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HC:,r.'....dLlG OF IIiEr'HILlPPINES

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DEPARTMENT OF PUBLIC WORKS AND HIGHWAYS

OFFICE OF THE SECRETARY
MANILA

30 Jme

1990

'.
DEPmENT
ORDER) SUBJECT:
r.
.
.Lf}.~"'"
)
No.
J-~.1JOJ1~
Series 0 999.
)
;:-x-x -x-x -x-x -x-x -x -x-x -x-x

].

Guidelines for the Implementation

of DPWH froiects by LGUs

Purpns~

This Department
Order sets the guidelines, including rules and
procedures, to be followed by all concerned in the implementation by local
government units (LUUs) of DPWH infrastructure projects pursuant to
existing laws and to instnlctions of the President.

2.

Pertinent Laws and President's

2.1

Instructions

The following provisions of existing laws (Annex "A") serve as

legal bases for the herein guidelines on the implementation by
LGUs ofDPWH projects:
a.

Section 85 of the General Provisions of the 1999 General

Appropriations Act, which authorizes the DPWH to enter
into a memorandum of agreement with an LGU with the
demonstrated capability to undertake a DPWH project by
itself, i.e., by administration, with the concurrence of the
Representative or Congressman of the legislative district
concerned.

b.

Special Provision No. ] of the DPWH budget und~!'~~le

1999 GAA, which authorizes the delegation of the
implementation
of DPWH projects to LGUs with the
demonstrated
capability to implement the projects by
themselves upon consultation with the Representatives
cOll.-:/.:rned.

f ",

c.

Special Provision No. 2 of the DPWH budget under the

1999 GAA, whIch authorizes the contracting out of the
mairtenance of National Roads with LGUs with the
demonstrated capability to undertake the work by
themselves in consultation w"ith the Representatives
concerned.

d.

Section 5 of R.A. No. 8150 or the Four-Year Public

Works and Highways Infrastructure Program Act, which
provides that the DPWH shall, upon the request of the
members of Congress concerned, authorize LGUs to
implement DPWH projects under the categories of local
roads and other public works, provided that the LGUs
have the capability to implement the projects.

e.

Special Provision No.3 of the Department of Agriculture

(DA) budget under the 1999 GA~, which provides for the
release to the DPWH of DA appropriations for farm-tomarket roads in key production areas .

f.

Special Provision No. 1 of the DECS-Schoolbuilding

Program under the 1999 GAA, which provides that a
schoolbuilding project may be implemented by an LGU
with the demonstrated capability to undertake the work by
itself in consultation with the Representative concerned.

g.

Section 10 of R.A. No. 8150, as adopted in Section 84 of

the 1999 GAA, which provides that, if the project costs
Twenty Million Pesos or less, it may be done by
administration without prior public bidding. The same
section states that, if the project costs more than Twenty
Million Pesos it may be done by administration only in
case of (i) emergency arising from natural calamities or
where immediate action is necessary to prevent imminent
loss of life and/or property or to comply with governn~ent
commitments, (ii) failure to award a contract atter
competitive bidding for a valid cause, (iii) termination or
rescission of contract, or (iv) areas~with critical peace and
order problems as certified by the Local Peace and Order
Council, prior authority to shall be obtained from the
DPWH Secretary if the project cost is One Hundred
Million Pesos (PI00,000,000) or less, or from the
President, upon recommendation of the DPWH Secretary,

if the project cost is more than One Hundred Million

Pesos (PI00,OOO,OOO).
2.2

In addition, the herein guidelines are based on the following

decisions of the President (Annex "B"):
.. -,

3.

a.

The President's approval dated 16 April 1999 of the leUerrequest dated 16 April 1999 of the Chairmen of the
Regional Development Councils or RDCs, authorizing the
DPWH to let the Provinces with capabilities to handle the
construction of farm-to-market roads, school buildings,
flood control projects, and the maintenance of national
roads.

b.

