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(NAR) VOL.8 NO. 3 / JULY - SEPTEMBER 1997

[ NEDA, September 17, 1997 ]

UNIFORM GUIDELINES FOR BLACKLISTING CONTRACTORS INVOLVED IN PUBLIC CONSTRUCTION




1. GENERAL

The Implementing Rules and Regulations (IRR) of P.D. No. 1594 as amended last 12 July 1995 provide under Section IB 10.5-2 the formulation of uniform guidelines for blacklisting constructors involved in public construction and revision of the same whenever necessary by a committee composed of representatives from government tendering agencies and constructors associations created by the Construction Industry Authority of the Philippines (CIAP). The guidelines shall stipulate, among others, the administrative sanctions to be imposed for offenses/violations committed by constructors during the contract implementation phase.

These guidelines were developed to address the following issues: differing sanctions imposed by agencies concerned on erring constructors; absence of administrative procedures, due process for blacklisting constructors by some concerned agencies; and, lack of information networking within and among agencies on offenses committed by constructors.

2. SCOPE

These guidelines shall cover the blacklisting of constructors involved in government infrastructure projects who committed offenses/violations during pre qualification, bidding, and contract implementation.

The prequalification, bidding and award phases are included in these guidelines to harmonize the blacklisting and delisting procedures and to expand coverage of the blacklisting reports.

Joint ventures and consortia are likewise covered by these guidelines but the number of times sanctioned and corresponding sanctions imposed shall be accrued by the joint ventures and/or consortia concerned and their individual member-constructors.

3. DEFINITION OF TERMS

3.1       Constructor — deemed synonymous with the term builder and hence, any person or entity including joint venture and consortium licensed by the Philippine Contractors Accreditation Board (PCAB) who undertakes or offers to undertake or purports to have the capacity to undertake or submits a bid for infrastructure projects.

3.2       Infrastructure Projects — refers to construction, improvement or rehabilitation of roads and highways, airports and air navigation facilities, railways, ports, flood control and drainage, water supply and sewerage, irrigation systems, dams, buildings, communication facilities, dredging and reclamation, power generating plants, power transmission and distribution facilities and other related construction projects.

3.3       Government-Level/Blacklisted Constructor — a constructor who was suspended or disqualified by a government tendering agency Head and/or Board and/or is included in the CIAP-Consolidated Government-Level Blacklisted Constructors. Said constructor shall not be allowed to participate in the prequalification and bidding of all government tendering agencies for a given period of time.

4. CRITERIA FOR BLACKLISTING CONTRUCTORS

4.1       Government-Level Blacklisting Criteria during Prequalification, bidding, and award

The following administrative sanctions as provided for under Section 10.5-1 of the amended IRR of P.D. 1594 shall be imposed for offenses/violations committed by constructors during prequalification, bidding and award:

a.         Suspension for one (1) year for first offense, disqualification for two (2) years for the second offense and perpetual disqualification for succeeding offense on any of the following.
a.1  Misrepresentation or concealment of any material fact information in the sworn prequalification statements and/or bids, including but not limited to:

i.          falsification of public documents

ii.          submission of borrowed license (license lending).

a.2  Submission of bids and/or detailed estimates that are identical to each other or to the Approved Agency Estimate (ME) which manifestly indicate rigging or collusion.

a.3  Other acts of the constructors which directly or indirectly tend to defeat the purpose of public bidding.
b.         Suspension for six (6) months for first offense, disqualification for one (1) year for second offense, disqualification for two (2) years for third offense and perpetual disqualification for succeeding offense:
b.1       Non-submission of bids by prequalified constructors.
c.         Forfeiture of bid security for first offense, and suspension of one (1) year for second offense, and perpetual disqualification for succeeding offense on any of the following:
c.1       Unjustified failure or unreasonable refusal of the winning bidder to accept or signify conforme to the Notice of Award (NOA).

