Benchmarkings

Transportation and communications, the large to medium scale international class port costs USD200 Million often with host country local counterpart funding for civil works.
Large to medium scale airports cost USD200 Million with host country counterpart in local currency for civil works.
Rail, the cost per kilometer of rail inclusive of cost of coaches, USD1 Million per kilometer. Recent price changes has pulled the price much further upwards.
Energy, the cost per Mega Watt production output of a prospective power generating plant, is USD1 Million per Mega Watt.
Housing, for upscale housing, the cost in the Philippines is from PHP20,000 to PHP100,000 per square meter.
Environment, in new technologies for water safety management systems, the cost per 15,000 acres amount to around USD2 Million. For 20-year old technologies, the cost should be about 50% to 75% much lower.
Much benchmark data is already available on the world wide web and directly accessible.
Project Owners or Contractors are advised to beware of supplier or service provider companies that charge double or triple the price of their capabilities. Many companies are not transparent with their competencies, making project owners and general contractors suffer at the end when the true worth of their services, supplies and technologies turn out not to be what was paid for.
On the question of contracting, before the enabling documents or agreements are inked, a middle road should be reached through patient negotiations with suspect companies. However if a decent and fair price cannot be arrived at, no contract should be signed with over billing companies using obsolete software or hardware and providing substandard supplies.

Second site for Liberty Hills Project

The Liberty Hills Residences and Resorts Project will be undertaken in partnership with the government. The site is at Palico, Barangay Bilaran, Municipality of Nasugbu, Batangas.

The procedures and dynamics prior to entering into full function construction with government is a very lengthy one. In this view, Cyberparks determined to include a second site in its portfolio. There will now be two Liberty Hills projects within Batangas Province.

The acquisition of project area for the second site is in the negotiations phase. An announcement will be made shortly on the details of the project and the possible participation of interested contractors for the construction of the residential and entertainment complex

Local Contractors, Foreign Contractors

Local contractors are open to enter into negotiated contracts with Cyberpark. All foreign contractors with new technology inputs are enjoined to match and tie up with allied local contractors or allow partnership and collaboration with contractors under the stable of Cyberpark.

For local contractors, kindly see the project links page.

Deadline for Foreign Contractors Extended

Cyberpark Group extends its deadline for signing of contracts with foreign contractors from the original date of November 10, 2012 to February 10, 2012.

Obtaining of Bid Documents and Forms from Cyberpark Group will end on December 10, 2012.

The deadline for the submission of all contract documents will be on January 10, 2013.

Good luck to the bidders!

Congratulations to Co-operatives

It is a fitting time for celebration. Cooperatives have finally been given recognition by the United Nations. 2012 is declared as the International Year of Co-operatives. This is the beginning for coops to shine further. In the Philippines hundreds of successful cooperatives have achieved so much over time that beginning with a few thousand pesos capital, when their members get their acts together they accomplish what many profit-centered corporations have not been able to do. In the realm of cooperatives, the money turning over in the year just passed is around One Thousand Three Hundred Billion, or P1.3 Trillion. That is just from what we can monitor. What about the gains and revenues of other cooperatives that are not easily reflected in public sites? Even the biggest banks in the country could be put to shame by the success of the cooperative movement. In proportion to their capital expenditure, coops generate higher incomes than many banks put together. The only caveat I learned while working with coops is that once you install the Board of Directors, many of them that were hitherto shy, withdrawn and could hardly even make a campaign speech on their election to officer's posts in their cooperative, become proud, to say the least. But there are ways to place the cooperative's officers properly in line and when that happens, if the General Assembly has vigilant and well-meaning members to its credit, the coop becomes a very successful money making machine. Congratulations to cooperatives all over the world! May your tribe increase!

Standards for Foreign Contractors

Advice to Foreign Contractors:

1.  The standards for foreign contractors for the THP I-III undertakings will vary from country to country.

2.  There will be separately drawn contract terms between Cyberpark and foreign entities, suitable to the culture and legal requirements of both the Philippines and the country of origin of the foreign contractor.

3.  In case of dispute, Philippine law will be applied only to a minimum, the provisions of international arbitration shall be invoked.

In brief, there will be least restrictions for the entry of foreign contractors, as long as they will comply with the reglamentary procedures for foreign companies to undertake business in the Philippines, including the acquisition or application for the appropriate visas for their executives, middle level managers and supervisors as well as staff.  On this score, there will be ample capability for the Procuring Entity to provide assistance to the Contractor, if and when it will be requested.

Techno Hub Project 2

The second project: WWR

White Wave is the second Techno Hub Project of Cyberpark. Read more from here.

The concept for White Wave is also made with this: The need to re-engineer resorts design paradirm

Techno Hub Project 1

The first project: FGH Village.

Due to the influx of mining investors in the mineral-rich Region XIII otherwise also known as the Caraga Region, there is a need for billeting and more residential as well as commercial spaces therein, especially in the regional capital, Butuan City. Read more from this site.

CPHI Standards in Contracting

In conformance with law and the requirements oftentimes of the government that relates to the status of the Corporation, CPHI undertakes to contract out its development projects in terms as close enough to the public sector standard.

CPHI General Conditions of Contract

 

1.       Definitions

For purposes of this Clause, boldface type is used to identify defined terms.

1.1.   The Arbiter is the person appointed jointly by the Procuring Entity and the Contractor to resolve disputes in the first instance, as provided for in GCC Clause 21.

1.2.   Bill of Quantities refers to a list of the specific items of the Work and their corresponding unit prices, lump sums, and/or provisional sums.

1.3.    The Completion  Date  is the date of completion of the Works as certified  by the Procuring Entity’s Representative, in accordance with GCC Clause 49.

1.4.    The  Contract  is  the  contract  between  the  Procuring  Entity  and  the  Contractor  to  execute, complete, and maintain the Works.  It consists of the documents listed in GCC Clause 2.3.

1.5.    The Contract Price is the price stated in the Letter of Acceptance and thereafter to be paid by the Procuring Entity to the Contractor for the  execution of the Works in accordance with this Contract.

1.6.    Contract Time Extension is the allowable period for the Contractor to complete the Works in addition to the original Completion Date stated in this Contract.

1.7.   The Contractor is the juridical entity whose proposal has been accepted by the Procuring Entity and to whom the Contract to execute the Work was awarded.

1.8.    The  Contractor’s  Bid  is  the  signed  offer  or  proposal  submitted  by  the  Contractor  to  the Procuring Entity in response to the Bidding Documents.

1.9.     Days are calendar days; months are calendar months.

1.10.   Dayworks  are  varied  work  inputs  subject  to payment  on a time  basis  for  the  Contractor’s employees and Equipment, in addition to payments for associated Materials and Plant.

1.11.    A Defect is any part of the Works not completed in accordance with the Contract.

1.12.   The Defects Liability Certificate is the certificate issued by Procuring Entity’s Representative upon correction of defects by the Contractor.

1.13.   The  Defects  Liability  Period  is  the one  year  period  between  project  completion and  final acceptance within which the Contractor assumes the responsibility to undertake the repair of any damage to the Works at his own expense.

1.14.  Drawings  are graphical  presentations of the Works. They include  all  supplementary  details, shop drawings, calculations, and other information  provided or approved for the execution of this Contract.

1.15.    Equipment  refers  to all  facilities,  supplies,  appliances, materials  or  things  required  for  the execution and completion of the Work provided by the Contractor and which shall not form or are not intended to form part of the Permanent Works.

1.16.    The Intended Completion Date refers to the date specified in the  SCC when the Contractor is expected to have completed the Works.  The Intended Completion Date may be revised only by the Procuring Entity’s Representative by issuing an extension of time or an acceleration order.

1.17.   Materials are all supplies, including consumables, used by the Contractor for incorporation in the Works.

1.18.     The Notice  to Proceed  is a written  notice issued by the Procuring  Entity  or the Procuring Entity’s Representative to the Contractor requiring the latter to begin the commencement of the work not later than a specified or determinable date.

1.19.   Permanent Works all permanent structures and all other project features and facilities required to be constructed and completed in accordance with this Contract which shall be delivered to the Procuring Entity  and  which  shall  remain  at the  Site  after  the removal  of all Temporary Works.

1.20.    Plant refers to the machinery, apparatus, and the like intended to form an integral part of the Permanent Works.

1.21.   The Procuring Entity is the party who employs the Contractor to carry out the Works stated in the SCC.

1.22.   The Procuring Entity’s Representative refers to the Head of the Procuring Entity or his duly authorized representative, identified in the  SCC,  who shall be responsible  for supervising the execution of the Works and administering this Contract.

