CE LAWS, ETHICS
AND CONTRACTS
ENGR. DAN GERICO L. BACANI
ETHICS
 moral principles that govern a person's
behavior or the conducting of an activity.
 examines the rational justification for our
moral judgments; it studies what is morally
right or wrong, just or unjust
 Ethics or moral philosophy is a branch of
philosophy that "involves systematizing,
defending, and recommending concepts
of right and wrong behavior
GENERAL ETHICS
 General ethics develops general principles
concerning the morality of human actions.
Why is general ethics important?
Ethics is what guides us to tell the truth, keep our promises, or
help someone in need. There is a framework of ethics
underlying our lives on a daily basis, helping us make
decisions that create positive impacts and steering us away
from unjust outcomes.
ETHICAL VALUES
 Ethical values are a set of moral guiding principles that
determine how a company conducts business. These
principles seek to serve and protect others above the
organization's self-interest. Beyond fulfilling legal obligations,
ethical values in business show strong moral character from
leaders and employees.
 What are some ethical values?
 Ethical decision-making is based on core character values like
trustworthiness, respect, responsibility, fairness, caring, and
good citizenship. Ethical decisions generate ethical behaviors
and provide a foundation for good business practices. See a
model for making ethical decisions
CIVIL ENGINEERING: CODE OF
ETHICS
FUNDAMENTAL PRINCIPLES
Civil engineers uphold and advance the integrity,
honor and dignity of the civil engineering profession
by:
• using their knowledge and skill for the
enhancement of human welfare and the
environment;
• being honest and impartial and serving with
fidelity the public, their employers/employees and
clients;
• striving to increase the competence and prestige
of the civil engineering profession; and
• supporting the professional and technical
societies of their disciplines.
FUNDAMENTAL CANONS
1. Civil Engineers shall hold paramount the
safety, health and welfare of the public and
shall strive to comply with the principles of
sustainable development in the performance
of their duties.
2. Civil Engineers shall perform services only
in areas of their competence.
3. Civil Engineers shall issue public statements
only in an objective and truthful manner.
 4. Civil Engineers shall act in professional
matters for each employer or client as faithful
agents or trustees, and shall avoid conflicts of
interest.
5. Civil Engineers shall build their
professional reputation on the merit of
their services and shall not compete
unfairly with others.
 6. Civil Engineers shall act in such a
manner as to uphold and enhance the
honor, integrity, and dignity of the civil
engineering profession.
 7. Civil Engineers shall continue their
professional development throughout
their
careers,
and
shall
provide
opportunities
for
the
professional
development of those civil engineers
under their supervision.
THE PRACTICE OF CIVIL ENGINEERING
 Quality is defined in the manual as a
condition of satisfactorily meet both the
project requirement and the expectations of
the client or employer. It requires much effort
which is considered:
 Conscious- Aware, sensible
 Continuous- Direct, Straight
 Consistent- Constant, Unchanging
PROFESSIONAL RESPONSIBILITY
 As a faithful trustee to the public interest and
private interest of clients, civil engineers have the
following responsibilities:
 1. Civil engineers shall conduct themselves in a
highly professional manner and faithfully serve their
clients and employers.
 2. Civil engineers are bound by the Canon
Laws/Guided by priciples.
 3. Sustainable development is the top priority in
professional engagement.
 4. The highest standard of Ethical Professional
Practice should be maintained when civil
engineers are dealing with employers or clients.
CLIENT-CIVIL ENGINEERING
RELATIONSHIPS
Many engineering works are
formed between civil engineers
and the following: Government
agencies, Industry Private clients
Civil engineering firms engaged for
a specific project Public agencies
Independent civil engineering
firms
OBLIGATIONS OF THE CIVIL
ENGINEER
 As a faithful trustee, civil engineers are obliged
to do the following:
 1. Perform their obligations with diligence,
care, and reasonable skill.
 2. Shall act independently and accordingly to
the contract, when required to certify or
decide between a client and a third party.
 3. Act as the client's faithful agent implied in
the contract.
 4. Give written notice on particulars of any
change in the scope of services.
 5. For staged services, civil engineers shall
not initiate ay service without the approval
of the client.
 6. When required, civil engineers shall
direct or work with other professions and
integrate concerned work, but shall not be
professionally liable for their work.
 7. The civil engineer may recommend
contractors or specialists to design and
execute certain parts of the works.
 8. Any interest which may have conflict of
interest of the client should be notified by
the civil engineer.
LIABILITY OF THE CIVIL ENGINEER
AND THE CLIENT
 1. The civil engineer shall pay for damages arising out of
breach of duty of care against the civil engineer to the
client.
 2. The client shall be liable to pay to the civil engineer if
a break of client's duty is established against the client.
 3. Conflicts arising from the agreement between the
client and the civil engineer follows the following
process: Amicable settlement. Mutual understanding
Mediation. Negotiation overseen by a third-party called
the mediator. Arbitration. negotiation where the thirdparty(considered as impartial) is in control in making the
final decision. Litigation (court proceeding). Negotiation
where courts and civil justice system are involved.
 4. A third-party arbitrator should be mutually acceptable
to both parties.
LIMITATION OR CIVIL ENGINEER'S
RESPONSIBILITY
 1. The civil engineer shall not be liable for
damages, loss, and costs: for any errors or
omissions for documents not prepared by him
or under his control, for fraudulent services or
negligence by the client or any other
consultant , contractor, supplier.
 2. The civil engineer shall not be liable for the
performance of other consultants, contractors,
suppliers (regardless of recommendation).
 3. The civil engineer shall not be responsible
for the procedures of techniques adopted by
any third party.
CIVIL ENGINEERING
SERVICES
 Typical services offered by civil engineers: Designs, consultations, and
advice Feasibility studies Field investigations and engineering data
collection Environmental assessments, impact statements, or engineering
reports Opinions of estimates Preliminary and final designs, drawings,
specifications, and construction bidding documents. Assistance in
securing construction bids and in awarding contracts Construction
administration and observation . Arrangements for or performance of
testing of materials and equipment Assistance in start-up, assessment of
capacity, and operation of facilities Preparation of operation and
maintenance manuals Appraisals and rate studies Value engineering
Expert testimony Assessment of risks Structural remediation or rehabilitation
Project management and controls Provision of supplemental temporary
staff Teaching
SELECTION OF A CIVIL
ENGINEER
The selection of a civil engineer is one important decision for the client.
 A. For engineering services in construction projects. The compensation
for services (full range) of an engineer in construction projects should
not be less than 1 to 2% of the life-cycle cost. Thereby, selection should
include an engineer who can monitor the project from design,
construction, and start-up.
 B. As a consultant Compensation depends on the cost of services so
selection is based on: Qualification Experience Reputation Quality of
client service Although selection based on quality and expertise made
by the client might be subjective, it is better to assign a qualified
individual in the company to do the choosing. Once the selection is
completed, discussions between the client and the civil engineer
should define the two important things before the compensation of the
engineer
PRIME PROFESSIONAL PRACTICE
The civil engineer can work:
 1. Directly. Serve the client (considered
as the project owner)
 2.Indirectly. When working as a subconsultant through another engineer or
architect.
DESIGN COMPETITION
 Design competition is the process
through which a civil engineer is to be
selected above other competitors based
on proposal or an innovative approach
to solving a client's needs. Invitation is
through: Directly through solicitation
Indirectly through a letter of request
through publication or newspaper
PROFESSIONAL PRACTICE OF
FOREIGN CIVIL ENGINEERS
 RA 8981 allows foreign engineers to practice in the Philippines by the
following conditions:
 1. Laws of the foreign country also allow Filipino civil engineers to
practice their profession on the foreign soil.
 2. Allowed under international agreement.
 3. Consultant to be engaged in foreign-funded, joint venture or foreignassisted projects of the government
 4. Employees of Philippine or foreign private institutions pursuant to the
law.
 5. Naturalized Filipino civil engineers who had been registered prior to
naturalization. There are requirements for foreign civil engineers to
comply before practicing in the country: Certificate of
registration/license Special permit from PRC Special permit from
Department of Labor and Employment
CLASSIFICATION OF ENGINEERING
SERVICES
Services provided by Civil Engineers can be grouped into seven
broad categories:
 A. Consultations, research, investigations, and reports
 B. Design services for construction projects
 C. Construction services
 D. Special services for construction projects
 E. Engineering support services
 F. Academic services
 G. Services as Employee
A. CONSULTATIONS, RESEARCH,
INVESTIGATIONS AND REPORTS
 This services deal primarily with collecting, interpreting, and
reporting information, together with formulating conclusions and
making recommendations. Typical services in this category are:
 A1. Preliminary and Feasibility Investigations and Reports
These services usually precede the authorization of a capital project
and may involve extensive investigations, analyses of conditions,
and comparison of several possible plans. These studies may include
the impact of a project upon the environment, sustainable
development, operating costs, life-cycle costs, financing
considerations, and expected revenues as bases for conclusions
and recommendations regarding the advisability of undertaking a
project.
 A2. Planning Studies
These services may include the broad areas of
developing the engineering requirements of
master
plans
for
long-range
capital
improvement
programs;
preparation
of
preliminary engineering of land development
plans, urban plans, and regional plans; and the
investigation of environmental conditions and
preparation of environmental impact studies
with subsequent engineering planning to
improve or maintain existing conditions.
A3. Appraisals, Valuations and Rate
These services may include investigations and analyses of
existing conditions; capital and operating costs;
overhead costs and costs of financing: and revenues as
needed to evaluate a property or to recommend
establishment of prospective rates Studies
A4. Assistance in Financial Matters
The Civil Engineer may be engaged by a client who is
planning to issue bonds, particularly revenue bonds, to
finance a capital project. The scope of services may
include an evaluation of capabilities of existing or
proposed facilities to meet present and future needs,
statements of probable construction cost, and an estimate
of annual revenue requirements, with a determination of
appropriate rates to provide this income.
A5. Materials Engineering and Equipment Tests
These services include tests of materials and equipment
under established codes and standards, specialized
examination of equipment and materials used in
construction and industry, and other inspections and
monitoring required by a client.
A6. Direct Personal Services
This includes services such as assistance in preparation for
legal proceedings. Appearances before courts or
commissions to render expert opinions and conclusions,
and investigations of technical matters where specialized
civil engineering knowledge, experience, and judgment is
required.
 A7. Research and Development
Research is a specialized investigation and gathering of data
from existing resources or through laboratory works and processes
related to the purpose and object of the research. Research and
development may cover the following:
(a)Development of new construction materials and methods
from concept to commercialization
(b)Improvement of construction materials and methods through
exhaustive studies to reduce total construction cost and at the
same time improve quality

A8. Special Services

These services can vary to suit special needs of the client and can include such
diverse

activities as:

Value Engineering

Appraisal and valuation

Load testing

Environmental evaluations

Traffic engineering

Forensic engineering for structural and other failures

Operational assistance

Materials design process

Pilot studies

Computer modelling

Safety engineering

Topographic, sounding and boundary survey engineering

Toxic and hazardous waste evaluation

Permit and application services

Sales and marketing service

Expert witness

Representation of municipal or private entities in projects proposed for

privatization
B. DESIGN SERVICES FOR
CONSTRUCTION PROJECTS
 The six standard phases of a construction project and
the engineering services needed for each are;
 B1. Study and Report Phase
This phase involves determination of project scope and
economic and technical evaluation of feasible
alternatives.
 B2. Preliminary Design Phase
This phase involves the establishment of the general size
and scope of the project and its location on the selected
site
 B3. Final Design Phase
This phase of project development is usually undertaken only after the client has
approved the preliminary design phase material.
 B4. Bidding and Negotiating Phase
 Services under this phase may include:
 1. Assisting the client in advertising for and obtaining bids or negotiating proposals
for each separate prime construction contract, maintaining a record of prospective
bidders to whom bidding documents have been issued, attending pre-bid
conferences, and receiving and processing deposits for bidding documents.
 2. Issuing addenda as appropriate to interpret, clarity, expand or amend the
bidding documents.
 3. Assisting the client in determining the qualifications and acceptability of
prospective contractors, subcontractors and materials suppliers.
 4. Consulting with and advising the client as to the acceptability of alternative
materials and equipment proposed by the prospective constructors when
substitution prior to the award of contracts is allowed by the bidding documents.
 5. Attending the bid opening, preparing bid tabulation sheets and providing
assistance to the client in evaluating bids or proposals and in assembling and
awarding contracts for construction, materials, equipment and services.
 B5. Construction Phase
Services under this phase involve consulting with and advising
the client during construction and are usually those associated
with service as the client's representative. Most Civil Engineers
are not willing to assume the responsibilities associated with
construction phase services without providing resident project
representative services at the site.
 B6. Operation Phase
At the completion of construction, the Civil Engineer may as a
basic service, assist in the start- up of project operations. The
Civil Engineer may be commissioned to prepare a manual for
both operation and maintenance requirements, and may also
provide assistance in adjusting and balancing equipment,
identifying deficiencies and assisting in obtaining corrections,
and performing inspections prior to the end of the project
warranty period. The Civil Engineer may assist in operator
training, setting up job classifications and salaries, organizing
the purchase of supplies, developing charts for recording
operational data, and observing and reporting on project
operations
C. CONSTRUCTION SERVICES
 • A registered Civil Engineer may engage in construction contracting after
being
licensed as a contractor by the Contractors Accreditation Board. It is considered
unethical for a civil engineer to allow his license to be used by any other
construction company except his own.
 • A registered Civil Engineer may provide the services of a supporting technical
employee as required of a construction company. He shall however, be paid the
professional fees, in addition to his regular salary, for any design work he performs
for which he signs as professional Civil Engineer and/or engineer on record.
 • A Civil Engineer may be employed as a construction engineer, resident Civil
Engineer, project engineer, quality control engineer, cost engineer or engineer
inspector in a project. In accordance with section 23 of RA544, only registered Civil
Engineer can take charge or supervise construction or alteration of any building or
structure and any other civil engineering works mentioned in Section 2 of the
mentioned Republic Act. The Civil Engineer when employed is similarly required to
comply with the code of ethics of the profession as the consulting Civil Engineer.
D. SPECIAL SERVICES FOR
CONSTRUCTION PROJECTS
 Special Services required during the study, design,
construction, and operation phases of a
construction project may include investigations,
reports, and activities beyond the scope of the
basic services. These services, many of which are
also listed earlier in this section under the category
*Consultations, Investigations, and Reports", may
relate to the clients decisions as to the feasibility
scope, and location of the project. The research,
compilation of engineering data, and acquisition
of property may involve professional specialists in
engineering and other fields.

Special Services that may be provided by the Civil Engineer or negotiated with other firms
or sub-consultants by the Civil Engineer acting on behalf of the client could include:

Geotechnical engineering - including test borings, sampling and analysis, and
recommendations.

2. Special studies, tests, and process determinations to establish design criteria or
demonstrate compliance.

3. Land surveys, establishment of boundaries and monuments, preparation of easement
descriptions, and related computations and drawings.

4. Engineering and topographic surveys for design and construction.

5. Mill, shop, or laboratory inspections of the materials and equipment.

6. Additional copies of reports, construction drawings, specifications, and other
documents as required for bidding and construction beyond the number specified in the
Basic Services agreement.

7. Extra travel and subsistence as defined by the agreement for engineering services.

8. Value engineering including review of the work of other engineers, either within the
same organization or in other firms to determine whether a proposed solution is optimum
and, if not, to suggest a better approach for meeting the project's functional and financial
criteria.

9. Redesign to reflect changes requested by the client or necessitated by the client's
acceptance of substitutions proposed by the contractor.

10. Assistance to the client as an expert witness in litigation in connection with the project
or in hearings before approving and regulatory agencies.

11. Final investigations involving detailed consideration of operation, maintenance, and
overhead expenses; preparation of final rate schedules, and earning and expense
statements; appraisals, valuations, and material audits or inventories required for
certification of force account construction performed by the client or for extra work done
by the contactor.
 12. Preparation of detailed applications and supporting
documents, grants or advances for public works projects.
 13. Plotting, computing, and filling of subdivision plans, staking
of lots, and other land planning and partitioning activities.
 14. Preparation of environmental assessment and impact
statements and other assistance to the client in connection
with public hearings.
 15. Additional studied and design efforts to meet special
conditions encountered during construction.
 16. Assistance to the client in the selection and engagement
of architects, other engineers, contractors and subcontractors,
and observation and approval of their services or work;
contacts with governmental agencies to obtain permits and
documents; and other services related to the project
development.
 17. Assessment of a completed project's ability to meet its
design intent relative to capacity, maintainability, operability,
or reliability.
 18. Computer simulation and modelling.
E. ENGINEERING SUPPORT
SERVICES
The engineering support services in general civil
engineering practice may involve drafting, land and
construction surveying, and other data gathering activities
for specialized purposes. Although persons who are not
Civil Engineers sometimes accomplish some of these tasks,
the procurement of adequate and correct data usually
requires professional. Civil Engineering judgment and
guidance. Since soundness of any engineering decision is
dependent upon the accuracy and suitability of data
obtained in field and laboratory investigations these
supporting services must be under the guidance of the
Civil Engineer whose decisions will be based upon those
data.
F. ACADEMIC SERVICES
 These services involve full or part time teaching or training of
prospective professionals and also the upgrading of knowledge
and skills of fellow professionals. Academic services may include:
 a) Teaching of civil engineering courses in engineering
colleges/universities on part/full time basis. As per RA8981, all
subjects for licensure examinations shall be taught by persons who
are holders of valid certificates of registration/professional licenses
and professional identification cards, or special temporary permits,
or a valid certificate of competency for the profession issued by
the Commission, and who comply with the other requirements of
the CHED.
 b) Lecturing in civil engineering courses designed by the Philippine
Institute of Civil Engineers for practicing engineers who want to
obtain CPD credits. c. Conducting tutorials/refresher courses on
civil engineering concepts and related subjects
 c) Serving as a Resource Speaker in Technical Session.
 d) Writing technical articles and pamphlets
G. SERVICES AS EMPLOYEE
 This is a condition when a Civil Engineer engages to perform work or fulfil duties
regularly for wages or salary being paid by an employer.
 • A Civil Engineer may be employed for any position or function in any commercial
or institutional organization. Where he is performing civil engineering functions, he is
required to follow the code of ethics for Civil Engineers and comply with the
standards and guidelines of PICE manual. A licensed Civil Engineer may not allow
his license to be used by the company that employs him without proper agreement
for his professional services. Where the firm he is working for uses his license to sign
and seal the plans, specifications and contract document, the Civil Engineer must
charge the professional fee for said services.
 • A Civil Engineer in part time employment with a firm is considered to be an
employee and the same time a consultant of the firm. The standards for an
employee and an individual consultant as defined in the PICE manual apply to this
Civil Engineer.
 • Any Civil Engineer employed as an individual consultant of any firm, whether the
firm is performing engineering, commercial, administrative, management or
financial services is required to comply with the requirements and the standards
herein established for a consulting Civil Engineering firm or consulting Civil Engineer.
 • All Government Civil Engineers employed by the instrumentalities of the
Government e.g. national and local, shall be governed by the pertinent existing
laws and regularities and particularly to those prescribed by the Civil Service
Commission. In case of any conflict with any of the provisions of the Manual of
Practice, such pertinent laws and regulations shall take precedence and shall
govern.
LET US EVALUATE: In about three to five sentences,
express your answers in clear and grammatically
correct sentences, and logical statements.
1. Why do we need to know the obligations and
liabilities of both the Civil Engineer and the Client?
2. What are the typical services offered by Civil
Engineers or civil engineering firms?
3. What are the requirements for foreign civil
engineers to practice their profession in the
Philippines?
4. Give one classification of Engineering Services,
elaborate.
5. Give the Two Prime Professional Practice of our
profession. Explain.
LET US EVALUATE: In about three to five sentences,
express your answers in clear and grammatically
correct sentences, and logical statements.
1. Give one classification of Engineering Services,
elaborate.
2. What are the different professional responsibilities
of a Civil Engineer?
3. How should a dispute between the Civil Engineer
and the Client be settled?
4. What are the typical services offered by a
Professional Civil Engineer?
5. Explain the following statement: “Quality Project
by definition is one satisfactorily meeting both the
expectation of the client or employer and the
requirements of the project.”
THE SELECTION OF THE CIVIL
ENGINEER
 The selection and engagement of a Civil
Engineer is one of the most important
decisions
to
be
made
during
the
development of an engineering project. No
two Civil Engineers have the same training,
experience,
capabilities,
personnel,
workloads, and particular abilities. Selection
of the most qualified Civil Engineer for a
specific project will result in a well-planned
and designed, economical, and successful
project
BASIS FOR SELECTION
 The client should establish administrative
policy and criteria for the selection of
qualified Civil Engineer for particular
projects. The client’s first step is to define
the proposed scope of the project.
 In some cases, this may be a general
statement
of
the
performance
requirements of the project. At other times,
the tasks to be performed maybe
individually identified and defined. By
clearly defining the services which the Civil
Engineer is to furnish, the client can
accurately judge whether or not the;
 Civil Engineer is best equipped to provide them.
 Some of the factors that should be considered in the selection
process are:
 1. The professional and ethical reputation of the Civil Engineer and
his staff as determined by inquiries to previous clients and other
references.
 2. Responsible Civil Engineers and its employee and must be
registered professional Civil Engineers.
 3. Civil Engineers should have demonstrated qualifications and
expertise in performing the services required for the project.
 4. Civil Engineer should be able to assign qualified engineering staff
who will be responsible charge of the project and will be able to
provide and complete the required services within the time
allotted.
 5. The Civil Engineer should have the necessary financial and
business resources to accomplish the assignment and provide
continuing service. The selection procedures that will be described
in the foregoing discussions apply to projects of the private sector.
For government projects, E.O.164 and PD 1594 as amended apply
to procurement of consulting services and selection of contractor
for construction, respectively.
CLIENT’S SELECTION
COMMITTEE
 Within the client’s organization there should be an established
administrative policy for designating the persons authorized to
select or recommend selection of Civil Engineers for specific
assignments.
 The persons appointed should be familiar with the project
requirements and should be kept free of internal or external
pressure during the selection process. One satisfactory
procedure is to utilize a selection committee of three or more
individuals, at least one of whom is a professional engineer of
the appropriate discipline.
 For public projects, the client must choose individuals who
demonstrate objectivity in order to avoid the appearance of a
conflict of interest in the selection of the Civil Engineer. At least
one of the individuals should be thoroughly familiar with the
civil engineering practices.
 The committee is responsible for making recommendations
after conducting appropriate investigations, interviews, and
inquiries. The final selection is then based upon the selection
committee’s recommendations
QUALIFICATIONS-BASED
SELECTION (QBS) PROCEDURE
 The selection procedure is considerably enhanced when the
client is fully familiar with the purpose and nature of the
proposed project, can describe the project in detail, and can
prepare a project scope and outline of services expected of
the Civil Engineer.
 In some cases the client may not have professional staff
available to define the project scope and describe the
required services. The client should still be familiar enough with
the project requirements to understand what is expected of
the Civil Engineer. The selection procedure, however, can be
modified to suit the circumstances. The client’s usual steps in
the selection procedure are presented below. If the client has
had satisfactory experience with one or more Civil Engineers, it
may not be necessary to follow all of the steps outlined
 1. By invitation or by public notice, state the general nature of the
project, the services required, And request statements of
qualifications and experience from Civil Engineers who appear to
be capable of meeting the project requirements. The client may
issue a “Request for qualifications” (RFQ) or "Request for proposals”
(RFP). RFQs are normally used to ascertain the general
qualifications in selected area of expertise while RFPs are used to
seek Civil Engineers for creating “short lists” for selecting a Civil
Engineer for a specific project.
 2. Prepare a budget for the staff time and costs that can be
expected from potential Civil Engineer prior to receipt of RFQs and
RFPs.
 3. Evaluate the statements of qualifications received. Select at
least three Civil Engineers or firms that may appear to be best
qualified for the specific project. It should be noted that often
more than three Civil Engineers or firms may appear to be equally
qualified – in which case more Civil Engineers or firms may be
considered. However, in fairness to those not selected it is usually
best to make a conscientious effort to keep the number selected
for further consideration for realistic minimum in view of the cost
and time required to prepare competent proposals.
 4. Write a letter to each Civil Engineer or selected for further
consideration describing the proposed project in detail, including
a project scope and outline of services required, and asking for a
proposal describing in detail the Civil Engineer’s plan for
managing and performing the required services, the personnel to
be assigned, the proposed schedule, experience with similar
projects, office location in which services are to be performed,
financial standing, present workload, and references. Each Civil
Engineer or firm should have an opportunity to visit the site, review
all pertinent data and obtain clarification of any items as required.
For major or complex projects, a pre-proposal conference may be
desirable to explain the details of the proposed scope of services
and to answer questions.
 5. On receipt of proposals, invite the Civil Engineers or firms to
meet individually with the selection committee for interviews and
discussions of the desired end results of the project and the
engineering services required. These interviews may be held at the
Civil Engineer’s office. The client may consider supplementing the
selection committee with personnel who have specialized
expertise to advise the committee, when appropriate. During
each interview the selection committee should review the
qualifications and experience of each Civil Engineer or firm, the
capability to provide the services within the time allotted, and the
key personnel to be assigned to the project
 6. Check with recent clients of each Civil Engineer or firm to
determine the quality of their performance. This check need not
limited to references listed by the Civil Engineer.
 7. List the Civil Engineer or firms in the order of preference, taking into
account their approach and understanding of the project,
reputation, experience, financial standing, size, personnel available,
quality of references, workload, location, and other factors pertinent
to the project being considered.
 8. Invite the Civil Engineer considered to be best qualified to
develop a detailed scope, list of deliverables and schedule, and to
negotiate fair compensation for the services.
 9. The compensation proposed by the Civil Engineer should be
evaluated on the basis of the clients experience and budget
estimate, taking account of the range of charges, giving
consideration to the project’s special characteristics and the scope
of services agreed upon. Fair and reasonable compensation to the
Civil Engineer is vital to the success of the project since it will enable
the consultant’s expertise to be fully utilized.
 10. If satisfactory agreement is not reached with the first
Civil Engineer, the negotiations should be terminated and
the Civil Engineer or firm be notified in writing to that effect.
Similar negotiations should then be held with the second
Civil Engineers or firm and, if necessary, with the third Civil
Engineers or firm. If no accord is reached, the client should
seek outside assistance before continuing.
CHARGING FOR CIVIL ENGINEERING
SERVICES
Charges for engineering services are usually
computed using one six methods:
 1. Salary cost times multiplier plus direct nonsalary expense (“Reimbursable”).
 2. Hourly billing rates plus reimbursables.
 3. Per Diem
 4. Cost plus fixed fee (“CPFF”).
 5. Fixed price
 6. Percentage of construction cost
(“Percentage”).
SALARY COST TIMES MULTIPLIER PLUS
DIRECT NONSALARY EXPENSE
 Compensation on the basis of the salary cost times an agreed
multiplier is a frequently used method of determining charges
for engineering services. With this method, charges for
engineering services based mainly on direct salaries. It is
therefore advisable that the Civil Engineer reach an
agreement with the client on salary ranges for each
classification of service applicable, as well as on the time
period over which they can be guaranteed. This may helpavoid future surprises, misunderstandings, and disputes.
 Regardless of the method utilized as a basis of compensation,
a provision in the agreement should state that payments will
be made to the Civil Engineer during progress of the services,
based on monthly invoices and within a reasonable time after
billing. Direct non salary expenses are a separate item for
reimbursement usually with a service charge. The following
factors are pertinent to the salary cost time multiplier version of
this method (they may also apply for other methods of
charging for civil engineering services)
 1. Salary cost is defined as “direct salaries plus employee
benefits” and includes salaries for partners or principals and
for technical, professional, administrative and clerical staff
directly”. Chargeable to the project: sick leave, vacation,
holiday and incentive pay; unemployment and other payroll
taxes; and he contributions for social security, worker’
compensation insurances retirement, medical, and other
group benefits.
 2. Multiplier which is applied to salary cost is a factor that
compensates the Civil Engineer for overhead (as defined
hereinafter) plus a reasonable margin for contingencies,
interest or invested capital readiness to serve, and profit. The
size of the multiplier will vary with the type of service, the
nature and experience of the civil engineering firm, and the
geographic area in which its office is located.
 Direct non-salary expenses usually incurred in engineering
engagements may include the following:
 a. Living and traveling expenses of principals and employees
when away from the home office on business connected with the
project.
 b. Identifiable communications expenses, such as long-distance
telephone, facsimile, telegraph shipping charges, and special
postage charges (for other than general correspondence).
 c. Expenses for services and equipment directly applicable to the
project, such as for specialized technical equipment, special legal
and accounting services, special computer rental and
programming services, computer run time and file storage, CADD
charges, sub consultants and subcontractors commercial printing
and binding, and similar services that are not applicable for
inclusion in general overhead.
 d. Identifiable drafting supplies, stenographic supplies, and
reproduction work (blueprint, photocopying, and printing)
charged to the client’s project) as distinguished from such supplies
and expenses applicable to several projects.
 e. Expenses for unusual insurance and specialized health and
safety programs and for special clothing for projects with
extraordinary risks such as toxic and hazardous waste conditions.
Such projects may require special insurance, which is also
normally billed as a direct cost to the project. Such expenses are
normally reimbursed by the client at actual invoice cost plus an
administration charge to compensate for associated
accounting, purchasing, contract administration, risk of liability,
etc.
 4. The Civil Engineers overhead which comprises a major
portion of the compensation generated by the multiplier
on salary cost, includes the following indirect costs:
 a. Provisions for office expenses-light, heat, telephone
depreciation, rental furniture, rent, drafting equipment
and engineering instruments, transportation expenses,
and office and drafting supplies not identifiable to a
specific project.
 b. Taxes and insurance other than those included as
salary cost.
 c. Library and periodical expenses and other costs of
keeping abreast of advances in engineering, such as
attendance at technical and professional meetings and
continuing education courses.
 d. Executive, administrative, accounting, legal, stenographic, and
clerical salaries and expenses (other than identifiable salaries
included in salary costs and expenses) plus salaries or imputed
salaries of partners and principals to the extent that they perform
general executive and administrative services as distinguished
from technical or advisory services directly applicable to
particular projects. These services and expenses, essential to
conduct of the business, include preliminary arrangements for
new projects or assignments and interest on borrowed capital.
 e. Business development expenses, including salaries of principals
and employees so engaged.
 f. Provision for loss of productive time of technical employees
between assignments, and for time of principals and employees
on public service assignments.
 g. Costs of acquiring and maintaining computers, development
of software, and training staff when not billed as a direct cost
 5. Accounting records. The Civil Engineer who performs services
under a salary cost times multiplier agreement or other costbased agreement must provide the accounting necessary to
segregate and record the appropriate expenditures. Adequately
detailed hourly time records must be maintained for principals,
engineers and other employees who devote; time to the project.
Applicable payroll records, together with receipts or other
documents to substantiate chargeable expenditures, must be
available for inspection audit by the client if required by
contract.
HOURLY BILLING RATE
The hourly billing rate method of the
compensation is very similar to the salary cost
times multiplier method in that the hourly billing
rate includes all direct personnel expenses,
overhead and profit. Direct non-salary expenses
(as defined under the salary cost times multiplier
section) are a separate item for reimbursement,
usually with a service charge.
PER DIEM
 The term per diem normally refers to an eight-hour day.
Direct personal services of the type described in Section 2
which are frequently charged on a per diem basis. This
basis is particularly suited to expert witness or other legaltype services and to other short-term engagements
involving intermittent personal services.
Where per diem services are furnished, the Civil Engineer
should be compensated for all of the time devoted to
providing them including travel and standby time. The per
diem charge should be based on complexity, risk, and
important of the services and on the Civil Engineer’s
professional standing, expertise, and breadth of experience.
The Civil Engineer is also reimbursed for travel and
subsistence costs and for other out-of-pocket expenses
incurred when away from the home office.
COST PLUS FIXED FEE
Under a cost-plus fixed fee agreement, the Civil Engineer is
reimbursed for the actual costs of all services and supplies related
project. including:
 • Salary costs, as previously defined
 • Overhead, as previously defined (The Civil Engineer should be
prepared to support the basis for overhead charges.)
 • Direct non-salary expenses, as previously defined
 • Fixed fee, an amount to compensate the Civil Engineer for
contingencies, interest on invested capital, readiness to serve, and
profit.
The fixed fee amount varies with the complexity and scope of the
engineering services required. It is frequently calculated as a
percentage of the salary costs, overhead, and direct non-salary
expenses.
FIXED PRICE
 The fixed price method of compensation is frequently used for
investigations and studies and for basic services on design type projects
where the scope and complexity of the assignment are clearly and fully
defined.
 The fixed price amount can be calculated as the sum total of the
estimated engineering costs for salaries, overhead and non-salary
expenses, an allowance for contingencies, interest on invested capital,
readiness to serve, and a reasonable amount for profit.
 A fixed price agreement should contain a clearly stated time period
during which the services will be performed and a provision for
adjustment of compensation if the project is delayed for reasons beyond
the Civil Engineer’s control. For design services, there should be provision
for changes required after approval of the preliminary design, with a
clear understanding as to where the final approval authority lies.
 Partial payments should be made to the Civil Engineer at stated intervals
usually once a month during the performance of the services. These
payments are usually based on the Civil Engineer’s statement of percent
completion to date.
PERCENTAGE OF CONSTRUCTION
COST
 The percentage of construction cost method is seldom used
raw. Because of increasing complexity and large variation in
tasks for projects, the percentage of construction cost fee
curves no longer have a direct correlation to the required
engineering fees for specific projects. Owners should either
use experienced "in-house" staff or retain consultants to
develop detailed program budgets for construction costs,
right of way, legal, administrative, engineering services and
permits.
 This Method may be used to determine the compensation of
the engineer for services where the principal responsibility is
the detailed design or construction supervision of facilities to
be constructed.
 The percentage fee shall consider the type, complexity,
location, and magnitude of construction cost of the project
and shall not exceed the following percentages of estimated
construction cost:
 a. Feasibility studies-three percent (3%);
 b. Detailed engineering design-six percent (6%);
 c. Detailed architectural and engineering design-eight percent
(8%); and
 d. Construction supervision-ten percent (10%)
SCHEDULE OF MINIMUM BASIC FEES
Certain principles to be observed in the rates of compensation for Civil
Engineers:
 1. When doing work on foreign assisted projects or in projects where
international consultants participate, the Civil Engineer performing
similar or equivalent work, should accept compensation that
approximates the international standard rates.
 2. Civil Engineers regularly employed in the private sector shall have a
minimum compensation corresponding to 10% more than the
minimum wage prevailing in the region as basic monthly salary. Civil
Engineers employed in the government sector shall have a minimum
basic monthly salary corresponding to appropriate entry positions
provided by the Civil Service Commission.
 3. A Civil Engineer employed in the private sector who signs and seals
the Civil Engineering plans, specifications, and other related
documents of a certain project for and in behalf of his employers shall
be compensated with a minimum of 10% of the professional fee for the
project, over and above the basic monthly salary.
TOTAL PROJECT COST
 Probable total cost is the approximation of the cost of a
program, project, or operation. It is the main concern of
the client throughout the planning design and
construction phases of a project. Probable total cost
often used to establish budgets for a typical project, is
made up of:
 Professional Engineering Cost.
 Construction Cost
 Legal and Land costs
 Owner’s cost (project administration, staffing, financing,
and other overhead)
 Contingency Allowance for unknowns
PROFESSIONAL ENGINEERING
COST
 Civil engr. Engaged to study & render planning report on the
contemplated project
 Study & report phase includes cost for field surveys, planning
analysis, geotechnical exploration analysis in addition to direct
engineering cost.
 Cost of coordination, evaluation implementation and compliance
increased correspondingly study and report phase is important
because its implementation determines the scope and
development of the entire project.
 In final design and construction phase services like surveying and
geotechnical engineering is needed.
CONSTRUCTION COST
 The cost of all the construction portions of a project
generally based upon the sum of the construction
contract(s) and other direct construction costs; does not
include the compensation paid to the architect and
consultants, the cost of the land, right-of-way, or other costs
which are defined in the contract documents as being the
responsibility of the owner.
 Is the estimated total cost of constructing the facility to be
covered by the proposed detailed design or construction
supervision services, excluding the fess and other costs of
such services, the cost of land and right of way, and legal
administrative expenses of the agency. The estimated
construction cost must be approved by the client before the
invitation to submit technical proposal is issued
LEGAL COST
 These cost includes the issuing of pledges, audits, cost
of the land and the interests of the lent money
throughout the construction. And can be best
estimated in collaboration with the customers
because
they
are
frequently
outside
the
understanding and control of the Civil Engineer.
LAND COST
 Land Cost varies considerably from the land cost.
Hence land cost should be add at actual,
considering the expenses under the following heads 1. Legal Charges
 2. Brokerage
 3. Tenant Shifting (If applicable)
OWNER’S COST (INCLUDES
ADMINISTRATION, STAFFING,
FINANCIAL COST)
 These costs, which includes
 Staffing
 Project administration
 Financing and;
 Other overhead
CONTINGENCY ALLOWANCE
 A contingency may be included in an estimate to
provide for unknown costs which are indicated as
likely to occur by experience, but are not identifiable.
When using an estimate which has no contingency to
set a budget or to set aside funding, a contingency is
often added to improve the probability that the
budget or funding will be adequate to complete the
project. Being unable to complete a project risks
public ridicule.
I.
General Overview of RA 9184 and its IRR
Historical Background
GPPB and its Functions
Key Features of RA 9184 and its IRR
Scope and Coverage
II. Definition of Terms
III. Principles of Public Procurement
IV. Procurement Methods and Procedures
V. Procurement Organizations
Government Procurement Policy Board – Technical Support Office
3
AMERICAN LAWS ON
PROCUREMENT
CONTRACTS
American Practice of
Public Bidding was
introduced in the
Philippines on 1900
INVITATION TO
BID
NO CONTRACT SHALL BE
ENTERED INTO WITHOUT
PUBLIC BIDDING
LOWEST
RESPONSIVE
BIDDER
PHILIPPINE PUBLIC
PROCUREMENT
4
PE
BEFORE THE
ENACTMENT OF GPRA
5
Executive
Orders
Implementing
Rules and
Regulations
Government Procurement Reform Act
Administrative
Issuances
10 January 2003
Implementing Rules and Regulations (IRR) Part A
8 October 2003
Revised IRR of 2009
Memorandum
Circulars
2 September 2009
Revised IRR of 2016
28 October 2016
6
PROBLEMS
REFORMS
Confusion caused by fragmented
legal system
Enactment of the Government
Procurement Reform Act (GPRA)
Inconsistent policies, rules, and
regulations due to lack of standards
Creation of the Government
Procurement Policy Board (GPPB)
Lack of transparency
Use of PhilGEPS (Philippine
Government Electronic Procurement
System)
Lack of check and balance
Participation of civil society
7
 Covers procurement of all government agencies
 General Rule is Public/Competitive Bidding
 Alternative Methods of Procurement allowed in highly exceptional
cases
 Use of the Approved Budget for the Contract (ABC) as ceiling for the
bid price
 Use of transparent, objective, and non-discretionary criteria
 Increased transparency in the procurement process
 Professionalization of procurement officials
 Inclusion of Penal and Civil Liabilities
Composed of the following:




