Construction Industry Authority of the Philippines (CIAP)

Construction Industry Authority of the Philippines (CIAP)

Domestic Operation

• Who may file for a contractor's license?

Persons/entities who intends to undertake or engage into construction contracting activities.

• Where do I file my application for contractor's license?

Applications for contractor’s license may be filed directly with the Philippine Contractors Accreditation Board (PCAB) Office (personally or by mall) or through the regional/provincial offices of the Regional Operations Group of the Department of Trade and Industry.

• How do I file and claim my license?

1. Accomplish the PCAB Application Forms properly
2. Submit to the Public Assistance Desk (PAD) for the checklisting / prescreening of application; and
3. After passing the prescreening, application is considered filed upon payment of filing fee of P600.00.

Note: Payment maybe made in cash, manager’s check, bank draft or postal money order payable to the “Construction Industry Authority of the Philippines-PCAB”. Upon receipt of payment, CIAP will issue an official receipt of payment.

Approved applications shall be issued the license certificate within a week after the Board’s approval. Disapproved applications shall be issued a “Notice of Disapproval/Deferral” as the case may be.

1. To claim License Certificate, secure an Order of Payment (OP) at the
   PCAB’s counter and pay the appropriate fee at the Construction Industry Authority of the Philippines (CIAP) cashier. The license certificate may be picked-up personally or through a representative with appropriate authorization or upon request may be mailed or delivered thru other means with cost for the account of the contractor.
2. All licenses shall be renewed annually on or before the expiration of their validity which is 30th June of each year. A license issued after the first of July is valid for the remaining part of the year.

• What is meant by a license “category”?

“Category” is the graded level of aggregate capability of a contractor with respect to his principal classification and is based on pre-determined qualification criteria which includes financial capacity, experience of sustaining technical employees, track record and equipment.

• What are the minimum requirements corresponding to each category?

In determining a contractor’s category, his qualifications must satisfy all the minimum requirements, corresponding to the classification and category applied for, quantified and rated according to equivalent credit points and shall be the lowest sustainable by all three determinants as follows:

1. Financial Capacity
2. Experience of Sustaining Technical Employee
3. Overall credit points based on the four qualification criteria

The minimum requirements for each contractor are shown in the PCAB Classification and Categorization Table.

• What changes may be instituted on a contractor’s license?

A contractor may apply/request for the following changes in his contractor’s license:

1. Category upgrading
2. Classification Revision
3. Change of Authorized Managing Officer
4. Change of Business Name
5. Change of Business Name & Status

• What is meant by a license “classification”?

“Classification ” means the area of operation that a contractor can engage in, based on the technical experience of his Sustaining Technical Employee. There are three (3) main contracting classifications in the licensing of contractors and which are further sub-classified accordingly:

a.                   General Engineering (GE)

GE-1 Road , Highway, Pavement, Railway, Airport, Horizontal Structures & Bridges

GE-2 Flood Control and Irrigation

GE-3 Dam, Reservoir and Tunneling

GE-4 Water Supply

GE-5 Port, Harbor and Offshore Engineering

1. General Building (GB)

GB-1 Building & Industrial Plant

GB-2 Sewerage & Sewage Treatment/Disposal Plant

GB-3 Water Treatment Plant & System

GB-4 Park, Playground & Recreational Work

1. Specialty

Sp-1 Foundation Work

Sp-2 Structural Steel Work

Sp-3 Concrete Pre-Casting & Pre-Stressing

Sp-4 Plumbing & Sanitary Work

Sp-5 Electrical Work

Sp-6 Mechanical Work

Sp-7 Air-Conditioning & Refrigeration Work

Sp-8 Elevator and Escalator Work

Sp-9 Fire-Protection Work

Sp-10 Waterproofing Work

Sp-11 Painting Work

Sp-12 Well-Drilling Work

Sp-13 Communication Facilities

International Operation

• Where does a Filipino contractor or consultancy firm intending to operate overseas register?

Under Presidential Decree No. 1167, as amended by P.D. 1657, Section 7, construction contractors and consultancy firms undertaking or who intend to undertake overseas construction projects shall register for accreditation at the Philippine Overseas Construction Board (POCB), which operates under the Construction Industry Authority of the Philippines

• How does a Filipino contractor or consultancy firm register for overseas operation?

A Filipino construction contractor or consultancy firm undertaking or who intend to undertake overseas construction projects must secure and fill-up the application forms available at the POCB and submit them upon accomplishment together with other supporting documents as may be required. The applicant must also meet the basic criteria set by the Board.

• What are the basic criteria for registration for overseas construction operations?

The basic criteria for registration for overseas construction operations are:

For Construction Companies

1. Must possess an appropriate and current PCAB license with at least a:

• Category AA and classification of general engineering and general building for those applying as a general construction contractor;
• Category A and a classification relevant to the specialization being applied for those applying as a specialty contractor; and
• Category A for those applying as service contractor.