1.23.  The Site is the place provided by the Procuring Entity where the Works shall be executed and any other place or places which may be designated in the  SCC, or notified to the Contractor by the Procuring Entity’s Representative as forming part of the Site.

1.24.   Site Investigation Reports are those that were included  in the Bidding Documents  and are factual and interpretative reports about the surface and subsurface conditions at the Site.

1.25.   Slippage is a delay in work execution occurring when actual  accomplishment falls below the target as measured by the difference between the scheduled and actual accomplishment of the Work by the Contractor as established from the work schedule. This is actually described as a percentage of the whole Works.

1.26.   Specifications means the description of Works to be done and the qualities of materials to be used, the equipment to be installed and the mode of construction.

1.27.    The  Start  Date,  as  specified  in  the   SCC,  is  the  date  when  the  Contractor  is  obliged  to commence execution  of  the Works.    It  does  not  necessarily  coincide  with  any  of  the  Site Possession Dates.

1.28.    A  Subcontractor  is  any  person  or  organization  to  whom  a  part  of  the  Works  has  been subcontracted by the Contractor, as allowed by the Procuring Entity, but not any assignee of such person.

1.29.    Temporary Works are works designed, constructed, installed, and removed by the Contractor that are needed for construction or installation of the Permanent Works.

1.30.  Work(s) refer to the Permanent Works and Temporary Works to be executed by the Contractor in accordance with this Contract, including (i) the furnishing  of all labor, materials, equipment and others incidental, necessary or convenient to the complete execution of the Works; (ii) the passing of any tests before acceptance by the Procuring Entity’s Representative; (iii) and the carrying  out  of  all  duties  and  obligations  of  the  Contractor  imposed  by  this  Contract  as described in the  SCC.

2.       Interpretation

2.1     In interpreting the Conditions of Contract, singular also means plural, male also means female or neuter, and the other way around.  Headings have no significance.  Words have their normal meaning under the language of this Contract unless specifically defined.  The Procuring Entity’s Representative will provide instructions clarifying queries about the Conditions of Contract.

2.2     If sectional completion is specified in the  SCC, references in the Conditions of Contract to the Works, the Completion Date, and the Intended  Completion  Date apply to any Section of the Works (other than references to the Completion Date and Intended Completion Date for the whole of the Works).

2.3     The documents forming this Contract shall be interpreted in the following order of priority:
(a)      Contract Agreement;
(b)      Instructions to Bidders;
(c)      Addenda to the Bidding Documents;
(d)      Specifications;
(e)      Drawings;
(f)      Special Conditions of Contract;
(g)      General Conditions of Contract;
(h)      Any other documents listed in the SCC as forming part of this Contract;
3.       Governing Language and Law

3.1     This  Contract has  been  executed  in the  English  language,  which  shall  be  the  binding  and controlling language for all matters relating to the meaning or interpretation of this Contract.  All correspondence and other documents pertaining to this Contract which are exchanged by the parties shall be written in English.

3.2     This Contract shall be interpreted in accordance with the laws of the Republic of the Philippines. In case of serious differences with foreign contractors, governing laws on existing International Arbitration Law may be invoked. 

4.       Communications

Communications between parties that are referred to in the Conditions shall be effective only when in writing.  A notice shall be effective only when it is received by the concerned party.

5.       Possession of Site

5.1     On the date specified in the  SCC, the Procuring Entity shall grant the Contractor possession of so much of the Site as may be required to enable it to proceed with the execution of the Works. If the Contractor suffers delay or incurs cost from failure on the part of the Procuring Entity to give   possession  in   accordance   with   the   terms   of   this   clause,   the   Procuring   Entity’s Representative shall give the Contractor a Contract Time Extension and certify such sum as fair to cover the cost incurred, which sum shall be paid by Procuring Entity.

5.2     If possession of a portion is not given by the date stated in the  SCC Clause 5.1, the Procuring Entity  will  be  deemed  to  have  delayed  the  start  of  the  relevant  activities.    The  resulting adjustments in contact time to address such delay shall be in accordance with GCC Clause 47.

5.3     The Contractor shall bear all costs and charges for special or temporary right-of-way required by it in connection with access to the Site. The Contractor shall also provide at his own cost any additional facilities outside the Site required by it for purposes of the Works.

5.4     The Contractor shall allow the Procuring Entity’s Representative and any person authorized by the Procuring  Entity’s  Representative  access  to  the  Site  and  to  any  place  where  work  in connection with this Contract is being carried out or is intended to be carried out.

6.       The Contractor’s Obligations

6.1     The Contractor shall carry out the Works properly and in accordance with  this Contract. The Contractor shall  provide  all supervision, labor,  Materials,  Plant  and  Contractor's  Equipment, which may be required. All Materials and Plant on Site shall be deemed to be the property of the Procuring Entity.

6.2     The Contractor shall commence execution of the Works on the Start Date and shall carry out the Works in accordance with the Program  of Work submitted by the Contractor, as updated with the approval of the Procuring Entity’s Representative, and complete them by the Intended Completion Date.

6.3     The Contractor shall be responsible for the safety of all activities on the Site.

6.4     The  Contractor  shall  carry  out  all  instructions  of  the  Procuring  Entity’s  Representative  that comply with the applicable laws where the Site is located.

6.5     The Contractor shall employ the key personnel  named in the Schedule of  Key Personnel, as referred to in the  SCC, to carry  out the supervision of  the Works. The Procuring  Entity  will approve any proposed replacement  of  key personnel only if their relevant  qualifications and abilities are equal to or better than those of the personnel listed in the Schedule.

6.6     If  the  Procuring  Entity’s  Representative  asks  the  Contractor  to  remove  a  member  of  the Contractor’s staff or work force, for justifiable cause, the Contractor shall ensure that the person leaves the Site  within seven (7)  days  and  has  no further  connection  with  the Work  in this Contract.

6.7     During Contract implementation, the Contractor and his subcontractors shall abide at all times by all labor laws, including child labor related enactments, and other relevant rules.

6.8     The Contractor shall submit to the Procuring Entity for consent the name and particulars of the person authorized to receive instructions on behalf of the Contractor.

6.9     The Contractor shall cooperate  and share  the Site with other contractors,  public authorities, utilities, and the Procuring Entity between the dates given in the schedule of other contractors particularly when  they  shall  require  access  to  the  Site.    The  Contractor  shall  also  provide facilities  and  services  for  them  during  this  period.    The  Procuring  Entity  may  modify  the schedule of other contractors, and shall notify the Contractor of any such modification thereto.

6.10   Should anything of historical or other interest or of significant value be unexpectedly discovered on the Site, it shall be the property of the  Procuring  Entity.   The Contractor  shall notify the Procuring  Entity’s  Representative of such discoveries and carry out the Procuring Entity’s Representative’s instructions in dealing with them.

7.       Performance Security

7.1     Unless otherwise specified in the  SCC, within ten (10) calendar days from receipt of the Notice of Award from Procuring Entity but in no case later  than the signing of the contract by both parties, the Contractor shall  furnish  the performance  security in any forms prescribed in ITB Clause 32.2.

7.2     The performance security posted in favor of the Procuring Entity shall be forfeited in the event it is established that the Contractor is in default in any of its obligations under the Contract.

7.3     The  performance  security  shall  remain  valid  until  issuance  by  the  Procuring  Entity  of  the Certificate of Final Acceptance.

7.4     The  performance  security  may  be  released  by  the  Procuring  Entity  and  returned  to  the Contractor after  the issuance of the Certificate  of  Final Acceptance subject  to the following conditions:

(a)      There are no pending claims against the Contractor or the surety company filed by the Procuring Entity;

(b)     The Contractor has no pending claims for labor and materials filed against it; and

(c)      Other terms specified in the SCC.

7.5     The Contractor shall post an additional performance  security  following the  amount  and form specified in ITB Clause 32.2 to cover any cumulative increase of more than ten percent (10%) over the original value of the contract  as a result of amendments  to order or change orders, extra work  orders and supplemental agreements, as the case may be.   The  Contractor shall cause the extension of the validity of the performance security to cover approved contract time extensions.

7.6     In case of a reduction in the contract value, or for partially completed, Works under the contract which are usable and accepted by the GOP, and the  use of which, in the judgment  of the implementing agency or the Procuring Entity, will not affect the structural integrity of the entire project, the  Procuring Entity  shall  allow a proportional  reduction  in the original  performance security,  provided  that  any  such  reduction  is  more  than  ten  percent  (10%)  and  that  the aggregate of such reductions is not more than fifty percent (50%) of the original performance security.

