Stiffer sanctions on erring contractors up

The Department of Transportation (DOTr) will start imposing stiffer penalties on the late delivery of projects.

In a statement on Tuesday, the DOTr said it had issued a memorandum stating that projects with a so-called work slippage of over 30 days would result in the cancellation of the contract as well as nonpayment and the blacklisting of the contractor.

The DOTr would then transfer the project to another contractor.

Work slippage referred only to delays “due to the contractor’s fault,” clarified Paul Yerba, DOTr undersecretary for legal affairs and procurement. This is because projects often fall behind due to the procurement of right of way, which is the government’s area of responsibility.

Yerba said the directive was issued on Feb. 23, 2018 on the heels of a Cabinet meeting during which President Duterte complained about project delays.

The DOTr, citing Transportation Secretary Arthur Tugade, noted that it would “not allow irresponsible contractors to take part in government projects, as it will not only result in delays but inflict further suffering of the people who are anxiously waiting for improvements.”

The 30-day threshold is tighter than what is outlined under Republic Act 9184 or the Government Procurement Law. Under the law’s implementing guidelines, slippage is expressed in percentage terms, meaning it depends on the length of the contract.

For example, termination can occur when the private contractor has incurred “negative slippage” of 15 percent for an ongoing project, and 10 percent after the contract time has expired.

Under the law, slippage can also trigger blacklisting, which disqualifies a company or group from participating in government biddings for a certain period.