Rules for Procurement and

Implementation (Project
Management) of
Infrastructure Projects

Engr. Blas Mathias A. Sypaco

Technical Service Chief
COA Regional Office No. VII
 Background
• RA 9184 (Government Procurement
Reform Act – January 26, 2003
• IRR-A – October 8, 2003
• IRR – September 2, 2009
• Latest Revision Published August 29, 2016
will take effect on October 28, 2016
Definition of Infrastructure Projects
[RA 9184,Sec. 5(k)]
• Includes the following:
– construction, improvement, rehabilitation, demolition,
repair, restoration or maintenance of roads and bridges,
railways, airports, seaports, communication facilities;
– civil works components of IT projects;
– irrigation, flood control and drainage;
– water supply, sanitation, sewerage and solid waste
management systems;
– shore protection;
– energy/power and electrification facilities;
– national buildings, school buildings, hospital buildings;
and
– other related construction projects of the government.
 INFRASTRUCTURE PROJECTS

Definition:

For purposes of the IRR, the term

“infrastructure projects” shall have the
same meaning as and shall be used
interchangeably with “civil works”.

4
Preparing for the Procurement of
Infrastructure Projects
• No bidding and award of contract shall be made unless the
detailed engineering investigations, surveys and designs,
including the acquisition of the ROW for the project, have
been sufficiently carried out (Section 17.6, RIRR);
• In case of projects with pending acquisition of right of way
site or location, the procurement process may commence,
but no award of contract shall be made until authority or
permit to enter is issued by the property owner; or a
notarized deed of sale or deed of donation is executed in
favor of the government; or a writ of possession is issued
by a court of competent jurisdiction, as the case may be.
Preparing for the Procurement of
Infrastructure Projects

• Investigations must be duly approved in accordance with

the standards and specifications prescribed by the
HOPE/LCE concerned, or his duly authorized
representative, and in accordance with the provisions of
Annex “A” of IRR;
• Exception: Design and Build Schem wherein bidders are
allowed to submit detailed engineering designs as part of
their bids.(GPPB Res. 22-2007)
 Preparing for the Procurement of
Infrastructure Projects
• Feasibility or preliminary engineering
study should be drawn prior to the
conduct of the detailed engineering
investigations, surveys and designs
to establish the technical viability
of the project and its conformance to
land use and zoning guidelines
prescribed by existing laws;
• Findings in the feasibility study should
be examined and specific (Lack of feasibility study?)
recommendations for changes in
the design standards of principal features,
if desirable, should be supported by detailed
justifications, including their effects on the cost,
and, if necessary, the economic justification
(IRR, Annex “A”).
Preparing for the Procurement of
Infrastructure Projects
• Work under Detailed Engineering shall
include, but not limited to:
1. Design Standards
2. Field Surveys and Investigations
3. Contract Plans
4. Quantities
5. Special Provisions
6. Unit Prices
7. Approved Budget for the Contract
8. Bidding documents as provided for in IRR.
9. Program of Work
Rule IV - Competitive Bidding
Sec. 10. Competitive Bidding

For Infrastructure Projects

 Procedural Steps for Procurement
of Goods & Infrastructure
from time IB is first posted
7 c.d.
Pre-Procurement
Advertisement Issue Bidding
Conference /Posting Documents

1 c.d. Maximum of 50/65 c.d. from last date of advertisement or posting of IB to bid opening

Opening of Opening of
Submission Eligibility Tech. Opening of
Of Bids Docs and Proposal Financial
Eligibility & Prel. Pre-Bid
Exam. Proposal
Check at least 12 c.d. Conference

Proposal Evaluation
Award of
& Ranking Post-qualification Contract
not more than 5/7 c.d. 45 c.d. max
Maximum of 113/144 c.d. with Minimum 28 c.d. 10
 Introduction
Importance of Bidding Documents

• Guide – Defines the objective, scope and outputs of

the project
• Eligibility of bidders
• Defines duration, quantity and delivery
• Technical Requirements
• Contractual Basis
 Introduction
Usage:
Gen Rule: The procedures and practices presented in the PBDs
are for mandatory use in projects (NGAs GOCCs, GFIs, SUCs,
and LGUs) that are financed in whole or in part by:
GOP or
any Foreign Government/Foreign or International Financing
Institution

