Cebu City Councilor Alvin Arcilla is pushing for stricter screening of contractor capacity following an executive session regarding the City's unrecovered P199.3-million advance payment to A.M. Oreta & Co. Inc.
Arcilla is studying whether the local government can legally prioritize or limit bidding to Cebu-based contractors to avoid logistical challenges caused by firms based outside the province.
The P199.3-million mobilization fee was paid in June 2021 for a P1.328-billion flood-control system that failed to proceed to construction because the contractor did not secure an approved design.
FOLLOWING a City Council executive session on the City’s unrecovered P199.3-million advance payment for a flood-control project, Councilor Alvin Arcilla is pushing for a closer look at the qualifications and capacity of contractors bidding for Cebu City projects.
Arcilla said in an interview on Thursday, Aug. 13, 2026, that the discussion on the flood control project highlighted the need for the City to examine not only whether contractors meet bidding requirements but also whether they have the manpower, equipment and logistical capacity to complete the projects they win.
He said he is studying whether the local government can require or prioritize Cebu-based contractors for city projects to make project implementation and monitoring easier.
“Actually, if it were up to me, I would still study whether we can limit the bidding to contractors within Cebu,” Arcilla said.
Arcilla, who moved for the executive session on the P199.3-million flood-control payment, said his proposal is a broader concern arising from what he has observed in the implementation of local projects. The executive session focused on the P199.3-million mobilization fee paid by the City in 2021 to A.M. Oreta & Co. Inc. for a P1.328-billion Design and Build Project–Flood Control System.
The project was supposed to cover drainage works along Cabreros St., N. Bacalso Ave., V.H. Garces St., A. Gabuya St., Leon Kilat St. and Escano St. Although the City released the 15 percent mobilization fee in June 2021, the project did not proceed to construction because the contractor failed to submit an acceptable plan.
“Not a single design submitted by the contractor was approved by the City Engineering Office,” Arcilla said.
Logistical hurdles hamper projects
The Commission on Audit later found that the City did not benefit from the uncompleted project and ordered the enforcement of liabilities related to the transaction. The P199.3 million has yet to be recovered.
After the executive session, Arcilla raised concerns about the broader pool of contractors participating in local developments, noting that several awarded firms are based outside the province.
“Actually, what I have observed in the City of Cebu is that the contractors are not from Cebu. Some are from Mindanao, some from Sultan Kudarat and some from Negros,” Arcilla said.
According to Arcilla, non-local operations create logistical challenges because firms must transport heavy equipment, materials and workers from their home regions. He cited the Pulangbato Bridge project, managed by a Leyte-based contractor, as a clear example of operational delays caused by mobilization difficulties.
For Arcilla, these ongoing setbacks raise serious questions about whether contractors undergo sufficient vetting regarding their actual capacity to execute projects after winning a bid.
“For me, there is 100 percent a lapse. We had a lapse because how could it have gotten through?” Arcilla said.
He emphasized that contractors who participate in municipal bidding must demonstrate the operational capacity to successfully finish their assigned tasks, noting that Cebu already possesses established construction firms with local personnel, offices and heavy equipment.
Legal frameworks under evaluation
Under Republic Act 12009, or the New Government Procurement Act, Section 27.1 of its Implementing Rules and Regulations provides that competitive bidding is “open to participation by any eligible bidder.” Because of this national framework, Arcilla wants to examine whether city authorities can legally prioritize local vendors without violating existing laws.
He acknowledged that any formal policy change must first pass legal scrutiny before moving forward, though he suggested that limiting bidding to Cebu-based contractors remains the ideal outcome.
Arcilla said he may pursue a resolution or ordinance if the proposal proves legally feasible. For now, the City Council remains focused on tightening contractor screening mechanisms following the completed review of the unrecovered P199.3-million flood-control payment. / CAV