Project Delivery Methods

Learning Objectives

  • Distinguish project delivery, procurement, and pricing decisions and identify the contractual relationships created by major delivery methods.
  • Compare Design-Bid-Build, Design-Build, Construction Management Agency, CM at Risk, EPC, EPCM, multiple-prime, and Integrated Project Delivery without treating any method as a guaranteed performance outcome.
  • Evaluate how design responsibility, cost risk, schedule integration, owner control, constructability, interface risk, and change management differ among delivery structures.
  • Explain Republic Act No. 11966, the PPP Code of the Philippines, as the current principal statutory framework for Philippine PPP projects and identify the former BOT Law only as historical/transitional context.
  • Distinguish national and local PPP concepts and describe the PPP project lifecycle at a conceptual level without inventing approval thresholds or procedures.

Project Delivery Method

A project delivery method is the contractual structure by which an owner organizes responsibility for design, construction, and related project services. It is distinct from the procurement method used to select a party and from the pricing mechanism used to pay that party.

Do Not Confuse Delivery, Procurement, and Pricing

  • Delivery method answers: who contracts with whom, and who carries design/construction responsibility?
  • Procurement method answers: how are designers, builders, or private partners selected?
  • Pricing arrangement answers: how is compensation calculated or adjusted?

A design-build project can use a lump-sum or another pricing model. A Design-Bid-Build construction contract can use lump sum or unit prices. A PPP can contain an EPC contract inside a much larger financing and operating structure. These labels are related but not interchangeable.

Do Not Confuse Delivery, Procurement, and Pricing

Classify a project decision by the question it answers before attaching risk conclusions to labels such as design-build, competitive procurement, lump sum, or PPP.

These are different decision layers that can be combined in many ways. Delivery allocates contractual responsibility for design/construction and related services; procurement selects the party or partner; pricing defines how compensation is calculated; a PPP can overlay financing, operations, maintenance, and public-service obligations. No branch implies a guaranteed cost or schedule outcome.

Do Not Confuse Delivery, Procurement, and PricingClassify a project decision by the question it answers before attaching risk conclusions to labels such as design-build, competitive procurement, lump sum, or PPP.. These are different decision layers that can be combined in many ways. Delivery allocates contractual responsibility for design/construction and related services; procurement selects the party or partner; pricing defines how compensation is calculated; a PPP can overlay financing, operations, maintenance, and public-service obligations. No branch implies a guaranteed cost or schedule outcome.. A project-structure decision or label is being evaluated → Is the question who contracts with whom for design/construction responsibility?; Is the question who contracts with whom for design/construction responsibility? — Yes → Classify the delivery structure: DBB, DB, CM, EPC/EPCM, multiple prime, or other hybrid; Is the question who contracts with whom for design/construction responsibility? — No → Is the question how a designer, contractor, or private partner is selected?; Classify the delivery structure: DBB, DB, CM, EPC/EPCM, multiple prime, or other hybrid → Does the arrangement add private financing/operation of public infrastructure or services?; Is the question how a designer, contractor, or private partner is selected? — Yes → Classify the procurement/selection method under the applicable private or public rules; Is the question how a designer, contractor, or private partner is selected? — No → Is the question how the contractor or provider is paid?; Classify the procurement/selection method under the applicable private or public rules → Does the arrangement add private financing/operation of public infrastructure or services?; Is the question how the contractor or provider is paid? — Yes → Classify pricing: lump sum, unit price, cost-reimbursable, GMP/target, or other agreed basis; Is the question how the contractor or provider is paid? — No → Identify the actual contractual function instead of relying on the project label; Classify pricing: lump sum, unit price, cost-reimbursable, GMP/target, or other agreed basis → Does the arrangement add private financing/operation of public infrastructure or services?; Identify the actual contractual function instead of relying on the project label → Does the arrangement add private financing/operation of public infrastructure or services?; Does the arrangement add private financing/operation of public infrastructure or services? — Yes → Analyze the RA 11966 PPP layer separately from internal delivery and pricing contracts; Does the arrangement add private financing/operation of public infrastructure or services? — No → Map the chosen layers together and test interface/risk allocation in the actual agreements; Analyze the RA 11966 PPP layer separately from internal delivery and pricing contracts → Map the chosen layers together and test interface/risk allocation in the actual agreements; Map the chosen layers together and test interface/risk allocation in the actual agreements → Evaluate risk from the combined contract terms—not the label alone

A project-structure decision or label is being evaluated → Is the question who contracts with whom for design/construction responsibility?; Is the question who contracts with whom for design/construction responsibility? — Yes → Classify the delivery structure: DBB, DB, CM, EPC/EPCM, multiple prime, or other hybrid; Is the question who contracts with whom for design/construction responsibility? — No → Is the question how a designer, contractor, or private partner is selected?; Classify the delivery structure: DBB, DB, CM, EPC/EPCM, multiple prime, or other hybrid → Does the arrangement add private financing/operation of public infrastructure or services?; Is the question how a designer, contractor, or private partner is selected? — Yes → Classify the procurement/selection method under the applicable private or public rules; Is the question how a designer, contractor, or private partner is selected? — No → Is the question how the contractor or provider is paid?; Classify the procurement/selection method under the applicable private or public rules → Does the arrangement add private financing/operation of public infrastructure or services?; Is the question how the contractor or provider is paid? — Yes → Classify pricing: lump sum, unit price, cost-reimbursable, GMP/target, or other agreed basis; Is the question how the contractor or provider is paid? — No → Identify the actual contractual function instead of relying on the project label; Classify pricing: lump sum, unit price, cost-reimbursable, GMP/target, or other agreed basis → Does the arrangement add private financing/operation of public infrastructure or services?; Identify the actual contractual function instead of relying on the project label → Does the arrangement add private financing/operation of public infrastructure or services?; Does the arrangement add private financing/operation of public infrastructure or services? — Yes → Analyze the RA 11966 PPP layer separately from internal delivery and pricing contracts; Does the arrangement add private financing/operation of public infrastructure or services? — No → Map the chosen layers together and test interface/risk allocation in the actual agreements; Analyze the RA 11966 PPP layer separately from internal delivery and pricing contracts → Map the chosen layers together and test interface/risk allocation in the actual agreements; Map the chosen layers together and test interface/risk allocation in the actual agreements → Evaluate risk from the combined contract terms—not the label alone