Except: Treaty or International or Executive Agreement

expressly provides use of foreign government/foreign or
international financing institution procurement guidelines

Prescribed Format:
− 4th Edition (As Harmonized with the Development Partners) – approved through
GPPB Res. 06-2010, dated 17 December 2010
 Introduction
Availability of Bidding Documents:
─ From the time the Invitation to Bid is first advertised/posted until the
Deadline for the Submission and Receipt of Bids
─ Posted (upload) at the PEs website and PhilGEPS website
─ Prospective bidders may download the Bidding Documents from any of
the said websites for free
─ However, bidders shall pay the fee for the Bidding Documents upon
submission of their Bids.
 To recover the cost of its preparation and development
 Table of Contents
Goods Infra
Sec. I - Invitation to Bid (IB) Sec. I - Invitation to Bid (IB)

Sec. II - Instructions to Bidders (ITB) Sec. II - Instructions to Bidders (ITB)

Sec. III - Bid Data Sheet (BDS) Sec. III - Bid Data Sheet (BDS)

Sec. IV - General Conditions of Contract Sec. IV - General Conditions of Contract

(GCC) (GCC)
Sec. V - Special Conditions of Contract Sec. V - Special Conditions of Contract
(SCC) (SCC)

Section VI - Schedule of Requirements Sec. VI - Specifications

14
 Table of Contents
Goods Infra
Section VII - Technical Specifications Sec. VII - Drawings

Section VIII - Bidding Forms Sec. VIII - Bill of Quantities (BOQ)

Section IX – Foreign Assisted Projects Sec. IX - Bidding Forms

Sec. X - Foreign-Assisted Projects

 Instructions to Bidders (ITB)
Documents comprising the Bid: Eligibility and
Technical Components
• The first envelope shall contain the following:
Eligibility Documents
Class “A”
• Legal Documents
 DTI / SEC / CDA Registration
 Mayor’s permit from principal place of business
 Tax Clearance per EO 398 Series 2005 finally review by
BIR – Sec. 24.1(a) IRR & C 12.1(a), ITB (GPPB Res. 21-
2013)
• Technical Documents
 Statement of all on-going contracts
 Statement identifying the bidders single largest 16
completed similar contract (GPPB Res 29-2012)
 PCAB (infra)
 Instructions to Bidders (ITB)
Documents comprising the Bid: Eligibility and
Technical Components
• The first envelope shall contain the following:
Eligibility Documents
Class “A”
• Financial Documents
 Latest Audited Financial Statements stamped received
by the BIR or its duly accredited institution
 NFCC computation
Class “B”
 Valid JVA/Special PCAB License

17
 Instructions to Bidders (ITB)
Documents comprising the Bid: Eligibility and Technical Components

• The first envelope shall contain the following:

─ Technical Component
a) Bid Security as to form, amount and validity period;
b) Project Requirements
c) Omnibus Sworn Statement

• The second envelope shall contain the following:

a)Financial Bid Form (includes bid prices and bill of quantities, as well
as applicable price schedules)
b)Other documents related to the financial component of the bid
required in the bidding documents

• All bids that exceed the ABC shall not be accepted.

18
 Instructions to Bidders (ITB)
Eligible Bidders (INFRA)
• Duly licensed Filipino citizens/sole
proprietorships, Partnerships, Corporations
and Cooperatives - 75% Filipino (LOI 630)
• If joint venture, less than 75% is allowed if
 Structures to be built require techniques not possessed by
75% Filipinos
 Not less than 25% Filipino
• Foreign Bidders may be eligible to participate
only when provided for under any Treaty or
International or Executive Agreement 19
 Instructions to Bidders (ITB)
• Single Largest Similar Completed Contract
Eligibility Criteria
 For Infra – 50%
 Contractors under Small A and B categories w/out
similar experience on the contract may bid if the
contract cost is not more than 50% of the ARCC
of their registration.
 For foreign funded procurement, a different track
record may be agreed upon
20
 Registration Allowable Range of Contract Cost (in Million
Particulars Pesos)

