The Market Monitor Minding the Nation's Business
Public Works Secretary Vivencio “Vince” Dizon on Friday announced new budget guidelines for project consultancy contracts of the Department of Public Works and Highways (DPWH), starting with a policy that sets stricter limits on proposed budgets for consultants.
Under Department Order No. 184, released last week, the Approved Budget for the Contract (ABC) will now strictly serve as the ceiling for bid prices in locally funded consulting projects. Bids that exceed the ABC will be automatically disqualified.
For foreign-assisted projects, the ABC—also referred to as the estimated project cost (EPC)—must conform to donor or lending institution rules. Any increase beyond the approved loan or grant amount will require clearance from oversight agencies such as the Department of Budget and Management (DBM) or the Department of Economy, Planning and Development (DEPDev).
“The new order imposes tighter controls by mandating documented market scoping, automatic disqualification of bids above the ceiling, and higher-level approvals for any cost adjustments in foreign-assisted projects,” Dizon said.
He explained that earlier rules, introduced during the time of former DPWH secretary and now Senator Mark Villar, pegged the ABC at a “management fee” that incorporated remuneration cost, overhead, social charges, a contingency fund, and a multiplier formula.
Dizon’s directive also tasks the DPWH Bureau of Design to validate all ABC packages and issue updated costing guidelines annually to reflect changes in laws, funding rules, or market conditions. TRACY CABRERA