DPWH Cannot Bar Private Contractors Linked to Lawmakers
MANILA — The Department of Public Works and Highways (DPWH) revealed it cannot prevent private contractors affiliated with lawmakers or government officials from joining the bidding for public infrastructure projects unless Congress enacts a specific law. The challenge lies in existing regulations that do not restrict such participation.
DPWH Secretary Manuel Bonoan acknowledged that the agency’s authority does not extend to investigating the backgrounds or affiliations of contractors. “It’s not part of the criteria to look into the personalities who probably co-own or are affiliated to these companies,” he said, highlighting a legal gap amid concerns over potential conflicts of interest.
Legal Framework Governing Contractor Participation
Reports surfaced about a possible scheme involving House of Representatives members or their relatives acting as contractors, possibly contributing to overpriced or substandard flood control and infrastructure projects. Despite this, all firms involved were able to bid because they obtained licenses from the Philippine Contractors Accreditation Board (PCAB).
Under Republic Act No. 4566, amended by Presidential Decree No. 1746, contractors must secure a PCAB license before engaging in business. The PCAB operates under the Construction Industry Authority of the Philippines, which is part of the Department of Trade and Industry.
“Once they have that PCAB license, and as long as they have complete documentation and pre-qualification documents, then they can participate in the bidding process,” Secretary Bonoan explained in a recent interview. This means that the agency must accept bids from licensed contractors regardless of their affiliations.
Investigation and Policy Implications
Secretary Bonoan deferred to President Ferdinand Marcos Jr. for decisions on potential policy reforms following an ongoing investigation into nearly 10,000 flood control projects completed over the last three years. “I think our hands are tied with regard to this kind of situation,” Bonoan said.
He added, “Unless there would be an enabling law that would actually prohibit these kinds of qualifications that could be incorporated in the guidelines, then they shall be qualified to participate in the bidding process.” This highlights the need for legislative action to address conflicts of interest in public contracting.
Flood Control Projects and Contractor Concentration
President Marcos revealed that approximately P100 billion, or about 20 percent of the P545-billion flood mitigation budget from July 2022 to May 2025, was awarded to just 15 out of 2,409 contractors. Five of these firms are reportedly connected to current or former politicians.
Among these are Albay-based Sunwest Inc. and Hi-Tone Construction & Development Corp., co-founded by Ako Bicol party-list Representative Elizaldy Co and his brother, former lawmaker Christopher Co. Elizaldy Co has stated he divested from Sunwest, now managed by Aderma Angelie Alcazar.
Other connections include the Discaya family, owners of Alpha & Omega Gen. Contractor & Development Corp. and St. Timothy Construction Corp. Alpha & Omega is led by Cezarah Rowena Discaya, who previously ran for Pasig City mayor.
Seven additional contractor firms linked to the Discaya family include St. Gerrard Construction, Elite General Contractor and Development Corp., St. Matthew General Contractor & Development, Great Pacific Builders, YPR General Contractor and Construction Supply, Amethyst Horizon Builders, and Way Maker OPC.
DPWH’s Role in Project Validation
While not directly involved in the investigation, the DPWH has begun verifying the status of the flood control projects flagged by the President. The agency focuses on field validation and verification to authenticate project completion and quality.
“Our people in the department have been in the field for some time now, gathering all the information that we need to authenticate the projects that we have submitted to the President,” Bonoan said.
Oversight by Regional Committees
According to Malacañang, Regional Project Monitoring Committees will lead the review of flood control projects. These committees are chaired by regional directors from the Department of Economy, Planning and Development, and co-chaired by the Department of Budget and Management.
They also include regional heads from the Department of the Interior and Local Government, the Presidential Management Staff, and representatives from the private sector and nongovernmental organizations. Their findings will be consolidated and submitted to the President for further action.
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