ATTN: MR.

ERIC BADILLO

Senior Vice President Finance

Lyceum of the Philippines- Batangas

THRU: MS. MALOU L. MAGADIA

Purchasing Director, LPU-B

Dear Sir Eric,

I hope this message finds you well. I am writing to address the matter concerning the project
management fee for the Project Management Team assigned to the construction of the Mock Aircraft
Facility project.

During our meeting with Dive Industries Phils., Inc., the contractor for the project, it was emphasized
that they would be responsible for covering the Project Management Fee starting March 2021 to May
2021. This decision was made due to the significant delay in project completion, which was a result of
their actions. In exchange for this responsibility, we granted them a final time extension until May 15,
2021.

However, despite the agreed-upon extension, the project was unable to reach its final completion
date due to various reasons and the contractor's failure to deliver the project as agreed. This has led
to ambiguity regarding the party responsible for shouldering the project management fee until the
project's completion. The project had only achieved a substantial completion rate of 95% on March
16, 2022.

On another note, the grounds for imposing Liquidated Damages are clearly outlined in the original
contract and the change order NTP, both of which were agreed upon and signed by both the owner
and the contractor. The contract explicitly states that Liquidated Damages shall amount to 1.5% of the
Total Contract Amount for each calendar day of delay. While the industry standard for Liquidated
Damages in a typical construction project is 1/10 of 1% of the Total Contract Amount, with a maximum
of 10%, the agreed-upon and signed contract should take precedence. Therefore, the owner's decision
to pass down the PMT Fee to the contractor should be considered valid and not perceived as a double
penalty.

In the end, the contract holds legal weight, and the decision to pass down the Project Management
Team fee to the contractor or bear it themselves as a kind consideration is within the Owner's
discretion.

Please let me know if you require any further clarification.

Best regards,

FIEHL AMOR R. LAROZA

Civil Engineer