CIAP DOCUMENT

102
Uniform General Conditions of
Contracts for Private
Construction
Prepared by;
Zymon Patawaran
MarcGil Tolentino
Renato H. Buizon
CIAP DOCUMENT
102
INTRODUCTION
The Construction Industry Authority of the Philippines (CIAP) is an
attached agency of the Department of Trade and Industry (DTI) which
was created under Presidential Decree No. 1746, as amended by
Executive Order Nos. 679 and 768, to promote, accelerate, and
regulate the growth and development of the construction industry.
Under the said law, the CIAP is mandated, among others, to
recommend and encourage the adoption of equitable and realistic
contract conditions for construction
 CIAP DOCUMENT 102
INTRODUCTION
In line with such mandate, the CIAP established the Uniform General Conditions
of Contract for Private Construction or the “CIAP Document 102”. It was
formulated by a Committee composed of representatives from various
professional organizations namely:
 Council of Engineering Consultants of the Philippines (CECOPHIL);
 Construction Project Management Association of the Philippines (CPMAP);
 Chamber of Real Estate and Builders Association (CREBA)
 International Federation of Building and Wood Workers (IFBWW);
 Philippine Constructors Association, Inc. (PCA);
 Philippine Chamber of Commerce, Inc. (PCCI);
 Philippine Institute of Construction Arbitrators (now Philippine Institute of
Construction Arbitrators and Mediators or PICAM);
 Philippine Institute of Civil Engineers (PICE);
 Subdivision and Housing Developers Association of the Philippines (SHDA);
 United Architects of the Philippines (UAP);
 Society of Philippine Accredited Consultants (SPAC); and the
 Confederation of Filipino Consulting Organizations, Inc. (COFILCO)
 CIAP DOCUMENT 102

INTRODUCTION
The Philippine Domestic Construction Board (PDCB) and the Philippine
Overseas Construction Board (POCB) two of the implementing arms of the
CIAP, have, likewise, submitted their inputs in the formulation of CIAP
Document 102 to support their recommendation for CIAP to bolster the
acceptance and use of the said document in private construction.

The first edition of CIAP Document 102 was published on 15 October 1997.
The revised version was issued on 29 June 2004 to incorporate prevailing
best practices and the changes that evolved in the construction industry
over the years.
 CIAP DOCUMENT 102
INTRODUCTION
What is CIAP Document 102?

CIAP Document 102 or the “Uniform General Conditions of Contract for

Private Construction” contains terms and conditions ordinarily
established in construction contracts. It is intended for use in contracts
for private construction in the Philippines.

What is the intent of CIAP Document 102?

CIAP Document 102 was formulated to provide the procedures,

guidelines, and criteria to be used by parties in a construction Contract,
or reference to the Contract to address deficiencies and/or any
ambiguity. The CIAP Document 102 will contribute to the enhancement
of fair contractual relationships in the construction industry
 CIAP DOCUMENT 102
What is a Construction Contract?
A typical Construction Contract consists of the following;
 Agreement,
 General Conditions,
 Drawings,
 Specifications,
 and other documents.

 Contract is used to describe the combination of two (2) sets of documents:

the Agreement and the Contract Documents.
 Agreement is used to describe the agreement signed by the Owner and the Contractor,
excluding the Contract Documents.
 Contract Documents are attached to the Agreement identified therein as Contract
Documents, including all additions, deletions and modifications which generally include the
following: Special Provisions or Conditions; General Conditions; Specifications; Drawings; and
other Bid Documents.
 CIAP DOCUMENT 102
CIAP Document 102 contains these conditions which are generally applicable for
all types of construction contracts, to wit:

Section I. Definitions and Documents

(Art. 1 Definitions;
Art. 2 Execution, Correlation, Meaning of Terms and Intent of Documents;
Art. 3 Drawings and Specifications;
Art. 4 Detail Drawings and Instructions;
Art. 5 Shop Drawings)

Section II. Laws, Regulations, Site Conditions, Permits & Taxes

(Art. 6 Laws and Site Conditions; Art. 7 Permits, Taxes and Surveys)

Section III. Equipment and Materials

(Art. 8 General; Art. 9 Equipment; Art. 10 Materials, Fixtures, Appliances, and Fittings
Furnished by the Contractor; Art. 11 Materials, Equipment, Fixtures, Appliances and
Fittings Furnished by the Owner; Art. 12 Royalties and Patents; Art. 13 Manufacturer’s
Directions
 CIAP DOCUMENT 102
Section IV. Premises and Temporary Structures
(Art. 14 Use of Premises; Art. 15 Temporary Structures and Facilities)

Section V. Protection of Work and Property

(Art. 16 Protection of Work and Owner’s Property; Art. 17 Protection of Adjacent Property
and Existing Utilities; Art. 18 Protection of Life, Work and Property During an Emergency)

Section VI. Labor, Work and Payments

(Art. 19 Labor; Art. 20 Work; Art. 21 Time of Completion of Work; Art. 22 Payments)

Section VII. Contractor- Separate Contractor-Subcontractors Relationship

(Art. 23 Separate Contracts with Other Contractors; Art. 24 Contractor-Separate Contractors
Relations; Art. 25 Sub-Contracts)

Section VIII. Suspension of Work and Termination of Contract

(Art. 26 Contractor’s Rights to Suspend Work or Terminate Contract; Art. 27 Owner’s Right to
Suspend the Work; Art. 28 Owner’s Right to Terminate Contract; Art. 29 Owner’s Right to
proceed with the Work After Reduction in Contractor’s Scope of Work, Partial Takeover from
Contractor)
 CIAP DOCUMENT 102
Section IX. Responsibilities and Liabilities of Contractor and of Owner
(Art. 30 Contractor’s Responsibility for Accidents and Damages; Art. 31 Contractor’s
Insurance and Bonds; Art. 32 Owner’s 3 Responsibilities and Liabilities; Art. 33 Liens,
Disputes and Arbitration)

Section X. - Owner’s Representative

Section XI. Schedule of Time Limits

What is the importance of clear contract terms and harmonized contract

documents?

