Regulation of the Awarding of Contracts for the Construction of Public Works

May 26, 1940

COMMONWEALTH ACT NO. 541

AN ACT TO REGULATE THE AWARDING OF CONTRACTS FOR THE CONSTRUCTION OR REPAIR OF PUBLIC WORKS

SECTION 1. All branches, offices, and subdivisions of the Government and all government-owned or controlled companies, authorized to contract and make disbursements for the construction or repair of public works, shall give preference in awarding contracts for such works to Filipino or American contractors and domestic entities when the lowest bid of a domestic bidder is not more than fifteenper centum in excess of the lowest foreign bid: Provided, however, That for the construction of land, air, and seacoast defenses, arsenals, barracks, depots, hangars, landing fields, quarters, hospitals, and all other buildings and structures required for the national defense of the Philippines, no foreign bids shall be allowed. aETDIc

SECTION 2. For the purposes of this Act, the following terms shall be taken in the sense herein-below indicated:

(a) The term "Filipino or American contractor" means any citizen of the Philippines or of the United States habitually established in business and engaged in general construction work.

(b) The term "domestic entity" means any corporate body or commercial company duly organized and registered under the laws of the Philippines seventy-five per centum of the capital of which is owned by citizens of the Philippines or of the United States, or by citizens of both countries.

(c) The term "domestic bidder" means any Filipino or American contractor or domestic entity which bids for any public work or work of construction or repair for the Government of the Philippines and/or any of its instrumentalities as enumerated in section one of this Act.

(d) The term "foreign bid" means the bid of any other contractor or entity, not included in subsection (a) of this section.

SECTION 3. This Act shall take effect upon its approval.

Approved: May 26, 1940