General Conditions of Contract

1. Definitions
1.1. Arbiter is the person appointed jointly by the PROCURING ENTITY and the Contractor to
resolve disputes in the first instance.
1.2 As-Built Drawings refer to the engineering plans for the structure as actually constructed
and completed under this Contract, considering all variations and modifications as approved
and executed.
1.3 Bill of Quantities refers to a list of the specific pay items of the Works under this Contract,
particularly their identification numbers, descriptions, units of measurement, and quantities,
together with their corresponding unit and total bid prices.
1.4 Certificate of Acceptance is the document issued by the PROCURING ENTITY, certifying
that the Works have been completed, including correction of all Defects, as of the end of the
Defects Liability Period, in accordance with the provisions of this Contract, and that,
therefore, the completed Works are accepted by the PROCURING ENTITY.
1.5 Contract is the legal agreement between the PROCURING ENTITY and the Contractor to
execute, complete, and maintain the Works. It consists of the documents listed in GCC
Clause 2.3.
1.6 Contract Price is the price stated in the Notice of Award and thereafter to be paid by the
PROCURING ENTITY to the Contractor for the execution of the Works in accordance with this
Contract.
1.7 Contract Time is the allowable period or duration within which the Contract Works must be
completed, i.e., from the Start Date to the Intended completion Date as specified in the SCC.
1.8 Contractor is the juridical entity whose bid has been accepted by the PROCURING ENTITY
and to whom this Contract to execute the Work was awarded, entered into, and approved.
1.9 Contractor’s Bid is the signed offer or proposal submitted by the Contractor to the
PROCURING ENTITY in response to the Bidding Documents.
1.10 Days are calendar days.
1.11 Dayworks are varied work inputs subject to payment on a time basis for the Contractor’s
employees and Equipment, in addition to payments for associated Materials and Plant.
1.12 Defect is any part of the Works not constructed in accordance with this Contract.
1.13 Defects Liability Certificate is the certificate issued by PROCURING ENTITY’s
Representative upon correction of defects by the Contractor.
1.16 Defects Liability Period is the one-year period between the completion and the final
acceptance of the Works during which the Contractor assumes the responsibility to
undertake the repair of any defect in or damage to the Works at his own expense.
1.17 Drawings are graphical presentations of the Works. They include all engineering plans,
supplementary details, shop drawings, calculations, and other information provided or
approved for the execution of this Contract.
1.18 Equipment refers to all machines, tools, facilities, supplies, appliances, and related items
required for the execution and completion of the Works provided by the Contractor and
which shall not form or are not intended to form part of the Permanent Works.
1.19 Intended Completion Date refers to the date specified in the SCC when the Contractor is
expected to have completed the Works. The Intended Completion Date may be revised only
by the PROCURING ENTITY’s Representative by issuing an extension of Contract Time or an
acceleration order.
1.20 Materials are all supplies, including consumables, used by the Contractor for incorporation
in the Works.
1.21 Notice to Proceed is a written notice issued by the PROCURING ENTITY or the PROCURING
ENTITY’s Representative to the Contractor requiring the latter to begin the Works not later
than the date specified in this Notice.
1.21 Permanent Works refer to all permanent structures and all other project features and
facilities required to be constructed and completed in accordance with this Contract which
shall be delivered to the PROCURING ENTITY and which shall remain at the Site after the
removal of all Temporary Works.
1.22 PERT/CPM is the acronym for Program Evaluation Review Technique/ Critical Path Method
and is a technique for planning, scheduling, and controlling a project, involving a network of
interrelated activities with their start and finish times. The critical path is the longest time
path through the network of activities.
1.23 Plant refers to the machinery, apparatus, and the like intended to form an integral part of
the Permanent Works.
1.24 PROCURING ENTITY is the party that engages the Contractor to carry out the Works
stated in the SCC.

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 1.25 PROCURING ENTITY’s Representative refers to the Head of the PROCURING ENTITY or his
duly authorized representative, identified in the SCC, who shall be responsible for
supervising the execution of the Works and administering this Contract.
1.26 Site is the right-of-way or place provided by the PROCURING ENTITY where the Works shall
be executed and any other place or places which may be designated in the SCC, or notified
to the Contractor by the PROCURING ENTITY’s Representative, as forming part of the Site.
1.27 Site Investigation Reports are factual and interpretative reports about the surface and
subsurface conditions at the Site, which are provided by the PROCURING ENTITY in the
Bidding Documents.
1.28 Slippage is a delay in work execution occurring when actual accomplishment falls below the
target as measured by the difference between the scheduled and actual accomplishment of
the Works by the Contractor as established from the work schedule. This is actually
described as a percentage of the whole Works.
1.29 Specifications mean the description of the Works to be done, qualities of materials to be
used, equipment to be installed, construction methods, workmanship, and finished product
required under this Contract.
1.30 Start Date, as specified in the SCC, is the date when the Contractor is obliged to commence
execution of the Works. It is the same as the effectivity date of the Contract as stated in the
Notice to Proceed. It does not necessarily coincide with any of the Site Possession Dates.
1.31 Subcontractor is any person or organization to whom a part of the Works has been
subcontracted by the Contractor for execution, as allowed by the PROCURING ENTITY, but
not any assignee of such person.
1.32 Temporary Works are works designed, constructed, installed, and removed by the
Contractor that are needed for the construction or installation of the Permanent Works.
1.33 Work(s) refer to the Permanent Works and Temporary Works to be executed by the
Contractor in accordance with this Contract, including (i) 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 this Contract as described in the SCC.

2. Interpretation
2.1. In interpreting the Conditions of Contract, singular also means plural, male also means
female or neuter, and the other way around. Headings have no significance. Words have
their normal meaning under the language of this Contract unless specifically defined. The
PROCURING ENTITY’s Representative will provide instructions clarifying queries about the
Conditions of Contract.
2.2. If sectional completion is specified in the SCC, the Contractor shall complete each section of
the Works on the dates stated in the SCC.
2.3. The documents forming this Contract shall be interpreted in the following order of priority:
1. Contract Agreement
2. Contractor’s Bid in the Form of Bid, including its Technical and Financial Proposals
3. Bid Data Sheet (BDS)
4. Instructions to Bidders (ITB)
5. Bid Bulletin (Addenda) to the Bidding Documents
6. Specifications
7. Drawings
8. Special Conditions of Contract (SCC)
9. General Conditions of Contract (GCC)
10. Invitation to Apply for Eligibility and to Bid (IAEB)
11. Contractor’s Letter of Intent (LOI) for Eligibility and Contractor’s Information (CI)
from the DPWH Registry
12. Notice of Award (NOA) with the Contractor’s Conforme
13. Performance Security
14. Credit Line or Cash Deposit Certificate
15. PERT/CPM Diagram and Bar Chart with S-Curve

3. Governing Language and Law

3.1 This Contract has been executed in the English language, which shall be the binding and
controlling language for all matters relating to the meaning or interpretation of this Contract.
All correspondence and other documents pertaining to this Contract which are exchanged by
the parties shall be written in English.
3.2 This Contract shall be interpreted in accordance with the laws of the Republic of the Philippines.

