Top 10 contractors under DU30 run record of fraud, delays, blacklisting

By Karol Ilagan and Malou Mangahas,
Philippine Center for Investigative Journalism 

 THREE HAD been suspended or blacklisted, including one for submitting fake tax clearance certificates. One had its corporate registration revoked. The officers of four others are facing trial for alleged graft. Two have direct connections to politicians, some others had sealed deals via financial favors exchanged with certain politicians. All share a record of incomplete or bad projects, and unsatisfactory ratings in some project performance evaluations.

Contractors with checkered histories have emerged as the Top 10 winners of the biggest civil-works contracts awarded from July 2016 to December 2017 under President Rodrigo R.. Duterte.

All the 10, however, are now facing investigation by the Department of Public Works and Highways (DPWH) “for various reasons,” according to DPWH Secretary Mark A. Villar.. But while these contractors secured contracts with apparent speed, DPWH has been slow to complete its investigation into their alleged irregular conduct or poor performance.

For instance, one of the 10, R.C. Tagala Construction (now registered as Syndtite Construction Corp.), had already bagged PhP5.7 billion worth of contracts in the first 18 months of Duterte in Malacañang when DPWH blacklisted it for a year just last Aug. 16.

The firm, under the name R.C. Tagala, was found to have violated the terms and conditions of its contract to build Phase 1 of Labo Bridge in Camarines Norte. The Camarines Norte District Engineering Office had terminated the contract year earlier on July 19, 2017, but it took DPWH 13 months to blacklist the firm, which only recently reegistered as Syndtite Construction Corp.

The good fortune of the top contractors is enrolled in the DPWH’s database of awarded contracts from July 2016 to December 2017.

The Duterte era’s Top 10 contractors cornered for themselves contracts worth PhP68.5 billion or 14 percent of the PhP500.7-billion total projects with notices to proceed issued by DPWH from July 2016 to December 2017.

Per company, however, the total value of awarded contracts could even be bigger as these firms also participated in joint ventures. DPWH’s data did not break down these details. (See Table: Duterte’s Top Contractors Financial Position)

To validate their profiles and contracting history, PCIJ reviewed the list of blacklisting reports of the Government Procurement Policy Board (GPPB); list of licensed contractors of the Philippine Contractors Accreditation Board (PCAB); suspension orders of DPWH; corporate documents filed with the Securities and Exchange Commission (SEC); case files at the Sandiganbayan anti-graft court; records of candidates and campaign donors of the Commission on Elections (Comelec); Construction Performance Evaluation System (CPES) reports; and Philippine Government Electronic Procurement System (PhilGEPS) records.

Same, some new names

Seven firms on the current list of Top 10 contractors under Duterte have had a long run of luck in terms of bagging contracts from the time of former President and now House Speaker Gloria Macapagal Arroyo. They did not all make it, however, to Arroyo’s Top 10 list.

These lucky seven under Duterte are:

• St. Gerrard Construction Gen. Contractor & Development Corp. (formerly St. Gerrard Construction), No. 1;
• Ulticon Builders, Inc., No. 2;
• Equi-Parco Construction Company, No. 3;
• IBC International Builders Corporation, No. 6;
• FFJJ Construction, No. 7;
• Northern Builders, No. 8; and
• ESR Construction and Development Corporation (formerly ESR Construction & Supplies), No. 9.

These seven had also ranked among the top contractors with notices to proceed on projects issued between July 2010 and June 2016 under former President Benigno S. Aquino III.  (See Table: Top DPWH Contractors by Administration).

There are three newcomers, however, in the Top 10 roster under Duterte:

• M. Montesclaros Enterprises, Inc., No. 4;
• Syndtite Construction Corporation (formerly R.C. Tagala Construction), No. 5; and
• Legacy Construction Corporation (formerly Legacy Construction), No.10.

At least two of the firms, meanwhile, not only have Triple-A General Engineering Licenses, but also political connections. One, Equi-Parco Construction Corp., is owned by the current mayor of Butuan City, while another, M. Montesclaros Enterprises, Inc., has two of its seven stockholders as in-laws of the late governor of Iloilo province.

