Cmpm (Ch.

7)

Article 415 of Republic Act No. 386, also known as the Civil Code of the
Philippines, enumerates the properties considered as immovable or real property:
Article 415. The following are immovable property:

(1) Land, buildings, roads, and constructions of all kinds adhered to the soil;
(2) Trees, plants, and growing fruits, while they are attached to the land or form
an integral part of an immovable;
(3) Everything attached to an immovable in a fixed manner, in such a way that it
cannot be separated therefrom without breaking the material or deterioration of the
object;
(4) Statues, reliefs, paintings, or other objects for use or ornamentation, placed
in buildings or on lands by the owner of the immovable in such a manner that it
reveals the intention to attach them permanently to the tenements;
(5) Machinery, receptacles, instruments or implements intended by the owner of the
tenement for an industry or works which may be carried on in a building or on a
piece of land, and which tend directly to meet the needs of the said industry or
works;
(6) Animal houses, pigeon-houses, beehives, fish ponds or breeding places of
similar nature, in case their owner has placed them or preserves them with the
intention to have them permanently attached to the land, and forming a permanent
part of it; the animals in these places are included;
(7) Fertilizer actually used on a piece of land;
(8) Mines, quarries, and slag dumps, while the matter thereof forms part of the
bed, and waters either running or stagnant;
(9) Docks and structures which, though floating, are intended by their nature and
object to remain at a fixed place on a river, lake, or coast;
(10) Contracts for public works, and servitudes and other real rights over
immovable property.

In summary, immovable property refers to land and everything that is permanently

attached or affixed to it, as well as other types of property enumerated in the
article above. This type of property is also known as real property or real estate.

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Republic Act No. 4566, also known as the Contractor's License Law, requires
contractors to secure a license from the Philippine Contractors Accreditation Board
(PCAB) before engaging in contracting activities in the country. The law was
amended by Presidential Decree No. 1746, which added new provisions to the
licensing requirements. Below are the general requirements for licensing under R.A.
4566 as amended by P.D. 1746:
1. Proof of Filipino citizenship or proof of compliance with the
requirements of the Foreign Investment Act, if applicable.
2. Submission of a notarized application form for a contractor's license.
3. Payment of the prescribed fees.
4. Compliance with the minimum capitalization requirements, which vary
depending on the type of contracting activities to be undertaken.
5. Submission of audited financial statements for the preceding year.
6. Submission of a statement of current work on hand, including a
description of the nature, value, and location of each project.
7. Submission of a list of completed contracts during the preceding three
years, including the name and address of the owner, type of work, contract price,
and completion date.
8. Submission of a list of equipment owned or leased by the contractor,
indicating the type, capacity, and condition of each item.
9. Certification of technical personnel, including architects, engineers,
and other professionals, who will be engaged in the contracting activities.
 10. Proof of the contractor's compliance with social security and other
labor laws.
11. Certification of compliance with the occupational safety and health
standards.
12. Compliance with other requirements that may be prescribed by the PCAB.

The specific requirements and procedures for licensing may vary depending on the
type of contracting activities to be undertaken and the category of the contractor.
It is recommended to consult the PCAB or seek legal advice for more information on
the licensing process.

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Public construction contracts in the Philippines are covered by several laws,

including the Procurement Law, which sets the standards and procedures for the
procurement of goods, works, and services by the government. Some of the laws
covered under the Procurement Law with regards to public construction contracts
are:
1. Republic Act No. 9184 or the Government Procurement Reform Act - This
law provides for the modernization, standardization, and regulation of procurement
activities in the government. It covers the procurement of goods, infrastructure
projects, and consulting services.
2. Presidential Decree No. 1594 or the Revised Government Auditing Code of
the Philippines - This law provides for the audit of government transactions,
including public construction contracts, to ensure that they are legal, regular,
and in accordance with the laws and regulations.
3. Republic Act No. 10149 or the Government Procurement Policy Board
(GPPB) Reform Act - This law reorganizes the GPPB, which is responsible for the
policy and technical aspects of government procurement. The GPPB sets the standards
and guidelines for the procurement of goods, works, and services.
4. Republic Act No. 6957 or the Build-Operate-Transfer (BOT) Law - This
law allows private entities to finance, construct, and operate public
infrastructure projects. It covers BOT agreements, which involve the transfer of
ownership of the infrastructure project to the government after a certain period.
5. Republic Act No. 7718 or the Philippine BOT Law - This law provides for
the implementation of BOT projects, including the procedures for bidding and
awarding BOT contracts.
6. Republic Act No. 8974 or the Right of Way Act - This law provides for
the acquisition of right-of-way properties needed for infrastructure projects. It
covers the determination of just compensation, the procedures for the acquisition
of the properties, and the settlement of disputes.