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4. Communications
Communications between parties that are referred to in these Conditions of Contract shall be effective
only when in writing. A notice shall be effective only when it is received by the concerned party.

5. PROCURING ENTITY’S Obligation to Deliver the Site, Materials, Equipment, and Plans
5.1 Not later than the date specified in the SCC, the PROCURING ENTITY shall deliver the Site,
clear of any obstructions or occupants, to the Contractor to enable it to proceed with the
execution of the Works.
5.2 If specified in the SCC, the PROCURING ENTITY shall also deliver to the Contractor any
government-furnished materials, equipment, and plans to be used in the Works not later
than the dates indicated in the SCC.
5.3 If the Contractor suffers a delay or incurs a cost from failure on the part of the PROCURING
ENTITY to deliver the Site, government-furnished materials, equipment or plans, in
accordance with the terms of this Clause, the PROCURING ENTITY’s Representative shall give
the Contractor a Contract Time Extension and certify such sum as fair to cover the cost
incurred, which sum shall be paid by PROCURING ENTITY.
5.4 The Contractor shall bear all costs and charges for special or temporary right-of-way
required by it in connection with access to the Site. The Contractor shall also provide at its
own cost any additional facilities outside the Site required by it for purposes of the Works.
5.5 The Contractor shall allow the PROCURING ENTITY’s Representative and any person
authorized by the PROCURING ENTITY’s Representative access to the Site and to any place
where work in connection with this Contract is being carried out or is intended to be carried
out.

6. Contractor’s Obligations
6.1 The Contractor shall carry out the Works properly and in accordance with this Contract. The
Contractor shall provide all supervision, labor, Materials, Plant and Equipment, which may be
required. All Materials and Plant on Site shall be deemed to be the property of the
PROCURING ENTITY.
6.2 The Contractor shall commence execution of the Works on the Start Date and shall carry out
the Works in accordance with the approved PERT/CPM network diagram submitted by the
Contractor, as updated with the approval of the PROCURING ENTITY’s Representative, and
shall complete the Works by the Intended Completion Date.
6.3 The Contractor shall be responsible for the safety of all activities on the Site.
6.4 The Contractor shall carry out all instructions of the PROCURING ENTITY’s Representative
that comply with the applicable laws where the Site is located.
6.5 The Contractor shall employ the key personnel, named in the Schedule of Key Personnel 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.
6.6 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.
6.7 During Contract implementation, the Contractor and its subcontractors shall abide at all
times by all labor laws, including child labor related enactments, and other relevant rules.
6.8 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.
6.9 The Contractor shall cooperate and share the Site with other contractors, public authorities,
utilities, and the PROCURING ENTITY during the dates given in the schedule of other
contractors particularly when they shall require access to the Site. The Contractor shall also
provide facilities and services for them during this period. The PROCURING ENTITY may
modify the schedule of other contractors, and shall notify the Contractor of any such
modification thereto.
6.10 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. The Contractor
shall notify the PROCURING ENTITY’s Representative of such discoveries and carry out the
PROCURING ENTITY’s Representative’s instructions in dealing with them.

7. Performance Security
7.1 The Contractor shall submit its Performance Security to the PROCURING ENTITY not later
than the date specified in the Notice of Award and shall be issued in any of the following
forms and corresponding amounts at the option of the Contractor:

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 Amount of Performance Security
Form of Performance Security (Equal to Percentage (%) of Total
Contract Price)
a. Cash, cashier’s/manager’s check, bank
draft/guarantee confirmed by a
Universal or Commercial Bank.
Goods & Consulting Services - Five
b. Irrevocable letter of credit issued by a
Percent (5%)
Universal or Commercial Bank:
Infrastructure Projects - Ten
Provided, however, that it shall be
Percent (10%)
confirmed or authenticated by a
Universal or Commercial Bank, if issued
by a foreign bank.
c. Surety Bond callable upon demand issued
by a surety or insurance duly certified
Thirty Percent (30%)
by the Insurance Commission as
authorized to issue such security.
Proportionate to share of form with
d. Any combination of the foregoing. respect to total amount of security

The amount of the Performance Security shall be increased to cover the amount of the
Advance Payment made in accordance with GCC Clause 40.
The Performance Security shall be discharged by the PROCURING ENTITY and returned to
the Contractor upon the issuance of the PROCURING ENTITY of the Certificate of Acceptance
of the Contract Works at the end of the Defects Liability Period, provided that it is replaced
by a Warranty Security against structural defects and/or failure as provided in GCC Clause
12.
The Performance Security shall be denominated in Philippine Pesos.
7.2 The Contractor, by entering into the Contract with the PROCURING ENTITY, acknowledges the
right of the PROCURING ENTITY to institute action on the Performance Security pursuant to Act
3688 of any individual, firm, partnership, corporation, or association supplying the Contractor
with labor, materials and/or equipment for the performance of this Contract.

8. Subcontracting
8.1 The Contractor may subcontract not more than fifty percent (50%) of the value of the Works
to subcontractors nominated in the Contractor’s Letter of Intent (LOI) for Eligibility and found
eligible and postqualified to undertake the specified portions of the Works. Subcontracting of
any portion of the Works shall not relieve the Contractor of any liability or obligation under
this Contract. The Contractor shall be responsible for the acts, defaults, and negligence of
any subcontractor, its agents, servants or workmen as fully as if these were the Contractor’s
own acts, defaults, or negligence.
8.2 All subcontracting arrangements as disclosed and identified in the Contractor’s LOI and
approved by the PROCURING ENTITY shall not be changed during the implementation of this
Contract.

9. Liquidated Damages
9.1 All contracts executed in accordance with the Act and this IRR shall contain a provision on
liquidated damages which shall be payable by the contractor in case of breach thereof. The
amount of the liquidated damages shall be at least equal to one-tenth of one percent (0.1%)
of the cost of the unperformed portion for every day of delay. Once the cumulative amount
of liquidated damages reaches ten percent (10%) of the amount of the contract, the
procuring entity shall rescind the contract, without prejudice to other courses of action and
remedies open to it.

9.2 If the Intended Completion Date is extended after liquidated damages have been paid, the
PROCURING ENTITY’s Representative shall correct any overpayment of liquidated damages
by the Contractor by adjusting the next payment certificate.

10. Site Investigation Reports

The Contractor, in preparing the Bid, shall rely on any Site Investigation Reports referred to in the
SCC supplemented by any information obtained by the Contractor.