c.2       Non-submission by the proposed awardee within the prescribed time of the performance security and other requirements necessary for contract preparation, i.e., Contractor's All Risk (CAR) Insurance, Affidavit of No Pending Case for Non-Payment of Tax, Construction Schedule, Cash Flow and other requirements necessary for the formalization of the contract.

c.3       Unjustified refusal or failure of the proposed awardee to enter or sign the prepared contract within the agency prescribed time.
4.2           Government-Level Blacklisting Criteria during Contract Implementation

The following administrative sanctions shall be imposed for offenses violations committed by constructors during contract implementation

a.         Forfeiture of performance security, and disqualification for six (6) months for first offense, and disqualification for one (1) year for second offense, and disqualification for two (2) years for third offense and perpetual disqualification for succeeding offense on any of the following:

a.1     Failure of the constructor due solely to his fault or negligence to mobilize and start work within the agency specified period in the Notice to Proceed (NTP).

a.2     Failure by the constructor to fully and faithfully comply with its contractual obligations without valid cause, or failure by the constructor to comply with any lawful instruction of the contracting officer or its representative/s pursuant to the implementation of the contract in any or combination of the following:
i.          Employment of competent engineers and/or work supervisors.

ii.          Provision of warning signs and barricades in accordance with approved plans and specifications and contract provisions.

iii.         Stockpiling in proper places of all materials including broken pavement and excavated debris in accordance with approved plans and specifications and contract provisions.

iv.         Deployment of committed equipment and manpower.

v.         Failure to renew the effectivity dates of the performance security after its expiration during the course of the execution of the works.
b.         Forfeiture of performance security, and disqualification for one (1 ) year for first offense, and disqualification for two (2) years for second offense, and perpetual disqualification for succeeding offense on any of the following:
b.1       Assignment and subcontracting of the construction works or any part without written approval by the agency Head concerned.

b.2       Poor performance by the constructor or unsatisfactory quality of work or progress of work arising from his fault or negligence as reflected in his Constructor's Performance Evaluation System (CPES) rating sheet. In the absence of the CPES rating sheet, the existing, performance monitoring system of the agency concerned shall be applied. Any of the following acts by the constructor shall be construed to mean as poor performance:

i.          Negative slippage of 15% and above due entirely to the fault or negligence of the constructor.

ii.          Quality of materials and workmanship not complying with the approved specifications arising from constructor's fault or negligence.
c.         Forfeiture of performance security, and disqualification for two (2) years for first offense, and perpetual disqualification for succeeding offense on:

c.1       Willful or deliberate abandonment of the project by the constructor without lawful and/or just excuse.

In any of the abovementioned offenses violations, the agency concerned may undertake by administration the whole or a portion of the unfinished work, or award the same to another qualified constructor pursuant to existing laws.

5. DUE PROCESS OR PROCEDURE FOR BLACKISTING CONSTRUCTORS

5.1       Verification — Verification of the offense during prequalification, bidding and award shall be made by the Prequalification, Bid and Award Committee (PBAC) while that during contract implementation shall be made by the Project Management Office (PMO) or its equivalent of agency concerned. Verification, which shall start from the discovery of the offense up to the submission of all reports accompanied by supporting affidavits or material evidences to the Legal Office shall be done within fifteen (15) calendar days.

5.2       Notification and Hearings — The Legal Office of the agency concerned shall notify the constructor concerned requiring him to answer the charges within fifteen (15) calendar days from receipt of notice. Based on the merits of the case, a Hearing Officer shall be assigned who shall schedule hearings with notices to both parties and invite a representative from a constructor association, preferably one that is accredited by the CIAP, as an observer for each hearing.

5.3       Decision — The agency Head and/or Board shall deliberate and decide based on the merits of the case presented. Based on the offense committed by the constructor, the corresponding sanction shall be imposed. The date of effectivity of serving the given penalty, i.e., date of start and completion, shall be stated clearly in the decision.

