24, February 2018

TO: Carren E. Kho

Ace Oliver P. Acedera
Luane Marie C. Dolauta

CC: Rito Y. Labata

Eddie P. de Guzman

RE: MITIMCO Damage Claim

The estimate of MITIMCO on the cost to repair is reasonable in terms of scope of

works, item quantities and unit costs but the validity of their claim can be challenged to
certain extent. We suggest that their engineers could comment on our thoughts and
discuss with us so can arrive to an agreement.

While the claims they cited are true to the actual condition, it is worth to note the
difference between damage and failure. DAMAGE is a result of failure due to
overloading, misuse or abuse in use while FAILURE is a condition resulting from faulty
design, workmanship or inferior material quality.

The cracking on the entire floor of warehouse #1 is a FAILURE.

Questions;

Was warehouse #1 been operated differently from others (Warehouse #2, #3 &#4)? Or
was it loaded more heavy than others? – Answer: NO.

If the operation inside each warehouse is the same, Why only warehouse #1 had cracks
on the entire floor? – while cracking of floor does not occur at the other warehouses (#2,
#3, #4).

Assuming that all four warehouses are designed for the same type of occupancy, and
were loaded or used in the same way, it can be construed that the floor at warehouse
#1 had been constructed with faulty design, workmanship or poor quality materials.
Further, we understand that they had observed our operation from the start and they
had not given notice to inform us that we are overloading the floors. Besides, there is no
sign inside the warehouse that specifies floor load limits. Under this circumstance, it is
not reasonable that the tenant be made to pay the cost to repair the floors.

Mark Anthony C. Años/ Cherrie P. Gamolo

Project Engineering