Chairman: Secretary of Department of
Budget and Management
Alternate Chairman: Director-General
of the National Economic and
Development Authority
12 Regular Members
Invited Resource Persons (audit, anticorruption agencies)
DPWH
DOH
NEDA
DOF
DND
DTI
DBM
DEPED
DOST
DILG
PRIVATE
SECTOR
REP
DOE
DOTr
DICT
9
11 Regular Members –
Secretaries of the following:











DPWH - Department of Public Works and Highways
DTI - Department of Trade and Industry
DOH - Department of Health
DND - Department of Defense
DEPED - Department of Education
DOF - Department of Finance
DILG - Department of Interior and Local Government
DOST - Department of Science and Technology
DOTr - Department of Transportation
DOE - Department of Energy
DICT - Department of Information and Communication
Technology
DPWH
DOH

DEPED
Private Sector Representative
DBM
NEDA
DOF
DND
DTI
12th Regular Member
DOST
DILG
PRIVATE
SECTOR
REP
DOE
DOTr
DICT
10
Policy-Making
> Amend
implementing rules &
regulations of
procurement law
(quasi-legislative
function)
> Prepare generic
procurement manual
and standard bidding
forms
Capacity
Development
> Establish a
sustainable training
program
Monitoring
> Ensure the proper
implementation by
PEs of the Act, this
IRR and all other
relevant rules and
regulations on public
procurement
> Review
effectiveness of
procurement law
> Protect national interest in all matters affecting public procurement, having due regard to
the country’s regional and international obligations.
11
13
Sec. 8.5.2 All bidders shall upload and maintain in PhilGEPS a current
and updated file of the following Class “A” eligibility documents under
Sections 23.1(a) and 24.1(a):
a) Registration Certificate;
b) Mayor’s/Business Permit or its Equivalent Document;
c) Tax Clearance;
d) Philippine Contractors Accreditation Board (PCAB) license and
registration; and
e) Audited Financial Statements.
For foreign bidders participating in the procurement by a Philippine
Foreign Service Office or Post, they shall submit their eligibility
documents under Sec. 23.1 of the 2016 IRR of RA 9184.
 R.A. 9184 applies to all branches and/or instrumentalities of
the government:
1.
2.
3.
4.
5.
National Government Agencies (NGAs)
State Universities and Colleges (SUCs)
Government Owned or Controlled Corporations (GOCCs)
Government Financial Institutions (GFIs)
Local Government Units (LGUs)
 It shall apply to all procurement activities involving:
1. Goods and Services
2. Infrastructure Projects
3. Consulting Services
Section 4, Revised IRR
 All fully domestically-funded procurement activities
 All foreign-funded procurement activities, unless otherwise
provided in a treaty or int’l/executive agreement
Mandates adherence to RA 9184 or selection through competitive
bidding. Otherwise, negotiating panel shall ensure that the
reasons for the adoption of a different rule or method of
procurement are clearly reflected in the records of discussion.
(Sec. 4.3, 2016 IRR of RA 9184)
Section 4, Revised IRR
 As may be agreed upon by the GOP and IFI in their treaty or
int’l/executive agreement
• Projects funded from foreign grants
• Projects for International Competitive Bidding
• Consulting Services for National Competitive Bidding
EXCEPT:
1. Procurement for goods, infrastructure projects, and consulting
services funded from Foreign Grants covered by R.A. 8182, as
amended by R.A. 8555, entitled “An Act Excluding Official
Development Assistance (ODA) from the Foreign Debt Limit in order to
Facilitate the Absorption and Optimize the Utilization of ODA
Resources, Amending for the Purpose Paragraph 1, Section 2 of
Republic Act No. 4860, as amended”, unless the GOP and the foreign
grantor/foreign or international financing institution agree otherwise;
2. Acquisition of real property which shall be governed by R.A. 8974, as
amended by RA 10752 entitled “An Act to Facilitate the Acquisition of
Right-of-Way Site or Location for National Government Infrastructure
Projects and for Other Purposes,” and other applicable laws;
3. Public-Private sector infrastructure or development projects and other
procurement covered by R.A. 6957, as amended by R.A. 7718 (BOT Law),
entitled “An Act Authorizing the Financing, Construction, Operation and
Maintenance of Infrastructure Projects by the Private Sector, and for
Other Purposes,” as amended;
4. Disposal of government properties;
 Commission on Audit Circular No. 86-264
 DBM National Budget Circular No. 425
Enumerated activities that are not considered as procurement
undertakings under RA 9184 and its IRR:
1.
Direct financial or material assistance to beneficiaries
Section 4.5(a) of the 2016 Revised IRR of RA 9184 contemplates
financial or material assistance given directly to individual recipients or
beneficiaries to address their immediate medical, funeral, transportation
and other allied needs and concerns, which do not involve actual
procurement of goods and services by government agencies.
Enumerated activities that are not considered as procurement
undertakings under RA 9184 and its IRR:
1.
Direct financial or material assistance to beneficiaries
If the direct financial or material assistance takes the form of goods,
supplies or items that are to be procured (e.g., relief goods), the same do
not fall within the coverage of the cited provision, but is subject to
procurement rules and regulations embodied in RA 9184 and its IRR.
(GPPB Circular 01-2017)
Enumerated activities that are not considered as procurement
undertakings under RA 9184 and its IRR:
2. Participation to scholarships, trainings, continuing education, etc
3. Lease of government property for private use
4. Job order workers
5. Joint Venture Agreements between Private Entities and GOCCs or
LGUs
6. Disposal of property and assets
Government Procurement Policy Board – Technical Support26Office
Procurement
Procurement
refers to the acquisition of goods,
consulting services, and the contracting for infrastructure
projects by procuring entity.
(Sec. 5(aa), IRR, R.A. 9184)
Refer to:

All items, supplies and materials

Including general support services

Needed in the transaction of public businesses or in the pursuit of any
government undertaking, project or activity

Whether in the nature of equipment, furniture, stationery, materials or
construction, personal property, including non-personal or contractual
services, such as:

repair and maintenance of equipment and furniture

trucking, hauling, janitorial and security and other related and
analogous servicesJustified by conditions specified in R.A. 9184
and its IRR
Except: Infrastructure projects and consulting services
Refer to:

construction, improvement, demolition, rehabilitation,
restoration or maintenance of civil works components of :

IT projects

Irrigation

flood control and drainage

water supply

sanitation, sewerage and solid waste management

national buildings, hospital buildings,
constructions projects of the Government
and
other
repair,
related

Refer to services for Infrastructure Projects and other types of projects
or activities of the Government requiring adequate external technical
and professional expertise that are beyond the capability and/or
capacity of the Government to undertake such as, but not limited to:

advisory and review services;

pre-investment or feasibility studies;

design;

construction supervision;

management and related services; and

other technical services or special studies.
 In case of projects involving mixed procurements, the nature of the
procurement, shall be determined based on the primary purpose of the
contract.
 Determination shall be made by the procuring entity.
 In mixed procurements, the PE shall specify in the Bidding Documents all
requirement applicable to each component of the project. In the
preparation of Bidding Documents, the PE shall ensure compliance with
existing laws, rules and regulations, especially those concerning licenses
and permits required for the project (Sec. 17.2, 2016 IRR of RA 9184)
 PE is in the best position to determine the correct classification of its
procurement based on its identified needs and the best way by which
these needs may be addressed, managed, and satisfied.
 It is the motivation or intention of the PE in pursuing the project that will
determine the primary purpose of a project.
NPM 11-2013
ublic Monitoring

Awareness and vigilance
ccountability

Responsibility over actions/decisions (“Answerable”)
ompetitiveness

Equal opportunity to all eligible bidders
ransparency

Wider dissemination of bid opportunities
treamlined Process


Uniformly applicable to all government agencies
Effective and efficient method
All Procurement shall be done through competitive bidding except as
provided in R.A. 9184.
Resort to alternative methods shall be made:
 Only in highly exceptional cases
 To promote economy and efficiency
 Justified by conditions specified in R.A. 9184 and its IRR
PreProcurement
Conference
Bid Submission
Bid Evaluation
Advertisement
and/or
Posting
Pre-Bid
Conference
Opening of
Technical Proposal
(incl. eligibility docs)
Opening of
Financial Proposal
Post-qualification
Contract
Award
44
PreProcurement
Conference
Pre-Bid
Conference
Bid Evaluation
(QBE or QCBE)
Advertisement
and/or
Posting
Bid Submission
Post-qualification
Eligibility and
Shortlisting
Opening of
Bids
(QBE or QCBE)
Contract
Award
Negotiation
45
 Head of the Procuring Entity (HOPE)
 Bids and Awards Committee (BAC)
 BAC Secretariat
 Te c h n i c a l Wo r k i n g G r o u p ( T W G )
 Observers
Refers to:
 Head of the agency or body, or his duly authorized official, for NGAs
and the constitutional commissions or offices, and other branches
of government;
 Governing Board or its duly authorized official, for GOCCs, GFIs and
SUCs; or
 Local Chief Executive, for LGUs
Note: In an agency, department, or office where the procurement is
decentralized, the head of each decentralized unit shall be considered
as the HoPE, subject to the limitations and authority delegated by the
head of the agency, department, or office
FUNCTIONS AND RESPONSIBILITIES:
1. Establishes BAC and appoints its members
 Ensures that BAC members give their utmost priority to duties
 Ensures professionalization of members of the procurement
organization
Within six (6) months upon designation, the BAC, its
Secretariat and TWG members should have satisfactorily
completed such training or program conducted, authorized or
accredited by the GPPB through its TSO. (Sec. 16, 2016 IRR
of RA 9184)
2. Approves the Annual Procurement Plan (APP)
3. Approves/Disapproves the Contract Award
4. Resolves Protests
As a general rule, HOPE must create a single BAC. However, separate
BACs may be created under any of the following conditions:
1.
The items to be procured are complex or specialized;
2.
If the single BAC cannot reasonably manage the procurement
transactions as shown by delays beyond the allowable limits; or
3.
If the creation is required according to the nature of the
procurement.
 PE’s creation of sub-BACs to be placed under a main BAC is not in
compliance with the requirements under Sec 11 of the IRR of RA
9184.
 PE may, however, establish separate BACs with the composition of
the BAC members subject to the qualifications under Section
11.2.2 of the IRR of RA 9184. Each BAC shall not be considered as
decentralized committees pursuant to Section 11.1.2 of the IRR
since it will be headed by a single HOPE.
NPM 74-2013
FUNCTIONS AND RESPONSIBILITIES:
 Recommends Procurement Method
 Creates a Technical Working Group (TWG)
 Conducts the bidding activities
 Resolves Requests for Reconsideration
 Recommends Imposition of Sanctions
 Invites Observers during all stages of the procurement process
 Conducts due diligence review or verifications of the qualifications
of observers
 Prepares Procurement Monitoring Report
FUNCTIONS AND RESPONSIBILITIES:
 Advertise and/or post the IB/REI
 Conduct pre-procurement and pre-bid conferences;
 Determine the eligibility of prospective bidders;
 Receive and open bids;
 Conduct the evaluation of bids;
 Undertake post-qualification proceedings;
 Recommend award of contracts to the HoPE or his duly authorized
representative;
 Recommend to the HoPE the use of Alternative Methods of
Procurement
FUNCTIONS AND RESPONSIBILITIES:
 Conduct any of the Alternative Methods of Procurement;
 Conduct periodic assessment of the procurement processes and
procedures
 Perform such other related functions as may be necessary
(Sec. 12.1, 2016 IRR of RA 9184)
M E M B E R S H I P A N D Q U A L I F I C AT I O N S :
 BAC members should occupy plantilla positions with the procuring
entity concerned.
 All members are regular members except the end-user member
who is considered as a provisional member. The members, whether
regular or provisional, are equally entitled to participate and to
vote during deliberations.
COMPOSITION: 5 but not more than 7 MEMBERS
designated by the HOPE
1.
Regular Members:
 Chairperson (3rd Ranking Permanent Official);
 Member representing the Legal or Administrative areas (5th
Ranking Permanent Personnel); or if not available, an officer of
the next lower rank;
 Member representing the Finance Area (5th Ranking
Permanent Personnel); or if not available, an officer of the next
lower rank;
COMPOSITION: 5 but not more than 7 MEMBERS
designated by the HOPE
2. Provisional Members
 Officer possessing
procurement.
Technical
expertise
relevant
to
the
 End user unit Representative. In case of procurement outsourcing,
a representative from the Procuring Entity may be designated as a
provisional member
HOPE
2nd
3rd
3rd
4th
5th
6th
3rd
 Same qualifications as their principals.
 Same term as the principal.
 Presence of alternate BAC members in BAC meetings are considered for
purposes of quorum.
 The relationship of the principal and the alternate is of co-equal nature,
rather than hierarchical.
 Accountability shall be limited to their respective acts and decisions.
 Shall be entitled to the proportionate honoraria for attendance in
meetings.
TERMS OF MEMBERSHIP:
The BAC members shall be designated for a term of one (1) year only,
reckoned from the date of designation. However, the HOPE may renew
or terminate such designation at his discretion.
Upon expiration of the terms of the current members, they shall
continue to exercise their functions until new BAC members are
designated.
TERMS OF MEMBERSHIP:
In case of resignation, retirement, separation, transfer, re-assignment,
or removal of a BAC member, the HOPE shall designate a replacement
that has similar qualifications as the official replaced. The
replacement shall serve for the unexpired term. In case of leave or
suspension, the replacement shall serve only for the duration of the
leave or suspension.
1.
Head of the Procuring Entity
2.
Official who approves procurement contracts;
3.
Chief Accountant or Head of the Provincial/City/Municipal
Accounting Office and his/her staff, unless the Accounting
Department is the end-user unit, in which case the Chief
Accountant, Head of the Accounting Department or his/her staff
may be designated as an end-user member. (COA Circular Letter
No. 2004 – 3)

HOPE may create a new office or designate an existing organic
office to act as BAC Secretariat
In case of ad hoc BAC Secretariat, the HOPE shall assign fulltime support staff in its BAC Secretariat (Sec. 14.2)

There is no minimum or maximum number of members of the BAC
Secretariat.

Head of the BAC Secretariat must be at least a 5th or 3rd ranking
permanent employee or, if not available, a permanent official of
the next lower rank
FUNCTIONS:

Provide administrative support to the BAC and TWG

Organize BAC and TWG meetings and conferences

Take custody of procurement documents and other records

Manage the sale and distribution of bidding documents

Advertise/post bidding opportunities,
Documents, and notices of awards

Assist in managing the procurement process

Monitor procurement activities and milestones

Consolidate PPMPs

Act as central channel of communications

Prepare minutes of meetings and resolutions of the BAC
including
Bidding
 Created by the BAC from a pool of legal, technical and financial
experts
- those experts outside the procuring entity concerned may be
included, i.e. government personnel and officials and
consultants from the private sector and academe with proven
expertise on the sourcing of goods, works or consulting
services. (GPPB Resolution No. 07-2012, GPPB Circular No.
02-2012)
 BAC may create separate TWGs to handle different procurements
FUNCTIONS:
Assist BAC in the following activities:
Eligibility screening
Bid evaluation
Post-qualification
Review of the Technical Specifications, Scope of Work, and Terms of
Reference
 Review of Bidding Documents
 Shortlisting of consultants
 Resolution of Request for Reconsideration