7.7     The Contractor, by entering into the Contract with the Procuring Entity, acknowledges the right of the Procuring Entity to institute action pursuant  to   Act 3688 against any subcontractor be they an individual,  firm,  partnership, corporation,  or association supplying the Contractor with labor, materials and/or equipment for the performance of this Contract.

8.       Subcontracting

8.1     Unless otherwise indicated in the  SCC,  the Contractor cannot subcontract Works more than the percentage specified in ITB Clause 8.1.

8.2     Subcontracting of any portion of the Works does not relieve the Contractor of any liability or obligation under this Contract.   The Contractor will be  responsible for the acts, defaults, and negligence of any subcontractor, its agents, servants or workmen as fully as if these were the Contractor’s own acts, defaults, or negligence, or those of its agents, servants or workmen.

8.3     Subcontractors  disclosed  and  identified   during  the  bidding  may  be  changed  during  the implementation of this Contract, subject to compliance with the required qualifications and the approval of the Procuring Entity.

9.       Liquidated Damages

9.1     The Contractor shall pay liquidated damages to the Procuring Entity at the rate per day stated in the SCC for each day that the Completion Date is later than the Intended Completion Date.  The total amount  of liquidated  damages  shall not exceed the amount  defined  in the  SCC.   The Procuring  Entity  may  deduct  liquidated  damages  from  payments  due  to  the  Contractor. Payment of liquidated damages shall not affect the Contractor. Once the cumulative amount of liquidated damages  reaches ten  percent (10%) of the amount  of this Contract, the Procuring Entity shall  rescind  this Contract,  without  prejudice to other courses of action  and  remedies open to it.

9.2     If the Intended  Completion  Date  is extended after  liquidated damages  have  been paid,  the Engineer of the Procuring Entity shall correct any overpayment of liquidated damages  by the Contractor by adjusting the next payment certificate.   The Contractor shall be paid interest on the overpayment, calculated from the date of payment to the date of  repayment, at the rates specified in GCC Clause 40.1.

10.     Site Investigation Reports

The Contractor, in preparing the Bid, shall rely on any Site Investigation Reports referred to in the  SCC supplemented by any information obtained by the Contractor.

11.     The Procuring Entity, Licenses and Permits

The Procuring Entity shall, if requested by the Contractor, assist him in applying for permits, licenses or approvals, which are required for the Works.

12.     Contractor’s Risk and Warranty Security

12.1   The Contractor shall assume full responsibility for the Works from the time project construction commenced up to final acceptance by the Procuring Entity and shall be held responsible for any damage or destruction of the Works except those occasioned by force majeure. The Contractor shall be fully responsible for the safety, protection, security, and convenience of his personnel, third parties, and the public at large, as well as the Works, Equipment, installation, and the like to be affected by his construction work.

12.2   The defects liability period for infrastructure projects shall be one year from project completion up  to  final  acceptance  by  the  Procuring  Entity.    During  this  period,  the  Contractor  shall undertake the repair works, at his own expense, of any damage to the Works on account of the use of  materials  of  inferior  quality  within  ninety  (90)  days  from  the  time  the  Head  of  the Procuring Entity has issued an order to undertake repair.  In case of failure or refusal to comply with this mandate, the Procuring Entity shall undertake such repair works and shall be entitled to full reimbursement of expenses incurred therein upon demand.

12.3   In case the Contractor fails to comply with the preceding paragraph, the Procuring Entity shall forfeit  its  performance  security,  subject  its   property  (ies)  to  attachment  or  garnishment proceedings, and perpetually disqualify it from participating in any public bidding. All payables of the GOP in his favor shall be offset to recover the costs.

12.4   After  final  acceptance  of  the  Works  by  the  Procuring  Entity,  the  Contractor  shall  be  held responsible  for  “Structural  Defects”,  i.e.,  major  faults/flaws/deficiencies  in  one  or  more  key structural elements of the project which may lead to structural failure of the completed elements or  structure,  or “Structural  Failures”,  i.e.,  where  one  or more  key structural  elements  in an infrastructure facility fails or collapses, thereby rendering the facility or part thereof incapable of withstanding the design loads, and/or endangering the safety of the users or the general public:

(a)      Contractor  –  Where  Structural  Defects/Failures  arise  due  to  faults  attributable  to improper construction, use of inferior quality/substandard materials, and any violation of the contract plans and specifications, the contractor shall be held liable;

(b)     Consultants – Where Structural Defects/Failures arise due to faulty and/or inadequate design and specifications as well as construction supervision, then the consultant who prepared the design or undertook construction supervision for the project shall be held liable;

(c)      Procuring    Entity’s   Representatives/Project    Manager/Construction    Managers    and Supervisors  –  The  project  owner’s  representative(s),  project  manager,  construction manager,  and   supervisor(s) shall be held liable in cases where the Structural Defects/Failures are due to his/their willful intervention in altering the designs and other specifications; negligence or omission in not approving or acting on proposed changes to noted  defects  or  deficiencies  in the  design and/or  specifications;  and  the  use  of substandard construction materials in the project;

(d)     Third   Parties   -   Third   Parties   shall   be   held   liable   in   cases   where   Structural Defects/Failures  are  caused  by  work  undertaken  by  them  such  as  leaking  pipes, diggings or excavations, underground cables and electrical wires, underground tunnel, mining shaft and the like, in which case the applicable warranty to such structure should be levied to third parties for their construction or restoration works.

(e)      Users - In cases where Structural Defects/Failures are due to abuse/misuse by the end user of  the  constructed  facility and/or  non–compliance  by  a user  with  the  technical design limits and/or  intended purpose of the same, then the user concerned shall be held liable.

12.5   The warranty  against Structural Defects/Failures,  except those occasioned  on force majeure, shall cover the period specified in the  SCC reckoned from the date of issuance of the Certificate of Final Acceptance by the Procuring Entity.

12.6   The  Contractor  shall  be  required  to  put  up  a  warranty  security  in  the  form  of  cash,  bank guarantee, letter of credit, Prime bank or reputable insurance company surety bond  callable  on demand,  in accordance  with the following schedule:

12.7   The warranty security shall be stated in Philippine Pesos and shall remain effective for one year from the date of issuance of the Certificate  of Final Acceptance by the Procuring Entity, and returned only after the lapse of said one year period.

12.8   In case of structural defects/failure occurring during the applicable warranty period provided in GCC   Clause12.5,   the   Procuring   Entity   shall   undertake   the   necessary   restoration   or reconstruction works and shall be entitled to full reimbursement by the parties found to be liable for  expenses  incurred  therein  upon  demand,  without  prejudice  to  the  filing  of  appropriate administrative, civil,  and/or  criminal  charges  against the  responsible  persons  as well as the forfeiture of the warranty security posted in favor of the Procuring Entity.

13.     Liability of the Contractor

Subject to additional provisions, if any, set forth in the SCC, the Contractor’s liability under this Contract shall be as provided by the laws of the Republic of the Philippines.

14.     Procuring Entity’s Risk

14.1   From the Start Date until the Certificate of Final Acceptance has been issued, the following are risks of the Procuring Entity:

(a)      The risk  of  personal injury,  death,  or loss  of  or damage  to property  (excluding  the Works, Plant, Materials, and Equipment), which are due to:

(i)      any type of use or occupation of the Site authorized by the Procuring Entity after the official acceptance of the works; or

(ii)     negligence, breach of statutory duty, or interference with any legal right by the Procuring Entity or by any person employed by or contracted to him except the Contractor.

(b)     The risk of damage to the Works, Plant, Materials, and Equipment to the extent that it is due to a fault of the Procuring Entity or in the Procuring Entity’s design, or due to war or radioactive contamination  directly  affecting  the  country  where  the  Works  are  to  be executed.

15.     Insurance

15.1   The Contractor shall, under his name and at his own expense,  obtain  and  maintain,  for the duration of this Contract, the following insurance coverage:

(a)      Contractor’s All Risk Insurance;

(b)     Transportation to the project Site of Equipment, Machinery, and Supplies owned by the Contractor;

(c)      Personal injury or death of Contractor’s employees; and

(d)     Comprehensive insurance for third party liability to Contractor’s direct or indirect act or omission causing damage to third persons.

