Manual

of
Professional
Practice
for
Civil
(Engineers
The Most Outstanding
Accredited Professional Organ/ration
for Me Year 2001
Awarded by:
PROFESSIONAL REGULATION COMMISSION (PRC)

Philippine Institute of Civil Engineers, Inc.

3rd Edition 2nd Printing September 2007

-A
 MANUAL OF PROFESSIONAL PRACTICE
FOR CIVIL ENGINEERS

r Edition
October 2005
2nd Printing
September 2007

COPYRIGHT
Registration No. A-2008-254
February 18, 2008 :,
, By PICE
All Rights Reserved I

This book or any part thereof must

not be reproduced in any form without
the written permission of the Publisher

THE PHILIPPINE INSTITUTE OF CIVIL ENGINEERS, INC.

4reltdo, arnekknt A.
CITE 41
 THE PHILIPPINE INSTITUTE OF CIVIL I NGINLERS TABLE OF CONTENTS
Into lwentios, a group of civil engineers mostly belonging to tho government sector
fret Organization of civil engineers in the Philippines, the Philippine Society of THE PHILIPPINE INSTITUTE OF CIVIL ENGINEERS ii
(PSCE). By 1937, another group of civil engineers mostly engaged In PREFACE v,vi
, formed the Philippine Association of Civil Engineers (PACE). The major ADOPTING THE MANUAL OF PROFESSIONAL
both organizations were similar, focused on the elevation of the standards of PRACTICE FOR CIVIL ENGINEERS vii
encourage research and engineering knowledge and technology, foster FOREWORDS
rig members and promote interaction with other technological and scientific PICE OFFICERS AND BOARD OF DIRECTORS 2001,2003,2006, & 2007 viii
In 1972, spearheaded by PACE, serious efforts were exerted to merge the two
The merger of PSCE and PACE was finalized in late 1973. PICE was CODE OF ETHICS xiii
vylth the Philippine Securities and Exchange Commission on December 11,
August 13, 1975, the Professional Regulation Commission gave its official SECTION 1. THE PRACTICE OF CIVIL ENGINEERING 1
Mellon No. 007 to PICE as the only recognized organization of civil engineers in the 1.1 General 1
mime To give special recognition to the efforts of past officials of PSCE and PACE 1.2 Professional Responsibility 1
formation of the very first organizations of civil engineers, the PICE National Board 1.3 Client-Civil Engineer Relationships 2
ridOre conducted a thorough research on the respective histories of the two 1.3.1 Obligations of the Civil Engineer 3
', salient; and so based on available records, PICE adopted the documented date of 1.3.2 Obligations of the Client 4
tended establishment of the 1u organization of Civil Engineers and thus 1937 as the 1.3.3 Liability of the Civil Engineer and the Client 5
odlited year of the founding of PACE instead of 1973, the year of the PSCE-PACE 1.3.4 Suspension or Termination of Services 7
ind SEC registration of PICE. All Past Presidents of PSCE and PACE are now 1.3.5 Settlement of Disputes 8
tinted as past presidents of PICE. 1.3.6 Ownership of Data, Designs and Documents 9
I I 1.4 Civil Engineering Services 9
1.5 Specialization in Civil Engineering 12
The PICE Vision 1.6 Selection of a Civil Engineer 12
The leader among The PICE Mission
professional organizations To advance the welfare of our 1.7 Prime Professional Practice 14
known globally for members and the development and 1.8 Employment 14
professionalism, integrity, prestige of The civil engineering 1.9 Design Competition 14
excellence end social responsibility- profession and to be a dynamic 1.10 Contingency Basis of Employment 14
A key player in nation building
force in nation building. 1.11 Professional Practice of Foreign Civil Engineers 15

SECTION 2. CLASSIFICATION OF ENGINEERING SERVICES 17

Shared Va ues 2.1 General 17
Professionalism, Integrity, Leadership, Excellence and Social Responsibility 2.2 Consultations, Research, Investigations and Reports 15
2.2.1 Preliminary and Feasibility Investigations and Reports 18
The NATIONAL OFFICE AND LIBRARY : 2.2.2 Planning Studies 18
Units 702, 703 and 705 Futurepoint Plaza Condo. 1,112 Panay Avenue, Quezon City 2.2.3 Appraisals, Valuations and Rate Studies 19
1100 Philippines 2.2.4 Assistance in Financial Matters 19
Tel. Nos. (632)448-7488to 90(632) 3764215 •Tottax Nos. (532)44374911376-4255
Coll. Nos. 09174278734 09174278785 i 0920.9287974109224665194 2.2.5 Materials Engineering and Equipment Tests 19
picenatligskylnelnete plcenatl@pice.org.ph• piceeventsiaspico.bayandslph 2.2.6 Direct Personal Services 19
picomemb@pke.bayandslphe pleeacctgigpice.bayandslph 2.2.7 Research and Development 20
civilengrs@pko.bayandslph 2.2.8 Special Services 20
Website: kwm.pice.org.ph 2.3 Design Services for Construction Projects 21
PHILIPPINE INSTITUTE OF CIVIL ENGINEERS, INC. 2.3.1 Study and Report Phase 22
Accredited National Organization 2.3.2 Preliminary Design Phase 23
Certificate No. 007 Professional Regulation Commission 2.3.3 Final Design Phase 24

ii iii
 2.3.4 61014 or 51061011atino
236 ConstructIon Phase PREFACE
2 3 0 Operation Phase
2 4 Construction Services •iri Manual contains Information that a Civil Engineer in Jury
2.5 Special Services for Construction Projects II,
2.6 Engineering Support Services
rIngsgement or employment may find useful to know and
2 7 Academic Services It is adopted or patterned after the ASCE Manuals and
3I
2 8 Services as Employee 32 on Engineering Practice No. 45, Consulting Engineering: A
SUCTION 3. THE SELECTION OF THE CIVIL ENGINEER ler the Engagement of Engineering Services, and Conditions
34 I I ngagement and Scale of Fees Agreement 4 by the Association
3I General
34
3.2 Basis for Selection 34 I :onsulting Engineers Singapore.
3,3 Client's Selection Committee 35
3.4 Qualifications-Based Selection (QBS) Procedure 36
3.5 Selection Procedure for 'Level of Effort' Contracts i RI main body of the Manual has five sections. The main sections
39
3.5.1 Bidding preceded by the Code of Ethics and detailed Guidelines Under
39
3.5.2 Two-Envelope System 41
T • I indamental Canons of Ethics adopted from the ASCE. The
SUCTION 4. CHARGING FOR CIVIL ENGINEERING SERVICES fir st section on the Practice of Civil Engineering discusses such
43
4 1 General
43
topics as professional responsibility, client-engineer relationships,
4 2 Salary Cost Times Multiplier Plus Direct Non-Salary Expense 45 am, and selection of a consulting civil engineer. Classification of
4 3 Hourly Billing Rate
4 4 Per Diem
49 rreineering Service in Section 2 discusses in detail the variety of
50 1 vices provided by civil engineers, including feasibility studies,
4 5 Cost Plus Fixed Fee 51
4 6 Fixed Price 52 rivostigations, appraisals and valuations, preliminary design,
4.7 Percentage of Construction Cost 53 instruction and operation. Section 3 provides guidance on the
4.8 Schedule of Minimum Basic Fees 55 election of an engineer. It discusses several selection procedures
.1 CTION 6. TOTAL PROJECT COST 57 rvailable. The next section covers the different methods of charging
51 General 57 Hi civil engineering services such as hourly billing rate or fixed
5.2 Professional Engineering Costs 57
5.3 Construction Cost price. The fifth and last section discusses the total project cost
58
5.4 Legal, Land, Administration, Staffing and Financial Costs 59
which includes such items as legal and administrative costs, and
5.5 Contingency Allowance 59 some contingency allowance.
5.6 Summary 59
APPENDICES Important documents are appended for the guidance of the users of
Schedule of Minimum Basic Fees this Manual. These are:
RA 544, An Act to Regulate the Practice of Civil Engineering in the Philippines
Extracts from the New Civil Code on Obligations and Contracts
Republic Act No. 9184, An Act Providing for the Modernization. Standardization • RA 544, An Act to Regulate the Practice of Civil Engineering
and Regulation of the Procurement Activities of the Government and for Other in the Philippines
Purposes
• OAP Document 102, Uniform General Conditions of Contract for Private
Construction (2004 Revised Edition) • Extracts from the New Civil Code on Obligations and
Contracts

iv
 • Implementing Rules and Regulations on the PraOuramplit rlt IflOLUTION ADOPTING TIM MANUAL ON PROPOSNIONAL PRACTIOR
Cue. iHaig Services for Government Projects OR CIVIL ENGINSIINS

to adopt the Manual on Professional Practice for Civil Engineer,

• P.U.1594 and its Implementing Rules and Regulations as by the Ad-hoe Committee created by the National Board of Directm
Amended (Note: deleted in the 2fid Edition)
In Quezon City this 171' day of August 2001.
CIAP Document 102, Uniform General Conditions of
Contract for Private Construction

I his Manual contains rules and procedures that have the force of
law and should be followed by the civil engineer and his client. N It. SISON YO
I lowever, other provisions are intended as references only and may p hI nt
have to be modified for specific and specialized applications.
RUB N A. SY KI-IN, SR.
.'001 Committee on Manual of Professional Practice for Civil 2nd e Prespnt
ti lineers
.liairman Efren H. Sison PE -. TAJADO
N(.1/A/at‘• AMAK
Tre
Members
Research and Manuscript Preparation
A. JA
Ernesto S. de Castro, Ph. D.
Primitivo C. Cal, Ph. D.
Roberto P. Bernardo
Mariano E. Raner, Ill OBERTO P. BERN •- • 0 I. BESAVILLA, JR.
Contributors
• koctor
Peter N. Aventajado
Eustaquio T. Coronel, Jr. Pf R
Rafael F. Erfe ctor
Antonio A. Janubas
Emilio M. Morales ALV d 0 PLEYTO AN .SAN
Rolando G. Roque Direc Si *btor
I ditor
Primitivo C. Cal, Ph.D.
Ni E. RANER, III B H RtrfrASUMAN, IPP
I ector Ex-Officio Director

vi vii
 FOREWORD for the 1" Edition (20011)Tnitito-• 1001 Mel Nsillontil t/fficorri till Moil! d Imiii
The Philippine Institute of Civil Engineers has prepared int red
: mini of
PrOfeallenal Practice for Civil Engineers to provide chill 6110
'their t I ' ' .• I , • rr , it I it, to
re to clarify the practice of cm] engineering .;' °M an Ulm lore DAVID M. CONSUNJI
es affecting their profession. The •raK ABER P. CAMAS
ring s governed by several laws, executive issuances, issuances of rrrl 11, IKON JUANITO P. ABERGAB AROER. L. IAZARO IN, Ph..0.
ROBERTO P. BERNARDO JESUS S. IIIPOLII0
TOO a ory and technical bodies, and standard practices that are found in VENANCIO I. BESAVILLA, JR, RAMON 0.11ECHAHOVA
•r - 41.1 I CAMMAY0 PETER L. DY
gloom° documents. The more important documents include RA 544, the .-1 vennendenl RAFAEL F. EFRE
after of Civil Engineering, the Civil Code which contains contractual rights SALVADOR A. PLEYTO
JOSE T. RODRIGUEZ
gild obligations, LOI 64 on the Procurement of Consulting Services and CIAP . 11111N A. SY ANTONIO B. SANCHEZ
Vicerfhoirklent MARIANO E. RANER, III Electoral College Chairman
'Document 102 setting Uniform General Conditions of Contract for Private
lOonstruction and PD 1594 which prescribes policies, guidelines, rules and 1, oCAMAD M, RAKF.IN, SR. BASHIR D. RASUMAN, IPP
Airy E x.CAliexo Director PRIMITIVO C. CAL, Ph.D.
ifigulations for govemment infrastructure contracts. These and other Executive Consultant and Legal
i t it tr N. AVENTAJADO Counsel
11110ortant documents are put under one cover through this Manual. Council of Advisers:
(Post Presidents)
tt 4_110 R. IlAhlAK FELIPE F. CRUZ
Tt1lre is confusion as to the scope of civil engineering in the light of the t0. VICENTE B. LOPEZ NANNETTE C. VILLANUEVA
(once of other related professions. These issues and concerns are NELSON 0. IRASGA National Administrative Once(
TONIO A. JANUBAS ANTONIO A. MANSUETO
feed in this Manual. Section 2 dearly delineates the scope of practice ROMULO M. DEL ROSARIO
II Engineering. Another issue pertaining to the presence of foreign civil
Misers and firms practicing civil engineering in the Philippines is also
in the Manual.

Ott behalf of the Institute, let me express our gratitude to the 2001 PICE
National Board of Directors and the Committee on Manual of Professional
Practice for Civil Engineers for its hard work and dedication in coming out with
NI Manual. Acknowledgment also goes to the various PICE Chapters,
particularly the Misamis Oriental-Cagayan de Oro Chapter who produced the
Mil Manual, for their support and inspiration. Finally, our gratitude also goes
tO the PICE National Secretariat for putting together this Manual.
or%Specialty Division Committee
Mon H. Sion, National President
Rogelio C. Lombos, Chair, Construction Management and Engineering Division
Emilio M. Morales, Chair, Geotechnical Engineering Division
Primitivo C. Cal, Ph.D., Chair, Transportation Engineering Division
Ernesto S. de Castro, Ph.D., Chair, Structural Engineering Division
Rolando G. Roque, Chair, Water Engineering Division

FREN H. SISON
ICE Past President
000-2001 & Chairman of the Inter-Specialty Group

viii ix
 1111111111.10.11111.111111!
ppm wt wit tor ilia 2" Edition (200 FOREWORD for the 3"1 Edition (2006)
11*
The Philippine Intititr Ito 01 civil thijineers, Inc published and IeledhetI tin
2M Edition of the Manual of Professional of Civil Engineers after the C l (whin Manual of Professional Practice for Civil Engineers
pump of Republic Act 9184, An Act Providing for the Modernization, released by tho Philippine Institute of Civil Engineers, Inc. after the
Standardization and Regulation of the Procurement Activities of the Matron Industr y Authority of the Philippines issued the 2nd Revised
Government and for the Other Purposes, otherwise knkown as the 11 of the CIAP Documents 102 otherwise known as the Uniform
"Government Procurement Reform Act." al Conditions of Contracts for Private Construction.
In effect the following Implementing Rules and Regulations have been
repealed: MOCAMAD M. RAKI-IN, SR.
• Procurement of Consulting Services for Government Projects PICE National President
2005
• PD 1594 (as amended)

MANUEL M. BONOAN 2006 PICE National Officers and Board of Directors

PICE National President
2002-2003

Directors ABER P. CANLAS

2003 PICE National Officers and Board of Directors
Olflesis JOSEFINO N. RIGOR
Audllor.
IIANUEL M. DONOAN
NNnt Directors
PETER N. AVENTAJADO ANTONIO A. AVILA
IkePresident VENANCIO I. BESAVILLA, JR.
EDUARDO V. CRUZ
ANITO P. ABERGAS
SINAOLAN T. MACARAMBON
VtoProsident JUN E. MENDOZA
BERNARDO S. MERCADO
RTO P. BERNARDO RAFAEL C. YABUT
EFREN H. SISON, IPP
AQUIO T. CORONEL, JR. Ex Officio Director
„asp
neektent
M. RAKI-IN, SR.
I FIDEL D. GINEZ
Atren
NTA
l:Fts t
VICENTE B. LOPEZ filANITO P. ABERGAS
I Vice-President
NELSON Q. IRASGA
ANTONIO A. MANSUETO
nilLIO R. HAMAK
ROMULO M. DEL ROSARIO muny
JUANITO N. FERRER
ABER P. CANLAS
NANCIO I. BESAVILLA, JR.
ANGEL L. LAZARO III, Ph.D.
JESUS S. HIPOLITO
RAMON G. HECHANOVA iiLYT.GO
fess Manager
DAVID M. CONSUNJI
Chancellor, College of Felon 1:AMON P. AQUINO
f O.
LEO CLETO A. GAMOLO
Legal Counsel I RNARDO S. MERCADO
' for
ANGEL L. LAZARO III, Ph.D.
MANUEL S. ACLAN
ALFONSO P. ESPIINTU
JESUS S. HIPOLITO
RAMON G. HECHANOVA
RONALDO S. ISON ANTONIO A. ABOLA
RODNEY P. MENCHAVEZ Chancellor. College of Fellows
FAUSTO D. PARBA, JR.
RUBEN A. SY
LEO CLETO A. GAMOLO
Legal Counsel
PETER N. AVENTAJADO, IPP
Ex-Officlo Director
NANNETTE C. VILLANUEVA
National Administrative Officer
Council of Advisers:
(Past Presidonls)
MANUEL M. BONOAN
EFREN H. SISON
BASHIR D. RASUMAN
FELIPE F. CRUZ
VICENTE B. LOPEZ
NELSON Q. IRASGA
ANTONIO A. MANSUETO
ROMULO M. DEL ROSARIO
DAVID M. CONSUNJI

•
Council of Advisers:
LY T.00 (Past Presidents) JUANITO N. FERRER
Manager NANNETTE C. VILLANUEVA
BASHIR D. RASUMAN National Administrative Officer
ITO M. PACHECO, Ph.D. FELIPE F. CRUZ
0.

X
xi
 ler
I (MI W0141) for Hut 3rd Edition, 2" Pi-Intim) WOO ni I MIL!'
Thin r edition of the Manual of Proles:Beim! Practice for Civil
flintlattiontal Principles
anglneers is being reprinted and released by Philippine InstilLite of Civil
Ingineers, Inc. The contents are totally the same as the SIedition, first en Moons uph tld and advance the integrity,honor and dignity
printed In 2005.
I 0141100ring profession by:
This Manual of Professional Practice for Civil Engineers is now being
Wed by some universities, colleges, schools offering the civil i their knowledge and skill for the enhancement of
On()insuring course in the Philippines. imtin welfare and the environment;

Li IIi, I honest and impartial and serving with fidelity the

JUANITO P. ABERGAS
1 .,11,11,., limit employers/employees and clients;
PICE National President
2007 meg to increase the competence and prestige of the civil
ngineering profession; and

.11iporting the professional and technical societies of their

2007 PICE National Officers and Board of Directors •iii.Giplines.

Iwiti.iitiontal Canons

Of Directors
NAMTO P. ABERGAS ROLANDO M. ASIS
PMIdent VENANCIO I. BESAVILLA, JR.
ERNESTO S. DE CASTRO, Ph.D.
YAM T. GO JULIUS S. MAQUILING
VIm.Prosident ROMEO S. MOMO
EDUARDO A. RAMIREZ
PIDEL U. °INEZ ANESIA R. TORQUATOR
2nd Vice-President
PRIMITIVO C. CAL, Ph.D.
RUBEN A. SY Ex•Officio Netter
Secretary
President Emeritus
RONALDO S. ISON ANTONIO A. MANSUETO
I ronaurer
Council of Advisers:
DENITO M. PACIIECO, Ph.D. (Past Presidents)
Nosiness Manager MOCAMAD M. RAKI•IN SR.
ANTONIO A. AVILA PETER N. AVENTAJADO
R MANUEL M. BONOAN
EFREN H. SISON
ROBERT G. LALA BASHIR D. RASUMAN
Auditor FELIPE F. CRUZ
a
NELSON Q. IRASGA
DAVID M. CONSUNJI
ABER P. CANLAS n Engineers shall hold paramount the safety, health and
ANGEL L. LAZARO III, Ph.D.
JESUS S. HIPOLITO hire of the public and shall strive to comply with the
RAMON G. HECHANOVA aciples of sustainable development in the performance of
ANGEL R. LAZARO, JR.
their duties.
ANTONIO A. ABOLA
Chancellor. College of Fellows
nl Engineers shall perform services only in areas of their
LEO CLETO A. GAMOLO
Legal Counsel ~tnpetence.
NANNETTE C. VILLANUEVA
NalionalAdministrateve Officer ivil Engineers shall issue public statements only in an objective
.111,1 truthful manner.
cavil Engineers shall act in professional matters for each
'mployer or client as faithful agents or trustees, and shall avoid
tit 'filets of interest.

xii
6 Civil Engineers ',Hod num "i, Ili n11101 I INLS TO PRACTICI
merit of their MCIIVILI”i mind :AMU not C011111010 1114,1'11v I IMO It I I II I UNUAMENTAL CANONS OF ETHICS

I, Civil Engineers shall act in such a manner as to 111)1101(1 Mid
enhance the honor, integrity, and dignity of the civil engineering
profession.
1: CIO Engineers shall continue their professional development
throughout their careers, and shall provide opportunities for the
professional development of those civil engineers under their
supervision.
UAW( IN I Civil Engineers shall hold paramount the safety,
anti welfare of the public and shall strive to comply with the
of sustainable development in the performance of their
on& duties.
vil Engineers shall recognize that the lives, safety, health
welfare of the general public are dependent upon
ortglneering judgments, decisions and practices
incorporated into structures, machines, products, processes
mind devices.
Engineers shall approve or seal only those design
lueuments, reviewed or prepared by them, which are
determined to be safe for public health and welfare in
onformity with accepted engineering standards.
civil Engineers whose professional judgment is overruled
under circumstances where the safety, health and welfare of
Ole public are endangered, or the principles of sustainable
development ignored, shall inform their clients or employers
01 the possible consequences.
civil Engineers who have knowledge or reason to believe
that another person or firm may be in violation of any of the
provisions of Canon 1 shall present such information to the
proper authority in writing and shall cooperate with the
proper authority in furnishing such further information or
assistance as may be required.
Civil Engineers should seek opportunities to be of
constructive service in civic affairs and work for the
advancement of the safety, health and well-being of their
communities, and the protection of the environment through
the practice of sustainable development.

xis xv
 f, Civil Engineers should be committed to ilium
i
environment by adherence to the principles of ZAII;,;1111;1.),i'
I of untrue, unfair or exaggerated statements regarding civil
development so as to enhance the quality of life of the
general public.
ON 2. Civil Engineers shall perform services only in areas of
their competence.
II, Civil Engineers shall undertake to perform engineering
assignments only when qualified by education or
experience in the technical field of engineering involved.
b. Civil Engineers may accept an assignment requiring
education or experience outside of their own fields of
competence, provided their services are restricted to those
phases of the project in which they are qualified. All other
phases of such project shall be performed by qualified
associates, consultants, or employees.
c. Civil Engineers shall not affix their signatures or seals to
any civil engineering plan or document dealing with subject
matter in which they lack competence by virtue of
education or experience or to any such plan or document
not reviewed or prepared under their supervision and
control.
d. Civil Engineers shall not use The Specialty Engineering
Title such as Structural Engineer, Transportation Engineer,
Water Engineer, Geotechnical Engineer, Construction
Engineer, etc. without the PICE Specialist Accreditation.
CANON 3. Civil Engineers shall issue public statements only in an
objective and truthful manner.
a. Civil Engineers should endeavor to extend the public
knowledge of civil engineering and sustainable
xvi
development, end shell not participate In the dissemination
engineering.
, ivil Engineers shall be objective and truthful in
professional reports, statements, or testimony. They shall
include all relevant and pertinent information in such
reports, statements, or testimony.
c. Civil Engineers, when serving as expert witnesses, shall
tt express civil engineering opinion only when it is founded
upon adequate knowledge of the facts, upon a background
of technical competence, and upon honest conviction.
d. Civil Engineers shall issue no statements, criticisms, or
arguments on civil engineering matters which are inspired
or paid for by interested parties, unless they indicate on
pe whose behalf the statements are made.
C. Civil Engineers shall be dignified and modest in explaining
their work and merit, and will avoid any act tending to
promote their own interests at the expense of the integrity,
honor and dignity of the civil engineering profession and/or
related professions.
I 'ANON 4. Civil Engineers shall act in professional matters for
each employer or client as faithful agents or trustees,
• and shall avoid conflicts of interest.
a. Civil Engineers shall avoid all known or potential conflicts
1
r• of interest with their employers or clients and shall
promptly inform their employers or clients of any business
association, interests, or circumstances which could
influence their judgment or the quality of their services.
b Civil Engineers shall not accept compensation from more
xvii
 than one party for services on the same proje0i, or fur
services pertaining to the same project, unless Ihu
circumstances are fully disclosed to and agreed to, by all
Interested projects.
c. Civil Engineers shall not solicit or accept gratuities, directly
or indirectly, from contractors, their agents, or other parties
dealing with their clients or employers in connection with
work for which they are responsible.
d. Civil Engineers in public services as members, advisors or
employees of a governmental body or department shall not
participate in consideration or actions with respect to
services solicited or provided by them or their organization
in private or public engineering practice.
te. Civil Engineers shall advise their employers or clients
when, as a result of their studies, they believe a project will
not be successful.
f. Civil Engineers shall not use confidential information
coming to them in the course of their assignments as a
means of making personal profit if such action is adverse to
the interests of their clients, employers or the public.
g. Civil Engineers shall not accept professional employment
outside of their regular work or interest without the
knowledge of their employers.
ON 5. Civil Engineers shall build their professional reputation
on the merit of their services and shall not compete
unfairly with others.
a. Civil Engineers shall not give, solicit or receive either
directly or indirectly, any political contribution, gratuity or
unlawful consideration in order to secure work, exclusive of
xviii
itectiring salaried positions through employment agencies.
ogineers should negotiate contracts for professional
services fairly and on the basis of demonstrated
competence and qualifications for the type of professional
service required.
Civil Engineers may request; propose or accept
professional commissions on a contingent basis only under
circumstances in which their professional judgments would
not be compromised.
Civil Engineers shall not falsify or permit misrepresentation
of their academic or professional qualifications or
experience.
ve Civil Engineers shall give proper credit for engineering
work to those to whom credit is due, and shall recognize
the proprietary interests of others. Whenever possible,
they shall name the person or persons who may be
responsible for designs, inventions, writings or other
accomplishments.
Civil Engineers may advertise professional services in a
way that does not contain misleading language or is in any
other manner derogatory to the dignity of the profession.
Examples of permissible advertising are as follows:
(1) Professional cards in recognized, dignified
publications, and listings in rosters or directories
published by responsible organizations, provided that
the cards or listings are consistent in size and content
and are in a section of the publication regularly
devoted to such professional cards.
xix
 (2) Brochures which tactually desalt; AIDGflerice,
facilities, personnel and capacity to renal service,
providing they are not misleading with respect to the
engineers participation in projects described.
(3) Display advertising in recognized dignified business
and professional publications, providing it is factual
and is not misleading with respect to the engineer's
extent of participation in projects described.
(4) A statement of the engineers' names or the name of
the firm and statement of the type of service posted
on projects for which they render services.
(5) Preparation or authorization of descriptive articles for
the lay or technical press, which are factual and
dignified. Such articles shall not imply anything more
than direct participation in the project described. •
(6) Permission by engineers for their names to be used in
commercial advertisements, such as may be
published by contractors, materials suppliers, etc.,
only by means of a modest, dignified notation
acknowledging the engineers' participation in the
project described. Such permission shall not include
public endorsement of proprietary products.
g. Civil Engineers shall not maliciously or falsely, directly or
indirectly, injure the professional reputation, prospects,
practice or employment of another engineer or
indiscriminately criticize another's work.
h. Civil Engineers shall not use equipment, supplies,
laboratory or office facilities of their employers to carry on
outside private practice without the consent of their
employers.
?OE
ON 0, Civil Engineers shall act in such a manner as to uphold
and enhance the honor, integrity, and dignity of the
civil engineering profession.
Civil Engineers shall not knowingly act in a manner which
will be derogatory to the honor, integrity, or dignity of the
civil engineering profession or knowingly engage in
husiness or professional practices of a fraudulent,
dishonest or unethical nature.
N, 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.
m. Civil Engineers should keep current in their specialty fields
by engaging in professional practice, participating in
continuing education courses, reading in the technical
literature, and attending professional meetings and
seminars.
e, Civil Engineers should encourage their engineering
employees to become registered at the earliest possible
date.
Civil Engineers should encourage engineering employees
to attend and present papers at professional and technical
society meetings.
d. Civil Engineers shall uphold the principle of mutually
satisfying relationships between employers and employees
with respect to terms of employment including professional
grade descriptions, salary ranges, and fringe benefits.
xxi
 SECTION 1

The Practice of Civil Engineering

al addresses the procurement of civil engineering

r a quality project. Quality by definition is one
meeting both the expectations of the client or
and the requirements of the project. It requires
al dedication, effort, adequate time for investigation,
and innovation, fair compensation, and appropriate
nd responsibility. It cannot be achieved only by effort at
Ing or end of a project. These efforts must be conscious,
and consistent throughout all phases of a project.

imeults from team effort and is measured by the degree of

ion of all parties involved. This manual is dedicated to
1.1 both the understanding and quality of the practice of
.41iieering.

tilopment of this manual is predicated on the basis that Civil

ing services are accomplished in a manner meeting the
of care of the profession of Civil Engineering.

PROFESSIONAL RESPONSIBILITY

iiidard of practice is for Civil Engineers to be given

)114 for studying, conceiving, designing, observing
lion, and assisting in the programming for operating and
U ling engineering works. Other services that are unforeseen
y inay be required of the Civil Engineer during the evolution of
 141.11W
fri project. The health, safety, well-being and comfort 01416,11)11c in
wing facility, and the ultimate facility cost, all depend to a
moldy' able extent on how well members of the project tum fulfill
their professional and contractual responsibilities. The Civil
nglneer, therefore, has obligations as trustee to the public interest
its well as faithful to the private interests of clients. Successfully
[(drilling these responsibilities require candor, mutual trust, and
niiri1ive communication and understanding between the Civil
I tigineer and the client. Only in this way can a professional
iiiIntionship be established and a successful project implemented.
rvil Engineers shall conduct themselves in a highly Professional
rim iner and Serve as Faithful Trustees or agents of their client or
employers.
wit Engineers are therefore bound by the Fundamental Canons of
I tines contained in this manual.
Care and protection of the environment is paramount in the Civil
I ngineer's work engagement.
Civil Engineers must always strive to maintain the highest standard
of Ethical Professional Practice in their dealing with Client
employers, employees, competitors and the community.
1.3 CLIENT-CIVIL ENGINEER RELATIONSHIPS
Many engineering works are conceived, designed, and constructed
through the efforts of Civil Engineers employed in governmental
agencies or in industry. Other engineering projects come to fruition
through the efforts of civil engineering firms engaged for a specific
project or program by public agencies or private clients. Many
public and private entities, of necessity rely on Civil Engineers as
their employees. Independent civil engineering firms are also relied
upon to accomplish projects which require special expertise beyond
the normal capabilities of the client. More recently clients have
2 3
1 -011 iw concepts, such as program management and
pi Hal, In implement projects.
ofinilion and explanation of proper relationships between Civil
multi and their public and private clients are important
of this manual. These are discussed below (See Annex
ample Contracts of Services).
1.3.1 OBLIGATIONS OF THE CIVIL ENGINEER
I lin Obligations of the Civil Engineer include:
The Civil Engineer shall perform Scope of the Services as
stated in SECTION 2.
The Civil Engineer shall exercise reasonable skill, care and
diligence in the performance of his obligations.
The Civil Engineer shall act independently and, as required
by the contract, perform with the necessary skills and
professional judgement, when required to certify, decide or
exercise discretion between the Client and a Third party with
whom the Client has a contract.
1. The Civil Engineer is authorized to act as the Client's faithful
agent when required but only as implied in SECTION 2 or
implied in the contract adopted for the Project.
When aware of any matters which will change or has
changed the scope of the services, the Civil Engineer shall
a
give written notice to the Client containing particulars of the
change.
For Specified Staged Services, the Civil Engineer shall not
initiate or proceed with any subsequent stage of the Services
without the approval of the Client.

7 Whun required, the Civil Engineer shall direct and co-upoi ate
with all other professionals and integrate their work where
applicable into that being undertaken by the Civil Engineer
and other professionals, but shall not be professionally liable
for their work.
8. The Civil Engineer may recommend specialist suppliers
and/or contractors to design and execute certain parts of the
Works, in which case the Civil Engineer shall co-ordinate the
design of such part or parts with the overall design of the
Works but he shall be relieved of all responsibility for the
design, manufacture, installation and performance of any
such part or parts of the Works. The Civil Engineer shall not
be liable for acts of negligence, default or omission by such
person or persons.
9. The Civil Engineer shall notify the Client of any interest the
Civil Engineer has which may significantly conflict with the
interests of the Client under their Contract.
1.3.2 OBLIGATIONS OF THE CLIENT
The Client has the following obligations.
1. The Client shall pay the Civil Engineer for his Services, the
amount of fees and expenses set out in or determined in
their Agreement.
4 2. The Client shall provide the Civil Engineer within reasonable
time (that does not result in delay to the provision of the
Services), all information required by the Civil Engineer in
the performance of his services and a decision in writing on
all matters properly referred to the Client in writing.
Um Client shall coopoi with the Civil Engineer and shall
nut Interfere with or obstruct the proper performance of the
Services.
.1 I he Client shall, as soon as practicable, make arrangements
In enable the Civil Engineer to enter the site and inspect
facilities needed in the performance of his services.
he Client shall arrange for the provision of services from
other professionals or others as may be required and bear all
costs.
8. When the Civil Engineer is required to administer the work of
other professionals or other third parties who are directly
contracted by the Client or when the Civil Engineer is
required to act as Engineer-to-the-Contract for any contract
on behalf of the Client then all instructions by the Client shall
be given through the Civil Engineer.
I. When aware of any matter which will change or has changed
the scope of the Civil Engineer's Services, the Client shall
notify in writing within 7 days the Civil Engineer containing,
as far as is practicable, the particulars of the change.
1.3.3 LIABILITY OF THE CIVIL ENGINEER AND THE CLIENT
the Civil Engineer shall only be liable to pay damages to the
client arising out of or in connection with their Agreement if a
breach of duty of care is established against the Civil Engineer.
the Client shall only be liable to pay damages to the Civil
I ngineer if a breach of the Client's duty to the Civil Engineer is
established against the Client.
Resolution of any conflict arising from the Agreement between
the Civil Engineer and the Client shall be done by giving
proferoncn to tho process of of In shun far
Letoblishmont of the breach of duty on the pan of the Civil
Engineer and that of the breach of the Client's duty to the Civil
Engineer shall be undertaken by a third party arbitrator mutually
acceptable to the Client and the Civil Engineer.
1.3.3 a. Limitation or Civil Engineer's Responsibility
1. The Civil Engineer shall have no responsibility or liability
for costs, loss or damage of whatsoever nature arising from
any errors in or omission from data, documents, plans,
design or specifications not prepared by the Civil Engineer,
or other personnel under the, direct control of the Civil
Engineer, and arising from any act or omission or lack of
performance or any negligent or fraudulent act or omission
by the Client or any Other Consultant, Contractor or supplier
to the Client or any employee or agent of the Client, Other
Consultants, Contractors or suppliers.
2. Notwithstanding any recommendation or lack of
recommendation made by the Civil Engineer to the Client,
the Civil Engineer shall not be held to have made any
warranty or promise as to the suitability, competence or
performance of any Other Consultant, Contractor, supplier,
or other third party.
3. The Civil Engineer shall not be responsible for the
techniques, method, programmes, sequences or procedures
adopted by any Contractor or other third party responsible
for executing any aspects of the Project, nor for their
performance on time, their failure to carry out the work in
accordance with any contract documents or for any other
acts or omissions.
*Services had been suspended, the time for their completion
6 7
1,3,3 I). Damages
It found that the Civil Engineer undertaking Services is liable
to the Client, damages shall be payable on the following
orms:
1. Damages payable shall be limited to the amount of
reasonably foreseeable loss and damage suffered as a
direct result of such breach;
2. The maximum amount of damages payable in respect of
liability, whether under the law or contract, or otherwise, is
limited to the amount specified in the Specific Provision or, if
no such amount or provision is specified, to the lesser of
P300,000 or 10% of the total amount of damages of the
portion of the work attributable to the Civil Engineer's breach
of duty or twenty five percent of the total of fees payable
under their Agreement;
3. If found to be liable, in circumstances where the acts or
omissions of a third party have contributed to the loss or
damage, the proportion of damages payable by the party
found liable shall be limited to that proportion which is
attributable to that party's breach of duty, whether the claims
are made under contract or otherwise.
itii SUSPENSION OR TERMINATION OF SERVICES
If circumstances arise for which the Civil Engineer is not
-.ponsible and which make it impractical or impossible for the
civil Engineer to perform in whole or in part the Services in
accordance with their Agreement then the Civil Engineer shall
promptly notify the Client of the same.
If by reason of the abovementioned circumstances certain
 IWPW
*hall be extended by thu extent of the delay plus 11 realonnblii
pulled fel limit resumption, or if the speed of performing coilitin
Services has to be reduced, the time for their completion shall
•‘1,inded as is necessary by reason of the circumstances.
I ho Client may suspend all or part of the Services or terminate
the Agreement by written notice of not less than 30 days to the
Clvil Engineer who shall immediately make arrangements to
stop the Services and minimize further expenditure.
The Civil Engineer by written notice of no less than 30 days may
terminate the Agreement or at his and or her discretion without
prejudice to the right to terminate, suspend the performance of
the whole or part or the Services under the following conditions:
1. When 30 days after the due date or payment of any account
the Civil Engineer has not received payment of that part of it
which has not by that time been contested in writing, or
2. When Services have been suspended for a period exceeding
6 calendar months, or if it is clear to the Civil Engineer that it will
be impossible or impractical to resume the suspended Services
before the period of suspension has exceeded six months.
When the Services are suspended or terminated the Civil
Engineer shall be entitled to payment for the Services carried
out including consequential costs, expenses and disruption fees
incurred as a result of the suspension or termination, and
remobilization fees on resumption. 'Suspension or termination of
the Agreement shall not prejudice or affect accrued rights or
claims and liabilities of the parties.
1.3.5 SETTLEMENT OF DISPUTES
If a dispute arises on either party, then that party shall by notice
in writing served on the other party of the details of the dispute
8 9
and request that the dispute be resolved by conciliation. If the
matter In dispute is not resolved in conciliation between the
parties within the prescribed time then the matter in dispute shall
he referred to arbitration.
9.3.6 OWNERSHIP OF DATA, DESIGNS AND DOCUMENTS
The design analyses, drawings, specifications and
reproductions thereof are instruments of service owned by the
r Professional Engineer and shall be used only for the specific
project covered by the agreement between the Client and
ingineer.
CIVIL ENGINEERING SERVICES
II Engineers and civil engineering firms, whether they serve
Ile or private employers (clients) can provide a variety of
rtent services which are described in Section 2. Typical
COS may include:
Design, consultations and advice
Feasibility studies
a Field investigations and engineering data collection
Environmental assessments, impact statements or
Engineering reports
Opinions of probable construction cost
•Preliminary and final designs, drawings, specifications and
construction bidding documents
Assistance in securing construction bids and in awarding
contracts