(Sec. 12.1, 2016 IRR of RA 9184)
 Observers represent the public, the taxpayers who are interested in
seeing to it that procurement laws are observed and irregularities
are averted.
 At least three (3) Observers shall be invited coming from:
 COA
 Duly recognized private group in the sector or discipline of the
particular type of procurement involved
 Non-Government Organization (NGO)
 In all stages of procurement process, During the 1) eligibility
checking, 2) shortlisting, 3) pre-bid conference, 4) preliminary
examination of bids, 5) bid evaluation, and 6) post-qualification, the
BAC must invite, in writing, at least three (3) Observers, at least 3 cd
5cd before the date of the procurement stage/activity
Observers shall be allowed access or be provided with the following
documents free of charge upon their request, subject to signing of a
confidentiality agreement:
1.
2.
3.
4.
5.
Minutes of BAC meetings;
Abstract of Bids;
Post-qualification summary report;
APP and related PPMP; and
Opened proposals
In all instances, observers shall be required to enter into a
confidentiality agreement with the concerned Procuring Entity in
accordance with the form prescribed by the GPPB.
RESPONSIBILITIES:
1.
Prepare report (jointly or separately) indicating their observations
on the procurement activities
2.
Submit report to the PE and furnish a copy to the GPPB and the
Office of the Ombudsman/Resident Ombudsman.
3.
Immediately inhibit and notify in writing the PE of any actual or
potential conflict of interest
If no report is submitted by the observer within seven (7) calendar days
after each procurement activity, then it is presumed that the bidding
activity conducted by the BAC followed the correct procedure
 PE is authorized to grant honoraria to the members of the BAC, the
TWG, and the BAC Secretariat provided the amount so granted does
not exceed twenty-five percent (25%) of their respective basic
monthly salary, subject to the following conditions:
 funds are available for the purpose; and
 the grant of honoraria conforms to the guidelines promulgated
by the DBM. (Section 15, IRR of R.A. 9184)
 DBM Budget Circular No. 2004-5A, dated 7 October 2005, as
amended by DBM Budget Circular No. 2007-3, dated 29 November
2007.
 Only for successfully completed procurement projects
 Limited to procurement that involves competitive bidding –
Competitive Bidding, LSB and Nego Proc-Two Failed Bidding.
 Granted to Chair or Members of the BAC or the TWG by the PE
concerned.
 BAC Secretariat performing attendant functions in addition to their
regular duties and functions may be paid honoraria at the same rate
as the TWG Chair and Members
 Those who are receiving honoraria shall no longer be entitled to
overtime pay for procurement-related services rendered.
 Payment of overtime services may be allowed for the administrative
staff, (clerks, messengers and drivers supporting the BAC, the TWG
and the Secretariat), for procurement activities rendered in excess of
official working hours.
 Collections from successfully completed procurement projects,
limited to activities prior to the awarding of contracts to winning
bidders:
 proceeds from sale of bid documents;
 fees from contractor/supplier registry;
 fees charged for copies of minutes of bid openings, BAC
resolutions and other BAC documents;
 protest fees; and
 proceeds from bid security forfeiture
Maximum Honorarium rate per
procurement project
BAC Chair
Php 3,000.00
BAC Members
Php 2,500.00
BAC Secretariat (Ad hoc)
TWG Chair and Members
Php 2,000.00
Members of the BAC Secretariat whose positions are in the Procurement Unit
of the agency shall not be entitled to honoraria although the payment of
overtime services may be allowed, subject to existing policy on the matter.
 House Bill No. 182 entitled Energy Efficiency and Conservation Act of
2016 provide for mechanisms to enable government agencies to
procure energy savings performance contracts.
 Through Resolution No. 20-2016, dated 23 September 2016, GPPB
espoused that in the procurement of goods, government agencies
shall be able to incorporate the minimum energy performance
standards for equipment, products and devices in crafting technical
specifications.
Why Go Green?
The PDP 2017-2022 aims to strengthen the nation’s aspirations of inclusive
and sustainable development through national efforts; GPP is one of the
mechanisms.
Support of local
businesses
GPP’s contribution
to the Philippine
Development Plans
& other policies
Increase
competitiveness
Help to achieve
environmental
objectives at national
and international
levels
 GPPB Resolution 25-2017, dated 30 May 2017 approves the
Philippine Green Public Procurement Roadmap, providing for
strategies and mechanisms for the gradual advancements of GPP in
the country.
The intervention logic of the Philippine
Green Public Procurement Roadmap
GOAL
POSITIVE IMPACT
STRATEGIES FOR
THE WAY FORWARD
STATE OF PLAY
RATIONALE
GPP is established throughout the government
(national to local)
…on Environment + Society + Economy
Policy commitment - GPP for CSEs and non-CSEs communication and awareness - monitoring
Building on existing policies and laws, inspired by international
best practices and addressing stakeholders issues and concerns
The government shall lead by example in creating a green market
SESSION
2 – OVERVIEW
1
THEFORWARD
PHILIPPINE
OF THE
GREEN
GPP EDUCATION
PUBLIC PROCUREMENT
MODULE
ROADMAP 2017 - 2022
THE
WAY
5 Strategies
1
Policy commitment
2
GPP for CSEs
3
GPP for Non-CSEs
4
Communication & Awareness
5
Monitoring
Commitment
GPP shall be the desirable norm of public
procurement
A resolution shall adopt:
• The first set of CSEs and the mechanisms
of the roadmap
• The first set of non-CSEs and the mechanisms
of the roadmap in this respect
• To establish and implement complementary measures
(capacity development, communication, monitoring)
GPP: Common-use Supplies
and Equipment (CSEs)
ASSESSMENT MATRIX
Market readiness
Environmental impact
Cost implications
Practicability
Support to government
Environmental objectives
Support to the local economy
FIRST SET OF
PRIORITIZED CSEs
GPP: Non-Common-use Supplies
and Equipment (Non-CSEs)
FIRST SET OF PRIORITIZED
PRODUCTS (non-CSEs)
ASSESSMENT MATRIX
Market readiness
Environmental impact
Cost implications
Practicability
Support to government
Environmental objectives
Support to the local economy
Sample Green Core Criteria and Technical Specifications
CSE PRODUCT: TOILET PAPER
SCOPE:
Toilet paper in rolled form, interfolded or coreless for toilet facilities of government
offices and public amenities
KEY ENVIRONMENTAL IMPACT
• Forest destruction and potential loss of biodiversity related to the pulp
production;
• Energy and water consumption during production of toilet paper;
• Harmful emissions to air and water during pulp and paper production.
• Chemical consumption during production;
• Waste generation and packaging.
GPP APPROACH
• .Purchase products with a low energy and resource use during processing;
• Purchase products which avoid harmful substances in paper production
and bleaching;
• Purchase products with high recycled content;
• Purchase products from legally and sustainably harvested wood.
Sample Green Core Criteria and Technical Specifications
CSE PRODUCT: TOILET PAPER
PRODUCT SPECIFICATIONS:
• Product must be made out of raw materials from 100% recycled fiber.
• At least Elementary Chlorine Free (ECF).
• The core as well as any paper wrapping and carton box packing must be
made from 100% recycled fiber and the cartons must be strong enough
for storage transit.
FUTURE CRITERIA:
• Recycled fiber must contain not less than
60% post-consumer fiber.
• Totally Chlorine Free (TCF)
Sample Green Core Criteria and Technical Specifications
CSE PRODUCT: TOILET PAPER
JUSTIFICATION:
• Paper production from recycled paper is far less environmentally
damaging. It avoids destruction of natural forests, reduces water
consumption, energy consumption (40%-64%) as well as emissions of
chemical substances to the air (74%) and to the water (35%).
EVIDENCE:
• Supplier must provide evidence that specifications are met. Especially
concerning the origin of raw materials certification schemes or evidence or
recycled materials must be provided
• Any appropriate means of proof demonstrating that the criteria are met
will be accepted (technical dossier from manufacturer, test report from
recognized body)
Sample Green Core Criteria and Technical Specifications
CSE PRODUCT: TOILET PAPER
VERIFICATION:
• High quality recycled paper may look identical to conventional paper,
which neither has an official label nor a product mark indicating the
recycled content.
• Independent testing can be carried out by the Forest Product Research
and Development Institute (DOST)
CONTACT US AT:
Unit 2506 Raffles Corporate Center
F. Ortigas Road, Ortigas Center
Pasig City, Philippines 1605
TeleFax: (632)900-6741 to 44
Email address: gppb@gppb.gov.ph
CIAP
DOCUMENT 102
Uniform General Conditions of Contract
for Private Construction
Download your copy of
the CIAP Document 102
from our website!
Interested to know
more about CIAP
Document 102?
Frequently Asked
Questions
(FAQs)
Scan the QR Code to be directed to the
link of the document:
You may reach us through the
following:
Primer on CIAP Document 102
PHILIPPINE DOMESTIC CONSTRUCTION BOARD
CIAP Document 102
(Uniform General Conditions of
Contract for Private Construction)
2004 Ed.
ciap.dti.gov.ph
pdcb@dti.gov.ph
www.facebook.com/DTI.CIAP.PDCB/
8896-1801 /8897-0791
Photo Source: Philippine Construction Industry Roadmap 2020 - 2030
WANT TO KNOW MORE ABOUT
CIAP DOCUMENT 102?
Here are some of the Frequently Asked
Questions to guide you:
What is CIAP Document 102?
It contains the general
conditions ordinarily established
in construction contracts,
reflecting the usages, customs,
and best practices in the
construction industry.
It forms part of the Contract
Documents which include the:
Agreement
Bid Documents
Specifications
Drawings
Special Conditions of Contract
Other Contract Documents.
Does CIAP Document 102 apply
to all construction contracts?
No. As its title suggests, it is
applicable only to private
contracts involving the
construction of any type of
structure or works as reflected in
R.A. No. 4566 (Contractor's
License Law).
It is strictly for domestic use.
Photo Source: Philippine Construction Industry Roadmap 2020 - 2030
What are the objectives of CIAP
Document 102?
Do the Courts recognize CIAP
Document 102?
It is intended to have suppletory
effect on private construction
contracts.
Yes. Its usage follows from the
premise that customs or
accepted usages of trade as a
source of law.
Its provisions serve as the
procedures, guidelines, and
criteria to be used in the
implementation of the Contract,
most especially in the
interpretation of the ambiguities
and omissions of stipulations in
the Contract.
It provides equitable and realistic
contract conditions which aims to
promote fair contractual
relationships in the construction
industry.
The Courts apply the provisions of
CIAP Document 102 on the basis
of Article 1376 of the Civil Code,
which says:
“The usage of customs of the
place shall be borne in mind in
the interpretation of the
ambiguities of a contract, and
shall fill the omission of
stipulations which are ordinarily
established.”
PRIMER on
CIAP DOCUMENT 102
UNIFORM GENERAL
CONDITIONS OF CONTRACT
FOR PRIVATE
CONSTRUCTION
Philippine Domestic Construction Board
Construction Industry Authority of the Philippines
Department of Trade and Industry
FOREWORD
The Construction Industry Authority of the Philippines (CIAP) is an attached agency of the
Department of Trade and Industry (DTI) which was created under Presidential Decree No.
1746, as amended by Executive Order Nos. 679 and 768, to promote, accelerate, and regulate
the growth and development of the construction industry. Under the said law, the CIAP is
mandated, among others, to recommend and encourage the adoption of equitable and
realistic contract conditions for construction.
In line with such mandate, the CIAP established the Uniform General Conditions of Contract
for Private Construction or the “CIAP Document 102”. It was formulated by a Committee
composed of representatives from various professional organizations namely:
Council of Engineering Consultants of the Philippines (CECOPHIL);
Construction Project Management Association of the Philippines (CPMAP);
Chamber of Real Estate and Builders Association (CREBA)
International Federation of Building and Wood Workers (IFBWW);
Philippine Constructors Association, Inc. (PCA);
Philippine Chamber of Commerce, Inc. (PCCI);
Philippine Institute of Construction Arbitrators (now Philippine Institute of
Construction Arbitrators and Mediators or PICAM);
Philippine Institute of Civil Engineers (PICE);
Subdivision and Housing Developers Association of the Philippines (SHDA);
United Architects of the Philippines (UAP);
Society of Philippine Accredited Consultants (SPAC); and the
Confederation of Filipino Consulting Organizations, Inc. (COFILCO).
The Philippine Domestic Construction Board (PDCB) and the Philippine Overseas Construction
Board (POCB), two of the implementing arms of the CIAP, have, likewise, submitted their
inputs in the formulation of CIAP Document 102 to support their recommendation for CIAP to
bolster the acceptance and use of the said document in private construction.
The first edition of CIAP Document 102 was published on 15 October 1997. The revised
version was issued on 29 June 2004 to incorporate prevailing best practices and the changes
that evolved in the construction industry over the years.
In 2017, DTI Undersecretary Atty. Ruth B. Castelo, in accord with PDCB’s recommendation for
CIAP to boost its efforts in promoting the use of CIAP Document 102 and enhance its
marketability especially to small contractors, approved the formulation and publication of a
Primer to increase the public’s awareness about the existence and importance of CIAP
Document 102 in promoting fair contractual relationships in the construction industry.
Through this Primer, the PDCB hopes to inform the public and all sectors concerned of the
existence of CIAP Document 102 whose provisions reflect usages and customs in the
Philippine construction industry, as reference and guide in the interpretation of contract
provisions and fill the omission of stipulations which are ordinarily established.
i
What is CIAP Document 102?
CIAP Document 102 or the “Uniform General Conditions of Contract for Private
Construction” contains terms and conditions ordinarily established in construction
contracts. It is intended for use in contracts for private construction in the
Philippines.
What is the intent of CIAP Document 102?
CIAP Document 102 was formulated to provide the procedures, guidelines, and
criteria to be used by parties in a construction Contract, or reference to the Contract
to address deficiencies and/or any ambiguity.
The CIAP Document 102 will contribute to the enhancement of fair contractual
relationships in the construction industry.
What is a Construction Contract?
A typical Construction Contract consists of an Agreement, General Conditions,
Drawings, Specifications, and other documents.
Contract is used to describe the combination of two (2) sets of documents: the
Agreement and the Contract Documents.
Agreement is used to describe the agreement signed by the Owner and the
Contractor, excluding the Contract Documents.
Contract Documents are attached to the Agreement identified therein as Contract
Documents, including all additions, deletions and modifications which generally
include the following: Special Provisions or Conditions; General Conditions;
Specifications; Drawings; and other Bid Documents.
Special Provisions or Conditions are instructions which are issued prior to bidding
to supplement and/or modify the Drawings, Specifications and/or General
Conditions of the Contract.
Specifications are the written or printed description of the work to be done
describing qualities of the material to be used, the equipment to be installed and
the mode of construction.
Drawings are graphical presentations of the Work, including supplementary
details and shop drawings.
General Conditions of Contract pertain to the roles, rights and obligations of the
contracting parties, and the rules and procedures by which the parties and
everyone concerned will be able to meet their obligations and perform the Works
covered under the Contract.
1
CIAP Document 102 contains these conditions which are generally applicable for
all types of construction contracts, to wit:
Section I. Definitions and Documents
(Art. 1 Definitions; Art. 2 Execution, Correlation, Meaning of Terms
and Intent of Documents; Art. 3 Drawings and Specifications; Art. 4
Detail Drawings and Instructions; Art. 5 Shop Drawings)
Section II. Laws, Regulations, Site Conditions, Permits & Taxes
(Art. 6 Laws and Site Conditions; Art. 7 Permits, Taxes and Surveys)
Section III. Equipment and Materials
(Art. 8 General; Art. 9 Equipment; Art. 10 Materials, Fixtures,
Appliances, and Fittings Furnished by the Contractor; Art. 11
Materials, Equipment, Fixtures, Appliances and Fittings Furnished by
the Owner; Art. 12 Royalties and Patents; Art. 13 Manufacturer’s
Directions)
Section IV. Premises and Temporary Structures
(Art. 14 Use of Premises; Art. 15 Temporary Structures and Facilities)
Section V. Protection of Work and Property
(Art. 16 Protection of Work and Owner’s Property; Art. 17 Protection
of Adjacent Property and Existing Utilities; Art. 18 Protection of Life,
Work and Property During an Emergency)
Section VI. Labor, Work and Payments
(Art. 19 Labor; Art. 20 Work; Art. 21 Time of Completion of Work;
Art. 22 Payments)
Section VII. Contractor-Separate Contractor-Subcontractors Relationship
(Art. 23 Separate Contracts with Other Contractors; Art. 24
Contractor-Separate Contractors Relations; Art. 25 Sub-Contracts)
Section VIII. Suspension of Work and Termination of Contract
(Art. 26 Contractor’s Rights to Suspend Work or Terminate Contract;
Art. 27 Owner’s Right to Suspend the Work; Art. 28 Owner’s Right to
Terminate Contract; Art. 29 Owner’s Right to proceed with the Work
After Reduction in Contractor’s Scope of Work, Partial Takeover from
Contractor)
Section IX. Responsibilities and Liabilities of Contractor and of Owner
(Art. 30 Contractor’s Responsibility for Accidents and Damages; Art.
31 Contractor’s Insurance and Bonds; Art. 32 Owner’s
Responsibilities and Liabilities; Art. 33 Liens, Disputes and
Arbitration)
Section X. Owner’s Representative
Section XI. Schedule of Time Limits
2
What is the importance of clear contract terms and harmonized contract
documents?
Many disputes in construction arise from inconsistent and ambiguous contract
terms and conditions which lead to varied interpretations and conflict between the
contracting parties. To avoid disputes that may affect the completion of the Work
and strain the relationship of the parties, it is important that contract documents
objectively reflect the agreement and true intent of the parties.
Section I (Definitions and Documents) provides the definitions of the terms used and
the execution, correlation, and intent of contract documents, as well as the rules to
be followed in case of conflict or discrepancy.
What are the obligations of the contracting parties when it comes to permits and
licenses, and payment of taxes?
Section II (Laws, Regulations, Site Conditions, Permits and Taxes) stipulates
compliance with all Laws in so far as they are binding upon or affect the parties to
the Contract.
The Owner, with the Contractor’s assistance, shall secure and pay all construction
permits and licenses necessary for the execution of the Work.
The Contractor shall secure the Final Occupancy Permit but he shall not be
responsible to the Owner if, without his fault, the license is not issued or there was
delay in its issuance. The Contractor shall pay all taxes as required by Laws pertinent
to the construction of the project.
Who is in charge of the safety and sanitation in the work premises?
Pursuant to Section IV & VI, the Contractor is in charge of the safety and sanitation at
the work site during and upon completion of work.
Who has the obligation to protect the Work and the Owner’s property from
damage?
Section V (Protection of Work and Property) provides that it is the obligation of the
Contractor to protect the work and the Owner’s property from damage.
Who is responsible for accidents in the work premises?
Section IX, Article 30 (Contractor’s Responsibility for Accidents and Damages) states
that the Contractor shall be primarily responsible for all safety measures in
executing the Work.
3
What are the bonds and guarantees required of the Contractor?
Section IX, Article 31 (Contractor’s Insurance and Bonds), enumerates the insurance,
bonds, and guarantees required of the contractor, to wit:
1.
2.
3.
4.
5.
6.
Contractor’s Liability Insurance (Contractor, Subcontractors and Owner)
Accident Insurance for Workers
Contractor’s Fire Insurance
Contractor’s Performance and Payment Bonds
Contractor’s Guarantee Bond
Contractor’s Guarantee-Warranty
Is the Owner required to obtain insurance?
Article 32.02 states that the Owner may opt to obtain an insurance that will protect
him from his contingent liability.
Is the Subcontractor also required to obtain bonds and insurance?
Article 33.03 provides that the Subcontract must require the Subcontractor to
obtain the same bonds and insurance coverage as are required of the Contractor.
What is the difference in the contractual relationship between the Owner and
“Separate Contractor” and between the Contractor and the “Subcontractor”?
The Owner shall provide for the coordination of the work performed by the Separate
Contractor with the Work of the Contractor.
The Contractor is fully responsible to the Owner for the acts and omissions of his
Subcontractors.
Is there a contractual relationship between the Owner and the Subcontractor?
The consent of the Owner to the Contractor’s engagement of a Subcontractor shall
not create any contractual relation between the Subcontractor and the Owner.
Is it required to appoint an Owner’s representative?
Section X, Article 34 (Owner’s Representative) provides for the appointment of the
representative of the Owner, and the extent and limitation of the authority granted
to the representative.
4
Is the Owner required to make advance payment to the Contractor?
Article 32 (Owner’s Responsibilities and Liabilities) provides that the Owner shall pay
the Contractor an advance payment, which shall be used for mobilization, purchase
of materials, and shall be recouped pro rata in the progress billings.
Can the Contractor commence with the Work even without the consent of the
Owner?
Article 21.01 (Notice to Proceed, when required) states that premature
commencement of construction shall be at the Contractor’s risk, and the Owner
gives the Contractor express or implied authority to do so.
How can the Owner ensure the quality and efficient execution of the Work?
Section VI (Labor, Work and Payments) provides that the Owner shall at all times
have access to the Work and shall provide sufficient number of inspectors while
Work is in progress to ensure quality.
Is substitution of materials and equipment allowed?
Section III (Equipment and Materials) provides that all materials and equipment
must conform to all Laws that are in force and applicable during the period of
construction, and that the Contractor shall bear all damages by reason of any delay
in the Work arising from failure to comply with such Laws.
What constitutes Change Order and adjustment of contract price?
Section VI, Article 20 (Work) describes the circumstances that are covered by a
Change Order and that warrant adjustment in contract price and, if necessary,
corresponding adjustment in completion time.
What are the conditions for the release of payment to the Contractor?
Art. 22.01 provides that the Contractor shall submit to the Owner the Breakdown of
Work and Corresponding Value of the Contract Amount showing the value assigned
to each part of the Work.
What is Progress Payment?
The Contractor may submit periodically but not more than once each month a
Request for Payment for work done.
5
Each request for progress payment shall be computed from the work completed on
all items listed in the Breakdown of Work and Corresponding Value, less a retention
of 10% of the progress payment to the Contractor.
What is Retention Money?
Progress payments are subject to retention of ten percent (10%). The purpose of
retention is to cover uncorrected discovered defects and third party liabilities. (Not
in CIAP Doc. 102)
What are the documents to be submitted by the Contractor to the Owner before
final payment?
1. Certificate of Final Building Occupancy;
2. Certificate of Final Inspection of electrical, telephone, sanitary,
mechanical, water, gas, safety and other utilities;
3. Original and three (3) sets of prints of “As-Built Drawings” of electrical,
sanitary, gas, telephone, and mechanical works;
4. Three (3) copies of Directory of Panel Boards and list of circuits;
5. Three (3) copies of Instructions and Manual for operating and
maintaining of fixtures and equipment;
6. Three (3) copies of Keying Schedule; and
7. Release of liens arising under the Contract (Sworn Statement or
Indemnity Bond).
Does the release of final payment relieve the Contractor of liability for any defect
in the Work?
After release of final payment and acceptance by the Owner of the Work, the
Contractor is still liable for any defect in the Work, if:
1. the defect is hidden;
2. the Owner’s acceptance of the Work was made with reservations to specific
portion of the Work;
3. inferior work or work which does not comply with the Drawings and
Specifications and is apparent upon inspection by the Owner within one
year from final payment; and
4. hidden defect discovered within the warranty period or within one year
from posting of the Guarantee Bond.
6
The Contractor is likewise liable for damages if the edifice falls, within fifteen years
from completion of the structure, on account of defects in the construction or the
use of materials of inferior quality or due to any violation of the terms of the
Contract as provided in Article 1723 of the Civil Code of the Philippines.
When shall the Owner release the retention money?
The amount retained by the Owner under the provision of the Contract shall be
released not later than the expiration of the “Period of Making Good of Known
Defects”.
What does “Period of Making Good of Known Defects” mean?
The expression “Period of Making Good of Known Defects” shall mean a period of
not more than thirty (30) calendar days, calculated from the date of receipt by the
Contractor of the last item in the punch list.
If after release to the Contractor of final payment or retention there are still
unpaid claims of Subcontractors and/or suppliers, is the Owner obliged to pay
such claims?
Section IX, Article 33.01 provides that, as a condition to final payment and/or
release of the retention, the Contractor shall release the Work from any legal liens.
Can the Owner take possession of and use any completed portion of the Work
prior to overall completion?
Section VI, Article 20.10 (Use of Completed Portions of Work) provides that the
Owner may take possession of and use any completed or partially completed
portion of the Work prior to overall completion, and shall issue a Certificate of
Completion for such portion taken over and release retention as required by the
Contract.
What is substantial completion?
Section VI, Article 20.11 (Substantial Completion and its Effect) provides that there is
substantial completion when the Contractor completes ninety five percent (95%) of
the Work.
What is a punch list?
Punch list, as defined under Article 20.11 C (a), is the list of defects found or
discovered on the completed work and which should be received by the Contractor
not later than 30 days from date of substantial completion.
7
What are the grounds for the suspension of the Work or termination of the
Contract?
Section 8 (Suspension of Work and Termination of Contract) illustrates the
conditions by which the Contractor or the Owner may suspend the Work or
terminate the Contract.
Are there prescribed periods within which the contracting parties shall perform
their respective obligations under the Contract?
CIAP Document 102 provides the prescribed time limits for the execution of the
contract conditions in order to facilitate the performance of the Works covered
under the Contract [Section XI (Schedule of Time Limits)].
What circumstances necessitate an extension of time?
Article 21.04 (Extension of Time) provides that the Contractor shall be entitled to an
equitable adjustment of completion time subject to certain conditions.
Article 21.04 (D) states that delay in the payment of any progress billing shall
automatically extend the Completion Time by a period equal to the delay.
What is the penalty for delay?
Article 21.05 provides that upon failure of the Contractor to complete the Work
within the Completion Time, the Contractor shall pay the Owner liquidated damages
in the amount stipulated in the Contract as indemnity, but shall not exceed ten
percent (10%) of the total contract price [Art. 29.06 (3)].
In case of disagreements in the interpretation and implementation of the contract
conditions, how can CIAP help resolve such disputes?
Section IX, Article 33.04 provides that in case of disagreements, the parties may
engage the services of an adjudicator to resolve their disputes, and that if either of
the party disagrees with the resolution of the adjudicator, the parties may submit
such disputes to arbitration.
One of the implementing arms of the CIAP, the Construction Industry Arbitration
Commission (CIAC), is tasked to provide alternative dispute resolution facilities for
the speedy and equitable settlement of claims and disputes arising from, or
connected with, construction contracts in the Philippines. CIAC offers mediation and
arbitration as ways of reconciling differences between disputants with the help of
people who are familiar/knowledgeable with the construction industry.
8
What is Mediation?
Mediation, as defined under Section 6 of the CIAC Mediation Rules, shall mean a
voluntary process in which a mediator, selected by the disputing parties, facilitates
communication and negotiation, and assists the parties in reaching a voluntary
agreement regarding a dispute.
What is Arbitration?
Arbitration is defined as the investigation and determination of matters of
differences between contending parties by one or more unofficial persons, called
arbitrators or referees, chosen by the parties. It is intended to avoid the formalities,
the delay, the expense and vexation of ordinary litigation.
How can interested parties avail of CIAC facilities?
If a dispute arises, a party may initiate the mediation by delivering a written Request
for Mediation to the other party in accordance with the CIAC Mediation Rules, or if
mediation fails, a Request for Arbitration in accordance with the CIAC Rules of
Procedure Governing Construction Arbitration.
Are there recommended dispute resolution clauses?
For parties entering into a Contract who wish to have future disputes referred to
mediation and/or arbitration, the following dispute resolution clauses may be
included:
Mediation and Arbitration (by CIAC):
Any dispute or differences arising out or in connection with this contract shall be
referred to the Construction Industry Arbitration Commission (CIAC) for
settlement, first through mediation under its Mediation Rules; or failing which, by
arbitration under its Rules of Procedure Governing Construction Arbitration by
[indicate number; one or three] arbitrator(s). The appointment of mediator or
arbitrator/s shall be made in accordance with such Rules. The place of mediation
or arbitration shall be [indicate place].
Purely Arbitration (by CIAC):
Any dispute arising out of or in connection with this contract, including any
question regarding its existence, validity or termination shall be referred to and
finally resolved by arbitration under the Rules of Procedure Governing
Construction Arbitration promulgated by the Construction Industry Arbitration
Commission, by [indicate number: one or three] arbitrator(s) to be appointed in
accordance with such Rules. The place of arbitration shall be [indicate place].
9
By negotiation among the parties (w/ time frame), Mediation and Arbitration (by
CIAC):
Any dispute or differences arising out or in connection with this contract shall be
settled by negotiation within a non-extendible period of 30 days from written
demand by either party. If such negotiation should fail, the same shall be referred
to the Construction Industry Arbitration Commission (CIAC) for settlement; first,
through mediation under its Mediation Rules within a non-extendible period of 48
days; or failing which, by arbitration under its Rules of Procedure Governing
Construction Arbitration by [indicate number: one or three] arbitrator(s). The
appointment of mediator or arbitrator/s shall be made in accordance with such
Rules promulgated by the CIAC. The place of mediation or arbitration shall be
[indicate place].
What are the issues that can be submitted for mediation or arbitration?
The jurisdiction of the CIAC may include, but is not limited to, the following:
-
violation of specifications for materials and workmanship;
violation of the terms of agreement;
interpretation and/or application of contractual provisions;
commencement time and delays;
maintenance and defects;
changes in contract cost
payment default of employer or contractor; and
amount of damages and penalties.
10
SECTION XI
SCHEDULE OF TIME LIMITS
The Contractor shall perform his work subject to certain Time Limits. This indexed section, as
based on the entire General Conditions, is provided for in order to facilitate the execution of his
work.
Reference
No. & Title
Time Limit
Article No.
1. CONTRACT TIME
1.1 Contract Time
Reckoning
1.2 Request for Time
2. CONTRACT SUM
2.1 Breakdown of Work
& Corresponding
Value
2.2 Claim for Extra Cost
3. PROGRESS/FINAL
PAYMENT
3.1 Owner’s Action on
Payment Request
3.2 Owner’s Action on
Final Payment
Request
3.3 Delayed Payment
3.4 Release of Retention
4. SUBSTANTIAL
COMPLETION and its
EFFECTS
The Contractor shall commence the Work within
seven (7) days from receipt of Notice to Proceed
(NTP) unless NTP provides for a later date
To be filed within fifteen (15) days from
occurrence of event which caused delay (par. B)
21.02
To be submitted within fifteen days from receipt
of the Notice to Proceed
22.01
Notice to be given to Owner within fifteen (15)
days
(1) after receipt of instruction involving extra
cost, or
(2) after recognition of delay due to Owner’s
fault
20.08
To be made within thirty (30) days after receipt
of request for payment
To act within thirty (30) days from receipt of the
request for payment
22.05
Delay in payment of the amount due shall
entitle the Contractor to interest from due date
based on the thirty (30) day loan rate of the
Land Bank of the Philippines
To be released not later than sixty (60) days
from substantial completion upon posting of
Contractor’s Guarantee Bond.
22.05
Substantial Completion is attained if the
Contractor completes ninety-five percent (95%)
of the works; or the
20.11
21.04
22.11
11
No. & Title
Time Limit
Reference
Article No.
Owner approves the Contractor’s billing for
completing at least 95% of the works unless the
Owner can establish that the unfinished portion
prevents the normal use of the completed
portion [par. A (a) & (b)].
The Owner may issue a Certificate of Substantial
Completion or equivalent document but the
date of document is not controlling if substantial
completion is shown to have been attained
earlier, unless the Contractor accepts the
certificate without taking any exceptions
thereto in writing within fifteen (15) days from
receipt of the certificate [par. A (c)].
5. CORRECTION OF WORK
5.1 Issuance of Punch
List
5.2 Correction Before or
After Final Payment
5.3 Making Good of
Known Defects
6. CONTRACTOR’S RIGHT TO
SUSPEND WORK OR
TERMINATE CONTRACT
The Owner shall issue the punch list/s which the
Contractor must receive not later than thirty
(30) days from date of substantial completion
[par C (a)].
The Owner may add to the punch list items but
only as to corrective work in the original punch
list/s not later than sixty (60) days from
substantial completion [par. C (b)].
20.11
Poor or inferior work, apparent upon inspection
to be condemned & Contractor notified to
enable him to correct, remove & replace the
same. Owner has one year from date of final
payment to condemn poor or inferior work,
otherwise, instructions to remove or replace
such shall be treated as change order.
22.10
Thirty (30) days from receipt by the Contractor
of the last item in the punchlist
20.12
&
20.13
26.00
Contractor may suspend work or terminate
Contract upon 15 days written notice to Owner,
for any of the following reasons:
12
No. & Title
7. OWNER’S RIGHT TO
TERMINATE CONTRACT
Time Limit
(1) If any court or other public authority orders
work to be stopped or suspended for ninety
(90) days through no fault of the Contractor or
his employees;
(2) If Owner fails to pay Contractor the approved
request for payment within thirty (30) days
from receipt.
(3) If Owner fails to pay Contractor the agreed
sum within thirty (30) days after its award by
arbitrators.
(4) If the Owner suspends the work without cause
for more than fifteen (15) days without
Contractor’s consent.
(5) If the Owner fails to deliver at the
construction site Owner-supplied/furnished
materials and/or equipment, for work along
the critical path beyond fifteen (15) days after
its scheduled delivery date.
(6) If approval of Variation Orders for additional
works along the critical path is delayed
beyond fifteen (15) days after submission for
approval by the Owner.
May be done immediately and without notice if
Contractor should:
(1) Declare bankruptcy, become insolvent or
assigns his assets for the benefit of his
creditors or appointment of trustee/receiver
for Contractor or any of its property.
May be done after giving fifteen (15) days written
notice to Contractor or to his Surety if Contractor
should:
(1) Disregard or violate provisions of the Contract
Documents or Owner’s instructions;
(2) Fail to provide skilled superintendent,
workmen or suitable materials or equipment;
(3) Fail to make prompt payment to
subcontractors, for labor or materials or
equipment;
(4) Disregard the authority of the Owner’s
Representative;
Reference
Article No.
28.01
28.02
13
No. & Title
Time Limit
Reference
Article No.
(5) Violates in any substantial way any provisions
of the Contract Documents;
(6) Repeatedly delays prosecution of work per
agreed Construction Schedule and/or
PERT/CPM plus any time extension duly
granted the Contractor.
8. DISPUTES
9. GUARANTEE BOND
9.1 Contractor’s
Guarantee Bond
The Owner or his representative shall act within a
period of fifteen (15) days on all matters under the
Contract requiring the Owner’s approval,
acceptance or decision.
If the Contractor disagrees with the determination
by the Owner or his representative, the same shall
be submitted to an adjudicator to be jointly
engaged by the parties within 15 days before the
commencement of the work. If either party
disagrees with the resolution of the adjudicator,
such shall be deemed a dispute that may be
submitted to arbitration.
33.04
&
33.05
To be furnished the Owner upon release of
retention and shall be effective for a period of one
year commencing from the date of acceptance as a
guarantee that all materials and workmanship
installed are of good quality.
31.05
Copies of this Primer, CIAP Document 102, the CIAC Mediation Rules and Rules of Procedure
Governing Construction Arbitration, are available at the CIAP website at www.ciap.dti.gov.ph
14
The PDCB Board:
Atty. Ramon P. Ereñeta, Jr.
Chairman
Members:
Engr. Rogelio C. Lombos
Engr. Liberito V. Espiritu
Engr. Anthony L. Fernandez
Atty. Romeo S. Lagman (resigned)
15
Philippine Domestic Construction Board
5th Floor, Executive Building Center, 369 Sen. Gil J. Puyat Ave. cor. Makati Ave., Makati City
Telephone No.: (632) 897-0791; Telefax No.: (632) 896-1801
Email: pdcb@dti.gov.ph
Website: ciap.dti.gov.ph
Republic Act No. 544*
(As Amended by R.A. 1582)
An Act to Regulate the Practice of Civil Engineering
in the Philippines
Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled:
Article I
TITLE OF THE ACT AND DEFINITION OF TERMS
Section 1. Title of Act.” This Act shall be known as the “Civil Engineering Law.”
Section 2. Definition of Terms.”
(a) The practice of civil engineering within the meaning and intent of this Act shall embrace services in
the form of consultation, design, preparation of plans, specifications, estimates, erection, installation and
supervision of the construction of streets, bridges, highways, railroads, airports and hangars, port works,
canals, river and shore improvements, lighthouses, and dry docks; buildings, fixed structures for irrigation, flood
protection, drainage, water supply and sewerage works; demolition of permanent structures; and tunnels. The
enumeration of any work in this section shall not be construed as excluding any other work requiring civil
engineering knowledge and application.
(b) The term “civil engineer” as used in this act shall mean a person duly registered with the Board for
Civil Engineers in the manner as hereinafter provided.
Article II
BOARD OF EXAMINERS FOR CIVIL ENGINEERS
Section 3. Composition of Board.” Within thirty days after the approval of this Act there shall be created
a Board of Examiners for Civil Engineers, hereinafter referred to as the Board, to be composed of a chairman
and two members who shall be appointed by the President of the Philippines, upon recommendation of the
Commissioner of PRC. The members of the Board shall hold office for a term of three years after appointment
or until their successors shall have been appointed and shall have qualified. The first members of the Board
appointed under this Act shall hold office for the following terms: One member for one year; one member for
two years; and one member for three years. Each member of the Board shall qualify by taking the proper oath
of office before entering upon the performance of his duties. Any member of the Board may be removed by the
President of the Philippines, upon recommendation by the Professional Regulation Commission for neglect of
duty, incompetency, malpractice, unprofessional, unethical, immoral, or dishonorable conduct, after having
been given opportunity to defend himself in a proper administrative investigation: Provided, That during the
process of investigation, the President of the Philippines, upon the recommendation of the PRC, shall have the
power to suspend such member under investigation and shall appoint a temporary member in his place.
Vacancies in the Board shall be filled for the un expired term only.
Section 4. Powers and Duties of the Board.” The Board for Civil Engineers is vested with authority,
conformable with the provisions of this Act, to administer oaths, issue, suspend and revoke certificates of
registration for the practice of civil engineering, issue certificates of recognition to civil engineers already
registered under this Act for advanced studies, research, and/or highly specialized training in any branch of civil