The President's approval dated 12 May 1999 of the

request dated 10 May 1999 of the House of
Representatives, for the DPWH Secretary to interpret the
contents of the said letter-request of the Chairmen of the
RDCs in accordance with the provisions of the 1999
GAA, particularly Section 85 of the General Provisions
and Special Provisions No. 1 and 3 of the DPWH section
thereof.

General Guidelines
3.1.

In accordance with the said provIsIons of existing laws and

instructions of the President, the following conditions must be
met before the DPWH Secretary can authorize an LGU to
implement a DPWH Project funded under the 1999 GAA:
a.

The LGU shall implement

administration only.

the Project by itself, i.e., by

b.

The LGU must possess the demonstrated capability to

implement the Project by administration, as determined
by the concerned DPWH District Engineer, using -the
evaluation criteria prescribed in item 5 hereof.

c.

The Representative or Congressman concerned must have

been duly consulted and given his written concurrence on
the proposed implementation by the LGU of the Project.
If, however, the Project is a farm-to-market road,
schoolbuilding, or flood control, or other infiastructure in

",
\

the category of "local roads and other public works" under

R.A. No. 8150 and is funded directly under the DPWH
budget, then the Congressman concerned must have
submitted a written request for the LGU to implement the
Project.
d.

If the Project costs more than Twenty Million Pesos

(P20,000,000), the Project may be done by administration
by the LGU only in any of the four cases provided in
Section 10 of R.A. 8150 (as ..mentioned in item 2.1-g
above), and provided that prior authority has been
obtained from the DPWH Secretary if the Project Cost is
One Hundred Million Pesos (PI00,000,000) or less, or
from the President, upon recommendation of the DPWH
Secretary, if the Project Cost is more than One Hundred
Million Pesos (PI 00,000,000).

3.2.

The LGU shall implement the Project in accordance with the

Program of Work, Plans, Specifications, Project Cost (Budget),
and Time Duration approved by the authorized DPWH official.

3.3.

To the extent feasible, the LGU shall use labor-based

equipment-supported methods in implementing the Project.

3.4

The LGU shall be accountable for the Project funds released to

it by the DPWH, as follows:
a.

Except for a Project involvil~g the maintenance of a

National Road (see item 3.5-a below), the DPWH shall
release to the LGU an initial cash advance equivalent to
fifteen percent (15%) of the approved Project Cost. The
DPWH shall release subsequent cash funds to the LGU
only after the latter has liquidated previous cash advances
based on Liquidation Reports signed cy the LGU
Treasurer/Chief Accountant and verified and ffHmd
correct by the Resident Auditor of the Commission on
Audit.

b.

In the case of a Project involving the maintenance of a

National Road which is to be contracted out to the LGU in
accordance with Special Provision No. 2 of the DPWH
budget under the 1999 GAA, the DPWH shall make an
advance payment to the LGU equal to fifteen percent

(15%) of the approved Project Cost. The DPWH shall

make subsequent progress payments to the LGU based on
its Progress Billings supported by Statements of Work
Act omplished approved by the DPWH District Engineers.
3.5.

4.

The District Engineer concerned shall oversee

implementation by the LGU of the Project.
submit monthly Project monitoring reports
Engineer, copy furnished the Regional Director

and monitor the

The LGU shall
to the District
concerned.

Additional Guidelines
4.1

Construction of Farm-to-Market Roads - In addition to the

General Guidelines in item 3 hereof, before the DPWH can
authorize an LGU to implement a farm-to-market road Project
funded under the DA budget in the 1999 GAA, the DA Secretary
must have been consulted and given his written concurrence on
this implementation arrangement.

4.2

Construction of Schoolbuildings - In addition to the General

Guidelines in item 3 hereof, before the DPWH can authorize an
LGU to implement a schoolbuilding Project funded under the
DECS-Schoolbuilding Program in the 1999 GAA, the DECS
Secretary must have been consulted and given his written
concurrence on this implementation arrangement.