15.2   The  Contractor  shall  provide  evidence  to  the  Procuring  Entity’s  Representative  that  the insurances required under this Contract have been effected and shall, within a reasonable time, provide  copies  of  the  insurance  policies  to  the  Procuring  Entity’s  Representative.         Such evidence and such policies shall be provided to the Procuring  Entity’s  through the Procuring Entity’s Representative.

15.3   The Contractor shall notify the insurers of changes in the nature, extent,  or program for the execution of the Works and ensure the adequacy of the insurances at all times in accordance with the terms of this Contract and shall produce to the Procuring Entity’s Representative the insurance policies in force including the receipts for payment of the current premiums.

The   above  insurance  policies  shall  be  obtained  from  any  reputable  insurance  company approved by the Procuring Entity’s Representative.

15.4   If the Contractor fails to obtain and keep in force the insurances referred to herein or any other insurance which he may be required to obtain under the terms of this Contract, the Procuring Entity may obtain and keep in force any such insurances and pay such premiums as may be necessary for the purpose.  From time to time, the Procuring Entity may deduct the amount it shall pay for said premiums including twenty five percent (25%) therein from any monies due, or which may become due, to the Contractor, without prejudice to the Procuring Entity exercising its right to impose  other  sanctions  against the Contractor  pursuant  to the  provisions of this Contract.

15.5   In the event the Contractor fails to observe the above safeguards, the Procuring Entity may, at the Contractor’s  expense, take whatever measure is deemed necessary for its protection and that of the Contractor’s personnel and third parties, and/or order the interruption of dangerous Works.  In addition, the Procuring Entity may refuse to make the payments under GCC Clause 40 until the Contractor complies with this Clause.

15.6   The  Contractor  shall  immediately  replace  the  insurance  policy  obtained  as  required  in  this Contract, without need of the Procuring  Entity’s  demand,  with a new policy issued by a new insurance company acceptable to the Procuring Entity for any of the following grounds:

(a)      The issuer of the insurance policy to be replaced has:

(i)      become bankrupt;

(ii)     been placed under receivership or under a management committee;

(iii)    been sued for suspension of payment; or

(iv)    been  suspended  by the  Insurance  Commission  and its  license  to engage in business or its authority to issue insurance policies cancelled; or

(v)     Where reasonable grounds  exist that the  insurer may  not  be  able,  fully  and promptly, to fulfill its obligation under the insurance policy.

16.     Termination for Default of Contractor

16.1   The  Procuring  Entity  shall  terminate  this  Contract  for  default  when  any  of  the  following conditions attend its implementation:

16.2   Due to the Contractor’s fault and while the project is on-going, it has incurred negative slippage of fifteen percent  (15%) or more in accordance  with  Presidential  Decree  1870, regardless of whether or not previous warnings and notices have been issued for the Contractor to improve his performance;

16.3   Due to its own fault and after this Contract time has expired, the Contractor incurs delay in the completion of the Work after this Contract has expired; or

16.4   The Contractor:

(a)      abandons the contract Works, refuses or fails to comply with a valid instruction of the Procuring Entity  or fails to proceed  expeditiously  and without delay despite  a written notice by the Procuring Entity;

(b)     does not actually have on the project Site the minimum essential equipment listed on the Bid necessary to prosecute the Works in accordance with the approved Program of Work and equipment deployment schedule as required for the project;

(c)      does not execute the Works in accordance with this Contract or persistently or flagrantly neglects to carry out its obligations under this Contract;

(d)     neglects  or  refuses  to  remove  materials  or  to  perform  a  new  Work  that  has  been rejected as defective or unsuitable; or

(e)      sub-lets any part of this Contract without approval by the Procuring Entity.

16.5   All materials on the Site, Plant, Equipment, and Works shall be deemed to be the property of the Procuring Entity if this Contract is rescinded because of the Contractor’s default.

17.     Termination for Default of Procuring Entity

17.1   The Contractor may terminate this Contract with the Procuring Entity if the works are completely stopped for a continuous period of at least sixty (60) calendar days through no fault of its own, due to any of the following reasons:

(a)      Failure of the Procuring Entity to deliver, within a reasonable time, supplies, materials, right-of-way, or other items it is obligated to furnish under the terms of this Contract; or

(b)     The prosecution of the Work is disrupted by the adverse peace and order situation, as certified by the Armed Forces of the Philippines Provincial Commander and approved by the Secretary of National Defense.

18.     Termination for Other Causes

18.1   The  Procuring  Entity  may  terminate  this  Contract,  in  whole  or  in  part,  at  any  time  for  its convenience.  The Head of the Procuring Entity may terminate this Contract for the convenience of the Procuring  Entity  if he  has  determined  the  existence  of conditions that make Project Implementation economically, financially or technically impractical and/or unnecessary, such as, but not limited to, fortuitous event(s) or changes in law and Private sector company policies.

18.2   The Procuring Entity or the Contractor may terminate this Contract if the other party causes a fundamental breach of this Contract.

18.3   Fundamental breaches of Contract shall include, but shall not be limited to, the following:

(a)      The Contractor stops  work  for twenty eight  (28)  days  when  no  stoppage  of work  is shown on the current Program of Work and the stoppage has not been authorized by the Procuring Entity’s Representative;

(b)     The Procuring Entity’s Representative instructs the Contractor to delay the progress of the Works, and the instruction is not withdrawn within twenty eight (28) days;

(c)      The Procuring Entity shall terminate this Contract if the Contractor is declared bankrupt or insolvent  as determined  with finality  by a court  of competent  jurisdiction.    In this event, termination will be without compensation to the Contractor,  provided that  such termination  will not  prejudice or affect any right of action or remedy which has accrued or will accrue thereafter to the Procuring Entity and/or the Contractor.  In the case of the Contractor's insolvency, any Contractor's Equipment which the Procuring Entity instructs in the notice is to be used until the completion of the Works;

(d)     A payment certified by the Procuring Entity’s Representative is not paid by the Procuring Entity to the Contractor  within  eighty  four  (84)  days  from  the date  of the  Procuring Entity’s Representative’s certificate;

(e)      The Procuring  Entity’s  Representative gives Notice  that failure to  correct  a particular Defect is a fundamental breach of Contract and the Contractor fails to correct it within a reasonable period of time determined by the Procuring Entity’s Representative;

(f)      The Contractor does not maintain a Security, which is required;

(g)     The Contractor has delayed the completion of the Works by the  number  of days for which the maximum amount of liquidated damages can be paid, as defined in the GCC Clause 9; and

(h)     In case  it is determined  prima facie  by the Procuring  Entity  that  the  Contractor  has engaged, before  or during the implementation of  the contract, in unlawful  deeds and behaviors relative to contract acquisition and implementation, such as, but not limited to, the following:

(i)      corrupt, fraudulent, collusive  and coercive practices as defined  in  ITB Clause 3.1(a);

(ii)     drawing up or using forged documents;

(iii)    using  adulterated  materials,  means  or  methods,  or  engaging  in  production contrary to rules of science or the trade; and

(iv)    any other act analogous to the foregoing.

18.4   The Funding Source or the Procuring Entity, as appropriate, will seek to impose the maximum civil, administrative and/or criminal penalties available under the applicable law on individuals and organizations deemed to be involved with corrupt, fraudulent, or coercive practices.

18.5   When persons from either party to this Contract  gives notice of a fundamental breach to the Procuring Entity’s Representative  in order to terminate the existing contract for a cause other than those listed under  GCC Clause 18.3, the Procuring Entity’s Representative shall decide whether the breach is fundamental or not.

18.6   If this Contract is terminated, the Contractor shall stop work immediately, make the Site safe and secure, and leave the Site as soon as reasonably possible.

19.     Procedures for Termination of Contracts

19.1   The following provisions shall govern the procedures for the termination of this Contract:

(a)      Upon receipt of a written report of acts or causes which may constitute ground(s)  for termination as aforementioned, or upon its  own initiative, the Implementing Unit shall, within a period of seven (7) calendar days, verify the existence of such ground(s) and cause the execution of a Verified Report, with all relevant evidence attached;

(b)     Upon recommendation by the Implementing Unit, the Head of the Procuring Entity shall terminate  this  Contract  only  by  a  written  notice  to  the  Contractor  conveying  the termination of this Contract. The notice shall state:

(i)      that this Contract is being terminated for any of the ground(s) afore-mentioned, and a statement of the acts that constitute the ground(s) constituting the same;

(ii)     the extent of termination, whether in whole or in part;

(iii)    an instruction to the Contractor to show cause as to why this Contract should not be terminated; and

(iv)    special instructions of the Procuring Entity, if any.