1. One of the key technical staff must have been employed with the company for not less than one year at the time of the filing of the application;
2. It must have at least five years of continuous actual operation as a licensed construction contractor;
3. It must have successfully completed during the immediate years the following type(s) and size(s) of projects;

• At least one (1) general engineering/building project costing not less than P10,000,000.00 for general construction contractor
• At least one (1) project falling within its field(s) of specialization costing not less than P5,000,000.00 for specialty contractor
• Substantial experience overseas as a labor sub-contractor or manpower service contractor and have remitted substantial amount of foreign exchange remittances.

For Specialized Consultancy Groups

1. Minimum paid-up capital and net worth of P250,000.00;
2. At least three permanently employed staff with appropriate degrees and professional training along the line of consultancy services offered by the company and with an aggregate experience of 25 man-years. One of the staff must have been actively engaged in the practice of his profession for at least 10 years. One of the key technical staff must have been employed with the company for not less than one year at the time of filing of the application;
3. The applicant must submit proof that the above-mentioned members of the staff possess the required experience and are permanently employed by the company;
4. It must have at least five years of continuous actual operation as a specialized consultant counted from the date of the firm’s earliest contract;
5. It must have successfully completed during the immediate past five years at least one consultancy project costing not less than P1,000,000.00.

• What documents does a Filipino contractor or consultancy firm need to prepare and submit in order to register for overseas operation with the Philippine overseas Construction Board (POCB)?

1. A Filipino contractor or consultancy firm need to prepare and submit in three copies the following documents in order to register for overseas operation with the POCB;
2. Notarized and completed application forms for registration (POCB Form 01) prescribed by the Board;
3. Copy of Contractor’s License issued by the PCAB (if applicable);
4. Copy of Articles of Incorporation, Partnership, Joint Venture, etc.;
5. Copy of Certificate of Registration with the Securities and Exchange Commission and the by-laws;
6. Board Resolution authorizing the filing of the application with the POCB and naming the person empowered to act for and on behalf of the applicant; Certified list of stockholders, indicating their respective nationality, amount subscribed and amount paid on subscription;
7. Certified list of current directors, officers and operations personnel indicating their respective nationality, position and status (whether full time or part time) together with their respective bio-data;
8. Copy of Audited Financial Statements of the applicant for the last three preceding years. In case the application is filed six months after the latest calendar or fiscal year, the applicant shall also submit the company’s latest audited interim financial statements;
9. Copy of income Tax Returns of the applicant for the last three years of its operations duly received by the BIR together with the corresponding BIR Tax Payment Orders and CB Confirmation Receipts;
10. Certified list of the completed and on-going construction or consultancy contracts of the applicant (POCB Form 01-A);
11. Statement under oath that the applicant has not undertaken any contract that was rescinded by the project owner/principal as a result of unsatisfactory performance by the applicant.

• What is the validity of the registration with POCB?

All contractors registered with the Board are required to renew their registration every two years during the month when their applications for registration were approved.

• What are the requirements for renewal of POCB registration?

The Board shall renew the registration only of those companies which still meet the requirements for registration enumerated in Section 1 of this Rule and which have not violated any provision of the Decree, the Rules and Regulations, and the terms and conditions of their registration.

• What is CPES and how is this program being implemented by the government?

CPES is a uniform rating system of evaluating the performance of constructors based on a set of criteria. It is like a “report card” wherein the constructors will be rated during construction and upon completion of the project.

The CPES program is being spearheaded by the Construction Industry Authority of the Philippines (CIAP) thru one of its implementing boards, the Philippine Domestic Construction Board (PDCB). Based on the IRR of PD1594, all concerned government agencies shall implement CPES program through establishment of CPES Implementing Unit (IU) in their agency. The IUs shall act as the agency’s overseer in the CPES implementation.

• How is a constructor being rated or evaluated?

With CPES, the performance of a constructor is evaluated during construction on the aspects of workmanship, materials, time, environmental, safety and health concern, resources deployment, and facilities. However, upon completion the aspects of workmanship and time shall be evaluated. The constructor shall receive a CPES rating from the agency concerned which implements the projects. The rating states both the numerical and descriptive performance of the constructor for each project visit.

What regulation requires the implementation of CPES in government construction projects?

Section IV PE of the Implementing Rules and Regulations (IRR) of PD 1594, as amended 12 July 1995 , provides that all contractors undertaking government  projects shall have their performance evaluated by agencies concerned using CPES.

• Who will be evaluated using CPES?

The following constructors undertaking projects with the government shall be evaluated:

1. local constructors licensed by and registered with the Philippine Contractors Accreditation Board (PCAB);
2. foreign constructors licensed by PCAB; and
3. Joint ventures and consortia licensed by PCAB.

• Who can use the CPES system?