  • A project-structure decision or label is being evaluated: terminator
  • Is the question who contracts with whom for design/construction responsibility?: decision
  • Classify the delivery structure: DBB, DB, CM, EPC/EPCM, multiple prime, or other hybrid: process
  • Is the question how a designer, contractor, or private partner is selected?: decision
  • Classify the procurement/selection method under the applicable private or public rules: process
  • Is the question how the contractor or provider is paid?: decision
  • Classify pricing: lump sum, unit price, cost-reimbursable, GMP/target, or other agreed basis: process
  • Does the arrangement add private financing/operation of public infrastructure or services?: decision
  • Analyze the RA 11966 PPP layer separately from internal delivery and pricing contracts: process
  • Identify the actual contractual function instead of relying on the project label: process
  • Map the chosen layers together and test interface/risk allocation in the actual agreements: process
  • Evaluate risk from the combined contract terms—not the label alone: terminator
Classify a Delivery Structure by Its Contracts

Identify the delivery model from who holds the design, construction, and management contracts rather than from marketing labels.

This is a contractual-relationship classifier, not a legal definition or recommendation. Actual agreements can create hybrids. PPP is screened separately because it adds a public implementing agency/private partner relationship and may include financing and operations beyond the underlying construction delivery.

Classify a Delivery Structure by Its ContractsIdentify the delivery model from who holds the design, construction, and management contracts rather than from marketing labels.. This is a contractual-relationship classifier, not a legal definition or recommendation. Actual agreements can create hybrids. PPP is screened separately because it adds a public implementing agency/private partner relationship and may include financing and operations beyond the underlying construction delivery.. Identify the owner's principal design and construction contracts → Does the arrangement include a public IA/private partner PPP relationship under RA 11966?; Does the arrangement include a public IA/private partner PPP relationship under RA 11966? — Yes → PPP/concession structure; classify its internal design/construction contracts separately; Does the arrangement include a public IA/private partner PPP relationship under RA 11966? — No → One entity holds both principal design and construction responsibility?; One entity holds both principal design and construction responsibility? — Yes → Does it integrate engineering, procurement, construction, and defined performance obligations?; Does it integrate engineering, procurement, construction, and defined performance obligations? — Yes → EPC or turnkey-type structure; Does it integrate engineering, procurement, construction, and defined performance obligations? — No → Design-Build or another integrated design-construction structure; One entity holds both principal design and construction responsibility? — No → Owner holds separate design and construction relationships; Owner holds separate design and construction relationships → Is a construction manager engaged before/during construction?; Is a construction manager engaged before/during construction? — Yes → Does the CM later hold construction performance risk as constructor?; Does the CM later hold construction performance risk as constructor? — Yes → CM-at-Risk-type structure; Does the CM later hold construction performance risk as constructor? — No → Agency CM structure; Is a construction manager engaged before/during construction? — No → Does owner hold multiple direct prime/trade contracts?; Does owner hold multiple direct prime/trade contracts? — Yes → Multiple-prime / EPCM-managed package structure; Does owner hold multiple direct prime/trade contracts? — No → Design-Bid-Build-type separate design/construction structure

Identify the owner's principal design and construction contracts → Does the arrangement include a public IA/private partner PPP relationship under RA 11966?; Does the arrangement include a public IA/private partner PPP relationship under RA 11966? — Yes → PPP/concession structure; classify its internal design/construction contracts separately; Does the arrangement include a public IA/private partner PPP relationship under RA 11966? — No → One entity holds both principal design and construction responsibility?; One entity holds both principal design and construction responsibility? — Yes → Does it integrate engineering, procurement, construction, and defined performance obligations?; Does it integrate engineering, procurement, construction, and defined performance obligations? — Yes → EPC or turnkey-type structure; Does it integrate engineering, procurement, construction, and defined performance obligations? — No → Design-Build or another integrated design-construction structure; One entity holds both principal design and construction responsibility? — No → Owner holds separate design and construction relationships; Owner holds separate design and construction relationships → Is a construction manager engaged before/during construction?; Is a construction manager engaged before/during construction? — Yes → Does the CM later hold construction performance risk as constructor?; Does the CM later hold construction performance risk as constructor? — Yes → CM-at-Risk-type structure; Does the CM later hold construction performance risk as constructor? — No → Agency CM structure; Is a construction manager engaged before/during construction? — No → Does owner hold multiple direct prime/trade contracts?; Does owner hold multiple direct prime/trade contracts? — Yes → Multiple-prime / EPCM-managed package structure; Does owner hold multiple direct prime/trade contracts? — No → Design-Bid-Build-type separate design/construction structure