Nine of the obscure contractors that made it to the Top 10 list under Arroyo no longer appear on the lists of the Aquino and Duterte administrations, however. (See Table: Duterte Administration’s Top Contractors General Information)

Over 2,200 contractors have participated in the bidding of DPWH contracts under the Duterte administration. But apart from the Top 10, only 80 other contractors had each won a billion pesos worth of projects in a span of one and a half years. The 2,120 others got much, much less. (See Table: Contractors Implementing DPWH projects)

Majority of the Construction Performance Evaluation System (CPES) reports for projects implemented by the top 10 contractors are satisfactory, while some garnered “very satisfactory,” and still a few others, “outstanding” ratings..

Nonetheless, for certain projects, all on the Top 10 list have also obtained low ratings, and some, unsatisfactory scores. A poor CPES rating should result in a contractor’s disqualification from subsequent bidding.

17 years on top

The luckiest of all the contractors would have to be Equi-Parco, which has retained its lock on the Top 10 list since Arroyo’s time, or from 17 years ago. Equi-Parco was the No. 2 top contractor under Arroyo, No. 1 under Aquino, and now No. 3 under Duterte.

The secret to its success derives apparently from its ownership. A Triple-A General Construction/General Engineering firm based out of Ambago town in Agusan del Norte, Equi-Parco is owned by the incumbent city mayor of Butuan, Ronnie Vicente C. Lagnada.

A civil engineer, Lagnada put up the company in 2002 together with Ruben A. Javier, also a civil engineer. By press accounts, friends and associates also call the mayor by his nicknames Equi-Parco, Ronnievic, or RVL.

PhilGEPS data from 2001 to 2018 show no records of any contracts that the local government of Butuan has awarded to Equi-Parco, but only those that the firm had won from the DPWH Butuan District Engineering Office. Equi-Parco has also been awarded contracts from the Philippine Ports Authority, National Irrigation Administration, among other national government agencies.

PCAB’s accreditation list as of June 2018 names Javier, and not Lagnada, as Equi-Parco’s representative.

Equi-Parco’s articles of partnership filed with the SEC in 2003 show that Ronnievic C. Lagnada and Ruben A. Javier contributed PhP25 million each to the firm. This 2003 document is the latest articles of partnership of the firm that is available from the SEC.

In its 2016 financial statement, Equi-Parco declared having PhP2.76 billion in current assets, PhP102.9 million in current liabilities, and PhP696.8 million worth of property and equipment. The company’s website shows various accreditation documents from DPWH for Equi-Parco to operate cement and asphalt batching plants from 2015 to 2017.

These values are just a fraction of the PhP31.82 billion in civil-works contracts that it has secured from DPWH in the last 18 years. Equi-Parco got PhP6.10 billion in civil-works contracts from DPWH under Arroyo from January 2001 to June 2010; PhP17.24 billion under Aquino from July 2010 to June 2016; and the PhP8.48 billion under Duterte from July 2016 to December 2017.

PCIJ wrote to Equi-Parco last June 27 to check if Lagnada has divested his interests from the firm and to request records of his divestment. On July 3, Equi-Parco’s records-section supervisor Vanessa Fuentes told PCIJ by phone to expect a response as soon as information is provided by the office, but this never came. Another woman who introduced herself only as an Equi-Parco representative but refused to give her name told PCIJ that since Lagnada is now part of government, he is therefore no longer part of Equi-Parco. PCIJ asked Fuentes to identify the second caller but she declined to do so. PCIJ also sent a registered mail to the Butuan’s Mayor’s Office but did not get a reply.

Conflict of interest

PCIJ has yet to see any document showing Lagnada as having divested his interests from Equi-Parco;  news reports in the last three years, however, have still referred to him as head or president and chief executive officer of the company.

Section 9 of the “Code of Conduct and Ethical Standards for Public Officials and Employees”  or R.A. No. 6713 states that a public official or employee shall avoid conflicts of interest at all times: “When a conflict of interest arises, he shall resign from his position in any private business enterprise within thirty (30) days from his assumption of office and/or divest himself of his shareholdings or interest within sixty (60) days from such assumption. The same rule shall apply where the public official or employee is a partner in a partnership.”

Lagnada won as Butuan mayor in the May 2016 elections. He ran under the National Unity Party that was formed by politicians who broke away from the Lakas-NUCD-CMD party of former Presidents Fidel V. Ramos and Arroyo.

The PhP8..48 billion in DPWH contracts that Equi-Parco won between July 2016 and December 2017 include PhP70.12 million worth of DPWH projects in Butuan where Lagnada is city mayor.