Many disputes in construction arise from inconsistent and ambiguous

contract terms and conditions which lead to varied interpretations and
conflict between the contracting parties. To avoid disputes that may affect
the completion of the Work and strain the relationship of the parties, it is
important that contract documents objectively reflect the agreement and
true intent of the parties.
 CIAP DOCUMENT 102- ART. 1: DEFINITIONS

SECTION I
DEFINITIONS AND DOCUMENTS

-provides the definitions of the terms used and the execution, correlation, and intent of
contract documents, as well as the rules to be followed in case of conflict or discrepancy.
1.01 ACT OF GOD OR FORCE MAJEURE

includes an event which cannot be foreseen, or which though foreseen, was inevitable. Rain, wind,
flood or other natural phenomenon of inconsequential degree for the locality shall not be construed
as an Act of God or Force Majeure.

[a] war, hostilities or warlike operations (whether a state of war be declared or not), invasion, act of
foreign enemy, civil war;

[b] rebellion, revolution, insurrection, mutiny, usurpation of civil or military government, conspiracy,
riot, civil commotion, terrorist acts;

[c] confiscation, nationalization, mobilization, commandeering or requisition by or under the order of

any government or de jure or de facto authority or ruler or any other act or failure to act of any local
or state or national government authority;
 CIAP DOCUMENT 102- ART. 1: DEFINITIONS

[d] strike, sabotage, lock-out, embargo, import restriction, port congestion, lack of usual
means of public transportation and communication, industrial dispute, shipwreck, shortage or
restriction of power supply, epidemics, quarantine, plague;

[e] earthquake, landslide, volcanic activity, fire, flood, inundation, tidal wave, typhoon or
cyclone, hurricane, storm, lightning, or other inclement weather condition, nuclear and pressure
waves, or other natural or physical disaster

[f] shortage of labor, materials or utilities where caused by circumstances that are themselves
Force Majeure.
1.02 ADVERTISEMENT or INVITATION TO BID

refers to the notice published by the Owner or the invitation issued to prospective bidders,
giving information as to the nature of the proposed project, conditions for the issuance of Contract
documents, date of bidding, and information that would give the Contractor a general idea of the
magnitude and extent of the project.
 CIAP DOCUMENT 102- ART. 1: DEFINITIONS
1.03 AGREEMENT

is the term used to describe the agreement signed by the Owner and the Contractor excluding
the Contract Documents which are attached thereto.

1.04 BID
is the tender, or proposal, or quotation, or offer of a bidder to perform the work described in the
Contract which in form and substance complies with the Instruction to Bidders.

1.05 BID BOND

refers to any acceptable form of bond accompanying the Bid submitted by the bidder as a
guarantee that the bidder will enter into the Contract with the Owner for the construction of the
Work, if the Contract is awarded to him.

1.06 BID DOCUMENTS

collectively refer to all documents provided or made available to prospective bidders which
include the Invitation to Bid and a copy of the Contract which the winning bidders would be required
to sign with the Owner.
 CIAP DOCUMENT 102- ART. 1: DEFINITIONS
1.07 BID BULLETIN
is a document containing additional information on Bid Documents issued to bidders before
date of bidding

1.08 BREAKDOWN OF WORK AND CORRESPONDING VALUE

is a listing of the different parts of the work indicating each part and its corresponding value. 

1.09 CHANGE ORDER

is a written order to the Contractor issued by the Owner after the execution of the Contract,
authorizing a change or variation in the work or an adjustment in the Contract Price or Contract
time.

1.10 CONTRACT
is the term used to describe the Agreement and the Contract Documents.
 CIAP DOCUMENT 102- ART. 1: DEFINITIONS
1.11 CONTRACT DOCUMENTS
are the documents attached to the Agreement identified therein as Contract Documents,
including all additions, deletions and modifications incorporated therein. These generally include the
following documents:
a. Special Provisions or Conditions
b. General Conditions
c. Specifications
d. Drawings
e. Other Bid Documents

1.12 CONTRACT PRICE

is the amount in money or other consideration to be paid by the Owner to the Contractor for
the execution of the Work in accordance with the Contract.

1.13 CONTRACTOR
is the person or firm duly registered and licensed by the Philippine Contractors Accreditation
Board whose proposal has been accepted and to whom was awarded the Contract to execute the
Work.
 CIAP DOCUMENT 102- ART. 1: DEFINITIONS
1.14 COST
means all expenditures properly incurred or to be incurred, whether on or off the site, including
overhead and other charges properly allocable thereto but does not include any allowance for profit.

