DPWH suspends reduced prices on construction materials materials

MANILA, Philippines — The skyrocketing prices of oil and basic commodities caused by the escalating conflict in the Middle East is supposedly also driving up the cost of delivery of construction materials and operating equipment, causing Public Works Secretary Vince Dizon to temporarily suspend the lowered Construction Materials Price Data (CMPD) he set last November to bust the so-called built-in overprice of infrastructure projects of the Department of Public Works and Highways (DPWH).

In an order issued last Wednesday, Dizon set “interim guidelines” on the utilization of construction materials prices and equipment rental rates outside those set in the Oct. 30 CPMD amid the fuel price volatility.

“Recent developments in the global oil market arising from geopolitical tensions between Iran, Israel, and the United States of America have resulted in abrupt increases in fuel and petroleum prices, consequently affecting both the delivered cost of construction materials and the operating cost of construction equipment,” Dizon said in Department Order 43. 

Dizon said that the DPWH recognizes that certain prices reflected in the latest DPWH CMPD, as well as the Prescribed Equipment Rental Rates, may no longer reasonably represent prevailing market conditions.

In order to make sure that project cost estimates remain reasonable and reflective of current market conditions, Dizon said that DPWH implementing offices in project offices, regional offices, and district engineering offices could use “supplier canvassed prices” as a reference for materials which have prevailing market prices not adequately reflected in the CMPD.

Dizon said that the supply canvass prices should be supported by at least three current, independent and verifiable supplier quotations for each construction material, reflecting prevailing market prices within or near the project’s locality.

The supply canvass prices should also be clearly indicated in the canvass documents of the date of canvass, material specifications, unit of measure, value-added tax inclusion or exclusion and applicable delivery conditions.

“The adoption of canvassed prices shall be subject to strict comparability requirements, including but not limited to conformity in technical specifications, quality standards, delivery conditions and market location,” he said.

Dizon said that the guidelines were temporary measures implemented solely to address temporary market disruptions affecting construction material prices and equipment rental rates due to fuel price volatility.