The Notice to Terminate shall be accompanied by a copy of the Verified Report;

(c)      Within a period of seven (7) calendar days from receipt of the Notice of Termination, the Contractor shall submit  to the Head  of the  Procuring  Entity  a verified position  paper stating why the contract should not be terminated.  If the Contractor fails to show cause after the lapse of the seven (7) day period, either by inaction or by default, the Head of the Procuring Entity shall issue an order terminating the contract;

(d)     The Procuring  Entity  may,  at anytime  before receipt  of the Bidder’s  verified  position paper to withdraw the Notice to Terminate if it is determined that certain items or works subject  of  the  notice   had   been   completed,   delivered,   or  performed  before   the Contractor’s receipt of the notice;

(e)      Within a non-extendible  period of ten (10) calendar  days from  receipt  of the verified position paper, the Head of the Procuring Entity shall decide whether or not to terminate this Contract.  It shall serve a written notice to the Contractor of its decision and, unless otherwise provided in the said notice, this Contract is deemed terminated from receipt of the Contractor of the notice of decision.   The termination  shall only be based on the ground(s) stated in the Notice to Terminate; and

(f)      The Head of the Procuring Entity may create a Contract Termination Review Committee (CTRC) to assist him in the discharge of this function.   All decisions recommended by the CTRC shall be subject to the approval of the Head of the Procuring Entity.

19.2   Pursuant  to Section  69(f)  of RA  9184  and  without  prejudice  to  the  imposition  of additional administrative sanctions as the internal rules of the agency may provide and/or further criminal prosecution as provided by  applicable  laws, the procuring  entity shall impose  on contractors after the  termination  of the contract  the penalty  of suspension  for one (1) year for  the first offense, suspension for two (2) years for the second  offense  from participating  in the public bidding  process,  for  violations  committed  during  the  contract  implementation  stage,  which include but not limited to the following:

(a)      Failure of the contractor, due solely to his fault or negligence, to mobilize and start work or performance within the specified period in the Notice to Proceed (“NTP”);

(b)     Failure  by the contractor to fully and faithfully comply  with its  contractual obligations without  valid  cause,  or  failure  by  the  contractor  to  comply  with  any  written  lawful instruction of the procuring entity or its representative(s) pursuant to the implementation of the contract.  For the procurement of infrastructure projects or consultancy contracts, lawful instructions include but are not limited to the following:

(i)      Employment  of  competent  technical  personnel,  competent  engineers  and/or work supervisors;

(ii)     Provision of warning signs and barricades in accordance  with  approved plans and specifications and contract provisions;

(iii)    Stockpiling in proper places of all materials and removal from the project site of waste and excess materials, including broken pavement and excavated debris in accordance with approved plans and specifications and contract provisions;

(iv)    Deployment of committed equipment, facilities, support staff and manpower; and

(v)     Renewal of the effectivity dates of the performance security after its expiration during the course of contract implementation.

(c)      Assignment and subcontracting of the contract or any part thereof or substitution of key personnel named in the proposal without prior written approval by the procuring entity.

(d)     Poor performance  by the contractor or unsatisfactory  quality and/or  progress  of work arising  from  his  fault  or  negligence  as  reflected  in  the  Constructor's  Performance Evaluation System (“CPES”) rating sheet.  In the absence of the CPES rating sheet, the existing performance monitoring system of the procuring entity shall be applied.  Any of the following acts by the constructor shall be construed as poor performance:

(i)      Negative slippage of 15% and above within the critical path of the project due entirely to the fault or negligence of the contractor; and

(ii)     Quality   of  materials   and   workmanship  not   complying   with   the   approved specifications arising from the contractor's fault or negligence.

(e)      Willful or deliberate abandonment or non-performance of the project or contract by the contractor resulting to substantial breach thereof without lawful and/or just cause.

In addition to the penalty of suspension, the performance security posted by the contractor shall also be forfeited.

20.     Force Majeure, Release From Performance

20.1   For purposes of this Contract the terms “force majeure”  and “fortuitous  event” may be used interchangeably.  In this regard, a fortuitous event or force majeure shall be interpreted to mean an  event  which  the  Contractor  could  not  have  foreseen,  or  which  though  foreseen,  was inevitable.  It shall not include ordinary unfavorable weather conditions; and any other cause the effects of which could have  been  avoided  with the  exercise  of  reasonable diligence  by the Contractor.

20.2   If this Contract is discontinued by an outbreak of war or by any other event entirely outside the control of either the Procuring  Entity or the Contractor, the Procuring Entity’s  Representative shall certify that this Contract has been discontinued.  The  Contractor  shall make the Site safe and stop work as  quickly as possible after receiving this certificate  and shall be paid for all works  carried  out  before  receiving  it  and  for  any  Work  carried  out  afterwards  to  which  a commitment was made.

20.3   If the event continues for a period of eighty four (84) days, either party may then give notice of termination, which shall take effect twenty eight (28) days after the giving of the notice.

20.4   After termination, the Contractor shall be entitled to payment of the unpaid balance of the value of the Works executed and of the materials and Plant reasonably delivered to the Site, adjusted by the following:

(a)      any sum to which the Contractor is entitled under GCC Clause 28; (b)  the cost of his suspension and demobilization;

(c)      any sum to which the Procuring Entity is entitled.

20.5   The net balance due shall be paid or repaid within a reasonable time period from the time of the notice of termination.

21.     Resolution of Disputes

21.1   If any dispute or difference of any kind whatsoever shall arise between the parties in connection with the implementation of the contract covered by the Act and this IRR, the parties shall make every effort to resolve amicably such dispute or difference by mutual consultation.

21.2   If the Contractor believes that a decision taken by the PROCURING ENTITY’s Representative was either outside  the authority  given to the  PROCURING  ENTITY’s  Representative by this Contract or that the  decision was wrongly taken, the decision shall be referred to the Arbiter indicated in the  SCC within fourteen (14) days of the notification of the PROCURING ENTITY’s Representative’s decision.

21.3   Any and all disputes arising from the implementation of this Contract covered by the R.A. 9184 and its IRR shall be submitted to arbitration  in the  Philippines  according to the provisions  of Republic  Act  No.  876,  otherwise  known  as  the  “  Arbitration  Law”  and  Republic  Act  9285, otherwise known as the “Alternative Dispute Resolution Act of 2004”: Provided, however, That, disputes that are within the competence of the Construction Industry Arbitration Commission to resolve shall be referred thereto.  The process of arbitration shall be incorporated as a provision in this  Contract  that  will  be  executed  pursuant to the  provisions  of the  Act  and  its  IRR-A: Provided, further, That, by mutual agreement, the parties may agree in writing to resort to other alternative modes of dispute resolution.  Additional instructions on resolution of disputes, if any, shall be indicated in the SCC.

22.     Suspension of Loan, Credit, Grant, or Appropriation

In  the  event  that  the  Funding  Source  suspends  the  Loan,  Credit,  Grant,  or  Appropriation  to  the Procuring Entity, from which part of the payments to the Contractor are being made:

(a)      The Procuring Entity is obligated to notify the Contractor of such suspension within seven (7) days of having received the suspension notice.

(b)     If the Contractor has not received sums due it for work already done within forty five (45) days from the time the Contractor’s claim for payment  has been certified by the Procuring Entity’s Representative,  the  Contractor   may   immediately   issue  a  suspension  of  work  notice  in accordance with SCC Clause 45.2.

23.     Procuring Entity’s Representative’s Decisions

23.1   Except  where otherwise  specifically stated,  the Procuring  Entity’s  Representative will decide contractual matters between the Procuring Entity and the Contractor in the role representing the Procuring Entity’s

23.2   The Procuring  Entity’s  Representative may delegate  any of his duties and  responsibilities to other  people,  except  to  the  Arbiter,  after  notifying  the  Contractor,  and  may  cancel  any delegation after notifying the Contractor.

24.     Approval of Drawings and Temporary Works by the Procuring Entity’s Representative

24.1   All Drawings prepared by the Contractor for the execution of the Temporary Works, are subject to prior approval by the Procuring Entity’s Representative before its use.

24.2   The Contractor shall be responsible for design of Temporary Works.

24.3   The Procuring Entity’s Representative’s approval shall not alter the Contractor’s responsibility for design of the Temporary Works.

24.4   The Contractor shall obtain approval of third parties  to the design  of the  Temporary  Works, when required by the Procuring Entity.

