School of Engineering and Architecture

Civil Engineering Department

General Civil Engineering

Chapter 5: Charging for Civil

Engineering Services
CE Laws, Ethics and Contracts
MODULE 2: MIDTERM

Objective After this chapter, the student should be able to:

 Evaluate the Civil Engineering services and determine
the cost of civil engineering project.

Content This chapter focuses on

 Charging for Civil Engineering Services
 Salary Cost Times Multiplier plus non-salary Expense
 Hourly Billing Rate
 Per Diem
 Cost Plus Fixed Fee
 Cost Plus Fixed Fee
 Fixed Price
 Percentage of Construction Cost
 Schedule of Minimum Basic Fees

Related These are supplemental content necessary for this chapter

 PICE (2003), Manual of Professional Practice for Civil
Readings Engineers, 2nd Edition. Manila: Philippine Institute of
Civil Engineers, Inc.
 HAU BOOKs 24x7

Engr. Carolina E. Dungca Page 1 of 6

Chapter 5- Charging for Civil Engineering Services

 https://www.bbc.co.uk/ethics/introduction/intro_1.shtml
Charges for civil Engineering services
1) salary cost × multiplier + Direct Non Salary -

Expense (Reimbursable)
2) Hourly Billing Rates plus Reimbursable
3) Per Diem

4) Cost Plus Fixed Fee CCPFF)

4.1. CHARGING FOR CIVIL ENGINEERING SERVICES 5) Fixed Price

construction cost (
Percentage )
"

percentage of
"

6)

Charges for Civil Engineering Services are usually computed using one of the six methods:
@
1. Salary cost times multiplier plus direct non-salary expense (“Reimbursable”)
reimbursable
.

2. Hourly Billing Rates plus Reimbursable →

3. Per Diem 4. Cost plus fixed fee (“CPFF”) SC ( multiplied 1- DNSE
4. Fixed Price 6. Percentage of Construction Cost (“Percentage”).

4.2. Salary Cost Times Multiplier plus non-salary expense;

Compensation on the basis of the salary cost times an agreed multiplier is a frequently used method
of determining charges for engineering services. With this method, charges for civil engineering
-
@
services are based mainly on direct salaries.
-
dÉ
The salary cost times multiplier method may be utilized as either a multiplier times salary cost (two
multiplier version) or a multiplier times direct salary cost (single multiplier version)
D
The direct salary times multiplier or as it is frequently called the- direct labor times multiplier version
is very similar to the salary cost times the multiplier with the exception that it applies a single
multiplier to unburdened direct labor cost, i.e., direct salaries without employees benefits. The
@
single multiplier includes
_@_ cost associated with employee benefits, overhead, and a margin for
= -

①
contingencies, risk, and profit.
single multiplier cost associated
-
benefits
of employee
salary cost -

direds-aanesplustheemployeeb-ne.it
The following factors are pertinent to the salary cost times multiplier:
1. Salary cost is defined as the “direct salaries plus the employee benefits” and includes salaries
= =
for partners or principals and
_
=
for technical, professional, administrative and clerical staff
directly”.

€-
2. Multiplier which is applied to salary cost is a factor that compensates the Civil Engineer for
overhead plus a reasonable margin for contingencies, interest or invested capital readiness
to serve, and profit.
3. Direct Non-salary expense usually incurred in engineering engagements may include the
following:
 Living and traveling expenses of principals and employee’s
 Identifiable communications expenses,
 Expenses for services and equipment directly applicable to the project

MODULE 2: MIDTERM
Engr. Carolina E. Dungca Page 2 of 6
Chapter 5- Charging for Civil Engineering Services

Identifiable drafting supplies, stenographic supplies, and reproduction work

 Expenses for unusual insurance and specialized health and safety programs and for
special clothing for projects with extraordinary risks.
4. The Civil Engineers overhead which comprises a major portion of the compensation
generated by the multiplier on salary cost, includes the following indirect cost: Indirect cost
→

 Provision for office expenses

 Tax and insurance other than those included as salary cost
 Library and periodical expenses and other costs of keeping abreast of advances in
engineering
 Executive, administrative, accounting, legal, stenographic, and clerical salaries and
expenses (Other than salaries included in salary costs and expenses)
 Business development expenses
 Provision for loss of productive time of technical employees between assignments
 Cost of acquiring and maintaining computers, development of software, and training
staff when not billed as direct cost.
5. 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.

4.3 Hourly Billing Rate Hourly Billing Rate -

includes all direct personnel expenses
overhead , and profit .