■ construction islitunistrotion and ohne! vntion
■ Arrangements for or performance of testing of materials
equipment
■ Assistance in start-up, assessment of capacity, and opera
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
Civil Engineers may also serve as construction managers
program managers and may employ other subconsultants an
subcontractors as part of their services.
Many Civil Engineers and civil engineering firms specialize I
specific areas of engineering, such as: structural and foundation
geotechnical and environmental, water resources and hydraulics
transportation, and construction management and engineering.
10
OIVII Rtigineuling fhms drew upon the combined
Various disciplines such as economists, planners,
Ad designers, estimators, architects, scientists,
lysts, specification writers, drafters, field
surveyors, and others. The expertise of
specialists in other fields, particularly as the use of
100Mputer-aided design and drafting increases, is
Likewise, Civil Engineers are employed by these
Mist them in the performance of their respective
hear provides services which may result in the client's
nencIal resources for construction of a proposed
suitability of the constructed project for the intended
t often be accepted at face value by the client, who
Millar with the technical and civil engineering aspects
Thus, civil engineering services must be performed in
and efficient manner, on a highly professional and
and in an atmosphere of mutual respect and trust.
plementation has become inbreasingly complex, involving
environmental, regulatory, technical and managerial
it a result, clients have opted to pursue a number of
teflon approaches. One such approach is commonly
rnm management. The client retains a program manager
specialized tasks necessary to the development or
of a specific project. Alternatively, the client may
rogram manager to develop, define and oversee the
prepare budgetary estimates of program costs, prepare
hedules, evaluate and select members of the program
provide periodic program status reports. In other cases,
M manager's staff would in essence act as an extension
rect with, the client's staff through the life of the program.
ses, the client continues to be the contracting agent with
ers of the program team and the contractors hired to
the project. The Program Manager is generally a Civil
11
I noinnor.
1.6 SPECIALIZATION IN CIVIL ENGINEERING
Within the practice of civil engineering, the PICE recognizes the
Initial five areas of specialization. A Civil Engineer who has
demonstrated his knowledge, experience, education and training i
accordance with the requirements of the concerned Special
Committee of the PICE is awarded a certificate of specialization b
PICE. Those awarded with the certificates are considered qualifie
for positions in the respective areas of specialization.
I he PICE recognizes specializations in the fields of structural
engineering, geotechnical engineering, water engineering,
transportation engineering, and construction management and
engineering. A Civil Engineer who has specialized in any area of
civil engineering may be considered as a specialist in the
appropriate field as enumerated.
1.6 SELECTION OF A CIVIL ENGINEER
The engagement of a Civil Engineer is one of the most important
decisions to be made during the development of an engineering
project. The accomplishment of the client's objectives and
commitment of financial resources, soundness of design, and
suitability of the proposed project for its intended function rest upon
the experience, organization, skill, integrity, and judgment of the
Civil Engineer. The Civil Engineer's recommendations based on
those factors, affect life-cycle costs and thereby influence the
economic feasibility of the undertaking.
The cost of the full range of engineering services typically amounts
to not less than 1 to 2% of the life-cycle cost of most construction
projects. It is, therefore in the client's best interest to engage the
at qualified and reputable Civil Engineers or Civil Engineering
rm available. It is usually advantageous for the client to select a
12
I Engineer who can support the project from conception through
Ign, construction, and project start-up. Continuity of service
$ In developing a relationship between the Civil Engineer and
anent, which will add to the success of the project.
lifications, experience, reputation, and quality of client service
Of critical importance in the selection of a Civil Engineer as a
pultant. Selection based primarily on cost of services, with
d consideration of the competence or expertise of the
Rant, can result in unsatisfactory service to the client and in
r overall project costs. The Civil Engineers competence in
laity fields, performance on other projects of similar nature,
relationship with the design team members, personnel
bignments, provision for independent reviews, and costs,
once and other annual charges and the resulting life-cycle
IS of the project. Importantly, the client should recognize that
sting an engineer based on quality and expertise is somewhat
Jective. It is imperative that clients assign those individuals who
re best suited within their organizations to make that selection.
Once a Civil Engineer is selected, detailed discussions between the
engineer and client to define the scope and expectations of the
4engineering services to be provided, are essential before
negotiating a fee for services. A clearly defined scope of services
greatly reduces the potential for misunderstandings or confusion
which can later evolve into project delays and claims for additional
compensation. A detailed scope of services protects the interests
of both the client and the consultants.
The Philippine Institute of Civil Engineers supports procedures such
as those specified by CIAP Documents 101 and 102, Executive
rder 164, and PD 1594 as amended. In applying these
procedures the selection, procurement and administration of
ngineering services should be the responsibility of the owner or
the owner's engineering staff.
13
 --,11111111111r
11 PRIME PROFESSIONAL PRACTICE
he guidelines in this manual refer specifically to the engagement
of engineering services where the consulting Civil Engineers serve
ns the client directly as a prime professional, and where the client is
iinually also the owner of the project. Some information in this
manual is also applicable when the Civil Engineer serves the client
indirectly as a sub-consultant through another engineer or architect
who serves as the prime professional. These services may also be
performed through another entity on a design-build construction
iiiiinagement, or turnkey project.
1.11 EMPLOYMENT
Hie guidelines in this manual also refer to Civil Engineers
iiiiiployed by professional consulting firms, government agencies,
Iticational institutions, construction firms, manufacturing and
wilmercial entities and other entities.
1.9 DESIGN COMPETITION
Design competition is a process through which a Civil Engineer is
selected above other competitors based on proposal or an
Innovative approach to solving a client's needs. Competing firms
are normally shortiisted from a number or engineers responding to
a client', solicitation either directly, by a letter request or indirectly
through a newspaper or other form or publication. The civil
engineer should be awarded a stipend to participate in the
competition.
1.10 CONTINGENCY BASIS OF EMPLOYMENT
Canon 5c or the PICE Code or Ethics provides that "Engineers may
request, propose or accept professional commissions on a
contingency basis only under circumstances in which their
professional judgments would not be compromised." Although
14
101111Pr •
11111111.1.111111,111111.1•1111.1
entIngent commissions are permissible, It Is the general view of
I 'ICE that it is not in the best interest of the client or the public for
the Civil Engineer to provide professional services on a contingency
1.11 PROFESSIONAL PRACTICE OF FOREIGN CIVIL
ENGINEERS
S
'foreign Civil Engineers are allowed by law (See RA 8981) to
practice civil engineering in the Philippines under the following
Instances.
The laws of the foreigner's state or country allow the citizens of
the Philippines to practice civil engineering on the same basis
and grant the same privileges as those enjoyed by the subjects
or citizens of such foreign state or country.
Allowed under international agreement.
Consultants to be engaged in foreign-funded, joint venture or
foreign-assisted projects of the government.
Employees of Philippine or foreign private institutions pursuant
to law.
Civil Engineers who were former citizens of the Philippines,
who had been registered and issued a certificate of registration
and a professional identification card prior to their
naturalization as foreign citizens, and who, while in the country
on a visit, sojourn or permanent residence, desire to practice
their profession.
he application of the law is however not automatic. Foreign civil
I
engineers must still secure a certificate of registration/license or
special permit from the Professional Regulation Commission.
0Agencies, organizations or individuals, whether public or private,
15
 .'"1111111.11r
who secure the services of a foreign CIA Inns, aro made
responsible by law (HA. 8981) for securing a special permit from
the PRC and the Department of Labor and Employment pursuant to SECTION 2
dr respective rules.

Classification of Engineering Services

GENERAL

needs for professional civil engineering services vary, and the

engineering firms that meet these needs vary in organizational
Oture, size, and capability. Many civil engineering firms provide
prehensive services to the client, while other firms specialize in
of engineering, such as geotechnical or structural, and
portation, water and construction management, and provide
r services to a prime engineer, architect, or owner. Few civil
eering firms are qualified to provide complete service for all
cts, and the use of associate professionals to provide
Clalized services is common.

ices provided by Civil Engineers can be grouped into five

ed categories:

Consultations, research, investigations, and reports.

Design services for construction projects
onstruction services
Special services for construction projects
Engineering support services
Academic services
Services as Employee

The types of infrastructure under the domain of civil engineering,

pursuant to RA 544, as amended, include:

1. Streets, bridges, highways and railroads

16 17

2 Airports and hangars
3 Portworks, canals, river and shore improvements, light houses
and dry docks
4, Buildings
8, Fixed structures for irrigation, flood protection, drainage, water
supply and sewerage works
8. Tunnels
The coverage of civil engineering has not been changed nor
diminished by subsequent laws.
2.2 CONSULTATIONS, RESEARCH, INVESTIGATIONS AND
REPORTS
These services deal primarily with collecting, interpreting, and
reporting information, together with formulating conclusions and
making recommendations. Typical services in this category are:
2.2.1 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.
2.2.2 Planning Studies
These services may include the broad areas of developing the
engineering requirements of master plans for long-range capital
18
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. Such
planning often requires coordination of the work of many
engineering and other disciplines.
# 2,2.3 Appraisals, Valuations and Rate Studies
# Those services may include investigations and analyses of
existing conditions; capital and operating costs; overhead costs
end costs of financing; and revenues as needed to evaluate a
property or to recommend establishment of prospective rates.
2.2.4 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
projected future needs, statements of probable construction
costs, and an estimate of annual revenue requirements, with a
determination of appropriate rates to provide this income.
2.2.5 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.
2.2.6 Direct Personal Services
This includes services such as assistance in preparation for
legal proceedings. Appearances before courts or commissions
19
to render export opinions and conclusions, and InVIllefletIons of
technical matters where specialized civil anulnouring
knowledge, experience, and judgment is required.
2.2.7 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.
2.2.8 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
20
Materials process design
Pilot studies
Computer modeling
Safety engineering
Topographic, sounding and boundary survey engineering
Toxic and hazardous waste evaluation
Permit and application services
Sales and marketing services
Expert witness
Representation of municipal or private entities in projects
proposed for privatization
DESIGN SERVICES FOR CONSTRUCTION PROJECTS
03/411 engineering services are required for each of six typical
1.11.ises of a construction project. All services are preferably
tiunished by the same Civil Engineer for consistency and efficiency,
hough at times services in various phases are furnished by
Iferent engineers or by the client. The services are supplemented
special services which may be provided by the client, a
ecialized engineer, or another Civil Engineer.
The six standard phases of a construction project and the
ngineering services needed for each are:
21
 .41.1411.1Pr
■ Study and Round Phase,
Analysis of the *Den of hydrological Mtn, traffic studios, mat
conceptual design conceptual opinions of ts needs, erials engineering,
cost. prob able con struction assembly of /ening, deed and other
restrictive land use
Information, and environmental assessments and impact
■ Preliminary Design Phase. statements.
Preparation of final design criteria,
preliminary drawings, outline specificatio
ns, and preliminary
opinions of probable construction cost. 3. Identifying and analyzing requirements of governmental
authorities having jurisdiction to approve
the design of the
■ Final Design Phase. project and participating in consultations with
Preparation of design calculations, such authorities.
construction drawings, specifications, esti
mated construction
cost, and other contract documents. 4. Providing analyses of the clients needs, planning surveys,
comparative evaluations of prospective sites
and solutions.
■ Bidding or Negotiating Phase.
Assistance
bidding or negotiating process for constru to the client with the 5. Providing a general economic analysis of the client's
ction of the project. requirements applicable to various alternat
ives.
■ Construction Phase.
Advice and Consultation on matters
related to his services. 6. Preparing a report and presenting alternative solutions
available to the client with the Civil Eng
ineer's findings and
Operation Phase. recommendations. The report may contain
schematic layouts,
Assistance to the clie
operation of the project, including periodic nt in start-up and sketches, conceptual design criteria with
appropriate exhibits to
inspections. indicate clearly the considerations involved
(including applicable
2.3.1 Study and Report Phase requirements of governmental authoriti
es having jurisdiction)
and the Civil Engineers conceptional opin
ion of probable costs
Fit phase involves determination of for the project.
project scope and
economic and technical evaluation of feas
ible alternatives. The
.tervices performed during this phase may 2.3.2 Preliminary Design Phase
include:
I Reviewing available data and consult This phase involves the establishment of
ing with the client to the general size and
clarify and define the client's requirements scope of the project and its location on
for the project. the selected site. The
preliminary design services may include:
Advising the client as to the necessity
of providing or 1. Consulting with the client, reviewing
obtaining from others additional data or preliminary reports,
services and assisting clarifying and defining the project req
the client in obtaining such data and serv uirements, reviewing
ices. These additional available data, and discussing general sche
tiervices may include photogrammetry, reco duling. Conferences
nnaissance surveys, may also be required with approv
property surveys, topographic sur ing and regulatory
veys, geotechnical
Investigations and consultations, seismici governmental agencies and applicable utilit
ty studies, compilation ies.

22
23
2. Advising the client as tO00101 additional dote or nthvices
of the typo described tinder the study and report phase above
nia required and assisting the client in obtaining such data and
Services.
3, Preparing preliminary design documents consisting of final
design criteria, preliminary drawings, outline specifications, and
written descriptions of the project.
4. Preparing revised estimates of probable total project costs.
Providing periodic status reports.
2.3.3 Final Design Phase
I his phase of project development is usually undertaken only
after the client has approved the preliminary design phase
material. The basic services for the final design phase may
include:
I Preparing construction drawings and specifications showing
the character and extent of the project based on the accepted
preliminary design documents.
2.. Preparing and furnishing to the client a revised estimate of
probable total project costs based on the final drawings and
specifications.
4 Furnishing the necessary engineering data and assisting in
the application for regulatory permits from local, or national
authorities. This is distinguished from and does not include
detailed applications and supporting documents for government
ijrants-in-aid or planning grants that would be furnished as
additional services described later in this section.
4. Preparing basic documents related to construction contracts
24
fur review and approval by the client (and the client's legal and
other advisors) Those may include contract agreement forms,
gannet' conditions and supplementary conditions, invitations to
bid, Instructions to bidders, insurance and bonding
•requirements, and other contract-related documents.
b. Furnishing to the client specified number of copies of
drawings, specifications and other contract documents.
E. Providing final design and construction services for design-
build contracts. The engineer generally serves as a
subcontractor to a general contractor during the initial planning
and design phases. Services provided by the engineer may
extend through the construction phase, as appropriate.
7. Providing periodic status reports.
2.3.4 Bidding or 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, clarify, 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
25
of alternative materials end equipment proposed by the
prospective constructors when substitution pilot to the awisil 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.
2.3.5 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. Construction phase services
may include:
1. Reviewing, for compliance with design concepts, shop and
erection drawings submitted by the constructors.
2. Reviewing laboratory, shop, and mill test reports on
materials and equipment.
3. Visiting the project site at appropriate intervals as
construction proceeds to observe .and report on the progress
and the quality of the executed work.
4. Providing services during construction by a full-time resident
project representative, and by supporting staff as required, to
enable construction to be accomplished in conformance to the
construction drawings, specifications, and other contract
documents.
5. Issuing instructions from the client to the contractors, Issuing
26
nncessnry interpretations and clarifications of contract
documents, preparing change orders, requiring special
Inspections and testing of the work, and making
recommendations as to acceptability of the work.
6. Making recommendations to the client on corrective actions
or contractual measures that may be exercised by the owner.
7. Preparing sketches required to resolve problems due to
actual field conditions encountered.
II. Determining amounts of progress payments due, based on
degree of completion of the work, and recommending issuance
of such payments by the client.
9. Observing and assisting performance tests and initial
operation of the project.
10. Preparing record drawings from information submitted by
the contractor.
11. Making a final inspection and reporting on completion of the
project, including recommendations concerning final payments
to contractors and release of retained percentages.
2.3.6 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 inspection prior to the end of the project
warranty period. The Civil Engineer may assist in operator
training, setting up job classifications and salaries, organizing
27
 the purchase of supplies developing dinars for recording
operational data, and observing and repodinu CM project
operations.
2.4 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 RA 544, only registered Civil Engineers 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
►he profession as the consulting.Civil Engineer.
2.5 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
28
ports, moy relate to the clients decisions as to the feasibility
tope, and location of the project. The research, compilation of
'hearing data, and acquisition of property may involve
salon& specialists in engineering and other fields.
olol services that may be provided by the Civil Engineer or
ranted with other firms or sub-consultants by the Civil Engineer
hp on behalf of the client could include:
;eotechnical engineering - including test borings, sampling and
‘inalysis, and recommendations.
Special studies, tests, and process determinations to establish
design criteria or demonstrate compliance.
Land surveys, establishment of boundaries and monuments,
preparation of easement descriptions, and related
computations and drawings.
Engineering and topographic surveys for design and
construction.
Mill, shop, or laboratory inspections of the materials and
equipment.
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.
Extra travel and subsistence as defined by the agreement for
engineering services.
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
29
 not, to anapest u bettor approach for meeting
the pleioclia
functional and financial criteria.
0 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 contractor.
12. Preparation of detailed applications and supporting documents
grants or advances for public works projects.
13. Plotting, computing, and filing 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 studies and design efforts to meet special conditions
encountered during construction.
18. 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 project development.
30
I: Assessment of a completed projects ability to meet its design
Intent relative to capacity, maintainability, operability, or
reliability.
Computer simulation and modeling.
,0 ENGINEERING SUPPORT SERVICES
ce professional services described above often require
(peering support services. Geotechnical engineering, for
wimple, frequently requires services such as taking soil and rock
wings, excavating test pits sampling and identifying soil and earth
Medals, field and laboratory tests and geophysical measurements
d observations. The engineering support services in general civil
cilneering practice may involve drafting, land and construction
rveying, and other data gathering activities for specialized
rposes. Although persons who are not Civil Engineers
etimes accomplish some of these tasks, the procurement of
equate and correct data usually requires professional Civil
ngineering judgment and guidance. Since soundness of any
ngineering decision is dependent upon the accuracy and suitability
f data obtained in field and laboratory investigations these
pporting services must be under the guidance of the Civil
pgineer whose decisions will be based upon those data.
ACADEMIC SERVICES
ese services involve full or part time teaching or training of
respective 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 RA 8981, all
subjects for licensure examinations shall be taught by persons
31
 who ale holders of valid certificates of raalStrOGIWPftlfessionel
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
d. Serving as a Resource Speaker in Technical Session.
e. Writing technical articles and pamphlets.
Standards for an employee and an individual consultant as
ad In this manual apply to this Civil Engineer.
ClvII Engineer employed as an individual consultant of any
whether the firm is performing engineering, commercial,
MInIstrative, management or financial services is required to
ply with the requirements and the standards herein established
a consulting Civil Engineering firm or consulting Civil Engineer.
Government Civil Engineers employed by the instrumentalities
the Government e.g. national and local, shall be governed by
ninent existing laws and regularities and particularly to those
scribed by the Civil Service Commission. In case of any conflict
Iii any of the provisions of this Manual of Practice, such pertinent
and regulations shall take precedence and shall govern.

2.8 SERVICES AS EMPLOYEE

This is a condition when a Civil Engineer engages to perform work

or fulfill 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 this manual. A licensed Civil Engineer may not
allow his licensed to be used by the company that employs him
without the 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
i‘ moll charge the professional fee for said services.

Civil Engineer in part time employment with a firm is considered

be an employee and at the same time a consultant of the firm.

32 33

firCTION 3 het Wall as determined by inquiries to previous clients and other
The Selection of the Civil Engineer
GENERAL
he selection and engagement of a Civil Engineer is one of the
OSt important decisions to be made during the development of an
polneering project. No two Civil Engineers have the same training,
xperience, capabilities, personnel, workloads, and particular
bIlltles. Selection of the most qualified Civil Engineer for a specific
reject will result in a well-planned and designed, economical,
and
UCcessful project.
his section presents what experience has shown to be the best
nd, therefore, the recommended procedure for the engagem
ent of
Civil Engineer.
2 BASIS FOR SELECTION
Elie client should establish administrative policy and criteria
for the
lactic!) of qualified Civil Engineers for particular projects. The
lent's first step is to define the proposed scope of the
project. In
me cases, this may be a general statement of the performa
nce
uirements of the project. At other times, the tasks to be
rformed maybe individually identified and defined. By clearly
fining the services which the Civil Engineer is to furnish, the
• nt can accurately judge whether or not the Civil Engineer is best
iiiipped to provide them.
me of the factors that should be considered in the selection
ores are:
34
the professional end ethical reputation of the Civil Engineer and
references.
Responsible Civil Engineers and its employee and must be
registered professional Civil Engineers.
Civil Engineers should have demonstrated qualifications and
expertise, performing the services required for the project.
Civil Engineer should be able to assign qualified engineering
staff who will be in responsible charge of the project and will be
able to provide and complete the required services within the
time allotted.
The Civil Engineer should have the necessary financial and
business resources to accomplish the assignment and provide
continuing service.
The selection procedures described in this manual 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.
3.3 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 eternal
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
35
"tint chounn individuals who demonstrate obleOtIvIty In older t
ovoid the appearance of a conflict of interest In the naloction of th
Engineer. At least one of the individuals should be thorough)
familiar with the civil engineering practices. The committee I
,responsible for making recommendations after conductin
appropriate investigations, interviews, and inquiries. The fine
rialectlon is then based upon the selection committee'
1 4 1commendations.
3.4
QUALIFICATIONS-BASED SELECTION (QBS)
PROCEDURE
I he selection procedure is considerably enhanced when the client
1,6 fully familiar with the purpose and nature of the proposed project,
an describe the project in detail, and can prepare a project scope
.ind outline of services expected of the Civil Engineer. In some
uses 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.
I he client's usual steps in the selection procedure are presented
Inflow. If the client has had satisfactory experience with one or
more Civil Engineers, it may not be necessary to follow all of the
'ceps outlined.
I 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 a 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.
36
ieper() budget for the staff time and costs that can be
toted from potential Civil Engineer prior to receipt of the
a or RFPs,
mluata the statements of qualifications received. Select at
sat 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.
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
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
37
 supplementing the selection committee with personnel wt
have epecinlized expertise to advise the 00mMittee, who
appropriate. During each interview the selection committ
should review the qualifications and experience of each Cl,
Engineer or firm, the capability to provide the services with
the time allotted, and the key personnel to be assigned to t
project.
0. Check with recent clients of each Civil Engineer or firm
determine the quality of their performance. This check ne
not be 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 th
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 reported in
Section 4 herein; 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
38
1101noora or firm. If no accord is ranched, the client should
elt outside assistance before continuing with the selection
Net Such a procedure will usually result in development of
.letisfactory contract. All such negotiations should be on a
Qtly confidential basis, and in no case should the
pensation discussed with one Civil Engineer be disclosed
mother.
hen agreement has been reached on scope, schedule and
mpensation, the client and selected Civil Engineer should
finalize their agreement in a written contract.
SELECTION PROCEDURE FOR "LEVEL OF EFFORT"
CONTRACTS
vol of effort" type of contract for engineering services is a
tract procedure used to supplement a client staff, either by
Wing an extension to existing disciplines and capabilities
tidy on board or by adding special disciplines not available on
client's staff.
applied to "level of effort" contracts, the QBS procedure sets
h the general nature of services to be rendered, the types of
Ocialists required and the estimated number of hours required
ring the contract period for each type and grade of specialist. and
n requests proposals from qualified firms. Proposals usually
Ole the experience of the firm as it pertains to the given scope of
rvices, and the backgrounds of the specialists available to work
the project. After narrowing the proposals to those which best
eet experience qualifications, the client negotiates an agreement
• described in paragraphs 9-11 above.
3.5.1 Bidding
Professional engineering and architectural societies, recognize
QBS as the preferred method for procurement of professional
39
services. In fact the NEDA Guidelines require the
PMOUrainent
of professional engineering and architectural services only by a
piocoss similar to that described in "Qualifications-Base
Selection Procedure", above.
Selection of Civil Engineers and related service professionals,
Including consultants and sub consultants on construction
projects, should result from competition based on the
qualifications and resources best suited to complete a project
successfully in terms of performance quality and cost-
effectiveness. Qualifications and resources, including training,
professional licensing experience, skills, capabilities, special
expertise personnel, and workloads, are paramount
considerations in engaging engineering services. Costs of these
services, while important and meriting careful negotiations and
performance accountability, are a small portion of overall project
costs and should be subordinate to professional qualifications
and experience.
Or these reasons, bidding for professional services is not
There are many reasons why bidding for consulting Civil
Engineering services often produces unsatisfactory results for
the client. Principal among these are:
Bidding does not recognize professional judgment, which is the
key difference between professional services and the furnishing
of products. Judgment is an essential ingredient in quality
engineering services.
It is virtually impossible to completely detail in advance the
scope of services required for an engineering project especially
for the study and preliminary phases, without lengthy
discussions and negotiations with the selected firm. Lacking
specifics, the bidding firms must, in order to be competitive,
submit a price for the least effort envisioned. The resulting
service performed is likely to be tailored to fit the minimal
requirements of the bid documents and will not necessarily suit
40
the client's needs or expectations.
In-depth studies and analyses by the consulting Civil Engineer
are not likely to be performed. The consulting Civil Engineer
selected by lowest bid will often provide only the minimum
services necessary to satisfy the client's scope of services.
The consulting Civil Engineer's ability to be flexible and creative
in meeting the client's requirements is severely limited.
The engineering designs are likely to be minimal in
completeness with the details left to the contractor. This
produces a lower first cost design but tends to add to the cost
of the completed project. The lack of design-details also can
and frequently does, lead to a greater number of change orders
during construction and to contractor claims at a later date.
ommended.
3.5.2 Two-Envelope System
The two-envelope system involves submission of a technical
proposal in one envelope and a price proposal in a second
envelope. The client then evaluates the technical proposals and
selects the best qualified Civil Engineer based on that consulting
Civil Engineer's technical proposal At this point in the selection
procedure, the client opens the price proposal submitted in the
second envelope and uses this as a basis for negotiation of
contractual scope and fees The second envelopes submitted by
the unsuccessful proposers are returned unopened.
If the client follows this procedure, the net effect is as outlined in
"Qualifications-Based Selection procedure," provided that the
client and the best qualified consulting Civil Engineer have
extensive discussions to reach full agreement on the scope of
41
 11.11.11Pr
services This Omit the client to utilize1 1dpe and SECTION 4
experience of the consulting Civil Engineer In establishing the
scope of services. Upon agreement of scope, the price o
services should be negotiated to reflect changes from th 'Charging for Civil Engineering Services
original scope used for obtaining proposals.

If both envelopes of all proposers are opened at the same time, GENERAL
a bidding process, as discussed in the section on "Bidding," is.
initiated with attendant disadvantages. Procedures should be Imes for engineering services are usually computed using one
established to provide confirmation that the second envelope is Ix methods:
opened for only the successful proposal.
Salary cost times multiplier plus direct non-salary expense
The two-envelope system is not recommended. If used as ("Reimbursable').
intended, it is similar to the recommended QES procedure Hourly billing rates plus reimbursables.
except that the added cost to prepare a comprehensive scope Per diem.
and price discourages some consulting Civil Engineers from Cost plus fixed fee ("CPFF').
participating. The costs to prepare a proper price proposal are Fixed price.
considerable to the firms not selected, which increases the Percentage of construction cost ("Percentage').
overall business costs of consulting civil engineering and
ultimately of the clients. binations of methods of payment for different phases of the
ntract may be used. The method or combination of methods used
spends upon the nature, scope, and complexity of services
uired by the client. The first four methods are based upon the
Ivil Engineers costs to perform services. They are particularly
pplicable to assignments where the scope of services is not self
alined. The fixed price and percentage of construction cost
ethods are based upon a specific deliverable and do require that
he project scope be well defined. The cost plus fixed fee method
provides more flexibility to accommodate both scope and fee
Changes than do either the fixed price or percentage or construction
Cost methods.

The potential risks and problems faced by both the client and the
Civil Engineer, when the scope of services is not well defined,
should be recognized and discussed during early negotiations.
Often, initial estimates of maximum engineering costs for projects

42 43

of uncertain scope are requested by the budgeting
purposes. Such budget estimates should stele the they do not
tunikliluto an agreed-upon maximum and that they aro to be
I ,vised as the scope of services becomes better defined.
'iron a reimbursement method such as salary cost times
'Moller, hourly billing rate, per diem, or cost plus fixed fee is
Ion because of uncertainty of the scope of services. It is logical
propose that an upper limit (maximum amount) for these services
included in the agreement. The inconsistency of such a proposal
proportional to the uncertainty of the scope. However, these
'Mods are used with a "not-to-exceed" amount. In this case, it is
Ii ortant for the client and the engineer to agree beforehand on a
•Mod for adjusting the "not to-exceed" amount when adjustment
warranted. One reasonable approach to compensation for
ortain assignments is to require the Civil Engineer to inform the
r-nt when engineering costs are approaching 75 percent of a
tied budget figure and to forecast the probable total cost. This
itvision gives the client and the engineer an opportunity to
•. imine progress at that point and, if appropriate, to revise either
• original budget or not-to-exceed amount or the scope of
tiaining services.
The charge for engineering services using the fixed price or the
tr,entage of construction cost methods is based entirely on the
.pe of services. These methods may be appropriate where the
ipe of services is well defined and the Civil Engineer's costs are
(Inn his/her control. Certain types of investigations and designs
well suited to these methods of determining charges.
.1ormination of charges for services such as resident project
, ,lesentation during construction, where the Civil Engineer's costs
tv be affected significantly by the contractors performance can be
ornplished more equitably by one of the methods based on the
tire' cost of service.
44
I
111111.11111111Mh-r-,---
gaaasionally, a Civil Engineer has unique qualifications, and/or
expertise that is not readily available, and/or computer programs
at materially decrease the time required for project execution. In
a Instances, the Civil Engineer may demonstrate that his/her
pose/ will make the project easier, faster: safer, or less
pensive to achieve the clients objective.
lerly, the client may wish the Civil Engineer to undertake a
Oct characterized by an accelerated schedule, non-routine
cat and/or high risk activities,. Under these circumstances
arges for engineering services may' be based on "value pricing.
hich reflects a premium rate not tied directly to the Civil
gineer's cost, but based on the Civil Engineers unique
ualifications or the extenuating circumstances One of the more
mmon value pricing tasks is providing expert witness services.
4,2 SALARY COST TIMES MULTIPLIER PLUS DIRECT NON-
SALARY EXPENSE
ompensation on the basis of the salary cost times an agreed
Multiplier is a frequently used method of determining charges for
'neerin• services. With this method, charges for engineering
ces are based mainly on direct salaries. It is therefore
visable that the Civil Engineer reach an agreement with the client
salary ranges for each classification of service applicable, as
II as on the time period over which they can be guaranteed. This
ay help avoid future surprises, misunderstandings, and disputes.
he salary cost times multiplier method may be utilized as either a
ultiplier times salary cost (two multiplier version) or a multiplier
es direct salary cost (single multiplier version)
The direct salary times multiplier or as it is frequently called the
rect labor times multiplier version is yew similar to the salary cost
mes multiplier with the exception that it applies a single multiplier
unburdened direct labor costs, i.e., direct salaries without
45
employes benefits. I he einglo multiplier includes Ousts asocial
with employee benefits, overhead, and a margin for centinnencie
rink, and profit. The direct salary times multiplier version of th
method Is being utilized more frequently due to the simplistic na
UtIllzinga single multiplier. Of the two versions of this metho
the salary cost times multiplier is the more easily accountable d_
basic premise of providing two separate multipliers. On
multiplier is based upon definitive costs. i.e, employee benefits en,
the other multiplier based upon costs which may vary from projec
to project.
Regardless of the method utilized as a basis of compensation, a
provision in the agreement should state that payments will be made
to tho Civil Engineer during progress of the services, based on
monthly invoices, and within a reasonable time after billing. Direct
nonsalary expenses are a separate item for reimbursement usually
with a service charge. The following factors are pertinent to the
iliiry cost times multiplier version of this method (they may also
'!ply 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, workers' compensation
insurance retirement, medical, and other group: benefits.
Note that salaries or imputed salaries of partners or principals,
to the extent that they perform technical or advisory services
directly chargeable to the project, are to be reimbursed in the
same way as are other direct salary costs.
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
46
or Invested capital readiness to serve, and profit. The size of the
multiplioi will yin y with the type of service, the nature and
eXparionco of the civil engineering firm, and the geographic area
which Its office is located.
The average multiplier should be between 2.5 and 3.0 times the
voyage salary cost. For some services, however, a higher
Multiplier is usually applicable for services requiring
fecommendations based on extensive experience and special
knowledge, or for services involving expert testimony in legal
proceedings. The Multiplier may also increase with the
experience and special capabilities of the Civil Engineer's firm.
3. Direct non-salary expenses usually incurred in engineering
engagements may include the following:
a. Living and traveling expenses of principals and employee's
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, GADD 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 (blueprinting, photocopying, and printing)
charged to the clients project) as distinguished from such
47
 'NNW
supplies end expenses applicable to semil projects,
u. Lxponses 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
48
expenses, essential to the 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.
6. Accounting records. The Civil Engineer who performs
services under a salary cost times multiplier agreement or other
cost-based 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.
3 HOURLY BILLING RATE
he hourly billing rate method of compensation is very similar to the
lary cost times multiplier method in that the hourly billing rate
irIcludes all direct personnel expense, overhead and profit. Direct
nen-salary expenses (as defined under the salary cost times
multiplier section) are a separate item for reimbursement, usually
With a service charge. Civil engineering firms may elect to utilize
this method of compensation on projects where the scope of
49
 1111111111Pr
Nervier, le not well donned or to simplify accounting and u'cord
knotting
4.4 PER DIEM
iho term per diem normally refers to an eight-hour day. Direr
personal services of the type described in Section 2 which a
frequently charged on a per diem basis. This basis is particular
suited to expert witness or other legal-type services and to othe
short-term engagements involving intermittent personal services.
Where per diem services are furnished, the Civil Engineer shou
be compensated for all of the time devoted to providing the
including travel and standby time. The per diem charge should b
based on the complexity, risk, and important of the services and o
the Civil Engineer's professional standing, expertise, and breadth o
experience. The Civil Engineer is also reimbursed for travel an
subsistence costs and for other out-of-pocket expenses incurre
when away from the home office.
For engagements in which the Civil Engineer is to appear as a
expert, a per diem charge is considered to be earned for each da
of such appearance, even though the Civil Engineer is not called t
testify or, if called, may, finish testifying in only a part of the day.
On occasion the urgency of the engagement requires the Civi
Engineers time regularly for periods longer than the normal eight
hour day. In such cases an understanding should be reached wit
the client, and the per diem rate increased accordingly.
Per diem rates can vary widely, depending on employe
classification, regional location, and period of service. Rates fo
consultation in connection with litigation and appearances before
commissions and courts are normally higher than the standard
rates.
50
COST PLUS FIXED FEE
er a cost plus fixed fee agreement, the Civil Engineer is
ureed for the actual costs of all services and supplies related
project, including:
*Wry costs, as previously defined
erhead, as previously defined (The Civil Engineer should be
pared to support the basis for overhead charges.)
Irect non-salary expenses, as previously defined
PIxed fee, an amount to compensate the Civil Engineer for
ntingencies, interest on invested capital, readiness to serve,
d profit.
boat plus fixed fee basis requires, as a prerequisite to equitable
tlitIons, that the client and the Civil Engineer define and agree
the scope of services the Civil Engineer is to perform. Such
lion of the scope of service is essential to enable the Civil
ear to estimate costs and propose an equitable fixed fee
nt. The scope of services, cost estimate, and fixed fee should
orporated into the client-engineer agreement.
cost plus fixed fee method can also be used when the Civil
Der is required to start providing service before the detailed
of services can be determined. In such cases, the following
orations apply:
e general scale and intent of the project should be fairly well
fined, even if the full scope is indeterminate; for example, the
mber, size, and character of buildings or other facilities, the
e of utilities, and other such essential information should be
enable.
51
) I ho types of service to bo pod-owned by the Civil Engineer
should be agreed upon and fully sot forth The agreements
should also provide for appropriate adjustments in the fixed fee,
In the event that the physical scope of the project, time o
completion, or level of effort and services required are material
changed over those contemplated during the negotiations.
The fixed fee amount varies with the complexity and scope of th
engineering services required. It is frequently calculated as
percentage of the salary costs, overhead, and direbt non-sala
expenses.
Agreements for cost-based methods should provide fo
reimbursement of all costs to be incurred directly or indirectly i
connection with the project, including but not limited to thos
foreseen when the agreement is negotiated. The list o
reimbursable items should be as complete and detailed a
possible. One advantage of the cost plus fixed fee method is that
eliminates any suspicion that the costs have been allowed to gro
in order to increase the Civil Engineer's fee, which by definition is
fixed amount. Because the entire fixed fee amount is due the Civi
Engineer, whether or not the estimated project costs have bee
reached the Civil Engineer has an incentive to complete the servic
promptly.
4.6 FIXED PRICE
The fixed price method of compensation is frequently used fo
Investigations and studies and for basic services on design typ
projects where the scope and complexity of the assignment a
clearly and fully defined. The fixed price amount can be calculated
as the sum total of estimated engineering costs for salaries
overhead and nonsalary expenses, an allowance for contingencies,
interest on invested capital, readiness to serve, and a reasonabl
amount for profit. Fixed price compensation for basic services on
certain design-type projects can also be computed as an
52
appropriate percentage of estimated construction costs; this
method and its limitations are discussed in the following section.
Results using the percentage method and the direct calculation
method are frequently used to check each other.
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 a 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
rvices. These payments are usually based on the Civil Engineer's
tatement of percent completion to date.
7 PERCENTAGE OF CONSTRUCTION COST
he percentage of construction cost method is seldom used raw.
ecause of increasing complexity and large variation in tasks for
ojects, the percentage of construction cost fee curves no longer
eve a direct correlation to the required engineering fees for
pecific projects. Owners should either use experienced "in-house"
aff or retain consultants to develop detailed program budgets for
nstruction costs, right of way, legal, administrative, engineering
rvices and permits.
his Method may be used to determined the compensation of the
ngineer for services where the principal responsibility is the
etailed design or construction supervision of facilities to be
nstructed.
onstruction Cost is defined as the estimated total cost of
nstructing the facility to be covered by the proposed detailed
53
design or construction supervision services, excluding the hum and
other costs of such services, the cost of land and right-of-way, and
legal and administrative expenses.
Over the years, engineering experience has established some
appropriate correlations between engineering costs and
construction costs for certain types of engineering design, where
design procedures and materials of construction are more or less
standardized. These correlations have resulted in various curves
and schedules which have been widely used.
The validity of the percentage-of-construction-cost method rests
upon the assumption that detailed design and construction
supervision costs vary in proportion to the cost of construction.
When judiciously applied, and with due consideration of the ranges
within which engineering scope may vary, this method is valuable
as a tool for general comparison with line-based fees for design
services. Its acceptance over many years also affords a valuable
guide for judging the reasonableness of proposal for consulting
services.
1 he 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%)
These percentages include only those works normally undertaken
In arriving at the expected outputs and do not include special
54
giddies or Investigations Indicated under Section 2.5 hereof, the
Outputs of which are ends by themselves.
It Is further emphasized that the above percentages are only
pilings and it does not necessarily mean that the said percentages
hail always be adopted for each project. The actual percentage
n particular project will depend on the factors mentioned above,
, the type, complexity, location and magnitude of construction
Cost As a general rule, projects within a higher range of
Construction cost will have lower percentages of fees than those
projects within a lower range of construction cost. The above limits
Ipercentages shall be reduced to the extent that some of the
Otivities undertaken by the client.
4,0 SCHEDULE OF MINIMUM BASIC FEES
Mates of compensation for Civil Engineers engaged in various
*opacities are given in Annex B. The PICE shall regularly update
Iho schedule of fees stipulated in the Annex. Certain principles
Should however be observed as follows.
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 (see Section 6.1.1 of the NEDA Guidelines).
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.
55
A Civil Engineer employer' in the private actor who alp SECTION 5
and seals the Civil Engineering plena, spocificittions an
other related documents of a certain project for and in beh
of his employers shall be compensated with a minimum Total Project Cost
10% of the professional fee for the project, over and abo
the basic monthly salary.
GENERAL

bable total cost is a major concern of the client throughout the

fining design, and construction phases of a project. The
bable total capital cost, often used to establish budgets for a
loot project, is made up of:

Professional engineering costs.