Section 47, Rule XV of Republic Act No. 9184 requires bidders to submit a sworn affidavit that it is not related to the head of the procuring entity, members of the Bids and Awards Committee, the Technical Working Group, and the Bids and Awards Committee Secretariat, the head of the project management office, or the end-user or implementing unit, and the project consultants, by consanguinity or affinity up to the third civil degree. Failure to comply with the provision shall be a ground for the automatic disqualification of the bid.

PCIJ has no information as to whether Lagnada or Javier is related to any member of the DPWH Butuan’s Bids and Awards Committee, the Technical Working Group, and the Bids and Awards Committee Secretariat, or the head of the project management office, the end-user or implementing unit, and project consultants.

Can’t, didn’t intervene

PCIJ shared its findings with DPWH and asked what is being done to ensure the integrity of the procurement infrastructure projects — that contracts are awarded to competent, clean, and capable contractors — especially in light of the government’s Build, Build, Build program.

DPWH spokesperson Anna Mae Lamentillo told PCIJ in an interview last Aug. 6 that DPWH did not intervene in the bidding process of the projects won by the 10 contractors “because that’s what the law mandates.”

What DPWH can guarantee, she said, is that the contractors will now be examined for their performance. “So if the previous administration did not look into their prior performance before bidding out another project,” Lamentillo said, “it will not happen in this administration because of the Infratrack system.”

DPWH uses an application called Infratrack supposedly to improve transparency and accountability in the monitoring of civil-works projects. It uses geotagging technology to help the agency monitor the progress of projects virtually.

When PCIJ commented that findings such as political ties and graft charges cannot be captured automatically by software, Lamentillo said that the agency “cannot do anything about it.” She added, “For as long as the procurement law allows it, DPWH cannot intervene. You cannot participate because then we will be contradicting the law. We will be violating the law.”

Lamentillo also said that some of the 10 firms are among the 43 contractors currently facing suspension over delayed projects. One of the 10 contractors, R.C. Tagala Construction which is now operating under the name Syndtite Construction Corporation, was recently blacklisted for one year beginning Aug. 16, 2018.

Secretary Villar on July 11 told reporters that contractors implementing more than 400 delayed infrastructure projects are close to being suspended and eventually will be blacklisted. According to Lamentillo, meanwhile, all 10 contractors are under investigation by the DPWH for various reasons.

Suspended, blacklisted

The No. 1 contractor in the Duterte era, St. Gerrard Construction General Contractor & Development Corp., had been suspended by DPWH under its former name St. Gerrard Construction.

From July 2016 to December 2017, St. Gerrard won PhP12.3 billion worth of contracts, excluding joint-venture projects it carried out with other firms.

On Aug. 12, 2015, DPWH issued a suspension order on St. Gerrard Construction because it submitted a tax clearance to the Procurement Service that was confirmed spurious by the Bureau of Internal Revenue (BIR). The order, signed by then DPWH Secretary Rogelio Singson, suspended St. Gerrard and its owner Pacifico F. Discaya II from participating in DPWH public biddings for one year.

The suspension was based on the implementing rules and regulation of Republic Act No. 9184 or the Government Procurement Reform Act, which penalizes bidders for one year for the first offense of submitting eligibility requirements containing false information or falsified documents.

On March 4, 2016, DPWH lifted St. Gerrard’s suspension after finding merit in Discaya’s letter for reconsideration.

Three months after DPWH suspended “St. Gerrard Construction,” a new firm named “St. Gerrard Construction General Contractor & Development Corp.,” registered with the SEC on Nov.. 12, 2015. Based in Pasig City, the firm is still owned by Pacifico F. Discaya II with four other stockholders: Cezarah Rowena C. Discaya, Krizza Mae S. Enerio, Christian Andrew J. Cruz, and Jenie P. Tumalin.

(Discaya was among the BIR’s Top 500 Taxpayers in 2014. Discaya paid PhP12.7 million in taxes that year.)

Got deals, while suspended

PCIJ, though, found that “St. Gerrard Construction” and “St. Gerrard Construction Gen. Contractor & Development Corp.” still won a total of nine contracts that were advertised within the period of its suspension from Aug.. 12, 2015 to March 4, 2016. The contracts amounted to a total of PhP440.5 million.

