CLAIMS, DISPUTES, AND ARBITRATION

RULE XVII – PROTEST MECHANISM

Section 55. Protests on Decisions of the BAC

55.1 Decisions of the BAC at any stage of the procurement process may be questioned
by filing a request for reconsideration within the three (3) calendar days upon receipt of
written notice or upon verbal notification. The BAC shall decide on the request for
reconsideration within seven (7) calendar days from receipt thereof. The bidder shall not
be allowed to submit additional documents to correct any defects in the bid submitted. If
a failed bidder signifies his intent to file a request for reconsideration, the BAC shall
keep the bid envelopes of the said failed bidder unopened and/or duly sealed until such
time that the request for reconsideration has been resolved.

55.2 In the event that the request for reconsideration is denied, decisions of the BAC
may be protested in writing to the HoPE: Provided, however, That a prior request for
reconsideration should have been filed by the party concerned in accordance with the
preceding Section, and the same has been resolved.

55.3 The protest must be filed within seven (7) calendar days from receipt by the party
concerned of the resolution of the BAC denying its request for reconsideration. A protest
shall be made by filing a verified position paper with the HoPE concerned, accompanied
by the payment of a non-refundable protest fee, which shall be paid in cash in
accordance with the following schedule:

ABC RANGE PROTEST FEE

₱50 million and below 0.75% of the ABC
More than ₱50 million to ₱100 ₱500,000.00
million
More than ₱100 million to ₱500 0.5% of the ABC
million
More than ₱500 million to ₱1 billion ₱2,500,000.00
More than ₱1 billion to ₱2 billion 0.25% of the ABC
More than ₱2 billion to ₱5 billion ₱5,000,000.00
More than ₱5 billion 0.1 % of the ABC

55.4 The verified position paper shall contain the following information:
a) The name of bidder;
b) The office address of the bidder;
c) The name of project/contract;
d) The implementing office/agency or Procuring Entity;
e) A brief statement of facts;
f) The issue to be resolved; and
 g) Such other matters and information pertinent and relevant to the proper
resolution of the protest.

The position paper is verified by an affidavit that the affiant has read and understood the
contents thereof and that the allegations therein are true and correct of his personal
knowledge or based on authentic records. An unverified position paper shall be
considered unsigned, produces no legal effect, and results to the outright dismissal of
the protest.

In addition, the bidder shall likewise certify under oath that:

a) he has not theretofore commenced any action or filed any claim involving the
same issues in any court, tribunal or quasi-judicial agency and, to the best of
his knowledge, no such other action or claim is pending therein;
b) b) if there is such other pending action or claim, he is including a complete
statement of the present status thereof; and
c) c) if he should thereafter learn that the same or similar action or claim has
been filed or is pending, he shall report that fact within five (5) days therefrom
to the HoPE wherein his protest is filed
Failure to comply with the foregoing requirements shall not be curable by mere
amendment of the verified position paper.

Section 56. Resolution of Protests

The protests shall be resolved strictly on the basis of records of the BAC. The HoPE
shall resolve the protest within seven (7) calendar days from receipt thereof. Subject to
the provisions of existing laws on the authority of Department Secretaries and the heads
of agencies, branches, constitutional commissions, or instrumentalities of the GoP to
approve contracts, the decisions of the HoPE concerned shall be final up to the limit of
his contract approving authority. With respect to LGUs, the decision of the local chief
executive shall be final.

Section 57. Non-interruption of the Bidding Process

In no case shall any protest taken from any decision treated in this Rule stay or delay
the bidding process: Provided, however, That protests must first be resolved before any
award is made.

Section 58. Resort to Regular Courts; Certiorari

58.1 Court action may be resorted to only after the protests contemplated in this Rule
shall have been completed, i.e., resolved by the HoPE with finality. The regional trial
court shall have jurisdiction over final decisions of the HoPE. Court actions shall be
governed by Rule 65 of the 1997 Rules of Civil Procedure.
58.2 This provision is without prejudice to any law conferring on the Supreme Court the
sole jurisdiction to issue temporary restraining orders and injunctions relating to
Infrastructure Projects of the GoP.

58.3 The head of the BAC Secretariat of the Procuring Entity concerned shall ensure
that the GPPB shall be furnished a copy of the cases filed in accordance with this
Section.

RULE XVIII – SETTLEMENT OF DISPUTES

Section 59. Arbitration

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

59.2 Any and all disputes arising from the implementation of a contract covered by the
Act and this IRR shall be submitted to arbitration in the Philippines according to the
provisions of R.A. 876, otherwise known as the "Arbitration Law" and R.A. 9285,
otherwise known as the “Alternative Dispute Resolution Act of 2004”: Provided,
however, That disputes that are within the competence of the Construction Industry
Arbitration Commission to resolve shall be referred thereto. The process of arbitration
shall be incorporated as a provision in the contract that will be executed pursuant to the
provisions of the Act and this IRR: Provided, further, That by mutual agreement, the
parties may agree in writing to resort to other alternative modes of dispute resolution.

Who can be accredited as arbitrators?

People from the government and the private sectors who meet the technical
requirements set by the CIAC shall be accredited and appointed by the CIAC as
arbitrators.

How many arbitrators may settle a dispute?

A single arbitrator or an arbitral tribunal of three (3) arbitrators may settle a
dispute.

What is the procedure for choosing or appointing the arbitrators?

 Sole Arbitrator - where the parties have agreed that the dispute(s) shall be
settled by a sole arbitrator, each shall nominate at least six (6) from the list of
CIAC-accredited arbitrators. The CIAC shall appoint the common nominee of the
parties. If there is no common nominee, the parties shall be asked to agree on a
common nominee within forty-eight (48) hours otherwise, the CIAC shall appoint
either a Sole Arbitrator who is not a nominee of any of the parties or, if it deems it
necessary, the members of the Arbitral Tribunal.
 Arbitral Tribunal - where the parties have agreed that the dispute(s) shall be
settled by an arbitral tribunal, each party nominates at least six (6) arbitrators
 from the list of arbitrators accredited by the CIAC. The CIAC then appoints one
arbitrator from the claimant's nominees and another from the respondent's list.
The third arbitrator shall be agreed upon by the two arbitrators first appointed.
The three shall decide from among themselves who shall be the chairman.
Common nominees shall be appointed

Construction arbitration shall cover, among others, dispute(s) arising from:

1. Violations of specifications for materials and workmanship;
2. Violations of terms of the agreement;
3. Interpretation and/or application of contractual provisions;
4. Commencement time and delays;
5. Maintenance and defects;
6. Payment defaults of employer or contractor; and
7. Changes in contract costs.

*The Disputes under the competence of the Construction Industry Arbitration

Commission are as follows*

 There may be defects and loopholes in the contract document. For example, the
contract document may not be clear, may have dual meanings at different
places, or may not have sufficient details.
 There may be a delay in the release of areas as per the contract. Besides, site
conditions differ to a large extent from those described in the contract document.
 The owner may desire to get the work done at a faster pace than is required by
the contract document.
 There may be a delay in the supply of power, water, and other materials from the
owner.
 There may be a hold on works due to a delay in the release of drawings and
other inputs.
 There may be a delay in the release of payments to the contractor.
 The scope of work may be substantially modified by the owner.
 There may be a levy of liquidated damages (LD) on the contractor. Other
recoveries from bills may also lead to the contractor making the claim.
 There may be a delay on the part of the contractor in the completion of works
due to inadequate mobilization of labor, material, and plant.
 There may be a loss of profit and investment for the owner due to delays caused
by the contractor.
 Construction claims can also arise on account of inclement weather.

Section 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 the Court.