Arcilla to study Cebu-only bidding for city government projects

CEBU CITY, Philippines — Cebu City Councilor Alvin Arcilla will study whether the city can limit participation in government project biddings to contractors based in Cebu, amid concerns that some outside contractors may lack the capacity to deliver the projects they win.

Arcilla said the proposal warrants closer examination following the city’s continuing efforts to recover a P199.3 million mobilization payment from a contractor whose P1.328-billion flood-control project never materialized.

“Actually, kung… ako, tun-an pa kung pwede ba within Cebu lang ang pwede gani mo-bid,” Arcilla said in an interview.

(Actually, I will still study whether bidding can be limited to those within Cebu.)

Arcilla said the city has established contractors capable of undertaking major projects and suggested that restricting participation to Cebu-based firms could make contractors more accountable to the local government.

“Unya naa pud sa Cebu ang mga maayong-laki nga mga contractor,” he said. “Mahadlok sa na sila mo-binoang, kay taga-Cebu man sila.”

(There are also large contractors in Cebu. They would be less likely to do something wrong because they are from Cebu.)

However, Arcilla stressed that he would first determine whether such a restriction could legally and practically apply to government procurement.

Contractor capacity questioned

Arcilla questioned whether non-Cebu suppliers and contractors have the capacity to fulfill government contracts.

He cited a laptop procurement involving the Cebu City Government, where a supplier initially won a bid and delivered a small order but later struggled to fulfill additional orders from other city departments.

According to Arcilla, the supplier eventually had to look for laptops elsewhere because it lacked sufficient purchasing capacity.

“Naa siya’y papeles ug uban pa, pero dili siya… more or less, wala siya’y capacity,” he said.

(The supplier had the necessary documents and other requirements, but more or less, it did not have the capacity.)

Arcilla said similar problems could delay city projects when contractors win bids without sufficient financial resources, equipment or other capacity to complete the work.

“Ang usa man gud nga makadugay sa mga project sa City, kaning mga supplier outside Cebu City nga usahay ba, walay capacity,” he said.

(One thing that can delay city projects involves suppliers outside Cebu City that sometimes lack the capacity.)

He said the city government must ensure that bidders can actually accomplish the projects they seek to undertake.

‘100%’ lapse in screening

Arcilla acknowledged that the government could have a lapse in screening bidders if contractors without adequate capacity manage to win public contracts.

Asked whether the situation indicated a weakness in the government’s screening process, Arcilla replied: “Ah, para nako, 100% naa.”

(For me, there is 100% a lapse.)

He said procurement rules and processes have changed, but the city still needs to examine how it evaluates a bidder’s capacity before awarding contracts.

Arcilla spoke as the Cebu City Government faces scrutiny over a P199.3 million mobilization payment made in 2021 to A.M. Oreta & Co., Inc. for a flood-control project that stalled at the design phase.

P199.3M remains unrecovered

The city awarded A.M. Oreta a P1.328-billion contract in 2021 for the Design and Build Project – Flood Control System (Construction of Drainage Mains). The project covered drainage works along Natalio Bacalso Avenue and Cabreros, V. H. Garces, A. Gabuya, Leon Kilat and Escano Streets.

The city released a P199,323,870.75 mobilization payment through a check dated June 15, 2021. The amount represented 15% of the contract price, with P10.95 million allocated for the design phase and P188.37 million for the build phase.

The build phase should have started after the design phase or within six months under the construction agreement.

It never did.

City Engineer Lowell Corminal said in a June 16, 2025, letter that the project failed to materialize and that the city received no benefit from the contract.

The Commission on Audit later issued a Notice of Disallowance dated July 30, 2024, finding that the city incurred damage because it did not benefit from the uncompleted contract.

COA also found that the advance payment for the build phase had become unnecessary and that the contractor’s obligation to return the advance arose after the contract expired.

Corminal said he sent demand letters to A.M. Oreta on April 28 and May 21, 2025, seeking settlement or the return of the advance payment. He later asked the city to pursue appropriate charges against the contractor to recover the amount.

COA holds officials liable

COA Regional Office VII issued an Order of Execution on March 17, 2026, citing its Nov. 19, 2025, decision and directing the Cebu City treasurer to withhold salaries or other amounts due to Corminal and former City Administrator Floro Casas Jr. to settle their respective liabilities.

For officials who no longer work in government, COA directed the city to pursue collection or settlement directly from them and report its efforts to the audit office.

Corminal continues to work with the Department of Engineering and Public Works but currently renders service without pay because of the COA order, according to records cited by the Sangguniang Panlungsod.

Bidding under scrutiny

Arcilla previously questioned why A.M. Oreta emerged as the sole bidder for the flood-control project and why none of Cebu’s established construction firms participated.

Arcilla said the proposed Cebu-only bidding arrangement could address some of these concerns, but he acknowledged that the idea still requires study.

He did not provide a timeline for the study or say whether he would eventually file a resolution or ordinance proposing the restriction.

Arcilla said the council’s immediate priority is recovering the P199.3 million in public funds that the city has yet to recoup.

The Cebu City Government has yet to announce a new resolution or confirm the filing of a fresh court case against A.M. Oreta following the executive session on Tuesday.

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