engineering subject to the approval of the PRC, to investigate such violations of this Act and the regulations,
there under as may come to the knowledge of the Board and, for this purpose, issue subpoena and subpoena
duces tecum to secure appearance of witnesses in connection with the charges presented to the Board, to
inspect at least once a year educational institutions offering courses in civil engineering, civil engineering works,
projects or corporations, established in the Philippines and, for safeguarding of life, health and property, to
discharge such other powers and duties as may affect ethical and technological standards of the civil
engineering profession in the Philippines. For the purpose of this Act, the Director of Public Works and/or his
authorized representative in the provinces and chartered cities shall be ex-officio agents of the Board and as
such it shall be their duty to help in the enforcement of the provisions of this Act. The Board may, with the
approval of the Professional Regulation Commission issue such rules and regulations as may be deemed
necessary to carry out the provisions of this Act. The board shall also adopt a code of ethics in the practice of
civil engineering and have an official seal to authenticate its official documents.
Section 5. Qualifications of Board Members.” Each member of the Board shall, at the time of his
appointment:
a.
b.
c.
d.
e.
f.
g.
Be a citizen and resident of the Philippines;
Be at least thirty years of age and of good moral character;
Be a graduate of civil engineering from a recognized and legally constituted school, institute,
college or university.
Be a registered civil engineer duly qualified to practice civil engineering in the Philippines;
Have practiced civil engineering, with a certificate as such, for a period of not less than ten years
prior to his appointment.
Not be a member of the faculty of any school, institute, college, or university where civil
engineering course is taught, nor have a pecuniary interest in such institutions;
No former members of the faculty of any school, institute or university where civil engineering is
taught can become a member of the Board unless he had stopped teaching for at least three
consecutive years.
Section 6. Fees and Compensation of Board.” The Board for Civil Engineers shall charge for each
application for examination the sum of P100 (one hundred) payable to the collecting and disbursing officer of
the PRC upon filing of said application, and for each certificate of registration, fifty pesos. Each member of the
Board shall receive a compensation of fifteen pesos for each applicant examined. A civil engineer in the service
of the Government of the Republic of the Philippines appointed as member of the Board shall receive the
compensation as herein provided, in addition to his salary in the Government. All authorized expenses of the
Board, including the compensation provided for herein, shall be paid by the collecting and disbursing officer of
the PRC out of such appropriation as may be made for the purpose. (See RA 6511 & PD 223)
Section 7. Annual Report.” The Board shall, at the end of each fiscal year, submit to the PRC a detailed
report of its activities and proceedings during the period covered by the fiscal year ended.
Article III
EXAMINATION AND REGISTRATION
Section 8. Examination Requirement.” All applicants for registration for the practice of civil engineering
shall berequired to pass a technical examination as hereinafter provided.
Section 9. Holding of Examination.” Examination of candidates desiring to practice civil engineering in
the Philippines shall be given in the City of Manila of each year, provided that such days do not fall on official
holidays, otherwise the examinations shall be held on the days next following.
Section 10. Subjects of Examination.” Applicants for certificate of registration as civil engineer shall be
examined, in the discretion of the Board, on the following subjects: mathematics, including algebra, plane and
spherical trigonometry, analytics, descriptive and solid geometry, differential and integral calculus, and rational
and applied mechanics; hydraulics; surveying, including highway and railroad surveying; plane, topographic and
hydrographic surveying, and advance surveying; design and construction of highways and railroads, masonry
structures, wooden and reinforced concrete buildings, bridges, towers, walls, foundations, piers, ports, wharves,
aqueducts, sanitary engineering works, water supply systems, dikes, dams and irrigation and drainage canals.
Section 11. Executive Officer of the Board.” The Commissioner of Professional Regulation Commission
shall be the executive officer of the Board and shall conduct the examinations given by the said Board. He shall
designate any subordinate officer of the Professional Regulation Commission to act as the Secretary and
custodian of all records including examination papers and minutes of the deliberation of the Board.
Section 12. Qualifications for Examination.” Any person applying for admission to the civil engineering
examination as herein provided shall, prior to the date of the examination, establish to the satisfaction of the
Board that he has the following qualifications:
a.
b.
c.
d.
Be at least twenty-one years of age;
Be a citizen of the Philippines;
Be of good reputation and moral character; and
Be a graduate of a four-year course in civil engineering from a school, institute, college or
university recognized by the Government or the State wherein it is established.
Section 13. Oath of Civil Engineers.” All successful candidates in the examination shall be required to
take a professional oath before the Board of Civil Engineers or other Government Officials authorized to
administer oaths, prior to entering upon the practice of the civil engineering profession.
Section 14. Seal and Use of Seal.” All registered civil engineers shall obtain a seal of such design as
the Board shall authorize and direct: Provided, however, That the serial number of the certificate issued by the
Board shall be included in the design of the seal. Plans and specifications prepared by, or under the direct
supervision of a registered civil engineer shall be stamped with said seal during the life of the registrant’s
certificate, and it shall be unlawful for any one to stamp or seal any documents with said seal after the
certificate of registrant named thereon has expired or has been revoked, unless said certificate shall have been
renewed or re-issued.
Section 15. Exemption from Registration.”
1. Registration shall not be required of the following persons:
a. Officers or enlisted men of the United States and Philippine Armed Forces, and civilian
employeesof the Government of the United States stationed in the Philippines while rendering
civil engineering services for the United States and/or Philippines.
b. Civil engineers or experts called in by the Philippine Government for consultation, or specific
designand construction of fixed structures as defined under this Act, provided that their practice
shall be limited to such work.
2. Any person residing in the Philippines may make plans on specifications for any of the following:
a. Any building in chartered cities or in towns with building ordinances, not exceeding the space
requirement specified therein, requiring the services of a civil engineer.
b. Any wooden building enlargement or alteration which is to be used for farm purposes only and
costingnot more than ten thousand pesos.
c. Provided, however. That there shall be nothing in this Act that will prevent any person from
constructing his own (wooden or light material) residential house, utilizing the services of a
person or persons required for the purpose, without the use of a civil engineer, as long as he
does no violate local ordinances of the place where the building is to be constructed.
3. Nor shall anything in this Act prevent draftsmen, student clerk-or-work, superintendents, and other
employees of those lawfully engaged in the practice of civil engineering under the provisions of this Act, from
acting under the instruction, control or supervision of their employer.
4. Nor shall anything in this Act prevent any person who prior to the approval of this Act have been
lawfully engaged in the practice of “maestro de obras” to continue as such, provided they shall not undertake
the making of plans supervision for the following classes of work:
a.
b.
c.
d.
Building of concrete whether reinforced or not.
Building of more than two stories.
Building with frames of structural steel.
Building of structures intended for public gathering or assemblies such as theaters,
cinematographs, stadia, churches, or structures of like nature.
5. Nor shall anything in this Act prevent professional architects and engineers to practice their
professions.
Section 16. Refusal to Issue Certificate.” The Board for Civil Engineers shall not issue a certificate to
any person convicted by a court of competent jurisdiction of any criminal offense involving moral turpitude, or to
any person guilty of immoral or dishonorable conduct, or to any person guilty of immoral or dishonorable
conduct, or to any person of unsound mind. In the event of a refusal to issue a certificate to any person, the
Board shall give to the applicant a written statement setting forth its reason for such action, which statement
shall be incorporated in the records of the Board.
Section 17. Suspension and Revocation of Certificates. “ The Board shall have the power, after due
notice and hearings to suspend or revoke the certificate of registration for any cause mentioned in the
preceding section.
Section 18. Re-issue and Replacement of Certificates. “ The Board may, after the expiration of one year
from the date of certificate of registration is revoked and for reasons it may deem sufficient, entertain an
application for a new certificate of registration from the registrant concerned. Such application shall be
accomplished in the same form prescribed for examination, but the Board may, in its discretion, exempt the
applicant from taking the requisite
examination.
Section 19. Transitory Provisions.” As soon as this Act takes effect, any person desiring to practice the
profession of civil engineering shall be required to obtain a certificate of registration in the manner and under
the conditions hereinafter provided. All civil engineers duly licensed under the provisions of Act Numbered
Twenty-nine hundred and eighty-five, as amended, at the time this Act takes effect, shall be automatically
registered under the provisions hereof. Certificates of registration held by such persons in good standing shall
have the same force and effect as though the same have been issued under the provisions of this Act. All
graduates in civil engineering from a school, institute, college, or university recognized by the Government who
have passed the civil service examination for senior civil engineer and have been practicing or employed in the
Government as such during five years are exempted from taking examination.
Article IV
ENFORCEMENT OF ACT AND PENAL PROVISIONS
Section 20. Enforcement of the Act by officers of the law.” It shall be the duty of all duly constituted law
officers of the national, provincial, city and municipal governments, or any political subdivisions thereof, to
enforce the provisions of this Act and to prosecute any person violating the same.
Section 21. Registration required.” Unless exempt from registration, no person shall practice or offer to
practice civil engineering in the Philippines without having obtained the proper certificate of registration from the
Board for Civil Engineers.*
Section 22. Penal provisions.” Any person who shall practice or offer to practice civil engineering in the
Philippines without being registered in accordance with the provisions of this Act or any person presenting or
attempting to use as his own the certificate of registration of a registered civil engineer, or any person who shall
give any false or forged evidence of any kind to the Board, or any person who shall impersonate any registrant
civil engineer of different name or any person who shall attempt to use a revoked or suspended certificate of
registration, or any person who shall use in connection with his name or otherwise assume, use or advertise
any title or description tending to convey the impression that he is a civil engineer, without holding a valid
certificate of registration, or any person who shall violate any of the provision of this Act, shall be guilty of a
misdemeanor and shall, upon conviction, be sentenced to a fine of not less than five hundred pesos nor more
than two thousand pesos, or to suffer imprisonment for a period of not less than six months not more than one
year, or both, in the discretion of the court.
Article V
MISCELLANEOUS PROVISIONS
Section 23. Preparation of plans and supervisions of construction by registered civil engineer.” It shall
be unlawful for any person to order or otherwise cause the construction, reconstruction, or alteration of any
building or structure intended for public gathering or assembly such as theaters, cinematographs, stadia,
churches or structures of like nature, and any other engineering structures mentioned in section two of this Act
unless the designs, plans, and specifications of same have been prepared under the responsible charge of, and
signed and sealed by a registered civil engineer, and unless the construction, reconstruction and/or alteration
thereof are executed under the responsible charge and direct supervision of a civil engineer. Plans and designs
of structures must be approved as provided by law or ordinance of a city or province or municipality where the
said structure is to be constructed.
Section 24. The practice of civil engineering is a professional service, admission to which must be
determined upon individual, personal qualifications. Hence, no firm, partnership, corporation or association may
be registered or licensed as such for the practice of civil engineering: Provided, however, That persons properly
registered and licensed as civil engineers may, among themselves or with a person or persons properly
registered and licensed as architects, form, and obtain registration of, a firm, partnership or association using
the term “Engineers” or “Engineers and Architects,” but, nobody shall be a member or partner of such firm,
partnership or association unless he is duly licensed civil engineer or architect, and the members who are civil
engineers shall only render work and services proper for a civil engineer, as defined in this Act, and the
members who are architects shall also only render work and services proper for an architect, as defined in the
law regulating the practice of architecture; individual members of such firms, partnership or association shall be
responsible for their own respective acts.
Section 25. Reciprocity requirements.” No person who is not a citizen of the Philippines at the time he
applies to take the examination shall be allowed to take it unless he can prove in the manner provided by the
Rules of Court that, by specific provision of law, the country of which he is a citizen, subject, or national either
admits citizens of the Philippines to the practice of the same profession without restriction or allows them to
practice it after an examination on terms of strict and absolute equality with citizens, subjects, or nationals of the
country concerned, including the unconditional recognition of degrees issued by institutions of learning duly
recognized for the purpose by the Government of the Philippines: Provided, That if he is not a citizen of the
Philippines, and was admitted to the practice of a profession in the Philippines after December 8, 1941, his
active practice in that profession, either in the Philippines or in the state or country where he was practicing his
profession, shall not have been interrupted for a period of two years or more prior to July 4, 1946, and that the
country or state from which he comes allows the citizens of the Philippines by specific provision of law, to
practice the same profession without restriction or on terms of strict and absolute equality with citizens, subjects
or nationals of the country or state concerned.
Section 26. Roster of civil engineers.” A roster showing the names and places of business of all
registered civil engineers shall be prepared by the Commissioner of PRC periodically but at least once a year.
Copies of this roster shall be placed on file with the PRC and furnished to all department heads, mayors of all
chartered cities, to the Director of Public Works, to such other Bureaus, government entities or agencies and
municipal and provincial authorities as may be deemed necessary and to the public upon request.
Section 27. Repeal.” All laws, parts of laws, orders, ordinances, or regulations in conflict with the
provisions hereof; including parts of Act Numbered Twenty-nine hundred and eighty-five, as amended, as
pertains to the practice of civil engineering, are hereby repealed, except the provisions of Act Numbered Thirtyone hundred and fifty nine amending Act Numbered Twenty-nine hundred and eighty-five, pertaining to the
practice of “maestro de obras.”
Section 28. Construction of Act.” If any part or section of this Act shall be declared unconstitutional,
such declarations shall not invalidate the other provisions hereof.
Section 29. Effectivity.” This Act shall take effect upon its approval.
Approved, June 17, 1950 (As amended by R.A. No. 1582, approved on June 16, 1956).
2
FOREWORD
One of the cornerstones of sound and harmonious business dealings is a fair contract which
balances risks-sharing and clearly defines the rights and obligations of the contracting parties.
Fair contract terms and conditions are of vital importance to an industry such as construction
because of the huge investments involved and the high risks faced by contractors and project
owners alike. Inequitable contractual relationships in the industry have, more often than not,
resulted in abandonment of projects, huge losses, and even bankruptcy, hence, posing a threat
to the long-term viability of the construction sector.
To address the problem, and in line with its mandate to recommend and encourage the
adoption of equitable and realistic contract conditions for construction and to reflect usages
of the trade and generally accepted construction industry standards, the Construction
Industry Authority of the Philippines (CIAP) joined hands with the private sector to draft
CIAP Document 102 and promote its adoption as the general conditions of contract for private
construction in the Philippines.
Work on this document started in May 1990 by a committee composed of representatives from
the Philippine Constructors Association (PCA); the United Architects of the Philippines
(UAP); the Philippine Institute of Civil Engineers (PICE); the Philippine Chamber of
Commerce & Industry (PCCI); and the Confederation of Filipino Consulting Organizations
(COFILCO). With UAP Document 301 as the frame of reference, an interim draft was
completed in December 1990 and adopted for use by UAP; PCA; PCCI; PICE; and CIAP.
Refinements to the interim CIAP Document 102 were completed in February 1997 by the same
committee which has since expanded its membership to include the Chamber of Real Estate
& Builders Association (CREBA); the Construction Project Managers Association of the
Philippines (CPMAP); and the Philippine Institute of Construction Arbitrators (PICA now the
Philippine Institute of Construction Arbitrators and Mediators or PICAM). A Memorandum
of Agreement (MOA) on the adoption of the final draft was signed on August 14, 1997 by the
PCA; PCCI; CREBA; PICE; CPMAP; PICA; and CIAP.
In line with the Construction Industry Strategic Plan for the 21 st Century (CI21), the
Committee reconvened in May 2002 to discuss and draft amendments to the document to
incorporate prevailing best practices in the industry and attune the same to the needs of the
changing times. The amendments were subjected to consultations with and among the
professional organizations in the industry. In its 43rd Regular Meeting held on June 29, 2004,
the CIAP Board approved the amendments to CIAP Document 102 under CIAP Board
Resolution No. 15, series of 2004. Subsequently, a MOA was signed on October 4, 2004 by
the PCA; UAP; PICE; PCCI; COFILCO; CREBA; CPMAP; PICA (now PICAM); and Society of
Philippine Accredited Consultants (SPAC), signifying their commitment to adopt CIAP
Document 102 for use as a standard and integral part of their construction Contracts.
On March 30, 2005, the CIAP Board issued a resolution, CIAP Board Resolution No. 1, series
of 2005, prescribing the use and application of the provisions of CIAP Document 102 to serve
as the procedures, guidelines and criteria to be used by the contracting parties, more
specifically in the adjudication and settlement of claims and disputes in contract
implementation, and in the following instances:
a) where the parties had failed to incorporate into their construction contract the general
conditions of contract; or
b) where the conditions of contract agreed upon are incomplete, in which case, CIAP
Document 102 shall fill the omission of stipulations; or
c) where certain provisions of the conditions of contract agreed upon are ambiguous, in
which case, reference may be made to CIAP Document 102 to explain the ambiguity.
3
In 2017, the Committee, composed of PCA; PICAM; CPMAP; PICE; PCCI; UAP COFILCO;
CECOPHIL; SHDA together with CIAP; PDCB; CIAC; and the DTI-Bureau of Philippine
Standards (BPS), was again reconvened to assess the document if it’s still relevant to the needs
of the industry or if there is a need to update/improve it.
In consultation with stakeholders, the Committee affirmed that CIAP Document 102 is still
relevant but needs to be updated/improved.
The CIAP Board, in its 79th Regular Meeting held on 18 February 2019, issued CIAP Board
Resolution No. 2, Series of 2019, creating the Technical Working Group (TWG) tasked to
review CIAP Document 102 and to make the necessary updates/amendments to make it
relevant to the needs of the industry.
The TWG, after due deliberations, submitted to the PDCB its proposed amendments to CIAP
Document 102 which consist of minor changes in the format, use of gender-fair language in
compliance with the directive of the Civil Service Commission (CSC) (CSC Memo Circular No.
12-2005), and few minor updates and improvement on certain provisions (see Appendix A).
The PDCB, through PDCB Board Resolution No. 01, Series of 2022, endorsed to the CIAP
Board the aforesaid TWG recommended revisions to CIAP Document 102, with its new
feature--the Annotations with Case Synopses and Jurisprudence, which the CIAP Board
approved in its 90th Regular Meeting held on 30 September 2022, through CIAP Board
Resolution No. 07, Series of 2022.
4
ACKNOWLEDGEMENT
The CIAP would like to express its sincere gratitude to the various professional organizations
which gave full and invaluable support to this endeavor of providing the construction industry
with an equitable and realistic contract conditions reflecting the usages of the trade and
generally accepted construction industry standards.
CIAP Document 102 would not have been possible without the support of the presidents and
representatives of the various professional organizations, and the patience, diligence, and
selfless dedication of the members of the Committee who religiously participated in the
deliberations and drafting work:
1st Edition that was published in 1997:
Messrs. Rogelio M. Nurga and Jaime H. Pajara (PCA); Mr. Joven B. Joaquin
(PICA, now PICAM); Messrs. Gregorio G. Sta. Maria, Sr. and Claudio B. Altura
(CPMAP); Messrs. Vicente B. Lopez and Felipe F. Cruz (PICE); Messrs. Charlie
Gorayeb and Jerry M. Navarrete (CREBA); Mr. Federico C. Pascual (PCCI); and
Messrs. Nestor S. Mangio and Emmanuel P. Cuntapay (UAP).
The members of the Committee: Archt. Ramon L. Abiera (UAP); Engr. Fedrico
Carandang (CREBA); Engr. Enrique P. Inciong and Mr. Joven B. Joaquin (PICA,
now PICAM); Engr. Potenciano A. Leoncio, Jr. (PICE); Engr. Manuel Limgenco
and Engr. Alfredo P. Montecillo (PCA); Mr. Manolito Madrasto (PCCI); Archt.
Felicitas A. Pio Roda (CPMAP); Atty. Custodio O. Parlade (CIAP Consultant); and
Ms. Alicia A. Tiongson (CIAP).
The Committee was ably assisted by the following staff of the Construction
Industry Arbitration Commission (CIAC): Kathryn Josephine T. Dela Cruz, Emily
P. Morallos, and Roger G. Antonio.
2004 Revised version:
Mr. Emilio Lolito J. Tumbocon (PCA); Engr. Eliseo I. Evangelista (PICA, now
PICAM); Archt. Felicitas A. Pio Roda (CPMAP); Mr. Peter N. Aventajado (PICE);
Ms. Purita L. Soliven (CREBA); Ms. Noemi L. Saludo (PCCI); Mr. Enrique O.
Olonan (UAP); Dr. Leandro A. Viloria (SPAC); and Ms. Elvira Ablaza (COFILCO).
The members of the Committee: Mr. Florentino S. Dulalia, Jr. (CREBA); Archt.
Prosperidad Luis (UAP); Mr. Joven B. Joaquin and Engr. Joel J. Marciano (PICA,
now PICAM); Dr. Ernesto S. De Castro (PICE); Messrs. Justo E. Manalo, Alfredo
Montecillo, and Manolito Madrasto (PCA); Messrs. Sergio Ortiz-Luis, Jr. and
Manuel J. Colayco, Jr. (PCCI); Archt. Felicitas A. Pio Roda (CPMAP); Engr.
Guadalupe O. Mansueto (SPAC); Engr. Ricardo Basa (COFILCO); Archt.
Geronimo V. Manahan (PDCB); Atty. Custodio O. Parlade; and Ms. Kathryn
Josephine T. Dela Cruz (CIAP)
The Committee was ably assisted by the following staff of the Construction
Industry Arbitration Commission (CIAC): Roger G. Antonio, Emily P. Morallos,
Delia B. Perlada, Jocelyn C. Carrasco, and Jose L. Pring, Jr.
2022 Revised version:
Presidents of the following organizations: PCA; PICAM; PICE; UAP; PCCI;
CPMAP; COFILCO; CECOPHIL; NACAP; SHDA; IIEE; PSPE; PSVARE; SPECS;
ASEP; and SOPI.
The Technical Working Group (TWG): Atty. Ma. Elena G. Francisco (PCA); Atty.
Jesusito G. Morallos and Archt. Felicitas A. Pio Roda (PICAM & CPMAP); Dr.
5
Ernesto S. De Castro (CECOPHIL/COFILCO); Engr. Isaac S. David and Engr. Gil
Talingdan II (PICE); Mr. Renato S. Tan and Mr. Santiago Ducay (SHDA); Engr.
Huillio B. Belleza (NACAP); Archt. Ramon L. Abiera (CIAP); Engr. Liberito V.
Espiritu (PDCB); Atty. Custodio O. Parlade (Legal Adviser); and Ms. Kathryn
Josephine T. Dela Cruz (CIAC).
Other contributors: Archt. Philip H. Recto; Engr. Salvador P. Castro Jr.; Engr.
Rodolfo R. Peñalosa; Engr. Rogelio M. Avenido; Mr. Joven B. Joaquin; Engr.
Jerico T. Borja; Mr. Paolo Wenceslao; Archt. Carlo Marudo; Atty. Michael
Macapagal; Atty. Donemark Calimon; Engr. Anna Encarnacion; Ms. Elvira Roseph
Castelo; Ms. May Rodriguez; Ms. Rosie Tsai; Ms. Karen Cristi; Mr. Alberto Molina;
Mr. Norman Bautista; and the Standards Development Division (SDD) of the
DTI—Bureau of Philippine Standards (BPS).
The TWG was ably assisted by the PDCB Secretariat: Executive Director Doris U.
Gacho, Engr. Jocelyn C. Carrasco, and Ms. Dana Lorraine C. Faurillo.
Sincere appreciation for the support extended to CIAP by DTI Undersecretary Ruth B. Castelo
for the Bureau of Philippine Standards (BPS) during the review of CIAP Document 102.
6
CIAP BOARD RESOLUTION NO. 7
Series of 2022
APPROVAL OF THE REVISIONS FOR CONSTRUCTION INDUSTRY AUTHORITY OF
THE PHILIPPINES (CIAP) DOCUMENT 102 AND RECOMMENDING THE USE OF CIAP
DOCUMENT 102 AS GENERAL CONDITIONS IN THE PRIVATE CONTRACTS IN THE
IMPLEMENTATION OF CONSTRUCTION PROJECTS
WHEREAS, under Section 2 (a) of PD 1746, the Construction Industry Authority of the
Philippines (CIAP), is tasked to promote, accelerate and regulate the growth and
development of the construction industry in conformity with national goals;
WHEREAS, the same law also provides that CIAP is tasked to recommend and
encourage the adoption of equitable and realistic contract conditions for construction;
WHEREAS, in 1997, CIAP in line with its mandate, created a Committee composed of
various professional groups in the industry to formulate the Uniform General
Conditions of Contract for Private Construction otherwise known as CIAP Document
102. The first and latest revised editions were then published by the CIAP thru
Philippine Domestic Construction Board (PDCB) in 1997 and 2004, respectively.
WHEREAS, during the 101st Philippine Domestic Construction Board (PDCB) Meeting
held on 20 July 2016, the Board recommends the formulation of annotations in CIAP
Doc. 102 so that the public will be able to understand its provisions and appreciate its
importance in the proper implementation of construction projects.
WHEREAS, after series of PDCB Board Meetings on this, on 17 September 2018, a
Committee on CIAP Document 102 was reactivated to assess the relevance of the
use of CIAP Document 102 as general conditions in the private contracts in the
implementation of construction projects. For this purpose, the Committee on CIAP
Document 102 thru the PDCB likewise conducted Consultative and Briefing sessions
with the industry stakeholders on 28 September and 20 November 2018, respectively;
WHEREAS, As a result thereof, the Committee finds the existing CIAP Document 102
is still relevant but needs to be revised to incorporate best practices in the industry and
update the documents considering the last revision was made in 2004;
WHEREAS, the Committee on CIAP Document 102, after due deliberations,
recommended revisions, among others:
•
•
•
New provisions to define the scope and coverage of CIAP Document 102;
Inserted new definitions such as advance payment and as-built drawings as
other Requirements before Final Payment; and
Deleted, modified, rephrased, and added words, provisions, and phrases.
WHEREAS, the Board agreed that a copy of the CIAP Document 102 shall be submitted
to the Office of the National Administrative Register (ONAR) of the University of the
Philippines.
7
NOW, THEREFORE, the Construction Industry Authority of the Philippines, in 90th
CIAP Regular Board Meeting held on 30 September 2022, RESOLVES, as it is
HEREBY RESOLVED, to approve the revisions to CIAP Document 102 and
recommend the use of CIAP Document 102 as general conditions in the private
contracts in the implementation of construction projects as well as the submission of
a copy at the Office of the National Administrative Register (ONAR) of the University
of the Philippines. Hereto attached, are the proposed revisions and the CIAP Doc. 102
copy, as Annexes A and B respectively, made as integral parts of this Resolution.
MAJORITY APPROVED.
30 September 2022
8
9
10
TABLE OF CONTENTS
FOREWORD
………………………………………………………………………………………………….2
ACKNOWLEDGEMENT .......................................................................................... 5
SCOPE……………………………………………………………………………………………………………19
Section I
Article 1
Definitions and Documents ........................................................... 19
Definitions .................................................................................... 19
1.01 act of God or force majeure ......................................................................................................... 19
1.02 advance payment/ down payment ............................................................................................. 19
1.03 Agreement................................................................................................................................... 20
1.04 As-Built Drawings ...................................................................................................................... 20
1.05 bid................................................................................................................................................ 20
1.06 bid bond ...................................................................................................................................... 20
1.07 Bid Bulletin ................................................................................................................................. 20
1.08 Bid Documents ........................................................................................................................... 20
1.09 Breakdown of Work and Corresponding Value ........................................................................ 20
1.10 change order................................................................................................................................ 20
1.11 Completion time limit .................................................................................................................. 21
1.12 Contract ........................................................................................................................................ 21
1.13 Contract Documents .................................................................................................................... 21
1.14 Contractor .................................................................................................................................... 21
1.15 Contract Price ............................................................................................................................... 21
1.16 cost ................................................................................................................................................ 21
1.17 Drawings ...................................................................................................................................... 22
1.18 Final payment ............................................................................................................................. 22
1.19 Guarantee Bond .......................................................................................................................... 22
1.20 Instruction to Bidders ................................................................................................................ 22
1.21 Invitation to Bid .......................................................................................................................... 22
1.22 last known address of a party .................................................................................................... 22
1.23 Laws............................................................................................................................................. 22
11
1.24 Owner .......................................................................................................................................... 22
1.25 Owner's Representative.............................................................................................................. 23
1.26 Payment Bond ............................................................................................................................ 23
1.27 Performance Bond ...................................................................................................................... 23
1.28 retention...................................................................................................................................... 23
1.29 Schedule of Materials and Finishes ........................................................................................... 23
1.30 Special Provisions or Conditions ............................................................................................... 23
1.31 Specifications .............................................................................................................................. 23
1.32 Sub-Contractor ........................................................................................................................... 23
1.33 Supplementary Specifications ................................................................................................... 24
1.34 Surety .......................................................................................................................................... 24
1.35 Work ............................................................................................................................................ 24
1.36 written notice .............................................................................................................................. 24
Article 2
Execution, Correlation, Meaning of Terms, and Intent of Documents 24
2.01
Intent of Contract .................................................................................................................. 24
2.02
Standard of Conduct .......................................................................................................... 24
2. 03
Interpretation of Contract ................................................................................................ 24
2.04
Conformity to the Contract ............................................................................................... 26
2.05
Meaning of Terms ...................................................................................................................27
2.06
Timely Exercise of Administrative Responsibilities .........................................................27
2.07
Defective Equipment, Materials, or Work............................................................................ 28
2.08
Review of Contract............................................................................................................. 28
2.09
Documents and Samples at the Site ................................................................................. 29
2.10
Ownership of Contract and Models ...................................................................................... 29
Article 3
Drawings and Specifications .......................................................... 29
3.01
Copies of Drawings and Specifications ................................................................................. 29
3.02
Coordination of Drawings and Specifications ...................................................................... 29
3.03
Clarification of Meaning of Drawings and Specifications ................................................... 30
3.04
Discrepancy in Drawings................................................................................................... 30
Article 4
Detail Drawings and Instructions .................................................. 30
12
4.01
Supplementary Drawings and Instructions ......................................................................... 30
Article 5
Shop Drawings .............................................................................. 30
5.01
Conditions in the Preparation of Shop Drawings ................................................................ 30
5.02
Identification........................................................................................................................... 31
5.03
Letter of Transmittal............................................................................................................... 31
5.04
Corrections, Changes and Variations .................................................................................... 31
5.05
Responsibility for Accuracy ................................................................................................... 32
5.06
Owner’s Approval .................................................................................................................. 32
Section II
Laws, Regulations, Site Conditions, Permits and Taxes .................. 32
Article 6
Laws and Site Conditions............................................................... 32
6.01
Laws and Regulations ............................................................................................................ 32
6.02
Site Conditions................................................................................................................... 32
Article 7
Permits, Taxes and Surveys ........................................................... 33
7.01
Permits and Licenses ............................................................................................................. 33
7.02
Taxes ....................................................................................................................................... 33
7.03
Construction Stakes and Reference Mark ............................................................................ 33
7.04
Services of Geodetic Engineer ............................................................................................... 33
Section III
Equipment and Materials .............................................................. 34
Article 8
General ......................................................................................... 34
Article 9
Equipment .................................................................................... 34
9.01
Quality of Equipment ............................................................................................................ 34
9.02
Equipment Substitution .................................................................................................... 34
Article 10
Materials, Fixtures, Appliances, and Fittings Furnished by the Contractor
35
10.01
Samples of Materials ..........................................................................................................35
10.02
Brand Name Materials and Substitutes ............................................................................35
10.03
Testing Samples of Materials .............................................................................................35
10.04
Quality of Materials ........................................................................................................... 36
10.05
Storage and Stockpiling of Materials................................................................................ 36
10.06
Defective Materials ............................................................................................................ 36
13
10.07
Imported Materials, Fixtures and Equipment ................................................................. 36
10.08
Owner’s Approval ...............................................................................................................37
Article 11
Owner
Materials, Equipment, Fixtures, Appliances and Fittings Furnished by the
37
Article 12
Royalties and Patents .................................................................... 37
Article 13
Manufacturer’s Directions............................................................. 37
Section IV
Article 14
Premises and Temporary Structures .............................................. 38
Use of Premises ............................................................................. 38
14.01
Limitation of Use ............................................................................................................... 38
14.02
Safeguard for Structure ..................................................................................................... 38
Article 15
Temporary Structures and Facilities .............................................. 38
15.01
Temporary Office and Contractor’s Building ................................................................... 38
15.02
Temporary Housing for Workers...................................................................................... 38
15.03
Safety and Sanitation......................................................................................................... 38
15.04