1.15 DRAWINGS
are graphical presentations of the Work. They include all supplementary details and shop
drawings.

1.16 FINAL PAYMENT

refers to the payment of the final progress billing and all approved claims including but not
limited to those variations in the work, Contract Price adjustments and/or escalation, acceleration of
work, and others. It does not include the retention money.

1.17 GUARANTEE BOND

is the approved form of security furnished by the Contractor and his Surety as a guarantee of the
quality of the materials provided, the equipment installed, and the workmanship performed by the
Contractor.
 CIAP DOCUMENT 102- ART. 1: DEFINITIONS
1.18 INSTRUCTION TO BIDDERS
refers to the list of instructions regarding the manner bids are to be prepared and the
conditions for the award of the Contract.

1.19 LAWS
refers to all laws, ordinances and other governmental rules and regulations applicable to the
project and to its execution.
1.20 OWNER
is the person or entity or authorized representative thereof who signed the Contract as
Owner.
1.21 OWNER'S REPRESENTATIVE
refers to the person or entity commissioned by the Owner or authorized in writing by the
Owner to act on his behalf.
1.22 PAYMENT BOND
is the approved form of security furnished by the Contractor and his Surety as a guarantee of
good faith on the part of the Contractor to faithfully comply with the Contract in respect of its
obligations arising therefrom to its workers, subcontractors, and suppliers
1.23 PERFORMANCE BOND
is the approved form of security furnished by the Contractor and his Surety as a guarantee of
good faith on the part of the Contractor to execute the Work in accordance with the Contract.
 CIAP DOCUMENT 102- ART. 1: DEFINITIONS
1.24 SCHEDULE OF MATERIALS AND FINISHES
is an outline specification enumerating the type or trade names of materials required to be used
by the Contractor for the Work.

1.25 SPECIFICATIONS
are the written or printed description of the work to be done describing qualities of the material
to be used, the equipment to be installed and the mode of construction.

1.26 SPECIAL PROVISIONS OR CONDITIONS

are instructions which are issued prior to bidding to supplement and/or modify the Drawings,
Specifications and/or General Conditions of the Contract
1.27 SUB-CONTRACTOR
is a contractor duly registered and licensed by the Philippine Contractors Accreditation Board
having a direct contract with the Contractor who acts for or in behalf of the Contractor in executing
any part of the Contract. One who merely furnishes materials without labor is a supplier and not a
Sub-Contractor.

1.28 SUPPLEMENTARY SPECIFICATIONS

refers to additional information which may be issued as an addition to or amendment of the
provisions of the Specifications.
 CIAP DOCUMENT 102- ART. 1: DEFINITIONS
1.29 SURETY
is the person, firm or corporation which issues the bond required of the Contractor.

1.30 TIME LIMIT OR COMPLETION TIME

is the period of time allowed by the Contract for the completion of the project or any stipulated
portions thereof.

1.31 WRITTEN NOTICE

means information, advice or notification pertinent to the project delivered in person or sent by
registered mail to an individual, firm or corporation at the latter's last known business address.

1.32 WORK
refers to all the Contractor-provided labor or materials or both as well as equipment
transportation, or other facilities necessary to commence and complete the construction and to fulfill
all his obligations which are called for in the Contract.
2.01 INTENT OF CONTRACT :
The intent of the Contract is to include all labor and materials, equipment and transportation
necessary for the proper execution of the Work.
2.02 STANDARD OF CONDUCT:
Each party to the Contract acknowledges that in the exercise of his rights in the performance of his
duties, he must act with justice, give the other party his due, and observe honesty and good faith.
ART. 2:
EXECUTION, CORRELATION, MEANING OF TERMS AND INTENT
OF DOCUMENTS
RULE 1: The Agreement and the Contract Documents shall be taken as mutually explanatory of
one another. The various provisions of the Contract shall be interpreted together attributing to the
doubtful ones that sense which may result from all of them taken jointly.

RULE 2: The provisions of the Civil Code of the Philippines on the interpretation of contracts and of
the Rules of Court on the Interpretation of Documents shall be applied.

RULE 3: Where the conflict between or among the provisions of the Agreement and/or the
Contract Documents cannot be resolved by Rules 1 and 2, it shall be understood that:

(a) the Detailed Drawings shall prevail over the General Drawings;
(b) words and figures shall prevail over the Drawings;
(c)words shall prevail over figures in Contract Documents;
(d) written dimensions shall prevail over measured dimensions.
ART. 2:
EXECUTION, CORRELATION, MEANING OF TERMS AND INTENT
OF DOCUMENTS
The order of priority among these documents shall be as follows:

(a) Agreement as modified by Notice of Award of Contract, if such be the case, and the Contractor's
conformity thereto:
(b) Instruction to Bidders and any amendment thereto;
(c) Addenda to Bid Documents;
(d) Specifications;
(e) Drawings;
(f) Special Conditions of Contract;
(b) (g) General Conditions of Contract;
(h) Other Contract Documents; and
(i) Other documents forming part of the Contract attached thereto or incorporated therein by
reference.
RULE 5: Where there is discrepancy, defective description, error or omission in any Contract
Document, the Contract Documents shall be interpreted as being complementary to each other. Thus,
what is called for in one Contract Document, although not mentioned in another Contract Document
where it should have been mentioned, shall be deemed to be called for by the Contract.
ART. 2:
EXECUTION, CORRELATION, MEANING OF TERMS AND INTENT
OF DOCUMENTS
RULE 6: The apparent silence of the Drawings, Specifications or any other Contract Document as to
any detail, or the lack of detailed description concerning any part of the work, shall be understood to
mean that good and accepted construction practice in accordance with the usage or custom of the
place shall be followed.