11. Licenses and Permits

The PROCURING ENTITY shall, if requested by the Contractor, assist it in applying for permits,
licenses or approvals, which are required for the Works.

12. Contractor’s Risk and Warranty Security

12.1 The Contractor shall assume full responsibility for the Works from the date of Contract
effectivity as indicated in the Notice to Proceed up to the date of issuance by the PROCURING

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 ENTITY the Certificate of Acceptance of the completed Works after the end of the Defects
Liability Period. It shall be held responsible for any damage or destruction of the Works
except those occasioned by force majeure. The Contractor shall be fully responsible for the
safety, protection, security, and convenience of his personnel, third parties, and the public at
large, as well as the Works, Equipment, installation, and the like to be affected by his
construction work.
12.2 The Defects Liability Period for infrastructure projects shall be one year from the completion
of the Works by the Contractor up to the final acceptance of the Works by the PROCURING
ENTITY. During this period, the Contractor shall undertake the repair works, at his own
expense, on any defect or damage to the Works on account of the use of materials of inferior
quality or substandard work within ninety (90) days from the time the Head of the
PROCURING ENTITY has issued an order to undertake repair. In case of failure or refusal to
comply with this mandate, the PROCURING ENTITY shall undertake such repair works and
shall be entitled to full reimbursement by the Contractor of expenses incurred therein upon
demand.
In case the Contractor fails to comply with the preceding paragraph, it shall suffer perpetual
disqualification from participating in any public bidding and its property or properties shall be
subject to attachment or garnishment proceedings to recover the costs. All payables of the
PROCURING ENTITY in the Contractor’s favor shall be offset to recover the costs.
12.3 After the issuance by the PROCURING ENTITY of the Certificate of Acceptance of the
completed Works, the Contractor shall be held responsible for structural defects and/or
failure of the completed facility within the warranty periods provided in SCC from the date of
issuance of the said Certificate of Acceptance, except those occasioned by force majeure and
those caused by other parties.
12.4 The Contractor shall be required to put up a Warranty Security in the form of cash, bank
guarantee, letter of credit, GSIS or surety bond callable on demand, in accordance with the
following schedule for the first year of the warranty period:

Minimum Amount in Percentage (%) of

Form of Warranty
Total Contract Price

1. Cash deposit, cash bond or letter of

Five Percent (5%)
credit issued by a reputable bank

2. Bank guarantee issued by a reputable

Ten Percent (10%)
bank
3. Surety bond issued by a surety or
insurance company accredited by Thirty Percent (30%)
the Insurance Commissioner

The Warranty Security shall be reduced for each succeeding year of the warranty period by
1/n, where n is the warranty period in number of years until the end of the last year when it
becomes nil.
12.5 The Warranty Security shall be stated in Philippine Pesos and shall remain effective during
the applicable warranty period provided in SCC Clause 12.3.
12.6 In case of structural defects/failure occurring during the applicable warranty period provided
in SCC Clause 12.3, the PROCURING ENTITY shall undertake the necessary restoration or
reconstruction works and shall be entitled to full reimbursement by the parties found to be
liable, of expenses incurred therein upon demand, without prejudice to the filing of
appropriate administrative, civil, and/or criminal charges against the responsible persons as
well as the forfeiture of the Warranty Security posted in favor of the PROCURING ENTITY.
For purposes of this clause, the term “structural defects” means major
faults/flaws/deficiencies in one or more key structural elements of the Works which may lead
to structural failure of the completed elements or structure. The term “structural failure” is
defined as an occurrence where one or more key structural elements in an infrastructure
facility fails or collapses, thereby rendering the facility or part thereof incapable of
withstanding the design loads, and/or thereby endangering the safety of the users or the
general public.

13. PROCURING ENTITY’s Risk

From the Start Date until the Certificate of Acceptance is issued, the following are risks of the
PROCURING ENTITY:
a. The risk of personal injury, death, or loss of or damage to property (excluding the Works,
Plant, Materials, and Equipment) which are due to:
(1) any type of use or occupation of the Site authorized by the PROCURING ENTITY
after the official acceptance of the works; or

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 (2) negligence, breach of statutory duty, or interference with any legal right by the
PROCURING ENTITY or by any person employed by or contracted to him except the
Contractor.
b. The risk of damage to the Works, Plant, Materials, and Equipment to the extent that it is due
to a fault of the PROCURING ENTITY or in the PROCURING ENTITY’s design, or due to war or
radioactive contamination directly affecting the Philippines.

14. Insurance
14.1 The Contractor shall, under his name and at his own expense, obtain and maintain, for the
duration of this Contract, a Contractor’s All Risk Insurance (CARI). The insurance policy for
this purpose shall be obtained from any reputable insurance company accredited by the
Office of the Insurance Commissioner and approved by the PROCURING ENTITY’s
Representative.
14.2 The CARI shall cover the value of the completed portions of the Works. It shall not,
however, cover any damage to the Works whose value is not more than ten percent (10%)
of the Total Contract Cost, as this is to be absorbed by the Contractor. The CARI shall,
therefore, start with nil at the beginning of Contract execution. It shall then be increased
over time as the Works progresses so that at any time it covers the value of the portions of
the Works actually completed.
14.3 The Contractor shall provide evidence to the PROCURING ENTITY’s Representative that the
insurance required under this Contract has been effected and shall, within a reasonable time,
provide a copy of the insurance policy to the PROCURING ENTITY’s Representative.
14.4 The Contractor shall notify the insurer of changes in the nature, extent, or program for the
execution of the Works and ensure the adequacy of the insurance at all times in accordance
with the terms of this Contract and shall produce to the PROCURING ENTITY’s Representative
the insurance policy in force including the receipts for payment of the current premiums.
14.5 If the Contractor fails to obtain and keep in force the insurance which it is required to obtain
under the terms of this Contract, the PROCURING ENTITY may obtain and keep in force any
such insurance and pay such premiums as may be necessary for the purpose. From time to
time, the PROCURING ENTITY may deduct the amount it shall pay for said premiums
including twenty five percent (25%) therein from any monies due, or which may become
due, to the Contractor, without prejudice to the PROCURING ENTITY exercising its right to
impose other sanctions against the Contractor pursuant to the provisions of this Contract.
14.6 In the event the Contractor fails to observe the above safeguards, the PROCURING ENTITY
may, at the Contractor’s expense, take whatever measure is deemed necessary for its
protection and that of the Contractor’s personnel and third parties, and/or order the
interruption of dangerous Works.
14.7 The Contractor shall immediately replace the insurance policy obtained as required in this
Contract, without need of the PROCURING ENTITY’s demand, with a new policy issued by a
new insurance company acceptable to the PROCURING ENTITY for any of the following
grounds:
a. The issuer of the insurance policy to be replaced has:
(1) become bankrupt;
(2) been placed under receivership or under a management committee;
(3) been sued for suspension of payment; or
(4) been suspended by the Insurance Commission and its license to engage in
business or its authority to issue insurance policies cancelled; or
b. Reasonable grounds exist that the insurer may not be able, fully and promptly, to
fulfill its obligation under the insurance policy.

