Procurement of Infrastructure Projects: Government of The Republic of The Philippines

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PHILIPPINE BIDDING DOCUMENTS

Procurement of
INFRASTRUCTURE
PROJECTS
Government of the Republic of the Philippines

Third Edition
October 2009
Preface
These Philippine Bidding Documents (PBDs) for the procurement of Infrastructure
Projects (hereinafter referred to also as the “Works”) through Competitive Bidding have been
prepared by the Government of the Philippines (GOP) for use by all branches, agencies,
departments, bureaus, offices, or instrumentalities 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 procedures
and practices presented in this document have been developed through broad experience, and
are for mandatory1 use in projects that are financed in whole or in part by the GOP or any
foreign government/foreign or international financing institution in accordance with the
provisions of the Implementing Rules and Regulations (IRR) of Republic Act 9184 (R.A.
9184).

The Bidding Documents shall clearly and adequately define, among others: (a) the
objectives, scope, and expected outputs and/or results of the proposed contract; (b) the
eligibility requirements of bidders; (c) the expected contract duration; and (d) the obligations,
duties, and/or functions of the winning bidder.

In order to simplify the preparation of the Bidding Documents for each procurement,
the PBDs groups the provisions that are intended to be used unchanged in Section II.
Instructions to Bidders (ITB) and in Section IV. General Conditions of Contract (GCC). Data
and provisions specific to each procurement and contract should be included in Section III.
Bid Data Sheet (BDS); Section V. Special Conditions of Contract (SCC); Section VI.
Specifications; Section VII. Drawings; and Section VIII. Bill of Quantities. The forms to be
used are provided in Section IX. Bidding Forms.

Care should be taken to check the relevance of the provisions of the Bidding
Documents against the requirements of the specific Works to be procured. In addition, each
section is prepared with notes intended only as information for the Procuring Entity or the
person drafting the Bidding Documents. They shall not be included in the final documents,
except for the notes introducing Section IX. Bidding Forms, where the information is useful
for the Bidder. The following general directions should be observed when using the
documents:

(a) All the documents listed in the Table of Contents are normally required for the
procurement of Infrastructure Project. However, they should be adapted as
necessary to the circumstances of the particular Project.

(b) Specific details, such as the “name of the Procuring Entity” and “address for
proposal submission,” should be furnished in the BDS and SCC. The final
documents should contain neither blank spaces nor options.

(c) This Preface and the footnotes or notes in italics included in the Invitation to Bid,
BDS, SCC, Specifications, Drawings, and Bill of Quantities are not part of the
text of the final document, although they contain instructions that the
Procuring Entity should strictly follow. The Bidding Documents should

1 Unless the Treaty or International or Executive Agreement expressly provides use of foreign
government/foreign or international financing institution procurement procedures and guidelines.

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contain no footnotes except Section IX. Bidding Forms since these provide
important guidance to Bidders.

(d) The cover should be modified as required to identify the Bidding Documents as to
the names of the Project, Contract, and Procuring Entity, in addition to date of
issue.

(e) If modifications must be made to bidding procedures, they can be presented in the
BDS. Modifications for specific Project or Contract details should be provided
in the SCC as amendments to the Conditions of Contract. For easy
completion, whenever reference has to be made to specific clauses in the BDS
or SCC these terms shall be printed in bold type face on Section II.
Instructions to Bidders, and Section IV. General Conditions of Contract,
respectively.

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TABLE OF CONTENTS

SECTION I. INVITATION TO BID 5


SECTION II. INSTRUCTIONS TO BIDDERS 11
SECTION III. BID DATA SHEET 39
SECTION IV. GENERAL CONDITIONS OF CONTRACT 49
SECTION V. SPECIAL CONDITIONS OF CONTRACT 83
SECTION VI. SPECIFICATIONS 91
SECTION VII. DRAWINGS 93
SECTION VIII. BILL OF QUANTITIES 95
SECTION IX. BIDDING FORMS 97