The Hourly billing rate method of compensation is very similar to the salary cost times multiplier
-
method in that the hourly billing rate includes all direct personnel expense, overhead and profit.
Direct non-salary expenses are a separate item for reimbursement, usually with a service charge.
short term engagements
-

Direct Personnel Services

4.4 Per Diem
- Éight-h0urda intermittent personal services,
Per Diem
-

eight hour
-

day
The term ‘per diem’ normally refers to an•eight-hour day. Direct personnel services are frequently
charged on a per diem basis. This basis is particularly suited to expert witness or other legal-type
services and to other short-term engagements involving intermittent personal services.
-

intermittent personal services

4.5. Cost Plus Fixed Fee Cost Plus Fixed Fee µ,
, , .. ,µµ ,
www.n.am ,
to the project
Under a cost plus fixed fee agreement, the Civil Engineer is reimbursed for the actual costs of all
services and supplies related to the project, including:
 Salary costs
 Overhead

MODULE 2: MIDTERM
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Chapter 5- Charging for Civil Engineering Services

 Direct non-salary expenses


=-#ÉÉ
Fixed fee, an amount to compensate the Civil Engineer for contingencies, interest on
invested capital, readiness to serve, and profit.
cost plus fixed tee basis -
an Into compile

prerequisite to equitable negotiations

The cost plus fixed fee basis requires as a prerequisite to equitable negotiations, that the client and

ousted
the Civil Engineer define and agree upon the scope of services the Civil Engineer is to perform.
#tbre teemed
The cost plus fixed fee method can also be used when the Civil Engineer is required to start
scope
-

providing service before the detailed scope of services can be determine. In such daces, the
following considerations apply;
general scale
 The general scale and intent of the project should be fairly well defined, even if the full scope
is indeterminate fairly defined
 The types of service to be performed by the Civil Engineer should be agreed upon and fully
set forth.
fixed fee amount varies
-
% of the salary costs
•
The fixed fee amount varies with the complexity and scope of the engineering services required. It
is frequently calculated as a percentage of the salary costs, overhead, and direct non-salary
expenses.
Percentage of the salary costs overhead & direct
,

not salary expenses

4.6. Fixed Price
Fixed Price Method & studies
Investigations
The fixed price method of compensation is frequently used for investigations and studies and for
basic services on design type projects where the scope and complexity of the assignment are clearly
and fully defined.
sum total estimated engineering costs
of
The fixed price can be calculated as the sum total of estimated engineering costs for salaries,

e-==
overhead and non-salary expenses, an allowance for contingencies, interest on invested capital,
readiness to serve, and a reasonable amount for profit.
Fixed price compensation for basic services on certain design-type projects can also be computed
as an appropriate percentage of estimated construction cost.

4.7. Percentage of Construction Cost of constmuion

Percentagedetailed Cost
→ compensation ( design
or construction supervision )
The Percentage of construction cost method may be used to determine the compensation of the
engineer for services where the principal responsibility is the detailed design or construction
supervision of facilities to be constructed.

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Engr. Carolina E. Dungca Page 4 of 6
 Chapter 5- Charging for Civil Engineering Services
→ estimated total cost of constructing the
facility
Construction cost is defined as 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 and administrative expenses.

The 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;
 Feasibility studies-three percent (3%);
 Detailed engineering design-six percent (6%); 3%-6%119%5;%%%ED
 Detailed architectural and engineering design-eight percent① (8%); and 8-1- → ardntengi
 Construction supervision-ten percent (10%) construction supervision
toy .
→

These percentages include only those works normally undertaken in arriving at the expected output
and do not include special studies or investigations indicated under Section 2.5 hereof, the output
of which are ends by themselves.

4.8. Schedule of Minimum Basic Fees

rate of compensation Annex B of Pkt manual
The Civil engineers rate of compensation in various capacities are given in Annex B of PICE manual.
regularly
①
The PICE shall regularly update the schedule of fees stipulated in the Annex.
PILE -

The following Principles should be observed:

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.
2. Civil Engineers regularly employed in the private sector shall have a minimum compensation
D 't 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.
3. A Civil Engineer employed in the private sector who signs and seals the Civil Engineering
plans, specifications and other related documents of a certain project for and in behalf of
his employers shall be compensated with a minimum of 10% of the professional fee for the
project, aver and above the basic monthly salary.
minimum 10-1 .
of the
professional fee

MODULE 2: MIDTERM
Engr. Carolina E. Dungca Page 5 of 6
Chapter 5- Charging for Civil Engineering Services

MODULE 2: MIDTERM
Engr. Carolina E. Dungca Page 6 of 6
 School of Engineering and Architecture
Civil Engineering Department
General Civil Engineering

Chapter 6: Total Project Cost

CE Laws, Ethics and Contracts

MODULE 2: MIDTERM

Objective After this chapter, the student should be able to:

 determine the total cost of the construction project

Content This chapter focuses on

 Total Project Cost
 Schedule of Minimum Basic Fee

Related These are supplemental content necessary for this chapter

 PICE (2003), Manual of Professional Practice for Civil
Readings Engineers, 2nd Edition. Manila: Philippine Institute of
Civil Engineers, Inc.
 HAU BOOKs 24x7
 https://www.bbc.co.uk/ethics/introduction/intro_1.shtml

TOTAL PROJECT COST

Engr. Carolina E. Dungca Page 1 of 5

Chapter 6- Total Project Cost

The probable total capital cost, often used to establish budgets for a typical project, made up of:
1. Professional engineering costs.
2. Construction costs.
3. Legal and land costs.
4. Owner’s costs, including project administration, staffing, financing, and other overheard.
5. Contingency allowance for unknowns.