These laws provide the framework for the procurement of public construction
contracts in the Philippines, with the aim of ensuring transparency,
accountability, and efficiency in the process. It is important for contractors,
suppliers, and other stakeholders to be familiar with these laws to comply with the
requirements and avoid legal and financial risks.

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The Implementing Rules and Regulations (IRR) of Republic Act No. 9184 or the
Government Procurement Reform Act provides for the specific provisions for
infrastructure projects with regards to the following:

i. Variation Order - The variation order is a written order by the procuring entity
directing the contractor to vary or modify the work under the contract. The IRR
provides that the variation order must be issued by the procuring entity and must
be based on valid and justifiable grounds. The contractor must submit a proposal
for the cost and time implications of the variation order, which must be evaluated
by the procuring entity before the variation order is approved.

ii. Additional/Extra Work Costing - The IRR provides that the additional or extra
work costing must be based on the prevailing market prices of labor, materials, and
equipment, as well as other costs directly related to the work. The procuring
entity must evaluate the proposed costing submitted by the contractor, and the
final cost must be approved by the head of the procuring entity.

iii. Conditions under which contractor is to start work under variation orders and
receive payments - The contractor may start the work under the variation order only
after receiving a written order from the procuring entity. The contractor is
entitled to receive payment for the work done under the variation order based on
the approved additional or extra work costing.

iv. Advance Payment - The IRR allows for advance payment to the contractor up to a
maximum of 15% of the contract amount for the procurement of materials, supplies,
and equipment that will be used in the implementation of the contract. The advance
payment must be covered by a performance security.

v. Progress Payment - The progress payment is the payment made to the contractor
based on the work accomplished in accordance with the contract schedule. The IRR
provides that the progress payment must not exceed 90% of the contract amount and
must be supported by the necessary documentation, such as inspection reports and
progress billing statements.

vi. Retention Money - The retention money is the amount withheld by the procuring
entity from the progress payment as a guarantee for the satisfactory completion of
the contract. The IRR provides that the retention money must not exceed 10% of the
progress payment and must be released to the contractor upon completion of the
contract and after the defects liability period.

vii. Contract Completion - The contract is considered completed when the contractor
has fully delivered the works, goods, or services in accordance with the contract
schedule and the required quality standards. The IRR provides that the procuring
entity must issue a certificate of acceptance upon the completion of the contract.

viii. Liquidated Damages - The liquidated damages are the damages that the
contractor must pay to the procuring entity for the delay or non-completion of the
contract. The IRR provides that the liquidated damages must not exceed 10% of the
contract amount per day of delay and must be based on a reasonable estimate of the
damages that the procuring entity will suffer due to the delay.

ix. Suspension of Work - The suspension of work is the temporary stoppage of the
work under the contract due to various reasons, such as force majeure, changes in
the scope of work, or non-performance by the contractor. The IRR provides that the
procuring entity may suspend the work under the contract by issuing a written
notice to the contractor, and the contractor must resume the work within the
specified period after the lifting of the suspension.

x. Extension of Contract time - The extension of the contract time may be granted
to the contractor under certain circumstances, such as force majeure, changes in
the scope of work, or other justifiable reasons. The IRR provides that the
procuring entity may grant the extension of the contract time by issuing a written
notice to the contractor, and the extension must be based on

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CIAC can stand for Construction Industry Advisory Council. It is a group of

professionals from various sectors of the construction industry who come together
to provide guidance, advice, and recommendations to project owners, contractors,
and other stakeholders.

