ART. 1: DEFINITIONS

1. Who are the parties involved in a contract for private construction under CIAP Document 102?

The parties are the OWNER (1.20) and his CONTRACTOR (1.13), or the CONTRACTOR his SUBCONTRACTOR.

An OWNER is the person or entity or authorized representative thereof who signed the Contract as Owner (1.20). He is represented by an OWNER'S REPRESENTATIVE, who is the person or entity commissioned by the Owner or authorized in writing by the Owner to act on his behalf (1.21).

A CONTRACTOR is the person or firm duly registered and licensed by the Philippine Contractors Accreditation Board whose bid proposal has been accepted and to whom was awarded the Contract to execute the WORK.

A SUBCONTRACTOR is a contractorduly registered and licensed by the Philippine Contractors Accreditation Board who signs a construction Contract with the main CONTRACTOR.

2. Does CIAP Document 102 provide for a specific bidding process in order for a party to become a Contractor?

CIAP Document 102 does not explicitly give a step-by-step process for the bidding.  Nevertheless, it defines several terms in relation to the bidding process.

 ·        An INVITATION TO BID is the notice published by the Owner or the invitation issued to prospective bidders, giving information as to the nature of the proposed project, conditions for the issuance of Contract documents, date of bidding, and information that would give the Contractor a general idea of the magnitude and extent of the project (1.02).

 ·        BID DOCUMENTS collectively refer to all documents provided or made available to prospective bidders, which include the Invitation to Bid and a copy of the Contract which the winning bidders would be required to sign with the Owner  and the Contract Documents (1.06).

 ·        A BID BULLETIN contains additional information on Bid Documents issued to bidders before the date of bidding (1.07).

 ·        A BID is the tender, or proposal, or quotation, or offer of a bidder to perform the work described in the Contract (1.04).

 ·        A BID BOND serves as a guarantee that the bidder will enter into the Contract with the Owner for the construction of the Work, if the Contract is awarded to him (1.05).

3. What is a 'contract for private construction'?

CONTRACT is the term used to describe the combination of two sets of documents: the AGREEMENT (1.03) and CONTRACT DOCUMENTS (1.11).

AGREEMENT is the term used to describe the agreement signed by the OWNER and the CONTRACTOR, excluding the CONTRACT DOCUMENTS (1.03).

CONTRACT DOCUMENTS are the documents attached to the Agreement identified therein as Contract Documents, including all additions, deletions and modifications incorporated to those Contract Documents.  These generally include the following (1.11):

 •       Special Provisions or Conditions

 •       General Conditions

 •       Specifications

 •       Drawings

 •       Other Bid Documents

4. What are special provisions or conditions, specifications, supplementary specifications and drawings?

SPECIAL PROVISIONS OR CONDITIONS are instructions which are issued prior to bidding to supplement and/or modify the Drawings, Specifications and/or General Conditions of the Contract (1.26).

SPECIFICATIONS are the written or printed description of the work to be done describing qualities of the material to be used, the equipment to be installed and the mode of construction (1.25).

SUPPLEMENTARY SPECIFICATIONS are additional information which may be issued as an addition to or amendment of the provisions of the Specifications (1.28).

DRAWINGS are graphical presentations of the Work, including supplementary details and shop drawings (1.15).

5. What is the WORK that the Contractor must perform pursuant to the Agreement?

WORK is all Contractor-provided labor and/or materials, as well as equipment, transportation or other facilities necessary to commence and complete construction and to fulfill all his obligations per the Contract (1.32). Note: Modify to better express the meaning of Work.

The WORK must be completed within a certain TIME LIMIT or COMPLETION TIME. (1.30). The OWNER shall issue a written CHANGE ORDER to the Contractor to authorize changes or variations in the work whether or not it requires an adjustment in the Contract Price or Contract Time. (1.09).

6. What are COSTS as defined under CIAP Document 102?

COSTS means all expenditures properly incurred or to be incurred, whether on or off the site, including overhead and other charges properly allocable thereto but does not include any allowance for profit (1.14). The Contractor incurs costs when performing the WORK.

7. May the Contractor sub-contract in order to complete the Work under the Agreement?

Yes. A Contractor may engage a SUB-CONTRACTOR to acts for or in its behalf in executing any part of the Contract (1.27).

If a party merely furnishes materials without labor, said party is a supplier and not a Sub-Contractor (1.27).

8.  Generally, what is the amount to be paid by the Owner to the Contractor for the execution of the Work?

The Owner should pay the CONTRACT PRICE, or the amount in money or other consideration to be paid by the Owner to the Contractor for the execution of the Work in accordance with the Contract.

The Owner's obligation to pay the CONTRACT PRICE ends when he makes the FINAL PAYMENT to the Contractor. There is a  FINAL PAYMENT when payment  is made of the final progress billing and all approved claims including but not limited to variations in the work, Contract Price adjustments and/or escalation, acceleration of work, and others (1.16).

9. Must the Contractor provide any securities to guarantee the performance of the Work?

Yes. There are three kinds of bonds defined in CIAP Document 102: Guarantee Bond, Payment Bond, and Performance Bond. The Contractor and his Surety furnish these bonds. A Surety is the person, firm, or corporation which issues the bond required of the Contractor (1.29).

GUARANTEE BOND is furnished as a guarantee of the quality of the materials provided, the equipment installed, and the workmanship performed by the Contractor (1.17).

PAYMENT BOND is furnished as a guarantee of good faith on the part of the Contractor to faithfully comply with the Contract in respect of its obligations arising therefrom to its workers, subcontractors, and suppliers (1.22).

PERFORMANCE BOND is furnished as a guarantee of good faith on the part of the Contractor to execute the Work in accordance with the Contract (1.23).

10. What are acts of God or force majeure?

ACTS OF GOD OR FORCE MAJEURE (1.01) refer to any event beyond the reasonable control of the Owner or the Contractor, as the case may be, and which is unavoidable notwithstanding the reasonable care of the party affected and shall include, without limitation, the following:

 •       War, hostilities or warlike operations (whether a state of war be declared or not), invasion, act of foreign enemy, civil war;

 •       Rebellion, revolution, insurrection, mutiny, usurpation of civil or military government, conspiracy, riot, civil commotion, terrorist acts;

 •       Confiscation, nationalization, mobilization, commandeering or requisition by or under the order of any government or de jure or de facto authority or ruler or any other act or failure to act of any local or state or national government authority;

 •       Strike, sabotage, lock-out, embargo, import restriction, port congestion, lack of usual means of public transportation and communication, industrial dispute, shipwreck, shortage or restriction of power supply, epidemics, quarantine, plague;

 •       Earthquake, landslide, volcanic activity, fire, flood, inundation, tidal wave, typhoon or cyclone, hurricane, storm, lightning, or other inclement weather condition, nuclear and pressure waves, or other natural or physical disaster;

 •       Shortage of labor, materials or utilities where caused by circumstances that are themselves Force Majeure.