Professional Engineering Costs

Civil Engineer
A Civil Engineer is often engaged to make a study and to render a planning report on the
contemplated project, including alternative solutions, layouts, and locations along with initial
estimates of the probable project cost. These may involve alternative or phased implementation
schemes which add flexibility to the project.

The study and report phase may include the cost for field or traffic surveys, planning analyses,
geotechnical explorations and analyses, in addition to the direct engineering costs.
The costs of coordination, evaluation implementation and compliance have increased
correspondingly. The extent of these concerns may not be identified during the study and report
phase, and sometimes not even after final plans and specifications have been prepared. As a result,
the estimated probable total cost of the project based on the study and report phase must be
understood to be preliminary in nature.

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, timing of the construction work must be considered because inflation will
affect the construction cost.
Construction cost
-
estimated total cost of constructing
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.
-

Legal, Land, Administration, Staffing and Financial Costs

-
These costs, which include audits, the cost of issuing bonds, land costs, and interest for borrowed
money during construction, are part of the probable total project cost and can best be estimated
in cooperation with the client because they are usually outside the knowledge and control of the
Civil Engineer.

MODULE 2: MIDTERM
Engr. Carolina E. Dungca Page 2 of 5
Chapter 6- Total Project Cost

Contingency Allowance

To provide for intangible costs, contingencies should routinely be added to the basic cost estimate.

o_0
It is common practice to add 20% or more to the estimated probable total project cost at the
completion of the study end report phase, reducing this to perhaps 10% at the completion of final
design and perhaps to 5% when the construction bids become known. Larger or more complex
projects may require higher contingencies.
-

SCHEDULE OF MINIMUM BASIC FEE

as PRIME PROFESSIONAL
Part A – Minimum Compensation for Civil Engineer as Prime Professional.
a. Group 1 - 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%
P1,150,000 plus 4.5% of excess
Over P20 million to P30 million of P20 million
P1.600,000 plus 3.5% of excess
Over P30 million of P30 million
b. Group 2 – Buildings of 3 stories up to 14 stories, towers, tanks, exhibition buildings,
memorials, industrial buildings, simple bridges, low dams, piers, wharves, bins and slios and
comparable projects.

Project Construction Cost Minimum Basic Fees

P10 Million and less 7%
P 200,000 plus 6.5% of excess
Over P10 million to P20 million of P10 million
P1,350,000 plus 5.5% of excess
Over P20 million to P30 million of P20 million
P1.900,000 plus 4.5% of excess
Over P30 million of P30 million
c. Group 3 – 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 Group 1
and 2.

MODULE 2: MIDTERM
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Chapter 6- Total Project Cost

Project Construction Cost Minimum Basic Fees

P10 Million and less 8%
P 800,000 plus 7.5% of excess
Over P10 million to P20 million of P10 million
P1,550,000 plus 6.5% of excess
Over P20 million to P30 million of P20 million
P2.200,000 plus 5.5% of excess
Over P30 million of P30 million

If the Civil Engineer is not the prime professional but renders basic civil engineering services only,
his fee shall be a minimum of 25% of the prime professional fee. 251 of the prime professional
.

as PROFESSIONAL fee
Part B – Minimum Compensation for Civil Engineer as Professional not Prime.
a. Group 4 – Hotels, large apartment building, office building, shopping centers, store
buildings, resorts, hospitals, and comparable projects.

Project Construction Cost Engineer's Fee

P10 million and less 1.05%
P105,000 plus 0.975% in excess
Over P10 million up to P20 million of P10 million
P202,500 plus 0.825% in excess
Over P20 million of P10 million
P285,000 plus 0.675% in excess
Over P30 million of P30 million
b. Structures not failing in any group shall be classified into Group 3.
Minimum Compensation for Civil Engineer’s for rendering the following services.

Professional Fees
25% of Professional Fee + 25%
1. Value Engineering of saving
2. Expert Witness P2,000 / appearance
/
☆ 21000 appearance
Minimum Compensation for Civil Engineering rendering Academic Services.

MODULE 2: MIDTERM
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Chapter 6- Total Project Cost

Teaching part time or full time basis

a. BS Degree Holder P75/hr – P150/hr
b. Master Degree Holder P150/hr – P250/hr
c. Doctorate Degree Holder P250/hr – P400/hr
d. Lecturer (PICE-CPD) P500/hr
e. Conducting Tutorial / Refresher
Courses P500/hr
f. Resource-Speaker P500/hr
g. Writer / Author P3,000/article
Source: PICE, Manual of Professional Practice for Civil Engineers 2nd Edition October
2003

 According to Economic Research Institute the average hourly salary of Civil Engineer is PHP
279/hr.
2791hr

https://www.academia.edu/7380400/CHARGING_FOR_CIVIL_ENGINEERING_SERVICES#:~:text=Wi
th%20this%20method%2C%20charges%20for%20civil%20engineering%20services,labor%20cost
%2C%20i.e.%2C%20direct%20salaries%20without%20employees%20benefits.

