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SECTION I - DEFINITIONS AND DOCUMENTS
Yes. A Contractor may engage a SUB-CONTRACTOR to act
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
• 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 act
s 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;
(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  copies). The process repeats until the Owner's approval is obtained (5.04[a]).