Prior and CFYs 2004- CFYs 2006- CFYs 2008-

up to CFY 2005 & 2007 & 2009 &
2003-2004 2005-2006 2007-2008 2009-2010
Size (For (For (For
License (For
and projects projects projects
Category projects
Range advertised advertised advertised advertised
for bidding for bidding for bidding for bidding
prior and from July from July from July
up to June 1, 2004 to 1, 2006 to 1, 2008 to
30, 2004) June 30, June 30, June 30,
2006) 2008) 2010)
Small A Trade Up to 0.5 Up to 0.5 Up to 0.5 Up to 0.5

Small B C&D Up to 3 Up to 10 Up to 20 Up to 30

Medium A B Up to 15 Up to 50 Up to 100 Up to 150

Medium B A Up to 30 Up to 100 Up to 200 Up to 300

Large A AA Up to 50 Up to 150 Up to 300 Up to 500

Large B Less than Less than Less than Less than

AAA or above 50 or above or above or above
150 300 500
 Instructions to Bidders (ITB)
Bidders Responsibilities
The Bidder is responsible for the following:

─ Having taken steps to carefully examine all of the Bidding Documents;

─ Having acknowledged all conditions, local or otherwise, affecting the

implementation of the contract;

─ Having made an estimate of the facilities available and needed for the
contract to be bid, if any;

─ Having complied with its responsibility to inquire or secure

Supplemental/Bid Bulletin; 22
 Instructions to Bidders (ITB)
Bidders Responsibilities
• The Bidder, by the act of submitting its bid, shall be deemed to have:
a) Inspected the site
b) Determined the general characteristics of the contract works and the conditions for the
Project
c) Examine all instructions, forms, terms, and project requirements in the Bidding
Documents.

• It shall be the sole responsibility of the prospective bidder to determine

a) Location and the nature of the contract, project, or work;
b) Climatic conditions;
c) Transportation facilities;
d) Nature and condition of the terrain, geological conditions at the site communication
facilities, requirements, location and availability of construction aggregates and other
materials, labor, water, electric power and access roads; and
e) Other factors that may affect the cost, duration and execution or implementation of the
contract, project, or work. 23
Omnibus Statement (prescribed by GPPB)
– Not blacklisted (RIRR Section 25.1)
– Docs submitted is an authentic copy of the original, complete, and
that all statements and information provided therein are true and
correct. (RIRR Section 25.2)
– Authorization to verify all documents submitted (RIRR Section
25.3)
– Authorization of representative (RIRR Section 25.4)
– Complies with disclosure provision (RIRR Section 25.5)
– Complies with responsibilities provided in the PBDs (RIRR Section
25.6)
– Complies with existing labor laws (RIRR Section 25.7)
– It did not give or pay, directly or indirectly, any commission,
amount fee, or any form of consideration, pecuniary or
otherwise, to any person or official, personnel or
representative of the government in relation to any
procurement project or activity. Sec. 25.2(a-c) (iv) IRR (GPPB
Res. 22-2013)
 Advertisement and Posting of
Invitation to Bid (IB)
Rates for Sale of Bidding Documents: (GPPB Res 04-2012)

Approved Budget for the Contract Maximum Cost of

Bidding Documents
(in Philippine Peso)
500,000 and below 500.00
More than 500,000 up to 1 Million 1,000.00
More than 1 Million up to 5 Million 5,000.00
More than 5 Million up to 10 Million 10,000.00
More than 10 Million up to 50 Million 25,000.00
More than 50 Million up to 500 Million 50,000.00
More than 500 Million 75,000.00
25
 Bidding Process for Goods & Infra
START
1. Posting in PhilGEPS
2. Posting in Agency
website, if any
3. Posting in Agency Prepare Bid Documents
E-procurement
service provider
4. Posting in
Conspicuous Yes
Bulletin Boards Pre-Procurement
ABC > 5M?
5. If ABC> 15M, Conference
advertisement at
least once in a No
newspaper of
general nationwide
circulation (after 2
yrs. upon Issue Invitation to Bid (IB)
compliance of
philgeps
requirement no
longer required) Interested Bidders
Issue Bid Documents &
Purchase Bid
Eligibility Requirements
Documents