MODULE 2: MIDTERM
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 School of Engineering and Architecture
Civil Engineering Department
General Civil Engineering

Chapter 7: R.A. 544: An Act to

Regulate the Practice of Civil
Engineering in the Philippines
CE Laws, Ethics and Contracts
MODULE 2: MIDTERM

Objective After this chapter, the student should be able to:

 Interpret R.A. 544 “An Act to regulate the Practice of Civil
Engineering in the Philippines

Content This chapter focuses on

 Article 1: Title of the Act and Definition of Terms
 Article 2: Board of Examiners for Civil Engineers
 Article 3: Examination and Registration
 Article 4: Enforcement of Act and penal provisions
 Article 5: Miscellaneous provisions

Related These are supplemental content necessary for this chapter

 PICE (2003), Manual of Professional Practice for Civil
Readings Engineers, 2nd Edition. Manila: Philippine Institute of Civil
Engineers, Inc.
 HAU BOOKs 24x7
 https://laws.chanrobles.com/republicacts/6_republicacts.php?id=548

Engr. Carolina E. Dungca Page 1 of 10

Chapter 7- R.A. 544
amended 2
RA NO 544
. ( RA .
1582 ) act to regulate the practice
Republic Act No. 544 (as amended by R.A. 1582) is an an act to regulate the practice of Civil
Engineering in the Philippines. which was approved on the 17th of July, 1950. It was amended by
RA 1582, which was also approved on the 16th of June 1956.

ARTICLE I
Title of the Act and Definition of Terms

Section 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.

ARTICLEII
Board of Examiners for Civil Engineers

Sec. 3. Composition of Board. – 30 days

Within thirty days after the approval of this Act there shall be created a Board of Examiners for
Civil Engineers, hereinafter referred to as the Board, to be composed of a chairman and two

=
members who shall be appointed by the Secretary of Public Works and Communications. The
members of the Board shall hold office for a term of three years after appointment or until their
-

successors shall have been appointed and shall have duly qualified. The first members of the
-

Board appointed under this Act shall hold office for the following terms: One member for one
year; one member for two years; and one member for three years. Each member of the Board

=
shall qualify the proper oath of office before entering upon the performance of his duties. Any
members of the Board may be removed by the Secretary of Public Works and Communications
for neglect of duty, incompetency, malpractice, unprofessional, unethical, immoral, or
-

dishonorable conduct, after having been given opportunity to defend himself in a proper

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Chapter 7- R.A. 544

administrative investigation: Provided, That during the process of investigation the Secretary of
Public
=
=
Works and Communications shall have the power to suspend such member under
investigation and shall appoint a temporary member in his place. Vacancies in the Board shall be
filled for the unexpired term only.

Sec. 4. Powers and duties of the Board. –

The Board of Examiners for Civil Engineers is vested with authority, conformable with the
provisions of this Act, to administer oaths, issue, suspend and revoke certificates of registration
for the practice of civil engineering, issue certificates of recognition to civil engineers already
registered under this Act for advanced studies, research, and/or highly specialized training in any
branch of civil engineering, subject to the approval of the Secretary of Public Works and
Communications, to investigate such violations of this Act and the regulations, thereunder as may
come to the knowledge of the Board and, for this purpose, issue subpoena and subpoena duces
tecum to secure appearance of witnesses in connection with the charges presented to the Board,
to inspect at least once a year educational institutions offering courses in civil engineering, civil
engineering works, projects or corporations, established in the Philippines and, for safe-guarding
of life, health and property, to discharge such other powers and duties as may affect ethical and
technological standards of the civil engineering profession in the Philippines. For the purpose of
this Act, the Director of Public Works and/or his authorized representative in the provinces and
chartered cities shall be ex-officio agents of the Board and as such it shall be their duty to help in
the enforcement of the provisions of this Act.

The Board may, with the approval of the Secretary

- -
of Public Works and Communications, issue
such rules and regulations as may be deemed necessary to carry out the provisions of this Act.
The Board shall also adopt a code of ethics in the practice of civil engineering and have an official
seal to authenticate its official documents.

Sec. 5. Qualifications of Board members. – Each member of the Board shall, at the time of his
appointment:

(a) Be a citizen and resident of the Philippines;

(b) Be at least thirty years of age and of good moral character; atleast 30 Years old

(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;

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Chapter 7- R.A. 544

(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 the 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
consecutive years.
pyo *5 / applicant
Sec. 6. Fees and compensation of Board. – The Board of Examiners for Civil Engineers shall charge
for each application for examination the sum of forty pesos payable to the collecting and
disbursing officer of the Bureau of Civil Service upon filing of said application for examination,
and for each certificate of registration, twenty pesos. Each member of the Board shall receive a
compensation of five pesos for each applicant examined. A civil engineer in the service of the
Government of the Republic of the Philippines appointed as member of the Board shall receive
the compensation as herein provided, in addition to his salary in the Government. All authorized
expenses of the Board, including the compensation provided for herein, shall be paid by the
collecting and disbursing officer of the Bureau of Civil Service out of such appropriation as may
be made for the purpose.