Temporary Signs................................................................................................................ 39
15.05
Temporary or Trial Usage ................................................................................................. 39
Section V
Article 16
Protection of Work and Property ................................................... 40
Protection of Work and Owner’s Property ..................................... 40
16.01
Safeguard Measures .......................................................................................................... 40
16.02
Old Materials ..................................................................................................................... 40
16.03
Trees and Other Plants ...................................................................................................... 40
16.04
Drainage .............................................................................................................................. 41
Article 17
Protection of Adjacent Property and Existing Utilities .................... 41
17.01
Contractor's Responsibility ................................................................................................ 41
17.02
Damages to Adjacent Utilities............................................................................................ 41
17.03
Condition Survey ................................................................................................................ 41
Article 18
Authorization to Contractor for the Protection of Life, Work and Property
During an Emergency ....................................................................................... 42
Section VI
Labor, Work and Payments ........................................................... 42
Article 19
Labor ............................................................................................ 42
Article 20
Work............................................................................................. 42
14
20.01
Methods and Appliances ................................................................................................... 42
20.02
Laying Out the Work ......................................................................................................... 42
20.03
Defective Work .................................................................................................................. 43
20.04
Inspection of Work ............................................................................................................ 43
20.05
Work During an Emergency ............................................................................................. 44
20.06
Increased or Decreased Quantities of Work .................................................................... 44
20.07
Changes in the Work ......................................................................................................... 44
A.
Changes Ordered by Owner ..................................................................................................... 44
B.
Change of Sub-Surface Conditions........................................................................................... 45
C.
Adjustment of Contract ............................................................................................................. 45
D.
Value of Extra Work.............................................................................................................. 45
E.
Award of Extra Work to Other Contractors ....................................................................... 46
20.08
Claims for Extra Cost......................................................................................................... 46
20.09
Cleaning up at Completion of Work ..................................................................................47
20.10
Use of Completed Portions of Work ..................................................................................47
20.11
Substantial Completion and its Effect .............................................................................. 48
20.12
Period of Making Good of Known Defects or Faults ....................................................... 49
20.13
Making Good of Known Defects or Faults ....................................................................... 49
20.14
Special Test and Inspection .............................................................................................. 49
20.15
Acceptance of Non-Conforming Work ............................................................................. 49
20.16
Adjustment of Prices ......................................................................................................... 50
20.17
Payment in Legal Tender ................................................................................................... 51
Article 21
Time of Completion of Work ........................................................... 51
21.01
Notice to Proceed, When Required ................................................................................... 51
21.02
Completion Time ................................................................................................................ 51
21.03
Schedule of Construction Work ......................................................................................... 51
21.04
Extension of Time ...............................................................................................................52
21.05
Delay in Completion of the Work ......................................................................................53
Article 22
22.01
Payments ...................................................................................... 54
Breakdown of Contract Amount ....................................................................................... 54
15
22.02
Requests for Payment........................................................................................................ 54
22.03
Authorized Deductions from Value of Completed Work ................................................ 54
22.04
Conditions Relative to Payments .......................................................................................55
22.05
Owner's Action on Requests for Payment .........................................................................55
22.06
Payment of Unpaid Labor, Sub-Contractors and Suppliers.............................................55
22.07
Payments Over Ninety Percent (90%)...............................................................................55
22.08
Other Requirements Before Final Payment ..................................................................... 56
22.09
Acceptance and Final Payment ......................................................................................... 56
22.10
Corrections of Work Before or After Final Payment ........................................................ 57
22.11
Release of Retention .......................................................................................................... 58
Section VII
Contractor—Separate Contractors—Sub-Contractors Relations...... 58
Article 23
Separate Contracts with Other Contractors .................................... 58
Article 24
Contractor and Separate Contractors Relations ............................. 58
24.01
Storage of Materials and Work Coordination .................................................................. 58
24.02
Cutting, Patching and Digging .......................................................................................... 58
24.03
Defective Work by Separate Contractors ......................................................................... 59
24.04
Damage Caused by Contractor to Separate Contractors ................................................. 59
24.05
Damage Caused by Separate Contractors to Contractor ...................................... 59
Article 25
Sub-Contracts ............................................................................... 59
25.01
General ............................................................................................................................... 59
25.02
Contractor's Responsibility ............................................................................................... 60
Section VIII
Suspension of Work and Termination of Contract .......................... 60
Article 26
Contractor's Right to Suspend Work or Terminate Contract ........... 60
Article 27
Owner's Right to Suspend the Work............................................... 61
27.01
Suspension Without Cause ................................................................................................ 61
27.02
Just Causes for Suspension of Work ................................................................................. 61
Article 28
Owner's Right to Terminate Contract ............................................. 62
28.01
Termination with Cause .................................................................................................... 62
28.02
Other Grounds for Termination with Cause .................................................................... 62
28.03
Termination Without Cause.............................................................................................. 63
16
Article 29
Owner's Right to Proceed with the Work after Reduction in the
Contractor's Scope of Work; Partial Takeover from Contractor ......................... 63
29.01
Owner's Right to Carry Out the Work .............................................................................. 63
29.02
Use of Materials and Equipment at Site ........................................................................... 64
29.03
Owner to Complete Work.................................................................................................. 64
29.04
Evaluation of Cost of Work ............................................................................................... 64
29.05
Owner's Right to Recover Damages ................................................................................. 65
29.06
Liquidated Damages .......................................................................................................... 65
Section IX
Article 30
Responsibilities and Liabilities of Contractor and of Owner ........... 66
Contractor's Responsibility for Accidents and Damages ................. 66
30.01
Safeguards to be Undertaken by Contractor .................................................................... 66
30.02
Owner Not to be Responsible ........................................................................................... 66
30.03
Contractor's Default ...........................................................................................................67
Article 31
Contractor's Insurance and Bonds ................................................. 67
31.01
Contractor's Liability Insurance ........................................................................................67
31.02
Accident Insurance for Workers ........................................................................................67
31.03
Contractor's Fire Insurance ...............................................................................................67
31.04
Contractor’s Performance and Payment Bonds ............................................................... 68
31.05
Contractor’s Guarantee Bond ........................................................................................... 68
31.06
Contractor’s Guarantee-Warranty .................................................................................... 68
31.07
Mandatory Conditions of Bonds ....................................................................................... 69
Article 32
Owner’s Responsibilities and Liabilities......................................... 70
32.01
Advance Payment .............................................................................................................. 70
32.02
Protection of Employees and Professionals Performing Services for the Owner ...... 70
32.03
Owner's Optional Insurance ............................................................................................. 70
32.04
Additional Information and Services Required of the Owner ........................................ 70
Article 33
Liens, Disputes and Arbitration ..................................................... 70
33.01
Liens ................................................................................................................................... 70
33.02
Assignment ......................................................................................................................... 71
33.03
Subcontracting .................................................................................................................... 71
17
33.04
Disputes...............................................................................................................................72
33.05
Settlement of Disputes .......................................................................................................72
Section X
Owner's Representative ................................................................. 73
Section XI
Schedule of Time Limits ................................................................ 75
APPENDIX……………………………………………………………………………………………………..79
18
SCOPE
This document specifies general conditions of contract between a private Owner and
Contractor applicable for the construction of any type of structure or works as contemplated
in the Republic Act No. 4566 otherwise known as Contractors’ License Law.
Section I
Definitions and Documents
Article 1
Definitions
For the purposes of this document, the following definitions apply:
1.01 act of God or force majeure
shall mean any event beyond the reasonable control of the Owner or the Contractor, as the
case may be, and which is unavoidable notwithstanding the reasonable care of the party
affected and shall include, without limitation, the following:
(a) war, hostilities or warlike operations (whether a state of war be declared or not), invasion,
act of foreign enemy, civil war;
(b) rebellion, revolution, insurrection, mutiny, usurpation of civil or military government,
conspiracy, riot, civil commotion, terrorist acts;
(c) confiscation, nationalization, mobilization, commandeering or requisition by or under the
order of any government or de jure or de facto authority or ruler or any other act or failure
to act of any local or state or national government authority;
(d) strike, sabotage, lock-out, embargo, import restriction, port congestion, lack of usual
means of public transportation and communication, industrial dispute, shipwreck,
shortage or restriction of power supply, epidemics, quarantine, plague;
(e) earthquake, landslide, volcanic activity, fire, flood, inundation, tidal wave, typhoon or
cyclone, hurricane, storm, lightning, or other inclement weather condition, nuclear and
pressure waves, or other natural or physical disaster;
(f) shortage of labor, materials or utilities where caused by circumstances that are themselves
force majeure.
1.02 advance payment/ down payment
the money given by the Owner to the Contractor to help the latter underwrite significant start
up or procurement costs that may have to be incurred before construction begins
19
1.03 Agreement
the term used to describe the agreement signed by the Owner and the Contractor excluding
the Contract Documents which are attached thereto
1.04 As-Built Drawings
drawings showing the structure as actually constructed including system and actual locations
of outlets, fixtures, services and equipment that were installed
1.05 bid
the tender, proposal, quotation, or offer of a bidder to perform the Work described in the
Contract which in form and substance complies with the Instruction to Bidders
1.06 bid bond
any acceptable form of bond accompanying the Bid submitted by the bidder as a guarantee
that the bidder will enter into the Contract with the Owner for the construction of the Work,
if the Contract is awarded to him
1.07 Bid Bulletin
a document containing additional information on Bid Documents issued to bidders before
date of bidding
1.08 Bid Documents
collectively refer to all documents provided or made available to prospective bidders which
include the Invitation to Bid, drawings and technical specifications and a copy of the Contract
which the winning bidders would be required to sign with the Owner
1.09 Breakdown of Work and Corresponding Value
a listing of the different parts of the Work indicating each part and its corresponding value
1.10 change order
a written order to the Contractor issued by the Owner after the execution of the Contract,
authorizing a change or variation in the Work or an adjustment in the Contract Price or
Contract Time
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1.11 Completion time limit
period of time allowed by the Contract for the completion of the project or any stipulated
portions thereof
1.12 Contract
the term used to describe the Agreement and the Contract Documents
1.13 Contract Documents
documents attached to the Agreement identified therein as Contract Documents, including all
additions, deletions and modifications incorporated therein. These generally include the
following documents which shall form part of this Contract and constitute integral parts
hereof:
(a) Special Provisions or Conditions;
(b) General Conditions;
(c) Specifications;
(d) Drawings;
(e) Contractor’s Performance and Payment Bonds contemplated in Clause 31.04 hereof;
(f) Contractor’s Guarantee Bond contemplated in Clause 31.05 hereof; and
(g) other Bid Documents
1.14 Contractor
the person or firm duly registered and licensed by the Philippine Contractors Accreditation
Board whose proposal has been accepted and to whom the Contract to execute the Work was
awarded
1.15 Contract Price
the amount in money, or other consideration, to be paid by the Owner to the Contractor for
the execution of the Work in accordance with the Contract
1.16 cost
all expenditures properly incurred or to be incurred, whether on or off the site, including
overhead and other charges properly allocable thereto but does not include any allowance for
profit
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1.17 Drawings
graphical presentations of the Work that include all supplementary details and shop drawings
1.18 Final payment
the payment of the final progress billing and all approved claims including but not limited to
variations in the work, Contract Price adjustments and/or escalation, acceleration of work,
and others.
NOTE: final payment does not include the retention money
1.19 Guarantee Bond
approved form of security furnished by the Contractor and its Surety as a guarantee of the
quality of the materials provided, the equipment installed, and the workmanship performed
by the Contractor
1.20 Instruction to Bidders
the list of instructions regarding the manner bids are to be prepared and the conditions for
the award of the Contract
1.21 Invitation to Bid
the notice or advertisement published by the Owner or the invitation issued to prospective
bidders, giving information as to the nature of the proposed project, conditions for the
issuance of Contract documents, date of bidding, and information that would give the
Contractor a general idea of the magnitude and extent of the project
1.22 last known address of a party
refers to the address in the Philippines given by a party in the Contract
1.23 Laws
all laws, ordinances and other governmental rules and regulations applicable to the project
and to its execution
1.24 Owner
person or entity, or authorized representative thereof, who signed the Contract as Owner
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1.25 Owner's Representative
the person or entity commissioned by the Owner, or authorized in writing by the Owner, to
act on its behalf
1.26 Payment Bond
approved form of security furnished by the Contractor and its Surety as a guarantee of good
faith on the part of the Contractor to faithfully comply with the Contract in respect of its
obligations arising therefrom to its workers, Sub-Contractors, and suppliers
1.27 Performance Bond
approved form of security furnished by the Contractor and its Surety as a guarantee of good
faith on the part of the Contractor to execute the Work in accordance with the Contract
1.28 retention
sum of money, usually 10% or less of every progress payment to a Contractor which the Owner
retains to underwrite future costs of completing the Contractor’s work and/or remedying the
defects therein
1.29 Schedule of Materials and Finishes
an outline specification enumerating the type or brand names of materials required to be used
by the Contractor for the Work
1.30 Special Provisions or Conditions
instructions issued prior to bidding to supplement and/or modify the Drawings,
Specifications and/or General Conditions of the Contract
1.31 Specifications
written or printed description of the Work to be done describing qualities of the material to
be used, the equipment to be installed and the mode of construction
1.32 Sub-Contractor
a Contractor duly registered and licensed by the Philippine Contractors Accreditation Board
having a direct contract with the Contractor and who acts for or in behalf of the Contractor in
executing any part of the Contract
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NOTE: one who furnishes materials without labor is a supplier and not a Sub-Contractor
1.33 Supplementary Specifications
additional information which may be issued as an addition to or amendment of the provisions
of the Specifications
1.34 Surety
person, firm, or corporation which issues the bond required of the Contractor
1.35 Work
shall refer to all the Contractor-provided labor or materials or both, as well as equipment
transportation or other facilities necessary to commence and complete the construction and
to fulfill all its obligations which are called for in the Contract
1.36 written notice
information, advice, or notification pertinent to the project delivered in person or sent by
registered mail to an individual, firm or corporation at the latter's last known business address
Article 2
Execution, Correlation, Meaning of Terms, and
Intent of
Documents
2.01
Intent of Contract
The intent of the Contract is to include all labor and materials, equipment, and transportation
necessary for the proper execution of the Work.
2.02 Standard of Conduct
Each party to the Contract acknowledges that, in the exercise of each party’s rights and in the
performance of his duties, each must act with justice, give the other party its due, and observe
honesty and good faith.
2. 03 Interpretation of Contract
(a) In case of conflict between the provisions of the Agreement or of any Contract Document,
or between the provisions of one of the Contract Documents and the provisions of another
Contract Document, or in case of discrepancy, defective description, error or omission in
the Contract, the following rules shall be followed:
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RULE 1: The Agreement and the Contract Documents shall be taken as mutually
explanatory of one another. The various provisions of the Contract shall be
interpreted together, attributing to the doubtful ones that sense which may
result from all of them taken jointly.
RULE 2: The provisions of the Civil Code of the Philippines on the interpretation of
contracts and of the Rules of Court on the Interpretation of Documents shall
be applied.
RULE 3: Where the conflict between or among the provisions of the Agreement and/or
the Contract Documents cannot be resolved by Rules 1 and 2, it shall be
understood that:
(a) the Detailed Drawings shall prevail over the General Drawings;
(b) words and figures shall prevail over the Drawings;
(c) words shall prevail over figures in Contract Documents; and
(d) written dimensions shall prevail over measured dimensions.
RULE 4: Where the conflict cannot be resolved by applying Rule 3 or where Rule 3 does
not apply, the conflict shall be resolved by giving precedence to the Agreement
or to provisions of a Contract Document higher in order of priority among the
various documents which comprise the Contract. The order of priority among
these documents shall be as follows:
(a) Agreement as modified by Notice of Award of Contract, if such be the
case, and the Contractor’s conformity thereto;
(b) Instruction to Bidders and any amendment thereto;
(c) Addenda to Bid Documents;
(d) Specifications;
(e) Special Conditions of Contract;
(f) General Conditions of Contract;
(g) Drawings;
(h) Contractor’s Performance and Payment Bonds contemplated in Clause
31.04 hereof;
(i) Contractor’s Guarantee Bond contemplated in Clause 31.05 hereof;
(j) Other Contract Documents; and
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(k) Other documents forming part of the Contract attached thereto or
incorporated therein by reference.
Where the order of precedence is modified in the Agreement, such modified
order of precedence shall be followed; however, the mere listing of Contract
Documents in the Agreement or any Contract Document shall not be
interpreted as establishing an order of precedence among them.
RULE 5: Where there is discrepancy, defective description, error or omission in any
Contract Document, the Contract Documents shall be interpreted as being
complementary to each other. Thus, what is called for in one Contract
Document, although not mentioned in another Contract Document where it
should have been mentioned, shall be deemed to be called for by the Contract.
RULE 6: The apparent silence of the Drawings, Specifications or any other Contract
Document as to any detail, or the lack of detailed description concerning any
part
of
the
work, shall be understood to mean that good and accepted
construction practice in accordance with the usage or custom of the place shall
be followed.
RULE 7: Rules 1 to 6 shall yield to specific rules of interpretation in this document or in
the Contract.
(b)
The Owner shall resolve the conflict, or interpret or explain such discrepancy, defective
description, error or omission with due regard to Article 2.04.
(c)
The interpretation of or explanation by the Owner shall be issued in the form of
instructions to the Contractor. Where the Owner fails to issue the instructions in
writing, the execution of that part of work affected by the interpretation or explanation
without a timely objection or protest of the Owner shall be deemed to have been
executed in accordance with the Owner's explanation or interpretation.
(d)
In all cases where a device, item, or part of equipment is referred to in the singular
number, it is intended that such reference shall apply to as many such devices, items, or
parts as are required to complete the work.
2.04 Conformity to the Contract
The Work shall be executed in accordance with the Contract.
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(a) If there be a variance between the Drawings and the Specifications, the provisions of
the Specifications shall prevail. In case of conflict between the General Conditions or
any modification thereof and the detailed specification requirements, the detailed
specification requirements shall prevail.
(b) Any discrepancy found between the Drawings and Specifications and site conditions
or any error or omission in the Drawings or Specifications shall be immediately
reported to the Owner, who shall promptly correct such discrepancy, error, or
omission. Any work involving such discrepancies shall be estimated by the Contractor
and unit prices or lump sum amounts shall be agreed upon by the parties whenever
possible before the work is done. Any work done by the Contractor involving
discrepancies found by the Contractor and not reported to and without the knowledge
of the Owner shall be considered as having been done at the Contractor's risk.
(c) The Owner shall be fully responsible for adequacy of the design and for sufficiency of
the Drawings and Specifications. The complete requirements of the Work shall be set
forth in Drawings and Specifications to be supplied by the Owner.
(d) In the event that any part or whole of the Works, when agreed upon, are designed by
the Contractor, then all responsibilities assigned to the Owner for the said design shall
automatically be assigned to the Contractor as its responsibility.
2.05
Meaning of Terms
(a) The words approved, directed and acceptable, or words of like import shall mean
approved by, directed by, or acceptable to the Owner.
(b) The word furnish shall be understood to mean to purchase and/or fabricate and
deliver to the jobsite or other location when so designated.
(c) The word install shall mean to build in, mount in positions, connect or apply any object
specified ready for the intended use.
(d) The word provide shall be understood to mean to furnish and install.
(e) The words required or necessary shall mean as required or necessary for the complete
execution of that portion of the Work.
2.06 Timely Exercise of Administrative Responsibilities
Whenever under the Contract, the Owner shall exercise its discretion fairly and in a timely
manner taking due regard of Completion Time and the approved construction schedule
notwithstanding any provision in the Contract requiring the Contractor to notify the Owner
when such action is due or when such equipment or materials are due. The Owner shall
exercise such discretion by:
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(a) giving decision, opinion or consent;
(b) expressing satisfaction and approval;
(c) determining value;
(d) providing drawings;
(e) supplying equipment or materials, or;
(f) otherwise taking action which may affect the Contractor's timely completion of the
Work
Whenever in the Contract, the Contractor shall give notice, submit data, catalogs, samples,
order or import materials or equipment, prepare and submit the construction schedule or
notify the Owner that a change has been ordered or an event causing a change has occurred
or been discovered. The Contractor shall do so in a timely manner so as to avoid any delay in
the completion of the Work.
Whenever the Contract or accepted industry practice requires that before any part of the Work
is covered, it must be inspected and approved, the Owner shall provide a sufficient number of
inspectors at the project site while work is in progress. The failure of the Owner to provide
such inspectors shall be understood as a waiver of the Owner to inspect and approve that part
of the Work.
2.07
Defective Equipment, Materials, or Work
Whenever the Contract or the General Conditions provide that the Owner may require the
Contractor to remove or replace defective or inferior materials or equipment or to replace bad
or defective work, the Owner, if represented by a professional duly authorized to supervise the
Contractor’s work and to exercise the discretion and authority of the Owner, shall condemn
such materials, equipment or work in order to minimize the damage or loss of the Contractor.
However, where even with the exercise of due diligence, the Owner could not have discovered
the use of inferior materials and equipment or the defective work, the Owner may condemn it
upon discovery, and the Contractor shall bear all the cost of removing and replacing the
defective or inferior material or equipment or the defective work.
2.08 Review of Contract
The Contractor shall carefully study and compare the various documents that comprise the
Contract and shall report to the Owner any error, inconsistency or omission that may be
discovered in its provisions. The Contractor, however, shall not be liable to the Owner for any
damage resulting from any such error, inconsistency or omission in the Contract. The
Contractor shall follow the Drawings and Specification and all additional detail drawings and
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instruction issued by the Owner as being in full and strict conformity with the Contract and
the requirements of the Work. Except for shop drawings, product data and samples for any
portion of the work provided or supplied by a specialty contractor, the Owner's approval
thereof shall be construed as the Owner's acknowledgement that the approved shop drawings,
product data and sample comply with the Contract. The Contractor shall not be liable to the
Owner for undetected error, inconsistency or omission in the Contract or for complying with
instructions or following Drawings or Specifications, or for using or following the approved
shop drawings, product data or sample.
2.09 Documents and Samples at the Site
The Contractor shall maintain in good order at the project site on a current basis one record
copy of all Drawings, Specifications, addenda, Change Orders and other modifications, and
changes made during construction, including approved shop drawings, product data and
samples. These documents and samples shall be available to the Owner for the latter's
inspection. The Contractor shall advise the Owner, on a current basis and in writing, of
changes in the Work made during construction, except those made in accordance with Change
Orders or Owner's instruction.
2.10
Ownership of Contract and Models
The Drawings, Specifications and models, including all additional instructions and copies
thereof, furnished to the Contractor shall remain the property of the Owner. They are not to
be used by the Contractor on any other work, and, with the exception of the signed Contract
inclusive of Contract Documents, they shall be returned to the Owner upon completion of the
Work before Final Payment to the Contractor is made.
Article 3
3.01
Drawings and Specifications
Copies of Drawings and Specifications
The Owner shall furnish the Contractor, free of charge, three sets of Drawings and
Specifications inclusive of the signed Contract. All other copies of Drawings and Specifications
as required by the Contractor shall be furnished to it at cost of reproduction.
3.02 Coordination of Drawings and Specifications
All Drawings and models are to be read and understood together with the Specifications, to
form a part thereof. Where figures are given, these are to be followed in preference to
measurements by scale. Anything shown on the Drawings but not mentioned in the
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Specifications, or vice versa, or anything not expressly set forth in either, but which is
reasonably implied, shall be furnished as if specifically shown and mentioned in both.
3.03 Clarification of Meaning of Drawings and Specifications
The Owner shall provide the Contractor directions and explanations necessary and proper to
make more definite and certain any requirement of the Drawings (including notes thereon)
or of the provisions of the Specifications. Upon request of the Contractor, the Owner shall
explain:
(a) the meaning of the Drawings, (including notes thereon) or of the Specifications;
and/or
(b) any obscurity as to the wording of the Specifications.
3.04 Discrepancy in Drawings
The Contractor shall report to the Owner any discrepancy in the figures in the drawings
immediately upon discovery. The Owner shall make the necessary correction. The Contractor
shall not be entitled to an adjustment of its Contract Price and Completion Time should its
work be ordered re-done if such work was made without notifying the Owner of the discovery
of the discrepancy and before the Owner makes the necessary correction.
Article 4
4.01
Detail Drawings and Instructions
Supplementary Drawings and Instructions
The Owner shall furnish additional detail drawings and instructions essential to proper
interpretation and proper execution of the Work. All such additional drawings and
instructions are to be considered of equal force as those which originally accompany the
Specifications.
Article 5
5.01
Shop Drawings
Conditions in the Preparation of Shop Drawings
The Contractor shall prepare, at its own expense, and submit two copies of all shop or setting
drawings, templates, patterns and models and the Owner shall pass upon them making
desired corrections, if any. The Contractor shall make the corrections in the shop drawings
required by the Owner and file with the latter three (3) corrected copies thereof.
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5.02
Identification
Shop drawings, which shall be numbered consecutively, shall represent:
(a) all working and erection dimensions;
(b) arrangement and sectional views;
(c) necessary details, including complete information for making connections with other
work;
(d) kinds of materials and finishes.
Shop drawings shall contain the following:
(a) date of approval by the Owner;
(b) name of project;
(c) descriptive names of equipment, materials, and classified item numbers; and
(d) location at which materials or equipment are to be installed in the Work.
5.03
Letter of Transmittal
Submission of shop drawings shall be accompanied by a letter of transmittal in duplicate,
containing the name of the project, the Contractor’s name, reference drawing number, titles,
and other pertinent data.
5.04 Corrections, Changes and Variations
The Contractor shall submit three sets of prints of shop drawings to the Owner for approval.
Satisfactory shop drawings will be so identified by the Owner, dated, and one copy thereof
returned to the Contractor. Should shop drawings be disapproved by the Owner, one set of
such shop drawings shall be returned to the Contractor indicating therein the corrections and
changes to be made.
(a) The Contractor shall make the required corrections and changes and resubmit the
shop drawings, in duplicate, until the Owner's approval is obtained.
(b) Upon receipt of such approval, the Contractor shall insert the date of approval on the
tracings and promptly furnish the Owner with three additional prints of approved
drawings.
(c) No work called for by the shop drawings shall be executed by the Contractor until the
Owner's approval is given.
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(d) Should the shop drawings show variations from the Contract requirements because of
standard shop practice or other reasons, the Contractor shall make specific mention
of such variations in its letter of submittal.
5.05
Responsibility for Accuracy
Should the Contractor be a specialty contractor or be engaged by the Owner as a specialty
contractor, the Owner's approval of shop drawings shall be general. It shall not relieve the
Contractor of responsibility for accuracy of such shop drawings, nor for proper fitting and
construction of work, nor for furnishing of materials or work required by the Contract and not
indicated on the shop drawings. The Owner’s approval of such drawings or schedule shall not
relieve the specialty contractor from responsibility for deviations from the Drawings or
Specifications, unless the Contractor has, in writing, called the Owner’s attention to such
deviations at the time of submission and secured the Owner’s written approval.
5.06 Owner’s Approval
Unless specified to the contrary or unless the Contractor’s submission is deficient, shop
drawing approval by the Owner shall be made within seven (7) working days of submission by
the Contractor.
Section II
Laws, Regulations, Site Conditions, Permits and Taxes
Article 6
Laws and Site Conditions
6.01
Laws and Regulations
In general, the Contractor shall comply with all Laws in so far as they are binding upon or
affect the parties thereto, or the Work. The Contractor shall also comply with regulations of
firms furnishing utilities such as water, gas, telephone and electricity for the project.
Should the Contractor perform any work contrary to such Laws or utilities’ regulations, it shall
bear all additional costs arising therefrom.
6.02 Site Conditions
Before the bidding and the awarding of the Contract, the Contractor is expected to have visited
the project site and made its own estimate of the facilities required in and difficulties attending
the execution of the Work, on account of local conditions and all other contingencies. The
Owner shall, however, furnish the Contractor a geodetic survey and sub-surface exploration
which the Contractor may rely upon in the preparation of its Bid.
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Article 7
7.01
Permits, Taxes and Surveys
Permits and Licenses
The Owner, with the Contractor’s assistance, shall secure and pay all construction permits and
licenses necessary for the execution of the Work or of any temporary work and easements in
relation thereto.
The Contractor shall secure the final occupancy permit but it shall not be responsible to the
Owner if, without its fault, the license is not issued or there was delay in issuance.
7.02
Taxes
Wherever the law of the place where the project is located requires sales, consumer use, or
other similar tax related or pertinent only to the construction of the project, the Contractor
shall pay such tax.
7.03
Construction Stakes and Reference Mark
The Owner shall furnish all surveys describing the physical characteristics, legal limitations,
and utility locations of the site. It shall also furnish rights-of-way for access to the site. The
Owner shall be responsible for the establishment of lot lines, boundary lines, easements and
benchmarks which shall be made by a certified surveyor. The Owner may request the
Contractor to verify before the start of the construction the result of such surveys, provided
the Owner shall pay for the cost of such verification. The Owner shall also pay for any damage
or cost to the Contractor brought about by errors in data furnished.
All other grade, lines, levels, and benchmarks necessary for the prosecution of the Work shall
be established and maintained by the Contractor.
The Contractor shall provide and maintain well-built batter boards at all corners. It shall
establish benchmarks in not less than two widely separated places. As work progresses, the
Contractor shall establish benchmarks at each floor giving exact levels of various floors, and
shall lay-out the exact locations of all partitions as a guide to all trades.
7.04
Services of Geodetic Engineer
The Contractor shall, at its option or when so required under the Contract, engage the services
of a licensed Geodetic Engineer to confirm and certify the location of column centers, piers,
walls, pits, trenches, pipe work, utility lines and work of a similar nature.
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The Geodetic Engineer shall also verify and certify the lines and levels of any part of the Work
at any time if so required by the Owner.
The certification shall be provided to the Owner and the Contractor. If the Geodetic Engineer
finds any deviation from the Drawings in the Work of the Contractor, he/she shall report
his/her findings to the Owner within 24 hours from discovery.
The Contractor shall be responsible for loss or damage caused by the act or omission of the
Geodetic Engineer. However, without exempting the Contractor from liability, but in
mitigation of it, the Geodetic Engineer's certification shall be regarded as an independent and
disinterested verification of such lay-out.
Section III
Equipment and Materials
Article 8
General
All materials and equipment must conform to all Laws now or which may be in force and
applicable during the period of construction. The Contractor shall bear all damages by reason