25.     Acceleration and Delays Ordered by the Procuring Entity’s Representative

25.1   When the Procuring Entity wants the Contractor to finish before the Intended Completion Date, the Procuring  Entity’s  Representative  will  obtain priced proposals for achieving the necessary acceleration from the Contractor.  If the Procuring Entity accepts these proposals, the Intended Completion Date will be adjusted accordingly and confirmed by both the Procuring Entity and the Contractor.

25.2   If the Contractor’s Financial Proposals for an acceleration are accepted by the Procuring Entity, they are incorporated in the Contract Price and treated as a Variation.

26.     Extension of the Intended Completion Date

26.1   The Procuring Entity’s Representative shall extend the Intended Completion Date if a Variation is issued which makes it impossible for the Intended Completion  Date to be achieved by the Contractor  without  taking  steps  to  accelerate  the  remaining  work,  which  would  cause  the Contractor to incur additional costs.  Unless specified in the SCC, no payment shall be made for any event which may warrant the extension of the Intended Completion Date.

26.2   The Procuring Entity’s  Representative shall decide whether and by how  much to extend  the Intended Completion Date within twenty one (21) days of the Contractor asking the Procuring Entity’s Representative for a decision thereto after fully submitting all supporting information.  If the Contractor has failed to give early warning of a delay or has failed to cooperate in dealing with a delay, the delay by this failure shall not be considered in assessing the new Intended Completion Date.

27.     Right to Vary

27.1   The  Procuring  Entity’s  Representative  with  the  prior  approval  of  the  Procuring  Entity  may instruct Variations,  up to a maximum cumulative  amount of ten percent (10%) of the original contract cost.

27.2   Variations shall be valued as follows:

(a)      At a lump sum price agreed between the parties;

(b)     where appropriate, at rates in this Contract;

(c)      in the absence of appropriate rates, the rates in this Contract shall be used as the basis for valuation; or failing which

(d)     at appropriate new rates, equal to or lower than current industry rates and to be agreed upon by both parties and approved by the Head of the Procuring Entity.

28.     Contractors Right to Claim

If the Contractor incurs cost as a result of any of the events under GCC Clause 13, the Contractor shall be entitled to the amount of such cost. If as a result of any of the said events, it is necessary to change the Works, this shall be dealt with as a Variation.

29.     Dayworks

29.1   Subject to GCC Clause 43 on Variation Order, and if applicable as  indicated in the  SCC, the Dayworks rates in the Contractor’s Bid shall be used for small additional amounts of work only when  the  Procuring  Entity’s  Representative  has  given  written  instructions  in  advance  for additional work to be paid for in that way.

29.2   All work to be paid for as Dayworks shall be recorded by the Contractor on forms approved by the Procuring Entity’s Representative.  Each completed form shall be verified and signed by the Procuring Entity’s Representative within two days of the work being done.

29.3   The Contractor shall be paid for Dayworks subject to obtaining signed Dayworks forms.

30.     Early Warning

30.1   The Contractor shall warn the Procuring Entity’s Representative at the  earliest  opportunity of specific likely future events or circumstances that may adversely affect the quality of the work, increase  the  Contract  Price,  or  delay  the  execution  of  the  Works.    The  Procuring  Entity’s Representative may require the Contractor to provide an estimate of the expected effect of the future event or circumstance on the Contract Price and Completion Date.  The estimate shall be provided by the Contractor as soon as reasonably possible.

30.2   The  Contractor  shall  cooperate  with  the  Procuring  Entity’s  Representative  in  making  and considering proposals for how the effect of such an event or circumstance can be avoided or reduced by anyone  involved in the work  and in carrying out any resulting  instruction  of the Procuring Entity’s Representative.

31.     Program of Work

31.1   Within  the  time  stated  in  the   SCC,  the  Contractor  shall  submit  to  the  Procuring  Entity’s Representative for approval a Program of Work showing the general methods, arrangements, order, and timing for all the activities in the Works.

31.2   An update of the Program of Work shall the show the actual progress achieved on each activity and the effect  of the progress  achieved on the  timing  of the remaining  work,  including  any changes to the sequence of the activities.

31.3   The Contractor shall submit to the Procuring Entity’s Representative for  approval an updated Program of Work at intervals  no longer than the  period stated in the  SCC.   If the Contractor does not submit an updated Program of Work within this period, the PROCURING ENTITY’s Representative may withhold the amount stated in the  SCC from the next payment certificate and continue to withhold this amount until the next payment after the date on which the overdue Program of Work has been submitted.

31.4   The Procuring  Entity’s  Representative’s  approval of the Program  of Work  shall not alter the Contractor’s obligations.  The Contractor may revise the Program of Work and submit it to the Procuring Entity’s Representative again at any time.  A revised Program of Work shall show the effect of any approved Variations; and if allowed, any Compensation Event.

31.5   When the  Program  of Work is  updated,  the  Contractor  shall provide  the  Procuring  Entity’s Representative  with  an  updated  cash  flow  forecast.    The  cash  flow  forecast  shall  include different currencies,  as defined  in  the  Contract,  converted as necessary  using  the Contract exchange rates.

31.6   All Variations shall be included in updated Program of Work produced by the Contractor.

32.     Management Conferences

32.1   Either the Procuring Entity’s Representative or the Contractor may require the other to attend a Management Conference.   The Management Conference shall review the plans for remaining work and deal with matters raised in accordance with the early warning procedure.

32.2   The Procuring Entity’s Representative shall record the business of Management Conferences and provide copies of the record to those attending the Conference and to the Procuring Entity . The responsibility of the parties for actions to be taken shall be decided by the Procuring Entity’s  Representative  either  at  the  Management  Conference  or  after  the  Management Conference and stated in writing to all who attended the Conference.

33.     Bill of Quantities

33.1   The Bill of Quantities shall contain items of work for the construction, installation, testing, and commissioning of work to be done by the Contractor.

33.2   The Bill of Quantities is used to calculate the Contract  Price.   The  Contractor is paid for the quantity of the work done at the rate in the Bill of Quantities for each item.

33.3   If the final quantity  of any work done differs from the quantity in the Bill of  Quantities for the particular item and is not more than twenty five percent (25%) of the original quantity, provided the aggregate changes for all items do not exceed ten percent (10%) of the Contract price, the Procuring  Entity’s  Representative  shall  make  the  necessary  adjustments  to  allow  for  the changes subject to applicable laws, rules, and regulations.

33.4   If requested by the Procuring Entity’s Representative, the Contractor shall provide the Procuring

Entity’s Representative with a detailed cost breakdown of any rate in the Bill of Quantities.

34.     Instructions, Inspections and Audits

34.1   The Procuring Entity’s personnel shall at all reasonable times during construction of the Work be entitled to examine, inspect, measure and test the materials and workmanship, and to check the progress of the construction.

34.2   If the Procuring Entity’s Representative instructs the Contractor to carry out a test not specified in the Specification to check whether any work has a defect and the test shows that it does, the Contractor shall pay for the test and  any  samples.   If there is no defect, the test shall be a Compensation Event.

34.3   The Contractor shall permit the Funding Source named in the  SCC to inspect the Contractor’s accounts and records relating to the performance of the Contractor and to have them audited by auditors appointed by the Funding Source, if so required by the Funding Source.

35.     Identifying Defects

The Procuring Entity’s Representative shall check the Contractor’s work and notify  the Contractor of any defects  that  are  found.    Such  checking  shall  not  affect  the  Contractor’s  responsibilities.    The Procuring Entity’s Representative may instruct the Contractor to search uncover defects and test any work that the Procuring Entity’s Representative considers below standards and defective.

36.     Cost of Repairs

Loss or damage to the Works or Materials to be incorporated in the Works between the Start Date and the end of the Defects Liability Periods shall be remedied by the Contractor at the Contractor’s cost if the loss or damage arises from the Contractor’s acts or omissions.

37.     Correction of Defects

37.1   The Procuring Entity’s Representative shall give notice to the Contractor of any defects before the end of the Defects Liability Period, which begins at Completion Date up to final acceptance by the Procuring Entity’s unless  otherwise specified in the  SCC.  The Defects Liability Period shall be extended for as long as defects remain to be corrected.

37.2   Every time notice of a defect is given, the Contractor shall correct the notified defect within the length of time specified in the Procuring Entity’s Representative’s notice.

37.3   The Contractor shall correct the defects which he notices himself before the end of the Defects Liability Period.

37.4   The Procuring Entity shall certify that all defects have been corrected. If  the  Procuring Entity considers that correction of a defect is not essential, he can request the Contractor to submit a quotation for the corresponding reduction in the Contract Price. If the Procuring Entity accepts the quotation, the corresponding change in the SCC is a Variation.