4.3

Construction of Flood Control - Only locally-funded flood

control Projects, i.e., those that are not fihanced by foreign loans
or grants, may be implemented by an LGU under this
Department Order.

4.4

Maintenance of National Roads - Pursuant to Special Provision

No. 2 of the DPWH budget under the 1999 GAA, the DPWH
may contract out the maintenance of a National Road to an
LGU with the demonstrated capability to undertake the Proiect
by itself, as determined by the District Engineer concerned,
using the criteria prescribed in item 5 hereof. Since the LGU
shall, in effect, act as a contractor of the DPWH, this contractual
relationship, including funding and payment arrangements, shall
be reflected in the Memorandum of Agreement between the
DPWH and the LGU.

5.

Criteria for Determinine the Capabilitv of an LGU

5.1

5.2

6.

The DPWH District Engineer concerned shall evaluate and

determine the demonstrated capability of an LGU to implement
a Project by itself, Le., by administration, on the basis of the
following criteria:
a.

Maintenance condition of the local roads under the LGU.

b.

Construction/maintenance experience or track record of

the LGU relevant to the proposed Project.

c.

Organization and personnel of the LGU for the proposed

Project.

d.

Construction equipment of the LGU for the proposed

Project.

e.

Financial and procurement management systems of the

LGU.

The details of these evaluation criteria, including the measurable

indicators thereof and their application, are given in the
prescribed evaluation format in Ann~x "C," which shall be
prepared and submitted by the District Engineer and approved
by the Regional Director.

Project Memoranda of Aereement

6.1

Every Project to be undertaken by an LGU in accordance with

the provisions of this Department Order shall be covered by a
Project Memorandum of Agreement (MOA) to be entered into
by and between the DPWH and the LGU concerned, using the
format in Annex "D," except in the case of the maintenance of
National Roads for which the format in Annex "E" shall be used.

6.2

The following DPWH officials are hereby authorized to enter

into and approve the said MOA:
Project Cost

Signing Official

Approving Official

Up to P30 M
Above P30 M

District Engineer
Regional Director

Regional Director.
Secretary

7.

Effectivity

This Department Order supersedes or amends all Department Orders

and other issuances or portions thereof inconsistent herewith, and takes
effect immediately.

);
\

ANNEX "A"
a.

SECTION 85 OF THE GENERAL PROVISIONS,

1999 GENERAL APPROPRIATIONS ACT (GAA)

PAGE 1430,
I

~
.
I

"Sec. 85 Implementing Agency for National Funded

Projects. Pursuant to Sec. 17 (c) of R.A. No. 7160, the
Local Government Code of 1991, projects, facilities,
programs and services funded under the General
Appropriations Acts shall be implemented by the
appropriate national government department or agency
irrespective of the nature and location of such projects,
facilities, programs and services: PROVIDED, That a
memorandum of agreement may be entered into with the
implementing national government agency and the
beneficiary LGU, designating the latter or any other local
government unit with demonstratetl capability to
undertake the proiect or activity by themselves with the
concurrence of the representative of the legislative
district concerned. " (underscoring supplied)

h.

SPECIAL PROVISION
756, 1999 GAA

NO.1 OF THE DPWH BUDGET, PAGE

"1. Restridion
on the Delegation
of Project
Implementation.
The implementation of projects
funded herein shall not be delegated ~o other agencies,
except those projects to be implemented by the
Engineering Brigades of the Armed Forces of the
Philippines, inter-department undertakings and projects
to be undertaken by other offices and agencies including
local government units with demonstrated capability.JQ
implement the proiect by themselves upon consultation
with the representative of the legislative district
concerned. In all cases, the Department of Public Works
and Highways shall exercise technical supervision over
the project." (underscoring supplied)

c.