11. What does WRITTEN NOTICE mean?

'Written Notice' means information, advice or notification pertinent to the project delivered in person or sent by registered mail, or by courier to an individual, firm or corporation at the latter's last known business address (1.31).

ARTICLE 2: EXECUTION, CORRELATION, MEANING OF TERMS AND INTENT OF DOCUMENTS

1. What is the intent of the Contract?

The intent of the Contract is to include all labor, materials, equipment and transportation necessary for the proper execution of the Work (2.01).

2.  What is the standard of conduct required of the parties?

Each party to the Contract acknowledges that, in the exercise of his rights and in the performance of his duties, he must act with justice, give the other party his due, and observe honesty and good faith (2.02).

3. What are the rules regarding the interpretation of Contract under CIAP Document 102, in the case of conflict, discrepancies, errors or omissions?

Article 2.03[a] provides for the following rules:

•       RULE 1: The Agreement and the Contract Documents shall be taken as mutually explanatory of one another. The various provisions of the Contract shall be interpreted together, attributing to the doubtful ones that sense which may result from all of them taken jointly.

•       RULE 2: The provisions of the Civil Code of the Philippines on the interpretation of contracts and of the Rules of Court on the Interpretation of Documents shall be applied.

•       RULE 3: Where the conflict between or among the provisions of the Agreement and/or the Contract Documents cannot be resolved by Rules 1 and 2, it shall be understood that:

(a) Detailed Drawings shall prevail over the General Drawings;

(b) Words and figures shall prevail over the Drawings;

(c) Words shall prevail over figures in Contract Documents; and

(d) Written dimensions shall prevail over measured dimensions.

 •       RULE 4: Where the conflict cannot be resolved by applying Rule 3 or where Rule 3 does not apply, the conflict shall be resolved by giving precedence to the Agreement or to provisions of a Contract Document higher in order of priority among the various documents which comprise the Contract. The order of priority among these documents shall be as follows:

(a) Agreement as modified by Notice of Award of Contract, if such be the case, and the Contractor's conformity thereto:

(b) Instruction to Bidders and any amendment thereto;

(c) Addenda to Bid Documents;

(d) Specifications;

(e) Drawings;

(f) Special Conditions of Contract;

(g) General Conditions of Contract;

(h) Other Contract Documents; and

(i) Other documents forming part of the Contract attached thereto or incorporated therein by reference.

 Where the order of precedence is modified in the Agreement, such modified order of precedence shall be followed; however, the mere listing of Contract Documents in the Agreement or any Contract Document shall not be interpreted as establishing an order of precedence among them.

 •       RULE 5: Where there is a discrepancy, defective description, error or omission in any Contract Document, the Contract Documents shall be interpreted as being complementary to each other. Thus, what is called for in one Contract Document, although not mentioned in another Contract Document where it should have been mentioned, shall be deemed to be called for by the Contract.

 •       RULE 6: The apparent silence of the Drawings, Specifications or any other Contract Document as to any detail, or the lack of detailed description concerning any part of the work, shall be understood to mean that good and accepted construction practice in accordance with the usage or custom of the place shall be followed.

In addition to the above rules:

 •       Specifications prevail over Drawings (2.04[a]).

 •       Detailed specification requirements prevail over general conditions (2.04[a]).

 •       In all cases where a device, item or part of equipment is referred to in the singular number, such reference shall apply to as many such devices, items, or parts as are required to complete the work (2.03[d]).

4. Should the above rules of interpretation be followed in all cases?

No. If the Contract provides for a different set of rules of interpretation, those shall be followed (RULE 7, 2.03[a]).

5. What does "mutually explanatory" mean, in RULE 1?

"Mutually explanatory" means that all of the CONTRACT DOCUMENTS be given equal weight when interpreting a particular doubtful provision, as opposed to making reference to a specified priority of documents.

6. What are the applicable provisions of the Civil Code on interpretation of contracts?

Articles 1370 to 1379 of the Civil Code cover the rules on interpretation of contracts under Civil Law. Foremost among these rules are:

 •       If the terms of the contract are clear and leave no doubt upon the intention of the contracting parties, the literal meaning of its stipulations shall control. If the words appear contrary to the evident intention of the parties, intention prevails over words (Art. 1370).

 •       If a stipulation of any contract can have several meanings, the meaning which will be most adequate to render the stipulation effective shall be adopted (Art. 1373).

 •       Words, which may have different significations, shall be understood in that which is most in keeping with the nature and object of the contract (Art. 1375).

 •       The usage or custom of the place shall be borne in mind when interpreting the ambiguities of a contract, and shall fill the omission of stipulations which are ordinarily established (Art. 1376).

7. What are the applicable provisions of the Rules of Court on interpretation of documents?

Rule 130(B)(4) of the Revised Rules of Evidence provides for the rules on interpretation of documents.

8. Who is responsible for resolving conflicts or discrepancies in the interpretation of the Contract?

The Owner is responsible for resolving such conflicts or discrepancies. The interpretation of or explanation by the Owner shall be issued in the form of instructions to the Contractor (2.03 [b] and [c]).

9. What is the consequence of the Owner failing to issue the instruction in writing?

The execution of the work affected by the interpretation or explanation without the Owner's timely objection or protest shall be considered executed in accordance with the Owner's interpretation or explanation (2.03[c]). Thus, the Owner cannot later on say that the work was done incorrectly.

10. What should the Contractor do if it spots a discrepancy in any of the documents enumerated in 2.04[a]? What are the consequences of not reporting to the Owner?

The Contractor should immediately report the discrepancy to the Owner, who shall promptly correct it. Any work involving such discrepancies shall be estimated by the Contractor and unit prices or lump sum amounts shall be agreed upon by the parties whenever possible before the work is done.

Any work done by the Contractor involving discrepancies found by the Contractor and not reported to and without the knowledge of the Owner shall be considered as having been done at the Contractor's risk (2.04[b]).

11. Who is responsible for adequacy of the design and sufficiency of the drawings and specifications?

Generally, the Owner shall be fully responsible for the adequacy of the design and for sufficiency of the Drawings and Specifications (2.04[c]).

However, if any part or whole of the Works, when agreed upon, are to be designed by the Contractor, then all responsibilities assigned to the Owner for such design shall automatically be assigned to the Contractor (2.04[d]).

12. What do "APPROVED DIRECTED AND ACCEPTABLE", "FURNISH", "INSTALL", "PROVIDE" AND "NECESSARY" mean?

 •       APPROVED, DIRECTED AND ACCEPTABLE: The words "approved", "directed" and "acceptable", or words of like import shall mean approved, directed by or acceptable to the Owner.