Sec. 7. Annual report. – The Board shall, at the end of each fiscal year, submit to the Secretary of
Public Works and Communications a detailed report of its activities and proceedings during the
period covered by the fiscal year ended.

ARTICLE III
Examination and Registration

Sec. 8. Examination requirement. – All applicants for registration for the practice of civil
engineering shall be required to pass a technical examination as hereinafter provided.

Sec. 9. Holding of examination. – Examination of candidates desiring to practice city engineering

in the Philippines shall be given in the City of Manila beginning the second Monday of February
and August of each year, provided that such days do not fall on official holidays, otherwise the
examinations shall be held on the days next following.

Section 10. Subjects of examination. – Applicants for certificates of registration as civil engineer
shall be examined, in the discretion of the Board, on the following subjects: mathematics,
including algebra, plane and spherical trigonometry, analytics, descriptive and solid geometry,

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Chapter 7- R.A. 544

differential and integral calculus, and rational and applied mechanics; hydraulics, surveying,
including highway and railroad surveying; plane, topographic and hydrographic surveying, and
advance surveying; design and construction of highways and railroads, masonry structures,
wooden and reinforced concrete buildings, bridges, towers, walls, foundations, piers, ports,
wharves, aqueducts, sanitary engineering works, water supply systems, dikes, dams, and irrigation
and drainage canals.

Section 11. Executive officer of the Board. – The Commissioner of Civil Service shall be the
executive officer of the Board and shall conduct the examinations given by said Board. He shall
designate any subordinate officer of the Bureau of Civil Service to act as the Secretary and
custodian of all records including examination papers and minutes of the deliberation of the
Board.

Section 12. Qualifications for examination. – Any person applying for admission to the civil
engineering examination as herein provided shall, prior to the date of the examination, establish
to the satisfaction of the Board that he has the following qualifications:

(a) Be at least twenty-one years of age; 21 years of age

(b) Be a citizen of the Philippines;

(c) Be of good reputation and moral character; 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.

Section 13. Oath of civil engineers. – All successful candidates in the examination shall be required
to take a professional oath before the Board of Examiners for Civil Engineers or other
Government Officials authorized to administer oaths, prior to entering upon the practice of the
civil engineering profession.

Section 14. Seal and use of seal. – All registered civil engineers shall obtain a seal of such design
as the Board shall authorize and direct: Provided, however, That the serial number of the
certificate issued by the Board shall be included in the design of the seal. Plans and specifications
prepared by, or under the direct supervision of a registered civil engineer shall be stamped with
said seal during the life of the registrant's certificate, and it shall be unlawful for any one to stamp
or seal any documents with said seal after the certificate of the registrant named thereon has
expired or has been revoked, unless said certificate shall have been renewed or re-issued.

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Chapter 7- R.A. 544

Section 15. Exemption from registration. – (1) Registration shall not be required of the following
persons:

(a) Officers or enlisted men of the United States and Philippine 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.
(b) Civil engineers or experts called in by the Philippine Government for consultation, or specific
design and construction of fixed structures as defined under this Act, provided that their practice
shall be limited to such work.

(2) Any person residing in the Philippines may make plans or specifications for any of the
following:

(a) Any building in chartered cities or in towns with building ordinances, not exceeding the space
requirement 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 a civil engineer, as long as he
does not violate local ordinances of the place where the building is to be 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
provisions 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 be 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 storeys.

(c) Building with frames of structural steel.

(d) Building of structures intended for public gathering or assemblies such as theaters,

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Engr. Carolina E. Dungca Page 6 of 10
Chapter 7- R.A. 544

cinematographs, stadia, churches, or structures of like nature.

(5) Nor shall anything in this Act prevent professional architects and engineers to practice their
professions.

Section 16. Refusal to issue certificate. – The Board of Examiners for Civil Engineers shall not issue
a certificate to any person convicted by a court of competent jurisdiction of any criminal offense
involving moral turpitude, or to any person guilty of immoral or dishonorable conduct, or to any
person of unsound mind. In the event 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.

Section 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.

Section 18. Re-issue and replacement of certificates. – The Board may, after the expiration of one
year from the date a certificate of registration is revoked and for reasons it may deem sufficient,
entertain an application for a new certificate of registration from the registrant concerned. Such
application shall be accomplished in the same form prescribed for examination, but the Board
may, in its discretion, exempt the applicant from taking the requisite examination.

Section 19. Transitory provisions. – As soon as this Act takes effect, any person desiring to practice
the profession of civil engineering shall be required to obtain a certificate of registration in the
manner and under the conditions hereinafter provided.

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 effect as though the same have been issued under the provisions of this Act.

All graduates in civil engineering from a school, institute, college, or university recognized by the
Government who have passed the civil service examination for senior civil engineer and have
been practising or employed in the Government as such during five years are exempted from
taking examination.

