Contractors' License Law (RA 4566), RA 11711, and SPP Document 207

Vocabulary practice flashcards covering RA 4566 (Contractors' License Law), PCAB regulations, RA 11711 amendments, the Architect's statutory duties, and SPP Document 207/Doc. 210 Design-Build arrangements.

Republic Act No. 4566

Also known as the Contractors' License Law (approved on 19 June 1965), an act regulating who may engage in the contracting business in the Philippines without prescribing how construction work is to be performed.

Philippine Contractors Accreditation Board (PCAB)

The first of four implementing agencies placed under the Construction Industry Authority of the Philippines (CIAP) under PD 1746, created to assume the functions, funds, and records of the abolished Philippine Contractors Licensing Board.

Contractor (Section 9(b), RA 4566)

A term deemed synonymous with 'builder,' referring to any person who undertakes, offers to undertake, purports to have the capacity to undertake, submits a bid, or carries out construction, alteration, repair, improvement, or demolition of any structure or project.

Four Covered Acts of Contracting

The statutory acts defining contracting under Section 9(b) of RA 4566: undertaking, offering to undertake, purporting to have the capacity to undertake, and submitting a bid; three of these four are complete before construction begins.

Minor Work Exemption (Section 13, RA 4566)

An exemption from licensing for work having an aggregate contract price of less than $\text{₱}10{,}000$, provided the work is not part of a larger operation divided into smaller contracts to evade the law.

Material Men Exemption (Section 15, RA 4566)

An exemption applying to any person who only furnishes materials or supplies without fabricating them into or consuming them in the performance of the contractor's work.

General Engineering Contracting (Section 9(c), RA 4566)

A branch of contracting whose principal business involves fixed works requiring specialized engineering knowledge and skill, such as irrigation, water supply, flood control, harbors, dams, railroads, highways, and bridges.

General Building Contracting (Section 9(d), RA 4566)

A branch of contracting whose principal business involves structures built for the support, shelter, and enclosure of persons, animals, or movable property, requiring the use of more than two unrelated building trades or crafts.

Specialty Contracting (Section 9(e), RA 4566)

A branch of contracting whose operations pertain to the performance of construction work requiring special skill and whose principal business involves the use of specialized building trades or crafts.

Incidental Work (Section 18, RA 4566)

Work in other crafts or trades that a specialty contractor is permitted to take and execute without additional licenses, provided it is merely incidental or supplemental to the performance of their licensed craft or trade.

Classification versus Category

The distinction in contracting licensing where classification determines the kind or scope of work the license covers, whereas category determines the allowable contract size or cost the license holder may undertake.

Regular License (PCAB)

A license issued to a Filipino sole proprietorship, partnership, or corporation meeting equity rules, authorizing engagement in contracting generally within granted classifications and categories for its term, not limited to a named project.

Special License (PCAB)

A license issued exclusively to a joint venture, consortium, or foreign contractor authorizing participation in one specific undertaking only, which does not survive that undertaking.

Authorized Managing Officer (AMO)

The responsible managing officer through whom an organization qualifies under Section 20 of RA 4566 by personally appearing before the Board to prove technical, administrative, and hiring/firing authority over the contracting business.

Sustaining Technical Employee (STE)

A full-time professional registered with the Professional Regulation Commission (PRC) who is engaged exclusively by a contracting firm to meet licensing qualifications.

Notice of Disassociation (Section 21, RA 4566)

The statutory requirement obligating a licensee to notify the Board in writing within ten days if the individual who qualified the licensee ceases to be connected with the firm.

Ipso Facto Suspension (Section 22, RA 4566)

The automatic suspension of a contractor's license by operation of law resulting from the failure to notify the Board of a qualifying person's disassociation within the mandatory ten-day period.

Republic Act No. 11711

An amendment approved on 27 April 2022 that amended Sections 23, 35, 39, and 40 of RA 4566, deleted Sections 37 and 38, established a 1-year license validity from issuance, adjusted fees, and heightened prohibited act penalties.

PCAB License Term (Section 23, as amended by RA 11711)

The validity duration of a contractor's license, set at one year from the date of issuance, replacing the original fiscal year system that had an annual deadline of 30 June.

Renewal Cycles (Section 38, as amended by RA 11711)

Renewal frequencies based on good standing: every three years for firms in operation for $25$ years or more; every two years for $10$ to fewer than $25$ years; and every year for fewer than $10$ years.

Renewal Application Filing Period (Section 38, as amended)

The required window for submitting license renewal applications, which must be filed not earlier than $90$ days and not later than $30$ days before license expiration.

Contractor Licensing Fees (Section 37, as amended by RA 11711)

Statutory fees set at $\text{₱}5{,}000.00$ for an original license, $\text{₱}6{,}000.00$ for an applicant examination, and $\text{₱}5{,}000.00$ for license renewal.

Fee Adjustment Limitation (Section 37, as amended)

The statutory limitation that permits the Board to adjust licensing fees in consultation with stakeholders not more than once every three years and by no more than $15\%$.

Prohibited Act Section 35(a)

Engaging in contracting, submitting bids, or assuming supervisory charge of construction work for a fee without a license, penalized by a fine of $\text{₱}100{,}000$ to $\text{₱}500{,}000$, plus $0.1\%$ of the project cost, and a one-year license disqualification.

Prohibited Act Section 35(b)

Two or more separately licensed contractors jointly submitting a bid or acting as a contractor without securing a joint venture license, penalized by automatic revocation of individual licenses, fines, and a one-year disqualification.

Prohibited Act Section 35(d)

Presenting or filing the license of another, giving false evidence to the Board, impersonating another, or using an expired or revoked license, penalized by a fine of $\text{₱}500{,}000$ to $\text{₱}1{,}000{,}000$ and imprisonment of $1$ to $6$ years.

Scope of Exemption for Architects (Section 14, RA 4566)

A provision exempting registered civil engineers and licensed architects from the Contractors' License Law only when acting solely in their professional capacity (e.g., design, contract documentation, advice, certification).

Architect's Duty in Biddings (Section 36, RA 4566)

A mandatory duty requiring architects and engineers preparing plans and specifications to include a copy or notice of RA 4566 in the specifications and invitation to bidders to inform them that a license is necessary before a bid is considered.

Design-Build Services by Administration (SPP Doc. 207, Sec. 2.1)

A delivery mode where the Architect renders Regular Design Services and conducts construction management tasks—including scheduling, hiring labor, negotiating piecework contracts, and procuring materials—for the account and direct funding of the Owner.

Design-Build Services on a Guaranteed Maximum Cost (SPP Doc. 207, Sec. 2.2)

A design-build arrangement where the Architect guarantees the project cost within $10\%$ of the estimate; realized savings are split $50/50$ with the Owner, while cost overruns beyond the $10\%$ tolerance are paid by the Architect up to their administration fee.

Revolving Fund in Design-Build Services (Doc. 210, Sec. 12.5.2)

A dedicated fund provided by the Client beforehand to pay costs of labor and materials directly, preventing the Architect from advancing personal funds, and subject to periodic auditing by the Client.

Recommended Professional Fee for Design-Build (Doc. 210, Sec. 12.4)

Compensation set at $7\%$ of the Project Construction Cost for Design-Build Services by Administration and $10\%$ for Guaranteed Maximum Cost, both exclusive of the Architect's separate fee for Regular Design Services.

Architect's Credo on Construction Conflict of Interest (Doc. 210, Sec. 12.2.2.2)

The ethical pledge requiring an architect involved in construction to disclose any business investment or venture creating a conflict of interest, ensuring client interests and impartial judgment are not compromised.