 •       FURNISH: The word "furnish" shall be understood to mean "purchase and/or fabricate and deliver to the jobsite or other location when so designated."

 •       INSTALL: The word "install" shall mean to build in, mount in positions, connect or apply any object specified ready for the intended use.

 •       PROVIDE: The word "provide" shall be understood to mean "furnish and install."

 •       REQUIRED OR NECESSARY: The words "required" or "necessary" shall mean as required or necessary for the complete execution of that portion of the Work (2.05).

13. What is the responsibility of the Owner with respect to performing acts which may affect the Contractor's timely completion of the work?

Article 2.06 enumerates some instances where the Owner may be required to act, and such action may affect the Contractor's timely completion of the work, such as:

 •       Giving his decision, opinion or consent;

 •       Expressing his satisfaction and approval;

 •       Determining value;

 •       Providing drawings;

 •       Supplying equipment or materials

In these cases, the Owner shall exercise such discretion fairly and in a timely manner, taking due regard of Completion Time and the approved construction schedule notwithstanding any provision in the Contract requiring the Contractor to notify the Owner when such action is due (2.06).

14. What is the Contractor's responsibility in giving notices or submissions to the Owner?

The Contractor shall give notices or submissions in a timely manner so as to avoid delays in the Work (2.06).

15. What is the responsibility of the Owner when the Contract or accepted industry practice requires that before any part of the Work is covered, it must be inspected and approved?

The Owner shall provide a sufficient number of inspectors at the project site while work is in progress. Failure of the Owner to provide inspectors is a waiver of the Owner to inspect and approve that part of the Work (2.06).

16. What must the Owner do with respect to removing/ replacing defective or inferior equipment, materials, or work?

If the Owner is: (a) authorized by the Contract or General Conditions to require the Contractor to remove or replace defective or inferior materials or equipment or to replace bad or defective work; and (b) represented by a professional duly authorized to supervise the Contractor's work and to exercise the discretion and authority of the Owner, the Owner shall promptly condemn (seize) such materials, equipment or work in order to minimize the damage or loss of the Contractor  (2.07).

However, where even with the exercise of due diligence, the Owner could not have discovered the use of inferior materials and equipment or the defective work, the Owner shall promptly  condemn it upon discovery, and the Contractor shall bear all the cost of removing and replacing the defective or inferior material or equipment or work (2.07).

17. What is the duty of the Contractor in reviewing the contract and its attached documents?

The Contractor shall carefully study and compare the various documents comprising the Contract and shall report to the Owner any error, inconsistency or omission that may be discovered in its provisions. The Contractor, however, shall not be liable to the Owner for any damage resulting from any such error, inconsistency or omissions.

The Contractor shall follow the Drawings and Specifications and all additional detail drawings and instructions issued by the Owner as being in full and strict conformity with the Contract and requirements of the Work.

The Contractor shall not be liable to the Owner for undetected error, inconsistency or omission in the Contract or for complying with instructions or following Drawings or Specifications, or for using or following the approved shop drawings, product data or sample (2.08).

18. How should the Owner's approval of documents be construed?

Generally, the Owner's approval shall be construed as the Owner's acknowledgment that the approved shop drawings, product data and sample comply with the Contract.

The above rule does not apply in the case of shop drawings, product data and samples for any portion of the work provided or supplied by a specialty contractor (2.08), for which the latter  shall be directly  liable to the Owner.

19. What documents should the Contractor maintain at the Project site?

The Contractor shall maintain in good order at the Project site on a current basis one (1) record copy of all Drawings, Specifications, addenda, Change Orders and other modifications, and changes made during construction, including approved shop drawings, product data and samples. These documents and samples shall be available to the Owner for the latter's inspection (2.09).

The Contractor shall advise the Owner, on a current basis and in writing, of changes in the Work made during construction, except those made in accordance with Change Orders or Owner's instruction (2.09).

20. Once the Owner provides a copy of the contract documents to the Contractor, does ownership of these documents transfer to the Contractor?

No.  The Drawings, Specifications and models, including all additional instructions and copies thereof, furnished to the Contractor shall remain the property of the Owner. They are not to be used by the Contractor on any other work, and, with the exception of the signed Contract inclusive of Contract Documents, they shall be returned to the Owner upon completion of the Work before Final Payment to the Contractor is made (2.10).

ARTICLE 3: DRAWINGS AND SPECIFICATIONS

1. How many sets of Drawings and Specifications must the Owner initially provide to the Contractor?

The Owner shall furnish the Contractor, free of charge, three (3) sets of Drawings and Specifications, inclusive of the signed Contract. All other copies of Drawings and Specifications as required by the Contractor will be furnished to him at cost of reproduction (3.01).

2.  How should the Drawings and Specifications be interpreted / understood?

All Drawings and models are to be read and understood together with the Specifications, to form a part thereof.  Where figures are given, they are to be followed in preference to measurements by scale.  Anything shown on the Drawings but not mentioned in the Specifications, or vice versa, or anything not expressly set forth in either but which is reasonably implied, shall be furnished as if specifically shown and mentioned in both (3.02).

3. What are the clarifications that a Contractor may request the Owner regarding  the meaning of drawings and specifications?

 •       The meaning of the Drawings (including notes thereon) or of the Specifications, or

 •       Any obscurity as to the wording of the Specifications.

 •       Directions and explanations necessary and proper to make more definite and certain any requirement of the Drawings (including notes) or of the provisions of the Specifications (3.03).

4. What must a Contractor do if he discovers discrepancy in the figures in the Drawings, and what is the consequence if he continues the Work notwithstanding the discrepancies?

The Contractor shall report to the Owner any discrepancy in the figures in the drawings immediately upon its discovery. The Owner shall make the necessary correction.

If the Contractor, without notifying the Owner of such discrepancy, performs his work according to the drawings notwithstanding such discrepancy , the Owner  may direct the Contractor to redo his work without an adjustment of his Contract Price and his Contract Time. 

ARTICLE 4: DETAIL DRAWINGS AND SPECIFICATIONS

1. How many additional detail drawings and instructions should the Owner provide to the Contractor?

CIAP Document 102 does not provide for an exact number.  However, it provides that the Owner shall furnish additional detail drawings and instructions essential to their proper interpretation and proper execution of the Work (4.01).

2.  How should the additional detail drawings and instructions be considered?

All additional drawings and instructions are to be considered of equal force as those which originally accompany the Specifications (4.01).

ARTICLE 5: SHOP DRAWINGS

1. What are shop drawings?

Shop drawings represent:

•       All working and erection dimensions;

•       Arrangement and sectional views;

•       Necessary details, including complete information for making connections with other work; and

•       Kinds of materials and finishes.

Shop drawings shall be dated, numbered consecutively, and shall contain:

•       The name of project;

•       The descriptive names of equipment, materials, and classified item numbers and

•       The location at which materials or equipment are to be installed in the Work (5.02).