CIAC members typically have expertise in areas such as architecture, engineering,

construction management, finance, and law, among others. They may offer insights on
issues such as project planning, design, cost management, scheduling, risk
management, and sustainability.

The role of CIAC in a construction project can vary depending on the specific
project and the needs of the stakeholders. In some cases, CIAC may be established
to provide ongoing guidance and oversight throughout the project lifecycle. In
other cases, CIAC may be brought in to provide targeted advice or recommendations
on specific issues that arise during the project.

Overall, the goal of CIAC in a construction project is to help ensure that the
project is completed on time, on budget, and to the satisfaction of all
stakeholders involved. By leveraging the collective knowledge and expertise of its
members, CIAC can provide valuable insights and recommendations that can help
mitigate risks, address challenges, and improve the overall success of the project.

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Arbitration in construction projects is a dispute resolution process in which an

impartial third party, called an arbitrator, is appointed to resolve disagreements
between the parties involved in the construction project.

Arbitration is an alternative to going to court and is often used as a faster, more

cost-effective, and less formal means of resolving disputes in the construction
industry. The arbitrator is usually an experienced construction professional with
expertise in the area of dispute, such as a lawyer, an engineer, or an architect.
Arbitration in construction projects typically involves the following steps:
1. Agreement to arbitrate: The parties involved in the construction
project agree to resolve disputes through arbitration by including an arbitration
clause in their contract.
2. Selection of arbitrator: The parties agree on a neutral arbitrator,
often with experience in construction disputes.
3. Pre-hearing conference: The arbitrator meets with the parties to
discuss the issues in dispute, clarify the process, and establish a timeline for
the arbitration.
4. Hearing: The parties present their evidence and arguments to the
arbitrator at a hearing, which is less formal than a court proceeding.
5. Decision: The arbitrator renders a binding decision, which is
enforceable by a court.

Arbitration in construction projects can be used to resolve a variety of disputes,

including claims for extra work, delays, defects, and payment disputes. It is often
considered a more efficient and cost-effective way to resolve disputes than going
to court, as it typically takes less time and is less formal.

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1. What is CIAC in construction project?

⁃ In a construction project, CIAC can stand for Construction Industry
Arbitration Commission. It is an alternative dispute resolution organization that
specializes in resolving construction-related disputes. CIAC provides a fast and
efficient means of resolving disputes that arise during the construction process,
including disputes between owners, contractors, subcontractors, and suppliers.
2. What is arbitration in construction project?
⁃ Arbitration in construction projects is a dispute resolution process in
which an impartial third party, called an arbitrator, is appointed to resolve
disagreements between the parties involved in the construction project. The
arbitrator is usually an experienced construction professional with expertise in
the area of dispute. Arbitration is often used as a faster, more cost-effective,
and less formal means of resolving disputes in the construction industry.
3. What is the jurisdiction of CIAC?
⁃ CIAC has jurisdiction over disputes arising from construction
contracts, including claims for payment, defects, delays, and other issues related
to construction projects. CIAC is authorized to hear disputes arising from
contracts between owners, contractors, subcontractors, and suppliers.
4. What are the steps taken in CIAC to resolve construction disputes?
⁃ The steps taken in CIAC to resolve construction disputes typically
include:
1. Filing of the request for arbitration: The party requesting arbitration
files a request with CIAC, outlining the dispute and the relief sought.
2. Appointment of arbitrator: CIAC appoints a neutral arbitrator with
experience in the construction industry.
3. Preliminary conference: The arbitrator schedules a preliminary
conference with the parties to discuss the dispute and establish a timeline for the
arbitration.
4. Exchange of information: The parties exchange information and evidence
related to the dispute.
5. Hearing: The parties present their evidence and arguments to the
arbitrator at a hearing, which is less formal than a court proceeding.
6. Decision: The arbitrator renders a binding decision, which is
enforceable by a court.
Overall, CIAC provides a streamlined and efficient process for resolving
construction disputes, allowing parties to avoid lengthy and costly court
proceedings.