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Chapter 7- R.A. 544

ARTICLE IV
Enforcement of Act and penal provisions

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 subdivision
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 title or
description tending to convey the impression that he is a civil engineer, without holding a valid
certificate of 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 more 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 registered civil engineer. – It shall
be unlawful for any person to order or otherwise cause the construction, reconstruction, or
alteration of any building or structure intended for public gathering or assembly such as theaters,
cinematographs, stadia, churches or 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 direct supervision of a civil engineer. Plans and designs of
structures must be approved as provided by law or ordinance of a city or province or municipality
where the said structure is to be constructed.

Sec. 24. Firms and corporations engaged in civil engineering practice. – A firm, partnership,

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Chapter 7- R.A. 544

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 engineers unless said person or persons are registered
civil engineers.

Sec. 25. Reciprocity requirements. – No person who is not a citizen of the Philippines at the time
he applies to take 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 citizens of the Philippines to the practice of the same
profession without restriction or allows them to practice it after an examination on terms of strict
and absolute equality with citizens, subjects, or nationals of the country concerned, including the
unconditional recognition of degrees issued by institutions of learning duly recognized for the
purpose by the Government of the Philippines: Provided, That if he is not a citizen of the
Philippines, and was admitted to the practice of a profession in the Philippines after December 8,
1941, his active practice in that profession, either in the Philippines or in the state or country where
he was practicing his profession, shall not have been interrupted for a period of two years or
more prior to July 4, 1946, and that the country or state from which he comes allows the citizens
of the Philippines by specific provision of law, to practice the same profession without restriction
or on terms of strict and absolute equality with citizens, subjects or nationals of the country or
state concerned.

Sec. 26. Roster of civil engineers. – A roster showing the names and places of business of all
registered civil engineers shall be prepared by the Commissioner of Civil Service periodically but
at least once a year. Copies of this roster shall be placed on file with the Secretary of Public Works
and Communications and furnished to all department heads, mayors of all chartered cities, to the
Director of Public Works, to such other Bureaus, government entities or agencies and municipal
and provincial authorities as may be deemed necessary and to the public upon request.

Sec. 27. Repeal. – All laws, parts of laws, orders, ordinances, or regulations in conflict with the
provisions hereof; including parts of Act Numbered Twenty-nine hundred and eighty-five, as
amended, as pertains to the practice of civil engineering, are hereby repealed, except the
provisions of Act Numbered Thirty-one hundred and fifty-nine amending Act Numbered Twenty-
nine hundred and eighty-five, pertaining to the practice of "maestro de obras."

Sec. 28. Construction of Act. – If any part or section of this Act shall be declared unconstitutional,
such declaration shall not invalidate the other provisions hereof.

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Chapter 7- R.A. 544

Sec. 29. Effectivity. – This Act shall take effect upon its approval.

Approved: June 17, 1950

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 School of Engineering and Architecture
Civil Engineering Department
General Civil Engineering
Chapter 9:
P.D. 1594 and Its Implementing Rules
and Regulations as Amended
CE Laws, Ethics and Contracts
MODULE 2-MIDTERM

Objective After this chapter, the student should be able to:

 Interpret P.D. 1594 and Its Implementing Rules and
Regulations as Amended

Content This chapter focuses on

 Section 1. Policy Objectives
 Section 2. Detailed Engineering
 Section 3. Prequalification of Prospective Contractors
 Section 4. Bidding.
 Section 5. Award and Contract.
 Section 6. Assignment and Subcontract.
 Section 7. Responsibility of the Contractor
 Section 8. Adjustment Contract Price
 Section 9. Change Order and Extra Work Order
 Section 10. Inspection and Construction of Contract Work
 Section 11. Government's Right to Take Over Contract Work
 Section 12. Implementing Rules and Regulations.
 Section 13. Separability Clause
 Section 14. Repealing Clause
 Section 15. Effectivity

Engr. Carolina E. Dungca Page 1 of 6

Chapter 9- P.D. 1594 and Its Implementing Rules and
Regulations as Amended
Related These are supplemental content necessary for this chapter
 PICE (2003), Manual of Professional Practice for Civil
Readings Engineers, 2nd Edition. Manila: Philippine Institute of Civil
Engineers, Inc.
 HAU BOOKs 24x7
 https://www.officialgazette.gov.ph/images/uploads/20160826-
IRR-RA-9184-procurement-reform.pdf
 https://lawphil.net/statutes/presdecs/pd1978/pd_1594_1978.html

PD 1594
PRESIDENTIAL DECREE No. 1594
.

PRESCRIBING POLICIES, GUIDELINES, RULES AND REGULATIONS FOR GOVERNMENT

INFRASTRUCTURE CONTRACTS

WHEREAS, the present policies, rules and regulations covering government contracts for
infrastructure and other construction projects are generally fragmented and have been found to
be inadequate to cope with the intricate and complex process involved;
WHEREAS, there is a need to adopt a comprehensive, uniform, and updated set of policies,
guidelines, rules and regulations covering government contracts for infrastructure and other
construction projects in order to achieve a more efficient and effective implementation of these
projects.

NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the powers
vested in me by the Constitution, do hereby order and decree the following:

Section 1. Policy Objectives.