15. Termination for Default of Contractor

15.1 The PROCURING ENTITY shall terminate this Contract for default when any of the following
conditions attend its implementation:
a. Due to the Contractor’s fault and while the Works are on-going, it has incurred a
negative slippage of fifteen percent (15%) or more in accordance with Presidential
Decree 1870; or
b. Due to the Contractor’s fault and after the Contract time has expired, it has incurred
a negative slippage of ten percent (10%) or more in the completion of the Works;
or
c. The Contractor:
(1) abandons the Contract Works, refuses or fails to comply with a valid
instruction of the PROCURING ENTITY or fails to proceed expeditiously and
without delay despite a written notice by the PROCURING ENTITY;

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 (2) does not actually have on the Site the minimum essential equipment listed
in the Bid necessary to prosecute the Works in accordance with the
approved PERT/CPM network diagram and equipment utilization schedule
as required under the Contract;
(3) does not execute the Works in accordance with this Contract or persistently
or flagrantly neglects to carry out its obligations under this Contract;
(4) neglects or refuses to remove materials or to perform a new work that has
been rejected as defective or unsuitable; or
(5) subcontracts any part of this Contract without approval by the PROCURING
ENTITY.
15.2 All materials on the Site, Plant, Equipment, and Works shall be deemed to be the property of
the PROCURING ENTITY if this Contract is terminated because of the Contractor’s default.

16. Termination for Convenience

The PROCURING ENTITY may terminate this Contract, in whole or in part, at any time for the
convenience of the Government if it has determined the existence of conditions that make contract
implementation economically, financially or technically impractical and/or unnecessary, such as, but
not limited to, fortuitous event(s) or changes in law and national government policies.

17. Termination for Insolvency

The PROCURING ENTITY shall terminate this Contract if the Contractor is declared bankrupt or
insolvent as determined with finality by a court of competent jurisdiction. In this event, termination
shall be without compensation to the Contractor, provided that such termination shall not prejudice or
affect any right of action or remedy which has accrued or will accrue thereafter to the PROCURING
ENTITY and/or the Contractor. In the case of the Contractor's insolvency, any Contractor's Equipment
which the PROCURING ENTITY instructs in the Notice of Termination is to be used until the completion
of the Works;

18. Termination for Unlawful Acts

18.1 The PROCURING ENTITY may terminate the Contract in case it is determined prima facie that
the Contractor has engaged, before or during the implementation of the Contract, in unlawful
deeds and behaviors relative to contract acquisition and implementation, such as, but not
limited to, the following:
a. corrupt, fraudulent, collusive and coercive practices as defined in ITB Clause 2;
b. drawing up or using forged documents;
c. using adulterated materials, means or methods, or engaging in production contrary
to rules of science or the trade; and
d. any other act analogous to the foregoing.
18.2 The PROCURING ENTITY will seek to impose the maximum civil, administrative and/or
criminal penalties available under the applicable law on individuals and organizations deemed
to be involved in corrupt, fraudulent, collusive or coercive practices.

19. Termination by Contractor

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 through no fault of the
Contractor, due to any of the following reasons:
a. The PROCURING ENTITY fails to deliver the Site, government-furnished materials,
equipment, or plans on the dates stated in GCC Clause 5.
b. The prosecution of the Works is disrupted by an adverse peace and order situation, as
certified by the Armed Forces of the Philippines Provincial Commander and approved by the
Secretary of National Defense.

20. Termination for Other Causes

20.1 The PROCURING ENTITY or the Contractor may terminate this Contract if the other party
causes a fundamental breach of this Contract.
20.2 Fundamental breaches of Contract shall include, but shall not be limited to, the following:
a. The Contractor stops work for twenty eight (28) days when no stoppage of work is
shown in the approved PERT/CPM network diagram, and the stoppage has not been
authorized by the PROCURING ENTITY’s Representative.
b. The PROCURING ENTITY’s Representative instructs the Contractor to delay the
progress of the Works, and the instruction is not withdrawn within twenty eight (28)
days.
c. A payment certified by the PROCURING ENTITY’s Representative is not paid by the
PROCURING ENTITY to the Contractor within eighty four (84) days from the date of
the PROCURING ENTITY’s Representative’s certificate.

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 d. The PROCURING ENTITY’s Representative gives Notice that failure to correct a
particular Defect is a fundamental breach of Contract and the Contractor fails to
correct the defect within a reasonable period of time determined by the PROCURING
ENTITY’s Representative.
e. The Contractor has delayed the completion of the Works by the number of days for
which the maximum amount of liquidated damages can be paid, as defined in the
GCC Clause 0.
20.3 When persons from either party to this Contract gives notice of a fundamental breach to the
PROCURING ENTITY’s Representative in order to terminate the existing contract for a cause
other than those listed under GCC Clause 20.2, the PROCURING ENTITY’s Representative
shall decide whether the breach is fundamental or not.
20.4 If this Contract is terminated, the Contractor shall stop work immediately, make the Site safe
and secure, and leave the Site as soon as reasonably possible.

21. Procedure for Termination of Contracts

21.1 Verification. Upon receipt of a written report of acts or causes which may constitute grounds
for termination as aforementioned, or upon its own initiative, the PROCURING ENTITY’s
Representative shall, within a period of seven (7) calendar days, verify the existence of such
ground(s) and cause the execution of a Verified Report, with all relevant evidence attached.
21.2 Notice of Termination. Upon recommendation by the PROCURING ENTITY’s Representative,
the Head of the PROCURING ENTITY shall terminate this Contract only by a written Notice of
Termination to the Contractor. The Notice shall state:
a. that this Contract is being terminated for any of the grounds aforementioned, and a
statement of the acts that constitute the ground(s).
b. the extent of termination, whether in whole or in part;
c. an instruction to the Contractor to show cause as to why this Contract should not be
terminated; and
d. special instructions of the PROCURING ENTITY, if any.
The Notice of Termination shall be accompanied by a copy of the Verified Report.
21.3 Show Cause. Within a period of seven (7) calendar days from receipt of the Notice of
Termination, the Contractor shall submit to the Head of the PROCURING ENTITY a verified
position paper showing cause as to why the Contract should not be terminated. If the
Contractor fails to do so, the Head of the PROCURING ENTITY shall issue a written Notice of
Decision confirming the Notice of Termination of the Contract.
21.4 Withdrawal of Notice of Termination. The PROCURING ENTITY may, at anytime before
receipt of the Contractor’s verified position paper, withdraw the Notice of Termination if it is
determined that certain items or works subject of the Notice had been completed, delivered,
or performed before the Contractor’s receipt of the Notice.
21.5 Notice of Decision. Within a non-extendible period of ten (10) calendar days from receipt of
the verified position paper, the Head of the PROCURING ENTITY shall serve the Contractor
his written Notice of Decision to confirm or withdraw the Notice of Termination. If the Notice
of Decision is to confirm the Notice of Termination, then this Contract is deemed terminated
from receipt by the Contractor of the said Notice of Decision. The termination shall be based
only on the grounds stated in the Notice of Termination
21.6 Review Committee. The Head of the PROCURING ENTITY may create a Contract Termination
Review Committee (CTRC) to assist him in the discharge of this function. All decisions
recommended by the CTRC shall be subject to his approval.
21.7 Notice by Contractor. The Contractor must serve a written Notice to the PROCURING ENTITY
of its intention to terminate the Contract at least thirty (30) days before its intended
termination. The Contract is deemed terminated if it is not resumed in thirty (30) days after
the receipt of such Notice by the PROCURING ENTITY.

