#1 is correct. It explains the purpose of the proposal. #2 is not correct. The wording makes it sound as if the proposal itself is constructing a city. 🌈

Agree with Nichole. You can say either "to construct" or "FOR constructing".

The first sentence means they are reviewing a proposal with the aim of building a facility. The second sentence is a bit unclear and less common, but it could mean they are evaluating a proposal that is currently in the process of constructing a facility, which is a less typical way to express such a situation.

“They are evaluating a proposal, constructing a facility” can work? In this case, is participle “constructing” functioning as a subject complement?