Construction cost.

Legal and land costs.

Owner's costs, including project administration, staffing,

financing, and other overhead.

Contingency allowance for unknowns.

2 PROFESSIONAL ENGINEERING COSTS

Civil Engineer is often engaged to make a study and to render a

nning report on the contemplated project, including alternative
lutions, layouts, and locations along with initial estimates of the
robable project cost. These may involve alternative or phased
plementation schemes which add flexibility to the project.

he study and report phase may include the cost for field or traffic
Urveys, planning analyses, geotechnical explorations and
nalyses, in addition, to the direct engineering costs.

57
The costs of coordination, ovalualion implementation and
cempliance have increased correspondingly 1 he roxlent of these
concerns may not be identified during the study and report phase
and sometimes not even after final plans and specifications hay
been prepared. As a result, the estimated probable total cost of th
project based on the study and report phase must be understood t
be preliminary in nature.
Because projects vary widely in nature and scope, the study and
report phase is important because its implementation determines
the scope and development of the entire project and its ultimate
capital and lifecycle cost. At times, preliminary investigations
become extensive and lengthy that the study and report phase
costs as much or more than the final design phase.
During the final design and construction phase, additional surveying
and geotechnical engineering services may be needed. Also
special or additional engineering services not originally identified
may be required by the client or recommended by the Civil
Engineer.
5.3 CONSTRUCTION COST
The study and report phase of the project usually includes a
preliminary estimate of the construction cost for the contemplated
project and for alternative project configurations. Such cost
estimates are approximate, since the final design drawings and
specifications have not yet been prepared. In addition, the timing of
the construction work must be considered because inflation will
affect the construction cost.
Construction Cost is the estimated total cost of constructing the
facility to be covered by the proposed detailed design or
Construction supervision services, excluding the fees and other
costs of such services, the cost of land and right-of-way, and legal
administrative expenses of the agency. The estimated construction
58
it roust be approved by the client before the invitation to submit
atmical proposal is issued.
LEGAL, LAND, ADMINISTRATION, STAFFING AND
FINANCIAL COSTS
se costs, which include audits, the cost of issuing bonds, land
a, and interest for borrowed money during construction, are
It of the probable total project cost and can best be estimated in
poration with the client because they are usually outside the
wledge and control of the Civil Engineer.
CONTINGENCY ALLOWANCE
the project moves forward from the study and report phase
ugh the final design phase and finally to construction award,
re becomes known about project details and costs, until at the
pletion of the project, the final project cost becomes a known
ntity.
provide for intangible costs, contingencies should routinely be
dod to the basic cost estimate. It is common practice to add 20%
more to the estimated probable total project cost at the
pletion of the study end report phase, reducing this to perhaps
% at the completion of final design and perhaps to 5% when the
nstruction bids become known. Larger or more complex projects
y require higher contingencies.
O SUMMARY
timate of probable total project cost should be periodically
Ised by the engineers as the design moves forward and more
oration becomes known. The client is normally responsible for
viding estimates of those costs which may lie outside the Civil
gineer's knowledge or expertise, such as those in the legal, land,
ministrative, and financial areas.
59
 Appendix A

SCHEDULE OF
MINIMUM BASIC FEE
 A111,11 NDIX A

SCHEDULE OF MINIMUM BASIC FEE

A — Minimum Compensation For Civil Engineer as Prime

nal When the Civil Engineer assumes overall coordination
ng architectural and other engineering services, the Engineer is a
ma professional.

a. Group I — Simple structures such as lofts, warehouses, garages,

sheds, market buildings, and comparable projects of one but not
more than two stories.

Project Construction Cost Minimum Basic Fees

P10 million and less 6%

Over P10 million to P20 million P 600,000 plus 5.5%

Over P20 million to P30 million P1,150,000 plus 4.5%

of excess of P20 million

Over P30 million P1,600,000 plus 3.5%

of excess of P30 million

b. Group II — Buildings of 3 stories up to 14 stories, towers, tanks,

exhibition buildings, memorials, industrial buildings, simple bridges,
low dams, piers, wharves, bins and silos and comparable projects.

Project Construction Cost Minimum Basic Fees

P10 million and less 7%

Over 10 million to P20 million ? P700,000 plus 6.5%

of excess of P10 million

Over P20 million to P30 million P1,350,000 plus 5.5%

of excess of P20 million

Over P30 million P1,900,000 plus 4.5%

in excess of P30 million

c. Group III - Buildings with fifteen (15) or more floors, long span and
complex bridges, high dams, 'major portworks power plants and
other complex structures not covered in Groups I and II.
 7141111111111111W
('t cUriatrUCHUP Cnst PRAtiagialteg MI11111111111 CompumentIon fur Civil Engineer's for rendering the following
morvIcos.
P10 million and loss 8%
Prolossionol Foes
Ovor P10 million to P20 million P800,000 plus 7.5%
In excess of P10 million 1. Value Engineering 25% of Profesional Fee
+ 25% of savings
Over P20 million up to P30 million P1,550,000 plus 6.5% 2 Expert Witness P2,0001 appearance
in excess of P20 million
nimum Compensation for Civil Engineers rendering Academic Services.
Over P30 million P2,200,000 plus 5.5%
in excess of P30 million Teaching part time or full time basis
If the civil engineer is not the prime professional for the above groups but a. BS degree holder P75/hr — 150/hr
renders basic civil engineering services only, his fee shall be a minimum of
25% of the prime professional fee. b. Master degree holder 150/hr — 250/hr
Pert B — Minimum Compensation For Civil Engineer as Professional Not c. Doctorate Degree holder 250/hr — 400/hr
Prime. When the Civil Engineer renders basic Engineering Design Services
only his fee shall be as follows: d. Lecturer (PICE-CPD) 500/hr
a.) Group IV — Hotels, large apartment buildings, office buildings, shopping e. Conducting tutorial/ 500/hr
centers, store buildings, resorts, hospitals, and comparable projects. refresher courses
Project Construction Cost Engineer's Fee f. Resource Speaker 500/hr
P10 million and less 1.05% g. Writer/Author P3,000/article
Over P10 million up to P20 million P105,000 plus 0.975%
in excess of P10 million

Over P20 million P202,500 plus 0.825%

in excess of P10 million

Over P30 million P285,000 plus 0.675%

in excess of P30 million

h Structures not falling in any group shall be classified into Group III.
 Appendix B

REPUBLIC ACT 544

An Act to Regulate the Practice of

Civil Engineering in the Philippines
 APPENDIX B

RA 644, AN ACT TO REGULATE THE PRACTICE OF CIVIL

ENGINEERING IN THE PHILIPPINES

No. 162
tiricond Congress
REPUBLIC ACT NO. 544 *

AN ACT TO REGULATE THE PRACTICE OF CIVIL ENGINEERING IN THE

PHILIPPINES

Do 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

SEC. 1. Title of Act — This Act shall be known as the "Civil Engineering
Law."

SEC. 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, portworks, 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 of Examiners for Civil Engineers' in the manner as
hereinafter provided.

ARTICLE II. — Board of Examiners for Civil Engineers

SEC. 3. Composition of Board — Within thirty days after the approval of this
Act there shall be created a Board of Examiners for Civil
Appointment:
Engineers2 hereinafter referred to as the Board, to be term of office
composed of a chairman and two members who shall be
appointed by the Secretary of Public Works and
Communication.'
• As amended by RA 1582.
' Now Professional Regulation Commission
INow Board of Civil Engineers.
 -1.1111111,
the members of the Board shell hold office for 010011 MO years aft
appointment or until their successors shall have been a and 111011 have dui
qualified. The Mal members of the Board appointed under this Aol shall hold off/
the following terms: One member for one year; one member for two years; a
member for three years. Each member of the Board shall qualify by taking 9
proper oath of office before entering upon the performance of his
.001111th for duties. Any member of the Board may be removed by the
Intond Secretary of Public Works and Communication' for neglect
duty, Incompetency, malpractice, unprofessional, unethica
rat, or dishonorable conduct, after having been given opportunity to defe
himself In a proper administrative investigation: Provided, That durineg the process
Investigation the Secretary of Public Works and Communications' shall have th
to suspend such member under investigation and shall appoint a tempera
Member In his place. Vacancies in the Board shall be filled for the unexpired term
y,
SEC. 4. Powers and duties of the Board. — The Board of Examiners for Civil
lindens is vested with authority, conformable with the provisions of this Act, t
Hinleter oaths, issue, suspend and revoke certificates of registration for th
lice of civil engineering, issue certificates of recognition to civil engineers alread
Aered under this Act for advanced studies, research, and/or highly specialized
ling In any branch of civil engineering, subject to the approval of the Secretary of
is Works and Communications,' to investigate such violations of this Act and the
liallons, there-under as may come to the knowledge of the Board and, for this
eon, Issue subpoena and subpoena dates tecum to secure appearance of
'nes in connection with the charges presented to the Board, to inspect at least
a year educational institutions offering courses in civil engineering, civil
!leering works, projects or corporations, established in the Philippines and, for
(warding of life, health and property, to discharge such other powers and duties
gray affect ethical and technological standards of the civil engineering profession
Philippines. For the purpose of this Act, the Director of Public Works and/or his
I rized representative in the provinces and chartered cities shall be ex-officio
its of the Board and as such it shall be their duty to help in the enforcement of
1 ,revisions of this Act.
Board may, with the approval of the Secretary of Public Works and
imunication,5
• Now Prime Minister of the Philippines upon the recommendation of the
axial Regulation Commission.
'Now Prime Minister of the Philippines.
s Id.
`Now Board of Civil Engineers. Soe PD 223, promulgated June 22, 1973.
'Now Professional Regulation Commission.
• such rules and regulations as may be doomed necessary to carry out the
v
EII Islone of this Act. The Board shell also adopt a code of ethics In the practice of
engineering end have en official seal to authenticate its official documents.
SEC. 6. Qualifications of Board Members. — Each member of the Board
gliaii, tit the lime of his appointment:
(a) Be a citizen and residence of the Philippines;
(b) Be at least thirty years of age and of good moral character;
(c) Be a graduate of civil engineering from a recognized and legally
constituted school, institute, college or university;
(d) Be a registered civil engineer duly qualified to practice civil engineering
In the Philippines;
(e) Have practiced civil engineering, with a certificate as such, for a period
of not less than ten years prior to his appointment;
(f) 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;
(g) 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,
SEC. 6. Fees and compensation of Board. — The Board of Examiners for
vii Engineers shall charge for each application for examination the sum of forty
s payable to the collecting and disbursing officer of the Bureau of Civil Service
n filing of said application for examination, and for each certificate of registration,
nty pesos." Each member of the Board shall receive a compensation of five
os for each applicant examined. A civil engineer in the service of the Government
)he Republic of the Philippines appointed as member of the Board shall receive the
pensation as herein provided, in addition to his salary in the Government. All
orized expenses of the Board, including the compensation provided for herein,
I be paid by the collecting and disbursing officer of the Bureau of Civil Service''
of such appropriation as may be made for the purpose.
3 Id.
`See RA 2032.
"'See RA 465, this volume, for examination foes. Now Professional Regulation Commission.
"See RA 465, this volume.
 Annual mpoil - The Board shall, Pi the end or mirth flactll
■ubmll lo Ilia Noctolury of Public Works and Communications' rfribilloil wort or
aclivillon nod pi ocoddIngti during the period covered by tim fiscal yam *Moil
ARTICLE III, - Examination and Registration
SEC. 8. Examination requirement. - All applicants for registration for
breath* of civil engineering shall be required to pass a technical examination
hereinafter provided.
SEC. 9. Holding of examination. - Examination of candidates desiring I
breaks civil engineering in the Philippines shall be given in the City of Manil
beginning the second Monday of February and August of each year, provided th.
Such days do not fall on official holidays, otherwise the examinations shall be held on
Ihe days next following.
SEC. 10. Subjects of examination. - Applicants for certificates of registration
S civil engineer shall be examined, in the discretion of the Board, on the following
ub3scts: mathematics, including algebra, plane and spherical trigonometry, analytics,
riptive and solid geometry, differential an integral calculus, and rational and
plied mechanics: hydraulics; surveying, Including highway and railroad surveying;
ane, topographic and hydrographlc surveying, and advance surveying; design and
struction of highways and railroads, masonry structures, wooden and reinforced
rete buildings, bridges, towers, walls, foundations, piers, ports, wharves,
uoducls, sanitary engineering works, water supply systems, dikes, dams, and
Nation and drainage canals.
"Now Professional Regulation Commission.
1r id.
sec
SEC. 12. Qualifications for examination. — Any person applying for
salon to the civil engineering examination as herein provided shall, prior to the
Of the examination, establish to the satisfaction of the Board that he has the
ng qualifications:
(a) Be at least twenty-one years of age;
(b) Be a citizen of the Philippines;
(c) Be of good reputation and moral characters; and
(d) 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.
SEC. 13. Oath of civil engineers. - All successful candidates in the
riminafion shall be required to take a professional oath before the Board of
k )(miners for Civil Engineers's or other Government Officials authorized to
administer oaths,16 prior to entering upon the practice of the civil engineering
profession.
SEC. 14. Seal and use of seal. - All registered civil engineers shall obtain a
of such design as the Board shall authorize and direct: Provided, however, That
serial number of the certificates issued by the Board shall be included in the
Ign of the seal. Plans and specifications prepared by, or under the direct
rvision of a registered civil engineer shall be stamped with said seal during the
of the registrant's certificate, and it shall be unlawful for any one to stamp or seal
documents with said seal after the certificate of the registrant named thereon has
red or has been revoked, unless said certificate shall have been renewed or re-
ed.
SEC. 15. Exemption from registration. — (1) Registration shall not be required
the following persons:
(a) Officers or enlisted men of the United States and Philippines Armed
Forces, and civilian employees of the Government of the United States
stationed In the Philippines while rendering civil engineering services for
the United States and/or Philippines.
"Superseded by PD 223, promulgated June 22, 1973.
"Now Board of Civil Engineers.
"Sec Section 21, Administrative Code for persons authorized to administer oaths.

(b) Civil engineers or export. called In by the MeOpine (jovernment for
consultation, or a specific design and construction Of hired strucluirrs no
defined under this Act, provided that their mottos shall be limited to
such work.
(2) Any person residing in the Philippines may make plans or specifications fof
any of the following:
(a) Any building in chartered cities or in towns with building ordinances, not
exceeding the space requirements 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 costing not 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 that purpose, without the use of civil engineer, as long as he doe
not violate local ordinances of the place where the building is to
constructed.
(3) Nor shall anything in this Act prevent draftsmen, student clerk-of-work,
superintendents, and other employees of those lawfully engaged in the
practice of civil engineering under the provision 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) Building of concrete whether reinforced or not.
(b) Building of more than two stories.
(c) Building with frames of structural steel.
(d) Building of structures intended for public gathering or assemblies s
as theaters, cinematographs, stadia, churches or structures of like
nature.
7
1 Now Professional Regulation Commission.
1
11111111111111111111111!"
(8) Nor shell anything in this Act prevent professional architects and engineers
to practice their profttenione
SEC. 10. Refuse/ to issue certificate. — The Board of Examiners for Civil
Pioneers" shall not Issue a certificate to any person convicted by a court of
sompatont jurisdiction of any criminal offense involving moral turpitude, or to any
person guilty of immoral or dishonorable conduct, or to any
I .en' of board person of unsound mind. In the vent 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.
SEC. 17. Suspension and revocation of certificates. — Subject to the
approval of the Secretary of Public Works and Communications," the Board shall
have the power, after due notice and hearing, to suspend or revoke the certificate of
registration for any cause mentioned in the preceding section.
SEC. 18. Re-issue and replacement of certificates. — The Board may, after
expiration of one year from the date a certificate of registration is revoked and for
sons it may deem sufficient, entertain an application for a new
Filing of
ficate of registration from the registrant concerned. Such application
ication shall be accomplished in the same form prescribed for
mination, but the Board may, in its discretion, exempt the
plicant from taking the requisite examination.
SEC. 19. Transitory provision. - As soon as this Act takes effect, any
son desiring to practice the profession of civil engineering shall be required to
n a certificate of registration in the manner and under the conditions hereinafter
vided.
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
affect as though the same have been issued under the provisions of this Act.
All graduates in civil engineering from a school, institute, college, or
versity recognized by the Government who have passed the civil service
amination for senior civil engineer and have been practicing or employed in the
vemment as such during five years are exempted from taking examination.
"Now Professional Regulation Commission.
 1,111111,
ARTIOLS IV. — Enforcement of Act and penal provistans
SEC. 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.
SEC. 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 of Examiners for Civil
Engineers.*
SEC. 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
tale or description tending to convey the Impression that he Is a civil engineer, without
holding a valid certificate or registration, or any person who shall violate any of the
provisions 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 nor mor
than one year, or both, In the discretion of the court.
ARTICLE V. — Miscellaneous provisions
SEC. 23. Preparation of plans and supervision of construction by registe
civil engineer. — It shall be unlawful for any person to order or otherwise cause
construction, reconstruction, or alteration of any building or structure intended f
public gathering or assembly such as theaters, clnematographs, stadia, churches
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 directs supervision of a
civil engineer. Plans and designs of structures must be approved Approved of
as provided by law or ordinance of a city or province or municipality plans and
where the said structure is to be constructed. designs
'Now Professional Regulation Commission.
NC 24 T ha practice of civil engineering Is n professionte service,
lidmisslon to which must be determined upon Individual, personal qualifications.
lance, no firm, partnership. corporation or association may be registered or licensed
sia such for the practice of civil engineering: Provided, however, That persons
properly registered and licensed as civil engineers may, among themselves or with a
ten or persons properly registered and licensed as architects, form, and obtain
Welton of, a firm, partnership or association using the term "Engineers' or
news and Architects,' but, nobody shall be a member or partner of such firm,
hip or association unless he is a duly licensed civil engineer or architect, and
he Members who are civil engineers shall only render work and services proper for a
I engineer, as defined In this Act, and the members who are architects shall also
render work and services proper for an architect, as defined in the law regulating
practice of architecture,' individual members of such firms, partnership or
asSOclation shall be responsible for their own respective acte°
SEC. 25. Reciprocity requirements. - No person who is not a citizen of the
lippines 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
Wizens of the Philippines to the practice of the same profession without restriction or
Owe them to practice it after an examination on terms of strict and absolute equality
citizens, subjects, or nationals of the country concerned, including the
ditional recognition of degrees issued by Institution of learning duly recognized
the purpose by the Government of the Philippines: Provided, That if he is not a
19
See RA 545, this volume.
20
Words in bold in the text above are amendments introduced RA 1582, section i , approved June
16, 1956.
Statutory History of section 24:
Original text —
SEC. 24. (Firm and corporation engaged In civil engineering practice. -A firm, partnership,
corporation, or association may engage in the practice of civil engineering In the Philippines
provided that such practice is carried out under the supervision of a civil engineer or civil
engineers holding valid certificates issued by the Board.
No firm, partnership, corporation or association, using the name of a person or persons as
in the name of the firm, shall advertise as civil engineer unless said person or persons are
restricted civil engineers) (Ed, Note: Words in brackets were deleted in RA 1582, supra.)
tatiteli of the Philippine., and was admitted to the prept100 Of el profession in the
Philippines after December 0, 1041, his active practice in that profession, either In the RELATED STATUTES
Philippines or in Ilia slate or country whew ho was practicing his profession, shall not
hove boon interrupted for a period of two years or more prior to July 4, 1948, and that Mt 4211 (affootIve August 2, 1935)
Permitting under-aged persons to take the board examination on condition that
the Country or state from which he comes allows the citizens of the Philippines by they will not practice their profession until they attained the required age.
prIfic provision of law, to practice the same profession without restriction or on
rer n of strict and absolute equality with citizens, subjects or nationals of the country AA 646 (Effective Juno 17, 1950)
Of state Concerned.21 Regulating the practice of Architecture.
SEC. 28. Roster of civil engineers. — A roster showing the names and
NA 1080 (Effective June 15, 1954)
Ices of business of all registered civil engineers shall be prepared by the Making bar and board examinations equivalent to 1"$ grade civil service eligibility.
Commissioner of Civil Service.n periodically but at least
Perlin& Preparation by once a year. Copies of this roster shall be placed on file
Conunissioner of $A 4666 (Effective June 19, 1965)
with the Secretary of Public Works and Regulating constructions.
Civil Service
Communications23 and furnished to all department
heads, mayors of all chartered cities, to the Director of 8181 (Effective September 8, 1967)
bile Works, to such other Bureaus, government entities or agencies and municipal Requiring residence and reciprocity in the exercise of professions by aliens.
rid provincial authorities as may be deemed necessary and to the public upon
uost. PD 1360 (Promulgated April 7, 1978)
Allowing applicants for citizenship to take board examination pending the
SEC. 27. Repeal. — All laws, parts of laws, orders, ordinances, or regulations approval of their petition.
conflict with the provisions hereof; including parts of Act Numbered Twenty-nine
ndred and eighty-five, as amended, as pertains to the practice of civil engineering
re hereby repealed, except the provisions of Act Number Thirty-one hundred and
fly-nine amending Act Numbered Twenty-nine hundred and eighty-five, pertaining to
0 practice of "maestro de obras."

SEC. 28. Constniction of Act - If any part or section of this Act shall be
wed unconstitutional, such declarations shall not invalidate the other provisions
roof.

SEC. 29. Effectivity. — This Act shall take effect upon its approval.

Approved, June 17, 1950.

"See PD 657. promulgated February 4, 1975.

"Now Professional Regulations Commission.
"Now Minister of Public Works. Transportation and Communications.
 Appendix C

EXTRACTS FROM THE NEW CIVIL CODE

ON OBLIGATIONS AND CONTRACTS
 APPENDIX C

EXTRACTS FROM THE NEW CIVIL CODE ON OBLIGATIONS

AND CONTRACTS

Title I — OBLIGATIONS

Chapter 1

GENERAL PROVISIONS

Art. 1166. An obligation is a juridical necessity to give to do or not to do. (n)

Art. 1157. Obligations arise from:

(1) Law;
(2) Contracts;
(3) Quasi-contracts;
(4) Acts or omissions punished by law; and
(5) Quasi-delicts. (1089a)

Art. 1156. Obligations derived from law are not presumed. Only those
pressly determined in this Code or special laws are demandable, and shall be
ulated by the precepts of the law, which establishes them; and as to what has not
en foreseen, by the provisions of this Book. (1090)

Art. 1159. Obligations arising from contracts have that force of law between
contracting parties and should complied with in good faith. (1091a)

Art. 1160. Obligations derived from quasi-contracts shall be subject to the

visions of Chapter 1, Title XVII, (EXTRA-CONTRACTUAL OBLIGATIONS). (n)

Art. 1161. Civil obligations arising from criminal offenses shall be governed
the penal laws, subject to the provisions of article 2177, and of the pertinent
visions of Chapter 2, Preliminary Title, on Human Relations and of Title XVIII
MACES), regulating damages. (1092a)

Art. 1162. Obligations derived from quasi-delicts shall be governed by

vision of Chapter 2, Title XVII (EXTRA-CONTRACTUAL OBLIGATIONS), and by
vial laws. (1093a)
 meiMir
Chapter 2
NATURE AND EFFECT OP OBLIGATIONS
Art. 1183. Every person obliged to give something is also obliged to t
die of It with the proper diligence of a good father of a family, unless the law or
dululation of the parties requires another standard of care (1094a)
Art. 1164. The creditor has a right to the fruits of the thing from the time
illgellon to deliver it arises. However, he shall acquire no real right over it until
sine has been delivered to him (1095)
Art. 1165. When what is to be delivered is a determinate thing, the credit
In addition to the right granted him by article 1170, may compel the debtor to m
lite delivery.
If the thing is indeterminate or genetic, he may ask that the obligation
implied with at the expense of the debtor.
If the obligor delays, or has promised to deliver the same thing to two
more persons who do not have the same interest, he shall be responsible for
fortuitous event until he has effected the delivery. (1096)
Art. 1166. The obligation to give a determinate thing includes that
delivering all its accessions and accessories, even though they may not have be
i mullioned. (1097a)
Art. 1167. If a person obliged to do something fails to do it, the same sh
Im executed at his cost.
This same rule shall be observed if he does it in contravention of the tenor
the obligation. Furthermore, it may be decreed that what has been poorly done
undone.
Art. 1168. When the obligation consists in not doing and the obligor d
whet has been forbidden him, it shall also be undone at his expense. (1099a)
Art. 1169. Those obliged to deliver or to do something incur in delay fro
time the obligee judicially or extrajudicially demands from them the fulfillment of th
obligation.
However, the demand by the creditor shall not be necessary in order th
oily exist:
(1) When the obligation or the law expressly so declares; or
(2) When from the nature and the circumstances of the obligation It appears
the designation of the time when the thing Is to be delivered or the service is to
rendered was a controlling motive for the establishment of the contract; or
(3) When demand would be useless, as when the obligor has rendered it
his power to perform.
In reciprocal obligations, neither party incurs in delay if the other does not
y or Is not ready to comply in proper manner with what is incumbent upon him.
the moment one of the parties fulfills his obligations, delay by the other begins.
00.)
Art, 1170. Those who in the performance of their obligations are guilty of
negligence, or delay, and those who in any manner contravene the tenor
roof, are liable for damages. (1101)
Art. 1171. Responsibility arising from fraud is demandable in all obligations.
y waiver of an action for future fraud is void. (1102a)
Art. 1172. Responsibility arising from negligence in the performance of
kind of obligation is also demandable, but such liability may be regulated by the
rts. according to the circumstances. (1103)
Art. 1173. The fault or negligence of the obligor consists in the omission of
diligence which is required by the nature of the obligation and corresponds with
circumstances of the persons, of the time and of the place. When negligence
s bad faith, the provisions of articles 1171 and 2201, paragraph 2, shall apply.
If the law or contract does not state the diligence which as to be observed in
performance, that which is expected of a good father of a family shall be required.
104a)
Art. 1174. Except in cases expressly specified by the law, or when it is
rwise declared by stipulation, or when the nature of the obligation requires the
umption of risk, no person shall be responsible for those events which could not
foreseen, or which, though foreseen, were inevitable. (1105a)
Art. 1175. Usurious transaction shall be governed by special laws. (n)
Art. 1176. The receipt of the principal by the creditor without reservation
th respect to the interest, shall give rise to the presumption that said interest has
paid.
The receipt of a later installment of a debt without reservation as to prior
stallments, shall likewise raise the presumption such installments have been paid
110a)
 14111111r
Art. 1177. The creditors, after having pursued the pomion
emn
the debtor to satisfy their claims, may exercise all the rIghtelit ng all ihn nolo
Of the latter for the some purpose, save those which are Inherent In his person. th
may also Impugn the acts which the debtor may have done to defraud them (1111)
Art. 1178. Subject to the laws, all rights acquired in virtue of an obligat
tfarismitsIble, If there has been no stipulation to the contrary. (1112)
Chapter 3
DIFFERENT KINDS OF OBLIGATIONS
Section 1. Pure and Conditional Obligations
Art. 1179. Every obligation whose performance does not depend upon
future or uncertain event, or upon a pat event unknown to the parties, is demanda
11 Once
Every obligation which contains a resolutory condition shall also
andable, without prejudice to the effects of the happening of the event. (1113)
Art. 1180. When the debtor binds himself to pay when his means permit hi
do so, the obligation shall be deemed to be one with a period, subject to I
sion of article 1197. (n)
Art. 1181. In conditional obligations, the acquisition of rights, as well as th
extinguishment or loss of those already acquired, shall depend upon the happeni
of the event which constitute the condition. (1114)
Art. 1182. When the fulfillment of the condition depends upon the sole will of
the debtor, the conditional obligation shall be void. If it depends upon chance or
upon the will of a third person, the obligation shall take effect in conformity with the
Mon of this Code. (1115)
Art. 1183. Impossible conditions, those contrary to good customs or public
Icy and those prohibited by law shall annul the obligation which depends upon
If the obligation is divisible, that part thereof which is not affected by the
Bible or unlawful condition shall be valid.
The condition not to do an impossible thing shall be considered as not
ng been agreed upon. (1116a)
1114. The condition that some event happen al a determine time shall
linguini the obligation as soon as the time expires or if it has become indubitable
t the event will not take place. (1117)
Art. 1186. The condition that some event will not happen at a determinate
shall render the obligation effective from the moment the time indicated has
ad, or If it has become evident that the event cannot occur.
If no time has been fixed, the condition shall be deemed fulfilled at such time
may have probably been contemplated, bearing in mind the nature of the
Igation. (1118)
Art. 1186. The condition shall be deemed fulfilled when the obligor
tardy prevents its fulfillment. (1119)
Art. 1187. The effects of a conditional obligation to give once the condition
I been fulfilled, shall retroact to the day of the constitution of the obligation.
verthetess, when the obligation imposes reciprocal prestations upon the parties,
fruits and interests during the pendency of the condition shall be deemed to have
n mutually compensated. If the obligation is unilateral, the debtor shall
ropriate the fruits and interest received, unless from the nature and circumstances
the obligation it should be inferred that the intention of the person constituting the
me was different.
In obligations to do and not to do, the courts shall determine, in each case,
the retroactive effect of the condition that has been complied with. (1120)
Art. 1188. The creditor may, before the fulfillment of the condition, bring the
Ippropriate actions for the preservation of his right.
The debtor may recover what during the same time he has paid by mistake
In case of a suspensive condition. (1121a)
Art. 1189. When the conditions have been imposed with the intention of
suspending the efficacy of an obligation to give, the following rules shall be observed
In case of the improvement, loss or deterioration of the thing during the pendency of
the condition:
(1) If the thing is lost without the fault of the debtor, the obligation shall be
extinguished;
(2) If the thing is lost through the fault of the debtor, he shall be obliged to
pay damages; it is understood that the thing is lost when it perishes, or goes out of
commerce, or disappears in such a way that its existence is unknown or it cannot be
recovered;
 "71.1171r7
.
(3) When the thing deteriorates without the fault of the debtor,
Impairment Is to bn borne by the creditor,
(4) If It deteriorates through the fault of the debtor, the creditor may c
between the rescission of the obligation and its fulfillment, with indemnity
damages in either case;
(5) If the thing Is improved by its nature, or by time, the improvement 11
MUM to the benefit of creditor;
(6) If It is improved at the expense of the debtor, he shall have no other
than that granted to the usufructuary. (1122)
Art. 1190. When the conditions have for their purpose the extinguishment
nn obligation to give, the parties, upon the fulfillment of said conditions, shall return
nnrh other what they have received.
In the case of the loss, deterioration or improvement of the thing,
previsions which, with respect to the debtor, are laid down in the preceding art
(hall be applied to the party who is bound to return.
As for obligations to do and not to do, the provisions of the se
imgraph of article 1187 shall be observed as regards the effect of
imguishment of the obligation. (1123)
Art. 1191. The power to rescind obligations is implied in reciprocal ones,
i• m one of the obligors should not comply with what is incumbent upon him.
The injured party may choose between the fulfillment and the rescission
obligation, with the payment of damages in either case. He may also se
.. lesion, even after he has chosen fulfillment, if the latter should beco
possible.
The court shall decree the rescission claimed, unless there be just cau
miorizing the fixing of a period.
This is understood to be without prejudice to the right of third persons w
eve acquired the thing, in accordance with articles 1385 and 1388 and the Mortga
iw (1124)
Art. 1192. In case both parties have committed a breach of the obligat
liability of the first infractor shall be equitably tempered by the courts. If it cann
determined which of the parties first violated the contract, the same shall
l,med extinguished, and each shall bear his own damages. (n)
&Gallon 2, Obligations with a Period
Art. 1193. Obligations for whose fulfillment a day certain has been fixed,
II be demandable only when that day comes.
Obligations with resolutory period take effect at once, but terminate upon
al of the day certain.
A day certain is understood to be that which must necessarily come,
gh it may not be known when.
If the uncertainty consists in whether the day will come or not, the obligation
agnditional, and it shall regulated by the rules of the preceding Section. (1125a)
Art. 1194. In case of loss, deterioration or improvement of the thing before
arrival of the day certain, the rules in article 1189 shall be observed. (n)
Art. 1195. Anything paid or delivered before the arrival of the period, the
gor being unaware of the period or believing that the obligation has become due
demandable, may be recovered, with the fruits and interests. (1126a)
Art. 1196. Whenever in an obligation a period is designated, it is presumed
have been established for the benefit of both the creditor and the debtor, unless
the tenor of the same or other circumstances it should appear that the period
II been established in favor of one or of the other. (1127)
Art. 1197. If the obligation does not fix a period, but from its nature and the
umstances it can be inferred that a period was intended, the courts may fix the
alion thereof.
The courts shall also fix the duration of the period when its depends upon the
ttAll of the debtor.
In every case, the courts shall determine such period as may under the
umstance have been probably contemplated by the parties. Once fixed by the
urts, the period cannot be changed by them. (1128a)
Art. 1198. The debtor shall lose every right to make use of the period:
(1) When after the obligation has been contracted, he becomes insolvent,
Unless he gives a guaranty or security for the debt;
(2) When he does not furnish to the creditor the guaranties or securities
Which he has promised;
 11.11111PF
(3) When by his own acts he has Impaired said 0111111.118 of Seeurttles after
Ihalr ailablishment and when through a fortuitous even they disappear, unless he
Immediately gives new ones equally satisfactory.
(4) When the debtor violates any undertaking, in consideration of which the
Ofeditor agreed to the period;
(5) When the debtor attempts to abscond. (1129a)
Section 3. Alterative Obligations
Art. 1199. A person alternatively bound by different prestations shall
Ognipletely perform one of them.
The creditor cannot be compelled to receive part of one and part of the other
1,111dertaking. (1131)
Art. 1200. The right of choice belongs to the debtor, unless it has been
ssly granted to the creditor.
The debtor shall have no right to choose those prestations which are
sable, unlawful or which could not have been the object of the obligation. (1132)
Art. 1201. The choice shall produce no effect except from the time it has
been communicated (1133)
Art. 1202. The debtor shall lose the right of choice when among the
prestations whereby he is alternatively bound, only one as practicable. (1134)
Art. 1203. If through the creditor's acts the debtor cannot make a choice
according to the terms of the obligation, the latter may rescind the contract with
ages. (n)
The indemnity shall be fixed taking as a basis the value of the last thing
disappeared, or that of the service which last became impossible.
Damages other than the value of the last thing or service may also be
rded. (1135a)
Art. 1205. When the choice has been expressly given to the creditor, the
anon shall cease to be alternative from the day when the selection has been
municated to the debtor.
Until then the responsibility of the debtor shall be governed by the following
(I) if one of the things is lost through a fortuitous event, he shill perform the
obligation by delivering ihat which the creditor should choose from among the
remainder. or that which remains If only one subsists,
(2)If the loss of one things occurs through the fault of the debtor, the creditor
may claim any of those subsisting, or the price of that which, through the fault of the
former, has disappeared, with a right to damages;
(3) If all the things are lost through the fault debtor the choice by the creditor
Shall fall upon the price of any one of them, also with indemnity for damages;
The same rules shall be applied to obligations to do not or to do in case one,
Some or all of the prestations should become impossible. (1136a)
Art. 1206. When only one prestation has been agreed upon but the obligor
may render another in substitution, the obligation is called facultative.
The loss or deterioration of the thing intended as a substitute, through the
negligence of the obligor, does not render him liable. But once the substitution has
n made, the obligor is liable for the loss of the substitute on account of his delay,
igence or fraud. (n)
Section 4. Joint and Solidary Obligations
Art. 1207. The concurrence of two or more creditors or of two or more
debtors in one and the same obligation does not imply that each one of the former
hes a right to demand, or that each one of the latter is bound to render, entire
Compliance with the prestation. There is a solidary liability, only when the obligation
expressly so states, or when the law or the nature of the obligation requires solidarity.
(1137a)
Art. 1208. If from the law, or the nature or the wording of the obligations to
which the preceding article refers the contrary does not appear, the credit or debt
shall be presumed to be divided into as many equal shares as there are creditors or
debtors, the credits or debts being considered distinct from one another, subject to
the Rules of Court governing the multiplicity of suits. (1138a)
Art. 1209. If the division is impossible, the right of the creditors may be
prejudiced only by their collective acts, and the debt can be enforced only by
proceeding against all the debtors. If one of the latter should be insolvent, the others
shall not be liable for his share. (1139)
Art. 1210. The indivisibility of an obligation does not necessarily give rise to
solidarity. Nor does solidarity of itself imply indivisibility. (n)
 Art. 1211. Solidarity may exist although the °radial 01W Me debtors m
not be bound In the same manner and by the same periods and conditions (1140)
Art. 1212. Each one of the solidarity creditors may do whatever may
useful to the others, but not anything which may be prejudicial to the latter. (1141e)
Art. 1213. A solidary creditor cannot assign his rights without the consent
the others. (n)
Art. 1214. The debtor may pay any one of the solidary creditors; but if
demand, judicial or extrajudicial, has been made by one of them, payment should
made to him. (1142a)
Art. 1215. Novation, compensation, confusion or remission of the d
made by any of the solidary creditors or with any of the solidary debtors, s
extinguish the obligation, without prejudice of the provisions of article 1219.
The creditor who may have executed any of these acts, as well as he
collects the debt, shall be liable to the others for the share in the oblige
corresponding to them. (1143)
Art. 1216. The creditor may proceed against any one of the solidary deb
Of some or all of them simultaneously. The demand made against one of them
not be an obstacle to those which may subsequently be directed against the oth
so long as the debt has not been fully collected. (1144a)
Art. 1217. Payment made by one of the solidary debtors, extinguishes
obligation. If two or more solidary debtors offer to pay, the creditor may ch
which offer to accept.
He who made the payment may claim from his co-debtors only the s
which corresponds to each, with the interest for the payment already made. If
payment is made before the debt is due, no interest for the intervening period may
demanded.
When one of the solidary debtors cannot, because of his insol
reimburse his share to the debtor paying the obligation, such share shall be bo
all his co-debtors, in proportions to the debt of each. (1145a)
Art. 1218. Payment by a solidary debtor shall not entitle him
reimbursement from his co-debtors if such payment made after the obligation
prescribed or become illegal. (n)
Art. 1219. The remission made by the creditor of the share which a
one of the solidary debtors does not release the latter from his responsibility to
oo'dobtors, In one the debt had been totally paid by anyone of them before the
salon was effected (11400
Art. 1220. The remission of the whole obligation, obtained by the of the
try debtors, does not entitle him to reimbursement from his co-debtors. (n)
Art, 1221. If the thing has been lost or if the prestation has become
ssIble without the fault of the solidary debtors, the obligation shall be
uiehed.
If there was fault on the part of any one of them, all shall be responsible to
Creditor, for the price and the payment of damages and interest, without prejudice
it action against the guilty or negligent debtor.
If through a fortuitous event, the thing is lost or the performance has become
sable after one of the solidary debtors has incurred in delay through the judicial
strajudicial demand upon him by the creditor, the provisions of the preceding
graph shall apply. (1147a)
Art. 1222. A solidary debtor may, in actions filed by the creditor, avail
f of all defenses which are derived from the nature of the obligation and of
which are personal to him, or pertain to his own share. With respect to those
personally belong to the others, he may avail himself thereof only as regards
part of the debt for which the latter are responsible. (1148a)
Section 5. Divisible and Indivisible Obligations
Art. 1223. The divisibility or indivisibility of the things are the object of
ions in which there is only one debtor and only one creditor does not alter or
the provisions of Chapter 2 of this Title. (1149)
Art. 1224. A joint indivisible obligation gives rise to indemnity for damages
the time anyone of the debtors does not comply with his undertaking. The
who may have been ready to fulfill their promises shall not contribute to the
nity beyond the corresponding portion of the price of the thing or of the value
service in which the obligation consists. (1150)
Art. 1225. For the purposes of the preceding articles, obligations to give
things and those which are not susceptible of partial performance, shall be
to be indivisible.
When the obligation has for its object the execution of a certain number of
Of work, the accomplishment of work by metrical units, or analogous things
by their nature are susceptible of partial performance, it shall be divisible.
 However, even though the object or service may be fillyeleelly divisible, en
obligation is Indivisible If so provided by law or intended by the parties Chapter 4