  • Identify the owner's principal design and construction contracts: terminator
  • Does the arrangement include a public IA/private partner PPP relationship under RA 11966?: decision
  • PPP/concession structure; classify its internal design/construction contracts separately: terminator
  • One entity holds both principal design and construction responsibility?: decision
  • Does it integrate engineering, procurement, construction, and defined performance obligations?: decision
  • EPC or turnkey-type structure: terminator
  • Design-Build or another integrated design-construction structure: terminator
  • Owner holds separate design and construction relationships: process
  • Is a construction manager engaged before/during construction?: decision
  • Does the CM later hold construction performance risk as constructor?: decision
  • CM-at-Risk-type structure: terminator
  • Agency CM structure: terminator
  • Does owner hold multiple direct prime/trade contracts?: decision
  • Multiple-prime / EPCM-managed package structure: terminator
  • Design-Bid-Build-type separate design/construction structure: terminator

Private-Sector Delivery Structures

Design-Bid-Build (DBB)

Typical relationship: the owner contracts separately with the designer and the construction contractor. Design is substantially developed before the construction contract is awarded.

  • Design responsibility: principally remains with the owner's design team, subject to contractor design delegated by the contract.
  • Cost risk: depends on the construction pricing arrangement and completeness of the bid documents.
  • Schedule integration: design and main construction are more sequential than in integrated methods, although enabling works or packages can alter the sequence.
  • Owner control: the owner generally retains direct control of the designer and design development.
  • Constructability/interface risk: contractor input may arrive later unless preconstruction review is separately obtained.
  • Change management: incomplete or changed owner design can generate variations, but DBB does not inherently cause change orders.

Competitive bidding can produce market price competition, but DBB does not guarantee the lowest final cost or longest duration.

Design-Build (DB)

Typical relationship: the owner contracts with one design-build entity for both design and construction, with designers and constructors organized beneath or within that entity.

  • Design responsibility: contractually concentrated in the design-builder, subject to owner criteria and retained responsibilities.
  • Cost risk: depends on scope maturity, pricing form, allowances, contingencies, and change provisions.
  • Schedule integration: design and construction can overlap more readily.
  • Owner control: the owner should state performance and design requirements clearly; detailed design control may be exercised differently than under DBB.
  • Constructability: constructor involvement during design can improve coordination when the team uses it effectively.
  • Interface risk: the owner has fewer prime design/construction interfaces, while the design-builder must manage its internal design-construction interfaces.

A single design-build contract can enable integration, but it does not guarantee lower cost, shorter duration, or fewer disputes.

Construction Management Agency (CMA)

Under agency construction management, the construction manager acts as the owner's professional adviser rather than as the principal constructor. The owner retains the construction-contract risk allocated in its direct contracts.

The CM may support estimating, scheduling, constructability, procurement packaging, coordination, and administration. Where the owner holds multiple prime trade contracts, the owner carries significant inter-prime contractual interface risk unless the contracts allocate coordination effectively.

In AIA/AGC project-delivery terminology, CM as adviser/agency is better treated as a project-management overlay than as a separate construction delivery method by itself; it can support DBB, multiple-prime, or another underlying contract structure. This terminology is an international industry classification, not a Philippine statutory rule.

Construction Management at Risk (CMAR)

CMAR is an international/commercial delivery model in which the owner commonly retains a separate designer and engages a construction manager early for preconstruction services; the CM later assumes contractual construction performance risk, often under a guaranteed maximum price or similar commercial arrangement.

"At risk" is not a complete risk allocation. Design responsibility, contingency use, allowances, trade procurement, GMP exclusions, changes, and schedule obligations still depend on the contract. CMAR is not established by a single Philippine statute as a universal standard form.

Engineering, Procurement, and Construction (EPC)

In EPC, one contractor commonly assumes integrated responsibility for engineering, procurement, construction, and defined completion/performance obligations. It is frequently used for industrial, energy, process, and complex infrastructure projects.

EPC can transfer substantial interface and performance responsibility to the contractor, but owner requirements, site risk, permitting, utility interfaces, tests, relief events, and price adjustment remain contract-specific. EPC does not mean "all risk to the contractor."

Engineering, Procurement, and Construction Management (EPCM)

In EPCM, the EPCM service provider normally designs, supports procurement, and manages construction on the owner's behalf, while the owner contracts directly with suppliers and construction packages. The EPCM provider is therefore not automatically the single constructor or guarantor of total project price and completion.

EPCM can give the owner direct package control and flexibility, but it also leaves the owner with more contract interfaces and integration responsibility than a single EPC contract.

Multiple-Prime Contracting

The owner enters separate prime construction contracts for major work packages. This can permit earlier package awards and specialist contracting, but it creates direct interfaces among primes for access, sequence, temporary works, tolerances, safety coordination, testing, and completion.

A CM or program manager can coordinate those interfaces, but management services do not eliminate the owner's underlying contractual exposure unless the contracts reallocate it.

Integrated Project Delivery (IPD)

IPD is an international collaborative model associated with early involvement of the owner, designer, constructor, and other key participants. It may use a multiparty agreement and shared commercial incentives, but AIA guidance also recognizes that IPD principles can be applied through a variety of contractual arrangements.

IPD is not a Philippine statutory delivery method. When used in the Philippines, its collaborative features, governance, and any shared-risk/reward mechanism must be implemented through enforceable contracts consistent with Philippine law and professional-practice requirements.

Screen Project Characteristics Before Selecting Delivery

Use project characteristics to shortlist delivery structures without claiming that any method guarantees cost, time, or quality outcomes.