SPECIAL PROVISION
756,1999 GAA

NO.2 OF THE DPWH BUDGET, PAGE

"2.
Release
and Use of Roads and Bridges
Maintenance
Funds ....
Of the amount herein
appropriated for the maintenance of roads and bridges, a
maximum of seventy percent (70%) may be contracted
out to qualified entities including local government units
with demonstrated capability to undertake the work by
themselves pursuant to Section 84 of the
General
Provisions of this Act in consultation with the
representatIve of the legislative district concerned. The
balance shall be used for maintenance hy force account."
(underscoring supplied)

d.

SECTION 5 OF R.A. NO. 8150 (FOUR-YEAR PUBLIC WORKS

AND HIGHWAYS INFRASTRUCTURE ACT)
"Sec. 5 Participation of Local Government Units The Department of Public Works and Highways
(DPWH) shall, upon the request of the member(s) of
Congress
concerned,
authorize
provinces,
cities,
municipalities or barangays to implement projects under
the categories of local roads and other public works in
this Act: Provided, That these local government units
have the capability to implement such projects."
(underscorit)g supplied)

e.

SPECIAL PROVISION NO.3

OF THE DEPARTMENT
OF
AGRICULTURE BUDGET, 1999 GENERAL APPROPRIATIONS
ACT (GAA)
"3.
Implementation
of Farm-to-Market
Roads
Projects. The appropriation herein provided for capital
outlays for the Department of Agriculture for the
construction of farm-to-market roads within areas
covered by irrigation system shall be released to, and
administered by, the National Irrigation Administration:
PROVIDED, That appropriations intended for the
construction of roads in key production areas shall be
released to the Department of Public WorKs and
()

Highways:
PROVIDED,
FURTHER,
That the
Department of Agriculture after consultation with the
respective representative of the legislative district
concerned, shall identify the respective locations or sites
where the appropriate projects shall be constructed:
PROVIDED, FURTHERMORE, That the amount of One
Hundred Fifty Million Pesos (P150,000,000) shall be
used to construct farm-to-market roads in Agrarian
Reform Communities including those not covered by
such irrigation system." (underscoring !mpplied)

f.

SPECIAL
PROVISION
NO.
1
OF
THE
DECSSCHOOLBUILDING PROGRAM, PAGE 1172, 1999 GAA
"1. Release of Capital Outlays.
The appropriations
herein provided for the construction, rehabilitation,
replacement, completion and repair of elementary and
secondary schoolbuildings shall be directly released to.
and administered by. the Department of Public Works
and Highways based on the work program submitted by
the Department of Education, Culture and Sports:
PROVIDED, That the initial release shall be made within
thirty (30) days after the receipt of the required
documentation: PROVIDED, FURTHER, That the said
construction, rehabilitation, replacement, completion and
repair of the school building may be implemented by
local government units with demonstrated capability to
undertake the work by themselves in' consultation with
the representative of the legislative district concerned and
the Department of Education. Culture and Sports."
(underscoring supplied)

II

g.

SECTION 10 OF R.A. NO. 8150 (FOUR YEAR PUBLIC WORKS

AND HIGHWAYS INFRASTRUCTURE
PROGRAM ACT),
PAGES 606-607, AS ADOPTED IN SECTION 84 OF THE 1999
GAA

"Sec. 10. Work by Administration - ~Except as may be

expressly authorized by the President of the Philippines,
any project in this Act with a cost of Twenty million
pesos (P20,000,000) or less, based on the approved
program of work under Section 8 hereof, may be done by
administration or force account without prior public
bidding. "
"A project costing over Twenty million pesos
(P20,000,00) may be prosecuted by administration by the
agency concerned only in the case of: (a) emergency
arising from natural calamities or where immediate action
is necessary to prevent imminent loss of life and/or
property or to comply with government commitments; (b)
failure to award a contract after competitive public
bidding for,a valid cause; (c) termination or rescission of
contract; (d) areas with critical peace and order problems
as certified by the Local Peace and Order Council:
Provided, That prior authority shall be obtained from the
Secretary of Public Works and Highways if the project
cost is One hundred million pesos (P 100,000,00) or less,
or from the President of the Philippines, upon
recommendation of the Secretary of, Public Works and
Highways, if the project cost is more than One hundred
million pesos (P 100,000,000)."