2. Who prepares the shop drawings?

The Contractor shall prepare the shop drawings at his own expense (5.01).

3. How many shop drawings should the Contractor prepare and submit for the Owner's approval?

The Contractor shall submit two (2) copies of all shop or setting drawings, templates, patterns and models (5.01). Submission of shop drawings shall be accompanied by a letter of transmittal in duplicate (two copies), containing the name of the project, the Contractor's name, number drawings, titles, and other pertinent data (5.03).

If the shop drawings show variations from the Contract requirements because of standard shop practice or other reasons, the Contractor shall make specific mention of such variations in his letter of submittal (5.04[d]).

4. May the Contractor execute any work called for by the shop drawings without the Owner's approval?

No. The Owner must first give his approval before the Contractor can execute such work (5.04[c]).

5. May the Owner make corrections to the shop drawings? If there are corrections, what is the process for re-submission of those documents?

The Owner may make corrections, if he desires (5.01). In that case, the Contractor shall make the corrections in the shop drawings required by the Owner and file with the latter three (3) corrected copies (5.01; 5.04).

Satisfactory shop drawings will be identified by the Owner, dated, and one (1) copy will be returned to the Contractor.

Should shop drawings be disapproved by the Owner, one (1) set of such shop drawings will be returned to the Contractor indicating therein the corrections and changes to be made (5.04).

The Contractor shall make the required corrections and changes and resubmit the shop drawings, in duplicate (two copies), until the Owner's approval is obtained (5.04[a]).

Upon receipt of approval, the Contractor shall insert the date of approval on the tracings and promptly furnish the Owner with three (3) additional prints of approved drawings.

6. How many days does the Owner have to approve shop drawings?

Generally, the Owner has to approve the shop drawings within 7 working days of submission by the Contractor.

This period does not apply in the following cases:

 •       When the CONTRACT specifies the contrary; or

 •       When the Contractor's submission is deficient (such as if corrections are needed)

Unless specified to the contrary or unless the Contractor’s submission is deficient, shop drawing approval by the Owner shall be made within seven (7) working days of submission by the Contractor (5.06).

7. Is the Owner responsible, in all cases, for the accuracy of drawings?

Generally, the Owner is responsible, except if the Contractor is a specialty contractor or is engaged by the Owner as a specialty contractor in which case it is the specialty contractor which is responsible In such case, the Owner's approval shall not relieve the Contractor of responsibility for accuracy of such shop drawings, nor for proper fitting and construction of work, nor for furnishing of materials or work required by the Contract and not indicated on the shop drawings.  

The Owner's approval of such drawings or schedule shall not relieve the specialty contractor from responsibility for deviations from the Drawings or Specifications, unless he has, in writing, called the Owner's attention to such deviations at the time of submission and secured the Owner's written approval (5.05).

8. Summarize the submissions, approvals, and corrections procedures for shop drawings.

 •       First, the Contractor submits two (2) copies of all shop drawings to the Owner for approval. The Owner will generally have seven (7) working days from submission to act on those drawings.

If the drawings are approved:

 •       The Owner shall identify those drawings which he approves, date them, and then return one (1) copy to the Contractor.

 •       Upon receipt of such approval, the Contractor shall insert the date of approval on the tracings and promptly furnish the Owner with three (3) additional prints of approved drawings.

If the drawings require corrections and/or are disapproved by the Owner:

 •       One (1) set of such shop drawings will be returned to the Contractor, indicating therein the corrections and changes to be made (5.04).

 •       The Contractor shall make the required corrections and changes and resubmit the shop drawings, in duplicate (two [2] copies). The process repeats until the Owner's approval is obtained (5.04[a]). 

ARTICLE 8: GENERAL

1. What laws must the materials and equipment conform to?

All materials and equipment must conform to all Laws which may be in force and applicable during the period of construction (8.01).

2. What is the effect if the Contractor fails to comply with the applicable laws?

The Contractor shall bear all damages by reason of any delay in the Work arising from his failure to comply with the applicable laws (8.01).

3.  What if the applicable laws are revised or changed during the construction period, and the cost or time of completion of the Contract is affected as a result?

The Owner shall recognize that a constructive change in the Work has occurred and make a corresponding adjustment of the  Contract Price and Completion Time (8.01).

ARTICLE 9: EQUIPMENT

1. If the Owner, in the detailed Specifications, refers to certain equipment by name and catalog number, does this mean that the Contractor can only use that specified equipment?

No. This procedure is not to be construed as eliminating from competition other products of equal or better quality by other manufacturers where they are fully suitable in design (9.01).

2. Can the Contractor substitute equipment? When can he do this and what process should be followed?

The Contractor can substitute equipment, upon approval of the Owner in writing.

The Contractor shall furnish the complete list of proposed substitutions preferably prior to the signing of the Contract together with such engineering and catalog data as the Owner may require. Thus, the Contractor may furnish the complete list of proposed substitutions even after the signing of the Contract.

All requests for substitution of equipment shall be in writing. The Owner will approve or disapprove the request in writing. No substitute equipment shall be used unless approved in writing by the Owner.

The Contractor shall abide by the Owner's judgment as to the acceptable proposed substitute equipment (9.02).

ARTICLE 10:MATERIALS, FIXTURES, APPLIANCES, AND FITTING FURNISHED BY THE CONTRACTOR

1. Must the Contractor furnish a sample of all materials, fixtures, appliances and fitting to the Owner for the latter's approval?

Not in all cases. The Contractor shall furnish for approval samples as specified or required (10.01).

2. What is the procedure that the Contractor must follow when furnishing samples of materials, fixtures, appliances and fittings to the Owner for approval?

 •       Three (3) samples shall be submitted, of adequate sizeto show quality, type, color, range, finish, and texture of material. That number may change, if specified (10.01[a]).

 •       Each sample shall be labelled, bearing the material's name and quality, the Contractor's name, date, project name, and other pertinent data (10.01[b]).

 •       If the Specifications require the manufacturer's printed installation directions, such directions shall accompany the samples submitted for approval (10.01[c]).

 •       A letter of transmittal in triplicate (3 copies) from the Contractor requesting approval shall accompany all sets of samples (10.01[d]).

3. How much time does the Owner have to approve the materials, samples, or equipment?

The Owner must act on the submission of equipment, samples, or materials within seven (7) days of submission by the Contractor (10.08). The 7-day period may be disregarded in the following cases:

 •       If specified to the contrary; or

 •       If the Contractor's submission is deficient.

4. Can the Contractor order materials without Owner's prior approval?

If the material does not require prior approval per the Specifications, the Contractor may order such material without the Owner's prior approval (10.01). If the material requires the Owner's prior approval, the Contractor shall not order it until such approval is given in writing (10.01[e]). The Owner’s approval must be timely.