This screening framework is conceptual. Legal eligibility, procurement rules, market capacity, professional-practice requirements, financing, owner capability, and project-specific risk allocation must still be assessed. A method is not selected solely because it can enable overlap or integration.

Screen Project Characteristics Before Selecting DeliveryUse project characteristics to shortlist delivery structures without claiming that any method guarantees cost, time, or quality outcomes.. This screening framework is conceptual. Legal eligibility, procurement rules, market capacity, professional-practice requirements, financing, owner capability, and project-specific risk allocation must still be assessed. A method is not selected solely because it can enable overlap or integration.. Define owner outcomes, constraints, and risk capacity → Is private financing/operation of a public service part of the objective?; Is private financing/operation of a public service part of the objective? — Yes → Evaluate RA 11966 PPP eligibility and lifecycle structure; Evaluate RA 11966 PPP eligibility and lifecycle structure → Test shortlist against law, market, interfaces, price model, and owner capability; Is private financing/operation of a public service part of the objective? — No → Is one design-construction responsibility a core objective?; Is one design-construction responsibility a core objective? — Yes → Are procurement, commissioning, and integrated performance obligations central?; Are procurement, commissioning, and integrated performance obligations central? — Yes → Evaluate EPC/turnkey-type structure; Are procurement, commissioning, and integrated performance obligations central? — No → Evaluate Design-Build structure; Evaluate EPC/turnkey-type structure → Test shortlist against law, market, interfaces, price model, and owner capability; Evaluate Design-Build structure → Test shortlist against law, market, interfaces, price model, and owner capability; Is one design-construction responsibility a core objective? — No → Must owner retain a separate direct designer relationship?; Must owner retain a separate direct designer relationship? — Yes → Is early constructor input materially important?; Is early constructor input materially important? — Yes → Evaluate CMAR or preconstruction-plus-construction structure; Is early constructor input materially important? — No → Evaluate DBB with appropriate preconstruction controls; Evaluate CMAR or preconstruction-plus-construction structure → Test shortlist against law, market, interfaces, price model, and owner capability; Evaluate DBB with appropriate preconstruction controls → Test shortlist against law, market, interfaces, price model, and owner capability; Must owner retain a separate direct designer relationship? — No or flexible → Will owner directly hold multiple trade/package contracts?; Will owner directly hold multiple trade/package contracts? — Yes → Evaluate EPCM or multiple-prime management structure; Will owner directly hold multiple trade/package contracts? — No → Evaluate agency CM support around the selected construction contract; Evaluate EPCM or multiple-prime management structure → Test shortlist against law, market, interfaces, price model, and owner capability; Evaluate agency CM support around the selected construction contract → Test shortlist against law, market, interfaces, price model, and owner capability

Define owner outcomes, constraints, and risk capacity → Is private financing/operation of a public service part of the objective?; Is private financing/operation of a public service part of the objective? — Yes → Evaluate RA 11966 PPP eligibility and lifecycle structure; Evaluate RA 11966 PPP eligibility and lifecycle structure → Test shortlist against law, market, interfaces, price model, and owner capability; Is private financing/operation of a public service part of the objective? — No → Is one design-construction responsibility a core objective?; Is one design-construction responsibility a core objective? — Yes → Are procurement, commissioning, and integrated performance obligations central?; Are procurement, commissioning, and integrated performance obligations central? — Yes → Evaluate EPC/turnkey-type structure; Are procurement, commissioning, and integrated performance obligations central? — No → Evaluate Design-Build structure; Evaluate EPC/turnkey-type structure → Test shortlist against law, market, interfaces, price model, and owner capability; Evaluate Design-Build structure → Test shortlist against law, market, interfaces, price model, and owner capability; Is one design-construction responsibility a core objective? — No → Must owner retain a separate direct designer relationship?; Must owner retain a separate direct designer relationship? — Yes → Is early constructor input materially important?; Is early constructor input materially important? — Yes → Evaluate CMAR or preconstruction-plus-construction structure; Is early constructor input materially important? — No → Evaluate DBB with appropriate preconstruction controls; Evaluate CMAR or preconstruction-plus-construction structure → Test shortlist against law, market, interfaces, price model, and owner capability; Evaluate DBB with appropriate preconstruction controls → Test shortlist against law, market, interfaces, price model, and owner capability; Must owner retain a separate direct designer relationship? — No or flexible → Will owner directly hold multiple trade/package contracts?; Will owner directly hold multiple trade/package contracts? — Yes → Evaluate EPCM or multiple-prime management structure; Will owner directly hold multiple trade/package contracts? — No → Evaluate agency CM support around the selected construction contract; Evaluate EPCM or multiple-prime management structure → Test shortlist against law, market, interfaces, price model, and owner capability; Evaluate agency CM support around the selected construction contract → Test shortlist against law, market, interfaces, price model, and owner capability

  • Define owner outcomes, constraints, and risk capacity: terminator
  • Is private financing/operation of a public service part of the objective?: decision
  • Evaluate RA 11966 PPP eligibility and lifecycle structure: process
  • Is one design-construction responsibility a core objective?: decision
  • Are procurement, commissioning, and integrated performance obligations central?: decision
  • Evaluate EPC/turnkey-type structure: process
  • Evaluate Design-Build structure: process
  • Must owner retain a separate direct designer relationship?: decision
  • Is early constructor input materially important?: decision
  • Evaluate CMAR or preconstruction-plus-construction structure: process
  • Evaluate DBB with appropriate preconstruction controls: process
  • Will owner directly hold multiple trade/package contracts?: decision
  • Evaluate EPCM or multiple-prime management structure: process
  • Evaluate agency CM support around the selected construction contract: process
  • Test shortlist against law, market, interfaces, price model, and owner capability: terminator