of any delay in the Work arising from its failure to comply with this provision. Where any
revision or amendment to such Laws is made during the construction period which affects the
cost or time of completion of the Contract, a constructive change in the Work shall be
recognized and a corresponding Contract Price and Completion Time adjustment shall be
made.
Article 9
9.01
Equipment
Quality of Equipment
In order to establish standards of quality, the Owner, in the detailed Specifications may have
referred to certain equipment by name and catalog number. This procedure is not to be
construed as eliminating from competition other products of equal or better quality by other
manufacturers where they are fully suitable in design.
9.02 Equipment Substitution
The Contractor shall furnish the complete list of proposed substitutions preferably prior to
the signing of the Contract together with such engineering and catalog data as the Owner may
require. All requests for substitution of equipment shall be in writing. The Owner will approve
or disapprove the request in writing. No substitute equipment shall be used unless approved
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in writing by the Owner. The Contractor shall abide by the Owner’s judgment as to which
proposed substitute items of equipment are judged to be acceptable.
Article 10
Materials, Fixtures, Appliances, and Fittings Furnished by the
Contractor
10.01 Samples of Materials
(a) Unless otherwise specified, three samples shall be submitted, of adequate size to show
quality, type, color, range, finish, and texture of material.
(b) Each sample shall be labelled, bearing the material’s name and quality, the
Contractor’s name, date, project name, and other pertinent data.
(c) Where the Specifications require the manufacturer’s printed installation directions,
such directions shall accompany the samples submitted for approval.
(d) A letter of transmittal in triplicate from the Contractor requesting approval shall
accompany all sets of samples.
(e) Materials requiring prior approval of the Owner shall not be ordered until such
approval in writing is given by the Owner.
All materials shall be furnished
substantially equal in every respect as the approved samples.
10.02 Brand Name Materials and Substitutes
(a) Whenever an item or class of materials is specified exclusively by brand name,
manufacturer’s name or catalog reference, only such item shall be used except as
provided in paragraph (b) hereof.
(b) No substitution shall be made of any material, article, or process required under the
Contract unless the substitution is approved in writing by the Owner.
(c) The Contractor shall be responsible for materials and articles installed or used without
such approval.
(d) Samples of materials for use, in reinforced concrete work such as steel bars, cement,
and aggregates and their certificates of origin shall be approved by the Owner.
10.03 Testing Samples of Materials
The Contractor shall submit to the Owner as many samples as may be needed for purposes of
testing. Testing of all samples shall comply with the Specifications and government standards
and shall be performed by a competent entity or testing laboratory approved by the Owner.
All costs of shipment, delivery, handling, and testing of Contractor-supplied samples are to be
paid by the Contractor.
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10.04 Quality of Materials
Unless otherwise specified, all materials shall be new, and their quality shall be of the best
grade of their respective kinds taking into account the nature of the project and requirements
of the Contract.
10.05 Storage and Stockpiling of Materials
(a) The Owner shall provide the Contractor, at or near the project site, sufficient space for
the Contractor’s and Sub-Contractors’ use for storage of materials and for erection of
sheds and tool houses.
(b) All materials affected by moisture (e.g. cement, steel, wood, etc.) shall be stored on
platforms and protected from the weather.
The materials shall be so stored as to
ensure the preservation of their quality and fitness for the Work. Stored materials
shall be located so as to facilitate prompt inspection.
(c) Should it be necessary at any time to move materials, sheds, or storage platforms, the
Contractor shall do so at its own expense.
10.06 Defective Materials
All materials different from the Specifications shall be considered non-conforming to the
minimum requirements. The Contractor shall remove or replace materials different from the
Specifications when ordered to do so by the Owner. Upon the Contractor’s failure to do so,
the Owner may remove and replace them and deduct the cost of removal and replacement
from any money due or to become due the Contractor. No materials, the defects of which have
been subsequently corrected, shall be used until the Owner’s approval is given.
Should the Specifications, Drawings, Special Provisions and Supplementary Specifications fail
to provide any detail or description concerning the nature and quality of the Work to be
performed, it should be understood that generally accepted construction practice shall be
followed.
10.07 Imported Materials, Fixtures and Equipment
The Contractor, taking into consideration the Completion Time, shall make timely
arrangements for the purchase and delivery of all specified imported materials, fixtures,
appliances and equipment in order to avoid delay in the completion of the Work.
No extension of time shall be allowed if, due to negligence or inadvertence of the Contractor,
such imported items arrive late.
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10.08 Owner’s Approval
Unless specified to the contrary or unless the Contractor’s submission is deficient, equipment,
samples or materials submissions shall be acted upon by the Owner within seven (7) working
days of submission by the Contractor.
Article 11
Materials,
Equipment,
Fixtures,
Appliances
and
Fittings
Furnished by the Owner
Materials, equipment, fixtures, appliances and fittings specifically indicated in the Contract
shall be provided in accordance with the Owner-approved construction schedule. Materials
furnished by the Owner shall be deemed acceptable for the purpose intended. The Contractor
may continue to use them until otherwise directed in writing by the Owner. No further test
shall be required unless the Owner directs otherwise and pays the cost of such test.
Should the Contractor discover any defect in materials furnished by the Owner, the Contractor
shall advise the Owner in writing. The Contractor shall be responsible for material loss of or
damage to any Owner-provided material, equipment, fixture, appliance or fitting in its
custody.
Unused, Owner-supplied materials, equipment, fixtures, appliances and fittings, the cost of
which was not charged to the Contractor and did not form part of the Contract Price, shall
belong to the Owner which shall be returned to the Owner by the Contractor upon completion
of the Work. Those the cost of which was charged to the Contractor and deducted from its
Contract Price shall belong to the Contractor.
Article 12
Royalties and Patents
The Contractor shall pay all royalties and license fees on all patented materials and processes
it furnished. It shall defend all suits or claims corresponding thereto for infringement of any
patent rights and shall save the Owner harmless from loss on account thereof.
Article 13
Manufacturer’s Directions
All manufactured articles, materials, equipment, appliances, fixtures and fittings supplied by
the Contractor shall be applied, installed, connected, erected, used, cleaned, and conditioned
by the Contractor, in accordance with the manufacturer’s printed directions. Where reference
is made to the manufacturer’s directions, the Contractor shall submit the specified number of
copies of such directions to the Owner.
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Section IV
Premises and Temporary Structures
Article 14
Use of Premises
14.01 Limitation of Use
The Contractor shall confine its apparatus, the storage of materials, and the operations of its
workers to limits indicated by Law or directions of the Owner and shall not unreasonably
encumber the work premises with its materials.
14.02 Safeguard for Structure
The Contractor shall not load or permit any part of the structure to be loaded with a weight
that will endanger its safety. The Contractor shall enforce the Owner’s safety instructions
regarding signs, advertisements, fires and smoking, and any other factors that may cause
endangerment to safety.
Article 15
Temporary Structures and Facilities
15.01 Temporary Office and Contractor’s Building
The Contractor shall at all times, taking into account the location and size of the site, provide
and maintain an adequate weather tight temporary office with necessary basic facilities such
as water, light, and telephone.
When practicable or depending upon the nature and
complexity of the project, the Owner may require the Contractor to comply with other
requirements for temporary structures and facilities as provided for in the Contract.
15.02 Temporary Housing for Workers
The temporary buildings for housing workers, or the erection of tents or other forms of
protection shall be at such places the Owner has designated; provided, however, that if no
particular area is designated, the Contractor may use its own discretion in determining such
areas in consultation with the Owner. The sanitary condition of the grounds in or about such
structures at the project site shall at all times be maintained by the Contractor in a manner
satisfactory to the Owner. Sleeping and/or cooking shall not be allowed within the building
line of the project under construction.
15.03 Safety and Sanitation
The Contractor, from the commencement of the Work up to completion, shall:
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(a)
furnish and put up all temporary barricades and guard lights necessary for the
protection, proper prosecution and completion of the Work;
(b)
maintain guard lights at the top of the following, but not limited to, falsework tower,
barricades, railings;
(c)
provide and maintain sufficient sanitary toilet accommodation and other necessary
conveniences including, but not limited to, water connections for the use of personnel and
laborers on the work properly secluded from public observation in such manner and at such
points as shall be approved by the Owner, use shall be strictly enforced;
(d)
keep such places clean and free from pests; and
(e)
remove all connections and appliances connected therewith prior to the completion of
the Work.
15.04 Temporary Signs
Signs or advertisements shall only be displayed upon the approval of the Owner. The
Contractor may erect one painted sign indicating the names and addresses of the Owner, the
Contractor, and the various Sub-Contractors. The Owner shall approve the size, color,
lettering, and location of such temporary signs.
15.05 Temporary or Trial Usage
Temporary or trial usage by the Owner of any mechanical device, machinery, apparatus,
equipment, or any work or materials supplied by the Contractor before final completion and
written acceptance by the Owner shall not be construed that the Owner has accepted it.
Such test run shall be made by the Owner for such reasonable length of time, as the Owner
shall deem necessary. The Owner shall not be liable for injury to or breaking of any part of
such work which may be caused by weakness or inaccuracy of structural parts, defective
materials, or workmanship.
The Contractor may, at its own expense, make such trial usage with prior notice to and for the
benefit of the Owner.
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Section V
Protection of Work and Property
Article 16
Protection of Work and Owner’s Property
16.01 Safeguard Measures
The Contractor shall:
(a) take all reasonable measures to protect from damage:
(i) the Works;
(ii) the Owner's property, and;
(iii)the equipment, materials, appliances and fixtures supplied or paid for by the
Owner and shall make good any damage, injury or loss thereto, except such as may
be caused by agents or employees of the Owner, or due to causes considered as
Acts of God;
(b) provide reliable and competent security personnel to guard the site and premises, provide
all doorways with locks under the Contractor’s control and lock such doors at the close of
each day's work; provided, however, that if the Owner deems the security service
inadequate or incompetent, the Contractor shall increase or change the security personnel;
(c) prohibit smoking at the site and post signs to this effect at conspicuous places;
(d) prohibit fires built on the site except by expressed consent of the Owner; and
(e) provide and maintain in good working order an adequate number of fire-fighting
equipment and such equipment shall not be used for any other purpose.
16.02 Old Materials
All old materials of value as determined through a joint inventory by the Owner and the
Contactor found at the work site shall be carefully stored at the place designated by the Owner;
and the Contractor shall be responsible for safekeeping until final acceptance of the Work.
16.03 Trees and Other Plants
Existing vegetation such as but not limited to trees, plants, and shrubs, identified by the
Owner to remain at site shall be boxed and otherwise protected from damage within the site
located outside building lines shall not be cut or removed without written approval from the
Owner and appropriate authorities.
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(a) When specifically included in the Contractor's scope of work, all trees and other plants
that need to be transplanted elsewhere shall be done by the Contractor in accordance
with instructions of the Owner.
(b) Any damage to the abovementioned vegetation, streets, and sidewalks, resulting from
fault or negligence of the Contractor in connection with the execution of the Work shall
be made good and/or replaced or repaired by the Contractor at its own expense.
16.04 Drainage
The natural flows of rivers or streams shall not be interrupted or obstructed unless necessary
in the prosecution of the Work, and provided that the Contractor shall do so in such a way
that no damage shall result to either public or private interests.
The Contractor shall be liable for all damages which may result from its neglect to provide
other means of drainage for any existing natural or artificial drainage which it obstructed
and/or interrupted.
Article 17
Protection of Adjacent Property and Existing Utilities
17.01 Contractor's Responsibility
The Contractor shall adequately protect adjacent property as provided by Law and the
Contract. Any neighboring property or building which may be jeopardized in any manner
must be thoroughly and substantially protected against damage during construction at the
Contractor’s expense.
17.02 Damages to Adjacent Utilities
The Contractor shall be liable for and pay for all damages to adjacent and existing utilities
occasioned in any manner by its act or neglect, or by that of its agents, employees, or workers.
17.03 Condition Survey
Prior to commencement of the Works, the Contractor shall, insofar as is legally and physically
possible, survey and ascertain the condition of any existing adjacent properties or buildings
and record the results thereof through photographic record or by any other means.
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Article 18
Authorization to Contractor for the Protection of Life, Work and
Property During an Emergency
In an emergency endangering life, the Work or the adjoining property, the Contractor, even
without special instruction or authorization from the Owner, shall act, at its discretion, to
prevent or minimize such threatened loss or injury. Emergency work performed by the
Contractor shall be treated as one performed under a Change Order unless the emergency was
caused or brought about by its fault or negligence.
Section VI
Labor, Work and Payments
Article 19
Labor
The Contractor shall employ only competent and duly qualified professionals, technical
personnel, foremen, and construction workers to execute the Work.
Article 20
Work
The purpose of this Article is to ensure that the Contractor is paid for Work completed and for
the Owner to retain such portion of the Contract Price, which, together with the Performance
Bond, is sufficient to complete the Work without additional cost to the Owner.
20.01 Methods and Appliances
The Contractor shall use such methods and appliances for the performance of the Work that
shall ensure the completion of the Work of the required quality within the Completion Time.
At any time, before the commencement or during the progress of the Work, the Owner may
order the Contractor to increase the rate of efficiency or improve the system of operation of
such methods or appliances which appear to the Owner to be inefficient or inappropriate for
producing the quality of work required or ensuring the required rate of progress. The
Contractor shall must comply with such order. Failure, however, of the Owner to demand
such increase of efficiency or improvement of the character or methods of work or of the
appliances shall not relieve the Contractor from its obligation to turn out such quality of work
and rate of progress as are called for in the Contract.
20.02 Laying Out the Work
All stakes and benchmarks placed by the Contractor in laying out the Work and approved by
the Owner shall be carefully guarded and preserved by the Contractor. Unless such stakes or
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marks are displaced or rendered useless through the carelessness or neglect of the Owner or
of its agents or employees, these shall be replaced by the Contractor at its expense.
20.03 Defective Work
Work that does not comply with the Contract shall be considered as defective work. Defective
work shall be condemned by the Owner upon discovery, and when such work has been
condemned, it shall be immediately removed by the Contractor and replaced in accordance
with the Drawings and Specifications.
20.04 Inspection of Work
(a) The Owner shall have access, at all times, to the Work. The Owner shall provide a
sufficient number of inspectors while Work is in progress to ensure its timely
inspection.
(b) The Contractor shall furnish without additional charge all reasonable facilities, labor
and materials necessary for the convenient inspection and tests that may be required
by the inspectors.
(c) The Owner shall provide inspectors authorized to witness the pouring of concrete and
the absence of the Owner's inspectors at any time during the progress of the work shall
be an implicit approval of the quality of the cement mix and the authority to pour it.
(d) Should the Specifications, the Owner's instructions, the Laws, or any public authority
require any work to be specifically tested or approved, the Contractor shall give timely
notice to the Owner and other parties required to conduct or be present at the
inspection of the date and time of such inspection. Inspection by the Owner shall be
made, where practicable, at the source of supply.
(e) Should any work be covered up without timely notice to the Owner, or before the
Owner can make a timely inspection thereof, it must, if required by the Owner, be
uncovered for examination at the Contractor's expense. However, notwithstanding the
failure of the Owner to make a timely inspection of the work before it is covered, its reexamination may be ordered by the Owner and if so ordered, the work must be
uncovered by the Contractor at the Owner's expense. However, if such work be found
not in accordance with the Contract, the Contractor shall shoulder the cost of
uncovering and re-doing the work.
(f) Should there be indications that the work done is not in accordance with the Drawings
and Specifications, the Owner may at any time before final acceptance of the Work,
make an examination of the portion already completed by removing or tearing out the
same. The Contractor shall, on request, furnish all necessary facilities, labor, and
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materials. If such work is found to be defective in any material respect due to fault of
the Contractor or its Sub-Contractors, the Contractor shall defray all the costs of such
examination and of satisfactory reconstruction. If, however, such work is found to
meet the requirements of the Contract, the actual cost of labor and materials
necessarily involved in the examination and replacement plus fifteen percent (15%),
shall be allowed the Contractor and it shall, in addition, if completion of the work has
been delayed thereby, be granted a suitable extension of time on account of the
additional work involved.
(g) All inspection and tests shall be performed as not to unnecessarily delay the work.
20.05 Work During an Emergency
The Contractor shall perform any work and shall furnish and install all materials and
equipment necessary during an emergency endangering life or property.
In such cases,
Article 18.01 shall apply.
20.06 Increased or Decreased Quantities of Work
Adjustments in working drawings to suit field conditions which cannot be foreseen at the time
of calling for bids, may be necessary during construction. It is the essence of the Contract to
recognize such changes in Drawings as normal. The resulting change in quantities or the
increase in the scope of work of the Contractor shall be covered by a Change Order. Work done
by the Contractor without timely notice to the Owner that an adjustment is required of
Contract Price and Completion Time shall be at its own risk and expense.
20.07 Changes in the Work
A.
Changes Ordered by Owner
The Owner may at any time order extra work or make changes by altering, adding to or
deducting from the scope of work and within the general scope thereof; provided however that
the resulting overruns or underruns from the quantities or costs in the Bid do not exceed
twenty-five percent (25%). Such changes shall be ordered by the Owner in writing.
The issuance by the Owner of the revised Drawings or Supplemental Specifications changing
the nature or work to be performed or of the materials, equipment, appliances or fixtures to
be provided, shall be treated as sufficient written instruction of the Owner to the Contractor
to execute the change.
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B.
Change of Sub-Surface Conditions
Should, during the progress of the work, sub-surface conditions at the site materially different
from those shown on the Drawings or indicated in the Specifications or in any Contract
Document, be discovered or encountered, the attention of the Owner shall be called to such
conditions before these are disturbed. The Owner shall thereupon investigate the conditions,
and if it finds that they materially differ from those shown on the Drawings or indicated in the
Specifications or in the report of the Owner's geodetic survey and sub-surface exploration, it
shall make such changes in the Drawings and Specifications as it may find necessary.
Should, as a result of sub-surface conditions, additional or a different type of work be
required, although no change in the Drawings or Specifications may be required, a Change
Order shall be necessary and issued to the Contractor.
C.
Adjustment of Contract
The Work shall be executed under the conditions of the Contract.
If changes under
paragraphs A and B shall cause an increase or decrease in the amount due under the Contract,
or in the time required for or manner of its performance, an equitable adjustment shall be
made, and the Contract modified accordingly. In the event that the Work is increased by such
changes, the Contractor shall furnish proportionate additional Performance Bond.
In case the Owner initiates a deductive change order for the purpose of transferring certain
work items or part of the scope of work to another party or for the Owner to supply certain
construction materials, then the Contractor shall be entitled to fifteen percent (15%) of the
amount deducted in the change order to recover its overhead and profit.
D.
Value of Extra Work
The value of any extra work or change shall be determined by the Owner in any one or more
of the following ways:
a. by a lump sum acceptable to the Contractor;
b. by unit prices either stipulated in the Contract or subsequently agreed upon, provided
the aggregate value of changes does not exceed twenty-five percent (25%) of the
original Contract Price of the particular pay item;
c. by actual direct cost plus value added tax, if any, plus fifteen percent (15%) for
Contractor's profit and overhead.
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Changes required by the Owner which in the aggregate exceed twenty-five percent (25%) for
overruns shall be covered by a supplemental contract. The Contractor shall not be obliged to
execute such changes in accordance with the unit rate specified in its Bid, a supplementary
contract being treated as one separate from and independent of the Contract.
Where the aggregate value of all changes per pay item exceed twenty-five percent (25%) and
the Contractor, without demanding the execution of a supplemental contract executes the
additional work required with objection or protest, the value of the changes shall be
determined in accordance with subparagraph (b) above.
Under case (c) above, the Contractor shall keep and present, in such form as the Owner may
direct, a correct account of the direct cost together with vouchers and other supporting
documents.
E.
Award of Extra Work to Other Contractors
In case any extra work shall be required in the proper performance of the Work, and the
Contractor and the Owner shall fail to arrive at any agreement as to the adjustment of Contract
Price and/or Completion Time, the Owner may award such extra work to another contractor.
20.08 Claims for Extra Cost
Should the Contractor claim that any instructions by the Owner or the Drawings or
Specifications issued after submission of the Bid, involve a change, it shall give the Owner
written notice thereof within fifteen (15) days after the receipt of such instruction, Drawings
or Specifications, as much as possible, before proceeding to execute the work, except in
emergency endangering life or property provided for in Article 18.01.
In like manner, should the Contractor incur a delay in the mobilization and/or in the progress
of its work for reasons attributable to the Owner, such as, but not limited to, Owner-supplied
materials not arriving on time, movements or work executed by the Owner which interfere
with the progress of the Contractor's work, delayed decisions by the Owner and other matters
related thereto, it shall give the Owner written notice thereof within fifteen (15) days after
recognition of such delay.
The amount due to the Contractor under this article shall be paid by the Owner in the same
manner as any other sum to which the Contractor may be entitled under the Contract,
particularly under Articles 20.06, 20.07, 22.05 and 22.10. Delay in said payment shall entitle
the Contractor to an extension of time and to payment of interest in accordance with Article
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22.05. Refusal or unreasonable delay by the Owner to pay the amount due shall entitle the
Contractor to suspend or terminate the Contract whenever permitted under Article 26.
20.09 Cleaning up at Completion of Work
The Contractor shall at all times keep the premises free from accumulations of waste materials
or rubbish caused by its employees. Rubbish shall not be thrown from windows or other parts
of the structure without the use of rubbish chutes. At the completion of the Work, the
Contractor shall remove all temporary work, its rubbish therefrom and all its tools, scaffolding
and surplus materials and turn over the Work for occupancy.
All dirt, stains, and the like on all finishing of floors, walls and ceilings, decorative work,
finishing hardware and fixtures shall be removed.
All woodwork, finishing hardware and all metal works shall be cleaned and polished.
All glazing, marble and tile work shall be washed and cleaned. The Contractor shall also clean
the site as shown in the Drawings and all areas which the Contractor used in the execution of
the project.
Should the Contractor fail to clean up after due notice at the completion of the Work, the
Owner may do so, and the cost thereof charged to the Contractor.
Should a dispute arise between the Contractor and separate contractors as to their
responsibility for cleaning up, the Owner may clean up the site and charge the cost thereof to
the contractors responsible therefor as the Owner shall determine to be just.
20.10 Use of Completed Portions of Work
The Owner may take possession of and use any completed or partially completed portion of
the Work, although the time for completing it or portions thereof may not have expired; but
such taking of possession and use shall not be deemed an acceptance of any work not
completed in accordance with the Contract. Neither shall it be deemed a waiver by the Owner
of the right to claim damages due to delay in the completion of the Work. Shall such prior use
increase the cost or delays the completion of uncompleted work or cause refinishing of
completed work, the Contractor shall be entitled to extra compensation or extension of time
or both.
In the event of the Owner taking over any portion of the Work for its use prior to overall
completion, then the Owner shall issue a Certificate of Completion for such portion taken over
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and release retention as required by the Contract, subject to the provisions of Articles 20.11,
20.12, 20.13, 20.14 and 20.15.
20.11 Substantial Completion and its Effect
A. (a) There is substantial completion when the Contractor completes ninety-five percent
(95%) of the Work, provided that the remaining work and the performance of the work
necessary to complete the Work shall not prevent the normal use of the completed
portion.
(b) The approval by the Owner of the Contractor’s billing for completing at least ninetyfive percent (95%) of the Work shall be deemed the Owner’s acknowledgment that the
Contractor has substantially completed the Work unless the Owner can establish that
the unfinished work prevents the normal use of the completed portion.
(c) The Owner may also issue to the Contractor a written acknowledgement of
substantial completion which may be in the form of a Certificate of Substantial
Completion or equivalent document but the date of this document shall not be
controlling if substantial completion is shown to have been made at an earlier date,
unless the Contractor accepts the certificate without taking exceptions thereto in
writing within fifteen (15) days from receipt.
B. (a) Notwithstanding paragraph A above, the equipment, fixtures and utilities (collectively
referred to as Facility) furnished and/or installed by the Contractor which the Contract
requires to be test-run prior to acceptance shall be test-run successfully before the
Work can be accepted as substantially completed.
(b) The Owner shall, without delay, cause the test-run of the Facility. Should the
Contractor be unable to completely install or furnish and test-run the Facility without
fault on its part, the Contractor shall automatically be entitled to an extension of
Completion Time equal to the period of delay.
C. (a) The Owner shall issue to the Contractor one or more lists of defects found or
discovered on the completed work, otherwise known as a punch list or lists, which the
Contractor must receive from the Owner not later than thirty (30) days from date of
substantial completion.
(b) The Owner may add to the punch list items but only as to corrective work on the items
in the original punch list or lists not later than sixty (60) days from date of substantial
completion.
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A. (a) No liquidated damages for delay beyond the Completion Time shall accrue after the
date of substantial completion of the Work.
(b) If the targeted date of completion has arrived and the Contractor cannot achieve
ninety-five percent (95%) completion of the Work due to the uncompleted Facility
caused by the Owner's fault, negligence or delay of the Owner, the Contractor shall be
deemed to have achieved substantial completion provided:
i.
the Contractor has completed at least ninety-five percent (95%) of the Work
minus the uncompleted Facility; and
ii.
the Contractor has completed the work required on the Facility but for that
which is directly affected by the Owner’s fault, negligence or delay.
The Owner shall release to the Contractor the Contract Price less the cost of the
uncompleted portion of the Work and the amounts mentioned in Article 22.03.
20.12 Period of Making Good of Known Defects or Faults
Period of Making Good of Known Defects or Faults shall mean a period of not more than thirty
(30) days, calculated from the date of receipt by the Contractor of the last item in the punch
list submitted during the period stated in Article 20.11 C (b), during which the Contractor shall
complete the corrective works.
20.13 Making Good of Known Defects or Faults
The Contractor shall execute at its own expense all works necessary for making good of known
defects, imperfections or faults (wear and tear excepted) within the period stated in Article
20.12.
Should the defect or fault be due to a cause attributable to the Owner, the value of such work
shall be ascertained and paid for as if it were additional work.
20.14 Special Test and Inspection
Special test, inspection or approval, not otherwise required in the Contract which the Owner
instructs the Contractor to perform after the date of substantial completion, shall be treated
as a separate work which shall be covered by a supplemental agreement.
20.15 Acceptance of Non-Conforming Work
If the Owner accepts defective or non-conforming work, instead of requiring its removal and
correction, the Owner shall issue to the Contractor a change order to reflect a reduction in the
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Contract Price where appropriate by an amount not exceeding the value of the unfinished
work as determined in the Breakdown of Work and Corresponding Value. Such adjustment
shall be effected whether or not final payment has been made.
20.16 Adjustment of Prices
This Article 20.16 shall not apply to an increase or decrease in the cost of materials and
services provided or supplied by the Owner.
A. There shall be added to or deducted from the Contract Price such sums affecting the
execution of the Work caused by any of the following:
(a) an event of force majeure including abnormal changes in costs of materials;
(b) increases in labor costs mandated by law or wage order;
(c) increase in the cost of oil; and
(d) the deterioration of peace and order.
B. Adjustment of prices due to escalation or reduction of costs of executing the Work shall
be made using a parametric formula to be agreed upon by the parties. Such adjustment
shall be made to provide equitable relief to both the Owner and the Contractor,
allowing neither to gain nor to lose by such fluctuation. Adjustment of the Contract
Price due to escalation shall be for the sole purpose of compensating the Contractor
for the increase in the direct cost of its labor and materials used for the Work, plus
value-added tax.
C. The adjustment of prices shall be determined on the basis of the original Contract unit
prices of labor and materials and such unit prices in effect during the relevant period
of work accomplishment.
D. Unless the parties agree otherwise, the Contract Price shall be adjusted, not oftener
than once a month, due to increase or decrease of the direct cost of labor and materials
of more than five percent (5%) of the original Contract unit prices of the relevant items
of work. The adjustment shall include the first five percent (5%).
E. In case the project is behind schedule by more than fifteen percent (15%) from the
approved construction schedule, not due to excusable delays, the payment for work
accomplished shall be made on the basis of the Contract Price as adjusted in
accordance with the escalation rate applicable during the period in which it should
have been accomplished.
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20.17 Payment in Legal Tender
Payments in money under the Contract shall be made in the currency stipulated. Should it not
be legally possible to deliver such currency, payments shall be made in the currency which is
legal tender in the Philippines.
Article 21
Time of Completion of Work
21.01 Notice to Proceed, When Required
A Notice to Proceed shall be issued by the Owner to the Contractor only when the Contract so
provides. Premature commencement of construction shall be at the Contractor's risk unless it
is due to mutual desire to have the Contractor commence the work early, and the Owner gives
the Contractor express or implied authority to do so.
21.02 Completion Time
The Contractor shall complete the Work in accordance with the Contract within the period
fixed therein and as adjusted due to changes both directed and constructive. If the Contractor
is directed to commence the Work after receipt of the Notice to Proceed to be issued by the
Owner, such shall begin within seven (7) days from receipt of the Notice to Proceed, unless
the Notice to Proceed provides for a later date for commencement of the Work.
For projects involving several phases of work with milestones, commencement date shall be
reckoned from the time the Contractor receives the Notice to Proceed and/or Possession of
Site for each milestone as shall be necessary to enable the Contractor to execute the contract
works in accordance with the schedule stipulated in the Contract.
21.03 Schedule of Construction Work
A. The Contractor, immediately after the Contract has taken effect, shall submit for
approval a construction schedule in a form acceptable to the Owner indicating the
approximate date each pay item will be started and completed, the equipment to be
used and number of workers to be employed to complete it in accordance with the
schedule. The progress of the work shall be at a rate sufficient to complete the Work
in an acceptable manner within the Completion Time.
B. In case of slippage, the Owner may call for meetings with the Contractor and other
contractors involved to determine the possible cause/s contributing to the slow
progress of the construction work, and if such slippage is due to the fault or negligence
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of the Contractor, the Owner may require the Contractor to submit a catch-up schedule
which shall be subject to approval by the Owner.
C. The Owner may order the acceleration of work to meet a desired completion date.
Acceleration of work for the benefit or convenience of the Owner or caused by the fault
of or delay by the Owner, shall be treated as extra work for which a Change Order shall
be issued, and the Contractor shall be paid for the cost of such acceleration. However,
where the reason for acceleration is due to the fault of the Contractor, such additional
cost for acceleration shall be borne by the Contractor alone.
21.04 Extension of Time
A.
The Contractor shall be entitled to an equitable adjustment of Completion Time
where the Contractor is obstructed or delayed in the prosecution or completion of
the Work by:
(a) the act, neglect, delay or fault of the Owner, or any other contractor employed
by the Owner on the Work;
(b) third-party strikes or lockouts or strikes by employees other than the
Contractor's employees or a lockout by an employer other than the Contractor;
(c) an act of God or force majeure;
(d) unsuitable weather conditions which render the work impracticable
or impossible or which slow down the prosecution of the Work;
(e) peace and order conditions;
(f) changes ordered or authorized by the Owner or authorized under the Contract;
and
(g) delay authorized by the Owner pending arbitration of an unresolved
dispute between the Owner and the Contractor.
The Contractor shall be entitled to substantiated prolongation costs only in respect
of (a), (f) and (g), and of (d) when Changes or Variations by the Owner caused the
works to be executed in a period of inclement weather conditions which is different
from that envisaged at the bidding stage.
B.
For delay caused by paragraphs A(b), (c), (d), (e) and (f) of this Article 21.04, the
Contractor shall within fifteen (15) days from the occurrence of the event which
caused the delay, notify the Owner and the Owner shall, not later than fifteen (15)
days from receipt of such notice, give the Contractor an equitable adjustment of the
Completion Time. The failure of the Owner to respond to the Contractor or to give an
equitable adjustment of the Completion Time shall be deemed an approval by the
Owner of the adjustment requested by the Contractor.
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C. (a) For delay caused by paragraphs A(a) and (g), and in default of an agreement between
the Owner and the Contractor, the Contractor shall be entitled to an adjustment of
Completion Time equal to the delay caused by such factor/s. However, the
Contractor shall not be entitled to extension of Completion Time due to the alleged
failure of the Owner to furnish materials or information or provide drawings, unless
in the construction schedule approved by the Owner, these are necessary to
prosecute the Work in the order required, and the failure of the Owner to provide
these caused a delay in the work of the Contractor.
(b) The Owner, taking into account the construction schedule it approved and the
progress of the work of the Contractor, is conclusively presumed to know when
materials, equipment or supplies or drawings to be provided by the Owner shall be
required by the Contractor. The failure of the Contractor to give prior or timely
notice to the Owner of the date when such material, equipment or supplies or
drawings shall be required, shall not be a ground for denying the Contractor an
adjustment of Completion Time.
(c) The failure of the Owner to reply to the Contractor's request for adjustment of
Completion Time within fifteen (15) days from the date of receipt of the request
shall be deemed an approval by the Owner of the adjustment requested by the
Contractor. Such request shall be deemed a formality which does not affect the right
of the Contractor to an equitable adjustment of Completion Time as provided in
this paragraph C.
D. Delay in the payment of any progress billing as required in Article 22.05 shall
automatically extend the Completion Time by a period equal to the delay. The
Contractor shall not be required to give notice to the Owner nor be required to
establish that such delay actually delayed the prosecution of the Work or delayed the
Contractor to a period equal to the delay in the payment of the billing.
21.05 Delay in Completion of the Work
(a) It is understood that time is an essential feature of the Contract.
(b) Upon failure of the Contractor to complete the Work within the Completion Time, the
Contractor shall pay the Owner liquidated damages in the amount stipulated in the
Contract as indemnity. The Owner may deduct from any sum due the Contractor the
amount which has accrued as liquidated damages. Liquidated damages shall accrue from