RULE 7: Rules 1 to 6 shall yield to specific rules of interpretation in this document or in the Contract.

b. The Owner shall resolve the conflict, or interpret or explain such discrepancy, defective description,
error or omission with due regard to Article 2.04 below.

2.04 CONFORMITY TO THE CONTRACT:

The Work shall be executed in accordance with the Contract.

a. If there be a variance between the Drawings and the Specifications, the provisions of the
Specifications shall control. In case of conflict between the General Conditions or any modification
thereof and the detailed specification requirements, the detailed specification requirements shall
control.
ART. 2:
EXECUTION, CORRELATION, MEANING OF TERMS AND INTENT
OF DOCUMENTS
b. Any discrepancy found between the Drawings and Specifications and site conditions or any error or
omission in the Drawings or Specifications shall be immediately reported to the Owner, who shall
promptly correct such discrepancy, error, or omission. Any work involving such discrepancies shall be
estimated by the Contractor and unit prices or lump sum amounts shall be agreed upon by the parties
whenever possible before the work is done. Any work done by the Contractor involving discrepancies
found by the Contractor and not reported to and without the knowledge of the Owner shall be
considered as having been done at the Contractor's risk.

c. The Owner shall be fully responsible for adequacy of the design and for sufficiency of the Drawings
and Specifications. The complete requirements of the Work shall be set forth in Drawings and
Specifications to be supplied by the Owner.

2.05 MEANING OF TERMS

a. APPROVED, DIRECTED AND ACCEPTABLE : The words "approved", "directed" and "acceptable", or
words of like import shall mean approved, directed by or acceptable to the OWNER.
b. FURNISH : The word "furnish" shall be understood to mean "purchase and/or fabricate and deliver to
the jobsite or other location when so designated.”
c. INSTALL : The word "install" shall mean to build in, mount in positions, connect or apply any object
specified ready for the intended use.
d. PROVIDE : The word "provide" shall be understood to mean "furnish and install.”
e. REQUIRED OR NECESSARY : The words "required" or "necessary" shall mean as required or necessary
for the complete execution of that portion of the Work.
ART. 2:
EXECUTION, CORRELATION, MEANING OF TERMS AND INTENT
OF DOCUMENTS
2.06 TIMELY EXERCISE OF ADMINISTRATIVE RESPONSIBILITIES. Whenever under the Contract, the
Owner is required to exercise his discretion by:

a. giving his decision, opinion or consent, or

b. expressing his satisfaction and approval, or
c. determining value, or
d. providing drawings, or
e. supplying equipment or materials, or
f. otherwise taking action which may affect the Contractor's timely completion of the Work,

2.08 REVIEW OF CONTRACT.

The Contractor shall carefully study and compare the various documents that comprise the Contract and shall
report to the Owner any error, inconsistency or omission that may be discovered in its provisions. The Contractor,
however, shall not be liable to the Owner for any damage resulting from any such error, inconsistency or omission in
the Contract. The Contractor shall follow the Drawings and Specification and all additional detail drawings and
instruction issued by the Owner as being in full and strict conformity with the Contract and the requirements of the
Work.
ART. 3: DRAWINGS AND SPECIFICATIONS
3.01 COPIES OF DRAWINGS AND SPECIFICATIONS:

The Owner shall furnish the Contractor, free of charge, three sets of Drawings and
Specifications inclusive of the signed Contract. All other copies of Drawings and Specifications as
required by the Contractor will be furnished to him at cost of reproduction.
ART. 4: DETAIL DRAWINGS AND INSTRUCTIONS
4.01 SUPPLEMENTARY DRAWINGS AND INSTRUCTIONS:

The Owner shall furnish additional detail drawings and instructions essential to their proper
interpretation and proper execution of the Work. All such additional drawings and instructions are to
be considered of equal force as those which originally accompany the Specifications
ART. 5: SHOP DRAWINGS
5.01 CONDITIONS IN THE PREPARATION OF SHOP DRAWINGS:

The Contractor shall prepare at his own expense and submit two copies of all shop or setting
drawings, templates, patterns and models and the Owner shall pass upon them making desired
corrections, if any. The Contractor shall make the corrections in the shop drawings required by the
Owner and file with the latter three (3) corrected copies thereof.
ART. 5: SHOP DRAWINGS
5.02 IDENTIFICATION:

Shop drawings which shall be numbered consecutively shall represent:

a. All working and erection dimensions.
b. Arrangement and sectional views.
c. Necessary details, including complete information for making connections with other work.
d. Kinds of materials and finishes.

Shop drawings shall be dated and contain (a) the name of project, (b) the descriptive names of
equipment, materials, and classified item numbers and (c) the location at which materials or
equipment are to be installed in the Work.

