gap, regulatory reforms should require procuring entities to evaluate the JV holistically during post-qualification. This must include verifying the accuracy and plausibility of the declared contributions; confirming the actual availability of personnel, equipment, facilities, and financial resources committed by the respective contributing partners; and assessing whether the JV’s internal governance arrangements are adequate for the scale and complexity of the project. Such verification is essential, especially where JV participation is used to pool capacities for large, technical, or mission-critical procurements.
We believe that these recommendations fall squarely within the Board’s authority to prescribe the documentary, procedural, and evaluative standards necessary to operationalize the governing principles of RA 12009.
Read the full policy paper here: R2KRN Policy Paper – Opacity of Joint Ventures
See R2KRN’s transmittal letter to GPBB: R2KRN Transmittal to GPPB
See R2KRN’s transmittal letter to ICI: R2KRN Transmittal to ICI