FROM BIG TO SMALL
The Procurement Reform Act of 2002 also specifies that for infrastructure projects, contractors must have “a valid (PCAB) license and registration for the type and cost of contract to be bid.”

According to Molano, who is also a current member of the DPWH’s BAC, a company needs to maintain a certain amount of net worth as a requirement in securing such a license. He says that if a contractor is not able to undertake several projects and the net worth requirement is not reached in the annual renewal of the PCAB license, it will opt to downgrade.

“So ‘yung iba, nagtayo ng mas maliit na company. Of course, hindi puwedeng magsabay ‘yun sa bidding of the same projects (So others formed a smaller company. Of course, it is not allowed for both companies to bid in the same projects),” says Molano.

E. Gardiola is also not the only one among the top 10 to be registered with both the SEC and DTI. Four more are registered in both agencies: Meditechtrade in San Juan, Sunwest Construction and Development in Legazpi City, L.R. Tiqui Builders in Bulacan, and Grace Construction in Ozamis City.

But two of the top 10 firms, Hi-Tone Construction and Development in Legazpi City and G.C.I. Construction in Camarines Sur, are registered only with the DTI, while Ulticon Builders in Butuan City is registered only with the SEC.

Then there are JSG Construction and Northern Builders, which both had their respective SEC registration revoked and now have only DTI registration. According to Molano, some companies do shift from corporation to sole proprietorship because a “smaller company” would be able to participate in “small projects.”

REVOKED REGISTRATION
The Gardiolas’ spokesperson, Marana, however, says that the SEC revoked JSG’s registration in 2006 due to the oversight of the company’s previous accountant, and that “we are preparing a Petition to lift said revocation.”

He adds that since the revocation of its SEC registration, JSG has decided to temporarily keep away from biddings and contracts. “They (JSG) maintain that it was in 2007 that they last participated in the bidding and that (in) 2008, they have not participated in any bidding and whatever projects they were handling were for projects awarded to them in 2007,” says Marana in an e-mail.

The Gardiolas themselves have refused requests for interviews from both the PCIJ and GMA-7 News.

The DPWH database, though, indicates that JSG has continued to win contract bids in 2008. Its last project was undertaken in Biliran — rehabilitation and improvement of national roads and bridges along road sections Almeria-Kawayan and Looc-Tabunan worth P19.2 million — with a Notice to Proceed dated May 30, 2008.

TEMPORARY LICENSE?
Another document posted on the official website of the Government Procurement Policy Board (GPPB), the agency assigned to monitor agency compliance with procurement laws, also indicates that the DPWH’s No.1 contractor has only a temporary PCAB license. In the document titled “List of PCAB Renewal Applications for CY 06-07 Eligible for Temporary License (as of 11 July 2006),” JSG Construction Company, Inc. is listed as having only “Temporary License No. 9350,” along with another frequent DPWH contractor, Ulticon Builders, Inc., which was assigned “Temporary License No. 17267.”

But Marana denies this, asserting that JSG has a “permanent (PCAB) license valid until June 2009.” He says that JSG has “religiously filed (its) financial statement with the BIR (Bureau of Internal Revenue) annually as a requirement for accreditation with PCAB.”

GPPB executive director Ruby Alvarez herself expressed surprise when told of the PCAB temporary license list. She said that the idea of contractors having only “temporary license” does not exist in procurement laws, even as the term “special license” is applied to local contractors joining bids for foreign-funded projects.

Alvarez checked with a PCAB official on the phone and the latter was similarly surprised.

PCAB Director Rene Fajardo, however, says a temporary license, which is valid for only 30 days, is issued to contractors whose license is about to expire. He says this acts as an "extension" while PCAB is still processing the license renewal of the contractor until they are given a regular license.

BANNED BY DOH
It seems, though, that the DPWH is simply not that nitpicky with its contractors. The No. 2 company in its list, in fact, was serving out a ban imposed by another government agency while it was winning bids with the DPWH.

The year-long ban (from March 9, 2005 to March 9, 2006) had been imposed by the Central Bids and Awards Committee of the Department of Health (DOH) for Meditechtrade’s failure to deliver within deadline 28 units of eight-cubic-foot, single-door refrigerators for the contract price of P429,759.20. In the end, the company delivered nothing at all.

Meditechtrade won P9.29 million worth of contracts with the DPWH in 2005. The figure shot to P416.4 million in 2006, increased some more to P2.58 billion in 2007, and ended 2008 with DPWH projects that had a total price tag of P1.7 billion.

From 2004 when it started contracting with the DPWH, Meditechtrade had bagged a total of P4.65 billion in contracts with the department.