It is the policy of the government to adopt a set rules and regulations covering government
contracts for infrastructure and other construction projects which shall:
a) bring about maximum efficiency in project implementation and minimize project costs and
contract variations through sound practices in contract management;
b) promote a healthy partnership between the government and the private sector in furthering
national development; and
c) enhance the growth of the local construction industry and optimize the use of indigenous
manpower, materials and other sources.

Section 2. Detailed Engineering.

No bidding and/or award of contract for a construction project shall be made unless the detailed
engineering investigations, surveys, and designs for the project have been sufficiently carried out

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Chapter 9- P.D. 1594 and Its Implementing Rules and
Regulations as Amended
in accordance with the standards and specifications to be established under the rules and
regulations to be promulgated pursuant to Section 12 of this Decree so as to minimize quantity and
cost overruns and underruns, change orders and extra work orders, and unless the detailed
engineering documents have been approved by the Minister of Public Works, Transportation and
Communications, the Minister of Public Highways, of the Minister of Energy, as the case may be.

Section 3. Prequalification of Prospective Contractors.

A prospective contractor may prequalified to offer his bid or tender for a construction project only
if he meets the following requirements.
a) Legal Requirements. The prospective contractor must have been licensed as a contractor for
the current year pursuant to Republic Act No. 4566, must have paid his privilege tax to
practice or engage in the contracting business for the current year, must comply with the
Administrative Order No. 66 of the Office of the President of the Philippines, and must
comply with other existing pertinent laws, rules and regulations.
b) Technical Requirements. The prospective contractor must meet the following technical
requirements to be established in accordance with the rules and regulations to be
promulgated pursuant to Section 12 of this Decree, to enable him to satisfactorily prosecute
the subject project:
1) Competence and experience of the contractor in managing projects similar to the
subject project.
2) Competence and experience of the contractor's key personnel to be assigned to the
subject project.
3) Availability and commitment of the contractor's equipment to be used for the subject
project.
c) Financial Requirements. The net worth and liquid assets of the prospective contractor must
meet the requirements, to be established in accordance with the rules and regulations to be
promulgated pursuant to Section 12 of this Decree, to enable him to satisfactorily execute
the subject project. The prospective contractor may be allowed to cover the deficiency in
the required net worth through a line of credit fully committed to the subject project by a
bank or financial institution acceptable to the Ministry concerned.
d) Filipino participation. The Government shall promote maximum participation of eligible
Filipino contractors in all construction projects.

Section 4. Bidding.
Construction projects shall generally be undertaken by contract after competitive public bidding.
Projects may be undertaken by administration or force account or by negotiated contract only in
exceptional cases where time is of the essence, or where there is lack of qualified bidders or
contractors, or where there is a conclusive evidence that greater economy and efficiency would be
achieved through this arrangement, and in accordance with provision of laws and acts on the

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Chapter 9- P.D. 1594 and Its Implementing Rules and
Regulations as Amended
matter, subject to the approval of the Ministry of Public Works, Transportation and
Communications, the Minister of Public Highways, or the Minister of Energy, as the case may be, if
the project cost is less than P1 Million, and of the President of the Philippines, upon the
recommendation of the Minister, if the project cost is P1 Million or more.

A bidder's bond, in an amount to be established in accordance with the rules and regulations to be
promulgated pursuant to Section 12 of this Decree, shall accompany the bid to guarantee that the
successful bidder shall, within a prescribed period from receipt of the notice of award, enter into
account and furnish the required performance bond for the faithful and complete prosecution of
the work specified in the contract documents.

Section 5. Award and Contract.

The contract may be awarded to the lowest prequalified bidder whose bid as evaluated complies
with all the terms and conditions in the call for bid and is the most advantageous to the
Government.
To guarantee the faithful performance of the contractor, he shall, prior to the award, post a
performance bond, in an amount to be established in accordance with the rules and regulations to
be promulgated under Section 12 of this Decree.
All awards and contracts duly executed in accordance with the provisions of this Decree shall be
subject to the approval of the Minister of Public Works, Transportation and Communications, the
Minister of Public Highways, or the Minister of Energy, as the case may be.

Section 6. Assignment and Subcontract.

The contractor shall not assign, transfer, pledge, subcontract or make any other disposition of the
contract or any part of interest therein except with the approval of the Minister of Public Works,
Transportation and Communications, the Minister of Public Highways, or the Minister of Energy, as
the case may be. Approval of the subcontract shall not relieve the main contractor from any liability
or obligation under his contract with the Government nor shall it create any contractual relation
between the subcontractor and the Government.

Section 7. Responsibility of the Contractor.

The contractor shall assume full responsibility for the contract work until its final acceptance by the
Government and shall be held responsible for any damage or destruction of works except those
occasioned by force majeure.

Except likewise for force majeure, the contractor shall be fully responsible for the safety, protection,
security, and convenience of his personnel, third parties, and the public at large, as well as the
works, equipment, installation and the like to be affected by his construction work.