Comparative Risk and Control Matrix

Delivery structurePrimary design relationshipPrimary construction relationshipSchedule-integration mechanismOwner-control patternMain interface concern
DBBOwner–DesignerOwner–ContractorMain design and construction are ordinarily more sequential; packaging can change thatDirect designer relationshipDesigner–contractor interpretation and timing of constructability input
DBOwner–Design-BuilderSame design-builderDesign and construction may overlap when scope, procurement, and release strategy permitControl is exercised mainly through owner requirements and review rightsInternal design–construction integration and clarity of owner requirements
CMAOwner–DesignerOwner–GC or multiple primes; CM acts as agent/adviserDepends on packaging and the contracts the owner chooses to placeOwner retains direct contracts and substantial decision responsibilityOwner-held construction interfaces and limits of the CM's delegated authority
CMAROwner–DesignerOwner–CM/ConstructorEarly CM involvement may support phased procurement or overlapping workOwner retains separate designer and constructor/CM relationshipsDesigner–CM boundary, trade procurement, contingency, and GMP assumptions
EPCOften within EPC Contractor's responsibilityEPC ContractorEngineering, procurement, construction, testing, and commissioning can be integrated contractuallyOwner primarily controls through requirements, interfaces, review rights, and change mechanismsPerformance criteria, owner interfaces, tests, and relief events
EPCMOwner–EPCM ConsultantOwner–Trade/Supply ContractorsPackages can overlap, but owner-side integration and management are intensiveOwner retains direct package contractsPackage boundaries, supplier/trade interfaces, and owner-held completion risk
Multiple primeOwner–Designer or other design arrangementOwner–Multiple PrimesSeparate packages can be sequenced or overlapped by the ownerHigh direct contractual involvementInter-prime scope, access, temporary works, sequencing, and responsibility gaps
IPD-styleAs drafted; IPD principles may use multiparty or other collaborative arrangementsAs drafted; construction responsibility follows the chosen agreement structureEarly joint planning and shared governance are intended to improve integrationCollaborative governance rather than a simple high/low control rankingEnforceability of bespoke governance, responsibility, and any shared risk/reward rules

This matrix compares typical contractual mechanisms, not guaranteed outcomes or mandatory legal definitions. Actual agreements, project readiness, procurement, market conditions, and team performance control the result.

Cost Risk, Change Focus, Constructability, and Project Fit

Delivery structureCost/price-risk patternConstructability and interface patternChange-management focusProjects commonly suited to the structure
DBBDepends on the construction pricing basis and completeness of the owner-designed documentsConstructor input ordinarily arrives after substantial design unless separately engaged earlierOwner-design revisions, quantity/site issues, and interpretation of completed bid documentsProjects where the owner wants a separate designer relationship and can substantially define design before main construction procurement
DBCost exposure depends on owner-requirement maturity, pricing basis, allowances, and relief/change clausesConstructor and designer can coordinate within one design-build organizationDistinguish owner changes from design development already included in the design-builder's obligationProjects that benefit from integrated design–construction responsibility and requirements that can be expressed clearly
CMAOwner retains the cost exposure created by its construction contracts; the CM is ordinarily a professional adviser rather than the price guarantorCM can provide early constructability advice, but owner-held prime interfaces remainCoordinate changes across the owner's designer, GC, or multiple prime contracts within delegated authorityOwners able to retain contractual risk but wanting professional preconstruction/coordination support
CMARCost risk depends on the at-risk construction agreement, frequently including GMP, allowances, contingencies, exclusions, and change rulesEarly constructor participation can inform packaging, sequencing, and constructabilityTrack design development against GMP assumptions, contingency, trade buyout, allowances, and owner changesProjects where the owner wants a separate designer plus early constructor involvement and later construction performance responsibility
EPCContractor commonly carries integrated engineering/procurement/construction and defined performance obligations, but relief events and owner interfaces remain contract-specificSingle integrated EPC organization manages many internal technical/procurement interfacesOwner requirement changes, interface changes, performance criteria, tests, and contractual relief eventsProcess, energy, industrial, or infrastructure projects where integrated procurement, commissioning, and performance obligations are central
EPCMOwner generally retains package/supplier cost and completion interfaces; EPCM compensation and liability are separately definedEPCM consultant coordinates design/procurement/construction packages, while owner holds the package contractsPropagate design and scope changes consistently across affected supplier/trade contractsSophisticated owners seeking direct procurement/package flexibility and able to manage retained commercial risk
Multiple primeOwner directly holds price and performance exposure across several prime contractsConstructability can benefit from specialist input, but inter-prime scope, access, and sequencing require strong owner coordinationPrevent one package change from creating unpriced or unprogrammed consequences in anotherProjects that can be divided into coherent packages and have an owner capable of managing multiple direct interfaces
IPD-styleWhere shared-risk/reward is used, its economics depend on the actual agreement; IPD principles alone create no universal cost formulaEarly collaborative participation is intended to surface constructability and interface issues collectivelyUse the agreed collaborative governance and commercial mechanism rather than assuming conventional bilateral change rulesProjects with mature participants willing to use bespoke collaborative governance, transparency, and aligned incentives
PPP/concessionRisk can extend beyond construction price to financing, demand/revenue or availability payments, operations, maintenance, handback, and government undertakingsThe private partner must integrate lifecycle interfaces, often through separate EPC/O&M/finance contractsVariations can affect construction, financing, performance standards, payments/tariffs, approvals, and lifecycle obligationsPublic infrastructure/development services that satisfy the current RA 11966 framework and justify long-term private participation

These are typical risk questions, not automatic allocations. The signed contracts, governing law, procurement rules, financing documents, and project facts determine actual entitlement and exposure.