22. Force Majeure and Release From Performance

22.1 For purposes of this Contract the terms “force majeure” and “fortuitous event” may be used
interchangeably. In this regard, a fortuitous event or force majeure shall be interpreted to
mean an event which the Contractor could not have foreseen, or which though foreseen, was
inevitable. It shall not include ordinary unfavorable weather conditions, and any other cause
the effects of which could have been avoided with the exercise of reasonable diligence by the
Contractor.
22.2 If this Contract is discontinued by an outbreak of war or by any other event entirely outside
the control of either the PROCURING ENTITY or the Contractor, the PROCURING ENTITY’s
Representative shall certify that this Contract has been discontinued. The Contractor shall
make the Site safe and stop work as quickly as possible after receiving this certificate and
shall be paid for all portions of the Works carried out before receiving it and for any part of
the Works carried out afterwards to which a commitment was made.

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 22.3 If the event continues for a period of eighty four (84) days, either party may give the other a
Notice of Termination, which shall take effect twenty eight (28) days after the receipt of the
Notice.
22.4 After termination, the Contractor shall be entitled to payment of the unpaid balance of the
value of the Works executed and of the materials and Plant reasonably delivered to the Site,
adjusted by the following:
a. Any sum to which the Contractor is entitled under GCC Clause 29.
b. The cost of his suspension and demobilization.
c. Any sum to which the PROCURING ENTITY is entitled.
22.5 The net balance due shall be paid or repaid within a reasonable time period from the date of
the Notice of Termination.

23. Payment on Termination

23.1 If the Contract is terminated because of a fundamental breach of Contract by the Contractor,
the PROCURING ENTITY’s Representative shall issue a certificate for the value of the work
done and materials ordered less advance payments received up to the date of the issue of
the certificate and less the value of the work not completed. Additional liquidated damages
shall not apply. If the total amount due to the PROCURING ENTITY exceeds any payment
due to the Contractor, the difference shall be a debt payable to the PROCURING ENTITY.
23.2 If the Contract is terminated for the PROCURING ENTITY’s convenience or because of a
fundamental breach of Contract by the PROCURING ENTITY, the PROCURING ENTITY’s
Representative shall issue a certificate for the value of the work done, materials ordered, the
reasonable cost of removal of Contractor’s equipment, and the Contractor’s costs of
protecting and securing the Works, less advance payments received up to the date of the
certificate.
23.3 The net balance due shall be paid or repaid within twenty eight (28) days from the notice of
termination.
23.4 If the Contractor has terminated the Contract under GCC Clauses 16 or 19, the PROCURING
ENTITY shall promptly return the Performance Security to the Contractor.
24. Resolution of Disputes
Any and all disputes arising from the implementation of this Contract covered by the R.A. 9184 and
its IRR-A shall be submitted to arbitration in the Philippines according to the provisions of R.A. 9285,
otherwise known as the “Alternative Dispute Resolution Act of 2004”. Disputes that are within the
competence of the Construction Industry Arbitration Commission to resolve shall, however, be
referred thereto. By mutual agreement, the parties to this Contract may agree in writing to other
alternative modes of dispute resolution.

25. PROCURING ENTITY’s Representative’s Decisions

25.1 Except where otherwise specifically stated, the PROCURING ENTITY’s Representative shall
decide contractual matters between the PROCURING ENTITY and the Contractor in the role
representing the PROCURING ENTITY.
25.2 The PROCURING ENTITY’s Representative may delegate any of his duties and responsibilities
to other people, except to the Arbiter, after notifying the Contractor, and may cancel any
delegation after notifying the Contractor.

26. Approval of Drawings and Temporary Works by the PROCURING ENTITY’s Representative
26.1 All Drawings prepared by the Contractor for the execution of the Temporary Works are
subject to prior approval by the PROCURING ENTITY’s Representative before their use.
26.2 The Contractor shall be responsible for the design of Temporary Works.
26.3 The PROCURING ENTITY’s Representative’s approval shall not alter the Contractor’s
responsibility for the design of the Temporary Works.
26.4 The Contractor shall obtain approval by third parties of the design of the Temporary Works,
when required by the PROCURING ENTITY.

27. Acceleration Ordered by the PROCURING ENTITY’s Representative

27.1 When the PROCURING ENTITY wants the Contractor to finish the Works before the Intended
Completion Date, the PROCURING ENTITY’s Representative shall obtain a financial proposal
from the Contractor to achieve the necessary acceleration of the Works.
27.2 If the Contractor’s financial proposal for acceleration of the Works is accepted by the
PROCURING ENTITY, it shall be incorporated in the Contract Price and treated as a Variation
Order. The Intended Completion Date shall be adjusted accordingly and confirmed by both
the PROCURING ENTITY and the Contractor.

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28. Extension of the Intended Completion Date
28.1 The PROCURING ENTITY’s Representative shall extend the Intended Completion Date if a
Variation Order is issued which makes it impossible for the Intended Completion Date to be
achieved by the Contractor without taking steps to accelerate the remaining work, which
would cause the Contractor to incur additional costs.
28.2 The PROCURING ENTITY’s Representative shall decide whether and by how much to extend
the Intended Completion Date within twenty one (21) days of the Contractor asking the
PROCURING ENTITY’s Representative for a decision thereto after fully submitting all
supporting information. If the Contractor has failed to give an early warning of a delay or
has failed to cooperate in dealing with a delay, the delay by this failure shall not be
considered in assessing the new Intended Completion Date.

29. Contractor’s Right to Claim

If the Contractor incurs a cost as a result of any of the events under GCC Clause 13, the Contractor
shall be entitled to the amount of such cost. If as a result of any of the said events, it is necessary to
change the Works, this shall be dealt with as a Variation Order.