38.     Uncorrected Defects

38.1   The Procuring Entity shall give the Contractor at least fourteen (14) days notice of his intention to use a third party to correct a Defect. If the  Contractor does not correct the Defect himself within the period, the  Procuring Entity may have the Defect corrected by the third party. The cost of the correction will be deducted from the Contract Price.

38.2   The use of a third party to correct defects that are uncorrected by the Contractor will in no way relieve the Contractor of its liabilities and warranties under the Contract.

39.     Advance Payment

39.1   The Procuring Entity shall, upon a written request of the contractor which shall be submitted as a contract document, make an advance payment to the contractor in an amount not exceeding fifteen percent (15%) of the total contract price, to be made in lump sum or, at the most two, installments according to a schedule specified in the SCC.

39.2   The  advance payment  shall  be made  only  upon  the submission  to and  acceptance  by the Procuring Entity of an irrevocable standby letter of credit of equivalent value from a commercial bank, a bank guarantee or a surety bond callable upon demand, issued by a surety or insurance company duly licensed by the Insurance Commission and confirmed by the Procuring Entity.

39.3   The advance payment shall be repaid by the Contractor by deducting fifteen (15%) percent from his periodic progress payments or a percentage equal  to the percentage of the total contract price used for the advance payment.

39.4   The contractor may reduce his standby letter of credit or guarantee instrument by the amounts refunded by the Monthly Certificates in the advance payment.

39.5   The Procuring Entity will provide an Advance Payment on the Contract Price as stipulated in the Conditions of Contract, subject to the maximum amount stated in SCC Clause 39.1.

40.     Progress Payments

40.1   The Contractor may submit a request for payment for Work accomplished.   Such request for payment  shall  be  verified  and  certified  by  the   Procuring  Entity’s   Representative/Project Engineer.  Except as otherwise stipulated in the  SCC, materials and equipment delivered on the site but not completely put in place shall not be included for payment.

40.2   The Procuring Entity shall deduct the following from the certified gross  amounts to be paid to the contractor as progress payment:
(a)      Cumulative value of the work previously certified and paid for.
(b)      Portion of the advance payment to be recouped for the month.
(c)      Retention money in accordance with the condition of contract.
(d)      Amount to cover third party liabilities.
(e)      Amount to cover uncorrected discovered defects in the works.
40.3   Payments shall be adjusted by deducting  therefrom the amounts  for  advance payments  and retention.  The Procuring Entity shall pay the Contractor the amounts certified by the Procuring Entity’s Representative within twenty eight (28) days from the date each certificate was issued. Unless  otherwise  indicated  in  the  SCC, no  payment  of  interest  for  delayed  payments  and adjustments shall be made by the Procuring Entity.

40.4   The first progress payment may be paid by the Procuring Entity to the Contractor provided that at least twenty percent (20%) of the work has been accomplished as certified by the Procuring Entity’s Representative.

40.5   Items of the Works for which a price of “0” (zero) has been entered will not be paid for by the Procuring Entity and shall be deemed covered by other rates and prices in the Contract.

41.     Payment Certificates

41.1   The Contractor shall submit to the Procuring Entity’s Representative monthly statements of the estimated value of the work executed less the cumulative amount certified previously.

41.2   The  Procuring  Entity’s  Representative  shall  check  the  Contractor’s  monthly  statement  and certify the amount to be paid to the Contractor.

41.3   The value of Work executed shall:

(a)      be determined by the Procuring Entity’s Representative;

(b)     comprise the value of the quantities of the items in the Bill of Quantities completed;   and

( c)     include the valuations of approved variations.

41.4   The Procuring Entity’s Representative may exclude any item certified in a previous certificate or reduce the  proportion  of  any  item  previously  certified  in  any  certificate in  the  light  of  later information.

42.     Retention

42.1   The Procuring Entity shall retain from each payment due to the Contractor an amount equal to a percentage thereof using the rate as specified in SCC Clause 42.2.

42.2   Progress payments are subject to retention of ten percent (10%), unless otherwise specified in the SCC, referred to as the “retention  money.”    Such  retention shall  be based on the total amount due to the Contractor prior to any deduction and shall be retained from every progress payment until fifty percent (50%) of the value of Works, as determined by the Procuring Entity, are completed.   If, after fifty percent (50%) completion, the Work is satisfactorily done and on schedule, no additional retention shall be made; otherwise, the ten percent (10%) retention shall again be imposed using the rate specified therefor.

42.3   The total “retention money” shall be due for release upon final acceptance of the Works.  The Contractor may, however, request the substitution  of  the  retention  money for each progress billing with irrevocable  standby  letters of credit from a commercial bank, bank guarantees or surety bonds callable on demand, of amounts equivalent to the retention money substituted for and  acceptable  to  the  Procuring  Entity,  provided  that  the  project  is  on  schedule  and  is satisfactorily undertaken.   Otherwise, the  ten (10%)  percent  retention  shall be made.   Said irrevocable standby letters of credit, bank guarantees and/or surety bonds, to be posted in favor of the Procuring entity shall be valid for a duration to be determined by the concerned implementing office/agency or  Procuring  Entity  and  will  answer  for  the  purpose  for  which  the  ten  (10%) percent retention  is  intended,  i.e.,  to  cover  uncorrected  discovered  defects  and  third  party liabilities.

42.4   On completion of the whole Works, the Contractor may substitute retention money with an “on demand” Bank guarantee in a form acceptable to the Procuring Entity.

43.     Variation Orders

43.1   Variation  Orders  may  be  issued  by the Procuring  Entity  to cover any  increase/decrease in quantities, including  the introduction  of new  work  items that are not included  in the original contract or reclassification  of  work items  that  are either  due  to change of plans,  design  or alignment to suit actual field conditions resulting in disparity between the preconstruction plans used for purposes of bidding and the “as staked plans” or construction drawings prepared after a joint survey by the Contractor and the Procuring Entity after award of the contract, provided that the cumulative amount of  the Variation Order does not exceed ten percent (10%) of the original project cost. The addition/deletion of Works should be within the general scope of the project as bid and awarded. The scope of works shall not be reduced so as to accommodate a positive Variation Order. A Variation Order may either be in the form of a Change Order or Extra Work Order.

43.2   A Change Order may be issued by the implementing official to cover any increase/decrease in quantities of original Work items in the contract.

43.3   An Extra Work Order may be issued by the implementing  official to cover  the introduction  of new work necessary for the completion, improvement or protection of the project which were not included as items of Work in the original contract, such as, where there are subsurface or latent physical conditions at the site differing materially from those indicated in the contract, or where there are duly unknown physical conditions at the site of an unusual nature differing materially from  those  ordinarily  encountered  and  generally  recognized  as  inherent  in  the  Work  or character provided for in the contract.

43.4   Any cumulative Variation Order beyond ten percent (10%) shall be subject of another contract to be bid out if the works are separable from the original contract.  In exceptional cases where it is urgently necessary to complete the original scope of work, the Head of the Procuring  Entity may   authorize a positive  Variation  Order go beyond ten  percent  (10%)   but not more than twenty percent (20%) of the original contract price, subject to the guidelines to be determined by the CPHI Executive Committee:  Provided, however,  That appropriate sanctions shall be imposed on the  designer, consultant or official  responsible  for the original  detailed  engineering  design  which  failed  to consider the Variation Order beyond ten percent (10%).

43.5   In claiming for any Variation Order, the Contractor shall, within seven (7) calendar days after such work has been commenced or after the circumstances leading to such condition(s) leading to the extra cost, and  within twenty-eight (28) calendar days deliver a written communication giving full and detailed particulars of any extra cost in order that it may be investigated at that time. Failure to provide either of such notices in the time stipulated shall constitute a waiver by the contractor for any claim. The preparation and submission of Variation Orders are as follows:

(a)      If the Procuring Entity’s representative/Project Engineer believes that a Change Order or Extra Work Order should be issued, he shall prepare the proposed Order accompanied with the notices submitted by the Contractor, the plans therefore, his computations as to the quantities of  the additional works involved per item indicating the specific stations where such works are needed, the date of his inspections and investigations thereon, and the log book thereof, and a detailed estimate of the unit cost of such items of work, together with his justifications for the need of such Change Order or Extra Work Order, and shall submit the same to the Head of the Procuring Entity for approval.

(b)     The Head of the Procuring Entity or his duly authorized representative, upon receipt of the proposed Change Order or Extra Work Order shall immediately instruct the technical staff of the Procuring Entity’s to conduct an on-the-spot investigation to verify the need for the Work to be prosecuted. A report of such verification shall be submitted directly to the Head of the Procuring Entity or his duly authorized representative.

