Bohol contractors seek relief from DPWH


The combined sixty-six strong members of the Bohol Contractors Development Organization, Inc. and the Association of Bohol’s Construction Companies, Inc. strongly urged Acting Secretary Roger G. Mercado of the Ministry of Public Works and Roads to review the approval process for any price increases for contract applications “given the seriousness of the current situation (extreme increase in the price of oil) which is currently besieging the construction industry.

Mercado immediately responded to the contractors’ call by issuing Departmental Order No. 63, Series of 2022 after an initial urgent demand letter was received as evidence of a “desperate attempt to stay in our business.”

A staggering estimate of 4 billion pesos worth of public works projects are in jeopardy as local contractors desperately try to figure out the best way to mitigate the runaway construction costs that beset the industry with its main price indicator, fuel diesel, the main engine for construction equipment, hovering at over PhP92.00 per liter and is expected to break the P100.00 per liter mark sooner rather than later.

The rising cost of petroleum, aggregates, cement, steel bars and other related materials has already exceeded 80% of the direct cost.

The Bohol contractors pointed out that the determination of “extraordinary circumstances” under the DPWH Claims Handbook and Departmental Order No. 60, Series of 2017 “appears to have a bottleneck since the sole authority to determine the clause extraordinary is centralized with the National Economic and Development Authority (NEDA) which causes unnecessary delays and would result in the eventual closure of our business due to extreme losses.

The contractors appealed to Mercado to modify the determination of the “extraordinary circumstances” clause to a local office under the direct supervision and control of NEDA instead of leaving it solely to the first socio-economic planning agency in the country.

The Bohol Entrepreneurs believe that the price increase request process will be decentralized and that “the processing will hopefully be faster”.

According to some contractors, one possible way to decentralize the request for contract price escalation is to explore how to quickly process contract price adjustments during the period of extraordinary circumstances without each contractor needing to individually request confirmation from NEDA. price escalation.

Price escalation refers to an increase in the contract price during the performance of the contract based on the existence of “extraordinary circumstances” as determined by NEDA and after prior approval by the Public Procurement Policy Board ( GPPB).

It’s a desperate race between approval of escalating contract demand prices and exorbitant prices for construction materials in the face of an impending halt to projects as contractors watch helplessly and dip into their pockets to mitigate losses in order to save the life of the projects. (Chito M. Visarra)

Comments are closed.