On June 27, 2018, PCIJ sent a letter to Discaya asking why a new entity was registered and whether it was done to be able to bid on contracts despite the suspension of St. Gerrard Construction..

On July 2, Discaya initially asked PCIJ to follow up after a few days so that he could present “complete data.” PCIJ called him on July 5 and again on July 9, when he said he would try to give his answers within the same week. PCIJ has yet to get a reply from the St. Gerrard owner as of press time.

St. Gerrard has a Double A license category with a primary classification under General Building, according to PCAB records, as of June 2018.

Republic Act No. 4566, also known as the Contractors License Law, provides that no contractor shall engage in the business of contracting without first having secured a PCAB license to conduct business. It is considered an offense to engage in contracting business without a license first being obtained. This is to ensure that only qualified and reliable contractors are allowed to undertake construction in the country and to promote the growth of the contracting sector and the upgrading of construction capability.

A contractor’s license classification refers to the area of operation the firm can engage in. This is determined by the firm’s technical experience of its sustaining technical employee (STE). A contractor may apply for and be issued more than one classification, one of which shall be designated as his principal classification.

The license category, meanwhile, indicates the graded level of aggregate capability of a contractor with respect to its principal classification and is based on predetermined qualification criteria such as financial capacity, experience of STE, track record, and equipment.

Minimum requirements

In determining a contractor’s category, its qualification must satisfy all the minimum requirements, corresponding to the classification and category being applied for, qualified, and rated according to equivalent credit points and shall be the lowest sustainable by all three determinants as follows: financial capacity, experience of STE, and overall credit points based on the four qualification criteria.

A Double-A General Building license means, among other requirements, that St. Gerrard Construction must have had a minimum of PhP45 million stockholder’s equity and minimum of 895 credit points, computed according to PCAB guidelines.

St. Gerrard has current assets worth PhP2.85 billion and current liabilities of PhP9.88 million, according to its 2016 financial statement. It also has property and equipment worth PhP54.6 million.

Suspended, too

Another blacklisted contractor that changed its name is Syndtite Construction Corporation, which used to operate as R.C. Tagala Construction.

R.C. Tagala Construction has just been blacklisted for one year by the DPWH starting Aug. 16, 2018. The firm was among the 43 contractorsfacing suspension over delayed projects. R.C. Tagala was suspended for violating the terms and conditions of its contract during the implementation of the construction of Labo Bridge and its approaches (Phase 1) in Labo, Camarines Norte. Camarines Norte District Engineering Office thus terminated R.C. Tagala’s contract on July 19, 2017.

Records from the Construction Industry Authority of the Philippines (CIAP) show that earlier, R.C. Tagala Construction had been blacklisted in public biddings by the Local Government of Manolo Fortich in Bukidnon in 2016. The blacklisting ended on July 31, 2017..

Records obtained from the Philippine Overseas and Domestic Construction Board show that R.C. Tagala Construction incurred a negative slippage of more than 15 percent, in addition to submitting a counterfeit bank guarantee as performance security. Slippage refers to a contractor failing to meet a deadline.

The blacklisting order, signed by Manolo Fortich Mayor Clive Quiño, indicated that R.C. Tagala, after already incurring a slippage of negative 15 percent, failed to correct the violation despite several notices and warning. The slippage, Quiño wrote, already reached negative 23.98 percent. The contract for the “Rehabilitation/Concreting of Mantibugao-Minsuro Farm-to-Market Road” awarded to R.C. Tagala was thus terminated on July 14, 2016.

In July 2017, Quiño issued a delisting order, which lifted the sanction against R.C. Tagala. According to the order, the contractor paid PhP9.59 million to the local government unit, which corresponds to the amount advanced to the contractor as authorized mobilization and part of the performance guarantee.

A Triple-A contractor based in Quezon City, Syndtite Construction registered with the SEC on April 24, 2015, a year before R.C. Tagala was blacklisted by the Manolo Fortich LGU. Syndtite is owned by Rosanno C. Tagala, Jusiah S. Tagala, Christian Dalmes S. Tagala, Marithel T. de Jesus, Edwin Sabas Recto J. Homena. Rosanno C. Tagala, who owned R.C. Tagala Construction, owns majority or 70 percent of Syndtite Construction, according to its 2017 general information sheet.

From July 2016 to December 2017, Syndtite won contracts worth a total of PhP5.7 billion, DPWH data show.

