CE LAWS,

ETHICS &
CONTRACTS
Engr. Norliela Linog-Beserial
CE Laws, Ethics & Contracts 2

CONTRACT
DOCUMENTS
CE Laws, Ethics & Contracts
3

CONTRACT
The treatment of the word contract in this discussion is limited to the application of the word in
connection with the government contracts particularly in the Department of Public Works and Highways
(DPWH).
Contract as defined by the DPWH manual is the written agreement entered into between the government
and the contractor covering the performance of work and the furnishing of materials in the construction of
a project, using the standard government form of contract.
The contract shall include the following documents:
1. Contract Agreement 12. Bid forms; which includes the ff
2. Conditions of Contract a) Authority of signing official
3. Drawing Plans b) Bid prices in the bill of quantities
4. Specifications c) Detailed estimates
5. Invitation to Bid d) Construction schedules
6. Instructions to Bidders e) Construction methods
7. Addenda f) Project organizational chart
8. Performance Bond g) Manpower schedule
9. Pre-qualifications and Post qualifications h) Equipment utilization schedule
statements i) Cash flow and payment schedules
10. Certificate of cash deposits for operating j) Certificate of site inspection
expenses
11. Notice of award of contract and contractors 13. Other contract documents that may be
approval. required by the implementing office.
 TERMINOLOGIES 4

Notice to Contractors
An official notice to contractors stating among others the time and place where to submit the sealed
proposals/bids for a designated project.

Bid/Proposals
A written offer of a bidder submitted in the prescribed form in response to the advertised project to
furnished materials, labor and equipment to perform a specific work within the time prescribed in
contract payment.

Contract Bond
Contract bond is the security given by the contractor and a surety in a penal sum satisfactory to the
Department as guarantee for the faithful performance of the contract according to its expenses terms, tenor
or effect.

Extra Work
Work or labor and materials furnished by the contractor in order to complete the contract in an
acceptable manner, but for which is no basis of payment provided in the contract.

Special Provision
Specific clause setting forth the conditions or requirements, peculiar to the project under
considerations and covering the work involved in the proposal and estimate, which are not satisfactory
stipulated by the general specifications.
 CE Laws, Ethics & Contracts

5
Bidder
It refers to a person/firm duly registered under the laws of the Philippines formally submitting a
proposal/bid of work, acting directly or thru authorized representative, pre-qualified and duly licensed
under Contractors License Law.

Prequalification of Bidders
Proposal forms will be issued only to responsible prospective bidders who have filed confidential
qualifications statements with the Department and whose qualifications have been considered satisfactory.

Bidding Committee
Incharged with the receiving, opening and evaluating the bids on the designated time and place as
advertised.

Employer
Means the Government of the Republic of the Philippines represented by the DPWH acting thru the
Secretary, including any of his authorized representatives.

Consultants
The personnel of the contracted consulting firms assigned in the project as authorized by the DPWH.

Bill of Quantities
Tabulated form on which the work item number, description, unit and approximated quantities both
with unit cost and total prices for each item of works.
 CE Laws, Ethics & Contracts

Calendar Day 6

Means the period of 24-hr extending from midnight to midnight and shall include all calendar days.

Change Order
Written order issued by the engineer to the contractor covering the alterations or the unforeseen work
resulting either in the increase in the original quantities of any or all item of works or reclassifications of
an existing item to another item as those provided for in the original contract or decrease in the quantity
due to under runs or deletion of portion or section of the project.

Engineer
The Secretary of the Department or a representative duly authorized by the Secretary, such
representative acting only within the scope of particular duties assigned or within the scope of his
authority vested

Contractor
Person/firm undertaking the construction and completion of the project under the terms of the
contract, acting directly or thru duly authorized representative and licensed under the provision of RA
4566.

Bid Schedule
Tabulated form included in the proposal form, containing items, estimated quantities and blank
spaces for unit bid prices and amounts.
 CE Laws, Ethics & Contracts

Pre-Bid Information 7

The Department will provide personnel to assist the prospective bidders in clarifying any and all
questions they may have on the plans, specifications, special provisions and the operating conditions. This
service may be extended to include a pre-bid conference to be held not less than 1 week before the date of
opening the proposals if so requested by the bidders at least 2 weeks before the bidding.

Award
Written acceptance of the proposal/bid submitted by the bidder who is offering the most
advantageous bid to the government.