B
 Bidding Process for Goods & Infra
B at least 12 days
At leastopening
before 12 c.d. of
before bid opening
bids
Yes Pre-Bid
ABC > 1M?
Conference

Bidders No
submit Opening should be w/n
Eligibility, Open Eligibility Envelope & 45/50/65 c.d. from last date
of advertisement/posting
Technical & Conduct Eligibility Check
Financial Env. Opening of 2 envelopes
done within one (1) day
BAC Sec. stamps face of
Ineligible bidder Open Technical Proposal & outer envelope as
may file Motion “RECEIVED” w/ date
for Reconsideration Conduct Prelim. Exam. and time countersigned
by bidder/representative
BAC shall initial every
Within 3 c.d. from page of original copies
receipt of verbal or Open Financial Proposal of all bids
written notification Return bids of ineligible
bidders unopened
BAC prepares Resolve MR filed w/n 3
Abstract of Bids, and Bid Evaluation & Ranking c.d. from receipt of
Evaluation Report notice
C
 Bidding Process for Goods & Infra
All bidders
C Post-Dis-
qualified? Yes
BAC/TWG
may conduct
site inspection, Are all Declare Failure
test samples, bids >ABC? Yes of Bidding
and inquiries
of LCB’s past No Yes
performances Modify Specs.
Post-Qualification of
Prepares Post- 2nd
Qualification Lowest Calculated Bidder
Failure?
A
Summary Report No
No
BAC notifies Bidder Yes
Post-disqualified Yes
Post-qualified?
Bidder of reason
Yes
1. BAC Resolution to Resolve any
Post-disqualified
bidders may file Recommend Award pending MR/ Adjust ABC
MRs/Protests 2. Notify losing Bidders Protest before
making any
Award
W/n 4/7 c.d. from Approval/Disapproval Negotiated
receipt of BAC
Resolution of BAC Recommendation D Procurement
 Bidding Process for Goods & Infra
D

Resolution
Approved?
No
?
Yes

Issue Notice of Award

Bidder posts Within 10

Performance Sign contract c.d. from
Security Notice of
Award

Did Bidder sign No

Contract & post Disqualify
Perf. Security? Bidder

Yes
C
E
 Bidding Process for Infrastructure
Projects Yes E
Sanggunian
Authorization?

Yes No
Contract Contract
Approval by Higher
Authority?
Approved by
HEAD?
? A

Within NGAs, Yes

SUCs & No Approval/ Within 3 c.d.
LGUs – 20 Disapproval Issue Notice to Proceed from date of
CD; GOCCs – (deemed approved) approval
30 CD

Proceed to Contract
Implementation Process

END
RULE XVI – ALTERNATIVE
METHODS OF PROCUREMENT

Sec 48.
Alternative Methods
For Infrastructure Projects
 Alternative Methods
NEGOTIATED PROCUREMENT (TWO FAILED
BIDDINGS)

Conditions:
1.Two failed biddings
2.Mandatory review of the following:
 Minimum technical specifications
 ABC, which may be adjusted up to 20% from last
bidding

Invite sufficient number to ensure competition

Information communicated on an equal basis

32
 Alternative Methods
NEGOTIATED PROCUREMENT (TWO FAILED BIDDINGS)

 Simultaneous negotiations

 Submission of best and final offer on a specified date

 Successful offer to be selected:

 Meet minimum technical specifications
 Does not exceed ABC

 Observers shall be invited in all stages

33
 Alternative Methods
SMALL VALUE PROCUREMENT (NEGOTIATED PROCUREMENT)
A. Conditions :
1.There is an unforeseen contingency requiring immediate purchase
2.Amount does not exceed the threshold

THRESHOLDS:
a) For NGAs, GOCCs, GFIs, and SUCs – P100,000.00
b) For LGUs:

DOF Classification of LGUs Maximum Amount (in Php)

Province City Municipality
1st Class 100, 000 100, 000 50, 000
2nd Class 100, 000 100, 000 50, 000
3rd Class 100, 000 80, 000 50, 000
4th Class 80, 000 60, 000 50, 000
5th Class 60, 000 50, 000 50, 000
6th Class 50, 000 50, 000 50, 000

Barangays – 50, 000.00

34
 Alternative Methods
B. Procurement of Small Value Procurement:
a) For NGAs, GOCCs, GFIs and SUCs – P500,000.00
b) For LGUs

Classification of LGUs Maximum Amount (in Php)

Province City Municipality
1st Class 500, 000 500, 000 100, 000
2nd Class 500, 000 500, 000 100, 000
3rd Class 500, 000 400, 000 100, 000
4th Class 400, 000 300, 000 50, 000
5th Class 300, 000 200, 000 50, 000
6th Class 200, 000 100, 000 50, 000

b.2: Barangays – Php 50, 000.00

35
 Alternative Methods
NEGOTIATED PROCUREMENT (EMERGENCY CASES)

 Conditions:
 Imminent danger to life or property during a state of calamity
 When time is of the essence arising from natural or man-made calamities
 Other causes where immediate action is necessary:
 To prevent damage to or loss of life or property
 To restore vital public services, infrastructure facilities, and other
public utilities

 Negotiate with any supplier, contractor, or consultant with technical, legal,

and financial capability

36
 Alternative Methods
NEGOTIATED PROCUREMENT (TAKE OVER OF CONTRACTS)

 Conditions:
 Rescinded or terminated contract
 Immediate action is necessary:
 To prevent damage to or loss of life or property
 To restore vital public services, infrastructure facilities,
and other public utilities

 Negotiate starting with the 2nd LCB at the bidder’s original bid
price, then to the next if negotiation fails

 If negotiation fails, invite a short list of at least 3 to submit bids

and negotiate starting with the LCB
37
 Alternative Methods
NEGOTIATED PROCUREMENT
(ADJACENT/CONTIGUOUS)

Conditions:
1.Subject contract is adjacent or contiguous to an on-going infra or consulting
2.Original contract is a result of competitive bidding
3.Subject contract has similar/related scopes of work
4.Within the contractor’s/consultant’s capacity
5.Same prices or lower unit prices as the original contract less mobilization cost
6.Amount does not exceed amount of the on-going project
7.No negative slippage
8.Negotiations commenced before expiry of original contract

38
 Alternative Methods
NEGOTIATED PROCUREMENT (AGENCY-TO-AGENCY)

Conditions:
1.Cost-benefit analysis indicating A-to-A is more efficient and
economical
2.A-to-A does not exceed 25% of PE’s total budget for each
category (goods, infra, consulting), as reflected in its approved APP
3.Servicing agency has mandate to undertake the project
4.Servicing agency owns or has access to necessary tools required
for the project

Other requirements provided in Implementing Guidelines on

Agency-to-Agency Arrangements (GPPB Resolution 18-2007)

39
 Alternative Methods
NEGOTIATED PROCUREMENT (Scientific, Scholarly or
Artistic Work exclusive Technology and Media Services)

 Requirement:

•The construction or installation of an infrastructure facility

where the material, equipment, or technology under a
proprietary right can be obtained from the same contractor

40
 Alternative Methods
NEGOTIATED PROCUREMENT (NGO PARTICIPATION)

Condition:
•Appropriation law or ordinance earmarks an amount to be
contracted to NGOs

PE may opt to conduct public bidding or negotiated procurement

for the selection of NGO, subject to the rules provided in the
guidelines (GPPB Resolution 12-2007)

41
 Alternative Methods
NEGOTIATED PROCUREMENT (COMMUNITY
PARTICIPATION)

Conditions:
1.In the interest of project sustainability or to achieve certain
specific social objectives

2. PE to propose procedures, specifications, and contract

packaging for GPPB approval

42
 CONTRACT
IMPLEMENTATION
Annex “E” of IRR

43
 Notice to Proceed

• The LCE/HOPE or his/her duly authorized representative issues

NTP to the successful bidder within three (3) calendar days
from the date of the approval of the contract.