30. Dayworks
30.1 Subject to GCC Clause 44 on Variation Orders, and if applicable as indicated in the SCC, the
Dayworks rates in the Contractor’s Bid shall be used for small additional amounts of work
only when the PROCURING ENTITY’s Representative has given written instructions in
advance for additional work to be paid for in that way.
30.2 All work to be paid for as Dayworks shall be recorded by the Contractor on forms approved
by the PROCURING ENTITY’s Representative. Each completed form shall be verified and
signed by the PROCURING ENTITY’s Representative within two days of the work being done.
30.3 The Contractor shall be paid for Dayworks subject to obtaining signed Dayworks forms.

31. Early Warning

31.1 The Contractor shall warn the PROCURING ENTITY’s Representative at the earliest
opportunity of specific likely future events or circumstances that may adversely affect the
quality of the Work, increase the Contract Price, or delay the execution of the Works. The
PROCURING ENTITY’s Representative may require the Contractor to provide an estimate of
the expected effect of the future event or circumstance on the Contract Price and Completion
Date. The estimate shall be provided by the Contractor as soon as reasonably possible.
31.2 The Contractor shall cooperate with the PROCURING ENTITY’s Representative in making and
considering proposals for how the effect of such an event or circumstance can be avoided or
reduced by anyone involved in the Work and in carrying out any resulting instruction of the
PROCURING ENTITY’s Representative.

32. PERT/CPM Network Diagram

32.1 The Contractor shall undertake the Works in accordance with the PERT/CPM network diagram
which is part of the approved Contract.
32.2 The Contractor shall submit to the PROCURING ENTITY’s Representative a report, on the
dates stated in the SCC, showing the actual progress achieved on each activity in the
approved PERT/CPM network diagram, and the effect of the progress achieved on the timing
of the remaining work, including any recommended changes in the sequence of the activities.
32.3 The Contractor shall submit to the PROCURING ENTITY’s Representative, for approval, an
updated PERT/CPM network diagram within two (20 days after a Variation Order or Contract
Time extension is approved.

33. Management Conferences

33.1 Either the PROCURING ENTITY’s Representative or the Contractor may require the other to
attend a Management Conference. The Management Conference shall review the plans for
remaining work and deal with matters raised in accordance with the early warning
procedure.
33.2 The PROCURING ENTITY’s Representative shall prepare the minutes of Management
Conferences and provide copies of the miunutes to those attending the Conference. The
responsibility of the parties for actions to be taken shall be decided by the PROCURING
ENTITY’s Representative either at the Management Conference or after the Management
Conference and stated in writing to all who attended the Conference.

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34. Bill of Quantities
34.1 The Bill of Quantities, shown in Part II – Section VII of these Bidding Documents, contains
the items of work for the construction, installation, testing, and commissioning of the Works
to be done by the Contractor.
34.2 The Bill of Quantities is used to calculate the Contract Price. The Contractor shall be paid for
the actual quantity of each pay item, certified by the PROCURING ENTITY’s Representative as
accomplished, at the unit price in the Bill of Quantities for that item.
34.3 If the final quantity of any pay item accomplished differs from the original quantity in the Bill
of Quantities for that item and is not more than twenty five percent (25%) of that original
quantity, provided the aggregate changes for all work items do not exceed ten percent
(10%) of the Contract Price, the PROCURING ENTITY’s Representative shall make the
necessary adjustments to allow for the changes, subject to applicable laws, rules, and
regulations.
34.4 If requested by the PROCURING ENTITY’s Representative, the Contractor shall provide the
PROCURING ENTITY’s Representative with a detailed cost breakdown of any unit price or rate
in the Bill of Quantities.

35. Instructions, Inspections and Audits

35.1 The PROCURING ENTITY’s personnel shall at all reasonable times during construction of the
Works be entitled to examine, inspect, measure and test the materials and workmanship,
and to check the progress of the construction.
35.2 If the PROCURING ENTITY’s Representative instructs the Contractor to carry out a test not
specified in the Specifications to check whether any work has a defect and the test shows
that it does, the Contractor shall pay for the test and any samples. If there is no defect, the
test shall be a Compensation Event.
35.3 The Contractor shall permit the PROCURING ENTITY to inspect the accounts and records of
the Contractor relating to its performance and to have them audited by auditors approved by
the PROCURING ENTITY.

36. Identification of Defects

The PROCURING ENTITY’s Representative shall check the Contractor’s work and notify the Contractor
of any Defects that are found. Such checking shall not affect the Contractor’s responsibilities. The
PROCURING ENTITY’s Representative may instruct the Contractor to uncover Defects and test any
work that the PROCURING ENTITY’s Representative considers below standard and defective.

37. Cost of Repairs

Loss or damage to the Works or Materials to be incorporated in the Works between the Start Date and
the end of the Defects Liability Period shall be remedied by the Contractor at the Contractor’s expense
if the loss or damage arises from the Contractor’s acts or omissions.

38. Correction of Defects

38.1 The PROCURING ENTITY’s Representative shall give notice to the Contractor of any defects
before the end of the Defects Liability Period, which begins at Completion Date up to the
date of issuance of the Certificate of Acceptance by the PROCURING ENTITY. The Defects
Liability Period shall be extended for as long as defects remain to be corrected.
38.2 Every time notice of a Defect is given, the Contractor shall correct the notified defect within
the length of time specified in the PROCURING ENTITY’s Representative’s notice.
38.3 The Contractor shall correct the Defects which it notices itself before the end of the Defects
Liability Period.
38.4 The PROCURING ENTITY’s Representative shall certify that all Defects have been corrected.
If the PROCURING ENTITY’s Representative considers that correction of a Defect is not
essential, he can request the Contractor to submit a quotation for the corresponding
reduction in the Contract Price. If the PROCURING ENTITY’s Representative accepts the
quotation, the corresponding change shall be covered by a Variation Order.

39. Uncorrected Defects

39.1 The PROCURING ENTITY shall give the Contractor at least fourteen (14) days notice of its
intention to use a third party to correct a Defect. If the Contractor itself does not correct the
Defect within that period, the PROCURING ENTITY may have the Defect corrected by the
third party. The cost of the correction will be deducted from the Contract Price.
39.2 The use of a third party to correct Defects that are uncorrected by the Contractor will in no
way relieve the Contractor of its liabilities and warranties under the Contract.