5.03 LETTER OF TRANSMITTAL:

Submission of shop drawings shall be accompanied by a letter of transmittal in duplicate,

containing the name of the project, the Contractor's name, number drawings, titles, and other
pertinent data.
ART. 5: SHOP DRAWINGS
5.04 CORRECTIONS, CHANGES AND VARIATIONS:

The Contractor shall submit three sets of prints of shop drawings to the Owner for approval.
Satisfactory shop drawings will be so identified by the Owner, dated, and one copy thereof returned
to the Contractor. Should shop drawings be disapproved by the Owner, one set of such shop
drawings will be returned to the Contractor indicating therein the corrections and changes to be
made.

a. The Contractor shall make the required corrections and changes and resubmit the shop
drawings, in duplicate, until the Owner's approval is obtained.
b. Upon receipt of such approval, the Contractor shall insert the date of approval on the tracings and
promptly furnish the Owner with three additional prints of approved drawings.

c. No work called for by the shop drawings shall be executed by the Contractor until the Owner's
approval is given.

d. If the shop drawings show variations from the Contract requirements because of standard shop
practice or other reasons, the Contractor shall make specific mention of such variations in his letter
of submittal.
ART. 5: SHOP DRAWINGS
5.05 RESPONSIBILITY FOR ACCURACY:

If the Contractor is a specialty contractor or is engaged by the Owner as a specialty contractor,

the Owner's approval of shop drawings will be general. It shall not relieve the Contractor of
responsibility for accuracy of such shop drawings, nor for proper fitting and construction of work, nor
for furnishing of materials or work required by the Contract and not indicated on the shop drawings.
The Owner's approval of such drawings or schedule shall not relieve the specialty contractor from
responsibility for deviations from the Drawings or Specifications, unless he has, in writing, called the
Owner's attention to such deviations at the time of submission and secured the Owner's written
approval.

5.06 OWNER’S APPROVAL:

Unless specified to the contrary or unless the Contractor’s submission is deficient, shop drawing
approval by the Owner shall be made within (7) working days of submission by the Contractor.
 Section II (Laws, Regulations, Site Conditions, Permits and
Taxes)
What are the obligations of the contracting parties when it comes to
permits and licenses, and payment of taxes?

Section II (Laws, Regulations, Site Conditions, Permits and Taxes) stipulates compliance
with all Laws in so far as they are binding upon or affect the parties to the Contract.

The Owner, with the Contractor’s assistance, shall secure and pay all construction permits
and licenses necessary for the execution of the Work.

The Contractor shall secure the Final Occupancy Permit but he shall not be responsible to
the Owner if, without his fault, the license is not issued or there was delay in its issuance.
The Contractor shall pay all taxes as required by Laws pertinent to the construction of the
project.
 CIAP DOCUMENT 102

Who is in charge of the safety and sanitation in the work

premises?

Pursuant to Section IV & VI, the Contractor is in charge of the safety and
sanitation at the work site during and upon completion of work.

Who has the obligation to protect the Work and the Owner’s
property from damage?

Section V (Protection of Work and Property) provides that it is the

obligation of the Contractor to protect the work and the Owner’s property
from damage.
 CIAP DOCUMENT 102
Who is responsible for accidents in the work premises?

Section IX, Article 30 (Contractor’s Responsibility for Accidents and

Damages) states that the Contractor shall be primarily responsible for all
safety measures in executing the Work.
What are the bonds and guarantees required of the
Contractor?
Section IX, Article 31 (Contractor’s Insurance and Bonds),
-----enumerates the insurance, bonds, and guarantees required of the
contractor, to wit:
1. Contractor’s Liability Insurance (Contractor, Subcontractors and Owner)
2. Accident Insurance for Workers
3. Contractor’s Fire Insurance
4. Contractor’s Performance and Payment Bonds
5. Contractor’s Guarantee Bond 6. Contractor’s Guarantee-Warranty
 CIAP DOCUMENT 102
Is the Owner required to obtain insurance?
Article 32.02 states that the Owner may opt to obtain an insurance that will protect
him from his contingent liability.

Is the Subcontractor also required to obtain bonds and insurance?

Article 33.03 provides that the Subcontract must require the Subcontractor to obtain
the same bonds and insurance coverage as are required of the Contractor.

What is the difference in the contractual relationship between the

Owner and “Separate Contractor” and between the Contractor and the
“Subcontractor”?
The Owner shall provide for the coordination of the work performed by the Separate
Contractor with the Work of the Contractor. The Contractor is fully responsible to the
Owner for the acts and omissions of his Subcontractors.
 CIAP DOCUMENT 102
Is there a contractual relationship between the Owner and the
Subcontractor?
The consent of the Owner to the Contractor’s engagement of a
Subcontractor shall not create any contractual relation between the
Subcontractor and the Owner.

Is it required to appoint an Owner’s representative?

Section X, Article 34 (Owner’s Representative) provides for the
appointment of the representative of the Owner, and the extent and
limitation of the authority granted to the representative.

Is the Owner required to make advance payment to the Contractor?

Article 32 (Owner’s Responsibilities and Liabilities) provides that the
Owner shall pay the Contractor an advance payment, which shall be used
for mobilization, purchase of materials, and shall be recouped pro rata in
the progress billings.
 CIAP DOCUMENT 102
Can the Contractor commence with the Work even without the
consent of the Owner?
Article 21.01 (Notice to Proceed, when required) states that premature
commencement of construction shall be at the Contractor’s risk, and the
Owner gives the Contractor express or implied authority to do so.

