Contract Implementation for

Government Projects as per

2016 Revised Implementing Rules
and Regulations (IRR) of R. A. 9184
What is a Contract?

Is an agreement of between Procuring Entity (P.E.) and a

qualified Contractor to execute, complete and maintain
works based on the Bill of Quantities incl. the furnishing of
all labor, materials, equipment and others incidental,
necessary or convenient to the complete execution of the
Works; (ii) the passing of any tests before acceptance by
the Procuring Entity’s Representative; (iii) and the carrying
out of all duties and obligations of the Contractor imposed
by the Contract.
3 MAIN PARTS OF THE CONTRACT :

 Contract Agreement – Signed and duly notarized agreement

between the Procuring Entity (P.E.) and the Contractor.

 General Conditions of the Contract (Section IV of PBDS) –

Common document containing all the rights and obligations of
the parties (Contractor and Procuring Entity).

 Special Conditions of the Contract (Section V PBDS) -

complimentary document to the GCC, specifying contractual
requirements as determined by the PE. (Incl. amendments and/or
supplements as set by the P.E.
GENERAL CONDITIONS OF THE
CONTRACT
SECTION 6. CONTRACTOR’S OBLIGATIONS
1. The Contractor shall carry out the Works properly and in accordance
with the Contract. The Contractor shall provide all supervision, labor,
Materials, Plant and Contractor's Equipment, which may be required. All
Materials and Plant on Site shall be deemed to be the property of the
Procuring Entity.

2. The Contractor shall commence execution of the Works on the Start

Date and shall carry out the Works in accordance with the Program of
Work submitted by the Contractor, and complete them by the Intended
Completion Date.

3. The Contractor shall be responsible for the safety of all activities on the
Site.
4. The Contractor shall carry out all instructions of the Procuring Entity’s
Representative that comply with the applicable laws where the Site is
located.

5. The Contractor shall employ the key personnel named in the

Schedule of Key Personnel, as referred to in the SCC, to carry out the
supervision of the Works. The Procuring Entity will approve any proposed
replacement of key personnel only if their relevant qualifications and
abilities are equal to or better than those of the personnel listed in the
Schedule.

6. If the Procuring Entity’s Representative asks the Contractor to remove

a member of the Contractor’s staff or work force, for justifiable cause,
the Contractor shall ensure that the person leaves the Site within seven
(7) days and has no further connection with the Work in this Contract.
7. During Contract implementation, the Contractor and his subcontractors
shall abide at all times by all labor laws, including child labor related
enactments, and other relevant rules.

8. The Contractor shall submit to the Procuring Entity for consent the name and
particulars of the person authorized to receive instructions on behalf of the
Contractor.

9. The Contractor shall cooperate and share the Site with other contractors,
public authorities, utilities, and the Procuring Entity between the dates given in
the schedule of other contractors particularly when they shall require access to
the Site.

10. Should anything of historical or other interest or of significant value be

unexpectedly discovered on the Site, it shall be the property of the Procuring
Entity.
SECTION 7. PERFORMANCE SECURITY
1. Within ten (10) calendar days from receipt of the Notice of Award
from the Procuring Entity but in no case later than the signing of the
contract by both parties, the Contractor shall furnish the performance
security in any of the forms prescribed in ITB Clause 32.2.

FORM AMOUNT
CASH OR MANAGER’S CHECK 10 % of Contract Amount
BANK DRAFT/GUARANTEE 10 % of Contract Amount

SURETY BOND 30 % of Contract Amount

2. The performance security posted in favor of the Procuring Entity shall
be forfeited in the event it is established that the Contractor is in default
in any of its obligations under the Contract.

3. The performance security shall remain valid until issuance by the

Procuring Entity of the Certificate of Final Acceptance
SECTION 9. LIQUIDATED DAMAGES
1. Contractor shall pay 1/10 of 1% of unfinished work per day.

SAMPLE COMPUTATION
AMOUNT OF UNFINSIHED WORK x 0.001 x NO. OF DAYS
Php 150,000.00 x 0.001 x 12 Days = Php 1800.00
SECTION 12. Contractor’s Risk and Warranty Security

1. The Contractor shall assume full responsibility for the Works from the
time project construction commenced up to final acceptance by the
Procuring Entity and shall be held responsible for any damage or
destruction of the Works except those occasioned by force majeure.

2. Defects Liability Period of one (1) year from contract completion up to

Final Acceptance.

3. Forfeiture of Performance Security.

4. Contractor shall be held responsible for “Structural Defects,” i.e., major
faults/flaws/deficiencies in one or more key structural elements of the
project which may lead to structural failure

5. Warranty Against Structural Defects:

15 years – permanent Structures (Type 4 and 5 i.e., School Bldgs.,
Hospitals, Offices etc.)
5 years – Semi-permanent Structures (Type 1, 2 & 3, i.e, roads,
canals, overpass, drainage, etc.)
2 years - bailey & wooden Bridges, irrigation wells and other similar
structures
SECTION 16. Termination for Default of Contractor

i. The Contractor has incurred 15% negative slippage.

ii. Expiration of Contract time due to its own fault.

iii. The Contractor :

i. abandons the Contract Works
ii. Failure to deploy minimum essential equipment
iii. Failure to execute Works in accordance to Plans and Specs.
iv. Refusal to remove or perform Work that has been rejected.
SECTION 17. Termination for Default of Procuring Entity

The Contractor may terminate this Contract with the Procuring Entity if the
works are completely stopped for a continuous period of at least sixty (60)
calendar days, due to the following;

a. Failure of the Procuring Entity to deliver, within a reasonable time,

supplies, materials, right-of-way other items it is obligated to furnish under
the terms of this Contract.

b. Adverse peace and order situation

SECTION 43. VARIATION ORDERS

1. Variations of up to Maximum of 10% of original contract Cost.

2. Change Order

3. Extra Work Order.

4. Variation Order beyond 10% but not more than 20% shall be subject of
another contract.
SECTION 43. SUSPENSION OF WORK

1. PE may suspend work due to force mejuere or any fortuitous events,

unsafe conditions which are unsafe for workers, or adjustment of plans.

2. Contractor may suspend work 15 days after giving notice due to;
a. Right-of-Way problems
b. Adjusted Plans are not furnished by Implementing Agency.
c. Peace and Order conditions
d. failure of PE to furnished materials and equipment if any.
e. Delay in payment of Contractor 45 days after receipt/certified by
PE’s representative.
SECTION 47. EXTENSION OF CONTRACT TIME

1. Upon issuance of Variation Order/Additional Work Order or

occurrence of special circumstances.

2. No extension due to (a) ordinary unfavorable weather conditions and

(b)failure or negligence of Contractor to provide the required
equipment, supplies or materials.

3. May be granted if activity falls within Critical Path.

SECTION 48. PRICE ADJSUTMENT
Except for extraordinary circumstances as determined by NEDA and
approved by the GPPB, no price escalation shall be allowed.

SECTION 49. COMPLETION

The Contractor shall request the Procuring Entity’s Representative to issue
a certificate of Completion of the Works, and the Procuring Entity’s
Representative will do so upon deciding that the work is completed.

50.TAKING OVER
The Procuring Entity shall take over the Site and the Works within seven (7)
days from the date the Procuring Entity’s Representative issues a
certificate of Completion
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