Public-Private Partnerships in the Philippines

Current Law: Republic Act No. 11966, PPP Code of the Philippines

Republic Act No. 11966 is the current principal statutory framework for Philippine PPP projects. It took effect on 23 December 2023. Its Implementing Rules and Regulations became effective on 6 April 2024.

Republic Act No. 11966 repealed Republic Act No. 6957, as amended by Republic Act No. 7718, the former BOT Law framework. The former BOT Law should therefore be taught only as historical or transitional context, not as the current governing statute.

BOT Still Exists as a PPP Contractual Form

Repeal of the old BOT Law did not erase BOT as a project structure. The current PPP Code IRR expressly includes BOT and variants among arrangements that may fall within the PPP framework.

The critical distinction is:

  • Historical legal framework: RA 6957, as amended by RA 7718 — repealed/replaced as the principal PPP statute.
  • Current legal framework: RA 11966 and its IRR.
  • Contractual PPP structures: BOT, BT, BLT, BOO, BTO, and other arrangements recognized by the current Code/IRR where their requirements are met.

Do not describe a present-day BOT project as being "governed by the BOT Law" merely because the commercial structure uses build-operate-transfer.

From the Former BOT Law to the Current PPP Code

Prevent the superseded RA 6957/RA 7718 framework from being taught as current law while preserving RA 11966 transitional analysis.

RA 11966 took effect on 23 December 2023 and repealed RA 6957, as amended by RA 7718. Section 35 of RA 11966 contains transitory rules for existing contracts and projects already at specified pre-effectivity stages. The current PPP Code and IRR must be consulted for the exact treatment of a legacy project. BOT remains a contractual PPP form under the current IRR; the historical BOT Law is no longer the principal current statute.

From the Former BOT Law to the Current PPP CodePrevent the superseded RA 6957/RA 7718 framework from being taught as current law while preserving RA 11966 transitional analysis.. RA 11966 took effect on 23 December 2023 and repealed RA 6957, as amended by RA 7718. Section 35 of RA 11966 contains transitory rules for existing contracts and projects already at specified pre-effectivity stages. The current PPP Code and IRR must be consulted for the exact treatment of a legacy project. BOT remains a contractual PPP form under the current IRR; the historical BOT Law is no longer the principal current statute.. A Philippine PPP/BOT issue must be analyzed today → Did the contract or defined project stage exist before PPP Code effectivity?; Did the contract or defined project stage exist before PPP Code effectivity? — No → Apply RA 11966 and current IRR as the principal PPP framework; Did the contract or defined project stage exist before PPP Code effectivity? — Yes → Apply RA 11966 Section 35 transitory rules to the legacy status; Apply RA 11966 Section 35 transitory rules to the legacy status → RA 6957 as amended by RA 7718 is historical/repealed framework; RA 6957 as amended by RA 7718 is historical/repealed framework → Is BOT or a BOT variant the commercial structure?; Apply RA 11966 and current IRR as the principal PPP framework → Is BOT or a BOT variant the commercial structure?; Is BOT or a BOT variant the commercial structure? — Yes → Treat BOT as a current PPP contractual form under the RA 11966 IRR; Is BOT or a BOT variant the commercial structure? — No → Classify the current PPP arrangement under the Code and IRR; Treat BOT as a current PPP contractual form under the RA 11966 IRR → Verify current PPP Center/PPPGB procedure for the actual project; Classify the current PPP arrangement under the Code and IRR → Verify current PPP Center/PPPGB procedure for the actual project

A Philippine PPP/BOT issue must be analyzed today → Did the contract or defined project stage exist before PPP Code effectivity?; Did the contract or defined project stage exist before PPP Code effectivity? — No → Apply RA 11966 and current IRR as the principal PPP framework; Did the contract or defined project stage exist before PPP Code effectivity? — Yes → Apply RA 11966 Section 35 transitory rules to the legacy status; Apply RA 11966 Section 35 transitory rules to the legacy status → RA 6957 as amended by RA 7718 is historical/repealed framework; RA 6957 as amended by RA 7718 is historical/repealed framework → Is BOT or a BOT variant the commercial structure?; Apply RA 11966 and current IRR as the principal PPP framework → Is BOT or a BOT variant the commercial structure?; Is BOT or a BOT variant the commercial structure? — Yes → Treat BOT as a current PPP contractual form under the RA 11966 IRR; Is BOT or a BOT variant the commercial structure? — No → Classify the current PPP arrangement under the Code and IRR; Treat BOT as a current PPP contractual form under the RA 11966 IRR → Verify current PPP Center/PPPGB procedure for the actual project; Classify the current PPP arrangement under the Code and IRR → Verify current PPP Center/PPPGB procedure for the actual project

  • A Philippine PPP/BOT issue must be analyzed today: terminator
  • Did the contract or defined project stage exist before PPP Code effectivity?: decision
  • Apply RA 11966 and current IRR as the principal PPP framework: process
  • Apply RA 11966 Section 35 transitory rules to the legacy status: process
  • RA 6957 as amended by RA 7718 is historical/repealed framework: annotation
  • Is BOT or a BOT variant the commercial structure?: decision
  • Treat BOT as a current PPP contractual form under the RA 11966 IRR: process
  • Classify the current PPP arrangement under the Code and IRR: process
  • Verify current PPP Center/PPPGB procedure for the actual project: terminator

Public-Private Partnership (PPP)

Under the current PPP Code IRR, PPP is a contractual arrangement between an Implementing Agency and a Private Partner to finance, design, construct, operate, and maintain, or any combination or variation of those functions, for infrastructure or development projects and services typically provided by the public sector, with associated risks shared and private investment recovery linked to performance.