"

ANNEX "Bl"
\.') .. ,'

I\~; S\Jqr]('~;lr~c1hy Sccwl;lry

Grcqorio Vlqilnr of thLi Dnp8rtmcnl of Puhlic Worl(:; ,1111:
IIIqhw,1YS (IJPWH), as 1;:11(0.n up III Iho mm~llIlq 01 (11\ I{OnlOnlll Unvclopmonl
COllI/cd:,

(HoDCs) this mornlnCj. Ihis is to raspcclhilly

mq\Jost for your ;:1IJlhom:...
llinn fnr DIJWI :
10 leI Ille PlOvinces with cClfJ;)bilities to h;)ncllc tho cons'r\i;lion
of f,l :n-to-nl{]rl(c:1

roClds, school buiklinQt" nood conlrol projncls, nncl ttlO mCJinlonnnce of :l;:1lion;.1rO;1d::
and hiGhways.
The DPWH will conlinue to havo tho respon~ilJillly 10 dCSI(!I'
evaluate clnd monitor Ihe projecls.
For this yo;]r, Ihe DPVv'H C<ln~llart

:0 Ir;Ill~;fcr to

c;lfJablo Provincns Ihe mainlcil'111'-

of ro<ld~; ,lrld hIDhwl'lj'S.

Vory trl Jiy yours,

I'\DC Chdirlllcn

Gov. L\lis C. Sill~J~;OIl

Chairman, I~DC I
.

.-.--

------ .

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ANNEX "C"

EVALUATION OF CAPABILITY OF LOCAL GOVERNMENT UNIT

(LGU) TO IMPLE1UENT DPWH INFRASTRUCTURE PROJECTS

Name ofLGU: ----------- Date of Evaluation: ---Name of Project proposed to be implemented by LGU:
Estimated Project Cost: _'

CRITERIA

APPLICATION

1. Maintenance Condition of Local (LGU) Roads

The LGU must have maintained its
Local Roads to a "fair" to "satisfactory"
level, using the road condition rating of
of the DPWH Bureau of Maintenance.

Actual condition rating of

Local Roads as of ---(date):
_

2. Experience or Track Record relevant to the

proposed Proiect

3.

2.1 The cost of the largest single

relevant project completed by the
LGU within the!ast three years
should be at least 50% of the
estimated cost of the Project.

Cost of largest project completed by LGU:

_
versus
50% of estimated cost of
pr6posed Project:
_

2.2 The cost of the completed largest

single relevant project managed within the last three years by the key LGU
personnel to be assigned to the Project (Project Manager to Foreman)
should be at least 50% of the estimated cost of the Project.

Cost of largest project managed by key LGU personnel:

versus
50% of estimated cost of
proposed Project:
_

Organization and Personnel for the Proiect

The LGU must have the required key
Personnel from its Engineering Office
who are available to undertake, supervise,

Yes/No

and manage the Project by administration.

4.

Construction Equipment for the Project

,.

The LGU must own and commit for the

Project the required minimum owned
equipment listed in Annex 1.
5.

Yes/No

Financial and Procurement Management

5.1 The LGU must have satisfactory
and procurement management
systems as indicated by the absence
of adverse findings in the latest
COA audit report.

Yes/No

5.2 The LGU must have fully liquidated

its previous cash advances from the
DPWH.

