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SIXTEENTH CONGRESS OF THE REPUBLIC ) 
OF THE PHILIPPINES 
) 
First Regular Session 
) 
'13 
SEP 11 P 6 :34 
SENATE 
S. B. No. 1 65a 
. Introduced by Senator Maria Lourdes Nancy S. Binay 
EXPLANATORY NOTE 
Swiss Challenge or Price Matching in public bidding has long received recognition as a 
process beneficial to the goverrnnent. 
Stripped to its essentials, the concept is simple. A private sector group comes up with a 
proposal to undertake a project or simply purchase an idle asset from the concerned 
goverrnnent agency. If the concerned goverrnnent agency finds merit to the proposal, it 
invites the general public to offer the best price on the proposal through public bidding. 
However, in recognition of the initiative of the original proponent, it is given a right to match 
the best price offered by the bidders. If it can match the offer, the project/asset is given to the 
original proponent. . 
Through the above scheme, the government is guaranteed of the best price in the market for 
the proposal. Notwithstanding this, the Swiss Challenge scheme is only provided for under 
the BOT Law as Amended specifically under Section 4(a) thereof. There are Opinions of the 
Department of Justice ("DOl") and Decisions of the Commission on Audit, which allow the 
use of Swiss Challenge or Price Matching Scheme, 
In DOJ Opinion No. 55 Series of 2003 rendered to the Department of Finance ("DOF") and 
the Privatization and Management Office ("PMO"), the DOJ recognized the legality of the 
practice of a Swiss Challenge even outside the BOT Law as Amended. 
In DOJ Opinion 93-2004, the DOJ reiterated Opinion No. 55 s. 2003 as a guide to the Social 
Security System's legal question regarding a Swiss Challenge procedure that it voluntarily 
adopted for its sale Equitable PCl Bank Shares to the Banco De Oro. 
The only Supreme Court case on Swiss Challenge outside the BOT Law involves the subject 
of DOJ Opinion 93-2004, which is the case of Osmena vs. Social Security System. l The 
Supreme Court however did not rule on the issue of Swiss Challenge. 
As it stands, there is a legal uncertainty regarding the applicability of Swiss Challenge to 
projects or proposals outside the BOT Law as Amended. This uncertainty can discourage 
initiatives from the private sector as they are not given any incentive as original proponent to 
pursue their proposal. 
To remedy this uncertainty and to encourage private sector 
1533 SeRA 313 (2007) 
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participation even for those projects outside the BOT Law as Amended, the passage of this 
Bill is strongly recommended 


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SIXTEENTH CONGRESS OF THE REPUBLIC ) 
OF THE PHILIPPINES 
) 
First Regular Session 
) 
'13 
SEP 1 \ P6 :34 
SENAl¥.. 
s, B. No. 
. 053 
Introduced by Senator Mol'ia Lourdes Nancy S. Binay 
AN ACT RECOGNIZING SWISS CHALLENGE OR PRICE MATCHING SCHEME lD 
ENCOURAGE PRIVATE SECTOR PARTICIPATION IN V ARIOUS GOVERNMENT 
PROJECTS NOT COVERED BY THE BOT LAW AS AMENDED 
Be it enacted by the Senate and House of Representatives of the Philippines in Congress 
assembled: 
SECTION 1. Declaration of Policy. The State recognizes the indispensable role of the 
private sector, encourages private enterprise, and provides incentives to needed investments. 
Towards this end, the State continues to enter to public-private partnership designed to tap 
private capital for the good ofthe pnblic. 
SECTION 2. Definition of Terms. As used in this Act, the following tenns are defined as 
follows: 
a. 
Swiss Challenge - Swiss challenge is a form of public procurement which 
requires a govermnent agency which has received an unsolicited bid for a public 
project or services to be provided to government, to publish the bid and invite 
. third parties to submit proposals on the subject of the unsolicited bid. The 
entity, which submitted the unsolicited bid can match or better the best bid 
which comes out of the Swiss challenge process. 2 
. 
b. 
Original Proponent-
Any natural or juridical person submitting an 
unsolicited proposal to the appropriate government agency to undertake a 
project or to purchase. 
SECTION 3, Unsolicited Proposals. 
Unsolicited proposals for projects or services 
submitted by the private sector may be considered by the govermnent agency or local 
government unit concerned: Provided, That, (1) such projects are not part of the list of 
priority projects and (2) no direct government guarantee, subsidy or equity is required. 
SECTION 4. SWiss Challenge or Price Matching. Unsolicited proposals shall be subject to 
Swiss Challenge Procedures as discussed hereunder. Upon receipt of a proposal which meets 
the requirements under Section 3, the govermnent agency or local government unit shall 
2 This is a slightly modified version of the footnoted definition of Swiss Challenge in the Supreme Court En 
Bane Decision in Sup/ico vs. NEDA, UR No. 178830, July 14, 2008. 


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invite by publication, for three (3) consecutive weeks, in a newspaper of general circulation, 
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comparative or competitive proposals. In the event that another proponent submits a better 
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proposal, the original proponent shall have the right to match that price within thirty (30) 
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working days. Once matched, the government agency or local government unit shall award 
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the contract to the original proponent. 
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SECTION 4. Negotiated Agreement. 
If no other proposal is received after sixty (60) 
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working days from the time of the invitation by publication, the goverrunent agency or local 
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goverrunent unit may directly negotiate with the proponent and enter into an agreement. 
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SECTION 5. Applicability to Unserviceable Property or Idle Assets of the Government. The 
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Swiss Challenge or Price Matching procedures discussed herein shall apply to the disposition 
13 _ or divestment. of unserviceable property or idle assets of the Government. The goverrunent 
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agency/local government seeking to dispose unserviceable or idle assets of the Government 
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shall secure the approval of the Commission on Audit (COA). 
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SECTION 5. Implementing Rules and Regulations. The Department of Justice in 
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coordination with the Department of Budget and Management and the COA shall issue the 
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necessary implementing rules and regulations within ninety (90) days from the approval of 
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this Act. 
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SECTION 6. Separability Clause. Should any part or provision of this Act be declared 
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unconstitutional or invalid, other parts or provisions hereof not otherwise affected thereby 
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shall remain in full force and effect. 
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SECTION 7. Repealing Clause. All laws, decrees, orders, rules and regulations, other 
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issuances, or parts thereof inconsistent with the provisions of this Act are hereby repealed or 
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modified accordingly. 
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SECTION 8. Effectivity. This Act shall take effect fifteen (15) days after its publication in at 
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least two (2) newspapers of general circulation. 
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Approved,