EXTINGUISHMENT OF OBLIGATIONS
In obligations not to do, divisibility or indivisibility shell be determined by t
character of the presentation in each particular case. (1151a)
General Provisions

Art. 1231. Obligations are extinguished:

Section 6. Obligations with a Penal Clause
(1) By payment or performance;
Art. 1226. In obligations with a penal clause, the penalty shall substitute t (2) By the loss of the thing due;
Indemnity for damages and the payment of interest in case of noncompliance, if the
(3) By the condonation or remission of the debt;
IS no stipulation to the contrary. Nevertheless, damages shall be paid if the obli
refuses to pay the penalty or is guilty of fraud in the fulfillment of the obligation. (4) By the confusion or merger of the rights of creditor and debtor;
(5) By compensation;
(6) By novation.
The penalty may be enforced only when it is demandable in accordance wi
IM provisions of this Code. (1152a)
Other causes of extinguishment of obligations, such as annulment,
rescission, fulfillment of a resolutory condition, and prescription, are governed
Art. 1227. The debtor cannot exempt himself from the performance of t elsewhere in this Code. (1156a)
obligation by paying the penalty, save in the case where this right has been expres
reserved for him. Neither can the creditor demand the fulfillment of the obligation a
the satisfaction of the penalty at the same time, unless this right has been clea
Section 1. Payment or Performance
granted him. However, if after the creditor has decided to require the fulfillment of t
obligation, the performance thereof should become impossible without his fault, t Art. 1232. Payment means not only the delivery of money but also the
penalty may be enforced. (1153a)
performance, in any other manner, of an obligations. (n)
Art. 1228. Proof of actual damages suffered by the creditor is not necessa Art. 1233. A debt shall not be understood to have been paid unless the
In order that the penalty may be demanded. (n)
thing or service in which the obligation consists has been completely delivered or
rendered, as the case may be. (1157)
Art. 1229. The judge shall equitably reduce the penalty when the principal
obligation has been partly or irregularly complied with by the debtor. Even if there Art. 1234. If the obligation has been substantially performed in good faith,
has been no performance, the penalty may also be reduced by the courts if it is
(ho obligor may recover as though there had been a strict and complete fulfillment,
Iniquitous or unconscionable. (1154a)
loss damages suffered by the obligee. (n)
Art. 1230. The nullity of the penal clause does not carry with it that of the Art. 1235. When the obligee accepts the performance, knowing its
principal obligation.
Incompleteness or irregularity, and without expressing any protest or objection, the
obligation is deemed fully complied with. (n)
The nullity of the principal obligation carries with it that of the penal clause.
(1155)
Art. 1236. The creditor is not bound to accept payment or performance by a
third person who has no interest in the fulfillment of the obligation, unless there is a
stipulation to the contrary.

Whoever pays for another may demand from the debtor what he has paid,
except that if he paid without the knowledge or against the will of the debtor, he can
recover only insofar as the payment has been beneficial to the debtor. (1158a)
 Art. 1237. Whoever pays on behalf of the deb*" 26611111 MO knowledge or
against the will of the latter, cannot compel the creditor to atitifOlre him In his light'
gulch AR those arising from a mortgage, guaranty, or penalty (11 fie)
Art. 1238. Payment made by a third person who does not intend to be
NOmbursed by the debtor is deemed to be a donation, which requires the debtor's
11011sent But the payment is in any case valid as to the creditor who has accepted It
(n)
Art. 1239. In obligation to give, payment made by one who does not have
On free disposal of the thing due and capacity to alienate it shall not be valid, without
prejudice to the provisions of article 1427 under the Title on "Natural Obligations.'
(1100a)
Art. 1240. Payment shall be made to the person in whose favor t
obligation has been constituted, or his successor in interest, or any person authorized
to receive it (1162a)
Art. 1241. Payment to a person who is incapacitated to administer his
rartrty shall b valid if he has kept the thing delivered, or insofar as the payment
g n e f eivttohim.
Payment made to a third person shall also be valid insofar as it has
• inunded to the benefit of the creditor. Such benefit to the creditor need not be
•ved in the following cases.
(1) If after the payment, the third person acquires the creditor's rights;
(2) If the creditor ratifies the payment to the third person;
(3) If by the creditor's conduct, the debtor has been led to believe that the
I person had authority to receive the payment (1163a)
Art. 1242. Payment made in good faith to any person in possession of the '
ill shall release the debtor. (1164)
Art. 1243. Payment made to the creditor by the debtor in after the latter has
.11 iialicially ordered to retain the debt shall not be valid. (1165)
Art. 1244. The debtor of a thing cannot compel the creditor to receive a
t. .1 tint one, although the latter may be of the same value as, or more valuable than
.1 which is due.
In obligations to do or not do, an act or forbearance cannot be substituted by
Mier act or forbearance against the obligee's will. (1166a)
Art. 1245. Dation in payment, whereby property is alienated to the creditor
.,illsfection of a debt in money, shall be governed by the law of sales. (n)
Art. 1246. When the obligation consists In the delivery of an Indeterminate
* generic thing. whose quality and circumstances have not boon stated, the creditor
wool demand a thing of superior quality. Neither can the debtor deliver a thing of
erior quality The purpose of the obligation and other circumstances shall be taken
consideration (1167a)
Art. 1247. Unless it is otherwise stipulated, the extrajudicial expenses
red by the payment shall be for the account of the debtor. With regard to judicial
It the Rules of Court shall govern.
Art. 1248. Unless there is an express stipulation to that effect, the creditor
not be compelled partially to receive the prestations in which the obligation
lets. Neither may the debtor be required to make partial payments.
However, when the debt is in part liquidated and in part unliquidated, the
for may demand and the debtor may effect the payment of the former without
Ring for the liquidation of the latter. (1169a)
Art. 1249. The payment of debts in money shall be made in the currency
stipulated, and if it is possible to deliverer such currency, then in the currency which
is legal tender in the Philippines.
The delivery of promissory notes payable to order, or bills of exchange or
er mercantile documents shall produce the effect of payment only when they have
n cashed, or when through the fault of the creditor they have been impaired.
In the meantime, the action derived from the original obligation shall be held
In abeyance. (1170)
Art. 1250. In case an extraordinary inflation or deflation of the currency
llpulated should supervene, the value of the currency at the time of the
establishment of the obligation shall be the basis of payment, unless there is an
agreement to the contrary. (n)
Art. 1261. Payment shall be made in the place designated in the obligation.
There being no express stipulation and if the undertaking is to deliver a
termine thing, the payment shall be made wherever the thing might be at the
ment the obligation was constituted.
In any other case the place of payment shall be domicile of the debtor.
If the debtor changes his domicile in bad faith or after he has incurred in
delay, the addition expenses shall be borne by him.
These provisions are without prejudice to venue under Rules of Court.
(1171a)
 Subsection 1. Application of Paymonts
Art. 1252. Ile who has various debts of the same kind In favor of ono and
1116 some creditor, may declare at the time of making the payment, to which of lh
the some must be applied. Unless the parties so stipulate, or when the application
payment Is made by the party for whose benefit the term has been constitut
epOlICallon shall not be made as to debts which are not yet due.
If the debtor accepts from the creditor a receipt in which an application of t
payment is made, the former cannot complain of the same, unless there is a cau
for Invalidating the contract. (1172a)
Art. 1253. If the debt produces interest, payment of the principal shall not
deemed to have been made until the interests have been covered. (1173)
Art. 1254. When the payment cannot be applied in accordance with t
preceding rules, or if application can not be inferred from other circumstances, th
debt which is most onerous to the debtor, among those due, shall be deemed to ha
been satisfied.
If the debts due are of the same nature and burden, the payment shall
applied to all of them proportionately. (1174a)
Subsection 2. Payment by Cession
Art. 1255. The debtor may cede or assign his property his creditors
payment of his debts. This cession, unless there is stipulation to the contrary, sha
only release the debtor from responsibility for the net proceeds of the thing assigned
The agreements which, on the effect of the cession, are made between the debt
and his creditors shall be governed by special laws. (1175a)
Subsection 3. Tender of Payment and Consignation
Art. 1256. If the creditor to whom tender of payment has been made refuse
without just cause to accept it, the debtor shall be released from responsibility by th
consignation of the thing or sum due.
Consignation alone shall produce the same effect in the following cases:
(1) When the creditor is absent or unknown, or does not appear at the pla
Of payment;
(2) When he is incapacitated to receive the payment the time it is due;
(2) When, without just cause, he refuses to give a receipt,
(3) Whim two of mote persons claim the same right to collect,
(4) When the title of the obligation has been lost. (1176a)
Art. 1267. In order that the consignation of the thing due may release the
r, It must first be announced to the persons interested in the fulfillment of the
Eton.
The consignation shall be ineffectual if it is not made strictly in consonance
the provisions which regulate payment. (1177)
Art. 1258. Consignation shall be made by depositing the things due at the
posal of judicial authority, before whom the tender of payment shall be proved, in a
r case, and the announcement of the consignation in other cases.
The consignation having been made, the interested parties shall also be
'fled thereof. (1178)
Art. 1259. The expenses of consignation, when properly made, shall be
rged against the creditor. (1179)
Art. 1260. Once the consignation has been duly made, the debtor may ask
judge to order the cancellation of the obligation.
Before the creditor had accepted the consignation, or before a judicial
laration that the consignation has been properly made, the debtor may withdraw
thing or the sum deposited, allowing the obligation to remain in force. (1180)
Art. 1261. If, the consignation having been made, the creditor should
ulhorize the debtor to withdraw the same, he shall lose every preference which he
ay have over the thing. The co-debtors, guarantors and sureties shall be released.
181a)
Section 2. Loss of the Thing Due
Art. 1262. An obligation which consists in the delivery of a determinate thing
all be extinguished if it should be lost or destroyed without the fault of the debtor,
before he has incurred in delay.
When by law or stipulation, the obligor is liable even for fortuitous events, the
s of the thing does not extinguish the obligation, and he shall be responsible for
Images. The same rule applies when the nature of the obligation requires the
Isumption of risk. (1182a)
 Art. 1283. In an obligation to deliver a generic 0110.4111110u or destruct
of anything of the name kind does not extinguish the obligallOrt (A)
Art, 1284. The courts shall determine whether, under the circumstances.
partial loss of the object of the obligation is so important as to extinguish
Obligation. (n)
Art. 1266. Whenever the thing is lost in the possession of the debtor, it sh
be presumed that the loss was due to his fault, unless there is proof of the contra
and without prejudice to the provisions of article 1165. This presumption does n
apply in a case of earthquake, flood, storm or other natural calamity (1183a)
Art. 1266. The debtor in obligations to do shall also be released when t
presentation becomes legally or physically impossible without the fault of the oblig
(1104a)
Art. 1267. When the service has been so difficult as to manifestly beyon
the contemplation of the parties, the obligor may also be released therefrom, in whole
or In part. (n)
Art. 1268. When the debt of a thing certain and determinate proceeds fro
a criminal offense, the debtor shall not be exempted from the payment of its pric
whatever may be the cause for the loss, unless the thing having been offered by hi
to the person who should receive it, the latter refused without justification to accept it
(1185)
Art. 1269. The obligation having been extinguished by the loss of the thing,
the creditor shall have all the rights of action which the debtor may have against third
persons by reason of the loss. (1186)
Section 3. Condonation or Remission of the Debt
Art. 1270. Condonation or remission is essentially gratuitous, and require
the acceptance by the obligor. It may be made expressly or impliedly.
One and the other kind shall be subject to the rules which govern inotficio
donations. Express condonation shall, furthermore, comply with the forms o
donation. (1187)
Art. 1271. The delivery of a private document evidencing a credit, mad
voluntarily by the creditor to the debtor, implies the renunciation of the action wh
the former had against the latter.
If In order to nullify this waiver it should be claimed to be inofficious, the
debtor and hi been may uphold It by proving that the delivery of the document was
made In virtue of payment of the debt. (1188)
Art. 1272. Whenever the private document in which the debt appears is
found In the possession of the debtor, it shall be presumed that the creditor delivered
N voluntarily, unless the contrary is proved. (11889)
Art. 1273. The renunciation of the principal debt shall extinguished the
accessory obligations; but the waiver of the latter shall leave the former in force.
(1100)
Art. 1274. It is presumed that the accessory obligation of pledge has been
remitted when the thing pledged, after its delivery to the creditor, is found in the
possession of the debtor, or of a third person who owns the thing (1191a)
Section 4. Confusion or Merger of Rights
Art. 1275. The obligation is extinguished from the time the characters of
Creditor and debtor are merged in the same person (1192a)
Art. 1276. Merger which takes place in the person of the principal debtor or
creditor benefits the guarantors. Confusion which takes place in the person of any of
the latter does not extinguish the obligation. (1193)
Art. 1277. Confusion does not extinguish a joint obligation except as
regards share corresponding to the creditor or debtor in whom the two characters
concur. (1194)
Section 5. Compensation
Art. 1278. Compensation shall take place when two persons, in their own
eight, are creditors and debtors of each other. (1195)
Art. 1279. In order that compensation may be proper, it is necessary:
(1) That each one of the obligors be bound principally, and that the he be at
same time a principal creditor of the other;
(2) That both debts consists in a sum of money, or if the things due are
consumable, they be of the same kind, and also of the same quality if the latter has
been stated;
(3) That the two debts be due;
 (4) !hal Shay bo Ilqu'doled and demandable,
(h ) I hid over neither of thorn there be any lolorillen of controversy,
ommenced by third persons and communicated in due limo to the debtor. (1196)
Art. 1280. Notwithstanding the provisions of the preceding article, the
Grantor may set up compensation as regards what the creditor may owe principal
tOr, (1197)
Art. 1281. Compensation may be total or partial. When the two debts are of
some amount, there is a total compensation. (n)
Art. 1282. The parties may agree upon the compensation of debts which
not yet due. (n)
Art. 1283. If one of the parties to a suit over an obligation has a claim for
maims against the other, the former may set it off by proving his right to said
nines and the amount thereof. (n)
Art. 1284. When one or both debts are rescissible or voidable, they may be
pensated against each other before they are judicially rescinded or avoided. (n)
Art. 1285. The debtor who had consented to the assignment of rights made
a creditor in favor of a third person, cannot set up against the assignee the
pensation which would pertain to him against the assignor, unless the assignor
s notified by the debtor at the time he gave his consent, that he reserved his right
0 the compensation.
If the creditor communicated the cession to him but the debtor did not
sent thereto, the latter may set up the compensation of debts previous to the
salon, but not of subsequent ones.
If the assignment is made without the knowledge of the debtor, he may set
the compensation of all credits prior to the same also later ones until he had
owledge of the assignment. (1198a)
Art. 1286. Compensation takes place by operation of law, even though the
bts may be payable at different places, but there shall be an indemnity for
penises of exchange or transportation to the place of payment. (1199a)
Art. 1287. Compensation shall not be proper when one of the debts arises
m a depositum or from the obligations of a depositary or a bailee in commodatum.
Neither can compensation be set up against a creditor who has a claim for
upport due by gratuitous title, without prejudice to the provisions of paragraph 2 of
Ida 301. (1200a)
Art, 12118, Neither shall theta he compensation If one of the debts consists
In civil liability ruining from penal offense (n)
Art. 1289. If a person should have against him several debts which are
susceptible of compensation, the rules on the application of payments shall apply to
Iha order of the compensation. (1201)
Art. 1290. When all the requisites mentioned in article 1279 are present,
compensation takes effect by operation of law, and extinguishes both debts to the
concurrent amount, even though the creditors and debtors are not aware of the
Compensation. (1202a)
Section 6. Novation
Art. 1291. Obligations may be modified by;
(1) Changing their object or principal conditions;
(2) Substituting the person of the debtor;
(3) Subrogating a third person in the rights of the creditor. (1203)
Art. 1292. In order that an obligation may be extinguished by another which
Substitute the same, it is imperative that it be so declared in unequivocal terms, or
that the old and the new obligations be on every point incompatible with each other.
(1204)
Art. 1293. Novation which consists in substituting a new debtor in the place
of the original one, may be made even without the knowledge or against the will of
the latter, but not without the consent of the creditor. Payment by the new debtor him
the rights mentioned in articles 1236 and 1237. (1205a)
Art. 1294. If the substitution is without the knowledge or against the will of
the debtor, the new debtor's insolvency or non-fulfillment of the obligation shall not
give rise to any liability on the part of the original debtor. (n)
Art. 1295. The insolvency of the new debtor, who has been proposed by the
original debtor and accepted by the creditor, shall not revive the action of the latter
against the original obligor, except when said insolvency was already existing and
public knowledge, or known to the debtor, when he delegated his debt. (1206a)
Art. 1296. When the principal obligation is extinguished in consequence of a
novation, accessory obligations may subsist only insofar as they may benefit third
person who did not give their consent. (1207)
 Art. 1297, If the now obligation Is void, the original one shall subsist, unless
the parties intended that the former relation should be extinguished In any avant (n)
Art. 1298. The novation Is void it the original obligation was void, except
When annulment may be claimed only by the debtor, or when ratification validatei
nil which are voidable, (1208a)
Art. 1299. If the original obligation was subject to a suspensive or resolutory
nixfillon, the new obligation shall be under the same condition, unless it is otherwise
Stipulated. (n)
Art. 1300. Subrogation of a third person in the rights of the creditor is either
Sol or conventional. The former is not presumed, except in cases expressly,
Mentioned In this Code; the latter must be clearly established in order that it may take
Otiect (1209a)
Art. 1301. Conventional subrogation of a third person requires the consent
Of the original parties and of the third person. (n)
Art. 1302. It is presumed that there is legal subrogation:
(1) When a creditor pays another creditor who is preferred, even without th
debtor's knowledge;
(2) When a third person, not interested in the obligation, pays with the
wgpreas or tacit approval of the debtor;
(3) When, even without the knowledge of the debtor, a person interested in
am fulfillment of the obligation pays, without prejudice to the effects of confusion as to
ie latter's share. (1201a)
Art. 1303. Subrogation transfers to the persons subrogated the credit with
one rights thereto appertaining, either against the debtor or against third persons,
ihey guarantors or possessors of mortgages, subject to stipulation in a
atentIonal subrogation. (1212a)
Art. 1304. A creditor, to who partial payment has been made, may exercise
light for the remainder, and he shall be preferred to the person who has been
'roasted in his place in virtue of the partial payment of the same credit. (1213)
I Ille II - CONTRACTS
Chapter 1
GENERAL PROVISIONS
Art. 1305. A contract is a meeting of minds between two persons whereby
One bind himself, with the respect to the other, to give something or to render some
service. (1254a)
Art. 1306. The contracting parties may establish such stipulations, clauses,
terms and conditions as they may deem convenient, provided they are not contrary to
law, morals, good customs, public order, or public policy. (1255a)
Art. 1307. Innominate contracts shall be regulated by the stipulation of the
parties, by the provisions of Titles I and II of this Book, by the rules governing the
most analogous nominate contracts, and by the customs of the place. (n)
Art. 1308. The contract must bind both contracting parties; its validity or
Compliance cannot be left to the will of them. (1256a)
Art. 1309. The determination of the performance may be left to a third
Iverson, whose decision shall not be left to the binding until it has been made known
to both contracting parties. (n)
Art. 1311. Contracts take effect only between the parties, their assigns and
heirs, except in cases where the rights and obligations arising from the contract are
not transmissible by their nature, or by stipulation or by provision of law. The heir is
not liable beyond the value of the property he received from the decedent.
If a contract should contain some stipulation in favor of a third person, he
may demand its fulfillment provided he communicated his acceptance to the obligor
before its revocation. A mere incidental benefit or interest of a person is not
Sufficient. The contracting parties must have clearly and deliberately conferred a
favor upon a third person (1257a)
Art. 1312. In contracts creating real rights, third person who come into
possession of the object of the contract are bound thereby, subject to the provisions
of the Mortgage Law and the Land Registration laws. (n)
Art. 1313. Creditors are protected in cases of contracts intended to defraud
them (n)
Art. 1314. Any third person who induces another to violate his contract shall
be liable for damage to other contracting party. (n)
 711111101Pr
Art. 1315. Contracts are perfected by mere coat, IS from that mo
the parties ore bound not only to the fulfillment of whet has ban (morosely stipule
but also to all the consequence which, according to their nature, may be In Kee
with good faith, sage and law. (1258)
Art. 1316. Real contracts, such as deposit, pledge and commodatum,
not perfected until the delivery of the object of the obligation. (n)
Art. 1317. No one may contract in the name of another without
authorized by the latter, or unless he has by law a right to represent him.
A contract entered into the name of another by one who has no authority
legal representation, or who has acted beyond his powers, shall be unenforcea
unless it is ratified, expressly or impliedly, by the person on whose behalf it has
executed, before it is revoked by the other contracting party. (1259a)
Chapter 2
ESSENTIAL REQUISITES OF CONTRACTS
General Provisions
Art. 1318. There is no contract unless the following requisites concur:
(1) Consent of the contracting parties;
(2) Object certain which is the subject matter of the contract;
(3) Cause of the obligation which is established. (1261)
Section 1. Consent
Art. 1319. Consent is manifested by the meeting of the offer and t
acceptance upon the thing and the cause which are to constitute the qualifi
acceptance constitutes a counter-offer.
Acceptance made by letter or telegram does not bind the offerer except fr
the time it came to his knowledge. The contract, in such a case, is presumed to hay
been entered into in the place where the offer was made. (1262a)
Art. 1320. An acceptance may be express or implied. (n)
Art. 1321. The person making the offer may fix the time, place, and mann
or acceptance, all which must be complied with. (n)
Art. 1399. An offer made through en agent Is accepted from the time
lance is communicated to him (n)
Art. 1323. An offer becomes ineffective upon the death, civil interdiction,
Ily, or Insolvency of either party before acceptance is conveyed. (n)
Art. 1324. When the offer has allowed the offeree a certain period to accept,
offer may be withdrawn at any time before acceptance by communicating such
rowel, except when the option is founded upon a consideration, as something
Or promised. (n)
Art. 1326. Unless it appears otherwise, business advertisements of things
sale are not definite offers, but mere invitations to make an offer. (n)
Art. 1326. Advertisement for bidders are simply invitations to make
eels, and the advertiser is not bound to accept the highest or lowest bidder,
s the contrary appears, (n)
Art. 1327. The following cannot give consent to a contract:
(1) Unemancipated minors;
(2) Insane or demented person, and deaf-mutes who do not know how to
(1263a)
Art. 1328. Contracts entered into during a lucid interval are valid. Contracts
eed to in a state of drunkenness or during a hypnotic spell are voidable. (n)
Art. 1329. The incapacity declared in article 1327 is subject to the
fications determined by law, and is understood to be without prejudice to special
qualification established in the laws. (1264)
Art. 1330. A contract where consent is given through mistake, violence,
midation, undue influence, or fraud is voidable. (1265a)
Art. 1331. In order that mistake may invalidate consent, it should refer to the
bstance to the thing which is the object of the contract, or to those conditions which
ve principally moved one or both parties to enter into the contract.
Mistake as to the identify or qualifications of one of the parties will vitiate
Consent only when such identify or qualifications have been the principal cause of
Contract.
A simple mistake of account shall give rise to its correction. (1266a)
 "7"19r...rr
Art. 1332. When one of the parties Is unable to MK Of If the muted III
language not understood by him, and mistake or fraud la alleged, the pe
enforcing the contract must show that the terms thereof have boon fully explained,
the fernier, (n)
Art. 1333. There is no mistake if the party alleging it knew the
sontingoncy or risk affecting the object of the contract. (n)
Art. 1334. Mutual error as to the legal effect of an agreement when the
purpose of the parties is frustrated may vitiate consent. (n)
Art. 1336. There is violence when in order to wrest consent, serious
Iffellatible force is employed.
There is intimidation when one of the contracting parties is compelled by
reasonable and well-grounded fear of an imminent and grave peril upon his person
property, or upon the person or property of his spouse, descendants or ascenda
to give his consent.
To determine the degree of the intimidation, the age, sex and condition of
person shall be borne in mind,
A threat to enforce one's claim through competent authority, if the claim
just or legal, does not vitiate consent. (1267a)
Art. 1336. Violence or intimidation shall annul the obligation, although it m
have been employed by a third person who did not take part in contract. (1268)
Art. 1337. There is undue influence when a person takes impro
advantage of his power over the will of another, depriving the latter of a reasonabl
freedom of choice. The following circumstances shall be considered: the confidential
family, spiritual and other relations between the parties, or the fact the person alleg
to have been unduly influenced was suffering from mental weakness, or was ignora
Of In financial distress. (n)
Art. 1338. There is fraud when, through insidious words or machinations
one of the contracting parties, the other is induced to enter into a contract which
without them, he would not have agreed to (1269)
Art. 1339. Failure to disclose facts, when there is a duty to reveal them, a
when the parties are bound by confidential relations, constitute fraud. (n)
Art. 1340. The usual exaggerations in trade, when the other party had a
Opportunity to know the facts, are not in themselves fraudulent. (n)
Art. 1341. A more expression of a opinion does not signify fraud, unless
de by an expert and the other party has relied on the former's special knowledge.
Art. 1342. Misrepresentation by a third person does not vitiate consent,
as such misrepresentation has created substantial mistake and the same is
ual (n)
Art. 1343. Misrepresentation made in good faith is not fraudulent but may
'Mutes error. (n)
Art. 1344. In order that fraud may take a contract voidable, it should be
ous and should not have been employed by both contracting parties.
Incidental fraud only obliges the person employing it to pay damages. (1270)
Art. 1345. Simulation of a contract may be absolute or relative. The former
lakes place when the parties do not intend to be bound at all; the latter, when the
parties conceal their true agreement. (n)
Art. 1346. An absolutely simulated or fictitious contract is void. A relative
simulation, when it does not prejudice a third person and is not intended for any
purpose contrary to law, morals, good customs, public order or public policy bind the
parties to their real agreement. (n)
Section 2. Object of Contracts
Art. 1347. All things which are not outside the commerce of men, including
future things, may be the object of a contract. All rights which are not intransmissible
may also be the object of contracts.
No contract may be entered into upon future inheritance except in cases
expressly authorized by law.
All services which are not contrary to law, moral, good customs, public order
or public policy may likewise be the object of a contract. (1271a)
Art. 1348. Impossible things or services cannot be the object of contracts.
(1272)
Art. 1349. The object of every contract must be determine as to its kind.
The fact that the quantity is not determine shall not be an obstacle to the existence of
the contract, provided it is possible to determine the same, without the need of a new
contract between the parties. (1273)
 auction 3, Cauao of Contracts
Art. 1350. In onerous contracts the cause is understood to be, for
contracting party, the proatallon or promise of a thing or service by the 0th
remuneratory ones, the service or benefit which is remunerated; and In cent
pure beneficence, the mere liberality of the benefactor. (1274)
Art. 1361. The particular motives of the parties in entering into a eon
ore different from the cause thereof. (n)
Art. 1362. Contracts without case, or with unlawful cause, produce no
whatever. The cause is unlawful if it is contrary to law, morals, good customs, pu
order or public policy. (1275a)
Art. 1353. The statement of a false cause in contracts shall render t
void, if it should not be proved that they were founded upon another cause which
true and lawful. (1276)
Art. 1364. Although the cause is not stated in the contract, it is presu
That It exist and is lawful, unless the debtor proves the contrary. (1277)
Art. 1366. Except in cases specified by law, lesion or inadequacy of ca
shall not invalidate a contract, unless there has been fraud, mistake or and
Influence. (n)
Chapter 3
FORM OF CONTRACTS
Art. 1356. Contracts shall be obligatory, in whatever form they may hay
boon entered into, provided all the essential requisites for their validity are presen
However, when the law requires that a contract be in some form in order that it ma
be valid or enforceable, or that a contract be proved in a certain way, the
requirement is absolute and indispensable. In such cases, the right of the parti
stated in the following article cannot be exercised (1278a)
Art. 1357. If the law requires a document or other special form, as in the
acts and contracts enumerated in the following article, the contracting parties may
compel each other to observe that form, once the contract has been perfected. This
right may be exercised simultaneously with the action upon the contract. (1279a)
Art. 1358. The following must appear in a public document:
(1) Acts and 00110110111 which have for their object the creation, transmission.
Mallon or extinguishment of real rights over immovable property, solos of real
ty or of an interest therein ore governed by articles 1403, No 2, and 1405;
(2) The cession, repudiation or renunciation of hereditary rights or of those of
genjugel partnership of gains;
(3) The power to administer property; or any other power which has for its
an act appearing or which should appear in a public document, or should
dice a third person;
(4) The cession of actions or rights proceeding from an act appearing in a
c document.
All other contracts where the amount involved exceeds five hundred pesos
it appear in writing, even a private one. But sales of goods, chattels or things in
n are governed by articles 1403, No. 2 and 1405. (1280a)
Chapter 4
REFORMATION OF INSTRUMENTS (n)
Art. 1359. When, there having been a meeting of the minds of the parties to
contract, their true intention is not expressed in the instrument purporting to
mbody the agreement, by reason of mistake, fraud, inequitable conduct or accident,
One of parties may ask for the reformation of the instrument to the end that such true
InIontion may be expressed.
If mistake, fraud, inequitable conduct, or accident has prevented a meeting
of the minds of the parties, the proper remedy is not reformation of the instrument but
annulment of the contract.
Art. 1360. The principles of the general law on the reformation of
Instruments are hereby adopted insofar as they are not in conflict with the provision of
this Code.
Art. 1361. When a mutual mistake of the parties causes the failure of the
Instrument to disclose their real agreement, said instrument may be reformed.
Art. 1362. If one party was mistaken and the other acted fraudulently or
Inequitably in such a way that the instrument does not show their true intention, the
former may ask for the reformation of the instrument.
 Art, 1313, When OM party was mistaken
and the other know or belle
that the Instrument did not stale their real agreement, Art. 1373. If some stipulation of any contract should admit of several
hut oOnnealed that fact net it should be understood as bearing that import which is most adequate to
fanner, the instrument may be reformed.
tit effectual (1204)
Art. 13114. When through the ignorance, lack of skill,
negligence or bad Art. 1374. The various stipulations of a contract shall be interpreted
on the part of the person drafting the instrument or of the clerk or typist,
Instrument does not express the true intention of the parties, the courts thin, attributing to the doubtful ones that sense which may result from all of them
may jointly. (1285)
that the Instrument be reformed.
Art. 1366. If two parties agree upon the mortgage Art. 1376. Words which may have different significations shall be
personal property, but the instrument states that the property or pledge of real stood in that which is most in keeping with the nature and object of the contract.
is sold absolutely
With a right of repurchase, reformation of the instrument is proper.
Art. 1366. There shall be no reformation in the following cases: Art. 1376. The usage or custom of the place shall be borne in mind in the
retation of the ambiguities of a contract, and shall fill the omission of stipulations
(1) Simple donations inter vivos wherein no condition are ordinarily established. (1287)
is imposed;
(2) Wills;
(3) When real agreement is void. Art. 1377. The interpretation of obscure words or stipulations in a contract
II not favor the party who caused the obscurity. (1288)
Art. 1367. When one of the parties has brought an action
to enforce t Art. 1378. When it is absolutely impossible to settle doubts by the rules
ostrument, he cannot subsequently ask for its reformation.
teblished in the preceding articles, and the doubts refer to incidental circumstances
Art. 1368. Reformation may be ordered at the instance of either a gratuitous contract, the least transmission of rights and interest shall prevail. If
party or hl contract is onerous, the doubt shall be settled in favor of the greatest reciprocity
kw:Gassers in interest, if the mistake was mutual; otherwise, upon petition of th
...lured party, or his heirs and assigns. Interests.