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Section I. Invitation to Bid
Notes on the Invitation to Bid
The Invitation to Bid provides information that enables potential Bidders to decide whether
to participate in the procurement at hand. The Invitation to Bid shall be:
(a) Advertised at least once in a newspaper of general nationwide circulation which has
been regularly published for at least two (2) years before the date of issue of the
advertisement, subject to Sections 21.2.2 of the IRR of R.A. 9184;
(b) Posted continuously in the Philippine Government Electronic Procurement System
(PhilGEPS) website, the website of the Procuring Entity concerned, if available,
and the website prescribed by the foreign government/foreign or international
financing institution, if applicable, for a minimum period of seven (7) calendar days
starting on the date of advertisement; and
(c) Posted at any conspicuous place reserved for this purpose in the premises of the
Procuring Entity concerned for a minimum period of seven (7) calendar days, as
certified by the head of the Bids and Awards Committee (BAC) Secretariat of the
Procuring Entity concerned.
Apart from the essential items listed in the Bidding Documents, the Invitation to Bid
should also indicate the following:
(a) The date of availability of the Bidding Documents, which shall be from the time
the Invitation to Bid is first advertised/posted until the deadline for the submission
and receipt of bids.
(b) The place where the Bidding Documents may be purchased or the website
where it may be downloaded.
(c) The deadline for the submission and receipt of bids from the last day of posting
of the Invitation to Bid; and
(d) Any important bid evaluation criteria .
The Invitation to Bid should be incorporated into the Bidding Documents. The
information contained in the Invitation to Bid must conform to the Bidding Documents and
in particular to the relevant information in the BDS.

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[Letterhead of the Procuring Entity]

INVITATION TO BID FOR [Insert name of Project]

1. Select one of the two following paragraphs, and delete the other depending on the
Funding Source:
a) If the Funding Source is GOP:
The [insert name of Procuring Entity], through the [insert source of funding and year]2
intends to apply the sum of [insert the approved budget for the contract] being the
Approved Budget for the Contract (ABC) to payments under the contract for [insert
name/no. of contract]. Bids received in excess of the ABC shall be automatically
rejected at bid opening.

b) If the Funding Source is a foreign government/foreign or international


financing institution:
The Government of the Philippines (GOP) [has received/has applied for/intends to
apply for] a [Loan/Credit/Grant] from the [state the foreign government/foreign or
international financing institution (e.g., Asian Development Bank, Japan International
Cooperation Agency, or World Bank)] toward the cost of [insert name of project], and
it intends to apply part of the proceeds of this [loan/credit/grant] to payments under the
contract for [insert name/no. of contract].

2. The [insert name of Procuring Entity] now invites bids for [insert brief description of
Works to be procured].3 Completion of the Works is required [insert the required
completion date or expected contract duration]. Bidders should have completed, within ten
(10) years from the date of submission and receipt of bids, a contract similar to the Project.
The description of an eligible bidder is contained in the Bidding Documents, particularly, in
Section II. Instructions to Bidders.

3. Select one of the two following paragraphs, and delete the other depending on the
Funding Source:
a) If the Funding Source is GOP:
Bidding will be conducted through open competitive bidding procedures using non-
discretionary pass/fail criterion as specified in the Implementing Rules and Regulations

2 In the case of National Government Agencies, the General Appropriations Act and/or continuing
appropriations; in the case of GOCCs, GFIs, and SUCs, the Corporate Budget for the contract approved by the
governing Boards; in the case of LGUs, the Budget for the contract approved by the respective Sanggunian.
(Section 5(a), R.A. 9184)
3 A brief description of the scope of Works should be provided, including quantities, location of project, and
other information necessary to enable potential bidders to decide whether or not to respond to the invitation.

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(IRR) of Republic Act 9184 (RA 9184), otherwise known as the “Government
Procurement Reform Act”.