PPP Is More Than a Construction Contract

A PPP may combine project development, financing, design, construction, operation, maintenance, lifecycle performance, user charges or availability payments where lawfully structured, handback, and public-service obligations. The construction package may use EPC or another delivery method, but the PPP agreement governs a broader long-term relationship.

Engineers should therefore distinguish:

  • the PPP agreement between the Implementing Agency and Private Partner;
  • the financing documents;
  • the design/construction contract used by the Private Partner;
  • the O&M arrangements; and
  • government approvals, undertakings, monitoring, and public-service requirements under the Code and IRR.

National and Local PPPs

National PPP Concept

National PPP projects are undertaken by national-level Implementing Agencies identified under the Code and IRR. Their project-development and approval route depends on the current statutory criteria, project characteristics, and the appropriate approving body.

This lesson deliberately does not reproduce monetary approval thresholds because those are current-law procedural details that must be checked against the latest Code, IRR, and PPP Governing Board/PPP Center issuances when a real project is evaluated.

Local PPP Concept

Local PPP projects are undertaken by local government units and other local Implementing Agencies covered by the Code and IRR. Under the current IRR, approval is assigned to the respective local Sanggunian for LGUs or the Board for local universities and colleges, subject to the Code and IRR. An LGU's Local PPP Project is subject to confirmation by the respective Local Development Council Executive Committee, followed by the applicable review and approval of the Local Sanggunian; additional regional endorsement or national approval applies where the current framework requires it.

PPP Governing Board Resolution No. 2025-06-02 provides the current amended guidelines and procedures for review and approval of Local PPP Projects and supersedes/amends the earlier 2024-07-02 guidelines. Use the current amended guidelines and subsequent issuances rather than an old local BOT/JV ordinance or the superseded BOT Law as the controlling current framework.

Solicited and Unsolicited PPPs

The PPP Code recognizes both:

  • Solicited proposals, where the Implementing Agency identifies and procures the PPP project through the statutory process; and
  • Unsolicited proposals, initiated by a Private Proponent and subjected to the Code/IRR process, including comparative challenge requirements.

The two routes are not interchangeable. Current submission, approval, procurement, and challenge procedures should be taken from the PPP Center's current process guidance and the Code/IRR, not reconstructed from the former BOT Law.

Conceptual PPP Project Lifecycle Under RA 11966

Show the common development-to-implementation sequence while keeping national/local and solicited/unsolicited approval details in current official guidance.

Based on the PPP Code, its IRR, and the PPP Center's current process materials. Exact approving bodies, documentary requirements, periods, thresholds, and challenge procedures depend on whether the project is national or local and solicited or unsolicited, plus current PPPGB/PPP Center issuances. This chart intentionally avoids hard-coding those changing details.

Conceptual PPP Project Lifecycle Under RA 11966Show the common development-to-implementation sequence while keeping national/local and solicited/unsolicited approval details in current official guidance.. Based on the PPP Code, its IRR, and the PPP Center's current process materials. Exact approving bodies, documentary requirements, periods, thresholds, and challenge procedures depend on whether the project is national or local and solicited or unsolicited, plus current PPPGB/PPP Center issuances. This chart intentionally avoids hard-coding those changing details.. Identify infrastructure/development service need → Develop project scope, feasibility, value-for-money, risk, financing, and PTCs; Develop project scope, feasibility, value-for-money, risk, financing, and PTCs → National or local Implementing Agency?; National or local Implementing Agency? — National → Use current national PPP review/approval route; National or local Implementing Agency? — Local → Use current local confirmation/review/approval route; Use current national PPP review/approval route → Project approved by the appropriate body under current rules?; Use current local confirmation/review/approval route → Project approved by the appropriate body under current rules?; Project approved by the appropriate body under current rules? — No → Revise, defer, or discontinue according to the applicable process; Revise, defer, or discontinue according to the applicable process → Develop project scope, feasibility, value-for-money, risk, financing, and PTCs; Project approved by the appropriate body under current rules? — Yes → Solicited or unsolicited proposal?; Solicited or unsolicited proposal? — Solicited → Conduct statutory solicited PPP procurement; Solicited or unsolicited proposal? — Unsolicited → Conduct statutory unsolicited-proposal and comparative-challenge process; Conduct statutory solicited PPP procurement → Finalize approved PPP contract and required closing conditions; Conduct statutory unsolicited-proposal and comparative-challenge process → Finalize approved PPP contract and required closing conditions; Finalize approved PPP contract and required closing conditions → Implement, monitor performance, manage approved variations, and enforce obligations; Implement, monitor performance, manage approved variations, and enforce obligations → Complete expiry, handback, termination, or other contractual closeout

