Lower House increases penalties for errant public works contractors

Published February 19, 2021, 4:38 PM

by Ben Rosario

The House of Representatives has passed on third and final reading a bill that will increase penalties for delinquent and errant contractors of public works projects of both government and private sectors.


Registering 200 “ayes” and 0 “nays” during plenary session on Monday, February 15, the Lower House approved on final reading House Bill 7808 which proposes to amend Sections 35, 347, 38, 39 and 40 of Republic Act No. 4566 or the Contractors’ License Law.

Pampanga Rep. Aurelio Gonzales Jr., principal author of the bill, said enactment into law of the measure will protect proponents of public works projects from delinquent or abusive contractors.

“We are updating the 56-year-old law, which Congress enacted in 1965 before martial law, to ensure that only qualified and reliable contractors are allowed to undertake construction in the country,” he said.

Gonzales, a civil engineer by profession, said the proposed changes in the law “aim to promote the orderly conduct and growth of the contracting industry and to enhance its capability for the benefit of the public and private sectors, and for the national interest.”

Under House Bill No. 7808, violators of the law like a person or contractor who participates in a bidding or actually engages in construction without a license from the Philippine Licensing Board for Contractors would face a fine of not less than P100,000 or .1 percent of the project cost, whichever is higher.

In addition to the fine, the errant individual would be prohibited from gaining a contracting license for one year.

The present penalty under RA No. 4566 is a fine of P500 to P5,000.

Licensed contractors who intend to jointly undertake a construction project would be required to obtain an additional license from the licensing board for their joint venture.

Failure to do so would automatically disqualify them from such project. Additionally, they would face a fine of .1 percent of the project cost.

The bill also increases processing fees from P50 to P5,000 for an original license and P50 to P5,000 for its renewal, and from P60 to P6,000 for  a written or an oral examination of an applicant.

The licensing board would be authorized to retain and use such fees for its operations.

A contracting license would be valid for one year. It would be renewed every year in the case of contractors in good standing for less than 10 years, every two years for those in good standing for 10 years to 25 years, and every three years for those with a good record for more than 25 years.

Applications and supporting documents may be filed with the licensing board in person or through online.