In addition, select one of the two following paragraphs and delete the other
depending on the existence of the condition under Section 23.5.2.2 of the IRR of RA
9184:
(i) Select this paragraph if no Treaty or International or Executive Agreement
allows foreign bidders to participate: Bidding is restricted to Filipino citizens/sole
proprietorships, partnerships, or organizations with at least seventy five percent
(75%) interest or outstanding capital stock belonging to citizens of the Philippines.
(ii) Select this paragraph if a Treaty or International or Executive Agreement
allows foreign bidders to participate: Bidding is open to all interested bidders,
whether local or foreign, subject to the conditions for eligibility provided in the
Implementing Rules and Regulations (IRR) of Republic Act (RA) 9184, otherwise
known as the “Government Procurement Reform Act”.

b) If the Funding Source is a foreign government/foreign or international


financing institution:
Bidding will be conducted in accordance with relevant procedures for open competitive
bidding as specified in the IRR of RA 9184 (R.A. 9184), with some amendments, as
stated in these bidding documents and is open to all bidders from eligible source
countries as defined in the applicable guidelines of the [state the foreign
government/foreign international financing institution concerned ( e.g. Asian
Development Bank, Japan International Cooperation Agency, or World Bank)].

4. Interested bidders may obtain further information from [insert name of the Procuring
Entity] and inspect the Bidding Documents at the address given below from [insert office
hours].

5. Select one of the following two paragraphs, and delete the other depending on the
Funding Source:
a) If the funding source is GOP:
A complete set of Bidding Documents may be purchased by interested Bidders from the
address below and upon payment of a nonrefundable fee for the Bidding Documents in
the amount of [insert amount in Pesos].
It may also be downloaded free of charge from the website of the Philippine
Government Electronic Procurement System (PhilGEPS) and the website of the
Procuring Entity, provided that bidders shall pay the fee for the Bidding Documents not
later that the submission of their bids.

b) If the funding source is a foreign government/foreign international financing


institution:

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A complete set of Bidding Documents may be purchased by the interested bidders on
[insert date of availability of Bidding Documents] from the address below and upon
payment of a nonrefundable fee for the bidding documents in the amount [ insert
amount in pesos].
It may also be downloaded free of charge from the website of the Philippine
Government Electronic Procurement System (PhilGEPS), the website of the Procuring
Entity, and [insert the website as required by the foreign government/foreign or
international financing institution], provided that bidders shall pay the nonrefundable
fee for the Bidding Documents not later than the submission of their bids.

6. Select one of the following two paragraphs, and delete the other: 4
a) If the Procuring Entity intends to open the Pre-Bid Conference to all
interested Bidders:
The [insert name of the Procuring Entity] will hold a Pre-Bid Conference on [insert
time and date] at [insert address for Pre-Bid Conference, if applicable], which shall be
open to all interested parties.

b) If the Procuring Entity intends to limit the Pre-Bid Conference to Bidders


who have purchased the Bidding Documents:
The [insert name of the Procuring Entity] will hold a Pre-Bid Conference on [insert
time and date] at [insert address for Pre-Bid Conference, if applicable], which shall be
open only to all interested parties who have purchased the Bidding Documents.

7. Bids must be delivered to the address below on or before [insert date and time] at
[insert address for submission and receipt of bids]. All bids must be accompanied by a bid
security in any of the acceptable forms and in the amount stated in ITB Clause C.
Bids will be opened in the presence of the bidders’ representatives who choose to attend at
the address below. Late bids shall not be accepted.

8. [Insert such other necessary information deemed relevant by the Procuring Entity]

9. The [insert name of the Procuring Entity] reserves the right to accept or reject any bid,
to annul the bidding process, and to reject all bids at any time prior to contract award,
without thereby incurring any liability to the affected bidder or bidders.

10. For further information, please refer to:


[Insert name of officer]
[Insert name of office]
[Insert postal address] and/or [Insert street address]
[Insert telephone number, indicate city code]
4 May be deleted in case the ABC is less than One Million Pesos (PhP1,000,000) where the Procuring Entity
may not hold a pre-bid conference.