Syndtite has current assets of PhP1.97 billion and current liabilities of PhP18.9 million. The company also has property and equipment worth PhP183.4 million, according to its 2016 financial statement.

No. 4 suspended also

The fourth top contractor, M. Montesclaros Enterprises Inc. (MMEI), also has a history of suspension with DPWH. Registered with SEC in 1995, MMEI got P6.36 billion worth of DPWH projects during Duterte’s first one and a half years in office.

On Dec. 15, 1989, DPWH, under then Secretary Fiorello R. Estuar, suspended M. Montesclaros Enterprises together with its partner A.C. Geronimo in a joint venture and Urban Consolidated Contractors (Phil.) Inc. for one year. The reason for suspension was not indicated in the official records, however.

On June 19, 1990, DPWH issued an order reducing the period of suspension from one year to six months. The suspension was in effect lifted on June 8, 1990. The order was issued in view of the representations made by the contractors that they had already realized the consequences of their actions and were at the time “supplicating for condonation with commitment of reform.”

PCIJ did not find any records showing that MMEI has been suspended or blacklisted again from any public bidding with DPWH since 1990.

Bukidnon-based MMEI has a Triple-A General Engineering license issued by PCAB. It is owned by Mariano R. Montesclaros together with seven other stockholders and family members: Esther T. Montesclaros, Maita Montesclaros-Gue, Mariano Rico T. Montesclaros, Totsy T.. Montesclaros-Duenas, Binky Montesclaros-Tupas, Marious T. Montesclaros, and Marlah Montesclaros-Tomboc.

MMEI has current assets worth PhP1.72 billion and current liabilities worth PhP797 million. The company also has property and equipment valued at PhP158 million, according to its 2016 financial statement.

Pending graft charges

The owners of Syndtite (formerly R.C. Tagala Construction), MMEI, and two other top contractors, IBC International Builders Corp. and Legacy Construction, appear in the Sandiganbayan graft case database.

Syndtite’s authorized managing officer, Rosanno C. Tagala, is among those charged by the Sandiganbayan for anomalies in contracts funded by the PhP1.53-billion royalties from the Malampaya gas field in 2008 and 2009. Former Palawan Governor Mario Joel Reyes and 40 other individuals are also among those charged.

According to records obtained by the Philippine Daily Inquirer, R.C. Tagala Construction, Syndtite’s former name, was involved in airport, road and water projects, some of which were declared to have been completed, but were not actually finished.

Inquirer reported state prosecutors as saying that Reyes conspired with seven other public officials to award 209 contracts to 11 construction firms sometime in 2008, despite violations of several requirements provided in R.A. No. 9184. These included the failure to post the bid invitation on the PhilGEPS website and the province’s website, as well as the non-submission of bidding documents.

State prosecutors likewise alleged that the engineering office faked the accomplishment and inspection reports and allowed the violation of terms for 39 infrastructure contracts worth a total of PhP461.37 million.

Half the value of the projects went to Puerto Princesa City-based BCT Trading and Construction, which had 80 contracts worth PhP722.75 million altogether, while R.C. Tagala Construction won 14 contracts worth PhP301.46 million in all.

According to the Sandiganbayan’s Second Division, the cases against former governor Reyes and the other accused including Rosanno C. Tagala are still pending with a pre-trial order to be issued, as of July 6, 2018.

The presentation of prosecution evidence is set on certain dates from January to March of 2019, while the defense is scheduled to present its evidence on several dates from April to June of next year.

Falsified minutes

The Sandiganbayan, meanwhile, found Helen Edith L. Tan, IBC International Builders Corp.’s proprietor, together with local officials of Maasin, Iloilo guilty of violating Section 3(e) of Republic Act No. 3019.

In 2015, the anti-graft court found that public officials falsified the Minutes of the Regular Session of the Sangguniang Bayan of Maasin, Iloilo City by making it appear that the body enacted resolutions on a certain date, which led to the signing of a memorandum of agreement between the Maasin municipal mayor and IBC’s Tan for the supposed rechanneling of the Tigum River path and the quarrying activities of IBC International Builders Corp. at the Tigum River.

Each of the accused was meted with the penalty of imprisonment of six years and one month to 10 years, as well as perpetual disqualification to hold public office.

In October 2016, however, the Supreme Court issued a decision that said that since Tan’s conviction was based on the presence of conspiracy, which the prosecution was not able to prove beyond reasonable doubt, her conviction of the offense charged must be reversed. Tan was thus acquitted.

