Construction firms oppose award of P1.5-billion hospital project to ‘blacklisted’ contractor

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Construction firms oppose award of P1.5-billion hospital project to ‘blacklisted’ contractor

Topic |  


The award for the construction of the P1.566 billion Governor Celestino Gallares Memorial Hospital (GCGMH) Specialized Medical Center in Barangay Malaya Norte, Cortes, Bohol on December 29, 2020, was met with stiff opposition from a group of bidders for the “hasty” approval of the bid proposal of the winning bidder who allegedly turned out to be a “blacklisted contractor.”

A joint venture (JV) composed of four construction firms – Dynamic Planners and Construction Corp., BNYU Development Corp., C.C. Maluenda Construction Inc., and N.N.Yu Construction, Inc. questioned the propriety of awarding the construction of the GCGMH expansion project to R.R. Encabo Constructor Inc./Grundstein Construction and Development Corp. Joint Venture.

According to reliable sources, both JV bidders submitted lower bids but Encabo/Grundstein JV  bagged the contract with the lowest bid of P30 million less than the Approved Budget of the Contract (ABC) of P1.566 billion.


The aggrieved JV is set to file before the Office of the Ombudsman a complaint against the members of the GCGMH Bids and Awards Committee (BAC) headed by its chairperson, Dr. Luciano J. Sarabosing, and the Head of the Procuring Entity (HOPE), Dr. Mutya Tirol-Macuno, GCGMH Medical Center Chief for violation of Republic Act (RA) 3019 known as the Anti-Graft and Corrupt Practices Act and possibly, according to the group’s legal counsels, breaches in the provision of RA 9184 otherwise known as the Government Procurement Reform Act.


Macuno responded to the allegations in a phone interview with the Chronicle debunking the allegations of the four-firm JV saying that “every aspect of the bidding process was strictly followed and above-board.”

According to Macuno, “There is no reason to delay the project since this project was conceived since 2014 during the term of Governor Edgar Chatto, now 1st District Congressman. The P78 million design was completed in August 2020 and we have to allocate the downloaded amount since this would revert to the Department of Budget and Management (DBM) and would undermine the absorptive capacity of the Department of Health (DOH).”

Macuno also bared the contentious discussion of the BAC over the reported blacklisting of R.R. Encabo. The Government Procurement Policy Board admitted that there was an existing case for the blacklisting of Encabo but it has yet to be resolved.  

“I assure Boholanos that the completion of a state of the art medical facility in Cortes to serve the medical needs of Bohol will be realized and will not be marred by insinuations and baseless allegations of irregularities.”




The consortium criticized the “rapid approval process” that was completed despite a string of holidays held between the seven days from December 22, 2020, up to December 29, 2020 – the day the award was issued to the Encabo/Grundstein JV and the signing of the contract on January 5, 2021.

With the project cost of more than a billion, the BAC should have exercised extra due diligence that should match the stringent requirements imposed by the procuring entity (GCGMH) which even prescribed that bidders should be an accredited 2018 International Organization for Standardization (ISO), according to the consortium.



The four-firm consortium also expressed doubts on the eligibility of the winning JV which they raised before the BAC as to the information on the alleged blacklisting of R.R. Encabo as part of a joint venture that incurred 85.43% slippage involving a project of the Department of National Defense (DND) in Lumbia Airport, Cagayan de Oro City.

According to a resolution signed by DND Secretary Delfin Lorenzana, a blacklist order dated June 30, 2020, named E.M. Carpio, Inc., J.D. Construction and R.R. Encabo as “blacklisted companies and therefore prohibited from participating in the bidding of all government projects within one year from the issuance therefor.”



In a letter requesting reconsideration on the award of the project to R.R. Encabo JV received by the BAC on January 8, 2021, the consortium reminded the committee that they were caught unaware of the award to R.R. Encabo JV since they did not receive any written or verbal notification that they were declared ineligible.

Sarabosing responded that the issue raised by the consortium of four firms is not subject for reconsideration since they were not disqualified.


The bidders also stressed that R.R. Encabo JV’s Statement of its Largest Completed Contract (SLCC) “may have been falsified” since the amount of P758 million representing the completed project cost for the construction of an eight-story Malabon Hospital and Medical Center, phase 1 located in Barangay Calmon, Malabon could be a spurious owner’s certificate of final acceptance.

Further verification by the JV bidder revealed that the hospital is “still under construction” while the project cost was only “P500,000.00 far below” the required project cost constituting 50% of the ABC” of P1.566 billion.

In response to the issue on the falsified SLCC of the winning bidder, the BAC dismissed the issue as “a mere allegation and the documents submitted were in order recommending to the procuring entity to award the contract to the lowest responsive bidder.”

The consortium told the Chronicle that the main reason for the objections raised before the BAC was to prevent the government to pursue projects that gloss over the provisions of the procurement process to safeguard the integrity of government transactions. (Chito M. Visarra)

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