2012-07-16

NPM 089-2012

Requesting Entity: Light Rail Transit Authority

Issues Concern: Single Largest Completed Contract Requirement for an Incorporated Joint Venture

 

Details

Whether the track record of partners may be considered and credited in favor of an incorporated Joint Venture (JV) for the purpose of complying with the technical eligibility requirements on the procurement of infrastructure projects.

A contractual JV is an unincorporated JV with no equity participation between the partners and their relations, rights and liabilities, as among themselves and in respect of third parties, are principally governed by contract or agreement. It does not have a legal personality distinct from its partners. On the other hand, an equity JV is an incorporated JV, which possesses a legal personality separate and distinct from the partners, who own a certain percentage of the equity. It is treated for all intents and purposes as a corporation and not merely a JV.

[T]he BAC may consider the individual experiences of the JV partners. Since the SLCC is a technical eligibility requirement under the IRR of RA 9184, any one of the JV partners in the unincorporated/contractual JV may submit the same as part of the bidding documents.

However, in the case of corporations, including incorporated/equity JVs, the track record of stockholders or individual juridical joint-ventures could not be credited in favor of the former. It is a settled rule that a corporation has a personality separate and distinct from its individual stockholders or members, and is not affected by the personal rights, obligations and transactions of the latter.

The SLCCs of the stockholders or individual juridical joint-ventures are personal to them and could neither be credited nor recognized in favor of the newly created equity JV corporation in the same manner that it could not be held liable for the obligations and liabilities of its stockholders.