For infra projects with ABC of 50M and below, the maximum
period is 2 calendar days.

• BAC Secretariat, shall post a copy of the NTP and the approved
contract within fifteen (15) calendar days from its issuance in
the PhilGEPS or the website of the PE, if any. (Section 37.4.2,
IRR of RA 9184)

44
 Notice to Proceed

EFFECTIVITY OF THE CONTRACT

The contract effectivity date shall be provided in the

Notice to Proceed by the PE, which shall not be later than
seven (7) calendar days from its issuance. (Section 37.4.1,
IRR of RA 9184)

45
Variation Orders – Change Order/Extra
Work Order

Change Order - may be issued by the

procuring entity to cover
any increase/decrease
in quantities

46
Extra Work Order – may be issued by the
procuring entity to cover the introduction
of new work necessary for the completion,
improvement or protection of the project
which were not included as items of work
in the original contract.

Provided that the cumulative amount of

Variation Order does not exceed ten
percent (10%) of the project cost.
47
 Variation Orders

• Appropriate sanctions shall be imposed on the designer,

consultant or official responsible for the original detailed
engineering design which failed to consider the Variation
Order beyond ten percent (10%).

• Time Frame for the processing of variation orders from the

preparation up to the approval by the procuring entity shall not
exceed 30 calendar days.
 ADDITIONAL/EXTRA WORK COSTING

For Variation Orders, the contractor shall be

paid for additional work items based on the
following:

A) For additional work duly covered by

Change Orders involving work items which
are exactly the same or similar to those in
the original contract, the applicable unit
prices of work items original contract shall
be used.

49
 ADDITIONAL/EXTRA WORK COSTING

For additional/extra works duly covered by EWO

involving new work items that are not in the
original contract, the unit prices shall be based on
the direct unit costs used in the original contract
(e.g. unit cost of cement, rebars, form lumber,
labor rate, equipt. rental, etc).

50
ADDITIONAL/EXTRA WORK COSTING

The direct cost of new work item shall then be

combined with the mark-up factor (i.e. taxes and
profit) used by the contractor in his bid to
determine the unit price of the new work item.

51
 Advance Payment
REQUIREMENTS:

•Written request of the contractor

– Submission of an irrevocable standby letter of credit of

equivalent value from a commercial bank, bank
guarantee, or surety bond

– Amount not to exceed 15% of the contract price

52
 Progress Payment

• Once a month, the contractor may submit a Statement of Work

Accomplished (SWA) or progress billing and corresponding
request for progress payment for work accomplished

• The SWA should show the amounts which the contractor

considers itself to be entitled to up to the end of the month, to
cover (a) the cumulative value of the works it executed to date,
based on the items in the Bill of Quantities, and (b) adjustments
made for approved variation orders executed

53
RETENTION MONEY

- Progress payments are subject

to 10% retention
- based on total amount due prior
to any deduction
- shall be retain from every
progress payment until 50%
completion of the works, subject
to satisfactory and on time
completion of the project.

54
 Liquidated Damages (Sec. 68)

– Applicable to Goods & Infra

• One-tenth of one percent (1%)
of the cost of the unperformed
portion for every day of delay
but total not to exceed 10% of
the contract amount

55
LIQUIDATED DAMAGES

• In no case however, shall the total sum of liquidated

damages exceed ten percent (10%) of the total
contract price, in which event the contract shall
automatically be taken over by the procuring entity
concerned or award the same to a qualified
contractor through negotiation and the erring
contractor’s performance security shall be forfeited.

56
LIQUIDATED DAMAGES

The amount of the forfeited performance

security shall be aside from the amount of the
liquidated damages that the contractor shall pay
the government and impose other appropriate
sanctions.

57
 DEFECTS LIABILITY PERIOD

In the case of failure or refusal to comply with this

mandate, the Government shall undertake such repair
works and shall be entitled to full reimbursement of
expenses incurred therein upon demand.