All materials shall be furnished substantially equal in every respect as the approved samples (10.01[e]).

5. When an item or class of materials is specified exclusively by trade name, manufacturer's name or by catalog reference, may the Contractor substitute another kind of material?

Generally, only such specified item shall be used for completing the Work as required by the Contract (10.02[a]).

However, the Contractor may substitute another material, article or process if the substitution is approved in writing by the Owner (10.02[b]). The Contractor shall be responsible for the materials and articles installed or used  without the Owner’s approval. (10.02[c]).

Samples of materials for use in reinforced concrete work such as steel bars, cement, and aggregates and their certificates of origin shall be approved by the Owner (10.02[d]).

The Owner’s action on the request for substitution of materials  or for approval of samples of materials shall be given in a timely manner.

6. Who is responsible for testing of samples and what standards must be followed?

The Owner shall be responsible for the testing. of samples which require the its approval.

The Contractor shall submit to the Owner as many samples as may be needed for purposes of testing. Testing of all samples shall comply with the Specifications and government standards and shall be performed by a competent entity or testing laboratory approved by the Owner (10.03).

However, if the Contractor supplies the samples, all costs of shipment, delivery, handling and testing of Contractor-supplied samples are to be paid by the Contractor (10.03).

7. May the items furnished by the Contractor be secondhand instead of brand-new?

Unlessthe Contract provides otherwise, all materials shall be new and their quality shall be of the best grade of their respective kinds taking into account the nature of the project and requirements of the Contract (10.04).

8. Who is responsible for providing storage space for the materials?

The Owner shall provide the Contractor, either at or near the project site, sufficient space for the Contractor's and Sub-contractors' use for storage of their materials and for erection of their sheds and tool houses (10.05[a]).

The Contractor shall store all cement, lime, and other materials affected by moisture on platforms and protected from the weather. The materials shall be so stored as to ensure the preservation of their quality and fitness for the work. Stored materials shall be so located so as to facilitate prompt inspection (10.05[b]).

9. What if the stored materials, sheds, or storage platform need to be moved?

The Contractor is responsible for the move and shall do so at his own expense (10.05[c]).

10. What are defective materials?

Defective materials are defined as all materials not conforming to the Specifications (10.06).

The Specifications, Drawings, Special Provisions and Supplementary Specifications shall provide any detail or description concerning the nature and quality of the Work to be performed. Should they fail to do so, it is understood that  generally accepted construction practice shall be followed (10.06).

11. What shall the Contractor do in case materials are considered defective?

The Contractor shall remove or replace defective materials when ordered to do so by the Owner.

Upon the Contractor's failure to do so, the Owner may remove and replace them and deduct the cost of removal and replacement from any money due or to become due the Contractor.

Even if the defects of the materials have been subsequently corrected, no materials shall be used until the Owner's approval is given (10.06).

12. If materials, fixtures and equipment have to be imported, can an extension of the Completion Time be granted to account for their delayed delivery?

The Contractor shall make timely arrangements for the purchase and delivery of all specified imported materials, fixtures, appliances and equipment in order to avoid delay in the completion of the Work (10.07).

Should Contractor-supplied imported materials, fixtures, appliances and equipment arrive late, an extension of time may be granted by the Owner if they arrived late for reasons other than the negligence or inadvertence of the Contractor.

ARTICLE 11: MATERIALS, EQUIPMENT, FIXTURES, APPLIANCES AND FITTINGS FURNISHED BY THE OWNER

1. How should materials, equipment, fixtures, appliances and fittings be provided?

Materials, equipment, fixtures, appliances and fittings specifically indicated in the Contract shall be provided in accordance with the Owner-approved construction schedule.

Materials furnished by the Owner shall be deemed acceptable to the Owner. No further test shall be required unless the Owner directs otherwise and pays the cost of such test.

The Contractor shall advise the Owner in writing  of any defect he discovers in materials furnished by the Owner The Contractor shall be responsible for material loss of or damage to any Owner-provided material, equipment, fixture, appliance or fitting in his custody,  if he uses them without a timely disclosure of such defect to the Owner. 

ARTICLE 12: ROYALTIES AND PATENTS

1. Who is responsible for paying all royalties and license fees on patented materials and processes?

The Contractor shall pay all royalties and license fees on all patented materials and processes furnished by him. He shall defend all suits or claims corresponding thereto for infringement of any patent rights and shall save the Owner harmless from loss on account thereof.

The Owner shall be responsible for paying royalties and license fees for Owner-furnished patented materials and processes.

ARTICLE 13: MANUFACTURER'S DIRECTIONS

1. What is the importance of the manufacturer's printed directions?

All Contractor-supplied manufactured articles, equipment, appliances, fixtures and fittings shall be applied, installed, connected, used, and conditioned by him in accordance with the manufacturer's printed directions.

2. How many copies of the manufacturer's directions shall be submitted to the Owner?

Where reference is made to the manufacturer's directions, the Contractor shall submit the specified number of copies of such directions to the Owner.

ARTICLE 16: PROTECTION OF WORK AND OWNER'S PROPERTY

1. What must the Contractor do to protect the Works and the owner's property?

In order for the Contractor to protect the Works and the Owner's property, he must:

 •       take all reasonable measures to protect from damage (i) the Works, (ii) the Owner's property, and (iii) the equipment supplied by the Owner and shall make good any damage or loss thereto,

o   Exception: The Contractor does not need to remunerate the Owner for damage caused by agents or employees of the Owner, or due to force majeure or causes considered  Acts of God;

 •       provide reliable watchmen to guard the site, provide all doorways with locks and lock such doors at the close of each day's work; provided, however, that if the Owner deems the security service inadequate or incompetent, the Contractor shall increase or change the security personnel;

 •       prohibit smoking at the site and signs to this effect shall be posted conspicuously;

 •       prohibit fires built on the site;

o   Exception: Unless the Owner gives his or her express consent

 •       provide and maintain in good working order an adequate number of fire-fighting equipment and such equipment shall not be used for any other purpose (16.01).

The Contractor must box or otherwise provide protection to the trees and other plants in the site. No trees within the site located outside building lines shall be cut or removed without the specific approval from the Owner (16.03). Any damage to the trees, plants, streets or sidewalks that result from fault or negligence of the Contractor shall be repaired by the Contractor at his own expense (16.03).

If it should be necessary to interrupt or obstruct the natural flow of rivers or streams, the drainage of the surface, or the flow of artificial drains, the Contractor shall do so in such a way that no damage shall result to either public or private interests. For any natural or artificial drainage which he or she may have obstructed, the Contractor must provide other means of drainage. Otherwise, the Contractor shall be liable for all the damages which may result therefrom (16.04).

