FINANCIAL PROPOSAL as per requirement to Bidders of the Magsaysay Park that was included in the Instruction to Bidders issued by the City Government of Dagupan.

(b1) Proposed tolls/ fees/ rentals/ other charges; and
-Present Worth of the proposed user (Future Tenants) tolls/ rentals/ other charges over the fixed term based on the discounting rate and foreign exchange rate prescribed in the bidding documents in accordance with Section 4.3 of IRR of R.A. No. 6957 as amended by R.A. No. 7718.
(b2) Any other document described in the Terms of Reference.

EVALUATION OF FINANCIAL PROPOSAL included in the INSTRUCTION to Bidders
Assessment and Comparison of the financial proposals of bidders shall be based on the Lowest PRESENT VALUE of the proposed tolls/ fees/ rentals and other charges over a fixed term for the facility to be constructed, rehabilitated, operated and maintained according to the prescribed minimum design and performance standards, plans and specifications. (as basis for the rate of return on investment of the proponent) (present value could be computed basing from cash flows)

The Lowest PRESENT VALUE could be computed by the Cash Flow of the project. The Capital Expenditure, other Expenses, Income and other accounts concerning the movement of cash. The Lease rate the proponent is to pay the government is a cash outflow. The rental rates(INCOME) and other charges the proponent shall be charging future tenants is a Cash Inflow. The scheduled amortization of the payment of the structure is a cash outflow(cost of the structure or Capital Expenditure). If the proponent has hard cash and finances the construction without borrowing money, the investment is considered in its present value as a cash out flow without need of getting the present value of the future amortizations.Other Forecasted Cash expenses are cash outflow.

Let it be stressed that the INCOME is still needed to determine the Lowest PRESENT VALUE.

Any accountant could compute the Present Value of the project. Any accountant would say that they will be needing the proposed Rental Rates the proponent is to charge its future tenants to compute for the Present Value. Any accountant having these data could compute the rate of return. This is the reason that the City Government stated these in the INSTRUCTION to Bidders specifically for the Magsaysay Park. That these must be submitted for their proposal. Lowest Present Value does not mean the bidder is to construct the structure with the lowest possible cost. Lowest Present Value is an analysis of the cash inflow and cash out flow. A bidder could construct a building that shall be worth 100million and yet have a Lower Present Value, compared to a bidder who shall construct a building worth 84million pesos. Present Value is dependent on the Capital Expenditure, other Expenses less the Future Income(to be moved back to present value).

What I do not understand during the deliberations in the Sanggunian is the persistent claim of the people defending the bidding process done and Metrostate that there is no need for the proponent to submit these cash inflow(How much the proponent will Charge future tenants) proposal. If that is the case, what will be the basis for EVALUATING the Financial Proposal? If this is the case, Then there was NO Financial Proposal that was Submitted, making the bidding a failed bidding.

The bottomline, however, is that, the two remaining bidders are DISQUALIFIED to begin with, because of RELATIONSHIP. Therefore, a rebidding should be in order. This will clarify the Legality and Clarity of the issue at hand.