the first day of delay in completing the Work within the Completion Time until the date
of substantial completion as determined under Article 20.11.
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(c) The amount of damages for corrective works uncompleted within the Period of Making
Good of Known Defects shall be based on the value of such uncompleted corrective work
in the Breakdown of Work and Corresponding Value for approved billings.
(d) Upon failure of the Owner to pay the Contractor for approved billings, the Contractor
shall have the right to suspend performance of the Work under the conditions provided
in Article 27(b), (c) and (d) and be entitled to the payment of interest under Article 22.05.
Article 22
Payments
22.01 Breakdown of Contract Amount
The Breakdown of Work and Corresponding Value as approved by the Owner, shall be used
as the basis for all Requests for Payment, and for determining the value of uncompleted work
or corrective works. Except in cases where unit prices form the basis for payment under the
Contract, the Contractor shall, within fifteen (15) days from the receipt of Notice to Proceed,
or from commencement of the Work, submit a Breakdown of Work and Corresponding Value
of the Contract Amount showing the value assigned to each part of the Work.
22.02 Requests for Payment
The Contractor may submit periodically but not more than once each month a Request for
Payment for work done. The Contractor shall furnish the Owner all reasonable facilities
required for obtaining the necessary information relative to the progress and execution of the
Work. Each Request for Payment shall be computed from the work completed on all items
listed in the Breakdown of Work and Corresponding Value, less a retention of ten percent
(10%) of the progress payment to the Contractor. When fifty percent (50%) of the Contract
has been accomplished, no further retention shall be made on progress billings for the balance
of the Work.
In general, and unless the Contract provides otherwise, no payment shall be made for
materials or items not incorporated in the work, except where such immediate acquisition is
made necessary due to shortages or import or transportation difficulties, in which case,
payment shall be made conditioned upon the submission by the Contractor of bills of sale, or
upon compliance with such other procedures as will establish the Owner's title to such
material or item, or otherwise adequately protect the Owner's interest.
22.03 Authorized Deductions from Value of Completed Work
The Owner may deduct the following from any payment due the Contractor:
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(a) the estimated cost of defective work not remedied;
(b) the amount of substantiated and unpaid claims by Sub-Contractors employed in and
suppliers of materials and labor for the Work unjustifiably withheld by the Contractor;
and
(c) the amount which has accrued as liquidated damages.
22.04 Conditions Relative to Payments
The Owner shall estimate the value of work accomplished by the Contractor using the
schedule stipulated in the Breakdown of Work and Corresponding Value as basis. Such
estimate of the Owner of the amount of work performed shall be taken as the basis for the
compensation to be received by the Contractor. While such preliminary estimates of amount
and quantity shall not be required to be made by strict measurement or with exactness, these
must be made as close as possible to the actual percentage of work accomplishment.
22.05 Owner's Action on Requests for Payment
Within thirty (30) days after a receipt of Request for Progress Payment from the Contractor,
the Owner shall pay the amount as certified. The 30-day period shall be inclusive of the period
required in evaluating and certifying the Contractor’s accomplishment.
In case the Owner fails to pay on time the amount due, the Owner shall pay, in addition to the
amount due, interest thereon computed from the due date in accordance with the 30-day
regular loan rate of the Land Bank of the Philippines prevailing on due date.
22.06 Payment of Unpaid Labor, Sub-Contractors and Suppliers
The Contractor shall pay punctually all workers it employed on the project at not less than
such rates as are provided by existing laws. The Contractor shall also pay promptly all
materials it purchased, equipment it used on the project, and all taxes due from it. The
Contractor shall remit all amounts required by law to be withheld from the salaries or wages
of its employees or workers.
22.07 Payments Over Ninety Percent (90%)
No payment shall be made in excess of ninety percent (90%) of the Contract Price, unless a
statement sworn to before any officer duly authorized to administer oaths is submitted by the
Contractor to the effect that all bills for labor, other than current wages, and all bills for
materials have been duly paid by the Contractor and its Sub-Contractor, if any, excepting only
such bills as may be enumerated in such sworn statement. The Contractor shall render the
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Owner free and harmless from any claims and payment of such bills and shall indemnify the
Owner the cost of defending itself against such claims.
22.08 Other Requirements Before Final Payment
The Contractor shall submit, aside from those which may be provided in the Contract, the
following, as applicable, before final payment is made:
(a) Certificate of Final Building Occupancy unless such certificate cannot be obtained through
no fault of the Contractor;
(b) Certificate of Final Inspection of electrical, telephone, sanitary, mechanical, water, gas,
safety and other utilities unless such certificate cannot be obtained through no fault of the
Contractor;
(c) original and three (3) sets of prints of As-Built Drawings of Electrical, Sanitary, Gas,
Telephone and Mechanical works, if such works are within the scope of the Contract. AsBuilt Drawings are the working drawings showing the system and actual locations of
outlets, fixtures, services and equipment that were installed.
(d) three (3) copies of Directory of Panel Boards and list of circuits;
(e) three (3) copies of Instructions and Manual for operating and maintaining of fixtures and
equipment;
(f) three (3) copies of Keying Schedule; and
(g) a release of liens arising under the Contract as provided in Article 33.01, and the sworn
statements required in Article 22.09 (A) and Article 22.07.
22.09 Acceptance and Final Payment
Whenever the Contractor notifies the Owner that the Work under the Contract has been
completely performed by the Contractor, the Owner shall proceed to verify the work, make
the final estimates, certify to the completion of the work, and accept the same.
A. The Owner shall then, except for causes herein specified, pay to the Contractor within
the period stated in Article 22.05, the amount which shall be found due, excepting
therefrom such sum or sums as may be lawfully retained under any of the provisions
of the Contract; provided that final payment on the Contract shall not be made until
the Contractor has submitted a statement sworn to before an officer duly authorized
to administer oath, showing that all taxes due from it in connection with this Contract
have been duly paid.
B. In case the Owner has reasonable grounds of belief that the Contractor has not
remitted to the appropriate government agency the employer's and employee's
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contributions or the withholding tax on the employees' wages, the Owner may require
evidence of remittance of such contributions or withholding tax in addition to
the sworn statement mentioned above, and withholding release of the amount
sufficient to cover such payments until the evidence required by the Owner is provided
by the Contractor.
C. The acceptance by the Contractor of final payment shall constitute a waiver of all its
claims against the Owner, except the following:
(a) a claim covered by a prior notice to the Owner reserved by the Contractor to be
filed in accordance with the Contract;
(b) a claim pending before and unresolved by the Owner at the time the request for
final payment is made;
(c) a dispute referred to arbitration in accordance with Article 33.05; and
(d) a claim which the Owner acknowledges with the payment not to be covered by it.
22.10 Corrections of Work Before or After Final Payment
A. Acceptance by the Owner of the Work of the Contractor shall relieve the Contractor of
liability for any defect in the Work unless:
(a) The defect is hidden, and the Owner could not have discovered the defect even with
the exercise of reasonable diligence.
(b) The Owner accepted the Work with express reservations seasonably made
as to the specific portion of the Work which was found defective and which requires
replacement or correction. A reservation which fails to specify the portion alleged
to be defective and also fails to state in as much detail as possible the nature and
extent of the defect shall be considered a general reservation and shall be
ineffective.
B. Paragraph A shall apply notwithstanding the issuance of the final certificate of
completion or of full payment.
C. Poor or inferior work or work which does not comply with the Drawings and
Specifications which is apparent upon inspection by the Owner or by the technical
representatives and inspectors employed by the Owner, shall forthwith be condemned
and the Contractor notified thereof to give the Contractor an opportunity, without loss
of time and without incurring unnecessary cost, to correct, remove and replace the
defective work. Work not so condemned within one year from final payment cannot
later be rejected by the Owner. If the Owner instructs the Contractor to remove or
replace it thereafter, the instruction shall be treated as a change order.
D. The Contractor shall be liable to the Owner for any hidden defect discovered and
notified to the Contractor which the Contractor receives from the Owner within the
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warranty period as provided in the Contract, or in default of any provision fixing the
warranty period, within one year from the posting of the Guarantee Bond.
E. Nothing herein shall be deemed to limit the liability of the Contractor to third persons
due to any loss or damage resulting from the collapse of the Work due to defects in the
construction or the use of materials of inferior quality or due to any violation of the
terms of the Contract in accordance with Article 1723 of the Civil Code of the
Philippines.
22.11 Release of Retention
Subject to Article 33.01 herein, the amount retained by the Owner under the provision of the
Contract shall be released not later than the expiration of the Period of Making Good of Known
Defects as provided in Article 20.12 upon the posting of the Contractor's Guarantee Bond.
Section VII Contractor—Separate Contractors—Sub-Contractors Relations
Article 23
Separate Contracts with Other Contractors
The Owner may perform work outside of the Contractor's scope of work or award separate
contracts to other contractors. Should the Contractor claim that delay, damage, or additional
cost is involved as a result, the Contractor shall make such claim as provided in the Contract.
The Owner shall provide for the coordination of the work performed by the Contractor and/or
each separate contractor with the Work of the Contractor.
Article 24
Contractor and Separate Contractors Relations
24.01 Storage of Materials and Work Coordination
The Contractor shall, to the extent possible, afford other contractors reasonable opportunity
for the introduction and storage of their materials and the execution of their work, and shall
properly connect and cooperate in the Owner's effort to coordinate its work with that of other
contractors so as to minimize interference or obstruction in the progress of the work
performed by each of them.
24.02 Cutting, Patching and Digging
The Contractor shall do all cutting, fitting or patching of its work that may be required to make
its several parts come together properly and fit it to receive or be received by work of other
contractors shown upon, or reasonably implied by, the Drawings and Specifications for the
completed structure.
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Any cost caused by defective or ill-timed work shall be borne by the party responsible therefor.
The Contractor shall not endanger any work by cutting, digging or otherwise and shall not cut
or alter the work of any other contractor save with the consent of the Owner.
24.03 Defective Work by Separate Contractors
Should any part of the Contractor's work depend for proper execution or results upon the work
of any other contractor, the Contractor shall inspect and promptly report it to the Owner. Its
failure to inspect and report it shall constitute an acceptance of the other contractor's work as
fit and proper for the reception of its work, except as to defects which may develop in the other
contractor's work after the execution of the Contractor's work.
To insure the proper execution of its subsequent work, the Contractor shall verify work
already in place and shall at once report to the Owner any discrepancy noticed between the
executed work and the drawings.
24.04 Damage Caused by Contractor to Separate Contractors
Should the Contractor cause damage to the work of any separate contractor, the Contractor
agrees to relieve the Owner of any liability which may arise therefrom.
24.05 Damage Caused by Separate Contractors to Contractor
Should any separate contractor cause damage to the Contractor’s work, then the Owner shall
hold harmless the Contractor in respect thereof.
Article 25
Sub-Contracts
25.01 General
It is understood and agreed that no portion of the Work shall be sublet or sub-contracted
without the Owner’s consent. However, any part thereof or any specialty work therein, may
be sublet or sub-contracted, subject to the provisions of Articles 25.02 and 33.03.
The consent of the Owner to the Contractor’s engagement of a Sub-Contractor, by itself, shall
not create any contractual relation between the Sub-Contractor and the Owner.
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25.02 Contractor's Responsibility
The Contractor is as fully responsible to the Owner for the acts and omissions of its SubContractors and the persons either directly or indirectly employed by them, as it is for the acts
and omissions of persons it directly employed.
Section VIII Suspension of Work and Termination of Contract
Article 26
Contractor's Right to Suspend Work or Terminate Contract
The Contractor may suspend work or terminate the Contract upon fifteen (15) days' written
notice to the Owner for any of the following reasons:
(a) Should an order of any court or other public authority caused the work to be stopped or
suspended for an aggregate period of ninety (90) days through no act or fault of the
Contractor or its employees.
(b) Should the Owner fail to pay the Contractor the approved Request for Payment as
provided in Article 22.05.
(c) Should the Owner fail to pay the Contractor any sum within thirty (30) days after its award
by arbitration.
(d) Should the Owner suspend the work without just cause for more than an aggregate period
of fifteen (15) days without the Contractor's consent.
(e) Should the Owner fail to deliver at the construction site Owner- supplied/furnished
construction materials and/or equipment, for the scope of work along the critical path,
beyond fifteen (15) days after its scheduled date for delivery as provided for in the
Contract.
(f) Should approval of Variation Orders for additional works along the critical path be delayed
beyond fifteen (15) days after submission for approval by the Owner or by its duly
designated Representative.
Should the suspension be necessary for proper execution of the Work or by reason of weather
or other conditions affecting the safety of the works and/or the Contractor’s workers, the
Contractor may request the Owner to suspend work in accordance with the applicable
provision or provisions of Article 27.02.
The Contractor shall be entitled to an equitable adjustment of Completion Time and/or
Contract Price for suspension of work due to the above circumstances.
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Article 27
Owner's Right to Suspend the Work
27.01 Suspension Without Cause
The Owner may, at any time and without cause, suspend the work or any portion thereof for
a period of not more than the aggregate period of fifteen (15) days by notice in writing to the
Contractor and shall fix the date on which work shall be resumed. The Contractor shall resume
the Work on the date so fixed. The Contractor will be allowed an adjustment in the Contract
Price to include demobilization and remobilization costs and/or stand-by time as applicable
as well as adjustment of Completion Time which shall not be less than the period of
suspension and shall include the delay due to remobilization of equipment and personnel. The
Owner may not suspend the work without just cause for more than an aggregate period of
fifteen (15) days without the Contractor's consent.
27.02 Just Causes for Suspension of Work
The Owner, by a written order, may direct the Contractor to stop the Work or any portion
thereof, in any of the following cases until the cause for such order has been eliminated:
(a) unsuitable weather or other conditions considered unfavorable for the prosecution of the
work;
(b) failure of the Contractor to correct defective work or to correct conditions which constitute
a danger to its workers or the general public;
(c) failure of the Contractor to carry out valid orders issued by the Owner or to comply with
any provision of the Contract, or its persistent failure to carry out the Works in accordance
with the Contract;
(d) the necessity for adjusting the Drawings to suit site conditions found during construction,
or in case of a change in Drawings and Specifications;
(e) failure of the Contractor to supply sufficient skilled workers, suitable materials or
equipment;
(f) failure of the Owner to supply Owner-supplied/furnished materials on time, where such
failure is due to causes beyond the reasonable control of the Owner;
(g) delay by the Owner in obtaining a right-of-way, where such obligation is assumed by the
Owner under the Contract, and the delay is not due to the fault or negligence by the Owner;
(h) Force majeure or fortuitous event;
(i) peace and order problems; or
(j) any condition similar to the above, beyond the control of the Owner.
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The Contractor shall immediately comply with such order to suspend the Work or any part
thereof for such period or periods and in such manner as the Owner may direct, and during
such suspension shall properly protect and secure the Work.
The Contractor shall be entitled to an equitable adjustment of Completion Time and Contract
Price for suspension of work due to items (a), (d), (f), (g), (h), (i) and (j). However, for item
(a), no such adjustment shall be allowed if unsuitable weather conditions were taken into
account in determining the Completion Time as provided for in the Bid Documents. Should
the actual number of days of unsuitable weather exceed the period taken into account in the
Bid Documents, the Contractor shall be entitled to an adjustment of Completion Time and
Contract Price.
Article 28
Owner's Right to Terminate Contract
28.01 Termination with Cause
The Owner may immediately terminate the Contract, without prior notice to the Contractor,
upon the occurrence of any of the following events:
(a)
should the Contractor be adjudged bankrupt or insolvent;
(b)
should the Contractor make a general assignment of its assets for the benefit of its
creditors;
(c)
should a trustee or receiver be appointed for the Contractor or for any of the Contractor's
property; or
(d)
should the Contractor file a petition for suspension of payments, or to reorganize under
the bankruptcy or similar Laws.
28.02 Other Grounds for Termination with Cause
The Owner may terminate the Contract upon the occurrence of any of the following events:
(a) the Contractor repeatedly fails to supply, based on the construction schedule, the
sufficient number of skilled workers or suitable materials or equipment;
(b) the Contractor repeatedly fails to make, without just cause, prompt payments to SubContractors for labor, materials or equipment, and completion of the Work is being
delayed;
(c) the Contractor disregards the Laws or orders of any public body having jurisdiction;
(d) the Contractor otherwise violates in any substantial way any provision of the Contract; or
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(e) slippage of the Contractor in excess of twenty-five percent (25%) in the prosecution of
Work per agreed construction schedule and/or PERT/CPM including any time
adjustment duly granted to the Contractor.
The Owner may, after giving Contractor and its Surety 15 days' written notice, terminate the
services of the Contractor, exclude the Contractor from the site and take possession of the
Work and of all the Contractor's tools, appliances, construction equipment and machinery at
the site and use the same and incorporate into the Work all materials and equipment stored
at the site including those stored elsewhere for which the Owner has paid the Contractor, and
finish the Work as the Owner may deem expedient. In such case the Contractor shall not be
entitled to receive any further payment until the Work is finished.
28.03 Termination Without Cause
Upon 15 days' written notice to the Contractor, the Owner may, without prejudice to any other
right or remedy, elect to abandon the Work and terminate the Contract. In such case, the
Contractor shall be paid for all work executed and any expense sustained including reasonable
termination costs.
Article 29
Owner's Right to Proceed with the Work after Reduction in the
Contractor's Scope of Work; Partial Takeover from Contractor
29.01 Owner's Right to Carry Out the Work
Should the Contractor:
(a) repeatedly fail to supply sufficient skilled workers or suitable materials or equipment;
(b) repeatedly fail to make prompt payments to Sub-Contractors for labor, materials or
equipment;
(c) fail within a mutually agreed time after written notice of the Owner to carry out remedial
or repair work;
(d) fail despite repeated remedial work to rectify the defects or the result of remedial work
does not conform to the specifications;
(e) fail to perform the Work in accordance with the Contract,
the Owner may, after seven (7) days following receipt by the Contractor of written notice and
without prejudice to any other remedy the Owner may have and without terminating the
Contract, make good such deficiencies. In such case an appropriate change order shall be
issued deducting from the payments then or thereafter due the Contractor the cost of
correcting such deficiencies, including compensation of additional services made necessary
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by such default, neglect or failure. If the payments then or thereafter due the Contractor are
not sufficient to cover such amount, the Contractor shall pay the difference to the Owner.
29.02 Use of Materials and Equipment at Site
The Contractor, upon receiving notice of termination of the Contract, shall vacate the site and
deliver possession of the Work, or the parts thereof specified in the notice, to the Owner. All
materials, plant, appliances and other essential equipment as may be needed for the
construction of the project, shall, at the option of the Owner, remain on the site until the Work
is completed and credit the Contractor a reasonable rental for the use the same.
In case such materials and/or equipment do not belong to the Contractor, then the Owner,
provided it does not violate the lease contract of the Contractor, shall have the option to retain
these for use in the project and pay reasonable rent directly to the lessor for their use,
chargeable against the Contractor.
29.03 Owner to Complete Work
The Owner shall then take over the Work, and use such tools, appliances and materials of
every description as may be found at the site for the purpose of completing the Work.
29.04 Evaluation of Cost of Work
Upon such termination of this Contract, the Owner shall ascertain and fix the value of the
work completed by the Contractor and not paid for by the Owner and of all usable materials
of the Contractor taken over by the Owner at the time of said termination.
(a) If the cost to the Owner of completing the Work, inclusive of reasonable administrative
and managerial services and the charges against the project prior to termination of the
Contract are not in excess of the Contract Price, then the difference between these may be
applied to settle claims filed against the Contractor, and the balance, if any, may be paid
to the Contractor. No amount in excess of the combined value of the unpaid completed
work, retained percentage and usable materials taken over by the Owner at the time of the
termination of the Contract shall be paid to the Contractor until the completion of the
work.
(b) In case of suspension of work, all unpaid work executed including costs incurred during
suspension shall be charged to the Owner.
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29.05 Owner's Right to Recover Damages
Neither the taking over by the Owner of the Work for completion by administration nor the
re-letting of the same to another contractor shall be construed as a waiver of the Owner's
rights to recover damages against the original Contractor and/or its sureties for the failure to
complete the work as stipulated.
In such case, the full extent of the damages for which the Contractor and/or its sureties shall
be liable shall include:
(a) Liquidated damages which may have accrued up to and including the day immediately
before the date the Owner effectively takes over the Work or the date of substantial
completion, whichever occurs earlier;
(b) the excess cost incurred by the Owner in the completion of the project over the Contract
Price inclusive of re-letting the same; Should the Owner complete the Work by
administration, the direct cost of completing the Work shall include the reasonable cost
of managerial and administrative services incurred from the time the Owner effectively
took over the Work by administration.
29.06 Liquidated Damages
1. Where the Contractor refuses or fails to satisfactorily complete the Work within the
specified Contract Time, including any time adjustment duly granted, the Contractor shall
pay the Owner liquidated damages in the amount stipulated in the Contract. Liquidated
damages shall accrue from the first day of delay in completing the Work until the date of
substantial completion as determined under Article 20.11.
2. To be entitled to such liquidated damages, the Owner does not have to prove that it has
incurred actual damages. Such amount shall be deducted from any money due or which
may become due the Contractor under the Contract.
The Owner may collect such
liquidated damages from the retention money or other securities posted by the Contractor,
whichever is convenient to the Owner.
3. In no case, however, shall the total sum of liquidated damages exceed ten percent (10%) of
the total Contract Price.
4. Should, before the completion of the whole of the Work, any part or section of the Work be
certified by the Owner’s Engineer or Representative as completed and occupied or used by
the Owner, the liquidated damages for delay shall be reduced in the proportion which the
value of the part or section so certified bears to the value of the whole of the Work, unless
a contrary provision is stipulated in the Contract.
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Section IX
Responsibilities and Liabilities of Contractor and of Owner
Article 30
Contractor's Responsibility for Accidents and Damages
30.01 Safeguards to be Undertaken by Contractor
The Contractor shall take all necessary precautions for the safety of employees and workers
on the Work, and comply with all Laws to prevent injury to persons on, about or adjacent to
the premises where the Work is being performed. The Contractor shall erect and properly
maintain at all times, as required by the conditions and progress of the Work, such barriers,
shoring, supports, braces, lights, danger signs and necessary safeguards, as will protect
workers and the public and as will effectively prevent any injury to persons and damage to
property in consequence of its work.
The Contractor shall designate a responsible member of its organization at the site, whose
duty shall be the prevention of accidents and damage to the Work, the Owner's property and
adjoining property. The name and position of the person so designated shall be reported by
the Contractor in writing to the Owner.
The Contractor shall be primarily responsible for all safety measures in prosecuting the Work
in accordance with R.A. No. 11058, An Act Strengthening Compliance with Occupational
Safety and Health Standards and Providing Penalties for Violations.
30.02 Owner Not to be Responsible
The Contractor shall render the Owner free and harmless for the death of, the disease
contracted or injury received by the Contractor or any of its employees or laborers, for any
damage done by or to Contractor’s plant or materials from any source or cause; and for
damages caused by the Contractor or its employees to any property of the Owner and
adjoining property.
(a) The Contractor shall indemnify and save harmless the Owner from and against all losses
and all claims, demands, payments, suits, actions, recoveries, and judgement of every
nature and description brought or recovered against the Owner, for any act or omission of
said Contractor, or of its agents or employees, in the execution of the Work or the guarding
of it.
(b) Claims for payment and repairs for damages for which the Contractor is liable shall be
settled by the Contractor at its own expense. In the event of failure of the Contractor to
repair such damages, and pay other claims, the Owner may repair the same and pay the
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claims, and deduct the entire cost of such repairs and claims from the payments due the
Contractor.
30.03 Contractor's Default
The Owner shall have the right to undertake reasonable safety and protection measures in
case of Contractor's default, and charge the cost of such measures to the Contractor.
Article 31
Contractor's Insurance and Bonds
31.01 Contractor's Liability Insurance
The Contractor shall secure and maintain insurance coverage from an insurance company
acceptable to the Owner as will protect itself, its Sub-Contractors, and the Owner from claims
for bodily injury, death or property damage which may arise from work under the Contract.
The Contractor shall not commence work under the Contract until it has obtained the
insurance coverage required and shall have filed the insurance policy or the certified copy of
the insurance policy with the Owner. Such insurance policy shall contain a clause providing
that it shall not be cancelled by the insurance company without written notice to and approval
of the Owner. The nature, extent and amount of such insurance coverage shall be as agreed
upon between the Owner and the Contractor. The Contractor shall ensure that such insurance
policy is effective during the execution of the Work.
31.02 Accident Insurance for Workers
The Contractor shall, in addition to compulsory coverage of workers under the workers’
compensation law, obtain insurance coverage for accidental death or injury of its officers,
employees and laborers without regard to tenure of employment as permanent or regular
workers, project workers or casual employees performing work at the project site. The
premiums to be paid on the insurance policy shall be paid by the Contractor and without cost
to those covered by the policy.
31.03 Contractor's Fire Insurance
In addition to such Fire Insurance as the Contractor elects to carry for its work, it shall secure
and maintain the policies upon such structures and materials and in such amounts as shall be
designated in the joint names of the Contractor and the Owner as their respective interests
may appear.
These policies shall be secured from a company which is satisfactory to the
Owner and delivered to the Owner. A Contractor's All Risk Policy or any insurance for third
party liability of the Contractor shall not include the Owner as co-insured but as a third party.
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31.04 Contractor’s Performance and Payment Bonds
The Contractor, prior to signing the Contract, shall furnish a Performance Bond equal to
fifteen percent (15%) of the Contract amount for the faithful performance of its Work and
fifteen percent (15%) bond covering Contractor’s obligations arising from the Contract to its
workers, Sub-Contractors and suppliers. Such bonds shall be in the form of surety bond as
approved by the Owner, and shall remain in effect until replaced by the Contractor’s
Guarantee Bond.
31.05 Contractor’s Guarantee Bond
The Performance and Payment Bonds will be released by the Owner upon posting by the
Contractor of a Guarantee Bond equivalent to the amount of the retention released to the
Contractor. The Guarantee Bond shall be for a period of one (1) year commencing from the
date of posting as a guarantee that all materials and workmanship installed under the Contract
are of acceptable quality.
31.06 Contractor’s Guarantee-Warranty
(a) The Contractor shall, in case of work performed by its Sub-Contractors and where
guarantees are required, secure guarantees from said Sub-Contractors and deliver copies
of same to the Owner upon completion of work. The term guarantee shall include
warranty.
(b) The Contractor shall and thereby guarantees all work performed by it directly and for
which guarantees are required.
(c) The Contractor shall guarantee for a period of one year, or for a longer period where so
provided in the Specifications, all materials and workmanship installed under the
Contract to be of acceptable quality in every respect and to remain so during the guarantee
period.
(d) Should any defect develop in aforesaid work, within the guarantee period due to fault in
material and/or workmanship, the Contractor shall make all repairs and do all necessary
work to correct defective work to the Owner's satisfaction. Such repairs and corrective
works shall be done by the Contractor at its exclusive expense and shall be commenced
within five (5) days after receipt of written notice by the Owner.
(e) In case the Contractor fails to commence or do the Work so ordered, the Owner may have
the Work done by another contractor and charge the cost thereof against monies retained
as provided for in the Contract and/or against its sureties.
(f) The foregoing remedies shall be without prejudice to the rights of the Owner under the
New Civil Code and other laws now or hereafter that may be applicable.
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31.07 Mandatory Conditions of Bonds
The bonds required of the Contractor shall be subject to mandatory conditions which shall
form part of said bonds.
A Surety issuing any bond called for in the Contract is deemed conclusively to have accepted
the following mandatory conditions:
(a) The Surety agrees in advance to future novation/s of the bond either by adjusting the scope
of the Work of the Contractor caused by directed or constructive changes, the Completion
Time or the Contract Price. Where the Contract provides that the Contractor shall obtain
the approval of the Surety to any such adjustment, the required approval shall be deemed
to be a mere formality, the absence of which shall not affect the obligation and liability of
the Surety under the bond.
(b) The bond issued by Surety under the Contract shall continue to have force and effect
beyond the effectivity period stated in the bond if the Work or the obligation for which it
was issued has not been completely performed. This is without prejudice to the right of
the Surety to demand from the Contractor the payment of the premium on the bond or to
the right of the Owner to pay such unpaid premium for the Contractor. The additional
premium on the bond for an extension of the Contract time due to reasons other than the
fault or negligence of the Contractor shall be billed at cost to the Owner. The bond may
not be cancelled or otherwise terminated by the Surety without the express written
consent of both the Owner and the Contractor. The right of the Surety shall be limited to
demand the payment of unpaid premium.
(c) The Owner shall have a right of recourse against the Surety on the bond until:
i.
it is cancelled by the Owner and returned to the Contractor;
ii.
it is replaced by another bond unless the Owner reserves the right to recover
against the former bond due to default of the Contractor;
iii.
the Owner issues to the Contractor an unconditional Certificate of Acceptance of
the Work.
(d) Until the Owner takes over the Work (not only a part thereof) or otherwise terminates the
Contract, the Contractor shall not be deemed in default, notwithstanding the reduction of
the Contractor's scope of work and any assistance provided by the Owner to enable the
Contractor to catch up and complete the remaining work. The Owner's assistance to the
Contractor shall not prejudice nor limit the right of the Owner to have a later recourse
against the bond.
69
Any provision in the bond thereby issued or in any document made prior to, concurrent with,
or after the issuance of the bond which tends to nullify, modify, or limit by time or otherwise,
any right of the Owner shall be void and shall not prevail over the above mandatory
conditions.
Article 32
Owner’s Responsibilities and Liabilities
32.01 Advance Payment
An advance payment in an amount to be mutually agreed upon shall be paid by the Owner to
the Contractor, provided that the Contractor shall post a surety bond of equivalent amount
callable on demand and acceptable to the Owner to guarantee its repayment. The Contractor
shall use the advance payment for mobilization, purchase of materials, and the like for the
project. This shall be recouped pro rata in the progress billings.
32.02 Protection of Employees and Professionals Performing Services for the
Owner
The Owner shall be responsible for and shall maintain such insurance as will protect it from
liability for personal injury including disease and death of persons under its employ or service
whether as temporary or permanent in status that are assigned to the project.
32.03 Owner's Optional Insurance
The Owner may maintain such insurance as will protect it from its contingent liability for
damages, for personal injury, including death, which may arise from the Work under the
Contract.
32.04 Additional Information and Services Required of the Owner
The Owner shall, at the request of the Contractor, at the time of the execution of the Contract,
furnish to the Contractor reasonable evidence that the Owner can fulfill its obligations under
the Contract. Unless such reasonable evidence is furnished, the Contractor may not be
required to execute the Contract or to commence or continue the Work.
Article 33
Liens, Disputes and Arbitration
33.01 Liens
As a condition to final payment and/or the release of the retention, the Contractor shall
release the Work from any legal liens attaching therewith as a result of unpaid claims of Sub70
Contractors and/or suppliers for the supply of materials and/or equipment to the Contractor
for the project in the form of a sworn statement by the Contractor or a duly authorized officer
of the Contractor stating that all such claims have been fully paid; and furnishing the Owner,
when required, with receipts or acknowledgments of payment issued by the Sub-Contractors
and/or suppliers. Should any of such claims remain unpaid as of the time of executing the
sworn statement, or if the Contractor is unable to furnish the Owner with proof of full payment
to any Sub-Contractor or supplier, the Contractor shall furnish the Owner with an indemnity
bond equal to the amount of the claims still unpaid. The indemnity bond may be issued by the
Surety which previously issued the Contractor's Performance Bond or any other bond
required under the Contract or by any other Surety acceptable to the Owner. The Owner may
recover against the Contractor and/or the Surety, on the latter's indemnity bond, any amount
paid by the Owner to discharge such liens, including costs incurred incident thereto and a
reasonable amount of attorney's fees.
33.02 Assignment
A. The Contract may not be assigned in whole or in part. Any purported assignment made of
the Contract or any part thereof without the consent of either party shall be void and
ineffective.
B. The Owner may nevertheless exact full compliance from both the Contractor and its
assignee without waiving the Owner's right at any time thereafter to reduce the
Contractor's scope of Work by removing from the Contractor the part of the Work which
was assigned and giving it to any other contractor and/or terminating the Contract in
either case, without any further cause than the assignment.
C. Any contract, agreement or binding written commitment entered into by the Contractor
either before or after the execution of the Contract, with any other person as cooperator,
consortium member, joint venture member, or supplier of equipment, technology,
materials or services for the joint execution of the Work, shall be provided to the Owner
at the latter's request. Should the Owner find that the contract, agreement or binding
written commitment is a disguised assignment of the Contract, the Owner shall so notify
the Contractor and shall have the rights under paragraph B above.
33.03 Subcontracting
The Contractor may subcontract any part of the Contract with the approval of the Owner.
The Owner may require the Contractor as a condition for the approval of the subcontract that:
71
(a) the subcontract shall be submitted to the Owner and the subcontract must require the
Sub-Contractor to obtain the same bonds and insurance coverage as are required of the
Contractor under the Contract; and
(b) the Contractor furnish the Owner copies of these insurance policies and bonds.
33.04 Disputes
A. All matters which under the Contract shall be accepted, approved or decided by the Owner
may be entrusted by the Owner to its authorized representative for determination within
a period of fifteen (15) days. The latter shall in all such matters act as agent of the Owner
whose determination binds the Owner.
B. Should the Contractor disagree with the determination by the Owner or by its authorized
representative, both parties shall attempt to settle the dispute amicably before the
commencement of arbitration, otherwise, such shall be deemed a dispute which may be
submitted to arbitration. However, unless both parties agree otherwise, the Contractor
shall move to commence arbitration even if no attempt at an amicable settlement has been
made.
33.05 Settlement of Disputes
A.
Dispute or Disagreement Submitted to Arbitration
Any person who undertakes to do construction work for a project in the Philippines agrees to
abide by and be bound by relevant Philippine laws and to settle construction disputes by
arbitration.