Yes/No

CONCLUSION:

Based on this evaluation, the LGU is/is not (please encircle)

capable
of implementing
the subject Project by
administrati on.
~

Submitted by:

Approved by:

DPWH District Engineer

DPWH Regional Director

ANNEX"D"
STANDARD FORMAT OF PROJECT MOA-1
,

PROJECT MEMORANDUM OF AGREEMENT (MOA)

BETWEEN THE DPWH AND THE LOCAL GOVERNMENT UNIT OF
FOR THE
IMPLEMENTATION OF A DPWH PROJECT

----------------

This
________

Memorandum
at

of

Agreement

(MOA) entered
into
by and between:

on

The Department of Public Works and Highways, herein represented by its

District Engineer,
" and hereinafter
referred to as the DPWH;
- and The Local Government Unit of ------------,
, herein
represented by its Governor/Mayor,
, and
----------hereinafter referred to as the LGU.

WITNESSETH
WHEREAS, under the 1999 General Appropriations Act or GAA (R.A.
No. 8745) and the Public Works and Highways Infrastructure Program Act
(R.A. No. 8150), nationally funded infrastructure pr9jects may be implemented
by Local Government Units with the demonstrated capability to undertake the
Projects by themselves,
upon prior consultation with and written
concurrence/request of the Representatives or Congressmen concerned;
*WHEREAS, President Joseph Estrada approved on 16 April 1999 the
request of the Chairmen of the Regional Development Councils for the DPWH
to let Provinces with capabilities to handle, among other things, the constr)lction
offarm-to-market roads, schoolbuildings, and flood control, which the President
clarified on 12 May 1999' to the effect that the said request shall be interpreted
in accordance with the provisions of the 1999 GAA (R.A. 8745), particularly
Section 85 of the General Provisions and the first and second paragraphs of the
Special Provision of the DPWH section thereof;
*Note: This WHEREAS shall be included in the MOA only if the LGU
is a Provincial Guvernment.

WHEREAS, in accordance with the said Department Order, the LOU has
submitted to the DPWH a written request given in Annex "I" hereof, for the the
DPWH to authorize the LOU to implement by administration the DPWH
Project mentioned in Amlex "I;"
WHEREAS, in accordance with the same Department Order, the DPWH
has determined the LOU to have the demonstrated capability to undertake the
said Project by administration, as shown by the evaluation results in Annex "II"
hereof'",
WHEREAS, in accordance with the same Department Order and pursuant
to the aforementioned laws, the Congressman concerned has been consulted and
has indicated his written concurrence/request on the proposed implementation
by the LGU of the said Project, as shown in Annex "III" hereof;
**WHEREAS, since the Project Cost is more than Twenty Million Pesos
(P20,OOO,OOO),
the conditions for work by administration prescribed in Section
10 of R.A. 8150 have been met, and prior authority has been obtained from the
DPWH Secretary/President to implement the Project by administration;
NOW, THEREFORE, in consideration of the foregoing premises, the
Parties to this MOA hereby agree on the following terms and conditions:
ARTICLE I - PROJECT COVERAGE
Section 1.1 This NIOA covers the implementation by the LOU of the
DPWH Project described in Annex "II" hereinafter ~alled the "PROJECT."
ARTICLE II - PROJECT IMPLEM~NTATION
Section 2.1 The LOU shall implement the PROJECT by administration
only, in accordance with the Programs of Work, Plans,
Specifications,
PROJECT Cost, and Time Duration approved by the DPWH Official
concerned, which are incorporated into this MOA as Annex "IlL"
Section 2.2 The LOU shall, to the extent feasible, use labor-based
equipment-supported methods in implementing the Project.

**Note:This WHEREAS shall be included in the MOA only if the Project

Cost is more than P20,000,000.

