War on Unlicensed Contractors
The NCR-CITC has initiated a war against unlicensed contractors. It has done so in its quest in achieving a level playing field in the construction contracting industry for both the employer and labor sectors alike. Currently, less than 10% of contractors in the country is licensed by the Philippine Contractors Accreditation Board (PCAB).
Contractors licensing is the foundation upon which the construction contracting industry is based. The purpose of the Contractors’ License Law (R.A. 4566) is to ensure, for the safety of the public, that only qualified and reliable contractors are allowed to undertake construction in the country. The Law mandates that only contractors, including sub- and specialty contractors, licensed by the Philippine Contractors Accreditation Board may engage in the business of construction contracting in the country. It further stipulates that all architects and engineers preparing plans and specifications for work to be contracted in the Philippines shall stipulate in their invitation to bidders, whether a resident of the Philippines or not, and in their specifications that it will be necessary for any bidder, whether contractor, sub-contractor or specialty contractor, to have a license before his bid is considered. The proliferation of unlicensed contractors has left this in disarray. This should not be so as the Department of Interior and Local Goverrnment (DILG) has issued a number of Memoranda Circulars directing city and municipal mayors to only issue Business Licences to those contractors, including sub- and specialty contractors, in posession of a valid PCAB license.
Unlicensed contractors cause a dangerous imbalance in the construction industry as they operate outside the regulatory system. Often as not they are advantaged over licenced and law abiding contractors as they are not subjected to scrutiny by DOLE and other government agencies as they are not in the government database. Minimum wage and social benefits (SSS, PagIBIG, PhilHealth) are frequently not complied with to the detriment of workers. Labor groups report of “fly-by-night” contractors frequently changing name in an attempt to escape liabilities and leaving workers’ wages unpaid.
The following Action Plan has been put in place for the National Capital Region to eradicate unlicensed contractors and create a level playing field:
- Reaching out to the public to report unlicensed contractors through the Report Page in the NCR-CITC website
- Compiling list of unlicensed NCR contractors by searching the web and directories
- Through DOLE-NCR request the Engineering and Architectural Boards of the PRC to direct licensed Engineers and Architects to only alow licensed contractors to partake in bids under their control
- Request DOLE-NCR to conduct of full audit on any identified unlicensed contractor
- Request DILG-NCR through DOLE-NCR to direct NCR LGU’s to revoke Business Licence issued to any identified unlicensed contractor
- Through DOLE-NCR, submit name and details of identified unlicensed contractor to DTI-NCR/PCAB for action
