QuestionsQuestions (Republic Act No. 4566)
RA 4566 is known as the “Contractors’ License Law.” It creates the Philippine Licensing Board for Contractors, prescribes its powers, duties, and functions, provides funds, and regulates the licensing of contractors.
The Board consists of a Chairman and two other members appointed by the President with the consent of the Commission on Appointments, under the office of the Board of Examiners.
A member must be of recognized standing in the branch of the contracting business for at least ten years, a citizen and resident of the Philippines for at least eight years immediately prior to appointment, at least 35 years old, and of good moral character.
The term is three years. Initial appointees receive staggered terms (Chairman: three years; one member: two years; the other member: one year). The President may remove a member for neglect/dereliction, incompetence, malpractice, or unprofessional/unethical/immoral/dishonorable conduct; the President may also suspend a member under investigation and designate a temporary member.
The Board can issue, suspend, and revoke licenses; investigate violations; issue subpoenas and subpoenas duces tecum for witnesses; and adopt rules/regulations (with Presidential approval), a code of ethics, and an official seal.
It must meet at least once a month and as frequently as necessary. It may be convoked by the Chairman or upon written request of the other two members.
A contractor (synonymous with “builder”) includes any person who undertakes or offers to undertake, bids, or purports to have capacity to construct, alter, repair, improve, move, wreck, demolish, or do any part of building/highway/road/railroad/excavation or other structure or project, including erection of scaffolding and related works. It includes subcontractors and specialty contractors.
A general engineering contractor is engaged in fixed works requiring specialized engineering knowledge (e.g., highways, bridges, dams, airports, pipelines). A general building contractor undertakes structures for support/shelter/enclosure requiring more than two unrelated building trades or crafts, or supervises the whole/part. A specialty contractor performs construction work requiring special skill and whose principal business involves specialized trades/crafts.
RA 4566 does not apply to: (1) authorized representatives of the Republic or political subdivisions; (2) sales/installation of finished products/materials not fabricated into a permanent fixed part; (3) construction/alteration of personal property; (4) work with aggregate contract price under ₱10,000 for labor/materials/other items on one undertaking/project, unless part of a larger operation or divided to evade; (5) registered civil engineers or licensed architects acting solely in professional capacity; and (6) persons only furnishing materials/supplies without fabricating into or consuming them in the work.
The applicant must show at least two years of experience in the construction industry and knowledge of building, safety, health, and lien laws of the Philippines, and rudimentary administrative principles of contracting as deemed necessary for public safety.
A partnership/corporation (or other organization) may qualify through its responsible managing officer appearing personally before the Board, proving he is a bona fide responsible officer and can exercise authority over the contracting business—such as making technical and administrative decisions and managing personnel actions (hiring, superintendence, promotion, transfer, layoff, discipline, discharge).
The licensee must notify the Board in writing within ten days from cessation/association/employment. Failure to notify results in the license being ipso facto suspended. Restoration requires an affidavit showing replacement by a qualified individual and compliance with the disassociation rules and character/previous license status.
Contractors actively engaged in construction at the effectivity of RA 4566 and licensed as such for the last five years may, upon application, be issued a license without the need for examination.
At least once a year, the Board must publish in a newspaper of general circulation a list of contractors’ names and addresses, and details of licenses issued, suspended, or revoked, plus such further information as it deems proper.
Examples include: abandonment without lawful/just excuse; willful and material departure/disregard of plans/specifications prejudicial to another without owner consent; willful misrepresentation in obtaining a license; aiding/abetting unlicensed persons or allowing one’s license to be used to evade licensing requirements; failure to comply with the Act; willful/fraudulent acts causing injury; and participation in acts/omissions constituting causes for disciplinary action through partnerships/corporations/associations where the licensee is responsible managing partner/officer/employee.
Accusations/charges must be filed within one year after the act or omission, except for violations involving willful misrepresentation (Section 28(c)), where it may be filed within two years after discovery by the Board of the alleged fraud/misrepresentation facts.
Law enforcement officers must report violations to the Board. The Board may institute the proper action in court and secure a writ of injunction without bond to restrain unlicensed contractors. Penalty: misdemeanor with fine not less than ₱500 but not more than ₱5,000 for submitting bids or undertaking supervisory work without a license, presenting another’s license, giving false evidence, impersonation, or using an expired/revoked license.