ENGR. CIRILO C.

OLMOGUEZ
Proprietor
CCO Engineering Construction & Supply
5th Floor, F. Inigo St., Davao City

Dear Engr. Olmoguez:

This has reference with the implementation of the project Electrical System
Upgrading of ERDB-CRERDEC Building in Minglanilla, Cebu with approved contract
amounting to Php 4,051,354.41.

We understand that through your own initiative to expedite the testing, you
have transacted with CEBECO for the installation of poles and primary lines including
hangers for the transformers primary side and energization of transformer (supply of
current for both branches load and primary side from point of connection) which
resulted to a variation in the contract in the amount of Php 476,970.55.

Annex “E” of the 2016 Revised Implementing Rules and Regulations of

Republic Act 9184 provides that Variation Orders may be issued by the procuring
entity to cover any increase/decrease in quantities, including the introduction of
new work items that are not included in the original contract or
reclassification of work items that are either due to change of plans, design or
alignment to suit actual field conditions resulting in the disparity between the
preconstruction plans used for purposes of bidding and the “as staked plans” or
construction drawings prepared after a joint survey by the contractor and the
Government after award of the contract, provided that the cumulative amount
of the positive or additive Variation Order does not exceed ten percent
(10%) of the original contract price.

Furthermore, that Variation Orders must conform to the following conditions:

1. That there will not be any short changes in the original design;
2. That it will not affect the structural integrity and usefulness of the
structure; and
3. That it is covered by a Certificate of Availability of Funds (CAF) .

Here, the Variation Order was made to introduce new work items that are not
included in the original contract. Such installation amounted to FOUR HUNDRED
SEVENTY SIX THOUSAND NINE HUNDRED SEVENTY AND 55/100 (PHP
476,970.55).

College, Laguna, Philippines

Tel. Nos. (049) 5363628; 5362229; 536226; Fax No. (049) 5362850
Email: erdb@denr.gov.ph
 Consistent with the provision of the law, the cumulative amount of the
Variation Order must not exceed 10% of the original contract price. The original
contract amount is Php 4,051,354.41, hence, it is imperative that the cumulative
amount of Variation Order must not exceed the 10% of the original contract price, or
Php 405,135.441. However, such payment must conform with the Agency’s
availability of funds.

In the certificate of availability of funds provided by the Budget Section, and

as certified by the Accounting Section of the Bureau ( attached as Annex A), the
remaining budget for the same amounts to_______________. Hence, as much as
we want to pay the full amount of the variation order, we would like to inform you
that we can only pay the Php 397,944.00 based on available savings generated from
capital outlay.

Premises being considered, the Bureau would like to negotiate with regard to
the payment of the amount to be reimbursed, subject to our availability of funds.
Nonetheless, the Bureau extends its utmost gratitude for your continued support
and envisions to have more engagement with you in the future. More power.

Very truly yours,

MARIA LOURDES G. FERRER, CESO III

Director

College, Laguna, Philippines

Tel. Nos. (049) 5363628; 5362229; 536226; Fax No. (049) 5362850
Email: erdb@denr.gov.ph
 17 August 2023

MEMORANDUM
FOR : The Director

THRU : The OIC, Assistant Director

FROM : The Chief, AFMD

SUBJECT : PAYMENT OF VARIATION ORDER FOR THE PROJECT OF

CRERDEC

This has reference with the implementation of the project Electrical System
Upgrading of ERDB-CRERDEC Building in Minglanilla, Cebu with approved contract
amounting to Php 4,051,354.41.

Though we approved to pay the CCO Engineering Construction & Supply for
the variation order in the amount of Php 476,970.55, we only have Php 397,944.00
available budget based on the generated savings from capital outlay.

In this regard, we are requesting your approval in the attached Modification

Advice Form (MAF) Nos. FCO1-2023-08-029 and FCO1-2023-08-0307 to cover the
payment of the variation order.

Also attached is the letter for CCO Engineering Construction & Supply
informing them of the approval of payment of such.

For your consideration.

EMMANUEL M. CUISON

College, Laguna, Philippines

Tel. Nos. (049) 5363628; 5362229; 536226; Fax No. (049) 5362850
Email: erdb@denr.gov.ph
 College, Laguna, Philippines
Tel. Nos. (049) 5363628; 5362229; 536226; Fax No. (049) 5362850
Email: erdb@denr.gov.ph
1