2.  What should the parties do about old materials?

All materials of value as determined through a joint inventory by the Owner and the Contractor found at the work site shall be carefully stored at the place designated by the Owner. The Contractor shall be responsible for their safekeeping until final acceptance of the Work (16.02).

ARTICLE 17: PROTECTION OF ADJACENT PROPERTY AND EXISTING UTILITIES

1. Does the Contractor also have the responsibility to protect adjacent property and/or existing utilities?

Yes, the Contractor also has the responsibility of protecting adjacent property and existing utilities. The Contractor shall adequately protect adjacent property as provided by Law and the Contract. Any neighboring property or building which may be jeopardized must be thoroughly protected against damage during construction at the Contractor's expense (17.01).

In addition to this, the Contractor shall be liable for and pay for all damages to adjacent and existing utilities occasioned in any manner by his act or neglect, or by that of his agents, employees, or workmen (17.02).

2. How can one ascertain if any damage is caused to adjacent property?

Prior to commencement of the Works, the Contractor shall, insofar as is legally and physically possible, survey and ascertain the condition of any existing adjacent properties or buildings and record the results thereof through photographic record or by any other means (17.03). 

ARTICLE 18: PROTECTION OF LIFE, WORK, AND PROPERTY DURING AN EMERGENCY

1. What are the responsibilities of a Contractor during an emergency?

During an emergency endangering life, the Work or the adjoining property, the Contractor shall act, at his discretion, to prevent or minimize the threatened loss or injury even without any instruction or authorization from the Owner (18.01).

Emergency work shall be treated as one performed under a Change Order. The exception to this is if the emergency was due to the Contractor's fault or negligence (18.01). 

ARTICLE 23: SEPARATE CONTRACTS WITH OTHER CONTRACTORS

1. Can the Owner have separate contracts with other contractors?

Yes. The Owner may perform work outside of the Contractor's scope of work or award separate contracts to other contractors. If the Contractor claims that delay, damage or additional cost is involved as a result, the Contractor shall make such claim as provided in the Contract. The Owner shall provide for the coordination of the work performed by the Owner and/or each separate contractor with the Work of the Contractor (23.01).

ARTICLE 24: CONTRACTOR-SEPARATE CONTRACTORS RELATIONS

1. What are the possible obligations that the Contractor may have with separate contractors?

One possible example is with regard to the storage of materials and work coordination. The Contractor shall, whenever and to the extent possible, afford other contractors reasonable opportunity for the introduction and storage of their materials and the execution of their work, and shall properly connect and cooperatein the Owner's effort to coordinate his work with that of other contractors so as to minimize interference or obstruction in the progress of the work performed by each of them (24.01).

Another example is with regard to the cutting, fitting or patching of work. The Contractor shall do all cutting, fitting or patching of his work that may be required to make its several parts come together properly and fit it to receive or be received by work of other contractors shown upon, or reasonably implied by, the Drawings and Specifications for the completed structure. In addition to this, the Contractor shall not endanger any work by cutting, digging or otherwise and shall not cut or alter the work of any other contractor save with the consent of the Owner. Any cost caused by defective or ill-timed work shall be borne by the party responsible therefor. The Contractor shall not endanger any work by cutting, digging or otherwise and shall not cut or alter the work of any other contractor save with the consent of the Owner.  (24.02).

Lastly, if any part of the Contractor's work depends for proper execution or results upon the work of any other contractor, the Contractor shall inspect and promptly report it to the Owner. His failure to inspect and report it shall constitute an acceptance of the other contractor's work as fit and proper for the reception of his work except as to defects which may develop in the other contractor's work after the execution of the Contractor's work.

To insure the proper execution of his subsequent work the Contractor shall verify work already in place and shall at once report to the Owner any discrepancy noticed between the executed work and the drawings (24.03).

2. What if the Contractor causes damage to the work of a separate contractor?

Should the Contractor cause damage to the work of any separate contractor, the Contractor agrees to relieve the Owner of any liability which may arise therefrom (24.04). On the other hand, should a separate contractor cause damage to the Contractor's work, then the Owner shall hold harmless the Contractor in respect thereof (24.05). 

ARTICLE 25: SUB-CONTRACTS

1. Can the Contractor contract another entity to complete a portion of the Work?

The general rule is that no portion of the Work shall be sublet or sub-contracted without the Owner's consent. However, any part thereof or any specialty work therein, may be sublet or sub-contracted, subject to the provisions of Articles 25.02 and 34.03. The consent of the Owner to the Contractor's engagement of a subcontractor, by itself, shall not create any contractual relation between the sub-contractor and the Owner  (25.01).

If such an arrangement is implemented, the Contractor is fully responsible to the Owner for the acts and omissions of  its sub-contractor (25.02).

2. If a subcontracting agreement is implemented, does it create a relationship between the Owner and the sub-contractor?

No, the consent of the Owner to the Contractor's engagement of a subcontractor, by itself, shall not create any contractual relation between the sub-contractor and the Owner (25.01).

ARTICLE 30: CONTRACTOR’S RESPONSIBILITY FOR ACCIDENTS AND DAMAGES

1. What are the safeguards that should be undertaken by the Contractor?

 Ÿ       The Contractor shall take all necessary precautions for the safety of employees and workmen on the Work, and comply with all Laws to prevent injury to persons on, about, or adjacent to the premises where the Work is being performed.

 Ÿ       The Contractor shall erect and properly maintain at all times, as required by the conditions and progress of the work, such as barriers, shoring, supports, braces, lights, danger signs and necessary safeguards, as will protect workmen and the public and as will effectively prevent any injury to persons and damage to property in consequence of his work.

 Ÿ       The Contractor shall designate a responsible member of his organization at the site, whose duty shall be the prevention of accidents and damage to the Work, the Owner's property, and adjoining property. The name and position.

 Ÿ       The Contractor shall be primarily responsible for all safety measures in prosecuting the Work in accordance with the safety manual approved by the Construction Industry Authority of the Philippines (CIAP) (30.01).

2. Will the owner be responsible for the death or injury of the Contractor or his employees from any source or cause by or to the Contractor's plant or materials? What about damages caused by the Contractor or his employees to any property of the Owner and adjoining property?

No. Article 30.02(a)states that the Contractor shall indemnify and save harmless the Owner from and against all losses and all claims, demands, payments, suits, actions, recoveries, and judgment of every nature and description brought or recovered against him, for any act or omission of said Contractor, or of his agents or employees, in the execution of the Work or the guarding of it.

3. Who will pay for the repair and damages of the Contractor?

Claims for payment and repairs for damages for which the Contractor is liable shall be settled by the Contractor at his own expense. (30.02[b])

4. What if the Contractor fails to repair and pay claims?

The Owner may repair the same and pay the claims, and deduct the entire cost of such repairs and claims from the payments due the Contractor.