How can the Owner ensure the quality and efficient execution
of the Work?
Section VI (Labor, Work and Payments) provides that the Owner shall at all
times have access to the Work and shall provide sufficient number of
inspectors while Work is in progress to ensure quality.
 CIAP DOCUMENT 102
Is substitution of materials and equipment allowed?
Section III (Equipment and Materials) provides that all materials and equipment must
conform to all Laws that are in force and applicable during the period of construction, and
that the Contractor shall bear all damages by reason of any delay in the Work arising from
failure to comply with such Laws.

What constitutes Change Order and adjustment of contract price?

Section VI, Article 20 (Work) describes the circumstances that are covered by a Change
Order and that warrant adjustment in contract price and, if necessary, corresponding
adjustment in completion time.

What are the conditions for the release of payment to the Contractor?
Art. 22.01 provides that the Contractor shall submit to the Owner the Breakdown of Work
and Corresponding Value of the Contract Amount showing the value assigned to each part of
the Work.
 CIAP DOCUMENT 102
What is Progress Payment? What are the documents to be submitted
The Contractor may submit
periodically but not more than once
by the Contractor to the Owner before
each month a Request for Payment final payment?
for work done. Each request for 1. Certificate of Final Building Occupancy;
progress payment shall be computed 2. Certificate of Final Inspection of electrical,
from the work completed on all telephone, sanitary, mechanical, water, gas, safety
items listed in the Breakdown of and other utilities;
Work and Corresponding Value, less 3. Original and three (3) sets of prints of “As-Built
a retention of 10% of the progress Drawings” of electrical, sanitary, gas, telephone,
payment to the Contractor. and mechanical works;
4. Three (3) copies of Directory of Panel Boards
What is Retention Money?
and list of circuits;
Progress payments are subject to
5. Three (3) copies of Instructions and Manual for
retention of ten percent (10%). The
operating and maintaining of fixtures and
purpose of retention is to cover
equipment;
uncorrected discovered defects and
6. Three (3) copies of Keying Schedule; and
third party liabilities. (Not in CIAP
7. Release of liens arising under the Contract
Doc. 102)
(Sworn Statement or Indemnity Bond).
 CIAP DOCUMENT 102
Does the release of final payment relieve the Contractor of liability for any
defect in the Work?
After release of final payment and acceptance by the Owner of the Work, the Contractor is
still liable for any defect in the Work, if:
1. the defect is hidden;
2. the Owner’s acceptance of the Work was made with reservations to specific portion of
the Work;
3. inferior work or work which does not comply with the Drawings and Specifications and is
apparent upon inspection by the Owner within one year from final payment; and
4. hidden defect discovered within the warranty period or within one year from posting of
the Guarantee Bond.

The Contractor is likewise liable for damages if the edifice falls, within fifteen years from
completion of the structure, on account of defects in the construction or the use of
materials of inferior quality or due to any violation of the terms of the Contract as provided
in Article 1723 of the Civil Code of the Philippines.
 CIAP DOCUMENT 102
When shall the Owner release the retention money?
The amount retained by the Owner under the provision of the Contract shall be
released not later than the expiration of the “Period of Making Good of Known Defects”.

What does “Period of Making Good of Known Defects” mean?

The expression “Period of Making Good of Known Defects” shall mean a period of not
more than thirty (30) calendar days, calculated from the date of receipt by the Contractor
of the last item in the punch list.

If after release to the Contractor of final payment or retention there are

still unpaid claims of Subcontractors and/or suppliers, is the Owner obliged
to pay such claims?
Section IX, Article 33.01 provides that, as a condition to final payment and/or release
of the retention, the Contractor shall release the Work from any legal liens.
 CIAP DOCUMENT 102
Can the Owner take possession What is a punch list?
of and use any completed Punch list, as defined under Article 20.11 C (a),
portion of the Work prior to is the list of defects found or discovered on the
completed work and which should be received
overall completion?
by the Contractor not later than 30 days from
Section VI, Article 20.10
(Use of Completed Portions of Work) date of substantial completion.
provides that the Owner may take
possession of and use any completed or What are the grounds for the
partially completed portion of the Work suspension of the Work or termination
prior to overall completion, and shall issue a
Certificate of Completion for such portion of the Contract?
taken over and release retention as Section 8 (Suspension of Work and Termination
required by the Contract. of Contract) illustrates the conditions by which
What is substantial completion? the Contractor or the Owner may suspend the
Section VI, Article 20.11 (Substantial Work or terminate the Contract.
Completion and its Effect) provides that
there is substantial completion when
the Contractor completes ninety five
percent (95%) of the Work.
 CIAP DOCUMENT 102
Are there prescribed periods within What is the penalty for delay?
which the contracting parties shall Article 21.05 provides that upon failure of
perform their respective obligations the Contractor to complete the Work within
under the Contract? the Completion Time, the Contractor shall
CIAP Document 102 provides the pay the Owner liquidated damages in the
prescribed time limits for the execution of
amount stipulated in the Contract as
the contract conditions in order to facilitate
the performance of the Works covered
indemnity, but shall not exceed ten percent
under the Contract [Section XI (Schedule of (10%) of the total contract price [Art. 29.06
Time Limits)]. (3)].
What circumstances necessitate an
extension of time?
Article 21.04 (Extension of Time) provides
that the Contractor shall be entitled to an
equitable adjustment of completion time
subject to certain conditions.