Registered on March 12, 1985, IBC International Builders Corp. is a Triple-A General Engineering contracting firm based Iloilo City. It bagged PhP5.25 billion in project contracts from July 2016 to December 2017.

According to records filed with the SEC, IBC has current assets worth PhP944 million and current liabilities of PhP55.9 million. IBC also reported property and equipment worth PhP1.3 billion, as of 2016.

Dishonored checks

For their part, Alex and Dominador Abelido, owners of Legacy Construction, are accused in a case that the Supreme Court found probable cause for violation of Section 3(e) of Republic Act No.. 3019 or the Anti-Graft and Corrupt Practices Act.

On Aug. 13, 2000, the Local Government of Valencia, Negros Oriental awarded Legacy Construction a contract for the improvement of its waterworks system for the amount of PhP14.62 million.

To implement the project, Legacy purchased pipes worth PhP2.82 million from New Bian Yek Commercial, Inc. But the check payments it issued were dishonored and not replaced. Because Legacy had already received a significant portion of the contract amount from Valencia LGU, New Bian Yek demanded payment for the pipes. Legacy, however, ignored the demand.

New Bian Yek brought the case to the Office of the Ombudsman, which in turn did not find probable cause for violation of Section 3(e) of R.A. No. 3019. New Bian Yek then filed a petition for certiorari to the Supreme Court. The High Court in 2009 found that the local government officials conspired with the Abelidos in depriving New Bian Yek Commercial of payment for Legacy’s obligation. “Such act was therefore undertaken in bad faith, with manifest partiality and in utter disregard of petitioners rights under PD 1594,” the court said.

The 2005 resolutions of the Office of the Ombudsman – Visayas were thus reversed and set aside except insofar as one respondent is concerned. New judgment was then rendered finding probable cause for violation of Section 3(e) R.A. No. 3019 against Alex Abelido and Dominador Abelido and Valencia officials. The Office of the Ombudsman – Visayas was likewise directed to file the necessary information against the respondents.

On March 26, 2015, Alex Abelido and his co-accused, were acquitted by the Sandiganbayan’s Fifth Division. The charge against Legacy owner and Alex’s father Dominador Abelido, meanwhile, was dismissed because he died in 2006 prior to the filing of the information with the anti-graft court.

In the decision signed by Associate Justice Alexander G. Gesmundo, the accused were acquitted of the charge of violating Section 3(e) of Republic Act No. 3019 because the prosecution failed to prove their guilt beyond reasonable doubt.

Undue injury

Section 3(e) of R.A. No. 3019 pertains to officials and employees of offices or government corporations “causing any undue injury to any party, including the government, or giving any private party any unwarranted benefits, advantage or preference in the discharge of his official, administrative or judicial functions through manifest partiality, evident bad faith or gross inexcusable negligence.”

To hold a person liable under this section, the following elements must be established beyond reasonable doubt by the prosecution:

• The accused must be a public officer discharging administrative, judicial, or official functions;
• He must have acted with manifest partiality, evident bad faith, or gross inexcusable negligence; and
• His action caused any undue injury to any party, including the government, or giving any private party unwarranted benefits, advantage or preference in the discharge of his functions.

The court ruled that the prosecution failed to prove the existence of the second and the third elements of the offense. The defense presented evidence that former Valencia Mayor Rodolfo V. Gonzalez Jr. wrote a letter inviting Dominador Abelido and his lawyer to a meeting with a lawyer and representative of New Bian Yek, belying the prosecution’s claim of evident bad faith and manifest partiality.

Legacy Construction also denied that the purchases made by its engineer Jaime Lu was the firm’s transaction because the latter was not authorized to do so; it also said that the check issued by Lu was not Legacy Construction’s but his personal one. The court then inferred that the purchases of Lu was purely personal and could not be attributed to Legacy Construction. Hence, contractor’s lien cannot be exercised, the court ruled.

Acquitted by Sandigan

Meanwhile, MMEI’s stockholders Marianito Montesclaros, Esther Montesclaros, Maita Montesclaros-Gue, Mariano Rico Montesclaros, and Totsy Montesclaros were acquitted in a graft case filed by the Office of the Ombudsman against them in 2010. Among the co-accused was former Iloilo governor Niel Tupas Sr., who died in 2015.