5. What if the Contractor defaults?

The Owner shall have the right to undertake reasonable safety and protection measures, and charge the cost of such measures to the Contractor. (30.03)

ARTICLE 31: CONTRACTOR’S INSURANCE AND BONDS

1.   What are the kinds of insurance required of the Contractor?

 A.   Liability Insurance

 1.   What is the purpose for securing an insurance?

To protect himself, his sub-contractors, and the Owner from claims for bodily injury, death or property damage.

 2.   Can the Contractor commence work without insurance and subsequently acquire one?

No, the Contractor shall not commence work under the Contract until he has obtained the insurance coverage required and shall have filed the insurance.

 3.   Is there any special clause that should be provided for in the Insurance policy?

Yes, the insurance policy shall contain a clause providing that it shall not be cancelled by the insurance company without written notice to and approval of the Owner. The nature, extent and amount of such insurance coverage shall be as agreed upon between the Owner and the Contractor. The Contractor shall ensure that such insurance policy is effective during the execution of the Work.

B.  Accident Insurance for workers

In addition to compulsory coverage of workers under the workmen's compensation law, the Contractor must obtain insurance coverage for accidental death or injury of his officers, employees and laborers without regard to their tenure of employment as permanent or regular workers.  The amount of the coverage shall be at least P100,000 per worker.  The Contractor shall pay the appropriate premiums without any cost to those covered by the policy.

C.  Fire Insurance

In addition to such Fire Insurance as the Contractor elects, he must secure and maintain the policies upon such structures and materials and in such amounts as shall be designated in the joint names of the Contractor and the Owner as their respective interest may appear.

2. What are the bonds required of the Contractor?

A.   Performance and Payment Bond

 1.   How much is the performance bond?

 •       15% of the Contract amount for the faithful performance of his work; and

 •       15% bond covering Contractor's obligations arising from the Contract to its workers, subcontractors and suppliers.

2.   How long will the bond remain in effect?

It shall remain in effect until replaced by the Contractor's guarantee bond.

B.  Guarantee Bond

1.   When will the performance and payment bond be released?

Upon posting by the Contractor of a Guarantee Bond equivalent to the amount of the retention released to the Contractor.

2.   For how long should the Guarantee Bond be held by the Owner?

For a period of one (1) year commencing from the date of posting as a guarantee that all materials and workmanship installed under the Contract are of acceptable quality.

C.  Guarantee-Warranty

1.   What if the Contractor gets a sub-contractor to do its work, who shall guarantee for the sub-contractor?

The Contractor shall secure guarantees from said sub-contractors and deliver copies of the same to the Owner upon completion of work. The term "guarantee" shall include "warranty".

 2.   What are the other guarantees by the Contractor?

•       All work performed by him directly and for which guarantees are required.

•       For a period of one year, or for a longer period where so provided in the Specifications, all materials and workmanship installed under the Contract are to be of acceptable quality in every respect and to remain so during the guarantee period.

•       Repairs and necessary work to correct defective work to the Owner's satisfaction. This shall be done at Contractor's exclusive expense and shall be commenced within five (5) days after receipt of written notice by the Owner.

 3.   What if the contractor fails to commence or do the work so ordered?

The Owner may have the work done by another contractor and charge the cost against monies retained as provided for in the Contract and/or against his sureties.

 4.   What is the effect of the surety or bondsman issuing any bond called for in the Contract?

He is deemed conclusively to have accepted the mandatory conditions, and any provision thereby issued or in any document made prior to, concurrent with, or after the issuance of the bond which tends to nullify, modify, or limit by time or otherwise, any right of the Owner shall be void and shall not prevail over the mandatory conditions.

 5.   What are the mandatory conditions of these bonds?

•       The surety or bondsman agrees in advance to future novation/s of the bond either by adjusting the scope of the Contractor's work caused by directed or constructive changes, the Completion Time or the Contract Price. Where the Contract provides that the Contractor shall obtain the approval of the surety or bondsman to any such adjustment, the required approval shall be deemed to be a mere formality, the absence of which shall not affect the obligation and liability of the surety or bondsman under the bond.

•       The bond issued shall continue to have force and effect beyond the effectivity period stated in the bond if the work or the obligation for which it was issued has not been completely performed. This is without prejudice to the right of the surety or bondsman to demand from the Contractor the payment of the premium on the bond or to the right of the Owner to pay such unpaid premium for the Contractor. The additional premium on the bond for an extension of the Contract time due to reasons other than the fault or negligence of the Contractor shall be billed at cost to the Owner. The bond may not be cancelled or otherwise terminated by the bondsman or surety without the express written consent of both the Owner and the Contractor. the right of the surety shall be limited to demand the payment of unpaid premium.

•       The Owner shall have a right of recourse against the surety on the bond until (a) it is cancelled by the Owner and returned to the Contractor, (b) it is replaced by another bond unless the Owner reserves the right to recover against the former bond due to default of the Contractor, (c) the Owner issues to the Contractor an unconditional Certificate of Acceptance of the Work.

•       Until the Owner takes over the work or terminates the Contract, the Contractor shall not be deemed in default notwithstanding the reduction of the Contractor's scope of work and any assistance provided by the Owner to enable the Contractor to catch up and complete the remaining work. The Owner's assistance to the Contractor shall not prejudice nor limit the right of the Owner to have a later recourse against the bond.

D.        Other remedies

The Owner's remedies are without prejudice to its rights under the Civil Code and other applicable laws.

ARTICLE 32: Owner's Responsibilities and Liabilities

1. What are the responsibilities and liabilities of the Owner?

 A.  Advance Payment

 i.   How much should the advance payment to the Contractor be?

The advance payment should be in an amount to be mutually agreed upon by the Owner and the Contractor.

ii.  What is the purpose of the advance payment?

The Contractor shall use the advance payment for mobilization, purchase of materials, and the like for the project. This shall be recouped pro rata in the progress billings.

iii.   Are there any conditions before any advance payment is made?

The Contractor shall post a surety bond of equivalent amount callable on demand and acceptable to the Owner to guarantee its repayment.

iv.  When is a bond callable on demand?

A bond is callable on demand when the surety is obliged to pay the Owner upon its call. It means payable on demand.

B.  Protection of employees and professionals performing services for the Owner

The Owner shall be responsible for and shall maintain such insurance as will protect him from liability for personal injury including disease and death of persons under his employ or service whether as temporary or permanent in status that are assigned to the project.

C.  Owner's optional Insurance

i.  What is the purpose of this?

To protect him from his contingent liability for damages, for personal injury, including death, which may arise from the work under the Contract.

D.  Additional information and services required of the Owner

The Owner shall, at the request of the Contractor, at the time of the execution of the Contract, furnish to the Contractor reasonable evidence that the Owner can fulfill its obligations under the Contract. Unless such reasonable evidence is furnished, the Contractor may not be required to execute the Contract or to commence or continue the Work.