Article 21.04 (D) states that delay in the

payment of any progress billing shall
automatically extend the Completion Time
by a period equal to the delay
 CIAP DOCUMENT 102
In case of disagreements in the interpretation and implementation of
the contract conditions, how can CIAP help resolve such disputes?
Section IX, Article 33.04 provides that in case of disagreements, the parties may
engage the services of an adjudicator to resolve their disputes, and that if either of
the party disagrees with the resolution of the adjudicator, the parties may submit
such disputes to arbitration.

One of the implementing arms of the CIAP, the Construction Industry Arbitration
Commission (CIAC), is tasked to provide alternative dispute resolution facilities for the
speedy and equitable settlement of claims and disputes arising from, or connected
with, construction contracts in the Philippines. CIAC offers mediation and arbitration
as ways of reconciling differences between disputants with the help of people who are
familiar/knowledgeable with the construction industry.
 CIAP DOCUMENT 102
What is Mediation?
Mediation, as defined under Section 6 How can interested parties avail of
of the CIAC Mediation Rules, shall
CIAC facilities?
mean a voluntary process in which a
mediator, selected by the disputing
If a dispute arises, a party may initiate the
parties, facilitates communication and
mediation by delivering a written Request for
negotiation, and assists the parties in
Mediation to the other party in accordance
reaching a voluntary agreement
with the CIAC Mediation Rules, or if
regarding a dispute.
mediation fails, a Request for Arbitration in
accordance with the CIAC Rules of Procedure
What is Arbitration? Governing Construction Arbitration.
Arbitration is defined as the
investigation and determination of
matters of differences between
contending parties by one or more
unofficial persons, called arbitrators or
referees, chosen by the parties. It is
intended to avoid the formalities, the
delay, the expense and vexation of
 CIAP DOCUMENT 102
Are there recommended dispute resolution clauses?
For parties entering into a Contract who wish to have future disputes referred to mediation
and/or arbitration, the following dispute resolution clauses may be included:

Mediation and Arbitration (by CIAC): Any dispute or differences arising out or in connection
with this contract shall be referred to the Construction Industry Arbitration Commission
(CIAC) for settlement, first through mediation under its Mediation Rules; or failing which, by
arbitration under its Rules of Procedure Governing Construction Arbitration by [indicate
number; one or three] arbitrator(s).
The appointment of mediator or 10 arbitrator/s shall be made in accordance with such
Rules. The place of mediation or arbitration shall be [indicate place].

Purely Arbitration (by CIAC): Any dispute arising out of or in connection with this contract,
including any question regarding its existence, validity or termination shall be referred to
and finally resolved by arbitration under the Rules of Procedure Governing Construction
Arbitration promulgated by the Construction Industry Arbitration Commission, by [indicate
number: one or three] arbitrator(s) to be appointed in accordance with such Rules. The
place of arbitration shall be [indicate place].
 CIAP DOCUMENT 102
By negotiation among the parties (w/ time frame),
Mediation and Arbitration (by CIAC):

Any dispute or differences arising out or in connection with this contract shall be settled by
negotiation within a non-extendible period of 30 days from written demand by either party.
If such negotiation should fail, the same shall be referred to the Construction Industry
Arbitration Commission (CIAC) for settlement; first, through mediation under its Mediation
Rules within a non-extendible period of 48 days; or failing which, by arbitration under its
Rules of Procedure Governing Construction Arbitration by [indicate number: one or three]
arbitrator(s). The appointment of mediator or arbitrator/s shall be made in accordance with
such Rules promulgated by the CIAC. The place of mediation or arbitration shall be [indicate
place].
 CIAP DOCUMENT 102

What are the issues that can be submitted for mediation or

arbitration?

The jurisdiction of the CIAC may include, but is not limited to, the
following:
- violation of specifications for materials and workmanship;
- - violation of the terms of agreement;
- - interpretation and/or application of contractual provisions;
- commencement time and delays;
- maintenance and defects;
- changes in contract cost
- payment default of employer or contractor; and
- - amount of damages and penalties.
 CIAP DOCUMENT 102

SECTION XI
SCHEDULE OF TIME LIMITS
The Contractor shall perform his work subject to certain Time Limits. This indexed section, as
based on the entire General Conditions, is provided for in order to facilitate the execution of
his work.
NO.
NO.NO.
TITLE
NO. TITLE
TITLE
TITLE  TIME
 TIME TIME
LIMIT
 TIMELIMITLIMIT
LIMIT REFERENCE
REFERENCE
REFERENCE
REFERENCE
NO.
5.  CORRECTION OF WORK
TITLE  TIME LIMIT REFERENCE
ARTICLE
ARTICLE
ARTICLE
ARTICLE NO. NO. NO.
NO.
NO. TITLE  TIME LIMIT REFERENCE
2.  
3.  
NO. TITLE
CONTRACT
NO. TITLE
PROGRESS/FINALSUM PAYMENT
 TIME LIMIT  TIME LIMIT REFERENCE ARTICLE
REFERENCE
ARTICLE NO.
NO.
7. 5.1 Issuance of Punch
TORIGHTList The Owner shall issue the punch list/s if  which thedaysContractor mustto Owner ARTICLE 20.11NO.
1.   CONTRACT TIME
4.
6.     
OWNER'SCONTRACTOR'S
RIGHT
SUBSTANTIAL
SUSPEND WORK OR
TO
COMPLETION
TERMINATE
TERMINATE CONTRACT
May be
 