The Sandiganbayan’s First Division said state prosecutors from the Office of the Ombudsman failed to prove allegations that Tupas acted with “evident bad faith, manifest partiality and gross inexcusable negligence” or conspired with the other respondents in issuing a quarrying permit to a private contractor in 2004.

The case stemmed from Tupas’s allegedly anomalous issuance of an industrial sand-and-gravel (ISAG) permit to Melvin Requinto despite the latter’s lack of track record and technical capability to go into the quarrying business.

With permit in hand, Requinto entered into a memorandum of agreement with the M. Montesclaros Enterprises Inc. for the operation and maintenance of a rock crushing plant. MMEI is a private company whose owners are Tupas’s relatives.

The MMEI in turn entered into a PhP63-million subcontractor agreement with Taisei-Shimizu Joint Venture (TSJV), which won the contract to build the New Iloilo Airport.

Marianito Montesclaros is the father of Binky Montesclaros-Tupas, also an MMEI stockholder and wife of Raul Tupas, son of the elder Tupas.

Poor performance

Majority of the CPES reports for projects implemented by the top 10 contractors are satisfactory, with some very satisfactory and outstanding ratings. All, however, also posted low ratings, with some unsatisfactory and poor scores. A “poor” (less than 75 percent) or “unsatisfactory” (75-82 percent) CPES rating should result in a contractor’s disqualification from succeeding biddings.

CIAP, through the Philippine Domestic Construction Board, implements the Construction Performance Evaluation System, a rating system used in evaluating the performance of constructors based on a set of criteria. The CPES is envisioned to provide information on the performance of constructors in government projects that may be used as basis for prequalification/eligibility check of constructors, agency shortlist, awarding of contracts, project monitoring and control, blacklisting of constructors, policy review/formulation, among others.

The No. 8 contractor, FFJJ Construction, got several unsatisfactory and poor CPES ratings, well below the passing rate of 82 percent. Of the 62 projects evaluated, FFJJ had at least 18 projects with poor and unsatisfactory ratings, while the rest are either satisfactory or very satisfactory. Except for 2012, FFJJ Construction had project evaluated with unsatisfactory ratings from 2008 to 2016. (See Table: Top Contractors with Unsatisfactory CPES Ratings)

A DTIegistered firm, FFJJ Construction, is a Triple-A General Engineering contractor based in Cotabato City. From July 2016 to December 2017, it bagged PhP5.03 billion worth of contracts. The business is owned by Engr. Osmeña L. Palanggalan.

R.C. Tagala Construction (now registered as Syndtite Construction) implemented eight projects that got unsatisfactory and poor CPES evaluations.

Northern Builders had two poor and one unsatisfactory evaluations, while Equi-Parco, IBC, MMEI, and St. Gerrard each had two unsatisfactory or poor ratings.

Legacy Construction, ESR Construction & Supply, and Ulticon Builders, meanwhile, implemented at least one project that received a poor or unsatisfactory score.

Procurement rules require contractors to obtain at least a “satisfactory” performance or 82 above.. A below-82 percent CPES rating means an “unsatisfactory” or poor performance, which should have resulted in a disqualification from succeeding biddings.

A constructor with a CPES rating of “poor” or “unsatisfactory” in any of its projects shall be blacklisted from participating in any government project, according to Section 4.2 (f) of the GPPB’s Guidelines for Blacklisting of Constructors.

A blacklisted person/entity is automatically delisted when the period for the penalty has elapsed, unless the blacklisting agency requests the GPPB to maintain the blacklisted person/entity in the blacklisting report due to justifiable reasons. In the latter case, the blacklisted person/entity is delisted only upon the blacklisting agency’s issuance of a delisting order.

Registration revoked

The SEC revoked the registration of Northern Builders for its failure to submit the required general information sheets and financial statements from 1997 to 2002.

Based in Tarlac, Northern Builders is a Triple-A contractor that bagged PhP4.95 billion worth of contracts under the Duterte administration. Northern Builders is now listed as being registered with DTI.

The 2017 financial statement of Northern Builders shows that it has current assets worth PhP1.84 billion and current liabilities of PhP407.7 million. It also reported property and equipment worth PhP621.7 million. –With research by John Antiquerra, Alyssa Rafael, Mildred Mira, Yzabel Layson, Vino Lucero, and Fern Felix, PCIJ, September 2018