Identify infrastructure/development service need → Develop project scope, feasibility, value-for-money, risk, financing, and PTCs; Develop project scope, feasibility, value-for-money, risk, financing, and PTCs → National or local Implementing Agency?; National or local Implementing Agency? — National → Use current national PPP review/approval route; National or local Implementing Agency? — Local → Use current local confirmation/review/approval route; Use current national PPP review/approval route → Project approved by the appropriate body under current rules?; Use current local confirmation/review/approval route → Project approved by the appropriate body under current rules?; Project approved by the appropriate body under current rules? — No → Revise, defer, or discontinue according to the applicable process; Revise, defer, or discontinue according to the applicable process → Develop project scope, feasibility, value-for-money, risk, financing, and PTCs; Project approved by the appropriate body under current rules? — Yes → Solicited or unsolicited proposal?; Solicited or unsolicited proposal? — Solicited → Conduct statutory solicited PPP procurement; Solicited or unsolicited proposal? — Unsolicited → Conduct statutory unsolicited-proposal and comparative-challenge process; Conduct statutory solicited PPP procurement → Finalize approved PPP contract and required closing conditions; Conduct statutory unsolicited-proposal and comparative-challenge process → Finalize approved PPP contract and required closing conditions; Finalize approved PPP contract and required closing conditions → Implement, monitor performance, manage approved variations, and enforce obligations; Implement, monitor performance, manage approved variations, and enforce obligations → Complete expiry, handback, termination, or other contractual closeout

  • Identify infrastructure/development service need: terminator
  • Develop project scope, feasibility, value-for-money, risk, financing, and PTCs: process
  • National or local Implementing Agency?: decision
  • Use current national PPP review/approval route: process
  • Use current local confirmation/review/approval route: process
  • Project approved by the appropriate body under current rules?: decision
  • Revise, defer, or discontinue according to the applicable process: process
  • Solicited or unsolicited proposal?: decision
  • Conduct statutory solicited PPP procurement: process
  • Conduct statutory unsolicited-proposal and comparative-challenge process: process
  • Finalize approved PPP contract and required closing conditions: process
  • Implement, monitor performance, manage approved variations, and enforce obligations: process
  • Complete expiry, handback, termination, or other contractual closeout: terminator

Selecting a Delivery Structure

Owner Decision Factors

Delivery selection should be based on project characteristics rather than slogans about which method is "best." Relevant questions include:

  • How mature and stable are the owner's requirements?
  • Who is best positioned to manage design responsibility and design interfaces?
  • How early is constructor input needed?
  • How important is direct owner control of detailed design?
  • Can scope packages be cleanly separated?
  • How many contractual interfaces can the owner competently manage?
  • Is price certainty sought before design completion, and what contingencies are realistic?
  • Does the project require performance guarantees, commissioning, or process integration?
  • Is private financing, operation, or lifecycle service part of the public-sector objective?
  • What procurement, professional-practice, licensing, and statutory constraints apply?

These factors produce a risk allocation, not a guaranteed result. Poorly defined requirements can undermine any delivery method.

Change Management by Delivery Structure

  • In DBB, owner-design changes and designer-contractor interpretation interfaces are prominent.
  • In DB, changes should distinguish owner requirement changes from design development within the design-builder's existing obligation.
  • In CMAR, changes may interact with allowances, contingency, trade-package buyout, and GMP assumptions.
  • In EPC, performance requirements, employer changes, interfaces, and relief events are central.
  • In EPCM/multiple-prime, package boundaries and owner-held inter-contract interfaces require disciplined change coordination.
  • In PPP, a project variation can implicate not only construction cost and time but also financing, performance standards, tariffs or payment mechanisms, approvals, and long-term risk allocation.

The contract must establish the change mechanism appropriate to the selected structure.

Relationship to Topics 07 and 17

Topic 07 covers ordinary government procurement under Republic Act No. 12009. Topic 17 covers CIAP Document 102 for private construction. A PPP under RA 11966 is a distinct statutory framework; a private construction contract within a PPP may use separate standard forms, but that does not replace the PPP Code obligations of the public Implementing Agency and Private Partner.

Interactive Learning Aid

Compare illustrative design–bid–build, design–build, and construction-management-at-risk structures. Contract relationships, risk allocation, cost and schedule depend on actual project facts; a delivery label does not guarantee any outcome.

Project Delivery Methods

Explore illustrative contractual relationships. No delivery model guarantees a lower price, faster completion, or lower owner risk; actual contracts, procurement rules, and project conditions govern.

Comparing: Design-Bid-Build (DBB)

Number of ContractsTwo (Designer & Builder)
Design Phase CollaborationMinimal (Contractor not involved)
Schedule PotentialSequential phases may extend schedule
Owner RisksManages separate design/construction interfaces
Key Takeaways
  • Delivery method, procurement method, and pricing arrangement are separate decisions.
  • DBB separates owner-designer and owner-contractor contracts; DB contractually combines design and construction responsibility; CMA, CMAR, EPC, EPCM, multiple-prime, and IPD create different interfaces and risk structures.
  • No delivery method itself guarantees lower final cost, shorter duration, fewer changes, or better quality.
  • RA 11966, the PPP Code of the Philippines, is the current principal PPP statute; RA 6957 as amended by RA 7718 is historical/transitional law because RA 11966 repealed it.
  • BOT remains a recognized PPP contractual arrangement under the current PPP Code IRR even though the former BOT Law is no longer the governing principal statute.
  • The PPP Code covers both national and local PPPs, but their approval and institutional routes differ and must be checked against current official guidance.
  • PPP delivery extends beyond construction into financing, operation, maintenance, performance, and long-term public-service obligations.

References