Before any decision is made by the agency Head and/or Board, the prospective government-level blacklisted constructor, shall not be considered blacklisted and can still participate in the prequalification and bidding of projects of any government agency but if the decision on blacklisting has been issued prior to award government-level blacklisted constructor shall not be eligible for award and such project shall be awarded to another constructor pursuant to existing laws.

In case a constructor commits more than one offense or a combination of offenses for the same period in a particular agency, each violation shall be meted the corresponding penalty.

5.4       Notification on Decision — The agency concerned shall notify the government Level blacklisted constructor and CIAP for information purposes within seven (7) calendar days after the decisions are made.

5.5       Effectivity of Sanctions — The government-level black-listing sanctions shall take effect on the date specified in the decision of the tendering agency Head and/or-Board.

6. MEASURES FOR DELISTING

6.1       Blacklisting for a Given Period — automatic lifting of blacklisting after serving the given penalty or by an order issued by the court or appellate authority on this matter.

6.2       Blacklisting for a Given Period with Conditions — the end of the period of blacklisting, a request shall be made by the government-level blacklisted constructor to the agency Head and/or Board concerned to issue a Delisting Order. Such Delisting Order shall be issued only When all liabilities/obligations have been settled by said constructor. The blacklisting of such constructor can also be lifted by an order issued by the court or appellate authority.

6.3       Perpetual Disqualification — no corrective action for delisting.

7. FOR INFORMATION SHARING/NETWORKING

7.1       The agency concerned shall submit to CIAP within seven (7 calendar days after the blacklisting/delisting decisions are made by the agency Head and/or Board any of the following authenticated documentary as described below:

a.       Blacklisting Order duly signed by the agency Head and/or Board containing, among others, Department/Office Order or Board Resolution number, name and address of the constructor, license number, Authorized Managing Officer (AMO), name of project/contract and location/amount, specific ground(s)/offense(s) committed as enumerated in Sections 4.1 and 4.2 hereof, sanction imposed and its date of start and completion, date of approval of blacklisting, other conditions which can extend effectivity of sanctions in Sections 4.1 and 4.2 hereof.

b.       Delisting Order duly signed by the agency Head and/or Board containing, among others, Department/Office Order or Board Resolution number, name and address of constructor, name of project/contract and location, specific sanction being lifted and the number of previously issued blacklisting Department/Office Order or Board Resolution, effectivity date of delisting, and date of delisting approval.

7.2       Should an agency — decide to elevate the case of its government-level blacklisted constructor to PCAB for proper action, such agency should submit to PCAB triplicate copies of written complaint under oath accompanied with supporting affidavits or material evidences.

7.3       The CIAP shall prepare every quarter the CIAP-Con-solicited Government-Level Blacklisted Constructors based on the submitted Blacklisting Order as provided for in Section 7.1-a hereof and disseminate the same to tendering agencies as cited in Section 8 hereof and the Commission on Audit (COA), indicate in such quarterly report the number of times a constructor has been blacklisted by type of offense/violation and by agency, delist from such report those whose sanctions are lifted automatically after serving the given penalty as Provided for in Section 6.1 hereof and those whose sanctions are lifted through the issuance of an order by the court or appellate authority or Delisting Order as provided for in Sections 6.1 and 6.2 hereof and upon receipt thereof by the CIAP, and release upon request by any agency updates on blacklisting. To be integrated in the aforementioned report is the CIAP-Consolidated List of Constructors with Revoked/Suspended PCAB Licenses.

8. APPLICABILTY

These guidelines shall apply to all contracts for infrastructure projects of an national government agencies and instrumentalities, including government-owned and controlled corporations (GOCCs).

9. EFFECTIVITY

These guidelines shall become effective upon approval by the National Economic and Development Authority (NEDA) Committee on Infrastructure (INFRACOM) and after fifteen (15) days upon publication by CIAP.
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