ARTICLE 33: Liens, Disputes, and Arbitration

I. LIENS

A.   Can the Contractor release the Work even though there are legal liens attached to it?

No. The Contractor shall release the Work from any legal liens attaching therewith as a result of unpaid claims of subcontractors and/or suppliers for the supply of materials and/or equipment to the Contractor for the project.

B.  What documents should be executed by the Contractor in respect of any such legal liens?

A sworn statement by the Contractor or a duly authorized officer of the Contractor stating that all such claims have been fully paid; and furnishing the Owner, when required, with receipts or acknowledgements of payment issued by the subcontractors and/or suppliers.

C.  What will happen if any of such claims remain unpaid as of the time of executing the sworn statement?

The Contractor shall furnish the Owner with an indemnity bond equal to the amount of the claims still unpaid. The indemnity bond may be issued by the surety which previously issued the Contractor's performance bond or any other bond required under the Contract or by any other surety acceptable to the Owner. The Owner may recover against the Contractor and/or surety, on the latter's indemnity bond, any amount paid by the Owner to discharge such liens, including costs incurred incident thereto and a reasonable amount of attorney's fees.

II. ASSIGNMENT

A.   Can the Contract be assigned?

No, the Contract may not be assigned in whole or in part. Any purported assignment made of the Contract or any part thereof without the consent of either party shall be void and ineffective. (33.02[A])

B.  May the Owner exact full compliance from both the Contractor and assignee?

Yes, he may do so even without waiving his right at any time thereafter to reduce the Contractor's scope of work by removing from the Contractor the part of the work which was assigned and giving it to any other contractor and/or terminating the Contract in either case, without any further cause than the assignment. [33.02(B)]

C.  May the Owner request for contracts entered into by the Contractor with any other person?

Yes, the Owner may request any contract, agreement or binding written commitment entered into by the Contractor either before or after the execution of the Contract, with any other person as cooperator, consortium member, joint venture member, or supplier of equipment, technology, materials or services for the joint execution of the Work. (33.02[C])

D.  What if the Owner finds that such contract entered into by the is a disguised assignment of the Contract?

The Owner shall notify the Contractor and shall have the rights under Article 33.02(B).

III. SUBCONTRACTING

A.   May the Contractor subcontract the Contract?

Yes. The Contractor may subcontract any part of the Contract with the approval of the Owner (33.03).

B.  What are the conditions the Owner may impose for the approval of the subcontract?

•       That the subcontract shall be submitted to the Owner and the subcontract must require the subcontractor to obtain the same bonds and insurance coverage as are required of the Contractor under the Contract,

•       That the Contractor furnish the Owner copies of these insurance policies and bonds (33.03).

C.  What is  nominated subcontractor?

A nominated subcontractor  is one selected by the Owner to carry out an element of the work requiring specialized skills and experience, whose scope of work, terms and prices are pre-negotiated with the owner and, as such, are imposed on the Contractor.

D.  What is the Contractor’s liability to the Owner for the fault or negligence of the nominated subcontractor?

[For discussion!]

IV. DISPUTES

A.   May the Owner entrust to his authorized representative the determination of matters which under the Contract require his acceptance, approval, or decision?

Yes, the Owner may, within a period of 15 days, entrust these to his authorized representative who shall act as his agent and whose determination binds the Owner.

B.  What if the Contractor disagrees with the determination by the Owner or his representative?

Such disagreement shall be brought before an adjudicator, who shall be jointly engaged by the Owner and the Contractor, not later than fifteen (15) days before the commencement of the Work to resolve conflicts arising from the foregoing determination by the Owner or by his representative.

C.  What if either party disagrees with the resolution of the adjudicator?

Such shall be deemed as a dispute which may be submitted to arbitration.

V.   SETTLEMENT OF DISPUTES

A.   Dispute or agreement submitted to Arbitration

1.   What law governs disputes?

Disputes shall be referred to and finally be resolved by arbitration under the Rules of Procedure Governing Construction Arbitration promulgated pursuant to Executive Order No. 1008 (Construction Arbitration Law) by one or panel of three (3) arbitrators appointed in accordance with such Rules.

2.   Where should arbitration take place?

The place of arbitration shall be in Metro Manila, Philippines.

3.   How should the claim be done?

By filing a claim with the Construction Industry Arbitration Commission.

B.  Substituted Service

1.   What is the effect of entering into a Construction Contract?

A party to a Construction Contract for a project in the Philippines shall, by entering into the same, be deemed to be submitting himself to the jurisdiction of the Construction Industry Arbitration Commission with regard to any dispute arising out or in connection with the Contract.

2.   To whom should a claim be served?

His co-venturer, partner or authorized representative, notwithstanding any statement to the contrary in the Agreement, Contract Documents, or any other communication to the other party or after entering into the Contract, unless he has filed with the Construction Industry Arbitration Commission an irrevocable special power of attorney authorizing another person or entity to receive by personal service at a definite address in Metro Manila, Philippines such claim, notices, and processes.

3.   What if a party, his co-venturer, or authorized representative declines service of such claim or notice? What if they cannot be found at his given address?

Such service shall be made upon the said party by filing the same with the Construction Industry Authority of the Philippines (CIAP) at its office address, and filing the claim, notice, or process shall complete the service upon the party concerned.

The implementation of CPES is governed by Section 12, Annex E of the Implementing Rules and Regulations (IRR) of RepublicActNo. 9184 (Government Procurement Reform Act). This law states that,  all government  procuring entities implementing infrastructure  projects are mandated to evaluate the performance of constructors using the CPES. This requirement covers all national government agencies, department, bureau, office, or instrumentality of the Government, including Government-Owned and/or Controlled Corporations (GOCCs), Government Financial Institutions (GFIs), State Universities and Colleges (SUCs) and Local Government Units (LGUs).

The CPES is envisioned to provide information on the performance of constructors in government projects which may be used as basis for prequalification/eligibility check of constructors, agency shortlist, awarding of contracts, project monitoring and control, blacklisting of constructors, policy review/formulation, industry planning, and credential/incentives/award.

In addition, this systematic monitoring and evaluation of constructor’s performance, will give the following benefits to the construction industry:

1. 1. Early detection  of problem areas encountered  in the  project and determination of appropriate corrective actions;
   2. Provide necessary safeguards to ensure that the interest of government is at all times protected;
   3. Contribute to the continuous improvement of the country’s construction capability.

1. Establish a  uniform  set  of criteria  for  rating  the  performance  of  constructors;
2. Develop a centralized base of information on the performance rating of constructors which can be used as reference for licensing, eligibility, screening, quality improvement, and other purposes of government agencies, project owners, financing institutions, insurance companies and other interested parties; and
3. Contribute in ensuring that infrastructure projects are conformed with the specified requirements of project owners.