Any dispute arising out of or in connection with the Contract including any question regarding
its existence, validity or termination not resolved as provided above shall be referred to and
finally resolved by arbitration under the Rules of Procedure Governing Construction
Arbitration promulgated pursuant to Executive Order No. 1008 (Construction Industry
Arbitration Law), as amended by R.A. 9285 or the ADR Act of 2004, by either a panel of three
(3) arbitrators or a Sole Arbitrator as may be agreed upon by the parties and appointed in
accordance with such Rules. The place of arbitration shall be in Metro Manila, Philippines.
B.
Delivery of Notice
A party to the Contract shall, by entering into the same, be deemed to be submitting itself to
the jurisdiction of the Construction Industry Arbitration Commission with regard to any
dispute arising out or in connection with the Contract as provided in Article 33.05, paragraph
A above.
72
Such party shall be notified of the claim referred to in Article 33.05, paragraph A and other
notices and processes incident thereto.
Notifications or communications from the CIAC Secretariat and/or the Arbitrator(s) shall be
validly made if they are delivered personally by an authorized representative of CIAC, by
private courier, by registered mail to the address(es) or last known address(es) of the
party(ies) for whom the same are intended appearing in the record, and/or by email sent to
the email addresses of the party(ies) on record, at the option of the Secretariat/Arbitrator(s).
Delivery of initial and subsequent communications from CIAC or from the arbitral tribunal to
a party which has moved out of its address of record to an unknown address, may be made
electronically or by some form of communication, approved by CIAC, to the latter’s last known
address. It shall not be necessary to send more than one communication for this purpose.
In case of a foreign corporation, notice may be given electronically or by registered air mail or
by some form of communication to the latter’s last known address. If the foreign corporation
cannot be given prompt and proper notice to that address, notice shall be given to its resident
agent in the Philippines or to the Securities and Exchange Commission in accordance with the
Corporation Code.
The address of record of a party or the address in the Philippines given in the contract it signs
shall be treated as its last known address unless later, it has given due notice to the parties to
the contract of its change of address in which case, the latter address should be regarded as
its last known address. Additionally, the address of record of the resident agent of a foreign
corporation appearing in the record of appointment as resident agent in the Securities and
Exchange Commission shall also be recognized as the address of record of the foreign
corporation in the Philippines.
Section X
Owner's Representative
The Owner’s Representative shall either be the Architect, the Engineer, Construction Manager
or other person designated by the Owner as the Owner's Representative.
The Owner's Representative shall have the full authority to act for and on behalf of the Owner
in all matters which under the Contract the Owner shall give its consent, approval or decision.
The Owner shall give the Contractor at the time of the Notice to Proceed or any time thereafter
the notice of appointment of the Owner's Representative. Unless the Contractor is notified in
writing by the Owner of the limits of authority of the Owner's Representative, it shall be
73
understood that the authority of the latter to act for and on behalf of the Owner is full and
unqualified.
In the absence of a written communication by the Owner to the Contractor notifying the latter
of the designation of a particular person as Owner’s Representative, the Architect shall
perform the functions and have the authority of the Owner's Representative if the project or
Work involves the construction of a building; but if the project or Work involves the
construction of an engineering structure, other than a building, or the construction of a
building if such constitutes only a minor portion of the project, the Engineer shall perform the
functions and have the authority of an Owner’s Representative.
The Owner’s Representative shall also perform the function of Construction Manager unless
the Owner designates another person as Construction Manager. If the Owner shall designate
a Construction Manager and define its functions, those functions of a Construction Manager
not delegated to the latter shall be performed by the Owner’s Representative.
Notwithstanding the designation by the Owner of an Architect, Engineer and/or Construction
Manager, communications between the Contractor and the Owner shall be made only through
the Owner’s Representative.
74
Section XI
Schedule of Time Limits
The Contractor shall perform its Work subject to certain Time Limits. This indexed section,
as based on the entire General Conditions, is provided in order to facilitate the execution of
its Work.
Title
Time Limit
Reference
Article
No.
1. Contract Time
1.1
Contract Time
Reckoning
The Contractor shall commence the Work within
seven (7) days from receipt of Notice to Proceed
(NTP) unless NTP provides for a later date.
21.02
1.2
Request for Time
To be filed within fifteen (15) days from
occurrence of event which caused delay.
21.04
(par. B)
2. Contract Sum
2.1 Breakdown of Work
& Corresponding
Value
To be submitted within fifteen days from receipt
of the Notice to Proceed
22.01
2.2 Claim for Extra Cost
Notice to be given to Owner within fifteen (15)
days
20.08
(1) after receipt of instruction involving extra cost,
or
(2) after recognition of delay due to Owner’s fault.
3. Progress/Final
Payment
3.1 Owner’s Action on
Payment Request
To be made within thirty (30) days after receipt of
request for payment.
3.2 Owner’s Action on
Final Payment
Request
To act within thirty (30) days from receipt of the
request for payment.
3.3 Delayed Payment
Delay in payment of the amount due shall entitle
the Contractor to interest from due date based on
the thirty (30) day loan rate of the Land Bank of
the Philippines
75
22.05
22.05
3.4 Release of
Retention
4. Substantial
Completion and its
Effects
To be released not later than sixty (60) days from
substantial completion upon posting of
Contractor’s Guarantee Bond.
22.11
Substantial Completion is attained if the
Contractor completes ninety-five percent (95%)
of the works; or the Owner approves the
Contractor’s billing for completing at least 95% of
the works unless the Owner can establish that the
unfinished portion prevents the normal use of the
completed portion. [pars. A(a) & (b)]
20.11
The Owner may issue a Certificate of Substantial
Completion or equivalent document, but the date
of document is not controlling if substantial
completion is shown to have been attained
earlier, unless the Contractor accepts the
certificate without taking any exceptions thereto
in writing within fifteen (15) days from receipt of
the certificate. [par. A(c)]
5. Correction of
Work
5.1 Issuance of Punch
List
The Owner shall issue the punch list/s which the
Contractor must receive not later than thirty (30)
days from date of substantial completion [par. C
(a)].
20.11
The Owner may add to the punch list items but
only as to corrective work in the original punch
list/s not later than sixty (60) days from
substantial completion [par. C(b)].
5.2 Correction Before or
After Final Payment
5.3 Making Good of
Known Defects
6. Contractor’s Right
to Suspend Work or
Terminate Contract
Poor or inferior work, apparent upon inspection
to be condemned & Contractor notified to enable
him to correct, remove & replace the same. Owner
has one year from date of final payment to
condemn poor or inferior work, otherwise,
instructions to remove or replace such shall be
treated as change order.
22.10
Thirty (30)
days
from
receipt
by the
Contractor of the last item in the punch list.
20.12 &
20.13
Contractor may suspend work or terminate
Contract upon 15 days’ written notice to Owner,
for any of the following reasons:
26
(a) Should an order of any court or other public
authority caused the work to be stopped or
76
suspended for a period of ninety (90) days
through no act or fault of the Contractor or its
employees.
(b) Should the Owner fail to pay the Contractor
the approved Request for Payment within thirty
(30) days from receipt.
(c) Should the Owner fail to pay the Contractor
any sum within thirty (30) days after its award by
arbitrators.
(d) Should the Owner suspend the work without
just cause for more than a period of fifteen (15)
days without the Contractor's consent.
(e) Should the Owner fail to deliver at the
construction site Owner-supplied/furnished
construction materials and/or equipment, for the
scope of work along the critical path, beyond
fifteen (15) days after its scheduled date for
delivery as provided for in the Contract.
(f) Should approval of Variation Orders for
additional works along the critical path be
delayed beyond fifteen (15) days after submission
for approval by the Owner or by its duly
designated Representative.
7. Owner’s Right to
Terminate Contract
May be done immediately and without notice:
28.01
Should the Contractor declare bankruptcy,
become insolvent or assigns its assets for the
benefit of its creditors or appointment of trustee/
receiver for Contractor or any of its property.
May be done after giving fifteen (15) days written
notice to Contractor or to its Surety should the
Contractor:
(1) Disregard or violate provisions of the Contract
Documents or Owner’s instructions;
(2) Fail to provide skilled superintendent,
workers or suitable materials or equipment;
(3) Fail to make prompt payment to SubContractors, for labor or materials or equipment;
(4) Disregard the authority of the Owner’s
Representative;
(5) Violate in any substantial way any provisions
of the Contract Documents;
77
28.02
(6) Repeatedly delays prosecution of work per
agreed
Construction
Schedule
and/or
time
extension
duly
PERT/CPM plus any
granted the Contractor.
8. Disputes
The Owner or its representative shall act within a
period of fifteen (15) days on all matters under the
Contract requiring the Owner’s approval,
acceptance or decision.
33.04 &
33.05
Should the Contractor disagree with the
determination by the Owner or by its authorized
representative, both parties shall attempt to settle
the dispute amicably before the commencement
of arbitration, otherwise, such shall be deemed a
dispute which may be submitted to arbitration.
However, unless both parties agree otherwise, the
Contractor shall move to commence arbitration
even if no attempt at an amicable settlement has
been made.
9. Guarantee Bond
9.1 Contractor’s
Guarantee Bond
To be furnished the Owner upon release of
retention and shall be effective for a period of one
year commencing from the date of acceptance as
a guarantee that all materials and workmanship
installed are of acceptable quality.
78
31.05
APPENDIX
79
Appendix “A”.
Amendments to CIAP Document 102
Minor change in the format and changes in the language used pertaining to gender, whereby
sexist language such as he/him/his/workmen were changed to gender-fair language in
compliance with the directive of the Civil Service Commission (CSC) (CSC Memo Circular No.
12-2005), encouraging the use of non-sexist language in all communications, issuances, and
official documents, were among the amendments made in the 2004 Edition of CIAP
Document 102, including updates and improvement on the following provisions, which are
incorporated in the 2022 version:
PROVISION
CHANGES
MADE
Scope
This
document
specifies
general
conditions of contract between a private
owner and contractor applicable for the
construction of any type of structure or
works as contemplated in the Republic
Act No. 4566 otherwise known as
Contractors’ License Law.
ART. 1:
DEFINITIONS
1.06 BID DOCUMENTS
1.03
ADVERTISEMENT
or INVITATION TO
BID
Article 1. Definitions
For the purposes of this document, the
following definitions apply:
1.02
advance
payment
down payment
the money given by the Owner to the
Contractor to help the latter underwrite
significant start up or procurement costs
that may have to be incurred before
construction begins
1.04 As-Built drawings
drawings showing the structure as actually
constructed including system and actual
locations of outlets, fixtures, services and
equipment that were installed
1.08 Bid Documents
collectively refer to all documents provided or
made available to prospective bidders which
include the Invitation to Bid, drawings and
technical specifications and a copy of the
Contract which the winning bidders would be
required to sign with the Owner
1.21 Invitation to Bid
the notice or advertisement published by the
Owner or the invitation issued to prospective
bidders, giving information as to the nature of the
proposed project, conditions for the issuance of
Contract documents, date of bidding, and
information that would give the
Contractor a general idea of the magnitude and
extent of the project
1.22 last known address of a party
refers to the address in the Philippines
given by a party in the Contract.
80
New provision to
define the scope
and coverage of
CIAP
Document
102
Inserted to describe
Art. 1
New item
Lifted
from Art.
22.08, item (c) -Other Requirements
Before Final Payment
Inserted “drawings
and
technical
specifications”
Deleted the word
“Advertisement” in
the title
New item under
definition of terms
1.28 retention
is a sum on money, usually 10% or less of
every progress payment to a Contractor
which the Owner retains to underwrite
future costs of completing the Contractor’s
work and/or remedying the defects therein
1.13 CONTRACT
DOCUMENTS
documents attached to the Agreement identified
therein as Contract Documents, including all
additions,
deletions
and
modifications
incorporated therein. These generally include the
following documents which shall form part of
this Contract and constitute integral parts
hereof:
Inserted
phrase
“which shall form
part of this Contract
and
constitute
integral
parts
hereof”.
Special Provisions or Conditions;
General Conditions;
Specifications;
Drawings;
Contractor’s Performance and
Payment Bonds contemplated
in Clause 31.04 hereof;
Contractor`s Guarantee Bond
contemplated in Clause 31.05
hereof; and
other Bid Documents
Inserted
“Contractor’s
Performance
and
Payment
Bonds
contemplated
in
Clause 31.04 hereof”
and
“Contractor`s
Guarantee
Bond
contemplated
in
Clause 31.05 hereof”
as items (e) and (f)
(a)
(b)
(c)
(d)
(e)
(f)
(g)
2.03 INTERPRETATION OF
CONTRACT
(a) RULE 4
New item under
definition of terms
RULE 4:
Where
the
conflict
cannot be resolved by applying Rule 3 or where
Rule 3 does not apply, the conflict shall be resolved
by giving precedence to the Agreement or to
provisions of a Contract Document higher in order
of priority among the various documents which
comprise the Contract. The order of priority among
these documents shall be as follows:
(a)
(b)
(c)
(d)
(e)
(e)
(f)
(g)
(h)
(i)
(h)(j)
(i)(k)
Agreement as modified by
Notice of Award of Contract, if
such be the case, and the
Contractor's conformity thereto;
Instruction to Bidders and any
amendment thereto;
Addenda to Bid Documents;
Specifications;
Drawings;
Special Conditions of Contract;
General Conditions of Contract;
Drawings;
Contractor’s Performance
and
Payment
Bonds
contemplated in Clause
31.04 hereof;
Contractor`s
Guarantee
Bond
contemplated
in
Clause 31.05 hereof;
Other Contract Documents; and
Other documents forming part
of the Contract attached thereto
or incorporated therein by
reference.
Where the order of precedence is modified in the
Agreement, such modified order of precedence
shall be followed; however, the mere listing of
Contract Documents in the Agreement or any
Contract Document shall not be interpreted as
establishing an order of precedence among them.
81
Changed the order
and
moved
“Drawings” after the
“General Conditions
of Contract”.
Inserted
“Contractor’s
Performance
and
Payment
Bonds
contemplated
in
Clause 31.04 hereof”
and
Contractor`s
Guarantee
Bond
contemplated
in
Clause 31.05 hereof”
as items H and I.
2.04 CONFORMITY TO THE
CONTRACT
2.05
a.
MEANING OF TERMS
2.05 b.
2.05 c.
2.05 d.
A. If there be a variance between the Drawings and
the Specifications, the provisions of the
Specifications shall control prevail. In case of
conflict between the General Conditions or any
modification thereof and the detailed specification
requirements,
the
detailed
specification
requirements shall control prevail.
2.05 Meaning of Terms
(a) The words approved, directed and acceptable,
or words of like shall mean approved by, directed
by, or acceptable to the Owner.
(b) The word furnish shall be understood to mean
to purchase and/or fabricate and deliver to the
jobsite or other location when so designated.
(c) The word install shall mean to build in, mount
in positions, connect or apply any object specified
ready for the intended use.
(d) The word provide shall be understood to mean
to furnish and install.
2.05 e.
(e) The words required or necessary shall mean as
required or necessary for the complete execution of
that portion of the Work.
5.03 LETTER OF
TRANSMITTAL:
5.03 Letter of Transmittal
Submission of shop drawings shall be
accompanied by a letter of transmittal in duplicate,
containing the name of the project, the
Contractor's name, reference drawing number,
titles, and other pertinent data.
10.02 Brand Name Materials and Substitutes
(a) Whenever an item or class of materials is
specified
exclusively
by
brand
name,
manufacturer’s name or catalog reference, only
such item shall be used except as provided in
paragraph (b) hereof.
10.06 Defective Materials
10.02 TRADE NAME
MATERIALS AND
SUBSTITUTES:
10.06 DEFECTIVE
MATERIALS:
All materials different from the Specifications
shall be considered non-conforming to the
minimum requirements. The Contractor shall
remove or replace materials different from the
Specifications when ordered to do so by the Owner.
Upon the Contractor’s failure to do so, the Owner
may remove and replace them and deduct the cost
of removal and replacement from any money due
or to become due the Contractor. No materials, the
defects of which have been subsequently corrected,
shall be used until the Owner’s approval is given.
Changed the word
“control” to “prevail”
Deleted the subtitle
“approved, directed
and acceptable” and
“import”
Deleted the subtitle
“furnish”
Deleted the subtitle
“install”
Deleted the subtitle
“provide”
Deleted the subtitle
“required
or
necessary”
Inserted the
“reference”
word
Changed the word
“trade” into “brand”
Inserted the word
“different from” and
“non-conforming to
the
minimum
requirements”
Should the Specifications, Drawings, Special
Provisions and Supplementary Specifications fail
to provide any detail or description concerning the
nature and quality of the Work to be performed, it
should be understood that generally accepted
construction practice shall be followed.
ART. 11: MATERIALS,
EQUIPMENT,
FIXTURES,
APPLIANCES AND
FITTINGS FURNISHED
BY THE OWNER
Article 11 Materials, Equipment, Fixtures,
Appliances and Fittings Furnished by the Owner
Materials, equipment, fixtures, appliances and
fittings specifically indicated in the Contract shall
be provided in accordance with the Ownerapproved construction schedule.
Materials
furnished by the Owner shall be deemed
acceptable for the purpose intended.
The
82
Added as new 3rd
paragraph
Contractor may continue to use them until
otherwise directed in writing by the Owner. No
further test shall be required unless the Owner
directs otherwise and pays the cost of such test.
Should the Contractor discover any defect in
materials furnished by the Owner, the Contractor
shall advise the Owner in writing. The Contractor
shall be responsible for material loss of or damage
to any Owner-provided material, equipment,
fixture, appliance or fitting in its custody.
14.02 SAFEGUARD FOR
STRUCTURE:
15.03 SAFETY AND
SANITATION:
15.04 TEMPORARY SIGN
16.01 SAFEGUARD
MEASURES:
Unused
Owner-supplied
materials,
equipment, fixtures, appliances and
fittings, the cost of which was not charged
to the Contractor and did not form part of
the Contract Price, shall belong to the
Owner which shall be returned to the
Owner by the Contractor upon completion
of the Work. Those the cost of which was
charged to the Contractor and deducted
from its Contract Price shall belong to the
Contractor.
14.02 Safeguard for Structure
The Contractor shall not load or permit any part of
the structure to be loaded with a weight that will
endanger its safety. The Contractor shall enforce
the Owner’s safety instructions regarding signs,
advertisements, fires and smoking, and any
other factors that may cause endangerment
to safety.
15.03 Safety and Sanitation
The Contractor, from the commencement of the
Work up to completion, shall:
a) furnish and put up all temporary barricades and
guard lights necessary for the protection, proper
prosecution and completion of the Work;
b) maintain guard lights at the top of the following,
but not limited to: falsework tower, barricades,
railings;
c) provide and maintain sufficient sanitary toilet
accommodation
and
other
necessary
conveniences including but not limited to
water connections for the use of personnel and
laborers on the work properly secluded from public
observation in such manner and at such points as
shall be approved by the Owner, use shall be strictly
enforced;
d) keep such places clean and free from pests; and
e) remove all connections and appliances connected
therewith prior to the completion of the Work.
15.04 Temporary Signs
Signs or advertisements shall only be
displayed upon the approval of the Owner.
The Contractor may erect one painted sign
indicating the names and addresses of the
Owner, the Contractor, and the various SubContractors. The Owner shall approve the size,
color, lettering, and location of such temporary
signs.
16.01 Safeguard Measures
The Contractor shall:
a) take all reasonable measures to protect from
damage:
- the Works;
- the Owner's property, and;
83
Added the phrase
“and
any
other
factors that may
cause endangerment
to safety”
Reword “until its” to
“up to” and added the
word “shall”
Added in item (b) the
phrase
“but
not
limited to”
For item (c), changed
the word “ample
sanitary”
into
“sufficient”
and
added the phrase
“conveniences
including but not
limited to”
Changed the word
“flies” into “pests” in
item (d)
Rephrased
paragraph
changed the
“giving”
“indicating”
this
and
word
into
Changed “watchmen”
into
“security
personnel”
16.03 TREES AND OTHER
PLANTS:
16.03 b.
ART. 18: PROTECTION OF
LIFE, WORK AND
PROPERTY DURING
AN EMERGENCY
18.01 AUTHORIZATION
TO CONTRACTOR:
ART. 19: LABOR
- the equipment, materials, appliances
and fixtures supplied or paid for by the
Owner;
- and shall make good any damage,
injury or loss thereto, except such as may
be caused by agents or employees of the
Owner, or due to causes considered as
Acts of God;
b) provide reliable and competent security
personnel to guard the site and premises,
provide all doorways with locks under the
Contractor’s control and lock such doors at the
close of each day's work; provided, however, that
if the Owner deems the security service
inadequate or incompetent, the Contractor shall
increase or change the security personnel;
c) prohibit smoking at the site and post signs to
this effect at conspicuous places;
d) prohibit fires built on the site except by
expressed consent of the Owner; and
(e) provide and maintain in good working order
an adequate number of fire-fighting equipment
and such equipment shall not be used for any
other purpose.
16.03 Trees and Other Plants
Existing vegetation such as but not limited to
trees, plants, and shrubs, identified by the
owner to remain at site shall be boxed and
otherwise protected from damage. Trees within the
site located outside building lines shall not be cut
or removed without written approval from the
Owner and appropriate authorities.
(b) Any damage to the abovementioned
vegetation, streets, and sidewalks, resulting from
fault or negligence of the Contractor in connection
with the execution of the Work shall be made good
and/or replaced or repaired by, at the
contractor’s own expense.
Article 18 Authorization to Contractor for
the Protection of Life, Work and Property
During an Emergency
In an emergency endangering life, the Work or the
adjoining property, the Contractor, even without
special instruction or authorization from the
Owner, shall act, at its discretion, to prevent or
minimize such threatened loss or injury.
Emergency work performed by the Contractor
shall be treated as one performed under a Change
Order unless the emergency was caused or brought
about by its fault or negligence.
Article 19 Labor
The Contractor shall employ only competent and
duly qualified professionals, technical personnel,
foremen, and construction workers to execute the
Work.
84
Inserted the phrases
“vegetation such as
but not limited to”
and “identified by the
owner”.
Reworded the second
sentence, and added
the highlighted words
“written” and “and
appropriate
authorities.”
Reworded the phrase
“Damage to trees,
plants, shrubs”
Modified original title
from “ Authorization
to Contractor” to
“Authorization
to
Contractor for the
Protection of Life,
Work and Property
During
an
Emergency”
Modified text under
Art. 19.01 and moved
Art. 19. Labor.
19.01 CHARACTER OF
WORKMEN:
Deleted the rest of the
sentence which says:“
Upon written request
of the Owner, the
Contractor
shall
remove from the site
an employee who is
careless
or
incompetent
or
obstructs
the
progress of the work
or acts contrary to
instructions
or
conducts
himself
improperly.”
Removed
“Character
Workmen”
ART. 20: WORK
20.13 MAKING GOOD OF
KNOWN DEFECTS OR
FAULTS:
Article 20 Work
The purpose of this Article is to ensure that the
Contractor is paid for Work completed and for the
Owner to retain such portion of the Contract Price,
which, together with the Performance Bond, is
sufficient to complete the Work without additional
cost to the Owner.
20.13 Making Good of Known Defects or Faults
The Contractor shall execute at its own expense all
works necessary for making good of known defects,
imperfections or faults (wear and tear excepted)
within the period stated in Article 20.12.
Should the defect or fault be due to a cause
attributable to the Owner, the value of such
work shall be ascertained and paid for as if
it were additional work.
20.16 ADJUSTMENT OF
PRICES:
20.16 Adjustment of Prices
This Article 20.16 shall not apply to an
increase or decrease in the cost of materials
and services provided or supplied by the
Owner.
A. There shall be added to or deducted from the
Contract Price such sums affecting the execution of
the Work caused by any of the following:
a) an event of force majeure including abnormal
changes in costs of materials;
b) increases in labor costs mandated by law or
wage order;
85
subtitle
of
Originally 20.11 E
2nd paragraph was
rephrased as shown.
Deleted
the
subsequent
paragraph
which
says:
“If the Contractor
shall fail to do any
such corrective work,
the Owner shall,
upon written notice
to the Contractor, be
entitled to carry out
such work by his own
workmen or by other
contractors,
and
charge
the
cost
thereof
to
the
Contractor.
The
Owner may withhold
an
amount
not
exceeding
the
Contract
cost
of
executing such work
from the payment to
the Contractor.”
Highlighted portion
was originally item F
of same article (Art.
20.16)
20.16 B.
22.04 CONDITIONS
RELATIVE TO
PAYMENTS:
22.09 ACCEPTANCE AND
FINAL PAYMENT:
c) increase in the cost of oil, and;
d) the deterioration of peace and order.
B. Adjustment of prices due to escalation or
reduction of costs of executing the work shall be
made using a parametric formula to be agreed
upon by the parties. Such adjustment shall be
made to provide equitable relief to both the Owner
and the Contractor, allowing neither to gain nor to
lose by such fluctuation. Adjustment of the
Contract Price due to escalation shall be for the
sole purpose of compensating the Contractor for
the increase in the direct cost of its labor and
materials used for the Work, plus value-added tax.
22.04 Conditions Relative to Payments
The Owner shall estimate the value of work
accomplished by the Contractor using the schedule
stipulated in the Breakdown of Work and
Corresponding Value as basis. Such estimate of
the Owner of the amount of work performed shall
be taken as the basis for the compensation to be
received by the Contractor. While such
preliminary estimates of amount and quantity
shall not be required to be made by strict
measurement or with exactness, these must be
made as close as possible to the actual percentage
of work accomplishment.
22.09 Acceptance and Final Payment
Whenever the Contractor notifies the Owner that
the Work under the Contract has been completely
performed by the Contractor, the Owner shall
proceed to verify the work, make the final
estimates, certify to the completion of the work,
and accept the same.
D. The Owner shall then, except for causes
herein specified, pay to the Contractor
within the period stated in Article 22.05,
the amount which shall be found due,
excepting therefrom such sum or sums as
may be lawfully retained under any of the
provisions of the Contract; provided that
final payment on the Contract shall not be
made until the Contractor has submitted a
statement sworn to before an officer duly
authorized to administer oath, showing
that all taxes due from it in connection
with this Contract have been duly paid.
E.
In case the Owner has reasonable grounds
of belief that the Contractor has not
remitted to the appropriate government
agency the employer's and employee's
contributions to the Social Security
System or to Medicare or the
withholding tax on the employees' wages,
the Owner may require evidence of
remittance of such contributions or
withholding tax in addition to the sworn
statement
mentioned
above,
and
withholding release of the amount
sufficient to cover such payments until the
evidence required by the Owner is
provided by the Contractor.
F.
The acceptance by the Contractor of final
payment shall constitute a waiver of all its
86
The TWG approved
the deletion of the
phrase “In default of
such agreement, the
parametric formula
under
applicable
laws
shall
be
applied.”
Inserted the phrase
“as basis”
Deleted the phrase
“to
the
Social
Security System
or to Medicare”
claims against the Owner, except the
following:
(a)
a claim covered by a prior notice to the
Owner reserved by the Contractor to be filed in
accordance with the Contract;
(b)
a claim pending before and unresolved by
the Owner at the time the request for final payment
is made;
(c)
a dispute referred to arbitration in
accordance with Article 33.05; and
(d)
a claim which the Owner acknowledges
with the payment not to be covered by it.
22.10 CORRECTIONS OF
WORK BEFORE OR
AFTER FINAL
PAYMENT:
22.10 Corrections of Work Before or After Final
Payment
A. Acceptance by the Owner of the Work of the
Contractor shall relieve the Contractor of liability
for any defect in the Work unless:
a) The defect is hidden and the Owner could not
have discovered the defect even with the exercise
of reasonable diligence.
b) The Owner accepted the Work with express
reservations seasonably made as to the specific
portion of the Work which was found defective and
which requires replacement or correction. A
reservation which fails to specify the portion
alleged to be defective and also fails to state in as
much detail as possible the nature and extent of the
defect shall be considered a general reservation and
shall be ineffective.
Added phrase “also
fails”
B. Paragraph A shall apply notwithstanding the
issuance of the final certificate of completion or of
full payment.
ART. 24: CONTRACTORSEPARATE
CONTRACTORS
RELATIONS
30.01 SAFEGUARDS TO BE
UNDERTAKEN BY
CONTRACTOR:
Article 24 Contractor and Separate Contractors
Relations
Added “and” in the
title of the article
30.01 Safeguards to be Undertaken by Contractor
Modified last part “in
accordance with the
safety
manual
approved by the
Construction
Industry Authority
of the Philippines
(CIAP)” into “R.A.
No. 11058, An Act
Strengthening
Compliance
with
Occupational Safety
and
Health
Standards
and
Providing Penalties
for Violations.”
The Contractor shall take all necessary precautions
for the safety of employees and workers on the
Work, and comply with all Laws to prevent injury
to persons on, about or adjacent to the premises
where the Work is being performed.
The
Contractor shall erect and properly maintain at all
times, as required by the conditions and progress
of the Work, such barriers, shoring, supports,
braces, lights, danger signs and necessary
safeguards, as will protect workers and the public
and as will effectively prevent any injury to persons
and damage to property in consequence of its
work.
The Contractor shall designate a responsible
member of its organization at the site, whose duty
shall be the prevention of accidents and damage to
the Work, the Owner's property and adjoining
property. The name and position of the person so
designated shall be reported by the Contractor in
writing to the Owner.
87
The Contractor shall be primarily responsible for
all safety measures in prosecuting the Work in
accordance with R.A. No. 11058, An Act
Strengthening
Compliance
with
Occupational Safety and Health Standards
and Providing Penalties for Violations.
31.02 ACCIDENT
INSURANCE FOR
WORKERS:
31.07 MANDATORY
CONDITIONS OF
BONDS
31.02 Accident Insurance for Workers
The Contractor shall, in addition to coverage of
workers under applicable statutory and regulatory
requirements on workers’ compensation, obtain
insurance coverage for accidental death or injury
of its officers, employees and laborers without
regard to tenure of employment as permanent or
regular workers, project workers or casual
employees performing work at the project site in
an amount of not less than P100,000.00
per officer, employee or laborer. The
premiums to be paid on the insurance policy shall
be paid by the Contractor and without cost to those
covered by the policy.
31.07 Mandatory Conditions of Bonds
The bonds required of the Contractor shall be
subject to mandatory conditions which shall form
part of said bonds.
A surety issuing any bond called for in the Contract
is deemed conclusively to have accepted the
following conditions:
a) The Surety or bondsman agrees in advance to
future novation/s of the bond either by adjusting
the scope of the Work of the Contractor caused by
directed or constructive changes, the Completion
Time or the Contract Price. Where the Contract
provides that the Contractor shall obtain the
approval of the surety to any such adjustment, the
required approval shall be deemed to be a mere
formality, the absence of which shall not affect the
obligation and liability of the Surety under the
bond.
b) The bond issued by Surety or bondsman
under the Contract shall continue to have force and
effect beyond the effectivity period stated in the
bond if the Work or the obligation for which it was
issued has not been completely performed. This is
without prejudice to the right of the Surety to
demand from the Contractor the payment of the
premium on the bond or to the right of the Owner
to pay such unpaid premium for the Contractor.
The additional premium on the bond for an
extension of the Contract time due to reasons other
than the fault or negligence of the Contractor shall
be billed at cost to the Owner. The bond may not
be cancelled or otherwise terminated by the Surety
without the express written consent of both the
Owner and the Contractor. The right of the Surety
shall be limited to demand the payment of unpaid
premium.
c) The Owner shall have a right of recourse against
the Surety on the bond until:
•
it is cancelled by the Owner and returned to
the Contractor;
88
Deleted the phrase
“in an amount of
not
less
than
P100,000.00 per
officer, employee
or laborer”
Deleted the word
“bondsman
•
•
it is replaced by another bond unless the
Owner reserves the right to recover against the
former bond due to default of the Contractor;
the Owner issues to the Contractor an
unconditional Certificate of Acceptance of the
Work.
Until the Owner takes over the Work (not only a
part thereof) or otherwise terminates the Contract,
the Contractor shall not be deemed in default,
notwithstanding the reduction of the Contractor's
scope of work and any assistance provided by the
Owner to enable the Contractor to catch up and
complete the remaining work. The Owner's
assistance to the Contractor shall not prejudice nor
limit the right of the Owner to have a later recourse
against the bond.
33.04 DISPUTES:
A.
Any provision in the bond thereby issued or in any
document made prior to, concurrent with, or after
the issuance of the bond which tends to nullify,
modify, or limit by time or otherwise, any right of
the Owner shall be void and shall not prevail over
the above conditions.
33.04 Disputes
A.
All matters which under the Contract
shall be accepted, approved or decided by the
Owner may be entrusted by the Owner to its
authorized representative for determination
within a period of fifteen (15) days. The latter shall
in all such matters act as agent of the Owner whose
determination binds the Owner.
B.
B.
Should the Contractor disagree
with the determination by the Owner or by
its authorized representative, both parties
shall attempt to settle the dispute amicably
before the commencement of arbitration,
otherwise, such shall be deemed a dispute
which may be submitted to arbitration.
However, unless both parties agree
otherwise, the Contractor shall move to
commence arbitration even if no attempt at
an amicable settlement has been made.
33.05 Settlement of Disputes
33.05 Settlement of Disputes
A.
A. Dispute
arbitration
DISPUTE OR
DISAGREEMENT
SUBMITTED TO
ARBITRATION
or
disagreement
submitted
to
A.
Dispute or Disagreement Submitted to
Arbitration
Any person who undertakes to do
construction work for a project in the
Philippines agrees to abide by and be bound
by relevant Philippine laws and to settle
construction disputes by arbitration.
89
Original paragraph
states:
“…
such
disagreement shall
be brought before an
adjudicator,
who
shall
be
jointly
engaged
by
the
Owner
and
the
Contractor, not later
than fifteen (15) days
before
the
commencement
of
the Work to resolve
conflicts arising from
the
foregoing
determination by the
Owner or by his
representative.
If
either of the party
disagrees with the
resolution of the
adjudicator,
such
shall be deemed as a
dispute which may be
submitted
to
arbitration.” xxx
Inserted
new
paragraph
“Any
person
who
undertakes to do
construction
work
for a project in the
Philippines agrees to
abide by and be
bound by relevant
Philippine laws and
to settle construction
Any dispute arising out of or in connection with the
Contract including any question regarding its
existence, validity or termination not resolved as
provided above shall be referred to and finally
resolved by arbitration under the Rules of
Procedure Governing Construction Arbitration
promulgated pursuant to Executive Order No.
1008 (Construction Industry Arbitration Law), by
panel of three (3) arbitrators appointed in
accordance with such Rules as amended by
R.A. 9285 or the ADR Act of 2004, by either
a panel of three (3) arbitrators or a Sole
Arbitrator as may be agreed upon by the
parties and appointed in accordance with
such Rules. The place of arbitration shall be in
Metro
Manila,
Philippines.
Resort
to
arbitration shall be made by filing a claim
with the Construction Industry Arbitration
Commission.
B. SUBSTITUTED SERVICE
B.
Substituted Service Delivery of Notice
A party to the Contract shall, by entering into the
same, be deemed to be submitting itself to the
jurisdiction of the Construction Industry
Arbitration Commission with regard to any dispute
arising out or in connection with the Contract as
provided in Article 33.05, paragraph A above.
Such party shall be notified served with of the
claim referred to in Article 34.05 33.05,
paragraph A and other notices and processes
incident thereto upon such claim being served
upon or filed with his co-venturer, partner
or
authorized
representative,
notwithstanding any statement to the
contrary in the Agreement, Contract
Documents, or any other communication to
the other party or after entering into the
Contract, unless he has filed with the
Construction
Industry
Arbitration
Commission an irrevocable special power
of attorney authorizing another person or
entity to receive by personal service at a
definite address in Metro Manila,
Philippines, such claim, notice and
processes. In case a party, his co-venturer,
or authorized representative declines
service of such claim, notice or process or
cannot be found at his given address such
service shall be made upon the said party by
filing the same with the Construction
Industry Authority of the Philippines
(CIAP) at its 54 office address, and filing
the claim, notice or process shall complete
the service upon the party concerned.
90
disputes
arbitration.”
by
Deleted phrase “by
panel of three (3)
arbitrators
appointed
in
accordance
with
such Rules” and
inserted “as amended
by R.A. 9285 or the
ADR Act of 2004, by
either a panel of
three (3) arbitrators
or a Sole Arbitrator
as may be agreed
upon by the parties
and appointed in
accordance
with
such Rules”.
Deleted the sentence:
“Resort
to
arbitration shall be
made by filing a
claim
with
the
Construction
Industry Arbitration
Commission.”
Changed
title of
clause to “Delivery of
Notice”.
Modified
2nd
paragraph,
see
deletions. Add new
paragraphs #3-6.
Notifications or communications from the
CIAC Secretariat and/or the Arbitrator(s)
shall be validly made if they are delivered
personally by an authorized representative
of CIAC, by private courier, by registered
mail to the address(es) or last known
address(es) of the party(ies) for whom the
same are intended appearing in the record,
and/or by email sent to the email addresses
of the party(ies) on record, at the option of
the Secretariat/Arbitrator(s).
Delivery of initial and subsequent
communications from CIAC or from the
arbitral tribunal to a party which has
moved out of its address of record to an
unknown
address,
may
be
made
electronically or by some form of
communication, approved by CIAC, to the
latter’s last known address. It shall not be
necessary to send more than one
communication for this purpose.
In case of a foreign corporation, notice may
be given electronically or by registered air
mail or by some form of communication to
the latter’s last known address. If the
foreign corporation cannot be given
prompt and proper notice to that address,
notice shall be given to its resident agent in
the Philippines or to the Securities and
Exchange Commission in accordance with
the Corporation Code.
The address of record of a party or the
address in the Philippines given in the
contract it signs shall be treated as its last
known address unless later, it has given due
notice to the parties to the contract of its
change of address in which case, the latter
address should be regarded as its last
known address. Additionally, the address
of record of the resident agent of a foreign
corporation appearing in the record of
appointment as resident agent in the
Securities and Exchange Commission shall
also be recognized as the address of record
of the foreign corporation in the
Philippines.
91
92