(c)      The, Head  of the  Procuring Entity  or his  duly  authorized  representative,  after  being satisfied that such Change Order or Extra Work Order is justified and necessary, shall review the estimated quantities and prices and forward the proposal with the supporting documentation to the Head of Procuring Entity for consideration.

(d)     If, after review  of the plans, quantities  and  estimated unit cost  of  the items  of work involved, the proper office of the procuring entity  empowered to review and evaluate Change  Orders  or  Extra  Work  Orders  recommends  approval  thereof,  Head  of  the Procuring Entity  or his duly authorized representative,  believing the Change  Order or Extra Work Order to be in order, shall approve the same.

(e)      The timeframe for the processing  of Variation  Orders from the  preparation up to the approval by the Head  of the Procuring  Entity  concerned  shall not exceed  thirty (30) calendar days.

44.     Contract Completion

Once  the project reaches  an accomplishment  of ninety five (95%) of the total  contract amount,  the Procuring Entity may create an inspectorate team to make preliminary inspection and submit a punch- list to the Contractor  in preparation  for  the final turnover  of the project. Said punch-list will contain, among others,  the  remaining  Works, Work deficiencies for  necessary  corrections, and  the  specific duration/time to  fully  complete  the  project  considering  the  approved  remaining  contract  time.  This, however, shall not preclude the claim of the Procuring Entity for liquidated damages.

45.     Suspension of Work

45.1   The Procuring Entity shall have the authority to suspend the work wholly or partly by written order for such period as may be deemed  necessary,  due to force majeure or any fortuitous events or for failure on the part of the Contractor to correct bad conditions which are unsafe for workers or for the general public, to carry out valid orders given by the Procuring Entity or to perform any provisions of the contract, or due to adjustment of plans to suit field conditions as found necessary during construction. The Contractor shall immediately comply with such order to suspend the work wholly or partly.

45.2   The  Contractor  or  its  duly  authorized  representative  shall  have  the  right  to  suspend  work operation on any or all projects/activities along the  critical  path of activities  after fifteen (15) calendar  days  from  date  of  receipt  of  written  notice  from  the  Contractor  to  the  district engineer/regional director/consultant  or  equivalent  official,  as  the  case  may  be,  due  to  the following:

(a)      There exist right-of-way problems which prohibit the Contractor from performing work in accordance with the approved construction schedule.

(b)     Requisite  construction  plans  which  must  be  owner-furnished  are  not  issued  to  the contractor precluding any work called for by such plans.

(c)      Peace  and  order  conditions  make  it extremely  dangerous,  if  not  possible,  to  work.

However, this condition  must be certified in writing  by the Philippine  National  Police (PNP) station  which has  responsibility  over  the  affected  area  and  confirmed  by the Department of Interior and Local Government (DILG) Regional Director.

(d)     There is  failure  on  the  part  of  the  Procuring  Entity  to  deliver  government-furnished materials and equipment as stipulated in the contract.

(e)      Delay in the payment  of Contractor’s claim for progress  billing  beyond forty-five  (45) calendar days from the time the Contractor’s claim has been certified to by the procuring entity’s authorized  representative  that the documents  are complete  unless  there  are justifiable reasons thereof which shall be communicated in writing to the Contractor.

45.3   In case of total suspension, or suspension of activities along the critical path, which is not due to any  fault  of  the  Contractor,  the  elapsed  time  between  the  effective  order  of  suspending operation and  the  order  to  resume  work  shall  be  allowed  the  Contractor  by  adjusting  the contract time accordingly.

46.     Payment on Termination

46.1   If the Contract is terminated because of a fundamental breach of Contract by the Contractor, the Procuring Entity’s Representative shall issue a certificate  for the value of the work done and Materials ordered less advance payments received up to the date of the issue of the certificate and less the percentage to apply to the value of the work not completed, as indicated  in the SCC. Additional Liquidated Damages shall not apply.  If the total amount due to the Procuring Entity exceeds any payment due to the Contractor, the difference shall be a debt payable to the Procuring Entity.

46.2   If the Contract is terminated for the Procuring Entity’s convenience or because of a fundamental breach of Contract by the Procuring Entity, the Procuring Entity’s Representative shall issue a certificate for the value of the work done, Materials ordered, the reasonable cost of removal of Equipment, repatriation of the Contractor’s  personnel employed solely on the Works, and the Contractor’s costs of protecting and securing the Works, and less advance payments received up to the date of the certificate.

46.3   The net balance  due shall be paid or repaid within twenty eight (28) days  from the notice of termination.

46.4   If the Contractor has terminated the Contract under GCC Clauses 17 or 18, the Procuring Entity shall promptly return the Performance Security to the Contractor.

47.     Extension of Contract Time

47.1   Should the amount of additional work of any kind or other special  circumstances  of any kind whatsoever occur such as to fairly entitle the  contractor to an extension of contract time, the Procuring Entity  shall  determine  the amount  of such  extension; provided  that the Procuring Entity is not bound to take into account any claim for an extension of time unless the Contractor has, prior to the expiration of the contract time and within thirty (30) calendar days after such work has  been  commenced  or  after  the  circumstances leading  to  such  claim  have  arisen, delivered to  the  Procuring Entity notices in order that it could have investigated  them  at that time. Failure to provide such notice shall constitute a waiver by the  Contractor  of any claim. Upon receipt of full and detailed particulars, the Procuring Entity shall examine the facts and extent of the delay and shall extend the contract time completing the contract work when, in the Procuring Entity’s opinion, the findings of facts justify an extension.

47.2   No extension of contract time shall be granted the Contractor due to (a) ordinary unfavorable weather  conditions  and  (b)  inexcusable  failure  or  negligence  of  Contractor  to  provide  the required equipment, supplies or materials.

47.3   Extension of contract time may be granted only when the affected activities fall within the critical path of the PERT/CPM network.

47.4   No extension of contract time shall be granted when the reason given to support the request for extension was already considered in the determination of the original contract time during the conduct of detailed  engineering and in the preparation  of the contract documents as agreed upon by the parties before contract perfection.

47.5   Extension of contract time shall be granted for rainy/unworkable days considered unfavorable for the prosecution of the works at the site, based on the actual conditions obtained at the site, in excess  of the number of  rainy/unworkable  days pre-determined by the Procuring Entity in relation to  the  original  contract  time  during  the  conduct  of  detailed  engineering  and  in the preparation of the contract documents as agreed upon by the parties before contract perfection, and/or for equivalent period of delay due to major calamities such as exceptionally destructive typhoons, floods and earthquakes, and epidemics, and for causes such as non-delivery on time of  materials,  working drawings,  or written  information to be  furnished by the Procuring Entity, non-acquisition of permit to enter private properties within the right-of-way  resulting in complete paralyzation of construction activities, and other  meritorious  causes  as  determined  by  the Procuring Entity’s Representative and approved by the Head of the Procuring Entity. Shortage of construction  materials,  general  labor  strikes, and peace  and  order  problems  that  disrupt construction operations  through no fault  of the Contractor  may  be  considered as additional grounds for extension of contract time provided they are publicly felt and certified by appropriate government agencies such as DTI, DOLE, DILG, and DND, among others. The written consent of bondsmen must be attached to any request of the Contractor for extension of contract time and submitted to the Procuring  Entity  for consideration  and  the validity  of the Performance Security shall be correspondingly extended.

48.     Price Adjustment

Except for extraordinary circumstances as determined by CPHI Board of Directors and approved by the CPHI Executive Committee, no price adjustment shall be allowed unless otherwise specified in the SCC.

49.     Completion

The Contractor shall request the Procuring Entity’s Representative to issue a certificate of Completion of the Works, and  the Procuring  Entity’s Representative  will  do so upon  deciding  that the  work is completed.

50.     Taking Over

The Procuring Entity shall take over the Site and the Works within seven (7) days from the date the Procuring Entity’s Representative issues a certificate of Completion.

51.     Operating and Maintenance Manuals

51.1   If “as built” Drawings and/or operating and maintenance manuals are required, the Contractor shall supply them by the dates stated in the SCC.

51.2   If the Contractor does not supply the Drawings and/or manuals by the dates stated in the  SCC, or they do not receive the Procuring Entity’s Representative’s approval, the Procuring Entity’s Representative  shall  withhold  the  amount  stated  in  the   SCC  from  payments  due  to  the Contractor.

End of General Conditions of Contract