Section 2.3 The LGU shall start the project within fifteen (15) days from
the approval of the MOA and shall complete the PROJECT within the Time
Duration prescribed in Annex "III".
Section 2.4 The LGU shall submit monthly monitoring reports on the
PROJECT to the DPWH District Engineer.
Section 2.5 Upon the satisfactory completion by the LGU of the
PROJECT as verified by the designated DPWH inspectorate team, the DPWH
District Engineer shall issue to the LGU the corresponding Certificate of
PROJECT Completion.
Section 2.6 Within one (1) year after the iss\Iance of the Certificate of
PROJECT Completion, the LGU shall correct, at its own expense, all defects
discovered in the PROJECT due to faulty construction or use of substandard
materials. After this one-year period and after the PROJECT is verified by the
DPWH inspectorate team as having no defects, the DPWH District Engineer
shall issue to the LGU the Certificate of PROJECT Acceptance.
ARTICLE III - PROJECT FUNDING
Section 3.1 The DPWH District Engineer shall issue to the LGU a Letter
of Advice of Allotment (LAA) equivalent to the approved PROJECT Cost
based on the allotment authorized by the Department of Budget and
Management. The LAA shall serve as the obligatiOlpl authority of the LGU to
implement the PROJECT.
Section 3.2 The LGU shall be fully accountable for all funds for the
PROJECT released to it by the DPWH.
Section 3.3 The DPWH shall release to the LGU an initial cash advance
for the PROJECT equivalent to fifteen percent (15%) of the obligational
authority (or PROJECT Cost). The LGU shall take up the said cash advance as
a Trust Deposit in a separate checking account with a Government depository
bank.
Section 3.4 The DPWH shall release to the LGU succeeding cash funds
for the PROJECT equivalent to the amounts of previous cash advances
liquidated, based on Liquidation Reports signed by the LGU Treasurer/Chief
Accountant and verified and found correct by the LGU Resident Auditor of the
Commission on Audit.
(1
\ L

ARTICLE IV - EFFECTIVITY
Section 4.1 This MOA shall take effect upon signing by the Parties
hereto and shall remain in force until the completion of the PROJECT, unless
mutually terminated earlier by the said Parties.
Section 4.2
Either Party to this MOA may initiate the termination of
this MOA in the event of a default by the other Party of any of its obligations
thereunder.
\VITNESS WHEREOF, the Parties hereto have affixed their signatures at
____________
, this
day of
_

For the LGU:

Governor/Mayor

For the DPWH:

'District Engineer

Signed in the presence of:

Head, Accounting Unit

Approved by:

DPWH Secretary/Regional Director

Copy furnished:

The Secretary, DPWI-I

The Congressman concerned

ANNEX "E"
STANDARD FORMAT OF PROJECT MOA - 2
PROJECT MEMORANDUM OF AGREEMENT (MOA)
BETWEEN THE DP\YH AND THE LOCAL GOVERNMENT UNIT OF
FOR THE MAINTENANCE
---------------OF A NATIONAL ROAD 1
This
_______

Memorandum
at

of

Agreement

(MOA) entered
by and between:

into

on

The Department of Public Works and Highways, herein represented by its

District Engineer,
, and hereinafter
referred to as the DPWH;
- and The Provincial Government of
represented by its Governor/Mayor,
hereinafter referred to as the LGU.

-, herein
, and

WITNESSETH
WHEREAS, in accordance with Section 85 of the General Provisions of
R.A. 8745 or the 1999 General Appropriations Act (GAA) and Special
Provision No. 2 of the DPWH budget under the 1999 GAA, the DPWH may
contract out the maintenance of a National Road to a Local Government Unit
which possesses the demonstrated capability to undertake the Project by itself,
upon prior consultation with and written concurrence/request of the
Congressmen concerned;
WHEREAS, President Joseph Estrada approved on 16 April 1999 the
request of the Chairmen of the Regional Development Councils for the DPWH
to let Provinces with capabilities to handle, among other things, the maintenance
of National Roads, which the President clarified on 12 May 1999 to the- effect
that the said request shall be interpreted in accordance with the provisions of
R.A. No. 8745 (1999 GAA), particularly Section 85 of the General Provisions
and the first and second paragraphs of the Special Provisions of the DPWH
section thereof;
WHEREAS, based on the foregoing premises, the DPWH issued
Department Order No. --LJl., dated June 30. 199>Yhichsets the guidelines,

