Bill of Materials and Labor Cost Transparency Act (Proposed)

EXPLANATORY NOTE

In many government infrastructure projects, citizens, engineers, and watchdog groups remain unaware of the actual itemized cost breakdown until after a contract is already notarized. This lack of early disclosure prevents public scrutiny, invites overpricing, and increases the risk of collusion and corruption. Transparency before contract notarization is a safeguard against abuse.

The proposed Bill of Materials and Labor Cost Transparency Act requires all government agencies and local government units (LGUs) to publish the complete and itemized Bill of Materials (BOM) - including quantities, unit costs, labor estimates, and subcontractor scopes - at least seven (7) calendar days before any public infrastructure contract is awarded or notarized. The BOM must be posted on the agency’s website, LGU's website, social media channels, and the Philippine Government Electronic Procurement System (PhilGEPS).

This Act ensures that engineers, concerned citizens, civic organizations, and anti-corruption watchdogs have enough time to examine cost structures and report anomalies before a contract becomes legally binding. It transforms the pre-award phase into an opportunity for transparency and fairness.

To ensure immediate impact without creating undue administrative burden, this law focuses first on the mandatory public disclosure of materials and labor - representing the largest and most abuse-prone cost components of public infrastructure projects. Other cost categories may be included through future amendments once a culture of transparency is established.

If enacted, this law would institutionalize a simple but powerful check against government overspending, ghost projects, and rigged bidding. By opening the itemization to public view before the moment of contract approval, it restores accountability to taxpayers and raises the technical quality of infrastructure nationwide.

This proposal is submitted with the hope that it will be enacted for the benefit of the people.

REPUBLIC ACT NO. XXXX

AN ACT MANDATING THE PUBLIC DISCLOSURE OF THE COMPLETE AND ITEMIZED BILL OF MATERIALS AND LABOR COST PRIOR TO THE NOTARIZATION OF ANY PUBLIC INFRASTRUCTURE CONTRACT, AND FOR OTHER PURPOSES

Section 1. Short Title.

This Act shall be known as the "Bill of Materials and Labor Cost Transparency Act".

Section 2. Declaration of Policy.

It is hereby declared the policy of the State to promote transparency, integrity, and accountability in all government infrastructure projects. The public has the right to access the full and itemized cost structure of publicly funded projects before any contract is notarized. Early disclosure prevents collusion, overpricing, and wasteful spending.

Section 3. Definition of Terms.

For the purpose of this Act, the following terms shall mean:

1. Bill of Materials (BOM) - A comprehensive, itemized list of all construction materials required for a public infrastructure project, including the name, specification, quantity, unit cost, and total cost of each material.
2. Labor Cost - The total estimated cost of manpower required to complete a public infrastructure project, including salaries, wages, allowances, benefits, and contractor mark-ups for both skilled and unskilled labor.
3. Subcontractor Scope - A breakdown of work segments, specialized services, or tasks contracted out to third-party subcontractors, including labor cost estimates and deliverables for each scope.
4. Equipment and Mobilization Costs - Costs related to the transportation, rental, operation, and installation of machinery, tools, and construction equipment, as well as site preparation and logistical mobilization activities.
5. Public Infrastructure Contract - Any legally binding agreement executed by a government agency, GOCC, or LGU with a private contractor or supplier for the construction, repair, or improvement of public infrastructure projects.
6. Pre-Notarization Period - The period of at least seven (7) calendar days before the notarization or formal awarding of any public infrastructure contract, during which the full BOM and Labor Cost shall be disclosed to the public.
7. Public Disclosure - The act of making documents or data publicly available and accessible through official websites, social media accounts, and the Philippine Government Electronic Procurement System (PhilGEPS), in a format that allows public review and verification.
8. Review Window - The minimum period of seven (7) calendar days after public disclosure during which engineers, civil society organizations, and watchdog groups may examine the BOM and Labor Cost and raise concerns or objections.
9. Covered Agencies - All departments, bureaus, offices, government-owned and controlled corporations (GOCCs), and local government units (LGUs) that implement or fund public infrastructure projects.

Section 4. Scope of Application.

This Act shall apply to all infrastructure projects of national government agencies, government-owned and controlled corporations (GOCCs), and local government units (LGUs), regardless of funding source or project scale.

Section 5. Mandatory Public Disclosure of Itemized Bill of Materials and Labor Cost.

All covered agencies shall publicly disclose the complete and itemized Bill of Materials (BOM) and Labor Cost at least seven (7) calendar days before any contract is notarized or awarded. The BOM shall include:

• Item descriptions and quantities
• Unit and total costs
• Labor and subcontractor estimates
• Equipment and mobilization costs, if applicable

Section 6. Platforms for Disclosure.

The BOM shall be published on the following platforms:

• The agency or LGU’s official website
• Its official social media channels
• The Philippine Government Electronic Procurement System (PhilGEPS)

These postings must be publicly accessible and archived for reference.

Section 7. Technical and Civil Society Review Window.

Engineers, civil society organizations, and watchdog groups shall be granted a review period of not less than seven (7) days to examine the disclosed BOM. Agencies must provide a contact point to receive comments or flags prior to contract signing.

Section 8. Prohibited Acts and Penalties.

Failure of any government official or employee to comply with Sections 4 to 6 of this Act - specifically the timely public disclosure of the itemized Bill of Materials (BOM) and Labor Cost - shall be grounds for administrative penalties, as follows:

• First Offense: Reprimand
• Second Offense: Suspension of five (5) to thirty (30) days
• Third Offense: One (1) month salary deduction
• Fourth Offense: Two (2) months salary deduction
• Fifth Offense: Dismissal from the service

These penalties shall be imposed without prejudice to other civil, criminal, or administrative liabilities under the Government Procurement Reform Act (R.A. No. 9184) and relevant anti-corruption laws. The Civil Service Commission (CSC) shall issue guidelines for uniform enforcement of these penalties.

Section 9. Implementing Rules and Regulations.

Within sixty (60) days from the effectivity of this Act, the Department of Public Works and Highways (DPWH), in coordination with the Department of the Interior and Local Government (DILG), the Commission on Audit (COA), and the Government Procurement Policy Board (GPPB), shall promulgate the necessary implementing rules and regulations (IRR) to effectively carry out the provisions of this Act.

The IRR shall include:

• Standard formats for the Bill of Materials (BOM) and Labor Cost
• Required disclosure platforms and procedures
• Public feedback mechanisms
• Penalty enforcement guidelines
• Monitoring, audit, and compliance protocols

The IRR shall be published online and take effect fifteen (15) days after its publication in the Official Gazette or a newspaper of general circulation.

Section 10. Separability Clause.

If any provision of this Act is declared invalid or unconstitutional, the remaining provisions shall remain in full force and effect.

Section 11. Effectivity Clause.

This Act shall take effect fifteen (15) days after its publication in the Official Gazette or in a newspaper of general circulation.