58
 Warranty
(Section 62)

For the procurement of infrastructure projects,

the contractor shall assume full responsibility for
the contract work from the time project
construction commenced up to final acceptance
by the government and shall be held responsible
for any damage or destruction of the works
except those occasioned by force majeure.

59
 WARRANTY PERIOD

a. Permanent Structures: Fifteen (15) years

Building of types 4 & 5 ( steel, iron, concrete or
masonry construction) steel and concrete bridges,
flyovers, concrete aircraft movement areas, ports,
dams, diversion tunnels, causeways, wharves, piers,
dikes, filtration and treatment plants, sewerage
systems, power plants, transmission and
communication towers, railway system, and other
similar structures

62
 WARRANTY PERIOD

b. Semi-Permanent Structures: Five (5)

years
Building types 1 & 2 (wooden), 3 ( masonry
and wood const) ,concrete roads, asphalt
roads, river control, drainage, irrigation and
drainage canals, municipal ports and river
landing, deep wells, rock causeway, pedestrian
overpass, and other similar structures; and

63
 WARRANTY PERIOD

c. Other Structures: Two (2) years

Bailey and wooden bridges, shallow wells, spring
development, and other similar structures.

64
WARRANTY PERIOD

In cases where structural

defects and/or failure arise
during the warranty period,
the following persons/parties
shall be held liable:

65
 WARRANTY PERIOD

• Contractor – where structural defects and/or

failure arise due to faults attributable to
improper construction use of inferior
quality/substandard materials, and any
violation of the contract plans and
specifications, the contractor shall be held
liable;
66
 WARRANTY PERIOD

• Consultants – where structural defects and/or failures

arise due to faulty and/or inadequate design and
specifications as well as construction supervision, then
the consultant who prepared the design or undertook
construction supervision for the project shall be held
liable;

67
 WARRANTY PERIOD

• Procuring Entity’s Representatives/Project

Manager/Construction Managers and
supervisors – the project owner’s
representative/s project manager,
construction managers, and supervisor/s
shall be held liable in cases where the
structural defects/failures are ;

68
WARRANTY PERIOD

due to his/their willful intervention in altering the

designs and other specifications; negligence or
omission in not approving or acting on proposed
changes to noted defects or deficiencies in the design
and/or specifications; and the use of substandard
construction materials in the project;

69
 WARRANTY PERIOD

• Third Parties – Third Parties shall be held

liable in cases where structural
defects/failure are caused by work
undertaken by them such as leaking pipes,
diggings/excavations, underground cables
and electrical wires, underground tunnel,
mining shaft and the like, in which case the
applicable warranty to such structure should
be levied to third parties for their
construction or restoration works.
70
 WARRANTY PERIOD

• Users – in cases where structural defects/failures are due

to abuse/misuse by the end user of the constructed
facility and/or non-compliance by a user with the
technical design limits and/or intended purpose of the
same, then the user concerned shall be held liable.

71
 Warranty Security

Form of Warranty Security Amt of Warranty

Security
 To ensure that the contractor will correct
(% of Contract Price)
structural defects and failures
a) Cash or LC from a Universal/Commercial 5%
Bank

b) Bank guarantee from 10%

Universal/Commercial Bank

c) Surety bond callable upon demand issued 30%

by GSIS or a surety/insurance company
certified by the Insurance Comm.

72
Warranty Security (Sec. 62)

– Warranty period vs. Warranty security period

– Warranty security period reduced to 1 year
– Liability per stage
• From project construction to final acceptance
• From project completion to final acceptance
• From final acceptance to warranty security period

Bidding Construction Completion Acceptance Warranty

Types of Implementation of Infrastructure
Projects:
1. By Contract – Procurement by RA 9184
(Infra./Civil Works)
2. By Administration: (GPPB Res. 018-2006
dated Dec. 6, 2006)
a. Construction Materials – Procurement
by RA 9184 (Goods)
b. Labor :
- In – House
- Job – Order 74

- Pakyaw Contracting System

THANK YOU
QUESTIONS?