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OF THE PHILIPPINES 
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First Regular Session 
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JiIN 30 p 4 :&i 
THIRTEENTH CONGRESS OF THE REPUBLl 
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S E N A T E  
Introduced by Senator S. R. Osmefia Ill 
EXPLANATORY NOTE 
Infrastructure development is one of the major legs on which our country's 
economic development stands. The government allocates a substantial proportion of 
its resources in public works projects. The huge expenditures on public works are 
often vulnerable to acts of dishonesty and anomalies such as substandard work and 
materials. 
PD 1759 was signed in 1981, to prevent the construction of public facilities that 
This law also 
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are below specifications as to materials, quantity and quality of work. 
imposes sanctions on violations of its provisions. 
This bill seeks to strengthen PD No. 1759 by increasing the penal sanctions on 
the violations of the law from a minimum imprisonment of twelve years to a minimum 
imprisonment of twenty years. 
It also defines the premature deterioration of public 
works structures as a prima facie evidence of violation of the provisions of this law. 
The decline in tax revenues as a result of the recent economic downturn 
imposes extreme pressure on the government's expenditure program. 
Hence it 
becomes even more important that measures are taken to assure quality and 
minimize costs in the construction of infrastructure facilities. 
In view of the foregoing, early passage of this bill is earnestly requested. 
yl/ 
SERGIO OSMENA 111 
Senator 


THIRTEENTH CONGRESS OF THE REPU 
"04 Jg;j 
OF THE PHILIPPINES 
1 
First Regular Session 
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S E N A T  
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S. No. 
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Introduced by Senator S. R. BsmeAa 111 
AN ACT 
INCREASING THE PENALTIES IMPOSED AGAINST CONTRACTORS AND 
SUBCONTRACTORS 
WHO 
VIOLATE 
ANY 
MATERIAL 
PROVISION 
OF 
CONTRACTS INVOLVING PUBLIC WORKS PROJECTS OF THE GOVERNMENT, 
AND PUBLIC OFFICIALS WHO ALLOW SUCH VIOLATIONS, AMENDING FOR 
THIS PURPOSE PRESIDENTIAL DECREE NO. 175 
Be it enacted by the Senate and the House of Representatives of the Republic of the 
Philippines in Congress assembled: 
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SECTION 1. Section I of Presidential Decree No. 1759, is hereby 
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amended to read as follows: 
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"Section 1. - Any provisions of law to the contrary notwithstanding, 
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contractors and sub-contractors who violate any material provision[s] of 
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contracts involving public works projects, either as to materials, quality 
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and quantity of work, resulting [to the] IN prejudice [of the] TO THE 
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government, shall suffer the penalty of IMPRISONMENT RANGING from 
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[twelve (12) TWENTY (20) years to life [imprisonment], 
A FINE 
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RANGING FROMFIFT PERCENT (50%) TO TWO HUNDRED PERCENT 
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(200%) OF THE AMOUNT OF THE CONTRACT, [at the discretion of the 
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Court,] and shall, in addition, suffer [perpetual disqualification from 
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participating in any government contracts.] IPSO FACTO REVOCATION 
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OF 
THEIR 
COTNRACTOR'S 
LICENSES 
INCLUDING 
THE 
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PROFESSIONAL LICENSES OF EXECUTIVES IN CHARGE OF THE 
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DESIGN AND CONTRUCTION OF THE PROJECT. 
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The offending contractor or sub-contractor shall further be liable for the 
cost of reconstructing such public works project in accordance with the 
specifications agreed upon. 
IN case of corporations, partnerships or associations, the 
President, General Manager or any responsible chief executive 
officer/officers shall be liable. 
ANY 
PROP R I ET0 RSH I P , COR PO RAlTO N , 
PARTN E RS H 
I P , 
ASSOCIATION, 
OR 
BUSINESS 
ORGANIZATION 
WHOSE 
PROPRIETOR, STOCKHOLDER, PARTNER, MEMBER OR OFFICER 
IS RELATED WITHIN THE FOURTH DEGREE OF CONSANGUINITY 
OR AFFINITY TO THE PERSON CONVICTED OF VIOLATION OF ANY 
OF THE ACTS PUNISHABLE UNDER THIS ACT IS PROHIBITED 
FROM PARTICIPATING IN SAID GOVERNMENT CONTRACT. 
THE PREMATURE DETERIORATION OF ANY PUBLIC WORKS 
PROJECT SHALL CONSTITUTE PRIMA FACIE EVIDENCE OF 
VIOLATION OF THE ACTS PUNlSHABLE UDNER THE FIRST 
PARAGRAPH OF THIS SECTION. THE SECRETARY OF THE 
DEPARTMENT OF PUBLIC WORKS AND HIGHWAYS IS HEREBY 
MANDATED TO PROMULGATE THE NECESSARY IMPLEM.ENTING 
RULES AND REGULATIONS TO EFFECTIVELY CARRY OUT THE 
INTENT OF THE PROVISIONS OF THIS OF PARAGRAPH.” 
SEC. 2. - Section 2 is amended to read as follows: 
“Any public official who, by reason of the duties of his office, shall 
consent, or though abandonment or negligence, permit the contractor of 
subcontractor to commit [the violations mentioned in Section 1 hereof,] 
ANY OF THE ACTS PUNISHABLE UNDER THIS ACT shall suffer the 
penalty of IMPRISONMENT RANGING from [twelve (1 2)] TWENTY (20) 
years to life [imprisonment], A FINE EQUIVALENT TO THIRTY 
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PERCENT (30%) OF THE AMOIUNT OF THE CONTRACT and 
perpetual disqualification [to] FROM holdlNG any public office. 
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ANY 
PROPR I ETORSH I P, CORPORATION, 
PARTNERS H I P, 
ASSOC lATl ON, OR 
BUSINESS 
ORGANIZATION 
WHOSE 
PROPRIETOR, STOCKHOLDER, PARTNER, MEMBER OR OFFICER 
ISRELATED WITHIN THE FOURTH DEGREE OF CONSANGUINITY 
OR AFFINITY TO THE PUBLIC OFFICER IN CHARGE OF OR 
ASSOCIATED IN ANY MANNER WITH THE PROJECT BEING 
UNDERTAKEN IS PROHIBITED FROM PARTICIPATING IN SAID 
GOVERNMENT CONTRACT.” 
SEC. 3. - Any provisions of law, degree, executive order or any issuance 
inconsistent herewith are hereby repealed and/or modified accordingly 
SEC. 4. - This Act shall take effect fifteen (15) days following completion 
of its publication in at least two (2) newspaper of general circulation 
Approved, 
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