Contractor
and
done
receive
Owner,
may suspend
immediately
not
for any later
of the
work
than
or
and withoutterminate
thirty
following (30)
reasons:
Contract
notice 
days
upon 15
Contractor
from
Substantial completion is attained if the Contractor completes the dateARTICLE NO.
written notice
should:
of
26
28.01
20.11
8.    GUARANTEE
2.1  
CONTRACTBreakdown of WorkBOND & Corresponding   substantial 
To be submitted
ninety completion
orfive per within
cent [par 15
(95%) days
C (a)].of from
or the theis receipt
works; or the of the
Notice
orOwner
31.05
22.01
and
Value
3.1  
8.1 
its EFFECTS
1.1   Contract Time
Owner's Action on
Contractor's Guarantee Payment
(1)    Declare
Request (1)    If any
creditors The
or
days through
To
To to
Owner be
bankruptcy,
court
beProceed
appointment
approves made furnished
To commence on the 7th day
other
may
no fault of
become
public
within
add
of
the 15
to the the
insolvent
authority
days punch
trustee/receiver
theContractor’s
Owner
orders
after
Contractor or hisbilling
assigns
work
receipt
list
for  items toupon
beassets
ofbut
Contractor
employees;
stopped
request
only
or
release
for
21.02
as
any
suspended
for
to
of
for completing at least 95% payment
its
of
benefit
property.
of90his
for
22.05
      corrective retention work in and
the shall
original be
punch effective
list/s not for
later a
sixty period
(60) of
  Reckoning
Bond May be days
(2)   done from receipt of Notice to
one
If Owner
offrom
  after
thesubstantial
unfinished
works unless
giving
year
fails to pay 15 days[par.
commencing
Contractor 
portion
the
written
prevents
Owner can establish that the
Cthe(b)]
notice
approved torequest
from
the Contractor
normal the oroftothe
date
for payment
use his Surety
ofcompleted
within 15 fromif
 
(1)    Disregard
Proceed (NTP) unless NTP
receipt.should:
Contractor
portion
acceptance
or violate [par. A as
(a) &
provisions a of(b)].
guarantee
the Contract Documents that all ormaterials
Owner's
28.02

3.2   Owner's Action on Final Payment instructions; provides for a later date
(3)    If Owner fails to pay Contractor the agreed sum within 30 days after its award by
and
To workmanship
act within
arbitrators.        
The Owner
30 days from receipt
may issue installed
a Certificate
of theare request ofbefor
goodpayment.
5.2 Correction
2.2   Request
Claim Before
for Extra or Cost
            After Final   Poor
(2)    Fail to provide or inferior
Notice to bework,
skilled apparent
superintendent,
given to Owner upon
workmen
within 15of
inspection
or
daysSubstantial
to
suitable Completion
materials or 22.10
20.08
Payment equipment; quality.  
(4)   condemned
If the or equivalent
Owner
  consent &
suspends document
Contractor
the work notified but
without the
to
cause date
enable
for more of
him document
to
than correct,
15 days is
withoutnot
(3)    Fail to make
remove &prompt
replace payment
the ofsame.to sub-contractors,
Owner has onefor isyearlabor
fromorto materials
date or
controlling if substantial completion shown or of been
, have
Contractor's
equipment; (1)    after receipt instruction involving extra cost
final payment
 attained to condemn
toearlier, unless poor or inferior
the Contractor work, otherwise,
accepts thethe certificate
1.2   Request for Time
3.3 Delayed Payment (4)    Disregard
and/or
To be filed within 15 days from
Delay
(5)    If Owner
instructions
without
(2)   
interest
equipment,
inauthority
thefails
after
payment
to
from
for
deliverofatof
remove
taking
recognition
due
work
the
any
date
along
the
the
of
amount
construction
Owner's
orthereplace
exceptions
baseddelay on
critical
due
due
the
path
shall entitle
site Owner-supplied/furnished
Representative;
such shall
thereto
to
30
beyond be
Owner's
day intreated
writing
loan
fifteen fault.
rate
(15) asof
days
21.04
Contractor
change
fifteen
the
after
materials
Land
its (15)
to 22.05
(5)    Violates indelivery
any substantial way any provisions of the Contract Documents
scheduled
(6)    Repeatedly
 
occurrence of event which
order.Bankdays offrom
delaysthedate.receipt of of
Philippines.
prosecution the workcertificate
per agreed [par. A (c)]. Schedule
Construction
Extension and/or
caused delay. ( par. B)
PERT/CPM plus any time extension duly
(6)    If approval of Variation Orders for additional works along the
 
beyond fifteen (15) days after submission of approval by the Owner.
granted the Contractor
critical path is delayed

5.3 Making
3.4   Release Good of Known Defects
of Retention Thirty (30)
To be days from
released not receipt by the
later than Contractor
60 days of the lastcompletion
from substantial item in 20.12
22.11
theupon
punch list of Contractor's Guarantee Bond.
posting &
20.13
 CIAP DOCUMENT 102

END!!
THANK YOU FOR LISTENING!!