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Chapter 9- P.D. 1594 and Its Implementing Rules and
Regulations as Amended
Section 8. Adjustment Contract Price.
Adjustment of contract price for construction projects may be authorized by the Minister of Public
Works, Transportation and Communications, the Minister of Public Highways, or the Minister of
Energy, as the case may be, upon recommendation of the National Economic and Development
Authority, if during the effectivity of the contract, the cost of labor, equipment, materials and
supplies required for the construction should increase or decrease due to direct acts of the
Government. The adjustments of the contract price shall be made using appropriate formulas
established in accordance with the rules and regulations to be promulgated under Section 12 of
this Decree.

Section 9. Change Order and Extra Work Order.

A change order or extra work order may be issued only for works necessary for the completion of
the project and, therefore, shall be within the general scope of the contract as bidded and awarded.
All change orders and extra work orders shall be subject to the approval of the Minister of Public
Works, Transportation and Communications, the Minister of Public Highways, or the Minister of
Energy, as the case may be.

Section 10. Inspection and Construction of Contract Work.

Inspection of the contract work shall be made by the Government while such contract work is in
progress to ascertain that the completed works comply in all respects with the standards and
requirements set forth in the contract documents. Notwithstanding such inspection, the contractor
shall be held responsible for the acceptability of the finished works. The contractor shall promptly
replace all materials and correct all works determined by the Government as failing to meet contract
requirements.

Section 11. Government's Right to Take Over Contract Work.

The Government may take over the contract work should the contractor abandon the contract
work, or unduly delay the prosecution of the contract work, or become insolvent, or assign his
assets for the benefit of his creditors, or be adjudged bankrupt, or assign the contract work without
written approval by the Government, or violate any condition or term of the contract. In any of
these cases, the Government may terminate the employment of the contractor and take over the
contract work after giving due notice to the contractor and his sureties.

Section 12. Implementing Rules and Regulations.

The Minister of Public Works, Transportation and Communications, as the lead official, the Minister
of Public Highways, the Minister of Energy, and the Director-General of the National Economic and
Development Authority, shall jointly promulgate the rules and regulations to implement the
provisions of this Decree. Once approved by the President of the Philippines, these implementing
rules and regulations shall be applicable to all contracts for infrastructure and other construction

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Chapter 9- P.D. 1594 and Its Implementing Rules and
Regulations as Amended
projects of all government agencies including government-owned or controlled corporations and
other instrumentalities.

Section 13. Separability Clause.

If any provision of this Decree is held unconstitutional, the other provisions shall remain valid.

Section 14. Repealing Clause.

All Acts, Charters, Decrees, Letters of Instructions, Executive Orders, Proclamations, rules and
regulations or parts thereof in conflict with the provisions of this Decree are hereby repealed or
modified accordingly.

Section 15. Effectivity.

This Decree shall take effect immediately.
Done in the City of Manila, this 11th day of June, in the year of Our Lord, nineteen hundred and
seventy-eight.

MODULE 2: MIDTERM
Engr. Carolina E. Dungca Page 6 of 6
Engr. Canlas is a tenured full time faculty in a private university. If he receives a basic monthly
salary of 26,000 plus 20% premium and a non-salary bonuses of 30,000 at the end of a year.
(1 year= 12 months); (1 month = 30 days).

a) How much will be his hourly billing rate? (1 day = 8 working hour).

Hourly Billing Rate

tk6oo0Y%¥%;P→"ʳI
=

=F140.<
b) If he is a part-time faculty and a holder of Master’s degree (₱250/hr rate), how much his basic
annual salary, if he rendered 12 hours a week? (1 month = 4 weeks).

B) BASIC ANNUAL SALARY

=
F- 250 ( K) (4) ( 12)

-8744,000Mt
A two (2) story public market is to be built has a project construction cost of ₱65 Million. The
LGU awarded the contract to Engineer A to do the project.

a) How much do Engineer A be compensated if he is the Prime professional based on the

approved minimum basic fee?

( 65 ooo , ooo 30 ooo ooo ) ( 0.035)

-

= 1,6N ooo t ,
,

-721825,008

b) If Engineer A offers detailed architectural and engineering design only, how much would he
charge the LGU based on percentage fee?

=
0-08 [ 65 ooo ooo
]

=PTS200,o①
Engr. Canlas is a tenured full time faculty in a private university. If he receives a basic monthly
salary of 26,000 plus 20% premium and a non-salary bonuses of 30,000 at the end of a year.
(1 year= 12 months); (1 month = 30 days).

a) How much will be his hourly billing rate? (1 day = 8 working hour).

a) Monthly salary =
26000 ( 0 2)
.
t 26000 =
☆ 31,200

Annual
salary
=
31,20044+30 ,
ooo =
☆ 404,400

Hruby timing Rate -9--40441 =P 1123.33333

360

8112362,333€ =Ft0.4it/hrJ
b) If he is a part-time faculty and a holder of Master’s degree (₱250/hr rate), how much his basic
annual salary, if he rendered 12 hours a week? (1 month = 4 weeks).

B) BASIC ANNUAL SALARY

=
F- 250 ( K) (4) ( K)

-8744,000Mt