Art. 1369. The procedure for the reformation of instrum If the doubts are cast upon the principal object of the contract in such a way
ents shall be that it cannot be known what may have been the intention or will of the parties, the
governed by rules of court to be promulgated by the Supreme Court.
contract shall be null and void. (1289)

Art. 1379. The principles of interpretation stated in Rules 123 of the Rules of
Chapter 5 Court shall likewise be observed in the construction of contracts. (n)
INTERPRETATION OF CONTRACTS

Art. 1370. If the terms of a contract are clear and leave no doubt upon the
Intention of the contracting parties, the literal meaning of its stipulations shall control. Chapter 6

If the words appear to be contrary to the evident intention of the parties, the RESCISSIBLE CONTRACTS
latter shall prevail over the former. (1281)

Art. 1371. In order to judge the intention of the contracting parties, their Art. 1380. Contracts validly agreed upon may be rescinded in the cases
(110ntemporaneous and subsequent acts shall be principally considered. (1282) established by law. (1290)

Art. 1372. However general the terms of a contract may be, Art. 1381. The following contracts are rescissible:
bo understood to comprehend things that are distinct they shall not
and cases that are different
from those upon which the parties intended to agree. (1283)
 (1) Those which are entered Into by guardians Whenever the wards w
they represent suffer lesion by morn than ono-fourth of the value of the things
Sc the object thereof,
(2) Those agreed upon in representation of absentees. If the latter suffer
lesion stated In the preceding number;
(3) Those undertaken in fraud of creditors when the latter cannot in any
Manner collect the claims due them;
(4) Those which refer to things under litigations if they have been ent
Int0 by the defendant without the knowledge and approval of the litigants or
Competent judicial authority;
(5) All other contracts specially declared by law to be subject to resciss
(1201a)
Art. 1382. Payments made in a state of insolvency for obligations to
fulfillment the debtor could not be compelled at the time they were effected, are a
rescissible. (1292)
Art. 1383. The action for rescission is subsidiary; it cannot be institu
except when the party suffering damage has no other legal means to o
reparation for the same. (1294)
Art. 1384. Rescission shall be only to the extent necessary to cover
damages caused. (n)
Art. 1385. Rescission creates the obligations to return the things which
the object of the contract, together with their fruits, and the price with its inters
consequently, it can be carried out only when he who demands rescission can re
whatever he may be obliged to restore.
Neither shall rescission take place when the things which are the object
the contract are legally in the possession of third persons who did not act in bad fal
In this case, indemnity for damages may be demanded from the pers
causing the loss. (1295)
Art. 1386. Rescission referred to in Nos. 1 and 2 of article 1381 shall
take place with respect to contracts approved by the courts (1296a)
Art. 1387. All contracts by virtue of which the debtor alienates property
gratuitous title are presumed to have been entered into in fraud of creditors, when t
donor did not reserve sufficient property to pay all debts contracted before t
donation.
Alienations by onerous title are also presumed fraudulent when made by
oils against whom some judgment has been rendered in any instance or some
of attachment has been Issued The decision or attachment need not refer to the
rty alIenated, and need not have been obtained by the party seeking the
ellen.
In addition to these presumptions, the design to defraud creditors may be
In any other manner recognized by the law of evidence. (1297a)
Art. 1388. Whoever acquires in bad faith the things alienated in fraud of
tors, shall indemnify the latter for damages suffered by them on account of the
nation, whenever, due to and cause, it should be impossible for him to return
If there are two or more alienations, the first acquirer shall be liable first, and
on successively. (1298a)
Art. 1389. The action to claim rescission must be commenced within four
For persons under guardianship and for absentees, the period of four years
II not begin until the termination of the former's incapacity, or until the domicile of
latter is known. (1299)
Chapter 7
VOIDABLE CONTRACTS
Art. 1390. The following contracts are voidable or annullable, even though
re may have been no damage to the contracting parties:
(1) Those where one of the parties is incapable of giving consent to a
tract;
(2) Those where the consent is vitiated by mistake, violence, intimidation,
due influence or fraud.
These contracts are binding, unless they are annulled by a proper action in
rt. They are susceptible of ratification. (n)
Art. 1391. The action for annulment shall be brought within four years.
This period shall begin:
 in °MOB of Intimidation, violence or undue DAUM* from Ilia lime the defeat
If the consent ceases
In case of mistake or fraud, from the time of the discovery of the same_
And when the action refers to contracts entered into by minors or o
Incapacitated persons, from the time the guardianship ceases. (1301a)
Art. 1392. Ratification extinguishes the action to annul a voidable cont
(13090)
Art. 1393. Ratification may be effected expressly or tacitly. It is underst
that there is a tacit ratification if, with knowledge of the reason which renders
contract voidable and such reason having ceased, the person who has a right
Invoke it should execute an act which necessarily implies an intention to waive
right. (1311a)
Art. 1394. Ratification may be effected by the guardian of the incapacitat
person. (n)
Art. 1395. Ratification does not require the conformity of the contracti
party who has no right to bring the action for annulment. (1312)
Art. 1396. Ratification cleanses the contract from all its defects from t
moment it was constituted. (1313)
Art. 1397. The action for the annulment of contracts may be instituted by
who are thereby obliged principally or subsidiarily. However, persons who a
capable cannot allege the incapacity of those with whom they contracted; nor
those who exerted intimidation, violence, or undue influence, or employed fraud,
caused mistake base their action upon these flaws of the contract. (1302a)
Art. 1398. An obligation having been annulled, the contracting parties sh
restore to each other the things which have been the subject matter of the contra
with their fruits, and the price with its interest, except cases provided by law.
In obligations to render service, the value thereof shall be the basis f
damages. (1303a)
Art. 1399. When the defect of the contract consists in the incapacity of
of the parties, the incapacitated person is not obliged to make any restitution exce
Insofar as he has been benefited by the thing or price received by him. (1304)
Art. 1400. Whenever the person obliged by the decree of annulment
return the thing can not do so because it has been lost through his fault, he sh
return the fruits received and the value of the thing at the time of the Ions,
'utmost train the same date (1307e)
Art. 1401. The action of annulment of contracts shall be extinguished when
thing which Is the object thereof is lost through the fraud or fault of the person
to has right to institute the proceedings.
If the right of action is based upon the incapacity of any one of the
reeling parties, the loss of the thing shall not be an obstacle to the success of the
, unless said loss took place through the fraud or fault of the plaintiff. (1314a)
Art. 1402. As long as one of the contracting parties does not restore what in
flue of the decree of annulment he is bound to return, the other cannot be
polled to comply with what is incumbent upon him (1308)
Chapter 8
UNEFORCEABLE CONTRACTS (n)
Art. 1403. The following contract are unenforceable, unless they are ratified.
(1) Those entered into in the name of another person by one who has been
given no authority or legal representation, or who has acted beyond his powers;
(2) Those that do not comply with the Statute of Frauds as set forth in this
number. In the following cases an agreement hereafter made shall be unenforceable
by action, unless the same, or some note or memorandum therefore, be in writing,
and subscribed by the party charged, or by his agent; evidence, thereof, of the
agreement cannot be received without, the writing or a secondary evidence of its
Contents:
(a) An agreement that by its terms is not to be performed within a year from
the making thereof;
(b) A special promise to answer for the debt, default, or miscarriage of
another;
(c) An agreement made in consideration of marriage, other than a mutual
promise to marry;
(d) An agreement for the sale of goods, chattels or things in action, at a
price not less than five hundred pesos, unless the buyer accept and
receive part of such goods and chattels, or the evidences, or some of
 them, of such things In nulion, or pay at the time some part of
purchase money, but when a sale is mndo by suction and entry Is m
by the auctioneer in hie sales book, al the lime of the sale, of the a
and kind of property sold, terms of sale, price, names of the purcha
and person on whose account the sale is made, it is a s
memorandum;
(e) An agreement for the leasing for a longer period than one year, or for
sale of real property or of an interest therein;
(f) A representation as to the credit incapable of giving consent to
contract.
(3) Those where both parties are incapable of giving consent to a contract.
Art. 1404. Unauthorized contracts are governed by article 1317 and
principals of agency.
Art. 1405. Contracts infringing the Statue of Frauds, referred to in No. 2
article 1403, are ratified by the failure to object to the presentation of oral evidence
prove the same, or by the acceptance of benefits under them.
Art. 1406. When a contract is enforceable under the Statute of Frauds, a
a public document is necessary for its registration in the Registry of Deeds,
parties may avail themselves of the right under article 1357.
Art. 1407. In a contract where both parties are incapable of giving conse
express or implied ratification by the parent, or guardian, as the case may be, of
of the contracting parties shall give the contract the same effect as if only one of th
were incapacitated.
If ratification is made by the parents or guardians, as the case may be,
both contracting parties, the contract shall be validated from the inception.
Art. 1408. Unenforceable contracts cannot be assailed by third persons.
Chapter 9
VOID OR INEXISTENT CONTRACTS
Art. 1409. The following contracts are inexistent and void from t
beginning:
(1) Those whose cause, object or purpose is contrary to law, morals, g
customs, public order or public policy.
(2) Those which are absolutely simulated or fictitious,
(3) Those whose cause or object did not exist al the time of the transaction,
(4) Those whose object is outside the commerce of men;
(5) Those which contemplate an impossible service;
(6) Those where the intention of the parties relative to the principal object of
contract cannot be ascertained;
(7) Those expressly prohibited or declared void by law.
These contacts cannot be ratified. Neither can the right to set up the
tense of illegality by waived.
Art. 1410. The action or defense for the declaration of the inexistence of a
tract does not prescribe.
Art. 1411. When the nullity proceeds from the illegality of the cause or
t of the contract, and the act constitutes a criminal offense, both parties being in
delicto, they shall have no action against each other, and both shall be
secuted. Moreover, the provisions of the Penal Code relative to the disposal of
cts or instruments of crime shall be applicable to the things or the price of the
tract.
This rule shall be applicable when only one of the parties is guilty; but the
Innocent one may claim what he has given, and shall not be bound to comply with his
promise. (1305)
Art. 1412. If the act in which the unlawful or forbidden cause consist does
not constitute a criminal offense, the following rules shall be observed:
(1) When the fault is not the part of both contracting parties, neither may
recover what he has given by virtue of the contract, or demand the performed of the
hers undertaking.
(2) When only one of the contracting parties is at fault, he cannot recover
What he has given by reason of the contract, or ask for the fulfillment of what has
been promised him. The other, who is not at fault, may demand the return of what he
has given without any obligation to comply with his promise. (1306)
Art. 1413. Interest paid in excess of the interest allowed by the usury laws
may be recovered by the debtor, with interest thereon from the date of the payment.
 11.111.11PIF

Art 1414. When money is paid or property MOVIMOVIM Illegal pur

the contract may ho repudiated by one of the parties before the purpose has
esomplisluid, or before any damage has been caused to a third parson. In
MN, the courts may, If the public interest will thus be subserved, allow the
lating the contract to recover the money or property.

Art. 1416. Where one of the parties to an illegal contract is incapable,

consent, the courts may, if the interest of justice so demands, allow recov
or property delivered by the incapacitated person.

Art. 1416. When the agreement is not illegal per se but is merely prohibit
the prohibition by the law is designed for the protection of the plaintiff, he may,
IC policy is thereby enhanced, recover what he has paid or delivered. Appendix D

Art. 1417. When the price of any article or commodity is determined

tissue, or by authority of law, any person paying any amount in excess of
Maximum price allowed may recover such excess.

Art. 1418. When the law fixes, or authorizes the fixing of the maxim
Dumber of hours of labor, and a contract is entered into whereby a laborer undertak
le work longer than the maximum thus fixed, he may demand additi
aimpensation for service rendered beyond the time limit.

Art. 1419. When the law sets, or authorizes the setting of a minimum REPUBLIC ACT NO. 9184,
*laborers, and a contract is agreed upon by which a laborer accepts a lower w
he shall be entitled to recover the deficiency.
AN ACT PROVIDING FOR THE
Art. 1420. In case of a divisible contract, if the illegal terms can
MODERNIZATION, STANDARDIZATION
separated from the legal ones, the latter may be enforced. AND REGULATION OF THE PROCUREMENT
Art. 1421. The defense of illegality of contracts is not available to third. ACTIVITIES OF THE GOVERNMENT AND
persons whose interests are not directly affected.
FOR OTHER PURPOSES
Art. 1422. A contract which is the direct result of a previous illegal contract,
Melo void and inexistent.
 Republic of the Philippines

Congress of the Philippines

Metro Manila
Twelfth Congress
Second Regular Session

and held in Metro Manila, on Monday, the twenty-second day

of July, two thousand two.

[ REPUBLIC ACT NO. 9184 ]

ACT PROVIDING FOR THE MODERNIZATION,

STANDARDIZATION AND REGULATION OF THE
PROCUREMENT ACTIVITIES OF THE GOVERNMENT
AND FOR OTHER PURPOSES

enacted by the Senate and House of Representatives of the

Philippines in Congress assembled:

ARTICLE I

GENERAL PROVISIONS

SECTION 1. Short Title. — This Act shall be known as the "Government

Foment Reform Act?

SEC. 2. Declaration of Policy. — It is the declared policy of the State to

le the ideals of good governance in all its branches, departments, agencies,
talons, and instrumentalities, including government-owned and/or-controlled
tlons and local government units.

SEC. 3. Governing Principles on Government Procurement — All

ment of the national government, its departments, bureaus, offices and
IL including state universities and colleges, government-owned and/or-
lad corporations, government financial institutions and local government units,
In all cases, be governed by these principles:

(a) Transparency in the procurement process and in the implementation of

nt contracts.
 791111Mirr
(b) Competitiveness by extending equal opportunity to enable
leintrecting parties who ere eligible and qualified to participate In public bidding
(o) Streamlined procurement process that will uniformly apply to
nrninent procurement. The procurement process shall be simple and
litele to advances in modem technology in order to ensure an effective
istlt method.
(d) System of accountability where both the public officials directly
golly Involved in the procurement process as well as in the implementati
iimmant contracts and the private parties that deal with government are.
putted by circumstances, investigated and held liable for their actions rel
iile.
(e) Public monitoring of the procurement process and the implementation
(Jed contracts with the end in view of guaranteeing that these contracts
dad pursuant to the provisions of this Act and its implementing rules a
•ilations, and that all these contracts are performed strictly according
fictions.
SEC. 4. Scope and Application. — This Act shall apply to the Procurement
infrastructure Projects, Goods and Consulting Services, regardless of source
hinds, whether local or foreign, by all branches and instrumentalities of govemm
departments, offices and agencies, including government-owned and/or—controll
irporations and local government units, subject to the provisions of Commonwe
.et No. 138. Any treaty or international or executive agreement affecting the su
, ,i.itter of this Act to which the Philippine government is a signatory shall be obsery
SEC. 5. Definition of Terms. - For purposes of this Act, the following to
words and phrases shall mean or be understood as follows:
(a) Approved Budget for the Contract (ABC) - refers to the budget for t
)(tact duly approved by the Head of the Procuring Entity, as provided for in t
.iineral Appropriations Act and/or continuing appropriations, in the case of Natio
.ovemment Agencies; the Corporate Budget for the contract approved by t
iyorning Boards, pursuant to E.O. No. 518, series of 1979, in the case
iiivemment-Owned and/or Controlled Corporations, Government Financi
istItutions and State Universities and Colleges; and the Budget for the contra
iriptoved by the respective Sanggunian, in the case of Local Government Units.
(b) BAC — refers to the Bids and Awards Committee established
cordance with Article V of this Act.
2
(a) Bidding Documonte — refer to documents issued by the Procuring Entity
BB the basis for Bids, furnishing all Information necessary for a prospective bidder to
prepare a bid for the Goods, Infrastructure Projects, and Consulting Services to be
ovided.
(d) Bid — refers to a signed offer or proposal submitted by a supplier,
ufacturer, distributor, contractor or consultant in response to the Bidding
uments.
(e) Competitive Bidding— refers to a method of procurement which is open to
rtIcipation by any interested party and which consists of the following processes:
ertisement, pre-bid conference, eligibility screening of prospective bidders, receipt
opening of bids, evaluation of bids, post-qualification, and award of contract, the
Specific requirements and mechanics of which shall be defined in the IRR to be
promulgated under this Act.
(f) ConsultingServices — refer to services for Infrastructure Projects and
other types of project% 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: (i) advisory and review
services; (0) pre-investment or feasibility studies; (iii) design; (iv) construction
Supervision; (v) management and related services; and (vi) other technical services
or special studies.
(g) G- EPS — refers to the Government Electronic Procurement System as
provided in Section 8 of this Act.
(h) Goods — refer to all items, supplies, materials and general support
services, except consulting services and infrastructure projects, which may be
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 for construction, or personal property of any kind, including non-
personal or contractual services such as the repair and maintenance of equipment
end furniture, as well as trucking, hauling, janitorial, security, and related or
analogous services, as well as procurement of materials and supplies provided by the
procuring entity for such services.
(i) GPPB — refers to the Government Procurement Policy Board established
In accordance with Article XX of this Act.
0) Head of the Procuring Entity — refers to: (i) the head of the agency or his
duly authorized official, for national government agencies; (ii) the governing board or
its duly authorized official, for government-owned and/or-controlled corporations; or
(iii) the local chief executive, for local government units. Provided, That in a
department, office or agency where the procurement is decentralized, the Head of
each decentralized unit shall be considered as the Head of the Procuring Entity
3

nrilrjrwr 10 Ilia lloillalions and authority delegated by Ilkm head or the dope
ulneo or trgootly
(k) InliaMtuclutu Propels — Include the construction, Impro
rehabilitation, demolition, repair, restoration or maintenance of roads end
lysgways, airports, seaports, communication facilities, civil works comport
ktfortnellon technology projects, Irrigation, flood control and drainage, water
illrlitation, sewerage and solid waste management systems, shore pro
aria /power and electrification facilities, national buildings, school b
hospital buildings and other related construction projects of the government.
(I) IRR — refer to the implementing rules and regulations to be pro
In accordance with Section 75 of this Act.
(m) Portal — refers to a website that aggregates a wide variety of con
the purpose of attracting a large number of users.
(n) Procurement — refers to the acquisition of Goods, Consulting SenA
and the contracting for Infrastructure Projects by the Procuring Entity. Procure
shall also include the lease of goods and real estate. With respect to real pro
Its procurement shall be governed by the provisions of Republic Act No. 8
entitled "An Act to Facilitate the Acquisition of Right-of-Way Site or Locatio
National Government Infrastructure Projects and for Other Purposes", and
applicable laws, rules and regulations.
(o) Procuring Entity — refers to any branch, department, office, agen
Instrumentality of the government, including state universities and coil
government-owned and/or- controlled corporations, government financial instituti
and local government units procuring Goods, Consulting Services and Infrast
Projects.
SEC. 6. Standardization of Procurement Process and Forms.
systematize the procurement process, avoid confusion and ensure transparen
procurement process, including the forms to be used, shall be standardized in
as practicable.
For this purpose, the GPPB shall pursue the development of ge
procurement manuals and standard bidding forms, the use of which once Issued
be mandatory upon all Procuring Entities.
4 5
Iiiii...11111111.111111111111411111111111111111111111r
ARTICLE II
PROCUREMENT PLANNING
SEC. 7. Procurement Planning and Budgeting Linkage. — All procurement
be within the approved budget of the Procuring Entity and should be
°tally and judiciously planned by the Procuring Entity concerned. Consistent
government fiscal discipline measures, only those considered crucial to the
discharge of governmental functions shall be included in the Annual
ment Plan to be specified in the IRR.
No government Procurement shall be undertaken unless it is in accordance
the approved Annual Procurement Plan of the Procuring Entity. The Annual
cement Plan shall be approved by the Head of the Procuring Entity and must be
stent with its duly approved yearly budget. The Annual Procurement Plan shall
ulated and revised only in accordance with the guidelines set forth in the IRR.
case of Infrastructure Projects, the Plan shall Include engineering design and
*Ilion of right-of-way.
ARTICLE III
PROCUREMENT BY ELECTRONIC MEANS
SEC. 8. Procurement By Electronic Means. — To promote transparency and
envy, information and communications technology shall be utilized in the conduct
urement procedures. Accordingly, there shall be a single portal that shall
as the primary source of information on all government procurement. The G-
shall serve as the primary and definitive source of information on government
urement. Further, the GPPB is authorized to approve changes in the
urement process to adapt to improvements in modern technology, provided that
modifications are consistent with the provisions of Section 3 of this Act.
To take advantage of the significant built-in efficiencies of the G-EPS and the
ume discounts inherent In bulk purchasing, all Procuring Entities shall utilize the G-
S for the procurement of common supplies in accordance with the rules and
edures to be established by the GPPB. With regard to the procurement of non-
mon use items, infrastructure projects and consulting services, agencies may
service providers to undertake their electronic procurement provided these
ce providers meet the minimum requirements set by the GPPB.
SEC. 9. Security, integrity and Confidentiality. — The G-EPS shall ensure the
rity, integrity and confidentiality of documents submitted through the system. It
I include a feature that provides for an audit trail for on-line transactions and allow
Commission on Audit to verify the security and integrity of the systems at any
 ARTICLO IV
COMPETITIVE BIDDING
SEC 10. Competitive Bidding. — All Procurement shall be done II
Competitive Bidding, except as provided for in Article XVI of this Act.
ARTICLE V
BIDS AND AWARDS COMMITTEE
SEC. 11. The BAC and its Composition. — Each procuring entity
Wallah a single BAC for its procurement. The BAC shall have at least five
members, but not more than seven (7) members. It shall be chaired by at I
third ranking permanent official of the procuring entity other than its head, and
composition shall be specified in the IRR. Alternatively, as may be deemed fit by
hoed of the procuring entity, there may be separate BACs where the number
complexity of the items to be procured shall so warrant. Similar BACs
decentralized and lower level offices may be formed when deemed necessary by
head of the procuring entity. The members of the BAC shall be designated by
Head of Procuring Entity. However, in no case shall the approving authority
member of the BAC.
Unless sooner removed for a cause, the members of the BAC shall hay
fixed term of one (1) year reckoned from the date of appointment, renewable at
discretion of the Head of the Procuring Entity. In case of resignation, retirem
separation, transfer, re-assignment, removal, th.e replacement shall serve only
the unexpired term: Provided, That in case of leave or suspension, the replacem
shall serve only for the duration of the leave or suspension. For justifiable causes,
member shall be suspended or removed by the Head of the Procuring Entity.
SEC. 12. Functions of the SAC. — The BAC shall have the follow'
functions: advertise and/or post the invitation to bid, conduct pre-procurement a
pre-bid conferences, determine the eligibility of prospective bidders, receive bids
conduct the evaluation of bids, undertake post-qualification proceedings, recomme
award of contracts to the Head of the Procuring Entity or his duly authoriz
representative: Provided, That in the event the Head of the Procuring Entity shat
disapprove such recommendation, such disapproval shall be based only on valid,
reasonable and justifiable grounds to be expressed in writing, copy furnished the
BAC; recommend the imposition of sanctions in accordance with Article XXIII, and
perform such other related functions as may be necessary, including the creation of a
Technical Working Group from a pool of technical, financial and/or legal experts to
assist in the procurement process.
6 7
In proper meek the MC shall also recommend to the Hoed of the Procuring
Baty the use of Alternative Methods of Procurement as provided for In Article XVI
tut
not
The BAC shall be responsible for ensuring that the Procuring Entity abides
the standards set forth by this Act and the IRR, and it shall prepare a procurement
Hering report that shall be approved and submitted by the Head of the Procuring
ty to the GPPB on a semestral basis. The contents and coverage of this report
II be provided in the IRR.
SEC. 13. Observers. — To enhance the transparency of the process, the
C shall, in all stages of the procurement process, invite, in addition to the
esentative of the Commission on Audit, at least two (2) observers to sit in its
eedings, one (1) from a duly recognized private group in a sector or discipline
avant to the procurement at hand, and the other from a non-government
genization: Provided, however, That they do not have any direct or indirect interest
the contract to be bid out. The observers should be duly registered with the
Securities and Exchange Commission and should meet the criteria for observers as
tlel forth in the IRR.
SEC. 14. BAC Secretariat. — To assist the BAC in the conduct of its
functions, the Head of the Procuring Entity shall create a Secretariat that will serve as
the main support unit of the BAC. The Head of the Procuring Entity may also
designate an existing organic office within the agency to serve as the Secretariat.
SEC. 15. Honoraria of BAC Members. — The Procuring Entity may grant
payment of honoraria to the BAC members in an amount not to exceed twenty live
percent (25%) of their respective basic monthly salary subject to availability of funds.
For this purpose, the Department of Budget and Management (DBM) shall
promulgate the necessary guidelines.
SEC 16. Professionalization of BAC, BAC Secretariat and Technical Working
Group Members. — The GPPB shall establish a sustained training program for
developing the capacity of the BACs, BAC Secretariats and Technical Working
Groups of Procuring Entities, and professionalize the same.
ARTICLE VI
PREPARATION OF BIDDING DOCUMENTS
SEC. 17. Form and Contents of Bidding Documents. — The Bidding
Documents shall be prepared by the Procuring Entity following the standard forms
and manuals prescribed by the GPPB. The Bidding Documents shall include the
following:
 (o) Approved Budget for the Contract;
(b) Instructions to Bidders, including criteria for eligibility, bid evaluatign
al•quallfcation, as well as the date, time and place of the pre-bbd Conf
applicable), submission of bids and opening of bids;
Terms of Reference;
Eligibility Requirements;
Plans and Technical Specifications;
Form of Bid, Price Form, and List of Goods or Bill of Quantities;
Delivery Time or Completion Schedule;
Form and Amount of Bid Security;
Form and Amount of Performance Security and Warranty; and,
Form of Contract, and General and Special Conditions of Contract.
The Procuring Entity may require additional document requirements
specifications necessary to complete the information required for the bidde
prepare and submit their respective bids.
SEC. 18. Reference to Brand Names. — Specifications for the Procure
of Goods shall be based on relevant characteristics andfor performs
requirements. Reference to brand names shall not be allowed.
SEC. 19. Access to Information. — In all stages of the preparation of
Bidding Documents, the Procuring Entity shall ensure equal access to informal'
Prior to their official release, no aspect of the Bidding Documents shall be divulged
released to any prospective bidder or person having direct or indirect interest in
project to be procured.
II
ARTICLE VII
INVITATION TO BID
SEC. 20. Pm-Procurement Conference. — Prior to the issuance of th
Invitation to Bid, the BAC is mandated to hold a pre-procurement conference on ea
8 9
end every procurement, except those contracts below a certain level or amount
Allied in the IRR, In which case, the holding of the same Is optional
The pre-procurement conference shall assess the readiness of the
lament In terms of confirming the certification of availability of funds, as well as
ng all relevant documents in relation to their adherence to law. This shall be
dad by the BAC, the unit or officials who prepared the bidding documents and
draft Invitation to Bid, as well as consultants hired by the agency concerned and
representative of the end-user.
SEC. 21. Advertising and Contents of the Invitation to Bd. — In line with the
pie of transparency and competitiveness, all Invitations to Bid for contracts
or competitive bidding shall be advertised by the Procuring Entity in such manner
for such length of time as may be necessary under the circumstances in order to
ure the widest possible dissemination thereof, such as, but not limited to, posting
the Procuring Entity's premises, in newspapers of general circulation, the G-EPS
the website of the Procuring Entity, if available. The details and mechanics of
ementation shall be provided in the IRR to be promulgated under this Act.
The Invitation to Bid shall contain, among others:
(a) A brief description of the subject matter of the Procurement;
(b) A general statement on the criteria to be used by the Procuring Entity for
eligibility check, the short listing of prospective bidders, in the case of the
urement of Consulting Services, the examination and evaluation of Bids, and
st-qualification;
(c) The date, time and place of the deadline for the submission and receipt of
eligibility requirements, the pre-bid conference if any, the submission and receipt
Of bids, and the opening of bids;
(d) The Approved Budget for the Contract to be bid;
(e) The source of funds;
(f) The period of availability of the Bidding Documents, and the place where
giose may be secured;
(g) The contract duration; and,
(h) Such other necessary information deemed relevant by the Procuring
!nifty.
SEC. 22. Pre-bid Conference. — At least one pre-bid conference shall be
Conducted for each procurement, unless otherwise provided in the IRR. Subject to
Ile approval of the MC, a 'Rebid conference may also be nonduclad upon
Millen request of any prospective bidder
The pro-bid conference(s) shall be held within a reasonable period be
the deadline for receipt of bids to allow prospective bidders to adequately p
their bids, which shall be specified in the IRR.
ARTICLE VIII
RECEIPT AND OPENING OF BIDS
SEC. 23. Eligibility Requirements for the Procurement of Goods a
Mhos(white Projects. — The BAC or, under special circumstances specified in
IRR, Its duly designated organic office shall determine the eligibility of prospec
bidders for the procurement of Goods and Infrastructure Projects, based on
bidders' compliance with the eligibility requirements within the period set forth in t
Invitation to Bid. The eligibility requirements shall provide for fair and equal access
all prospective bidders. The documents submitted in satisfaction of the eligibill
requirements shall be made under oath by the prospective bidder or by his d
authorized representative certifying to the correctness of the statements made a
the completeness and authenticity of the documents submitted.
A prospective bidder may be allowed to submit his eligibility requireme
electronically. However, said bidder shall later on certify under oath as to correctn
of the statements made and the completeness and authenticity of the docume
Submitted.
SEC. 24. Eligibility Requirements and Short Listing for Consulting Servi
- The eligibility of prospective bidders for the Procurement of Consulting Servi
shell be determined by their compliance with the eligibility requirements prescri
for the Competitive Bidding concerned, within the period stated in the Invitation
Bid. The eligibility requirements shall provide for fair and equal access to
prospective bidders. The prospective bidder shall certify under oath as to t
correctness of the statements made, and the completeness and authenticity of t
documents submitted.
A prospective bidder may be allowed to submit his eligibility requiremen
electronically. However, said bidder shall later on certify under oath as to correctne
of the statements made and the completeness and authenticity of the documen
submitted.
The eligible prospective bidders shall then be evaluated using numeri
ratings on the basis of the short listing requirements prescribed for the Competiti
Bidding concerned, within the period stated in the Invitation to Bid to determine t
short list of bidders who shall be allowed to submit their respective bids.
10
SEC. 25 Submission and Receipt of Bids. — A bid shall have two (2)
components, namely the technical and financial components which should be in
Separate sealed envelopes, and which shall be submitted simultaneously. The bids
$hell be received by the BAC on such date, time and place specified in the invitation
%O bid. The deadline for the receipt of bids shall be fixed by the BAC, giving it
Mclent time to complete the bidding process and giving the prospective bidders
Mcient time to study and prepare their bids. The deadline shall also consider the
oncy of the procurement involved.
Bids submitted after the deadline shall not be accepted.
Notwithstanding the provisions of this Section and Section 26 of this Act, the
PPB may prescribe innovative procedures for the submission, receipt and opening
bids through the G — EPS.
SEC. 26. Modification and Withdrawal of Bids. — A bidder may modify his bid,
provided that this is done before the deadline for the receipt of bids. The modification
shall be submitted in a sealed envelope duly identified as a modification of the
Original bid and stamped received by the BAC.
A bidder may, through a letter, withdraw his bid or express his intention not
to participate in the bidding before the deadline for the receipt of bids. In such case
he shall no longer be allowed to submit another Bid for the same contract either
directly or indirectly.
SEC. 27. Bid Security. — All Bids shall be accompanied by a Bid security,
Which shall serve as a guarantee that, after receipt of the Notice of Award, the
Winning bidder shall enter into contract with the Procuring Entity within the stipulated
Ume and furnish the required performance security. The specific amounts and
allowable forms of the Bid security shall be prescribed in the IRR.
SEC. 28. Bid Validity. — Bids and Bid securities shall be valid for such
reasonable period of time indicated in the Bidding Documents. The duration for each
Undertaking shall take into account the time involved in the process of Bid evaluation
and award of contract.
SEC. 29. Bid Opening. — The BAC shall publicly open all bids at the time,
date, and place specified in the bidding documents. The minutes of the bid opening
Shall be made available to the public upon written request and payment of a specified
fee.
11
 ARTICLE IX
DID EVALUATION
SEC 30. Preliminary Examination of Bids. — Prior to Bid evaluation,
shall exemine first the technical components of the bids using "pass/fall'
determine whether all required documents are present. Only bids that are do
to contain all the bid requirements of the technical component shall be consl
opening and evaluation of their financial component.
SEC. 31. Coiling for Bid Prices. - The ABC shall be the upper limit or
for the Bid prices. Bid prices that exceed this ceiling shall be disqualified outrig
further participating in the bidding. There shall be no lower limit to the amount
award.
SEC. 32, Bid for the Procurement of Goods and Infrastructure Projects
the procurement of Goods and Infrastructure Projects, the BAC shall evalue
financial component of the bids. The bids that passed the preliminary exa
shall be ranked from lowest to highest in terms of their corresponding ca
prices. The bid with the lowest calculated price shall be referred to as the
Calculated Bid.'
SEC. 33. Bid Evaluation of Short Listed Bidders for Consulting Sew
For the Procurement of Consulting Services, the Bids of the short listed bidders
be evaluated and ranked using numerical ratings in accordance with the evalu
criteria stated in the Bidding Documents, which shall include factors such as, but
limited to, experience, performance, quality of personnel, price and methodology
Bids shall be ranked from highest from to lowest in terms of their correspo
calculated ratings. The Bid with the highest calculated rating shall be the "I-11g
Rated Bid." After approval by the Head of the Procuring Entity of the Highest R
Bid, the BAC shall invite the bidder concerned for negotiation and/or clarification
the following items: financial proposal submitted by the bidder, terms of refere
scope of services, methodology and work program, personnel to be assigned to
job, services/facilities/data to be provided by the Procuring Entity concerned,
provisions of the contract. When negotiations with the first-in-rank bidder fails,
financial proposal of the second rank bidder shall be opened for negotiatl
Provided, That the amount indicated in the financial envelope shall be made as
basis for negotiations and the total contract amount shall not exceed the am
Indicated in the envelope and the ABC. Whenever necessary, the same process
be repeated until the bid is awarded to the winning bidder.
tinder any of the following circumstances:
12
ARTICLE X
POST-QUALIFICATION
SEC. 34. Objective and Process of Post-qualification. — Post-qualification is
stags where the bidder with the Lowest Calculated Bid, in the case of Goods and
fructure Projects, or the Highest Rated Bid, in the case of Consulting Services,
verification and validation whether he has passed all the requirements and
(lions es specified in the Bidding Documents.
If the bidder with the Lowest Calculated Bid or Highest Rated Bid passes all
criteria for post-qualification, his Bid shall be considered the "Lowest Calculated
ponsivo Bid," in the case of Goods and Infrastructure or the "Highest Rated
naive Bid," in the case of Consulting Services. However, if a bidder fails to
I any of the requirements or conditions, he shall be "post-disqualified" and the
shall conduct the post-qualification on the bidder with the second Lowest
Inflated Bid or Highest Rated Bid. If the bidder with the second Lowest Calculated
or Highest Rated Bid is post-disqualified, the same procedure shall be repeated
I the Lowest Calculated Responsive Bid or Highest Rated Responsive Bid is
Ily determined.
In all cases, the contract shall be awarded only to the bidder with the Lowest
Iculated Responsive Bid or Highest Rated Responsive Bid.
SEC. 35. Failure of Bidding. — There shall be a failure of bidding if:
(a) No bids are received;
(b) No bid qualifies as the Lowest Calculated Responsive Bid or Highest
sled Responsive Bid; or,
(c) Whenever the bidder with the highest rated/lowest calculated responsive
refuses, without justifiable cause to accept the award of contract, as the case may
Under any of the above instances, the contract shall be re advertised and re-
The BAC shall observe the same process and set the new periods according to
same rules followed during the first bidding. After the second failed bidding,
ever, the BAC may resort to negotiated procurement as provided for in Section
3 of this Act.
SEC. 36. Single Calculated/Rated and Responsive Bid Submission. — A
ngle calculated/ rated and responsive bid shall be considered for award if it falls
13
 (a) If after advertisement, only one prospeolive bidder
submits a I.
Intent and/or applies for eligibility check, end meats the oligibillly mainframe
criteria, after which it submits a bid, which Is found to be responsive
to the
requirements,
(b) If after (ho advertisement, more than ono prospective bidder ap
eligibility chock, but only one bidder meets the eligibility requirements or
critert
which It submits a bid which Is found to be responsive to the bidding requirem
(c) If after the eligibility check, more than one bidder meets the
ell
requirements, but only one bidder submits a bid, and its bid is found to be
to the bidding requirements. rep
In all instances, the Procuring Entity shall ensure that the ABC reflec
most advantageous prevailing price for the government.
ARTICLE XI
AWARD, IMPLEMENTATION AND TEMINATION OF THE CONTRACT
SEC. 37. Notice and Execution of Award. -
fifteen (15) calendar days from the determination andWithin a period not exce
declaration by the BAC of
Lowest Calculated Responsive Bid or Highest Rated Responsive Bid, and
recommendation of the award, the Head of the Procuring Entity or his duly authod
representative shall approve or disapprove the said recommendation. In case
approval, the Head of the Procuring Entity or his duly authorized representative
Immediately issue the Notice of Award to the bidder with the Lowest Calcula
Responsive Bid or Highest Rated Responsive Bid.
Within ten (10) calendar days from receipt of the Notice of Award,
winning bidder shall formally enter into contract with the Procuring Entity.
further approval of higher authority is
required, the approving authority for t
Contract shall be given a maximum of twenty (20) calendar days to approve
disapprove it.
In the case of government—owned and/or-controlled corporations, t
concerned board shall take action on the said recommendation within thirty (30
calendar days from receipt thereof.
The Procuring Entity shall issue the Notice to Proceed to the winning bidd
not later than seven (7) calendar days from the date of approval of the contract
by th
appropriate authority. All notices called for by the terms of the contract shall be
effective only at the time of receipt thereof by the contractor.
14
81W. 38. Period of Action on Procurement ActNitlea — 'the procurement
es from the opening of bids up to the award of contract shall not exceed three
ins, or a shorter period to be determined by the procuring entity concerned
prejudice to the provisions of the preceding section, the different
ant activities shall be completed within reasonable periods to be specified in
If no action on the contract is taken by the head of the procuring entity, or by
(July authorized representative, or by the concerned board. in the case of
Mment-owned and/or —controlled corporations, within the periods specified in
preceding paragraph, the contract concerned shall be deemed approved.
SEC. 39. Performance Security. — Prior to the signing of the contract, the
ng bidder shall, as a measure of guarantee for the faithful performance of and
plience with his obligations under the contract prepared in accordance with the
ng Documents, be required to post a performance security in such form and
nt as specified in the Bidding Documents.
SEC. 40. Failure to Enter into Contract and Post Performance Security. — If,
justifiable causes, the bidder with the Lowest Calculated Responsive Bid or
est Rated Responsive Bid fails, refuses or is otherwise unable to enter into
tract with the Procuring Entity, or if the bidder fails to post the required
ormance security within the period stipulated in the Bidding Documents, the BAC
II disqualify the said bidder and shall undertake post-qualification for the next-
ked Lowest Calculated Bid or Highest Rated Bid. This procedure shall be
coated until an award is made. However, if no award is possible, the contract shall
subjected to a new bidding.
In the case of a failure to post the required performance security, the bid
.$ecurity shall be forfeited without prejudice to the imposition of sanctions prescribed
Under Article XXIII.
SEC. 41. Reservation Clause. — The Head of the Agency reserves the right
10 reject any and all Bids, declare a failure of bidding, or not award the contract in the
following situations:
(a) If there is prima facie evidence of collusion between appropriate public
officers or employees of the Procuring Entity, or between the BAC and any of the
bidders, or if the collusion is between or among the bidders themselves, or between a
bidder and a third party, including any act which restricts, suppresses or nullifies or
tends to restrict, suppress or nullify competition;
(b) If the BAC is found to have failed in following the prescribed bidding
procedures; or
15
 (o) I or any justifiable and reasonable ground where Ilia award 01
contract will not redound lo the benefit of the government as defined in the IRR.
bl_C 42 Coalface Implementation and fontilnallon. - The rule,
guidelines for the Implementation and termination of contracts awarded pure
the provisions of this Act shall be prescribed in the IRR. The rules and gut
shall include standard general and special conditions for contracts.
ARTICLE XII
DOMESTIC AND FOREIGN PROCUREMENT
SEC. 43. Procurement of Domestic and Foreign Goods. - Consistent
the country's obligations under international treaties or agreements, Goods may
obtained from domestic or foreign sources and the procurement thereof shall be
to all eligible suppliers, manufacturers and distributors. However, in the interest
availability, efficiency and timely delivery of Goods, the Procuring Entity may
preference to the purchase of domestically-produced and manufactured g
supplies and materials that meet the specified or desired quality.
ARTICLE XIII
BIDDING OF PROVINCIAL PROJECTS
SEC. 44. Bidding of Provincial Projects. - Priority programs
Infrastructure projects funded out the annual General Appropriations Act which
Intended for implementation within the province shall be subject to the same pu
bidding and to the procurement processes prescribed under this Act. For purposes
this Article, Engineering District civil works projects, subject to consultation with
concerned Members of Congress, are included and subsumed in the term "provincl
projects" and shall be governed by this Section and Section 45 hereof.
SEC. 45. Provincial Bidders. - Within five (5) years from the effectivity of
Act, a contractor who participates in the bidding of provincial priority programs a
infrastructure projects, whose principal office is within the same province, and w.
submits the lowest bid among the provincial bidders which is higher than the lowe
bid made by a contractor with principal office outside the said province shall
granted the privilege to match the bid made by the latter: Provided, however, That t
release of funds for said projects shall be published in a local newspaper with t
widest circulation and the website of the DBM, the mechanisms of which shall
Spelled-out in the IRR.
16
ARTICLE XIV
LEASE OF COMPUTERS, COMMUNICATIONS, INFORMATION AND OTHER
EQUIPMENT
SEC. 48 Lease Contracts. - Lease of construction and office equipment,
uding computers, communication and information technology equipment are
I to the same public bidding and to the processes prescribed under this Act.
ARTICLE XV
DISCLOSURE OF RELATIONS
SEC. 47. Disclosure of Relations. - In addition to the proposed contents of
the Invitation to Bid as mentioned under Section 21 of this Act, all bidding documents
shall be accompanied by a sworn affidavit of the bidder that he or she or any officer
of their corporation is not related to the Head of the Procuring Entity by consanguinity
Of affinity up to the third civil degree. Failure to comply with the aforementioned
provision shall be a ground for the automatic disqualification of the bid in consonance
with Section 30 of this Act.
ARTICLE XVI
ALTERNATIVE METHODS OF PROCUREMENT
SEC. 48. Alternative Methods. - Subject to the prior approval of the Head of
the Procuring Entity or his duly authorized representative, and whenever justified by
the conditions provided in this Act, the Procuring Entity may, in order to promote
economy and efficiency, resort to any of the following alternative methods of
Procurement:
(a) Limited Source Bidding, otherwise known as Selective Bidding - a
method of Procurement that involves direct invitation to bid by the Procuring Entity
from a set of pre-selected suppliers or consultants with known experience and proven
capability relative to the requirements of a particular contract;
(b) Direct Contracting, otherwise known as Single Source Procurement- a
method of Procurement that does not require elaborate Bidding Documents because
the supplier is simply asked to submit a price quotation or a pro-forma invoice
together with the conditions of sale, which offer may be accepted immediately or after
some negotiations;
(c) Repeat Order - a method of Procurement that involves a direct
Procurement of Goods from the previous winning bidder, whenever there is a need to
17
 replenleh Goads procured under a contract previously awarded through C
Bidding,
(d) Shopping — a method of Procurement whereby the Procuring
simply requests for the submission of price quotations for readily available
shelf Goods or ordinary/regular equipment to be procured directly from supel
known qualification; or
(a) Negotiated Procurement — a method of Procurement that m
resorted under the extraordinary circumstances provided for in Section 53 of I
and other instances that shall be specified in the IRR, whereby the Procuring
directly negotiates a contract with a technically, legally and financially ce
Supplier, contractor or consultant.
In all instances, the Procuring Entity shall ensure that the most advantag
price for the government is obtained.
SEC. 49. Limited Source Bidding. — Limited Source Bidding may be re
to only in any of the following conditions:
(a) Procurement of highly specialized types of Goods and Cons
Services wnich are known to be obtainable only from a limited number of sources
(b) Procurement of major plant components where it is de
advantageous to limit the bidding to known eligible bidders in order to maintal
optimum and uniform level of quality and performance of the plant as a whole.
SEC. 50. Direct Contracting. — Direct Contracting may be resorted to on
any of the following conditions:
(a) Procurement of Goods of proprietary nature, which can be obtained
from the proprietary source, i.e. when patents, trade secrets and copyrights pr
Others from manufacturing the same item;
(b) When the Procurement of critical components from a s
manufacturer, supplier or distributor is a condition precedent to hold a contractor
guarantee its project performance, in accordance with the provisions of his contact;
(c) Those sold by an exclusive dealer or manufacturer, which does not h
eubsdealers selling at lower prices and for which no suitable substitute can be obta
et more advantageous terms to the government.
SEC. 51. Repeat Order. — When provided for in the Annual Procurem
an, Repeat Order may be allowed wherein the Procuring Entity directly procu
s from the previous winning bidder whenever there arises a need to replen
s procured under a contract previously awarded through Competitive Biddi
18
to posl•quallllcallon process proscribed in the Bidding Documents and provided
following conditions arc present
(o) T he unit price must be equal to or lower than that provided in the original
(b) The repeat order does not result in splitting of requisitions or purchase
(c) Except in special circumstances defined in the IRR, the repeat order shall
Dad of only within six (6) months from the date of the Notice to Proceed arising
original contract: and,
(d) The repeat order shall not exceed twenty-five percent (25%) of the
ly of each item of the original contract.
SEC. 52. Shopping. - Shopping may be resorted to under any of the following
lances:
(a) When there is an unforeseen contingency requiring immediate purchase:
led, however, That the amount shall not exceed Fifty thousand pesos (P50, 000);
(b) Procurement of ordinary or regular office supplies and equipment not
ble in the Procurement Service involving an amount not exceeding Two hundred
Thousand pesos (P250,000): Provided, however, That the Procurement does not
lilt in Splitting of Contracts: Provided, further, That at least three (3) price quotations
bona fide suppliers shall be obtained.
The above amounts shall be subject to a periodic review by the GPPB. For
purpose, the GPPB shall be authorized to increase or decrease the said amount in
r to reflect changes in economic conditions and for other justifiable reasons.
SEC. 53. Negotiated Procurement. — Negotiated Procurement shall be
ed only in the following instances:
(a) In cases of two (2) failed biddings, as provided in Section 35 hereof;
(b) In case of imminent danger to life or property during a state of calamity,
When time is of the essence arising form natural or man-made calamities or other
ses where immediate action is necessary to prevent damage to or loss of life or
rty, or to restore vital public services, infrastructure facilities and other public
ties;
(c) Take-over of contracts, which have been rescinded or terminated for
uses provided for in the contract and existing laws, where immediate action is
19
flaunting lu pausal damage to or lose of life or pH/petty, or to restore vital
Mervin., infrastructure facilities and other public utilities,
(d) Whore the subject contract Is adjacent or contiguous to an on
ruildructuro project, as defined In the IRR. Provided, however, That the
not Is the result of a Competitive Bidding; the subject contract to be negotla
' ,ler or related scopes of work; it is within the contracting capacity of the cent
Ontrector uses the same prices or lower unit prices as in the original contrite(
Halation cost, the amount involved does not exceed the amount of the o
liat; and, the contractor has no negative slippage: Provided, further,
I. lOolions for the procurement are commenced before the expiry of the
act. Whenever applicable, this principle shall also govern consultancy con
.te the consultants have unique experience and expertise to deliver the r
viCe; or,
(e) Subject to the guidelines specified in the IRR, purchases of Goods
.vier agency of the government, such as the Procurement Service of the DBM,
tilted with a centralized procurement of commonly used Goods for the govern
con-lance with Letters of Instruction No. 755 and Executive Order No. 359, serie
ul_C 54. Terms and Conditions for the use of Alternative Methods. —
i.oclflc terms and conditions, including the limitations and restrictions, for
iplIcation of each of the alternative methods mentioned in this Article shall
•ocified in the IRR.
ARTICLE XVII
PROTEST MECHANISM
SEC. 55. Protests on Decisions of the BAC. — Decisions of the BAC in
t.lecs of procurement may be protested to the head of the procuring entity and sh
In writing. Decisions of the BAC may be protested by filing a verified posit
.iper and paying a non-refundable protest fee. The amount of the protest fee and
1., Mods during which the protests may be filed and resolved shall be specified in th
HR.
SEC. 56. Resolution of Protests. — The protests shall be resolved strictly
lilt} basis of records of the BAC. Up to a certain amount to be specified in the IRR,
the decisions of the Head of the Procuring Entity shall be final.
SEC. 57. Non-interruption of the Bidding Process. — In no case shall any
inotest taken from any decision treated in this Article stay or delay the bidding
iiiocess. Protests must first be resolved before any award is made.
20
RFD H. Report fo Regular Courts, Guthman Court action may be
led to only seer the protests contemplated In this Article shall have been
plated Cases that are filed in violation of the process specified in this Article shall
dismissed for lack of jurisdiction. The regional trial court shall have jurisdiction
final decisions of the head of the procuring entity. Court actions shall be
rued by Rule 65 of the 1997 Rules of Civil Procedure.
This provision is without prejudice to any law conferring on the Supreme
the sole jurisdiction to issue temporary restraining orders and injunctions
Ing to Infrastructure Projects of Government.
ARTICLE XVIII
SETTLEMENT OF DISPUTES
SEC. 59. Arbitration. — Any and all disputes arising from the implementation
a contract covered by this Act shall be submitted to arbitration in the Philippines
ording to the provisions of Republic Act No. 876, otherwise known as the
itration Law": Provided, however, That, disputes that are within the competence
the Construction Industry Arbitration Commission to resolve shall be referred
eto. The process of arbitration shall be incorporated as a provision in the contract
will be executed pursuant to the provisions of this Act: Provided, That by mutual
reement, the parties may agree in writing to resort to alternative modes of dispute
solution.
SEC. 60. Appeals. — The arbitral award and any decision rendered in
accordance with the foregoing Section shall be appealable by way of a petition for
review to the Court of Appeals. The petition shall raise pure questions of law and
shall be governed by the Rules of Court.
ARTICLE XIX
CONTRACT PRICES AND WARRANTIES
SEC. 61. Contract Prices. — For the given scope of work in the contract as
awarded, all bid prices shall be considered as fixed prices, and therefore not subject
to price escalation during contract implementation, except under extraordinary
circumstances and upon prior approval of the GPPB.
For purposes of this Section, "extraordinary circumstances" shall refer to
events that may be determined by the National Economic and Development Authority
In accordance with the Civil Code of the Philippines, and upon the recommendation
of the procuring entity concerned.
21
 8FC. 02 Warranty - (a) Par the procurement of Uoods, In order to
Mei manufacturing definite shell be corrected by the supplier manufactu
distributor, as the case may be, Iar a specific lima altar performance of the cantle
Minority shall be required from the contract awardee for such period of time oil
be provided In the IRR, the obligation for which shall be covered by either ret
money In the amount equivalent to a percentage of every progress payment,
special bank guarantee equivalent to a percentage of the total contract price,
provided In the IRR. The said amounts shall only be released after the lapse a
Warranty period, provided that the Goods supplied are free from defects and
00ndillons Imposed under the contract have been fully met.
(b) For the procurement of infrastructure projects, the contractor
assume full responsibility for the contract work from the time project const
trommenced up to a reasonable period as defined in the IRR taking into conside
the scale and coverage of the project from its final acceptance by the govern
and shall be held responsible for any damage or construction of works except
Occasioned by force majeure. The contractor shall be fully responsible for the s
protection, security, and convenience of his personnel, third parties, and the pu
large, as well as the works, equipment, installation and the like to be affected
construction work and shall be required to put up a warranty security in the fo
cash, bank guarantee, letter of credit, Government Service Insurance System
or callable surety bond.
The contractor shall undertake the repair works, at his own expense, of
defect or damage to the infrastructure projects on account of the use of materia
Inferior quality within ninety (90) days from the time the Head of the Procuring En
hos issued an order to undertake repair. In case of failure or refusal to comply
Iles mandate, the government shall undertake such repair works and shall be enti
to full reimbursement or expenses incurred therein upon demand.
Any contractor who fails to comply with the preceding paragraph shall su
perpetual disqualification from participating in any public bidding and his property
properties shall be subject to attachment or garnishment proceedings to recover
00sts All payables of government in his favor shall be offset to recover the costs.
ARTICLE XX
THE GOVERNMENT PROCUREMENT POLICY BOARD
SEC. 63. Organization and Functions. - A Government Procurement Poli
Board (GPPB) is hereby established to: (a) protect national interest in all matte
effecting public Procurement, having due regard to the country's regional a
International obligations; (b) formulate and amend, wherever necessary, the IRR a
the corresponding standard forms for Procurement; (c) ensure that Procuring Entit
regularly conduct Procurement training programs and prepare a Procureme
22
operations manual for all offices and agencies of government, and (d) conduct an
annum, review of the effectiveness of this Act and recommend any amendments
thereto, as may be necessary.
The GPPB shall convene within fifteen (15) days from the effectivity of this
Act to formulate the IRR and for other related purposes. The GPPB shall be
supported by a technical support office.
In addition to the powers granted under this Act, the GPPB shall absorb all
the powers, functions and responsibilities of the Procurement Policy Board created
under Executive Order No. 359, series of 1989. All affected functions of the
Infrastructure Committee of the National Economic and Development Authority Board
are hereby transferred to the GPPB.
SEC. 64. Membership. - The GPPB shall be composed of the Secretary of
the Department of Budget and Management, as Chairman, the Director-General of
the National Economic and Development Authority, as Alternate Chairman, with the
following as Members; the Secretaries of the Departments of Public Works and
Highways, Finance, Trade and Industry, Health, National Defense, Education, Interior
end Local Government, Science and Technology, Transportation and
Communications, and Energy, or their duly authorized representatives and a
representative from the private sector to be appointed by the President upon the
recommendation of the GPPB. The GPPB may invite a representative from the
Commission on Audit to serve as a resource person.
ARTICLE XXI
PENAL CLAUSE
SEC. 65. Offenses and Penalties. - (a) Without prejudice to the provisions of
Republic Act No. 3019, otherwise known as the "Anti-Graft and Corrupt Practices Act"
end other penal laws, public officers who commit any of the following acts shall suffer
the penalty of imprisonment of not less than six (6) years and one (1) day, but not
more than fifteen (15) years:
(1) Open any sealed Bid including but not limited to Bids that may have been
bmitted through the electronic system and any and all documents required to be
led or divulging their contents, prior to the appointed time for the public opening of
s or other documents.
(2) Delaying, without justifiable cause, the screening for eligibility, opening of
ds. evaluation and post evaluation of bids, and awarding of contracts beyond the
ascribed periods of action provided for in the IRR.
23
 (3) Unduly Influencing or exerting undue pressure on any member of
Of any officer or employee of the procuring entity to lake a participle, action (o) Private Individuals who commit any of the following acts, and any public
wh uonspiring with them, shall suffer the penalty of imprisonment of not leas than
or lends to favor a pluticultu bidder six
• end one (1) day but not more than fifteen (15) years.
(4) Splitting of contracts which exceed proced
ural purchase (1) Submit eligibility requirements of whatever kind and nature that contain
%Meet'eve bidding
Wormetion or falsified documents calculated to influence the outcome
of the
screening process or conceal such information in the eligibility requirements
(5) When the head of the agency abuses
the exercise of his power to the Information will lead to a declaration of ineligibility from participating in public
bids es mentioned under Section 41 of this Act with manifes
t prefe
who is closely related to him in accordance with Section 47 of this Act.
(2) Submit Bidding Documents of whatever kind and nature that contain false
When any of the foregoing acts is done in collusion with private indiv lion or falsified documents or conceal such information in the Bidding
wile Individuals shall likewise be liable for the offense.
ants, in order to influence the outcome of the public bidding.
In addition, the public officer involved shall also suffer the pe
(3) Participate in a public bidding using the name of another or allow another
rary disqualification from public office, while the private individual
nently disqualified from transacting business with the governm s one's name for the purpose of participating in a public bidding.
ent.
(4) Withdraw a Bid, after it shall have qualified as the Lowest Calculated Bid!
(b) Private individuals who commit any of the following acts, including I Rated Bid, or refuse to accept an award, without just cause or for the purpose
lic officer, who conspires with them, shall suffer the penalty of imprisonment Ing the Procuring Entity to award the contract to another bidder. This shall include
leas than six (6) years and one (1) day but not more than
fifteen (15) years: non-submission within the prescribed time, or delaying the submis
sion of
(1) When two or more bidders agree rements such as, but not limited to, performance security, preparatory to the final
bona fide, when they knew that one or moreand submit different Bids as if they
of them was so much higher than
rd of the contract.
other that it could not be honestly accepted and
that the contract will surely (d) When the bidder is a juridical entity, criminal liability and the accesso
awarded to the pre-arranged lowest Bid. ry
sines shall be imposed on its directors, officers or employees who actually
commit
(2) When a bidder maliciously submits differen y of the foregoing acts.
t Bids through two or m
persons, corporations, partnerships or any other business entity in which
he SEC. 66. Jurisdiction. — Jurisdiction over the offenses defined under this
Interest to create the appearance of competition that does not in fact exist so Idle shall belong to the appropriate courts, according to laws existing at the
as to time of
adjudged as the winning bidder.
commission of the offenses.
(3) When two or more bidders enter into
to refrain from bidding for Procurement contracts, an agreement which call upon o
or which call for withdrawal of B
already submitted, or which are otherwise intended to ARTICLE XXII
secure an undue advantage t
any one of them.
CIVIL LIABILITY
(4) When a bidder, by himself or in connivance with others, employ scheme
Which lend to restrain the natural rivalry of the SEC. 67. Civil Liability in Case of Conviction. — Without prejudice to
parties or operates to stifle or suppres ministrative sanctions that may be imposed in proper cases, a conviction
competition and thus produce a result disadvantageous to the public.
under this
I or Republic Act No. 3019 shall cany with it civil liability, which may either
consist of
litution for the damage done or the forfeiture on favor of the government
In addition, the persons involvedshall also of any
perpetual disqualification from public office and suffer the penalty of temporary or warranted benefit derived from the act or acts in question or both, at the discretio
n of
be permanently disqualified from courts.
transacting business with the government.