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40. Advance Payment
40.1 The PROCURING ENTITY shall, upon a written request of the Contractor which shall be
submitted as a Contract document, make an Advance Payment to the Contractor in an
amount not to exceed fifteen percent (15%) of the total Contract Price, to be made in lump
sum or, at most, two installments according to the following schedule:
a. Upon issuance of the Notice to Proceed - one half of the advance payment
b. Upon mobilization of the Contractor’s - remaining half of the advance
equipment and materials payment
40.2 The Advance Payment shall be made only upon the submission by the Contractor to and
acceptance by the PROCURING ENTITY of an increment to the Performance Security,
submitted pursuant to GCC Clause 7, to cover the amount of the Advance Payment.
40.3 The Advance Payment shall be repaid by the Contractor by deducting, from periodic progress
payments to be made to the Contractor, a percentage equal to the percentage of the total
Contract Price used for the Advance Payment.
40.4 The Contractor may reduce its Performance Security by the amounts for the Advance
Payment refunded by the Monthly Certificates.

41. Monthly Statements or Progress Billings

The Contractor shall submit to the PROCURING ENTITY’s Representative, after the end of each
month, a Statement of Work Accomplished (SWA) or Progress Billing, showing the amounts which the
Contractor consider itself to be entitled 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.

42. Monthly Certificates and Progress Payments

42.1 The PROCURING ENTITY’s Representative shall check the Contractor’s monthly SWA and
certify the amount to be paid to the Contractor.
42.2 The PROCURING ENTITY’s Representative shall deduct the following from the certified gross
amounts to be paid, resulting in the net amount payable to the Contractor as progress
payment:
a. Cumulative value of the Work previously certified and paid for.
b. Portion of the advance payment to be recouped under the present certificate.
c. Retention money in accordance with GCC Clause 43.
d. Amount to cover approved third party liabilities.
e. Amount to cover uncorrected Defects in the Works.
f. Value of any work item presently certified but already paid for under an earlier
certification.
42.3 The PROCURING ENTITY shall pay the Contractor the said net amounts certified by the
PROCURING ENTITY’s Representative within twenty one (21) days from the date each
certificate was issued.
42.4 Items of the Works for which a price of “0” (zero) has been entered will not be paid for by
the PROCURING ENTITY and shall be deemed covered by other rates and prices in the
Contract.
42.5 The PROCURING ENTITY shall pay the Contractor a cumulative gross amount not exceeding
ninety percent (90%) of the total Contract price, since the remainder shall serve as the ten
percent (10%) retention money, as provided in GCC Clause 43.

43. Retention
43.1 The PROCURING ENTITY shall retain from each progress payment ten percent (10%) of such
payment, referred to as the “retention money.” Such retention money shall be based on the
total amount due to the Contractor prior to any deduction and shall be retained from every
progress payment until fifty percent (50%) of the value of the Works, as determined by the
PROCURING ENTITY, is completed. If, after fifty percent (50%) completion, the Works are
satisfactorily done and on schedule, no additional retention shall be made; otherwise, the ten
percent (10%) retention shall again be imposed using the rate specified therefor.
43.2 The total retention money shall be due for release upon final acceptance of the Works. The
Contractor may, however, request the substitution of the retention money for each progress
billing with an irrevocable standby letter of credit from a commercial bank, bank guarantee
and/or surety bond callable on demand, of amounts equivalent to the retention money
substituted for and in a form acceptable to the PROCURING ENTITY. The PROCURING
ENTITY shall allow such substitution provided that the Contract is on schedule and is
satisfactorily undertaken. The said irrevocable standby letter of credit, bank guarantee

12
 and/or surety bond, to be posted in favor of the PROCURING ENTITY, shall be valid for a
duration to be determined by the PROCURING ENTITY and shall answer for the purpose for
which the retention is intended, i.e., to cover uncorrected discovered Defects and third party
liabilities.
43.3 On completion of the whole Works, the Contractor may substitute retention money with an
“on demand” Bank guarantee in a form acceptable to the PROCURING ENTITY.

44. Variation Orders

44.1 Variation Orders may be issued by the PROCURING ENTITY to cover any increase or decrease
in quantities, including the introduction of new work items not included in the original
Contract or reclassification of work items due to change of plans, design or alignment to suit
actual field conditions, resulting in disparity between the preconstruction plans used for
purposes of bidding and the “as staked plans” or construction drawings prepared after a joint
survey by the Contractor and the PROCURING ENTITY after award of the Contract. The
cumulative amount of the positive or additive Variation Orders, however, shall not exceed
plus ten percent (10%) of the original Contract cost. Likewise, the cumulative amount of the
negative or deductive Variation Orders shall not exceed minus ten percent (10%) of the
original Contract cost. The addition or deletion of works shall be within the general scope of
the Contract as bid and awarded. The scope of the Works shall not be reduced so as to
accommodate a positive Variation Order. A Variation Order may be in the form of either a
Change Order or an Extra Work Order.
44.2 A Variation Order in the form of a Change Order may be issued by the PROCURING ENTITY
to cover any increase or decrease in quantities of original Work items in the Contract.
44.3 A Variation Order in the form an 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,
such as where there are subsurface or latent physical conditions at the Site differing
materially from those indicated in the Contract, or where there are duly unknown physical
conditions at the Site of an unusual nature differing materially from those ordinarily
encountered and generally recognized as inherent in the Works under in the Contract.
44.4 Any cumulative positive Variation Order beyond ten percent (10%) shall be the subject of
another contract to be bid out if the works are separable from the original Contract. In
exceptional cases where it is urgently necessary to complete the original scope of work under
the Contract, the Head of the PROCURING ENTITY may authorize a positive Variation Order
that will make the cumulative amount of the positive Variation Orders go beyond ten percent
(10%) but not more than twenty percent (20%), subject to the guidelines to be determined
by the GPPB, provided, however, that appropriate sanctions shall be imposed on the
designer, consultant or official responsible for the original detailed engineering design which
failed to consider the cumulative positive Variation Order beyond ten percent (10%).
44.5 The Contractor may propose a Variation Order by delivering to the PROCURING ENTITY’s
Representative - within seven (7) calendar days after the work necessitating the Order has
been commenced or after the circumstances necessitating the Order with an extra cost - a
written Notice, giving detailed particulars of the proposed Order, together with any extra
cost required, in order that it may be immediately investigated. Failure to provide such
Notice in the time stipulated shall constitute a waiver by the Contractor for any claim for
variation.
44.6 The preparation and submission of Variation Orders shall be as follows:
a. If the PROCURING ENTITY’s Representative finds that a Variation Order is
necessary, he shall prepare the proposed Order, accompanied with the Notice
submitted by the Contractor, the plans therefor, his computations on the quantities
of the additional, reduced or modified works involved per item, and detailed
estimates of the costs of such work items, together with his justifications for the
Variation Order, and shall submit the same to the Head of PROCURING ENTITY for
approval.
b. If the Head of the PROCURING ENTITY finds the proposed Variation Order to be in
order, he shall approve the same.
c. The timeframe for the processing of Variation Orders from the preparation by the
PROCURING ENTITY’s Representative up to the approval by the Head of the
PROCURING ENTITY concerned shall not exceed fifteen (15) calendar days.
44.7 Work under Variation Orders shall be valued and paid as follows:
a. At the unit prices for the same items in this Contract.
b. In the absence of unit prices for the same items rates in this Contract, at prices or
rates obtained from those of similar or related items in this Contract.