The government agencies implementing construction projects are mandatory required to adopt the CPES system in their infrastructure projects based on the IRR of PD 1594.

However, the private project owners, constructors, engineers, architects and the public can also use this system for monitoring/ evaluating their own projects/s. They have also the option to use this system through the CIAP accredited Constructors Performance Evaluators (CPEs), but shall be subject to terms and conditions.

• What are the possible uses of CPES ratings in the government and private sectors?

The uses of CPES ratings and other related information as identified by the industry are as follows: a) prequalification of constructors; b) agency shortlist; c) awarding of contracts; d) project monitoring and control; e) issuance of Certificate of completion; f) policy formulation/review; g) industry planning; and h) granting of credential /incentives/awards.

• How will the implementation of CPES help in the improvement of quality of our construction projects?

It is believed that CPES provides a systematic and objective monitoring and evaluation of constructors performance.  Thus, with implementation of CPES, the quality of infrastructure shall be thoroughly checked and problems encountered shall be given early resolution.

In the long run, what are the benefits we can get from implementing CPES in government construction projects?

With the implementation of CPES, the following are some of the short and long term effects:

1. Completion of infrastructure projects on time and with the desired quality;
2. Improvement of standards of constructors performance
3. Classification of constructors based on their performance;
4. Improvement of government’s efficiency and effectiveness on project implementation;
5. Strict compliance of constructors with environment, safety and health concerns; and
6. Improvement of domestic constructors capability for project implementation.

• What are the disputes that may be brought to the Construction Industry Arbitration Commission (CIAC) for adjudication?

CIAC settles disputes involving, among others: [1] violation of specifications for materials and workmanship; [2] violation of the terms of the agreement; [3] interpretation and/or application contractual provisions; amount of damages; [4] commencement time and delays; [5] maintenance and defects; [6] payment default of employer or contractor, and [7] changes in contract cost.

• What are the primary requirements for CIAC to acquire jurisdiction over construction disputes?

1. First, the contract of the parties must contain an arbitration clause, stating among others, that in case a dispute arises from said contract, it will be resolved by arbitration.  If the contract has no arbitration clause, both parties must sign an agreement to arbitrate.
2. Second, one of the parties must file a case or Request for Adjudication with the CIAC.

• What is arbitration and how is it different from conciliation/mediation?

Arbitration is a way of settling dispute(s) between parties who agree to submit the same for resolution by their nominated judges or arbitrators.  A decision or an award rendered by arbitrator(s) in arbitration proceedings is enforceable by a writ of execution.

In conciliation, the dispute is referred to a panel of conciliators tasked to bring the parties to an agreement.  Mediation is similar to conciliation except that the dispute is referred only to a single neutral third party, called a mediator, who is tasked to bring the disputing parties to a negotiation.  Decision or award rendered in conciliation/mediation is not binding upon the parties. They are merely recommendatory.

• What are the advantages of construction arbitration over court litigation?

Some of the advantages of construction arbitration, compared to litigation are as follows: [1] arbitrators have technical expertise; [2] parties choose the arbitrators; [3] parties choose the terms of reference; [4] proceedings are simple, faster and less expensive; [5] proceedings are confidential; and [6] arbitrator’s decision is binding.

• How long does it take CIAC to resolve a dispute by arbitration?

Of the 395 cases resolved by arbitration (as of October 19, 2006 ), CIAC has the following records:

From Filing of case to Award: 190.19 days or 9 mos. and 8 days;

From Signing of Terms of Reference to Award: 127.29 days or 4 mos. and 11 days.

• What can we do to erring contractors?

Erring contractors may be blacklisted/suspended by concerned government agency using the blacklist guidelines. The agency may also refer the case to the Philippine Contractors Accreditation Board (PCAB) for appropriate action.

• Is there a guideline for blacklisting government constructors?

Yes, the Uniform Guidelines for Blacklisting Constructors Involved in Public Construction.

• What are the penalties for the violations committed?

The penalty will depend on the violation committed by the constructor. The shortest penalty is six months while the longest is perpetual disqualification.

• Can a blacklisted constructor file a Motion for Reconsideration or Appeal?

Yes. The blacklisting guidelines as amended 18 July 2000 provide under Sections 6.5 and 6.6 the filing of a Motion of Reconsideration and Appeal, respectively.

• Can we award to the lowest bidder the contract if he is included in the list of blacklist constructors?

No. A contractor who is included in the list of Government-level blacklisted constructors shall not be allowed to participate in the prequalification and bidding of all government tendering agencies for a given period of time while those that are included in the Industry-Level blacklisted constructors are automatically banned from participating in the prequalification, bidding and undertaking any new government and private projects for a given period of time.

• How and when can the suspension of a blacklisted constructor be lifted?

The suspension of a blacklisted constructor may be lifted either automatically or through the issuance of a Delisting Order of the agency concerned depending on the condition of the Blacklisting Order.