A Call to Reform: Restoring the Integrity of Procurement in Infrastructure Projects

In the Philippines, contracting has long been plagued by systemic issues. Even with PCAB licensing in place — designed to establish qualification before bidding — the system continues to fail the very principles of procurement that international best practice demands: fairness, transparency, and value for money.

At present, contractors in large infrastructure projects too often operate as middlemen. They rarely execute the work themselves, but instead manage layers of subcontractors while adding their own margins. This adds cost without proportional value. Instead of streamlining delivery, the current contracting model has entrenched inefficiency, opacity, and inflated risks.

The World Bank’s seven principles of procurement — value for money, economy, integrity, fit-for-purpose, efficiency, transparency, and fairness — are benchmarks against which any system can be measured. Sadly, lump-sum contracting and lowest-bidder practices fail on almost every count. Costs are hidden, accountability is blurred, and project abandonment remains a recurring reality.

The Core Problem with Licensing

Even PCAB licensing, while intended to safeguard quality, is insufficient. Why? Because it legitimizes a juridical entity — the company itself — without ensuring that the actual natural persons managing projects are competent. The presence of an Authorized Managing Officer (AMO) and Sustaining Technical Employee (STE) is often more symbolic than substantive.

That is not to say that all contractors operate this way. Many firms uphold professional standards and field qualified leaders. But the uncomfortable question remains: out of nearly 19,000 PCAB-registered contractors, how many truly have AMOs and STEs who are qualified, present, and accountable — and how many simply carry names on paper to satisfy licensing requirements?

Currently, qualification is determined largely by nominal years of experience and financial capacity. These are not objective measures of actual competence in project delivery. They do not capture whether an AMO or STE can truly manage contracts, control risks, lead teams, and deliver infrastructure to the standards the public deserves.

The Call for Reform

What is urgently needed is a shift from paper qualifications to competency-based measurements:

Objective technical assessments — validated through examinations, case simulations, and peer-reviewed project documentation.

Competency certification of natural persons — aligned with internationally benchmarked standards such as ISO/IEC 17024, while harmonized with the Philippine National Qualifications Framework (NQF).

Performance-linked accountability — tying the name of the AMO/STE not just to the license but to the outcome of the project, with enforceable sanctions for negligence or incompetence.

In parallel, the Philippines must rethink contract forms and move toward models that inherently promote transparency and best value:

Guaranteed Maximum Price (GMP) and Target Cost Contracts with open-book accounting and shared savings/overruns.

Cost-reimbursable forms that emphasize auditability and discourage hidden margins.

Framework and Alliance contracts for long-term infrastructure programs, ensuring continuity and accountability.

Reform of CIAP Document 102, converting it from a single lump-sum standard into a suite of contract models — including versions for GMP, Target Cost, and Cost-Reimbursable contracts. This would give agencies the flexibility to choose the form most aligned with fairness, transparency, and value for money.

The Path Forward

The way forward is clear: construction must be professional-led, not contractor-driven. Infrastructure delivery should no longer depend solely on juridical entities shielded by paper qualifications. It must be anchored in individual competence, validated by internationally benchmarked standards that integrate with national qualifications. Only with the right qualifications at the helm can projects achieve fairness, transparency, and value for money.

To institutionalize this, the Philippines should establish a National Construction Project Management Office for Infrastructure (NCPMO) under a public–private partnership model. Such an office would:

Set and enforce competency standards for AMOs, STEs, and all professionals in leadership roles.

Oversee project management across government-funded infrastructure, ensuring consistency, accountability, and independence from contractor influence.

Maintain a national registry of certified project managers and engineers, so appointments are based on proven qualifications, not symbolic compliance.

Embed transparency through contract reform, including the modernized CIAP 102 suite of contracts.

Bridge public and private expertise, giving government access to world-class project management capacity while engaging professional associations and the private sector in governance.

Conclusion

Infrastructure is too critical to be left in the hands of middlemen shielded by juridical entities and paper qualifications. To restore the integrity of procurement, the Philippines must move away from lowest-bid lump sum contracting, modernize CIAP contracts, and demand competency from individuals as well as companies.

This is not merely a policy adjustment. It is a call to protect public resources, restore accountability, and ensure that infrastructure truly serves the people.