13
 c. Failing the above, at appropriate new unit prices or rates equal to or lower than
current market rates and to be agreed upon by both parties and approved by the
Head of the PROCURING ENTITY.

45. Contract Completion

Once the Contract reaches an accomplishment of ninety five percent (95%) of the total Contract
Works, the PROCURING ENTITY may create an inspectorate team to make a preliminary inspection
and submit a punch-list to the Contractor in preparation for the total completion of the Works. The
punch-list shall contain, among other things, the remaining unfinished portions of the Works,
deficiencies in the Works for necessary corrections, and the specific time to fully complete the whole
Works considering the approved remaining Contract time. This, however, shall not preclude any claim
of the PROCURING ENTITY for liquidated damages.

46. Suspension of Work

46.1 On any of the following grounds, the PROCURING ENTITY shall have the authority to suspend
the Works, wholly or partly by written order for such period as may be deemed necessary:
a. Force majeure or any fortuitous events have arisen.
b. The Contractor has failed to correct bad conditions which are unsafe for workers or
for the general public, to carry out valid orders given by the PROCURING ENTITY or
to perform any provisions of the Contract.
c. The plans have to be adjusted to suit field conditions as found necessary during
construction.
The Contractor shall immediately comply with such order to suspend the Works wholly or
partly.
46.2 On any of the following grounds, the Contractor or its duly authorized representative shall
have the right to suspend work on any activities along the critical path of the approved
PERT/CPM diagram of the Works after fifteen (15) calendar days from the date of receipt of a
written notice from the Contractor to the PROCURING ENTITY’s Representative:
a. There exist right-of-way problems which prevent the Contractor from performing
work in accordance with the approved construction schedule.
b. The PROCURING ENTITY has failed to deliver the Site and/or government-furnished
materials, equipment or plans as stipulated in GCC Clause 5.
c. The peace and order condition makes it extremely dangerous, if not impossible, to
work. This condition must be certified in writing by the Philippine National Police
(PNP) station which has responsibility over the affected area and confirmed by the
Department of Interior and Local Government (DILG) Regional Director.
d. There is a delay in the payment of Contractor’s claim for progress billing beyond
forty-five (45) calendar days from the time the Contractor’s claim has been certified
by the PROCURING ENTITY’s Representative, unless there are justifiable reasons
thereof which shall be communicated in writing to the Contractor.
46.3 In case of total suspension, or suspension of activities along the critical path, which is not
due to any fault of the Contractor, the PROCURING ENTITY shall adjust the contract time for
the elapsed time between the effective order of suspending operation and the order to
resume work.

47. Extension of Contract Time

47.1 Should the amount of additional work under an approved Variation Order or other special
circumstances of any kind whatsoever occur such as to fairly entitle the Contractor to an
extension of Contract Time, the PROCURING ENTITY shall determine the amount of such
extension; provided that the PROCURING ENTITY is not bound to take into account any claim
for an extension of time unless the Contractor has, prior to the expiration of the Contract
time and within seven (7) calendar days after such work has been commenced or after the
circumstances leading to such claim have arisen, delivered to the PROCURING ENTITY
notices in order that it could have investigated them at that time. Failure to provide such
notice shall constitute a waiver by the Contractor of any claim. Upon receipt of full and
detailed particulars, the PROCURING ENTITY shall examine the facts and extent of the delay
and shall extend the Contract time to complete the contract work when, in the PROCURING
ENTITY’s opinion, the findings of facts justify an extension.
47.2 No extension of Contract Time shall be granted the Contractor on the following grounds:
a. Where the Contractor fails to provide the equipment, supplies or materials required
to execute the Works.
b. Where the reason given by the Contractor to support its request for time extension
is bad weather, particularly rainy/unworkable days whose actual number as verified
by the PROCURING ENTITY’s Representative does not exceed the expected average
number of such days for the particular month in the vicinity of the Site as stated in
the SCC; the said expected number of days is based on the records of the Philippine

14
 Atmospheric, Geophysical and Astronomical Services Administration (PAGASA), and
was already considered by the DPWH in determining the Contract Time during the
detailed engineering and the preparation of the Bidding Documents (BDs) for the
project.
c. Where the reason given is adverse peace and order situation, but the cases cited
are verified to be isolated/minor and can be handled by normal police or military
action.
47.3 Extension of Contract Time may be granted only under any of the following conditions:
a. Where the affected activities fall within the critical path of the approved PERT/CPM
network, and any of items b to d below.
a. Where the additional work under an Approved Variation Order requires extra time.
b. Where the PROCURING ENTITY fails to provide the Site or deliver government-
furnished materials, equipment and plans on the dates specified in GCC Clause 5.
c. Where the actual verified rainy or unworkable days are in excess of the expected
average number of such days for the month as stated in GCC Clause 47.2-c above.
d. Where there occur exceptionally destructive typhoons, floods and earthquakes,
epidemics, general shortage of construction materials, general labor strikes, or
widespread peace and order problems that severely disrupt construction operations
through no fault of the Contractor, provided that they are publicly felt and certified
by appropriate government agencies such as PAGASA, Department of Trade and
Industry, Department of Labor and Employment, Department of Interior and Local
Government, and Department of National Defense, among others.
47.4 The written consent of bondsmen must be attached to any request of the Contractor for
extension of Contract Time and submitted to the PROCURING ENTITY for consideration, and
the validity of the Performance Security shall be correspondingly extended.

48. Price Adjustment

Except for extraordinary circumstances as determined by the NEDA and approved by the Government
Procurement Policy Board, no Contract Price adjustment shall be allowed.

49. Acceptance
The Contractor shall request the PROCURING ENTITY’s Representative to issue a Certificate of
Acceptance of the Works at the end of the Defects Liability Period, and the PROCURING ENTITY’s
Representative will do so upon deciding that the Works are satisfactorily completed according to the
requirements of the Contract, especially the Specifications and Drawings, including the corrections to
be done during the Defects Liability Period.
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 Acceptance.

51. As-Built Drawings

51.1 If As-Built Drawings are required, the Contractor shall supply them by the date stated
in the SCC.

51.2 If the Contractor does not supply the said Drawings by the date stated in the SCC, or if they
do not receive the approval of the PROCURING ENTITY’s Representative, the PROCURING
ENTITY’s Representative shall withhold the amount stated in the SCC from payments due to
the Contractor.

15