Execution of the Contract

No proposal shall be considered binding upon the government until after the ratification of the
contract. The contractor to whom the contract has been awarded shall enter into agreement with the
government within 10 days from the date he has been notified of the award.
BIDDING & CONTRACT DOCUMENTS 8

Proposed construction projects to be advertised for the bidding shall consist of the
necessary contract documents to be issued to all pre-qualified bidders. Said documents
includes the following:

1. List of pre-qualified data to be furnished by the tenderer

2. Instructions to bidders which include:
a) General information about the project
b) List of equipment required
c) Work schedules
d) Form of tender guarantee
3. Tender or Bidder’s form
4. Form of contract
5. General conditions of contract
6. Special conditions of contract
7. Technical specifications
8. Detailed drawings
9. Form of bonds
10. Bill of Quantities
 9

SUBMISSION OF TENDERS

Submission of tender or bid shall be in accordance with the following procedures:

1. Bidders shall submit their bid not later than 14 days before the opening of the bid.
The tender shall be in a sealed envelop containing the following documents:
a) Tender Bond
b) Credit Line
c) Partnership Agreement
d) Financial Statement
e) List of completed, on-going and expected projects
f) Contractor’s License
SUBMISSION OF TENDERS 10

Submission of tender or bid shall be in accordance with the following procedures:

2. The completed pro-formas for tendering with annexes, appendices and attached
requirements enclosed and sealed in an envelope marked “tendering volume” shall
be delivered personally on or before the time and date at the given address
specified in the advertisement.

Any tender or bid received after the time and date set for the opening will not be
opened and shall be returned to the Bidder.
This bid shall include the following:
a) Form of Tender with appendices
b) Schedule of Rates and Prices
c) Bill of Quantities
d) Performance Guarantee
e) Schedule of proposed construction plant
f) List of principal technical staff and supervisory staff.
g) Detailed unit price analysis of all pay items as shown in the BOQ
h) Preliminary construction schedules and memorandum of procedures.
 CE Laws, Ethics & Contracts

BIDS & CONTRACT AWARDS 11

Opening and Examination of Tender or Bids

1. At the time, date and place of bidding. Bids are publicly opened and witnessed
for examination and evaluation by the Budding Committee. Bidders are
instructed to be present during the opening of bids.

2. Prior to the reading of the Tender price, contents of the individual Tender
shall be determined as to their conformity and agreement with the
requirements. Any tender not complying with any of the requirements shall
be a cause for disqualification.

3. Only tenders considered satisfactory by the bid committee will be qualify for
the public reading of the bids.

4. The DPWH reserves the right to reject any or all Tenders or Bids and no
reason or explanation shall be given for the non-acceptance of the tender
submitted or to carry out any act which is the interest of the government.
 CE Laws, Ethics & Contracts

BIDS & CONTRACT AWARDS 12

Award of Contract

1. No tender or Bid shall be considered binding upon the DPWH until award
has been given and a Contract of Agreement has been executed.

2. The contract for the work shall be awarded to the bidder offering the most
advantageous bidder to the government and whose bid shall agree with all the
provisions and requirement to render it formal.

3. The bidder to whom the contract will be awarded shall sign the agreement
within thirty (30) calendar days from the date he was advised of the award
and shall within 10 calendar days provide the securities required by the
DPWH. Failure to comply shall be a cause for cancellation of the contract
Award and forfeiture of the Bid Bond as liquidated damages.
TENDER BOND SCHEDULE 13

Tender Bond Schedule

The bidder is required to submit a Tender Bond to the Department not later than
14 days before the day fixed for tendering as a guarantee that he will enter into
contract with the DPWH.

The amount of the Bond shall be in accordance with the following schedule.

Bid Prices (Peso) Bid Bond (Peso)

Up to 100 000 pesos 10% of the amount

Above 100 000 pesos to 1 000 000 pesos 10 000 pesos + 5% in excess of P100 000

Above 1 000 000 pesos to 5 000 000 pesos 55 000 pesos + 4% in excess of P1 000 000

Above 5 000 000 pesos to 10 000 000 pesos 215 000 pesos + 3% in excess of P5 000 000

Above 10 000 000 pesos to 100 000 000 pesos 365 000 pesos + 2% in excess of P10 000 000

Above 100 000 000 pesos 2 165 000 pesos + 1% in excess of P100 000 000
CREDIT LINE 14

In addition to the Tender Bond, bidder will also submit to the Department within
14 days before the day fixed for the opening of bids a proof of his credit line.
Credit line must be sufficient enough to cover up the amount equal to the
projected expenditures of equipment rentals, materials, fuel, labor and overhead
expenses of the construction during 60 days highest expenditures, or 15 percent of
the project cost whichever is smaller.
However, credit line should not be more than the following schedules.

Estimated Project Cost Credit Line

Up to 1 000 000 pesos 15% of the amount

Above 1 000 000 pesos to 5 000 000 pesos 150 000 pesos + 1% in excess of P1 000 000

Above 5 000 000 pesos to 10 000 000 pesos 190 000 pesos + 8% in excess of P5 000 000

Above 10 000 000 pesos to 100 000 000 pesos 232 500pesos + 7% in excess of P10 000 000

Above 100 000 000 pesos 862 500 pesos + 5% in excess of P100 000 000
THANK YOU
End