24
25
 it, I ; n9 I spoilarrar f iririumon All contracts asocuicil In acciii de (1)) In addition In the penalty of suspension, the Bid security or the
Ibis Aol shall I onInto n powtmlon nn 0(10(1411ml titoontims which shell ha pnyobla
once security posted by the concerned bidder or prospective bidder shall also
Of branch (helm)? I hi. notottot Omni& nholl ho noncifind
Had

(o) The Head of the Procuring Entity may delegate to the BAC the authority
ARTICLE XXIII
0 the aforementioned administrative penalties.
ADMINISTRATIVE SANCTIONS
SEC. 70. Preventive Suspension. — The head of the procuring entity may
Willy suspend any member of the Technical Working Group or the Secretariat, or
SEC 69 Imposition of Administrative Penalties. — (a) In addition
!mullions of Articles XXI and XXII of this Act, the Head of the Procuring Entity,
C If there are strong reasons or prima fade evidence showing that the officials or
es concerned are guilty of the charges filed against them under Articles XXI
lire eulhonly delegated to the BAC, if any, shall impose on bidders or pr
II of this Act or for dishonesty as defined by the Civil Service Laws. In all cases,
Hors, the administrative penalty of suspension of one (1) year for the first
sal and substantive due process as mandated by the Constitution and Civil
I suspension of two (2) years for the second offense from participating in the
fing process, for the following violations: laws, rules and regulations, shall be strictly observed.

(1) Submission of eligibility requirements containing false informal SEC. 71. Lifting of Suspension and Removal of Administrative Disabilities. —
.'lied documents. log of preventive suspension pending administrative investigation, as well as
val of administrative penalties and disabilities shall be in accordance with the
(2) Submission of Bids that contain false information or falsified docu Mons of Sections 52 and 53, Chapter 6 (Civil Service Commission), Book V of
iiie concealment of such information in the Bids in order to influence the oulco utive Order No. 292, the Administrative Code of 1987.
iibility screening or any other stage of the public bidding.
ARTICLE XXIV
(3) Allowing the use of one's name, or using the name of another
LEGAL ASSISTANCE AND INDEMNIFICATION OF BAC MEMBERS
poses of public bidding.
SEC. 72. Private Legal Assistance. — All the members of the BAC are hereby
(4) Withdrawal of a Bid, or refusal to accept an award, or enter into cent/
authorized to engage the services of private lawyers or extend counsel immediately
the government without justifiable cause, after he had been adjudged as ha
upon receipt of Court Notice that a civil or criminal action, suit or proceeding is filed
milted the Lowest Calculated Responsive Bid or Highest Rated Responsive Bid
Against them. The lawyer's fee shall be part of the indemnification package for the
MC members, subject to the provisions of Section 73 hereof.
(5) Refusal or failure to post the required performance security within I
.cubed time.
SEC. 73. Indemnification of BAC Members. — The GPPB shall establish an
equitable indemnification package for public officials providing services in the BAC,
(6) Termination of the contract due to the default of the bidder.
which may be in the form of free legal assistance, liability insurance, and other forms
Of protection and indemnification for all costs and expenses reasonably incurred by
Refusal to clarify or validate in writing its Bid during post-qualification within
Such persons in connection with any civil or criminal action, suit or proceeding to
id of seven (7) calendar days from receipt of the request for clarification.
Which they may be, or have been made, a party by reason of the performance of their
functions or duties, unless they are finally adjudged in such action or proceeding to
Any documented unsolicited attempt by a bidder to unduly influence
be liable for gross negligence or misconduct or grave abuse of discretion.
once of the bidding in his favor.
In the event of a settlement or compromise, indemnification shall be confined
All other acts that tend to defeat the purpose of the Competitive Bidding.
only on matters covered by the settlement, as to which the Procuring Entity had been
advised by counsel that the public officials to be indemnified have not committed
gross negligence or misconduct in the performance of their functions and duties.

26 27
 I he members of the DAC and the DAC Booratarial shall also be low, presidential decree or Issuance, executive order, letter of Instruction,
medical arsisience 1m:torrid In Ilin porfornionco of Ihoir functions. nutritive order, proclamation, charter, rule or regulation and/or parts thereof
nay to or Inconsistent with the provisions of this Act is hereby repealed, modified
°Mended accordingly.
ARTICLE XXV
SEC. 77. Separability Clause. — If any provision of this Act is declared invalid
FINAL PROVISIONS nalltutional, the other provisions not affected thereby shall remain valid and
Ming.
SEC. 74. Oversight Committee. — There is hereby created
Congressional Oversight Committee to oversee the implementation of this SEC. 78. Effectivity Clause. — This Mt shall take effect fifteen (15) days
period not exceeding five (5) years from the effectivity of this Act. The C g its publication in the Official Gazette or in two (2) newspapers of general
shell be composed of the Chairman of the Senate Committee on Cons Ilion.
Amendments and Revision of Laws and two (2) members thereof appointed
Senate President, and the Chairman of the House Committee on Appropriall Approved,
Iwo (2) members thereof to be appointed by the Speaker of the H
Representatives.

SEC. 75. Implementing Rules and Regulations and Standard F

Within sixty (60) days from the promulgation of this Act, the necessary rul (signed) (signed)
regulations for the proper implementation of its provisions shall be formulated FRANKLIN M. DRILON JOSE DE VENECIA JR.
°PPE, jointly with the members of the Oversight Committee created under President of the Senate Speaker of the House
74 hereof. The said rules and regulations shall be approved by the President of Representatives
Philippines. For a period not later than thirty (30) days upon the approval
Implementing rules and regulations, the standard forms for Procurement s This Act which is a consolidation of House Bill No. 4809 and Senate Bill No.
formulated and approved. 8 was finally passed by the House of Representatives and the Senate on
comber 18, 2002.
SEC. 76. Repealing Clause. — This law repeals Executive Order N
lanes of 2001, entitled "Consolidating Procurement Rules and Procedures f
National Government Agencies, Government-Owned-or-Controlled Corpora
and/or Government Financial Institutions, and Requiring the Use of the Gover (signed) (signed)
I tectronic Procurement System"; Executive Order No. 262, series of 2000, e OSCAR G. YABES ROBERTO P. NAZARENO
'Amending Executive Order No. 302, series of 1996, entitled "Providing Pol Secretary of the Senate Secretary General
Guidelines, Rules and Regulations for the Procurement of Goods/Supplies House of Representatives
National Government' and Section 3 of Executive Order No. 201, series of
entitled "Providing Additional Policies and Guidelines in the Procureme
Goods/Supplies by the National Government"; Executive Order No. 302, sell proved:
1996, entitled Providing Policies, Guidelines, Rules and Regulations f
Procurement of Goods/Supplies by the National Government" and Presld
Decree No. 1594 dated June 11, 1978, entitled "Prescribing Policies, Guid (signed)
Rules and Regulations for Government Infrastructure Contracts? This law a GLORIA MACAPAGAL-ARROYO
title Six, Book Two of Republic Act No. 7160, otherwise known as the " President of the Philippines
Government Code of 1991"; the relevant provisions of Executive Order No.
series of 1987, entitled 'Providing Additional Guidelines in the Processing
Approval of Contracts of the National Government"; and the relevant provisi
Republic Act No. 7898 dated February 23, 1995, entitled "An Act Providing for
Modernization of the Armed Forces of the Philippines and for Other Purposes."

28 29
 Appendix E

CIAP DOCUMENT 102

Uniform General Conditions of Contracts
for Private Construction
 FOREWORD
NMwith Its mandate to recommend and encourage the adoption of equitable and
stic contract conditions for construction, the Construction Industry Authority of the
lIppInes (CIAP) created a committee to formulate the Uniform General Conditions
Contract for Private Construction or CIAP Document 102. The first edition of CIAP
ument 102 was published by the CIAP on 15 October 1997.

Over the years, a lot of changes have evolved in the construction Industry. In view of
this end pursuant to the Construction Industry Strategic Plan for the 21" Century
(CI21), the CIAP conducted a survey sometime in 2001 on contractual problems
encountered by contractors, project owners and consultants in the implementation of
construction projects. The Committee on CIAP Document 102 reconvened in May
2002 to discuss and draft amendments to the document based on the issues
Identified in the survey and 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 43") Regular Meeting held on 29 June 2004, the CIAP Board approved
the amendments to CIAP Document 102 under CIAP Board Resolution No. 15, series
of 2004.

n a Memorandum of Agreement signed on 4 October 2004, the members of the

Committee on CIAP Document 102, composed of representatives from the Philippine
Constructors Association Inc. (PCA), the United Architects of the Philippines (UAP),
the Philippine Institute of Civil Engineers (PICE), the Philippine Chamber of
Commerce and Industry (PCCI), the Confederation of Filipino Consulting
Organizations (COFILCO), the Chamber of Real Estate & Builders Association
(CREBA), the Construction Project Managers Association of the Philippines
(CPMAP), the Philippine Institute of Construction Arbitrators (PICA), and the Society
of Philippine Accredited Consultants (SPAC), have committed to adopt the Document
for use as a standard and integral part of their construction contracts.

The CIAP hopes that this revised edition of CIAP Document 102 will contribute to the
enhancement of fair contractual relationships in the construction industry.
 AI 'N ir) W I 'I 'I1 r, I 't

Tito CIAP would like to expross Its sMcoro gratitude to the following prosidonte
Venous pmfossional organizations who gave their full and Invaluablo support
Miaow
Mr. Emilio J. Tumbocon - PCA
Engr. Eliseo I. Evangelista - PICA
Archt. Felicitas A. Pio Rode CPMAP
Mr. Peter N. Aventajado
▪
▪ PICE UNIFORM
Ms. Purita L. Soliven - CREBA
Ms. Noemi L. Saludo - PCCI GENERAL
Mr. Enrique 0. Olonan - UAP
Dr. Leandro A. Viloria - SPAC CONDITIONS
Ms. Elvira Ablaza - COFILCO

CIAP Document 102 would not have been possible without the patience, diligen
OF CONTRACT
soilless dedication of the following members of the Committee who ml
participated in the deliberations and drafting work:
FOR PRIVATE
Mr. Florentino S. Dulalia, Jr. - C
CONSTRUCTION
Archt. Prosperidad Luis - U
Mr. Joven B. Joaquin - PI
Engr. Joel J. Marciano - PI (CIAP DOCUMENT 102)
Dr. Ernesto S. de Castro - PIO 2004 Revised Edition
Mr. Justo E. Manalo - PCA
Mr. Alfredo Montecillo - PCA
Mr. Manolito Madrasto PCA
Mr. Sergio Ortiz-Luis Jr. - PCO
Manuel J. Colayco Jr. - PCO
Archt. Felicitas A. Pio Roda - CP
Engr. Guadalupe 0. Mansueto - SP
Engr. Ricardo Basa
COFILCO
Archt. Geronimo V. Manahan P
Atty. Custodio 0. Parlade C
Ms. Kathryn T. dela Cruz C

The Committee was ably assisted by the following staff of the Construction I
Arbitration Commission:
Engr. Roger G. Antonio
Ms. Emily P. Morallos
Ms. Delia B. Perlada
CONSTRUCTION INDUSTRY AUTHORITY OF THE PHILIPPINES
Engr. Jocelyn C. Carrasco
41F.Jupiter I Building, No. 56 Jupiter Street, Bel-Air \Mingo
Engr. Jose L. Pring, Jr. Makati City
 I. Board Floe. Nn in
flag of 2004
AUH of 2

W, THEREFORE, the Construction Industry Authority of the Philippines,

r duo deliberations In Its 43"1 Regular Meeting and finding the proposals 10
CIAP BOARD RESOLUTION NO. 15 In order, RESOLVES, as It is hereby RESOLVED, to approve the proposed
Series of 2004 endments to the Uniform General Conditions of Contract for Private
atruction (CIAP Document 102), attached hereto as Annex A and made an
nil part of this resolution.
APPROVING THE PROPOSED AMENDMENTS TO THE
UNIFORM GENERAL CONDITIONS OF CONTRACT ANIMOUSLY APPROVED.
FOR PRIVATE CONSTRUCTION (CIAP DOCUMENT 102)
Juno 2004, Makati City.
On motion duly seconded.

WHEREAS, the Construction Industry Authority of the Philippines (CIAP For the CIAP Board:
under Section 2 of P.D. No. 1746, Is mandated to promote, accelerate
regulate the growth and development of the construction industry and tasked,
among others, to recommend and encourage the adoption of equitable and
realistic contract conditions for construction; Undorsocro ry ADRIAN ISTOBAL, JR. r.,
(Representing DT' etary and 4tA
WHEREAS, pursuant to its mandate, the CIAP, through a committee CIAP Chairman Ces .V. Purisima) '
composed of representatives from the Council of Engineering Consultants of
the Philippines (CECOPHIL), Construction Project Management Association of
the Philippines (CPMAP), Chamber of Real Estate and Builders Association Attested by:
(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 (PICA),
Philippine Institute of Civil Engineers (PICE), Subdivision and Housing KATHR N JOSEPHINE T. • LA CRUZ
Developers Association of the Philippines (SHDA), and the United Architects of Acting :oard Secretary
the Philippines (UAP), formulated the Uniform General Conditions of Contract
for Private Construction (CIAP Document 102) which was formally adopted by
the PCA, PCCI, CREBA, PICE, CPMAP, PICA & CIAP in a Memorandum of Republic of the Philippines)
Agreement signed in August 1997: City of Makatl ) SS
WHEREAS, in line with the Construction Industry Strategic Plan for the 21"
Century (C121), the committee on CIAP Document 102 reconvened in May SUBSCRIBED and SWORN TO bofore me, Notary Public and in the
2002 to draft amendments to the document to Incorporate prevailing beet
practices in the Industry and attune the same to the needs of the changing Municipality/City of eir.u.„ on SEP 1 3 204 by KATHRYN
times; JOSEPHINE T. DELA CRUZ, Officer-in-Charge and Acting Board Secretary of
the CIAP, with Community Tax Certificate No. 15239353 issued at Makati City
WHEREAS, the proposed revisions to the document were subjected to on 17 February 2004.
consultations and discussions with and among the members of the Committee,
the Philippine Domestic Construction Board (PDCB), and the CIAP;
cititethr
WHEREAS, the PDCB, in Its meeting held on 21 May 2004, agreed to submit puutic
Y
the final revised version of the proposed amendments to CIAP Document 102 NiviutIPMPzoos
ii ~ WrIVP1011459e1c5*+ 04A_
to the CIAP Board: My c°"-"Ft 3
eP %80396-12-17-03 MANILA
Doc. No. 1 1 43_
CONSTRUCTION INDUSTRY AUTHORITY OF THE PHILIPPINES Page No.
4" ROOF, Jupatc I Building, 50 JuglIat SI., IRAS Meal' Oly, Philippine
Telephone: (632) 695-611261100-4424 Fax: (032) 507-0330
liook No.
ttapelnln.aom.ph
pmw.ditgov.ph Series of 20 4
 dLC cw
ar TITLE
III CTION I
Article 2.03 Interpretation of Contract
2.04 Conformity to the Contract
Ht ci 10N I DEFINITIONS AND DOCUMENTS 2.08 Meaning of Terms
Annie 1.00 Definitions Timely Exercise of Administrative Responsibilities
101 Act of God or Force Majeure 7111 Defective Equipment, Materials and Work
1.02 Advertisement or Invitation to Bid 2.08 Review of Contract
1.03 Agreement 2.09 Documents and Samples at the Site
1.04 Bid 2.10 Ownership of Contract and Models
1.05 Bid Bond Articio 3.00 Drawings and Specifications
1.06 Bid Documents 3.01 Copies of Drawings and Specifications
1.07 Bid Bulletin 3.02 Coordination of Drawings and Specifications
1.08 Breakdown of Work and Corresponding Value 3.03 Clarification of Meaning of Drawings and Specifications
1.09 Change Order 3.04 Discrepancy in Drawings
1.10 Contract Article 4.00 Detail Drawings and Instructions
1.11 Contract Documents 4.01 Supplementary Drawings and Instructions
1.12 Contract Price Article 5.00 Shop Drawings
1.13 Contractor 5.01 Conditions in the Preparation of Shop Drawings
1.14 Cost 5.02 Identification
1.15 Drawings 5.03 Letter of Transmittal
1.16 Final Payment 5.04 Corrections, Changes and Variations
1.17 Guarantee Bond 5.05 Responsibility for Accuracy
1.18 Instruction to Bidders 5.06 Owners Approval
1.19 Laws ECTION II LAWS, REGULATIONS, SITE CONDITIONS, PERMITS & TAXES
1.20 Owner rticle 6.00 Laws and Site Conditions
1.21 Owner's Representative 6.01 Laws and Regulations
1.22 Payment Bond 6.02 Site Conditions
1.23 Performance Bond rticle 7.00 Permits, Taxes and Surve s
1.24 Schedule of Materials and Finishes 7.01 Permits and Licenses
1.25 Specifications 7.02 Taxes
1.26 Special Provisions or Conditions 7.03 Construction Stakes and Reference Mark
1.27 Sub-Contractor 7.04 Services of Geodetic Engineer
1.28 Supplementary Specifications SECTION III EQUIPMENT AND MATERIALS
1.29 Surety Article 8.00 General
1.30 Time Limit or Completion Time rticle 9.00 Equipment
1.31 Written Notice 9.01 Quality of Equipment
1.32 Work 9.02 Equipment Substitution
Execution, Correlation, Meaning of Terms and Intent of. Materials, Fixtures, Appliances, and Fittings furnished by the
Article 2.00 Article 10.00
Documents Contractor
2.01 Intent of Contract 10.01 Samples of Materials
2.02 Standard of Conduct 10.02 Trade Name Materials and Substitutes
 aNOTION I
Article ON /
TITLE
le
1
10 03 Testing Samples of Materials
10 04 Quality of Materials 20 05 Work Dur ing an Emergency
10 05 Storage and Stockpiling of Materials 20.06 Increased or Decreased Quantities of Work
10 06 Defective Materials 20.07 Changes in the Work
10.07 Imported Materials, Fixtures and Equipment A. Changes Ordered by the Owner
10.08 Owner's Approval B. Change of Sub-surface Conditions
Materials, Equipment, Fixtures, Appliances & F C. Adjustment of Contract
Article 11 D. Value of Extra Work
Furnished by the Owner
Article 12 Royalties and Patents E. Award of Extra Work to Other Contractor
Article 13 Manufacturer's Directions 20.08 Claims for Extra Cost
SECTION IV PREMISES AND TEMPORARY STRUCTURES
20.09 Gleam U at Com etion of Work
Article 14.00 Use of Premises 20.10 Use of Com eted Portions of Work
14.01 Limitation of Use 20.11 Substantial Corn letion and its Effect
14.02 Safeguard for Structures 20.12 Period of Makin Good of Known Defects or Faults
Article 15.00 20.13 Makin Good of Known Defects or Faults
Temporary Structures and Facilities
15.01 20.14 Special Test and Inspection
Temporary Office and Contractor's Building
15.02 Temporary Housing for Workers 20.15 Acceptance of Non-conforming Work
15.03 Safety and Sanitation 20.16 Ad ustment of Prices
15.04 Temporary Signs 20.17 Pa ment in Le • al Tender
15.05 Temporary or Trial Usage Mole 21.00 Time of Corn • lotion of Work
aTION V 21.01 Notice to Proceed, When Required
PROTECTION OF WORK AND PROPERTY
16.00 Protection of Work and Owner's Property 21.02 Corn • letion Time
16.01 Safeguard Measures 21.03 Schedule of Construction Work
16.02 Old Materials 21.04 Extension of Time
16.03 Trees and Other Plants
21.05 Dela in Completion of the Work
16.04 Drainage rticle 22.00 Pa ents •
Article 17.00 Protection of Adjacent Property and Existing Utilities 22.01 Breakdown of Contract Amount
17.01 Contractor's Responsibility 22.02 Re • uests for Pa ment
17.02 22.03 Authorized Deductions from Value of Corn • feted Work
Damages to Adjacent Utilities
17.03 Condition Survey 22.04 Conditions Relative to Pa ents
Article 18.00 Protection of Life, Work and Property During an Emergen 22.05 Owner's Action on Re • uest for Pa ment
18.01 Authorization to Contractor 22.06 Pa ment of Un • aid Labor, Sub-Contractor and Su Hers
SECTION VI LABOR, WORK AND PAYMENTS 22.07 Pa ments over 90 • ercent
Article 19.00 Labor 22.08 Other Re • uirements Before Final Pa ment
19.01 Character of Workmen 22.09 Acceptance and Final Payment
Afticle 20.00 Work 22.10 Corrections of Work Before or After Final Pa ment
20.01 Methods and Appliances 22.11 Release of Retention
20.02 Laying Out the Work
20.03 Defective Work
20.04 Inspection of Work
SECTION / SUCTION /
Article 1111 I r
Article