including rules and procedures, for the implementation by Local government

Units ofDPWH Projects;
WHEREAS, in accordance with the said Department Order, the LGU has
has submitted to the DPWH a request, given in Annex "I" hereof, for the
DPWH to contract out to the LGU the maintenance of the National Road
,
mentioned in Annex "I'"
WHEREAS, as provided in the same Department Order, the DPWH has
determined the LGU to have the demonstrated capability to undertake the
Project by administration, as shown by the evaluation results in Annex "II;" and
WI-IEREAS, in accordance with the same Department Order and pursuant
to the aforementioned laws, the Congressman concerned has been duly

consulted and has indicated his written

concurrence on the proposed
implementation by the LGU of the Project, as shown in Annex "III;"
NOW, THEREFORE, in consideration of the foregoing premises, the
Parties to this MOA hereby agree on the following terms and conditions:

ARTICLE I - PROJECT COVERAGE

Section 1.1 This MOA covers the implementation by the LGU of the
Project involving the maintenance of the National Road section described in
Annex "IV," hereinafter called the "PROJECT."
ARTICLE II - PROJECT IMPLEMENTATION
Section 2.1 The (GU shall implement the PROJECT by administration
in accordance with the Program of Work, Plans and Specifications, PROJECT
Cost, and Time Duration approved by the DPWH Official concerned, which are
incorporated into the MOA as Annex "III."
Section 2.2
1he LGU shall, to the extent feasible, use. laborbased/equipment-supported methods in undertaking the PROJECT.
Section 2.3 The LGU shall start the project within fifteen (15) days
from the approval of the tvlOA and shall complete the PROJECT within the
Time Duration prescribed in Annex "III".

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Section 2.4 The LGU shall submit monthly monitoring reports on the
PROJECT to the DPWH District Engineer concerned
Section 2.5 Upon the satisfactory completion by the LGU of the
PROJECT as verified by the designated DPWH inspectorate team, the DPWH
District Engineer shall issue to the LGU the corresponding Certificate of
PROJECT Completion.
Section 2.6 Within -one (1) year after the issuance of the Certificate of
PROJECT Completion, the LGU shall correct at its own expense, all defects
discovered in the works due to faulty construction or use of substandard
materials. After this one-year period and after the PROJECT is verified by the
DPWH inspectorate team to be free of defects, the DPWH District Engineer
shall issue the Certificate of PROJECT Acceptance to the LGU.

ARTICLE III - PROJECT FUNDING AND PAYMENTS

Section 3.1 The DPWH shall issue a Certificate of Availability of Funds
covering the approved PROJECT Cost and obligate the said Funds, in the name
of the LGU as creditor, in its books of accounts.
Section 3.2 Upon signing of this MOA by both Parties, the DPWH shall
made an advance payment for the PROJECT to the LGU equivalent to fifteen
percent (15%) of the approved PROJECT Cost. The LGU shall take up said
cash advance as a Trust Deposit in a separate checking account with a
Government depository bank.
Section 3.3 The DPWH shall make subsequent progress payments for the
PROJECT to the LGU based on its Progress Billings supported by Statements
of Work Accomplished.

ARTICLE IV - EFFECTIVITY
Section 4.1 This MOA shall take effect upon signing by the Parties
hereto and shall remain in force until the completion of the PROJECT, unless
mutually terminated earlier by the said Parties.
Sedion 4.2 Either Party to this MOA may initiate the termination of this
MOA in the event of a default by the other Party of any of its obligations
thereunder.

WITNESS WHEREOF, the Parties hereto have affixed their signatures in

_________
, this
day of __ ~
_

For the LGU:

Governor/Mayor

For the DPVlH:

District Engineer

Signed in the presence of:

Head, Accounting Unit

Approved by:

DPWH Secretary/Regional Director

Copy furnished:

The Secretary, DPWH

The Congressman concerned

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