SECTION VII CONTRACTOR - SEPARATE CON tRACTOR• 31.05 Contractor's Guarantee Bond
SUBCONTRACTORS RELATIONSHIP 31.00 Contractor's Guarantee-Warranty
Ankh- 23.00 Separate Contracts with other Contractor 31.07 Mandato Conditions of Bonds
Article 24.00 Contractor-Separate Contractors Relations
24.01 Storage of Materials and Work Coordination 2.01 Advance Payment
24.02 Cutting, Patching and Digging Protection of Employees and Professionals Performing SetT- /16741-0r
24.03 Defective Work by Separate Contractors 32.02
the Owner
24.04 Damage Caused by Contractor to Separate Contractors 32.03 Owner's Optional insurance
24.05 Damage Caused by Separate Contractors to Contractor 32.04 Additional Information and Services Re•uired of the Owner
Article 28.00 Sub-Contracts rticle 33.00 Liens Dis • utes and Arbit
25.01 General 33.01 Liens
25.02 Contractor's Responsibility 33.02 Assignment
SECTION VIII SUSPENSION OF WORK AND TERMINATION OF CO 33.03 Subcontracting
Contractor's Right to Suspend Work or Terminate Con 33.04 Disputes
Owner's Right to Suspend the Work 33.05 Settlement of Disputes
27.01 Suspension Without Cause A. Dispute or Disagreement Submitted to Arbitration
27.02 Just Causes for Suspension of Work
Article 28.00 Owner's Right to Terminate Contract B. Substituted Service
28.01 Termination with Cause SECTION X OWNER'S REPRESENTATIVE
28.02 Other Grounds for Termination With Cause Article 34.00 Owner's Representative
28.03 Termination Without Cause SECTION XI SCHEDULE OF TIME LIMITS
Article 29.00 Owner's Right to Proceed with the Work After Reduction I
Contractor's Scope of Work; Partial Takeover From Cont
29.01 Owner's Right to Carry Out the Work
29.02 Use of Materials and Equipment at Site
29.03 Owner to Complete Work
29.04 Evaluation of Cost of Work
29.05 Owner's Right to Recover Damages
29.06 Liquidated Damages
SECTION IX RESPONSIBILITIES AND LIABILITIES OF CONTRACTOR AN
OF OWNER
Article 30.00 Contractors Responsibility for Accidents and Damages
30.01 Safeguards to be Undertaken by Contractor
30.02 Owner not to be Responsible
30.03 Contractor's Default
Article 31.00 Contractor's Insurance and Bonds
31.01 Contractors Liability Insurance
31.02 Accident Insurance for Workers
31.03 Contractor's Fire Insurance
31.04 Contractor's Performance and Payment Bonds
 CIAP DOCUMENT 102
UNIFORM GENERAL CONDITIONS OF CONTRACT
FOR PRIVATE CONSTRUCTION
1.03
SECTION I
DEFINITIONS AND DOCUMENTS
1.04
ART. 1: DEFINITIONS
1.01 ACT OF GOD OR FORCE MAJEURE shall mean any event beyond
the reasonable control of the Owner or the Contractor, as the cast 1.05
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 we 1.06
be declared or not), invasion, act of foreign enemy, civil war
[b] rebellion, revolution, insurrection, mutiny, usurpation of civl
or military government, conspiracy, riot, civil commotion
terrorist acts; 1.07
[c] confiscation, nationalization, mobilization, commandeering
requisition by or under the order of any government or di 1.08
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, por 1.09
congestion, lack of usual means of public transportation am
communication, industrial dispute, shipwreck, shortage 0
restriction of power supply, epidemics, quarantine, plague);
[e] earthquake, landslide, volcanic activity, fire, flood 1.10
inundation, tidal wave, typhoon or cyclone, hurricane, stonr
lightning, or other inclement weather condition, nuclear and
pressure waves, or other natural or physical disaster; 1.11
shortage of labor, materials or utilities where caused b
circumstances that are themselves Force Majeure.
1.02 ADVERTISEMENT or INVITATION TO BID refers to the nollee
published by the Owner or the invitation issued to prospective bidders,
giving information as to the nature of the proposed project, conditions far
the issuance of Contract documents, date of bidding, and inforii
would give the Contractor a general idea of the magnitude an, ;
the project.
AGREEMENT is the term used to describe the agreement signef I t .
Owner and the Contractor excluding the Contract Documents
attached thereto.
BID is the tender, or proposal, or quotation, or offer of a bidder to ern
the work described in the Contract which in form and substance
with the Instruction to Bidders.
BID BOND refers to any acceptable form of bond accompanying tip.
submitted by the bidder as a guarantee that the bidder will ante, 1. ,
Contract with the Owner for the construction of the Work, if the
is awarded to him.
BID DOCUMENTS collectively refer to all documents providuti
available to prospective bidders which include the Invitation to Bid
copy of the Contract which the winning bidders would be required Ir
with the Owner.
BID BULLETIN is a document containing additional information oil 1
Documents issued to bidders before date of bidding.
BREAKDOWN OF WORK AND CORRESPONDING VALUE is allolii
of the different parts of the work indicating each part Lid
corresponding value.
CHANGE ORDER is a written order to the Contractor issued by
Owner after the execution of the Contract, authorizing a Chinon
variation in the work or an adjustment in the Contract Price or Coto,
time.
CONTRACT is the term used to describe the Agreement I ;I
Contract Documents.
CONTRACT DOCUMENTS are the documents attached Iv ii
Agreement identified therein as Contract Documents, Include"
additions, deletions and modifications incorporated them"
generally include the following documents:
a. Special Provisions or Conditions
b. General Conditions
c. Specifications
di Drawings
0 Other I lid Documents
I I) CON I iffit: I PltICI is the amount in namely in other Gone
paid by the Owner to the Contractor for the execution of
ecconlencn with the Contract
1 13 CONTRACTOR is the person or firm duly registered end Ile
Philippine Contractors Accreditation Board whose proposal
accepted and to whom was awarded the Contract to execute
1.14 COST moans all expenditures properly Incurred or to be
whether on or off the site, Including overhead and other
properly allocable thereto but does not Include any all
profit.
1.15 DRAWINGS are graphical presentations of the Work. They
supplementary details and shop drawings.
1.18 FINAL PAYMENT refers to the payment of the final progress
all approved claims including but not limited to variations I
Contract Price adjustments and/or escalation, acceleration 0
others. It does not include the retention money.
1.17 GUARANTEE BOND is the approved form of security fuml
Contractor and his Surety as a guarantee of the quality of
provided, the equipment installed, and the workmanship
the Contractor.
1.18 INSTRUCTION TO BIDDERS refers to the list of instruction
the manner bids are to be prepared and the conditions for I
the Contract.
1.19 LAWS refers to all laws, ordinances and other governmental
regulations applicable to the project and to its execution.
1.20 OWNER is the person or entity or authorized representative
signed the Contract as Owner.
1.21 OWNER'S REPRESENTATIVE refers to the person
commissioned by the Owner or authorized in writing by the
on his behalf.
1.22 PAYMENT BOND is the approved farm of security furnish
Contractor and his Surety as a guarantee of good faith on the
Contractor to faithfully comply with the Contract in res
obligations arising therefrom to its workers, subcontractors, and
1 27 PORPORNIANCE BOND Is Iha approved form of security furnished by
the Contractor and his Surety as a guarantee of good faith on the part of
the Contractor to execute the Work in accordance with the Contract.
1.24 SCHEDULE OF MATERIALS AND FINISHES is an outline specification
enumerating the type or trade names of materials required to be used by
the Contractor for the Work.
1 76 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.
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.
I 27 SUB-CONTRACTOR is 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. One who merely furnishes materials
without labor is a supplier and not a Sub-Contractor.
1 28 SUPPLEMENTARY SPECIFICATIONS refers to additional information
which may be issued as an addition to or amendment of the provisions of
the Specifications.
1.29 SURETY is the person, firm or corporation which issues the bond
required of the Contractor.
30 TIME LIMIT OR COMPLETION TIME is the period of time allowed by the
Contract for the completion of the project or any stipulated portions
thereof.
1 31 WRITTEN NOTICE means 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.
1 32 WORK refers 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 his obligations
which are called for in the Contract.
EXECUTION, CORRELATION, MEANING OF TERMS AND INTENT OF
DOCUMENTS
 UI IN Il NT Of CON I RAC I Iha intent of the Confront le to
Intim and inelefinie equipment end hewer:Minn nacelle
proper execulion of the Work
202 STANDARD OF CONDUCT Each party to IM Contract
that, In the exercise of his rights and In the performance Of
must act with justice, give the other party his due, and obit
and good faith.
2 03 INTERPRETATION OF CONTRACT
a In case of conflict between the provisions of the Agreement
Contract Document, or between the provisions of one of the
Documents and the provisions of another Contract Document,
of discrepancy, defective description, error or omission In the
the following rules shall be followed:
RULE 1: The Agreement and the Contract Documents
taken as mutually explanatory of one ano
various provisions of the Contract shall be int
together, attributing to the doubtful ones that sen
may result from all of them taken jointly.
RULE 2:
The provisions of the Civil Code of the Philippines
interpretation of contracts and of the Rules of C
the Interpretation of Documents shall be applied.
RULE 3: Where the conflict between or among the proviel
the Agreement and/or the Contract Documents ca
resolved by Rules 1 and 2, it shall be understood
(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;
(d) written dimensions shall prevail over measured
dimensions.
RULE 4: Where the conflict cannot be resolved by applying Rut
or where Rule 3 does not apply, the conflict shall
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) Drawings;
(f) Special Conditions of Contract;
(g) General Conditions of Contract;
(h) Other Contract Documents; and
(i) 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.
custom of the place shall be followed
RULE 7: Rules 1 to 8 shall yield to specific rules of in
this document or In the Contract.
b. The Owner shall resolve the conflict, or Interpret or
discrepancy, defective description, error or omission with duS
Article 2.04 below.
c. The interpretation of or explanation by the Owner shall be Ise
form of instructions to the Contractor. Where the Owner fails to
instruction in writing, the execution of that part of work affect
interpretation or explanation without a timely objection or prof
Owner shall be deemed to have been executed in accordance
Owner's explanation or interpretation.
d. In all cases where a device, item or part of equipment is referred
singular number, it is intended that such reference shall apply to
such devices, items, or pads as are required to complete the work,
2.04 CONFORMITY TO THE CONTRACT: The Work shall be ex
accordance with the Contract.
a. If there be a variance between the Drawings and the Specie
the provisions of the Specifications shall control. In case of
between the General Conditions or any modification thereof a
detailed specification requirements, the detailed specifi
requirements shall control.
b. Any discrepancy found between the Drawings and Specifications
site conditions or any error or omission in the Drawings
Specifications shall be immediately reported to the Owner, who
promptly correct such discrepancy, error, or omission. Any
involving such discrepancies shall be estimated by the Contractor
unit prices or lump sum amounts shall be agreed upon by the pa
whenever possible before the work Is done. Any work done by
Contractor involving discrepancies found by the Contractor and
reported to and without the knowledge of the Owner shall
considered as having been done at the Contractor's risk.
c. The Owner shall be fully responsible for adequacy of the design
for sufficiency of the Drawings and Specifications. The compl
requirements of the Work shall be set forth in Drawings a
Specifications to be supplied by the Owner.
it In lite event that any part or whole of the Works, whim ;wood
upon, are ODMIllood by thu Contractor, than all ranponsIbIlltlos
asalpned to the Owner for Ma said doalcm shall automatically ho
assigned to the Contractor as his responsibility.
2 05 MEANING OF TERMS
APPROVED, DIRECTED AND ACCEPTABLE: The words "approved",
"directed" and "acceptable", or words of like import shall men
approved, directed by or acceptable to the OWNER.
b. FURNISH: The word "furnish" shall be understood to mean "purchase
and/or fabricate and deliver to the jobsite or other location when SO
designated."
c. INSTALL: The word "install" shall mean to build in, mount in positrons,
connect or apply any object specified ready for the intended use.
d. PROVIDE: The word "provide" shall be understood to mean "furnish
and install."
e. REQUIRED OR NECESSARY: 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 is required to exercise his
discretion by:
a. giving his decision, opinion or consent, or
b. expressing his satisfaction and approval, or
c. determining value, or
d. providing drawings, or
e. supplying equipment or materials, or
f. otherwise taking action which may affect the Contractors timely
completion of the Work,
he shall exercise such discretion fairly and in a timely manner taking due
regard of Completion Time and the approved construction schedule
nothwithstanding 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.
 Whenever In the C0111,001,1110 Contractor Is required 10 give not
data, catalogs, samples, ordor or Import materials or equipment,
end submit the COlilltluction schedule or nobly the Owner that a et
boon ordered or an event causing a change has occurred
discovered, the Contractor shell do so In a timely manner so as
any delay in the completion of the Work.
Whenever the Contract or accepted industry practice requires
any part of the Work is covered, it must be inspected and a
Owner shall provide a sufficient number of inspectors at the
while work is in progress and the failure of the Owner to pr
inspectors shall be understood as a waiver of the Owner to Ins
approve that part of the Work.
2.07 DEFECTIVE EQUIPMENT, MATERIALS, OR WORK. Whene
Contract or the General Conditions provide that the Owner may re
Contractor to remove or replace defective or inferior materials or eq
or to replace bad or defective work, the Owner, if he is represen
professional duly authorized to supervise the Contractor's work
exercise the discretion and authority of the Owner, shall condemn
materials, equipment or work in order to minimize the damage or lose
Contractor. However, where even with the exercise of due dilige
Owner could not have discovered the use of inferior materials
equipment or the defective work, the Owner may condemn It
discovery, and the Contractor shall bear all the cost of removing
replacing the defective or inferior material or equipment or the clef
work.
2.08 REVIEW OF CONTRACT. The Contractor shall carefully study
compare the various documents that comprise the Contract and shall r
to the Owner any error, inconsistency or omission that may be discov
in its provisions. The Contractor, however, shall not be liable to the
for any damage resulting from any such error, inconsistency or omission
the Contract. The Contractor shall follow the Drawings and Specificat
and all additional detail drawings and instruction issued by the Owner
being in full and strict conformity with the Contract and the requirements
the Work. Except for shop drawings, product data and samples for a
portion of the work provided or supplied by a specialty contractor, t
Owner's approval thereof shall be construed as the Own
acknowledgment that the approved shop drawings, product data a
sample comply with the Contract. TheContractor shall not be liable to t
Owner for undetected error, inconsistency or omission in the Contract or f
complying with instructions or following Drawings or Specifications, or f
using or following the approved shop drawings, product data or sample.
2 09 UOCUMftNTE AND SAMPLES AT THE SITE The Contractor shall
maintain In good order al 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 Contreolot
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 Owners 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.
ART. 3: DRAWINGS AND SPECIFICATIONS
3.01 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 will be furnished to him et
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, they are to be followed in
preference to measurements by scale. Anything shown on the Drawings
but not mentioned in the 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:
Upon request of the Contractor, the Owner will explain (i) the meaning of
the Drawings (including notes thereon) or of the Specifications, or (ii) any
obscurity as to the wording of the 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.
3.04 DISCREPANCY IN DRAWINGS: The Contractor shall report to the Owner
any discrepancy in the figures in the drawings immediately upon its
discovery. The Owner shall make the necessary correction. The Contractor
shall not be entitled to an adjustment of his Contract Price and Completion
 should hie work Ira on knurl ra.derin II such work wow monde
notifylito Iha Owner of the discovery of the discrepancy And be
Owner iiinknii thu I
y correction
AR I 4 DL I All DRAWINt IS AND INS I RUC I IONS
4.01 SUPPLEMLN I AR? DRAWINGS AND INSTRUCTIONS: The
furnish additional dotal drawings and instructions essential to th
interpretation and proper execution of the Work. All such
drawings and instructions are to be considered of equal force
which originally accompany the Specifications.
ART. 5: SHOP DRAWINGS
6.01 CONDITIONS IN THE PREPARATION OF SHOP DRAWINGS:
Contractor shall prepare at his own expense and submit two copies
shop or setting drawings, templates, patterns and models and the
shall pass upon them making desired corrections, if any. The C
shall make the corrections in the shop drawings required by the
file with the latter three (3) corrected copies thereof.
5.02 IDENTIFICATION: Shop drawings which shall be numbered cons
shall represent:
a. All working and erection dimensions.
b. Arrangement and sectional views.
c. Necessary details, including complete information for me
connections with other work.
d. Kinds of materials and finishes.
Shop drawings shall be dated and contain (a) the name of project, (b)
descriptive names of equipment, materials, and classified item num
and (c) the location at which materials or equipment are to be install
the Work.
5.03 LETTER OF TRANSMITTAL: Submission of shop drawings shall
accompanied by a letter of transmittal in duplicate, containing the name
the project, the Contractor's name, number drawings, titles, and of
pertinent data.
5 04 CORRECTIONS, CHANGES AND VARIATIONS: The Contractor sh
submit three sets of prints of shop drawings to the Owner for appro
Satisfactory shop drawings will be so identified by the Owner, dated, a
one copy thereof returned to the Contractor. Should shop drawings
d:sapproved by the Owner, one set of such shop drawings will be return
10 Ilia Coriander Indicating therein the corrections and changes Ira be
made
a. The Contractor shall make the required corrections and changes and
resubmit the shop drawings, In duplicate, until the Ownete 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.
d. If 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 his letter of submittal.
5.05 RESPONSIBILITY FOR ACCURACY: If the Contractor is a specialty
contractor or is engaged by the Owner as a specialty contractor, the
Owner's approval of shop drawings will 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 he 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
ART. 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. I le shall also comply with regulations of firms furnishing
such as water. gee, telephone and electricity for the project
If the Contractor performs any work contrary to such Laws or
regulations, he shall bear all additional costs arising therefrom.
0 02 SITE CONDITIONS: Before the bidding and the awarding of the
the Contractor is expected to have visited the project site and
own estimate of the facilities required in and difficulties atte
execution of the Work, on account of local conditions and
contingencies. The Owner shall, however, furnish the Contractor a
survey and sub-surface exploration which the Contractor may rely
the preparation of his Bid.
ART. 7: PERMITS, TAXES AND SURVEYS
7.01
PERMITS AND LICENSES: The Owner, with the Contractor's assts
shall secure and pay all construction permits and licenses necessary
execution of the Work or of any temporary work and easements in
thereto.
The Contractor shall secure the final occupancy permit but he shall
responsible to the Owner if, without his fault, the license is not iss
there was delay in its issuance.
7.02
TAXES: Wherever the law of the place where the project is loc
requires a sales, consumer, use, or other similar tax related or perti
only to the construction of the project, the Contractor shall pay such
7 03 CONSTRUCTION STAKES AND REFERENCE MARK: The Owner
furnish all surveys describing the physical characteristics, legal limitat'
and utility locations of the site. He shall also furnish rights-of-way
access to the site. The Owner shall be responsible for the establishment
lot lines, boundary lines, easements and benchmarks which shall be m
by a certified surveyor. The Owner may request the Contractor to ve
before the start of the construction the result of such surveys, provided t
Owner shall pay for the cost of such verification. The Owner shall also
for any damage or cost to the Contractor brought about by errors in da
furnished.
All other grade, lines, levels, and benchmarks necessary for th
prosecution of the work shall be established and maintained by th
Contractor.
The Contractor shall provide and maintain well-built batterboards at all
corners. He 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 venous floors. and shall lay.
out Itin mind locations of all partitions as a guide to all trades
104 SERVICES OF GEODETIC ENGINEER: The Contractor shall, at his
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.
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 the Owner and the Contractor. If the
Geodetic Engineer finds any deviation from the Drawings in the Work of the
Contractor, he shall report his 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 Engineers
certification shall be regarded as an independent and disinterested
verification of such lay-out.
SECTION III
EQUIPMENT AND MATERIALS
ART. 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 his
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.
ART. 9: EQUIPMENT
QUALITY OF EQUIPMENT: In order to establish standards of quality, the
9.01
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.
 902 CQUIPMSNI BUDBTITUTION' The Contractor shall fur Mall
list of proposed substitutions preferably prior to the signing of
together wit I i such engineering and catalog data as the Owllel
All requests for substitution of equipment shell be in writing
approve or disapprove the request In writing. No substitute
be used unless approved in writing by the Owner -I ha C
abide by the Owner's judgment as to which proposed su
equipment are judged to be acceptable.
ART. 10. MATERIALS, FIXTURES, APPLIANCES, AND FITTINGS f U
THE CONTRACTOR
10. 01 SAMPLES OF MATERIALS: The Contractor shall furnish for
samples as specified or required. The work shall be in ace
approved samples.
a. Unless otherwise specified, three samples shall be so
adequate size to show quality, type, color, range, finish, and
material.
b. Each sample shall be labelled, bearing the material's name a
the Contractor's name, date, project name, and other pertine
c. Where the Specifications require the manufacturer's printed ins
directions, such directions shall accompany the samples su
approval.
d. A letter of transmittal in triplicate from the Contractor requ
approval shall accompany all sets of samples.
e. Materials requiring prior approval of the Owner shall not be or
until such approval in writing is given by the Owner. All materials
be furnished substantially equal in every respect as the ap
samples.
10.02 TRADE NAME MATERIALS AND SUBSTITUTES:
a. Whenever an item or class of materials is specified exclusively
trade name, by manufacturers name or by catalog reference,
such item shall be used except as provided in paragraph (b) here
b. No substitution shall be made of any material, article, or proce
required under the Contract unless the substitution is approved
writing by the Owner.
0. The Contreotor 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 shill be
approved by the Owner.
10.03 TESTING SAMPLES OF MATERIALS: The Contractor shall submit to till
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.
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 their materials and for erection of their sheds and tool
houses.
b. All cement, lime, and other materials affected by moisture 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 so 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 his own expense.
10.06 DEFECTIVE MATERIALS: All materials not conforming to the
Specifications shall be considered defective. The Contractor shall remove
or replace defective materials 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 Urn looelfieelions, Drawings, Sent Pray
Supplementary Specifications fell to provide any doted Or
concerning thu nature and quality of the Work to be informed It
understood that generally accepted construction practice shall Ork
i10.07 IMPORTED MATERIALS, FIXTURES AND EQUIPMENT: The
taking Into consideration the Completion Time, shall me
arrangements for the purchase and delivery of all specified
materials, fixtures, appliances and equipment in order to avoid d
completion of the Work.
No extension of time shall be allowed if, due to negligence or inadV
of the Contractor, such imported items arrive late.
OWNER'S APPROVAL: Unless specified to the contrary or u n los
Contractor's submission Is deficient, equipment, samples or mate
submissions shall be acted upon by the Owner within soya
working days of submission by the Contractor.
ART. 11: MATERIALS, EQUIPMENT, FIXTURES, APPLIANCES AND FITTI
FURNISHED BY THE OWNER
Materials, equipment, fixtures, appliances and fittings specifically Ind;
in the Contract shall be provided in accordance with the Owner-appr
construction schedule. Materials furnished by the Owner shall be dee
acceptable for the purpose intended. The Contractor may continue to
them until otherwise directed in writing by the Owner. No further test s
be required unless the Owner directs otherwise and pays the cost of s
test. If the Contractor discovers any defect in materials furnished by
Owner, he shall advise the Owner in writing. The Contractor shall
responsible for material loss of or damage to any Owner-provided mat
equipment, fixture, appliance or fitting in his custody.
ART. 12: ROYALTIES AND PATENTS
The Contractor shall pay all royalties and license fees on all patent
materials and processes furnished by him. He shall defend all suits
claims corresponding thereto for infringement of any patent rights and shE
save the Owner harmless from loss on account thereof.
T. 13: MANUFACTURER'S DIRECTIONS
All manufactured articles, materials, equipment, appliances, fixtures a
fittings supplied by the Contractor shall be applied, installed, connect
erected, used, cleaned, and conditioned by him, in accordance wi
manufacturer's printed directions. Where reference is made to t
•
manufacturer's directions, the Contractor stunt nubndl Me mum Illed manner
of copies of such directions to the Owner .
SECTION IV
PREMISES AND TEMPORARY STRUCTURES
ART. 14: USE OF PREMISES
14.01 LIMITATION OF USE: The Contractor shall confine his apparatus, the
storage of materials, and the operations of his workmen to limits indicated
by Law or directions of the Owner and shall not unreasonably encumber
the work premises with his 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.
ART. 15: TEMPORARY STRUCTURES AND FACILITIES
15.01 TEMPORARY OFFICE AND CONTRACTOR'S BUILDING: The ContractOr
shall, taking into account the location and size of the site, at all limos
provide and maintain an adequate weathertight 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 men, or the erection of tents or other forms of protection will be
permitted only at such places as the Owner shall designate; provided,
however, that if no particular area is designated, the Contractor may use
his 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 in a manner satisfactory to
the Owner. Nobody shall be allowed to sleep or cook within the building line
of the project under construction.
15.03 SAFETY AND SANITATION: The Contractor shall, from the
commencement of the Work and until its completion: (a) furnish and put up
all temporary barricades and guard lights necessary for the protection,
proper prosec, lion and completion of the Work, (b) maintain ward lights at
the top of the -alsework tower, burin.: 'es. railings, etc.; (c) provide and
 maintain ample stailltay lolled accommodation and other
convonioncon Including water corium:lions for the 11110 of pars
laborers on tho work promo ly socludod from public obsorvatiO
manner and al such points as shall be approved by the Owner,
use shall bo strictly enforced; (d) keep such places clean and
flies; and (e) remove all connections and appliances connected
prior to the completion of the Work.
15 04 TEMPORARY SIGNS: No signs or advertisements will be all
displayed without the Owners approval. The Contractor may
painted sign, giving the names and addresses of the
Contractor, and the various sub-contractors. The Owner shall a
size, color, lettering, and location of such temporary signs.
15.05 TEMPORARY OR TRIAL USAGE: Temporary or trial usage by INF
of any mechanical device, machinery, apparatus, equipment, or a
or materials supplied by the Contractor before final completion and
acceptance by the Owner shall not be construed as evidence
Owner has accepted it.
Such test run shall be made by the Owner for such reasonable
time, as the Owner shall deem necessary. The Owner shall not be II
injury to or breaking of any part of such work which may be cau
weakness or inaccuracy of structural parts or by defective mat
workmanship.
The Contractor may, at his own expense, make such trial usage w
notice to and for the benefit of the Owner.
SECTION V
PROTECTION OF WORK AND PROPERTY
ART. 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 Work
the Owner's property, and (iii) the equipment, materials, applia
and fixtures supplied or paid for by the Owner and shall make
any damage, injury or loss thereto, except such as may be taus
agents or employees of the Owner, or due to causes considered
God;
b provide reliable and competent watchmen to guard the site and
premises, provide all doorways with locks under his control and luck
such doors at the close of each day's work; provided, however, Mel It
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 signs to this effect shall be posted
conspicuously;
d. prohibit fires built on the site except by express 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 their safekeeping until final acceptance of the Work
16.03 TREES AND OTHER PLANTS: Existing trees, plants, shrubs, etc., which
are to remain at the site shall be boxed and otherwise protected from
damage. No trees within the site located outside building lines shall be cu►
or removed without the specific approval from the Owner.
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. Damage to trees, plants, shrubs, streets, sidewalks, etc., resulting from
fault or negligence of the Contractor in connection with the execution of
the Work shall be made good andlor replaced or repaired by the
Contractor at his own expense.
16.04 DRAINAGE: If it should be necessary in the prosecution of the Work to
interrupt or obstruct the natural flow of rivers or streams, the drainage of the
surface, or the flow of artificial drains, the Contractor shall do so in such a
way that no damage shall result to either public or private interests. For his
neglect to provide other means of dfainage for any existing natural or
artificial drainage which he may have obstructed and/or interrupted, the
Contractor shall be liable for all damages which may result therefrom.
Alt I I/ 11140 II- t: I loN 1)1 N I Pin I A111)1 N. r, I iNG
I/ 0I CON I HAG I 014'S IALSPONSitill I Pe I riii moat
protect adjacent properly as provided by Law and the
neighboring property or building which may be jeopurdscad In
must be thoroughly and substantially protected against dB
construction at the Contractors expense.
17 02 The Contractor shall be liable for and pay for all damages to
existing utilities occasioned in any manner by his act or nog
of his agents, employees, or workmea.
17.03 CONDITION SURVEY: Prior to commencement of the
Contractor shall, Insofar as Is legally and physically pose
and ascertain the condition of any existing adjacent p
buildings and record the results thereof through photogre
or by any other means.
ART. 18: PROTECTION OF LIFE, WORK AND PROPERTY DUR
EMERGENCY
18.01 AUTHORIZATION TO CONTRACTOR: In an emergency enda
the Work or the adjoining property, the Contractor, even with
instruction or authorization from the Owner, shall act, at his die
prevent or minimize such threatened loss or injury. Emerge
performed by the Contractor shall be treated as one performed
Change Order unless the emergency was caused or brought a
fault or negligence.
SECTION VI
LABOR, WORK AND PAYMENTS
ART. 19: LABOR
19.01
1 CHARACTER OF WORKMEN: The Contractor shall employ
competent and duly qualified professionals, technical personnel, fo
mechanics and workers to supervise or execute the Work. Upon
request of the Owner, the Contractor shall remove from the si
employee who is careless or incompetent or obstructs the progress of
work or acts contrary to instructions or conducts himself improperly.
T. 20: WORK
JO 01 MLA I HUIlli AND APPLIANetti the Contractor shall use lath nihrhoUs
and eminences for the parlor mut ice of the Work us will ensure the
completion of the Work of the required quality within the Car iplotion I imo
If, at any time before the commencement or during the p ogress of the
Work, such methods or appliances appear to the Owner toss Inefficient or
inappropriate for producing the quality of work required, or insuring the
required rate of progress, the Owner may order the Contrac for to increase
the rate of their efficiency, or to improve their system of c Jeration Thu
Contractor must comply with such order. Failure, however, of tne 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
his obligation to turn out such quality of work and rate of progress as aro
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
marks are displaced or rendered useless through the carelessness or
neglect of the Owner or of his agents or employees, they shall be replaced
by the Contractor at his expense.
20.03 DEFECTIVE WORK: Work that fails to comply with the Contract is
defective. 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. If the Specifications, the Owner's instructions, the Laws, or any public
authority requires any work to be specifically tested or approved, the
Contractor shall give timely notice to the Owner and other parties
 inquired lu make or be present at the inspection of the date
ouch inspection Inspection by the Owner shall ha ma
practicable, at the source of supply
e. if any work should be covered up without timely notice lathe
before the Owner can make a timely Inspection thereof,
required by the Owner, be uncovered for examine
Contractor's expense. However, notwithstanding the fel
Owner to make a timely inspection of the work before it Is
re-examination may be ordered by the Owner and if so o
work must be uncovered by the Contractor at the Owner's
if such work be found not in accordance with the Co
Contractor shall shoulder the cost of uncovering and re-doing
f. If there are indications that the work done is not in accordance
Drawings and Specifications, the Owner may at any time
acceptance of the Work make an examination of the portion
completed by removing or tearing out the same. The Contract
on request, furnish all necessary facilities, labor, and materials,
work is found to be defective in any material respect due to fa
Contractor or his sub-contractors, the Contractor shall defray
costs of such examination and of satisfactory reconstruc
however, such work is found to meet the requirements of the
the actual cost of labor and materials necessarily involved
examination and replacement plus 15 percent (15%), shall be
the Contractor and he shall, in addition, if completion of the
been delayed thereby, be granted a suitable extension of
account of the additional work involved.
Ail inspection and tests shall be performed as not to delay the,
unnecessarily.
20.05 WORK DURING AN EMERGENCY: The Contractor shall perform
work and shall furnish and install all materials and equipment nec
during an emergency endangering life or property. In such cases,
18.01 shall apply.
20.06 INCREASED OR DECREASED QUANTITIES OF WORK: Adjustmen
working drawings to suit field conditions which cannot be foreseen at
time of calling for bids, may be necessary during construction. It is
essence of the Contract to recognize such changes in Drawings as
The resulting change in quantities or the increase in the scope of wo
the Contractor shall be covered by a Change Order. Work done by
Contractor without timely notice to the Owner that an adjustment is req
of Contract Price and Completion Time shall be at his own risk
expense.
20 07 CI IANOL8 IN Ti IL WORK
A CI JAMIE S ORDERED By OWNER f he Owner may al any time order
extra work or make changes by altering, adding to or deducting from his
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 Supplementa)rj
Specifications changing the nature or work to be performed of t
materials, equipment, appliances or fixtures to be provided shall ae rested
as sufficient written instruction of the Owner to the Contractor to *WA
the change.
B. CHANGE OF SUB-SURFACE CONDITIONS: If, during the progress Si
the work, sub-surface conditions at the site materially different from than
shown on the Drawings or indicated in the Specifications or in any Contract
Document, are discovered or encountered, the attention of the Owner shall
be called to such conditions before they are disturbed. The Ovinar shall
thereupon investigate the conditions, and if he 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.
he shall make such changes in the Drawings and Specifications as he may
find necessary.
If 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 where time 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 15% of the amount
deducted in the change order to recover his overhead and profit.
D. VALUE OF EXTRA WORK: The value of any extra work or charge r.:^P'
be determined by the Owner in any one or more of the following wa'
 (a) By a lump 11(1111 deCaptable to the Contractor
(b) By unit peeps elthei stipulated In the C0111100 or subsequa
agreed upon, provided the aggregate value of changes don
exceed 25% of the original Contract Price of the particular
Item,
(c) By actual direct cost plus value added tax, If any, plus ft
percent (15%) for Contractors profit and overhead.
Changes required by the Owner which in the aggregate exceed
five percent (25%) for overruns shall be covered by a suppleM
contract. The Contractor shall not be obliged to execute such cha
accordance with the unit rate specified in his Bid, a supplemen
contract being treated as one separate from and independent of
Contract.
Where the aggregate value of all changes per pay item exceed
five percent (25%) and the Contractor, without demanding the exe
of a supplemental contract executes the additional work required
objection or protest, the value of the changes shall be determined I
accordance with subparagraph (b) above.
Under case (c) above, the Contractor shall keep and present, in sr
form as the Owner may direct, a correct account of the direct co
together with vouchers and other supporting documents.
t. E. AWARD OF EXTRA WORK TO OTHER CONTRACTORS: In case any
extra work shall be required in the proper performance of the Work, a
the Contractor and the Owner shall fail to arrive at any agreement as
the adjustment of Contract Price and/or Completion Time, the Own
may award such extra work to another contractor.
08 CLAIMS FOR EXTRA COST: If the Contractor claims that a
instructions by the Owner or the Drawings or Specifications issued aft
submission of the Bid, involve a change, he shall give the Owner writ
notice thereof within fifteen (15) days after the receipt of such instruct•
Drawings or Specifications, as much as possible, before proceeding t
execute the work, except in emergency endangering life or prope
provided for in Article 18.01.
In like manner, if the Contractor incurs a delay in the mobilization and/
in the progress of his work for reasons attributable to the Owner, such ad
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 Contractors work, delayed decisions by the Owner and
other matters rotated thereto, he 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 (ho
Owner in the same manner as any other sum to which the Contractor
may be entitled under the Contract, particularly unaer 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 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 his 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, he shall remove all temporary work, his
rubbish therefrom and all his 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 ceiling,
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.
If the Contractor fails 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.
If a dispute arises between the Contractor and separate contractors as to
their responsibility for cleaning up, the Owner may clean up the site end
charge the cost thereof to the contractors responsiole therefor as ne
Owner shall determine to be just.
20.10 USE OF COMPLETED PORTIONS OF WORK: The Owner may to
possession of and use any completed or partially completed poriOn of
the Work, although the time for completing it or portions thereof may ..pt
have expired; but such taking of possession am• use shall not te
deemed an acceptance of any work not completed in accordance v..th
the Contract. Neither shall ;t be deemed a waiver Cy the Owner of ':te
right to claim damages due to delay in the complet on of the Work it
such prior use increases the cost or delays *le completion of
 imomplelail work or causal 1011111111111IU of completed
Conliaclor '111111 he entitled to extra tor-immolation or extension Or punoh Ind or lists, which the Connecter must receive from the Owner
both not Inter than thirty (30) days from dote of substantial Completion

RA The Owner may add to the punch list items but only as to corrective
In the ovoid of tho Owner taking over any portion of the Work
work on the items in the original punchlist or lists not later than sixty
use prior to overall completion, then the Owner shall lee
(60) days from date of substantial completion.
Certificate of Completion for such portion taken over and rel
retention as required by the Contract, subject to the provIelo
Articles 20.11, 20.12, 20.13,20.14 and 20.16. D. [a) No liquidated damages for delay beyond the Completion Time shall
accrue after the date of substantial completion of the Work.
20 11 SUBSTANTIAL COMPLETION AND ITS EFFECT:
(13) If the targeted date of completion has arrived and the Contractor
A. [a) There is substantial completion when the Contractor completes cannot achieve ninety five percent (95%) completion of the Work duo
to the uncompleted Facility caused by the Owner's fault, negligence or
five percent (95%) of the Work, provided that the remaining work
delay of the Owner, the Contractor shall he deemed to have achieved
the performance of the work necessary to complete the Work oh
substantial completion provided (i) the contractor has completed at
prevent the normal use of the completed portion.
least ninety five percent (95%) of the work minus the uncompleted
[b] The approval by the Owner of the Contractor's billing for completi Facility, and (li) the Contractor has completed the work required on the
Facility but for that which is directly affected by the Owner's fault,
least ninety five percent (95%) of the Work shall be deemed
negligence or delay. The Owner shall release to the Contractor the
Owner's acknowledgment that the Contractor has substanti
Contract Price less the cost of the uncompleted portion of the work and
completed the Work unless the Owner can establish that
the amounts mentioned in Article 22.03.
unfinished work prevents the normal use of the completed portion,

[c] The Owner may also issue to the Contractor a writ E. 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,
acknowledgement of substantial completion which may be in the f
which, together with the Performance Bond, is sufficient to complete the
of a Certificate of Substantial Completion or equivalent document
Work without additional cost to the Owner.
the date of this document shall not be controlling if substank
completion is shown to have been made at an earlier date, unless
20.12 PERIOD OF MAKING GOOD OF KNOWN DEFECTS OR FAULTS:
Contractor accepts the certificate without taking exceptions thereto
writing within fifteen (15) days from receipt.
The expression "Period of Making Good of Known Defects or Faults" shall
mean a period of not more than thirty (30) calendar days, calculated from
B. [a) Notwithstanding paragraph A above, the equipment. fixtures a
the date of receipt by the Contractor of the last item in the punch list
utilities (collectively, the "Facility") furnished and/or installed by 1
submitted during the period provided in Article 20.11 C (b), during which the
Contractor which the Contract requires to be test-run prior t
Contractor shall complete the corrective works.
acceptance shall be test-run successfully before the Work can
accepted as substantially completed.
20.13 MAKING GOOD OF KNOWN DEFECTS OR FAULTS: The Contractor shall
execute at his own expense all works necessary for making good of known
04 The Owner shall, without delay, cause the test-run of the Facility.
defects, imperfections or faults (wear and tear excepted) within the period
Should the Contractor be unable to completely install or furnish and
stated in Article 20.12.
test-run the Facility through no fault of his, the Contractor snail'
automatically be entitled to an extension of Completion Time equal to
the period of delay. If, in the opinion of the Owner, the defect or fault in the punch list is 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.
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
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 workman or by ullita outgun:1m a and charge the DOM
the Conlr actor Tha Owner may willMold on amount not ON
ConIfficl cum/ of t‘ocubou midi wink hum (ha payment to the
20 14 SPECIAL 1ES I AND INSPECTION Special lost, inspection
not otherwise required in the Contract which the Owner
Contractor to perform after the date of substantial comple
treated as a separate work which shall be covered by a
agreement.
20.15 ACCEPTANCE OF NON-CONFORMING WORK: If the Own
defective or non-conforming work, instead of requiring its NI
correction, the Owner shall issue to the Contractor a change ordoe
a reduction in the Contract Price where appropriate by an a
exceeding the value of the unfinished work as determined
Breakdown of Work and Corresponding Value. Such adjustment
effected whether or not final payment has been made.
20 16 ADJUSTMENT OF PRICES:
A. There shall be added to or deducted from the Contract Price sue
affecting the execution of the Work caused by any of the folio
event of force majeure including abnormal changes in costs of ma
increases in labor costs mandated by law or wage order, increase
cost of oil, and the deterioration of peace and order.
B. Adjustment of prices due to escalation or reduction of costs of ex
the work shall be made using a parametric formula to be agreed u
the parties. In default of such agreement, the parametric formula
applicable laws shall be applied. Such adjustment shall be ma
provide equitable relief to both the Owner and the Contractor, al
neither to gain nor to lose by such fluctuation. Adjustment of the C
Price due to escalation shall be for the sole purpose of compensati
Contractor for the increase in the direct cost of his labor and materials
for the work, plus value-added tax.
C. The adjustment of prices shall be determined on the basis of the on
Contract unit prices of labor and materials and such unit prices in e
during the relevant period of work accomplishment.
D. The Contract Price shall be adjusted, not oftener than once a month, du
increase or decrease of the direct cost of labor and materials of more
five percent (5%) of the original Contract unit prices of the relevant items
work. The adjustment shall include the first five percent (5%).
a In One the project is behind schedule by more than fifteen percent (10%)
from the approved construction schedule, not duo 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.
F 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.
10,17 PAYMENT IN LEGAL TENDER: Payments in money under the Con
shall be made in the currency stipulated; and if it is not legally possible
deliver such currency, then in the currency which is legal tender In
Philippines.
1 21 TIME OF COMPLETION OF WORK
21 01 NOTICE TO PROCEED, WHEN REQUIRED: A Notice to Proceed
issued by the Owner to the Contractor only when the Contract so pr
Premature commencement of construction shall be at the Contractor,
unless it is due to their mutual desire to have the Contractor commence
work early, and the Owner gives the Contractor express or impl
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 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 men 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.
 II In Glum of slippage. the ()mica may call for meetings with the
and other contractors Involved to determine the poselele
contlibuting lo the slow piques, of the cOlielitiction caulk,
slippage is duo to the fault or negligence of the Contractor, the
require the Contractor to submit a catch-up schedule v4Sch and
to approval by the Owner
C. The Owner may order the acceleration of work to meet a
completion date. Acceleration of work for the benefit or convent
Owner or caused by the fault of or delay by the Owner, shall be
extra work for which a Change Order shall be issued and the 0
shall be paid for the cost of such acceleration. However, where t11.
for acceleration is due to the fault of the Contractor, such additional.
acceleration shall be borne by the Contractor alone.
21.04 EXTENSION OF TIME:
A. The Contractor shall be entitled to an equitable adjustment of Coin
Time where the Contractor is obstructed or delayed in the prose()
completion of the Work by -
[a] the act, neglect, delay or fault of the Owner, or any other
employld by the Owner on the Work;
[b] third-party strikes or lockouts or strikes by employees other th
Contractor's employees or a lockout by an employer other then'
Contractor;
Cc] an act of God or force majeure;
(d) unsuitable weather conditions which render the work impracticable
impossible or which slow down the prosecution of the Work;
(e] peace and order conditions;
changes ordered or authorized by-the Owner or authorized under t
Contract, and
19) delay authorized by the Owner pending arbitration of an unresolv
dispute between the Owner and the Contractor.
[h] The Contractor shall he 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 Ir. a
period of Inclement weather conditions which Is different train
that envisaged untie 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 reply 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.
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, they are
necessary to prosecute the Work in the order required, and the failure
of the Owner to provide them caused a delay in the work of the
Contractor.
(b] The Owner, taking into account the construction schedule approved by
him 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, and
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 Contractors 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.
 ',.I I Oh 1)1 I AY IN i 'ANN 1 I ION 01 1111- WORK
1111 It lir iir alai skied that Ifirin Is nn entailed (nature of Ilia Gong
lb] Upon failure of the Contractor to complete the Work
Completion Time, the Contractor shall pay the Owner
damagos in the amount stipulated in the Contract as Inds
Owner may deduct from any sum duo the Contractor the al
has accrued as liquidated damages. Liquidated damages sh
from the first day of delay in completing the work within the C
Time until the date of substantial completion as determined
Article 20.11.
lc] The amount of damages for corrective works uncompleted wl
Period of Making Good of Known Defects shall be based on the
of such uncompleted corrective work in the Breakdown of Work
Corresponding Value for approved billings.
(d] Upon failure of the Owner to pay the Contractor for approved bill
the Contractor shall have the right to suspend performance of the
under the conditions provided in Article 27 (b), (c) and (d) and
entitled to the payment of interest under Article 22.05.
ART. 22: PAYMENTS
22.01 BREAKDOWN OF CONTRACT AMOUNT: Except in cases where
prices form the basis for payment under the Contract, the Contractor sh
within fifteen (15) days from the receipt of Notice to Proceed, or f
commencement of the Work submit a Breakdown of Work
Corresponding Value of the Contract Amount showing the value assig
to each part of the work. The Breakdown of Work and Corresponding Val
as approved by the Owner, shall be used as the basis for all Requests f
Payment, and for determining the value of uncompleted work or correct,
works.
22.02 REQUESTS FOR PAYMENT: The Contractor may submit periodically
not more than once each month a Request for Payment for work done,
The Contractor shall furnish the Owner all reasonable facilities required f
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 10% of the progress payment to the Contractor.
When 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 shell
be made for materials or Items not incorporated In the work, except whore
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 from any payment due the Contractor for -
a. The estimated cost of defective work not remedied;
b. The amount of substantiated and unpaid claims by subcontractors
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 as basis the schedule stipulated in the Breakdown of
Work and Corresponding Value. 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, they must be made as close as possible
to the actual percentage of work accomplishment.
22.05 OWNER'S ACTION ON REQUESTS 1.:012 PAYMENT: Within thirty (30)
days after a receipt of request for 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 workmen employed by him on the
project at not less than such rates as are provided by existing laws. He
shall also pay promptly all materials purchased by him, equipment used by
him on the project and all taxes due from him. He shall remit as required
 by law all amounts loony required to be withheld from the
wawa' of his employees or workmen
22 Of PAYMI N I S OVER 00 PERCENT No payment shell be made In
ninety percent (00%) of the Contract Price, unless a slothi
before any officer duly authorized to administer oaths is su
Contractor to the effect that all bills for labor, other then current
ell bills for materials have been duly paid by the Contractor
contractor, if any, excepting only such bills as may be enumera
sworn statement. The Contractor shall render the Owner
harmless from any claims and payment of such bills, and shall I
the Owner the cost of defending himself against such claims.
22.08 OTHER REQUIREMENTS BEFORE FINAL PAYMENT: The C
shall submit (aside from those which may be provided in the Con
following, as applicable, before final payment is made:
a. Certificate of Final Building Occupancy unless such certificate
be obtained through no fault of the Contractor.
b Certificate of Final Inspection of electrical, telephone, s
mechanical, water, gas, safety and other utilities unless such card
cannot be obtained through no fault of the Contractor.
c. Original and three (3) sets of prints of "As-Built Drawings" of El
Sanitary, Gas, Telephone and Mechanical works, if such works
within the scope of the Contract. "As-Built Drawings" are the wo
drawings showing the system and actual locations of outlets, fIxt
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 a
maintaining of fixtures and equipment.
f. Three (3) copies of Keying Schedule.
g. A release of liens arising under the Contract as provided in Article
34.01, 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,
shall make the final estimates, certify to the completion of the work, and
accept the same.
A The Owner shall then, except for causes heroin specified. pay to the
Contractor within the period stated In Article 22 05 above, the amount,
which shall be found duo, 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 10
administer oath, showing that all taxes due from him in connection with this
Contract have been duly paid.
B. In case the Owner has reasonable grounds of belief that the Contractor hoe
not remitted to the appropriate government agency the employer's end
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.
C. The acceptance by the Contractor of final payment shall constitute a waiver
of all his 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 end
unresolved by the Owner at the time the request for final payment is made;
(c) a dispute referred to arbitration in accordance with Article 34.05; 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 which is alleged to be defective and 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 Drawl
Specifications which is apparent upon Inspection by the Owner of
technical representatives and inspectors employed by the Omit
forthwith be condemned end the Contractor notified thereof to
Contractor an opportunity without loss of lime and without
unnecessary cost, to correct, remove and replace the defective
not so condemned within one year from final payment cannot
rejected by the Owner. If the Owner instructs Duo Contractor to
replace it thereafter, the instruction shall be treated as a change
D. The Contractor shall be liable to the Owner for any hidden
discovered and notified to the Contractor which the Contractor roc
from the Owner within the warranty period as provided in the Contract,
default of any provision fixing the warranty period, within one year I
posting of the Guarantee Bond.
E. Nothing herein shall be deemed to limit the liability of the Contractor
to
persons due to any loss or damage resulting from the collapse of the
due to defects in the construction or the use of materials of inferior qu
or due to any violation of the terms of the Contract in accordance
Article 1723 of the Civil Code of the Philippines.
22.11 RELEASE OF RETENTION: Subject to Article 33.01 herein, the am
retained by the Owner under the provision of the Contract shall be retest
not later than the expiration of the Period of Making Good of Kn
Defects as provided in Article 20.12 upon the posting of the Contract
Guarantee Bond.
SECTION VII
CONTRACTOR -SEPARATE CONTRACTORS-
SUBCONTRACTORS RELATIONS
MT. 23: SEPARATE CONTRACTS WITH OTHER CONTRACTORS
23.01 The Owner may perform work outside of the Contractors scope of work
or
award separate contracts to other contractors. If the Contractor claims 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 Owner and/or each separate
contractor with the Work of the Contractor.
MT 24: CONTRACTOR-SEPARATE CONTRACTORS RELATIONS
'4.01 I °RAUL OF MATERIALS AND WORK COORLSNA I ION, The
Contractor shall, to the extent possible, afford other contractors reasonable
opportunity for the Introduction and storage of thou materials and the
execution of their work, and shall properly connect and cooperate In the
Owner's effort to coordinate his work with that of other contractors SO GS
minimize interference or obstruction in the progress of the work pert
by each of them.
24.02 CUTTING, PATCHING AND DIGGING: The Contractor shall do all
fitting or patching of his work that may be required to make its se
come together properly and fit it to receive or be received by work of
contractors shown upon, or reasonably implied by, the Drawings
Specifications for the completed structure.
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: If any part of the
Contractor's work depends for proper execution or results upon the work of
any other contractor, the Contractor shall inspect and promptly report It to
the Owner. His failure to inspect and report it shall constitute an
acceptance of the other contractor's work as fit and proper for the reception
of his 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 his 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 causo damage to the Contractor's
work, then the Owner shall hold harmless the Contractor In respect
thereof.
MB 25 HUB CHN I HAG H
25 0 1 Ot-Nil HAI. It is understood and agreed that no portion of the W
be sublet of sub-contracted without the Owners consent. Ho
part thereof or any specialty work therein, may be sublet or sub
subject to the provisions of Articles 25.02 and 34.03.
The consent of the Owner to the Contractor's engag
subcontractor, by Itself, shall not create any contractual relat
the sub-contractor and the Owner.
25.02 CONTRACTOR'S RESPONSIBILITY: The Contractor agrees that
fully responsible to the Owner for the acts and omissions of hie
contractors and the persons either directly or indirectly employed by
as he is for the acts and omissions of persons directly employed by
ART. 27: OWNER'S RIGHT TO SUSPEND THE WORK
SECTION VIII
SUSPENSION OF WORK AND TERMINATION OF CONTRACT
ART. 26: CONTRACTOR'S RIGHT TO SUSPEND WORK OR TERMI
CONTRACT:
The Contractor may suspend work or terminate the Contract upon
(15) days' written notice to the Owner for any of the following reasons:
a. If an order of any court or other public authority caused the work to
stopped or suspended for an aggregate period of ninety (90) d
through no act or fault of the Contractor or his employees.
b. If the Owner shall fail to pay the Contractor the approved Request I
Payment as provided in Article 22.05.
c. If the Owner shall fail to pay the Contractor any sum within thirty
days after its award by arbitration.
d. If the Owner suspends the work without just cause for more than th
aggregate period of fifteen (15) days without the Contractor's consent.
e. If the Owner falls 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, 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 or by his duly designated
Representative.
If the suspension is necessary for the 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 Art. 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.
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 10
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 art
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:
(al Unsuitable weather or other conditions considered unfavorable for the
prosecution of the work;
[1:1 Failure of the Contractor to correct conditions which constitute a
danger to his workers or the general public, or to correct defective
work;
(c] Failure of the Contractor to carry out valid orders issued by the Owner
or to comply with any provision of the Contract, or his persistent failure
to carry out the Works in accordance with the Contract;
 I110 110(<11:112ily rill ndjualrnp Iha DiGWIngi to hull elle condlliene
/1111111u 1 nn111nu non. or In case of a change In Drawing.
c) If a trustee or receiver is appointed for the Contractor or for any of the
,jau fi, .111111111, Contractor's property, or
d) If the Contractor files a petition for suspension of payments, or to
iiiluio of the Contractor to supply sufficient skilled wor reorganize under the bankruptcy or similar laws.
suitable materials or equipment;
Failure of the Owner to supply Owner-supplied/furnished melon
28.02 OTHER GROUNDS FOR TERMINATION WITH CAUSE. The Owner may
lune, where such failure is due to causes beyond the rem
terminate the Contract upon the occurrence of any of the following event':
control of the Owner;
a) The Contractor repeatedly fails to supply, based on the construction
schedule, the sufficient number of skilled workmen or suitable
(91 Delay by the Owner in obtaining a right-of-way, where such obllg materials or equipment;
is assumed by the Owner under the Contract, and the delay Is not
to the fault or negligence by the Owner;
b) The Contractor repeatedly fails to make without just cause prompt
payments to subcontractors for labor, materials or equipment, and
th] Force majeure or fortuitous event;
completion of the Work is being delayed;
(i) Peace and order problems; or
c) The Contractor disregards the Laws or orders of any public body
having jurisdiction;
(I) Any condition similar to the above beyond the control of the Owner,
d) The Contractor otherwise violates in any substantial way any provision
The Contractor shall immediately comply with such order to suspend
of the Contract; or
work or any part thereof for such period or periods and in such manner
the Owner may direct, and during such suspension shall properly pr
e) Slippage of the Contractor in excess of 25% in the prosecution of work
and secure the Work.
per agreed construction schedule and/or PERT/CPM plus any UMII
adjustment duly granted to the Contractor.
The Contractor shall be entitled to an equitable adjustment of Comple
Time and Contract Price for suspension of work due to Items (a), [d],
The Owner may, after giving Contractor and his surety 15 days' written
[ 1)J, [I) & W. However, for Item [a), no such adjustment shall be allo
notice, terminate the services of the Contractor, exclude the Contractor
unsuitable weather conditions were taken into account in determining
from the site and take possession of the Work and of all the Contractor's
Completion Time as provided for in the Bid Documents. If the act
tools, appliances, construction equipment and machinery at the site and
number of days of unsuitable weather exceeds the period taken
use the same and incorporate into the work all materials and equipment
account in the Bid Documents, the Contractor shall be entitled to
stored at the site including those stored elsewhere for which the Owner has
adjustment of Completion Time and Contract Price.
paid the Contractor, and finish the work as Owner may deem expedient. In
such case the Contractor shall not be entitled to receive any further
ART. 28: OWNER'S RIGHT TO TERMINATE CONTRACT payment until the work is finished.
28.01 TERMINATION WITH CAUSE. The Owner may immediately terminate
28.03 TERMINATION WITHOUT CAUSE. Upon 15 days' written notice to the
Contract, without prior notice to the Contractor, upon the occurrence of
Contractor, the Owner may, without prejudice to any other right or remedy, elect
of the following events:
to abandon the work and terminate the Contract. In such case, the Contractor
shall be paid for all work executed and any expense sustained plus reasonable
a) If Contractor is adjudged bankrupt or insolvent;
termination costs.
b) If Contractor makes a general assignment of his assets for the be
of his creditors; ART. 29: OWNER'S RIGHT TO PROCEED WITH THE WORK AFTER REDUCTION IN
CONTRACTOR'S SCOPE OF WORK; PARTIAL TAKEOVER FROM
CONTRACTOR
29 01 OWNLIEll 1410111 TO CARRY OW THE WORK If the Contractor
Itepauledly fulls to supply sufficient skilled workmen or suitable motenolll
or equipment;
b) Repeatedly falls to make prompt payments to subcontractors for lebOf
materials or equipment;
c) Fails within a mutually agreed time after written notice of the Owner IC
carry out remedial or repair work;
d) Falls despite repeated remedial work to rectify the defects or the
result of remedial work does not conform to the specifications;
o) Fails 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 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 Tease
contract of the Contractor, shall have the option to retain them 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 0111
Contract, the Owner will ascertain and lix the value of the work
completed by the Contractor and not paid for by the Owner and of ell
usable materials of the Contractor taken over by the Owner et the Urns
of said termination.
a. If the cost to the Owner of completing the work, inclusive Of
reasonable administrative and managerial services and thi
charges against the project prior to termination of the Contract
are not in excess of the Contract Price, then the difference
between them 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.
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 his 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 h's 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; If
the Owner completes 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.
20. OOLIQUIDATED DAMAGES
1. Whore the Contractor refuses or falls to satisfactorily
complete the Work within the specified Contract time,
including any time adjustment duly granted, the Contraoto
shall pay the Owner liquidated damages In the amoun
stipulated In the Contract. Liquidated damages shall
accrue from the first day of delay in completing the Wo
until the date of substantial completion as determine
under Article 20.11.
2. To be entitled to such liquidated damages, the Owner dose
not have to prove that It has Incurred actual damages. Such,
amount shall be deducted from any money due or whioh
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.
30.02
3. In no case, however, shall the total sum of liquidated
damages exceed ten percent (10%) of the total contrao
price.
4. If, before the completion of.the whole of the Work, any part
or section of the Work has been 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.
SECTION IX
RESPONSIBILITIES AND LIABILITIES OF CONTRACTOR
AND OF OWNER
ART. 30: CONTRACTOR'S RESPONSIBILITY FOR ACCIDENTS AN
DAMAGES
30.03
30.01 SAFEGUARDS TO BE UNDERTAKEN BY CONTRACTOR: Th
Contractor shall take all necessary precautions for the safety o
employees and workmen on the work, and comply with all Laws to
prevent injury to persons on, about or adjacent to the premise/
where the Work is being performed. The Contractor shall erect and
properly maintain at all limes, es required by the condition and
progress of the work, such barriers, shoring, supports, braces, lights,
danger signs and necessary safeguards, as will protect workmen
and the public and as will effectively prevent any injury to persons
and damage to property in consequence of his work
The Contractor shall designate a responsible member of hie
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 the safety manual
approved by the Construction Industry Authority of the Philippines
(CIAP) .
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 his
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 his 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 him, for any act or
omission of said Contractor, or of his 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 his 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 claims, and deduct the entire cost of such repairs
and claims from the payments due the Contractor.
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.
M1. 31; CONTRACTOR'S MISIJNANGI ANt)
31.01 CONTRACTOR'S LIABILI Y INSURANCE the Contractor s
secure and maintain Insurance coverage from an Insurance com
acceptable to the Owner as will protect himself, his sub-contre0
and the Owner from claims for bodily injury, death or property d
which may arise from work under the Contract. The Contractor
not commence work under the Contract until he has obtained,
insurance coverage required and shall have filed the insurance
or the certified copy of the insurance policy with the Owner.
insurance policy shall contain a clause providing that It shall no
cancelled by the insurance company without written notice to
approval of the Owner. The nature, extent and amount of s
insurance coverage shall be as agreed upon between the Owner
the Contractor. The Contractor shall ensure that such insurance
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 workmen's
compensation law, obtain Insurance coverage for accidental death or
injury of his officers, employees and laborers without regard to their
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.
31.03 CONTRACTOR'S FIRE INSURANCE: In addition to such Fl
Insurance as the Contractor elects to carry for his work, he sh
secure and maintain the policies upon such structures and material
and in such amounts as shall be designated in the joint names of
Contractor and the Owner as their respective interest may appea
These policies shall be secured from a company which is satisfact
to the Owner and delivered to the Owner. A Contractor's All Risk Pol
or any insurance for third party liability of the Contractor shall
include the Owner as co-insured but as a third party.
31.04 CONTRACTOR'S PERFORMANCE AND PAYMENT BONDS: Th
Contractor, prior to signing the Contract, shall furnish a Performance
Bond equal to 15% of the Contract amount for the faithful perfordience
of his work and 15% bond covering Contractors obligations arising
from the Contract to its workers, subcontractors 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 Ob CONTRACTOR'S GUARANTEE BOND: The 'Rerformenee 1110 .
Payment Bonds will be released by the Owner upon posting by the
Contractor of a Guarantee Bond equivalent to the amount of Ihn
retention released to the Contractor. The Guarantee Bond shall be foi
a period of one (1) year commencing from ►he date of posting as a
guarantee that all materials and workmanship Installed under Ilia
Contract are of acceptable quality.
31.06 CONTRACTOR'S GUARANTEE-WARRANTY:
a. The Contractor shall, in case of work performed by his sub-
contractors and where guarantees are requirsd, secure
guarantees from said subcontractors 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 him 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 bo 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
his 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 his 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.
31.07 MANDATORY CONDITIONS OF BONDS
The bonds required of the Contractor shall be subject to the following
mandatory conditions which shall form part of said bonds.
A surety or bondsman Issuing any bond called for In the Contract le
(luointhl conclusively to have accepted the following mandatory
conditions, and 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 these
mandatory 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 or bondsman 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 or
bondsman 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 or bondsman 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 bondsman or 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 (a) it is cancelled by the Owner and returned to
the Contractor or (b) it Is replaced by another bond unless the
Owner reserves the right to recover against the former bond due
to default of the Contractor, or (c) 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 MO up and complete tip
remaining work. The Owners assistance to the Conic/Kim nlinll
not prejudice nor limit the right of the Owner to have a whit
recourse against the bond.
ART. 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 him
from liability for personal injury including disease and death of persons
under his 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 him from his 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.
ART. 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 subcontractors
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
subcontractors and/or suppliers. Should any of such claims remain
 unpaid as Of the time of executing the swum statement, or if the
Conflate( is unable to ha iish the Owner with proof of full payment to
any subcontractor 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
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 his 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. If the Owner finds 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 IBI above.
33.03. SUBCONTRACTING
A. The Contractor may subcontract any part of the Contract with the
approval of the Owner.
B. The Owner may require the Contractor as a condition for the approval
of the subcontract (1) that the subcontract shall be submitted to the
Owner and the subcontract must require the subcontractor to ebtain
the same bonds and insurance coverage as are required of the
Contractor under the Contract, and (2) that 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 Of
decided by the Owner may be entrusted by the Owner to hie
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. If the Contractor disagrees with the determination by the Owner
or by his representative, 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.
33.05 SETTLEMENT OF DISPUTES
A. DISPUTE OR DISAGREEMENT SUBMITTED TO 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) by panel of three (3) arbitrators
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
A party to the Contract shall, by entering into the same, be deemed 10
be submitting himself to the jurisdiction of the Construction Indust
Arbitration Commission with regard to any dispute arising out or I
connection with the Contract as provided in Article 33.05, paragraph
(Al above.
Such party shall be served with the claim referred to in Article 34.05,
paragraph (A] and other notices and processes incident thereto upon
such claim being served upon or filed with his co-venturer, partner Of
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, his functions, those functions of a Construction Manager not deans
unless tin has filed with the Construction Industry Arbitration the latter shall be performed by the Owner's Representative
Commission an irrevocable special power of attorney authorizing
enothor person or entity to receive by personal service at a definite Notwithstanding the designation by the Owner of an Architect, a
address in Metro Manila, Philippines, such claim, notice and and/or Construction Manager. communications between the Cont
processes. In case a party, his co-venturer, or authorized the Owner shall be made only through the Owner's Representative,
representative declines service of such claim, notice or process or
cannot be found at his given address such service shall be made upon yj SECTION XI
the said party by filing the same with the Construction Industry
Authority of the Philippines (CIAP) at its office address, and filing the SCHEDULE OF TIME LIMITS
claim, notice or process shall complete the service upon the party
concerned. The Contractor shall perform his work subject to certain Time Limits. This I
SECTION X section, as based on the entire General Conditions, is provided for in order to fa
the execution of his work.
OWNER'S REPRESENTATIVE
REFERS
NO. TITLE TIME LIMIT
ARTICLE
ART. 34: The Owner's Representative shall either be the Architect, the Engineer,
Construction Manager or other person designated by the Owner as the 1. CONTRACT TIME
Owner's Representative.
1.1 Contract Time The Contractor shall commence 21.02
The Owner's Representative shall have the full authority to act for and on Reckoning the Work within seven (7) days
behalf of the Owner in all matters which under the Contract the Owner shall from receipt of Notice to Proceed
give his consent, approval or decision. (NTP) unless NTP provides for a
1.2 Request for Time later date
The Owner shall give the Contractor at the time of the Notice to Proceed or Extension 21.04
any time thereafter the notice of appointment of the Owner's To be filed within fifteen (15) days
Representative. Unless the Contractor is notified in writing by the Owner of from occurrence of event which
the limits of authority of the Owner's Representative, it shall be understood caused delay. (par. B)
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
a CON I RAC I SUM 4. SUBSTANTIAL SubstentleI completion Is 20.11
COMPLETION and Its attained If
2.1 Breakdown of To be submitted within fifteen (15) EFFECTS the Contractor completes ninety
Work & days from the receipt of Notice to five per cent (96%) of the works;
Corresponding Proceed or the Owner approves the
Value Contractor's billing for
completing at least 96% of the
2.2 Claim for Extra Notice to he given to Owner within works unless the Owner can
Cost fifteen (15) days establish that the unfinished
portion prevents the normal use
(1) after receipt of instruction of the completed portion [par. A
involving extra cost , or (a) & (b)].
(2) after recognition of delay
due to Owner's fault. The Owner may Issue a
Certificate of Substantial
Completion or equivalent
document but the date of
document is not controlling If
PROGRESS/FINAL substantial completion is shown
PAYMENT to have been attained earlier,
unless the Contractor accepts
3 1 Owner's Action on To be made within thirty 30 days the certificate without taking any
Payment Request exceptions thereto in writing
after receipt of request for
within fifteen (15) days from
payment
3 2 Owner's Action on receipt of the certificate [par. A
(c)).
Final Payment To act within thirty (30) days from
Request receipt of the request for payment.
5. CORRECTION OF
3.3 Delayed Payment
WORK
Delay in payment of the
amount due shall entitle the
5.1 Issuance of The Owner shall issue the punch 20.11
Contractor io interest from due
Punch List list/s which the Contractor must
date based on the (thirty) 30
day loan rate of the Land Bank receive not later than thirty (30)
of the Philippines days from date of substantial
completion [par C (a)].

I REFERENCE The Owner may add to the

NO. TITLE TIME LIMIT
ARTICLE NO. punch list items but only as to
corrective work in the original
3.4 Release of To be released rot later than sixty punch list/s not later sixty (60)
Retest on (60) days from substantial days from substantial
completon upon posting of 5.1 Correction Before completion [par. C (b)]. 22.10
Contractors Guarantee Bond. or After Final
_
 Payment Pool or infnuMi work, apparent
upon inspection to be condemned
& Contiado' notified to enable him
to correct, remove & replace the
sumo. 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.
Nu. MILE
TIME LIMIT
5,2 Making Good of
Thirty (30) days from receipt by the
Known
Contractor of. the last item in the
Defects
punch list
1,.. ONTRACTOR'S Contractor may suspend work or
RIGHT TO SUSPEND terminate Contract upon 15 days
WORK OR written notice to Owner, for any of
I ERMINATE the following reasons:
CONTRACT
(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
miolpitiont, for work Ilion('
the critical path beyond
fifteen (16) 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
REFERENCE
ARTICLE NO. 7. OWNER'S RIGHT TO May be done immediately and
20.12 TERMINATE without notice if Contractor should:
CONTRACT
20.13 (1) Declare bankruptcy, become 28.01
insolvent or assigns his
assets for the benefit of his
26 creditors or appointment of
trustee/receiver for
Contractor or any of its
property.
May be done after giving fifteen (5)
days written notice to Contractor or
to his Surety if Contractor should:
REFERENCE
NO. TITLE TIME LIMIT
ARTICLE NO.
Disregard or violate provisions 28.02
of the Contract Documents or
Owner's instructions;
Fail to provide skilled
superintendent, workmen or
suitable materials or
equipment;
Fail to make prompt payment
to sub-contractors, for labor or
materials or equipment;
Disregard the authority of the
Owner's Representative;
Violates in any substantial
way any provisions of the
Contract Documents
 (6) Raptatadlicitgays
prosecution of work per
agreed Construction
Schedule and/or PERT/CPM
plus any time *Mansion
duly granted the
Contractor
PUTES The Owner or his representative
shall act within a period of fifteen
(16) days on all matters undor 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 16 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.
;UARANTEE BOND To be furnished the Owner upon
release of retention and shall be
I Contractor's effective for a period of one year
Guarantee Bond commencing from the date of
acceptance as a guarantee that all
materials and workmanship installed
are of good quality.
tfr
Mi MONANIMM AGM I MI NI
I hill MOM0114011111” of Agreement made end executed by
PHILIPPINE CONSTRUCTORS ASSOCIATION, INC, ("PCA"), a non-stock, net
profit corporation organized end existing under the laws of the Republlo of Use
Philippines, with principal office at the 3/F Padilla Bldg.. Emerald Avenue. Oillges
Commeicial Center, Pasig City;
PHILIPPINE INSTITUTE OF CIVIL ENGINEERS, INC. rPICE"), a non-stook, non-
profit corporation organized and existing under the laws of the Republic of the
Philippines, with principal office at Unit 701.705 Futurepoint Plaza Condominium,
112 Panay Ave.. Quezon City;
SOCIETY OF PHILIPPINE ACCREDITED CONSULTANTS (SPAC), a non-stock,
non-profit corporation organized and existing under the laws of the Republic of the
Philippines, with principal office at 81F Rm. 813 Futurepoint Plaza Condominium,
112 Panay Avenue. Quezon City;
CONFEDERATION OF FILIPINO CONSULTING ORGANIZATIONS, INC.
(COFILCO), a non-stock, non-profit corporation organized and existing under the
laws of the Republic of the Philippines, with principal office at 602 Manila Luxury
Condominium, Pearl Drive, Ortigas Complex, Pasig City;
PHILIPPINE CHAMBER OF COMMERCE AND INDUSTRY, INC. ("PCCI"), a non
stock, non-profit corporation organized and existing under the laws of the Republic
of the Philippines, with principal office at 14/F Multinational Bancorporation Building.
8805 Ayala Avenue, Makati City;
CONSTRUCTION PROJECT MANAGEMENT ASSOCIATION OF THE
PHILIPPINES ("CPMAP"), a non-stock, non-profit corporation organized and
existing under the laws of the Republic of the Philippines, with principal office at 6/F
JAKA II Bldg.. 150 Legaspi St., Legaspi Village, Makati City;
UNITED ARCHITECTS OF THE PHILIPPINES ("UAP"), a professional association.
organized and existing under the laws of the Republic of the Philippines, with
principal office at 53 Scout Ratios St. Quezon City:
CHAMBER OF REAL ESTATE & BUILDERS ASSOCIATION, INC. ("CREBA"), a
professional association organized and existing under the laws of the Republic of
the Philippines, with principal office at 3/F CREBA Bldg., Don Alejandro Roces
Avenue corner South A St., Quezon City;
PHILIPPINE INSTITUTE OF CONSTRUCTION ARBITRATORS, INC. ("PICA"), a
non-stock, nonprofit corporation organized and existing under the laws of the
Republic of the Philippines, with principal office at Penthouse, Atheneum Building,
160 L.P. Leviste Street, Salcedo Village, Makati City;
CONSTRUCTION INDUSTRY AUTHORITY OP THE PHILIPPINIS ("CIAP"), n
government @gamy Oreldad by ProWendel Decree 1740 and on oltoolled agency
to the lloponmont of Tiede and Indsutry, with principal Once at 44 Jupiter 1
Buikling, No 50 Jupiter St , Bel•Arr Wager, Mahan City ,
WITNESSETH: That •
WHEREAS, the Uniform General Conditions of Contract for Private Construction,
otherwise known as CIAP Document 102 was formulated by a committee composed
of various professional groups in the industry created by the CIAP Board;
WHEREAS, a Memorandum of Agreement on the adoption and use of CIAP
Document 102 was entered by and between the CIAP UAP, PICE, PCCI, CPMAP,
CREBA, PICA and PCA on August 14, 1997;
WHEREAS, in pursuit of the Construction Industry Strategic Plan for the 21st
Century (CI 21), the CIAP conducted a survey.sometime in 2001 on contractual
problems encountered by contractors, project owners and consultants in the
implementation of construction projects with the view of revising the CIAP
Document 102, to incorporate prevailing best practices in the industry and attune
the document to the needs of the changing times;
WHEREAS, the Committee on CIAP Document was reconvened in May 2002, with
an expanded membership (SPAC & COFILCO), to discuss and introduce
amendments to tho documents, based on the issues Identified in the survey;
WHEREAS, said committee has completed its work and has subjected this to
consultations with and among the professional organizations in the Industry and the
Philippine Domestic Construction Baord (PDCB) which endorsed to the CIAP Board
on 21 May 2004:
WHEREAS, the CIAP, in its 43rd Regular Board Meeting held on 29 June 2004,
passed Resolution No. 15. series of 2004, approving the proposed amendments to
CIAP Document 102;
NOW, THEREFORE, for and in consideration of the foregoing premises, the PCA,
PICE, SPAC. COFILCO. PCCI, CPMAP, UAP, CREBA, PICA and CIAP hereby
agree as follows:
1 To adopt the approved amenclments, to CIAP Document 102
contained in Annex A attached hereto and made an integral part of
this agreement
2 To provide for the prompt and complete dissemination and widest
circulation of CIAP Document 102 and all subsequent amendments
thereto to the members of each signatory organization and to the
general public, morn particularly to all persons or firms involved in
construction as project ownery designers, project managers, project
consultants, architects, engineers, oontreeters and SU
3. To recommend, promote and encourage the use et CIAI
102, as amended, to project owners, es was es to their
and the clients of their members, as general conditions
construction contracts;
4. To conduct seminars to Inform and educate their mom
as project owners, designers, project managers, project
architects, engineers, contractors and subcontrade
Importance of adopting this document and faithfully adh
provisions in private construction contracts;
5. For PCA, PICE, SPAC, COFILCO, PCCI, CPMAP, UAP,
and PICA to monitor prompt and strict compliance
Memorandum respecting the use of CIAP Document 102
conditions in their private construction contracts, and
sanctions whenever proper in accordance with the ru
respective organizations, and for each of them to report
periodically as CIAP may request, compliance
Memorandum of Agreement and action taken against
members; and
6. For PCA, PICE, SPAC, COFILCO, PCCI, CPMAP, UAP,
and PICA to submit such recommendations to CIAP for a
changes in CIAP Document 102 as they or their mem
believe to be necessary in order to insure fairness a
parties involved in any construction activity.
IN WITNESS WHEREOF, the parties hereto have caused
this Memorandum of Agreement by their respective authorized
this el'h day of October 2004 at Makati City, Philippines.
PHILIPPINE CONSTRUCTORS PHILIPPINE CHAMBER
ASSOCIATION, INC. COMMERCE AND INDU
By: By:
EMILI UMBOCON NOEMI L. SALUDO
President President
SOCIETY OF THE PHILIPPINE CONFEDERATION OF Fl
ACCREDITED CONSULTANTS CONSULTING ORGANIZA
By. By:
LEn ENIRA AB
President President
UNITED ARCHITECTS OF TTIE PHILIPPINE INSTITUTE OP
PHILIPPI INC. CIVIL ENGINEERS
By: By.

ONAN PE R Ne.aTAJADOe0ae.
President Pr t

CONSTRUCTION PROJECT MANAGEMENT PHILIPPINE INSTITUTE OF CONSTRUCTION

ASSCCIATION OF THE PHILIPPINES ARBITRATORS, INC.
By: By:

FELIC AS . O ROOK IISE . EV ELISTA

Presid nl President

CHAMBER OF REAL ESTATE CONSTRUCTION INDUSTRY

& BUILDERSS ASSO., INC. AUYHORITyIOF THE PHILIPPINES
By: By.

PURITA L SOLIVEN
President
• • int r ., refer firtr ;war tirrr ;ogre 101:
.,
-lc
PI
PIC
‘IC

-E