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[Insert contact’s email address]
[Insert facsimile number]
[Insert website address, if applicable]

_________________________________
[Insert Name and Signature of the BAC
Chairperson or the Authorized
Representative of the BAC Chairperson]

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Section II. Instructions to Bidders
Notes on the Instructions to Bidders
This Section of the Bidding Documents provides the information necessary for bidders to
prepare responsive Bids, in accordance with the requirements of the Procuring Entity. It
also provides information on the eligibility check, Bid submission, opening, and
evaluation, and on the award of contract.

This Section contains provisions that are to be used unchanged. Section III. Bid Data
Sheet consists of provisions that supplement, amend, or specify in detail information or
requirements included in this Section and which are specific to each procurement.

Matters governing the performance of the Contractor, payments under the contract, or
matters affecting the risks, rights, and obligations of the parties under the contract are not
normally included in this section, but rather under Section IV. General Conditions of
Contract (GCC), and/or Section V. Special Conditions of Contract (SCC). If duplication of
a subject is inevitable in the other sections of the document prepared by the Procuring
Entity, care must be exercised to avoid contradictions between clauses dealing with the
same matter.

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TABLE OF CONTENTS
A.GENERAL................................................................................................................................15
.1.1.Scope of Bid...................................................................................................15
.1.4.Source of Funds..............................................................................................15
.1.5.Corrupt, Fraudulent, Collusive, and Coercive Practices................................15
.1.9.Conflict of Interest.........................................................................................16
.1.12.Eligible Bidders ...........................................................................................17
.1.18.Bidder’s Responsibilities.............................................................................19
.1.27.Origin of GOODS and Services...................................................................20
.1.28.Subcontracts.................................................................................................21
B.CONTENTS OF BIDDING DOCUMENTS.........................................................................................21
.1.32.Pre-Bid Conference......................................................................................21
.1.36.Clarification and Amendment of Bidding Documents.................................21
C.PREPARATION OF BIDS.............................................................................................................22
.1.40.Language of Bids.........................................................................................22
.1.41.Documents Comprising the Bid: Eligibility and Technical Components ...22
.1.43.Documents Comprising the Bid: Financial Component..............................24
.1.46.Alternative Bids...........................................................................................24
.1.50.Bid Prices.....................................................................................................25
.1.55.Bid Currencies..............................................................................................25
.1.59.Bid Validity..................................................................................................26
.1.62.Bid Security .................................................................................................26
.1.68.Format and Signing of Bids ........................................................................28
.1.74.Sealing and Marking of Bids........................................................................28
D.SUBMISSION AND OPENING OF BIDS...........................................................................................29
.1.80.Deadline for Submission of Bids.................................................................29
.1.81.Late Bids......................................................................................................29
.1.82.Modification and Withdrawal of Bids..........................................................29
.1.87.Opening and Preliminary Examination of Bids ..........................................30
E.EVALUATION AND COMPARISON OF BIDS...................................................................................31
.1.95.Process to be Confidential ...........................................................................31
.1.98.Clarification of Bids ....................................................................................31
.1.99.Detailed Evaluation and Comparison of Bids .............................................31
.1.106.Post Qualification ......................................................................................32

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.1.113.Reservation Clause.....................................................................................33
F.AWARD OF CONTRACT.............................................................................................................34
.1.117.Contract Award .........................................................................................34
.1.121.Signing of the Contract..............................................................................35
.1.126.Performance Security ................................................................................36
.1.130.Notice to Proceed.......................................................................................37
1.Definitions .........................................................................................................53
.1.1.Interpretation..................................................................................................55
.1.4.Governing Language and Law.......................................................................55
.1.7.Communications............................................................................................55
.1.8.Possession of Site...........................................................................................56
.1.13.The Contractor’s Obligations.......................................................................56
.1.24.Performance Security...................................................................................57
.1.32.Subcontracting..............................................................................................58
.1.36.Liquidated Damages.....................................................................................58
.1.39.Site Investigation Reports............................................................................59
.1.40.The Procuring Entity, Licenses and Permits................................................59
.1.41.Contractor’s Risk and Warranty Security....................................................59
.1.50.Liability of the Contractor............................................................................61
.1.51.Procuring Entity’s Risk................................................................................61
.1.53.Insurance......................................................................................................62
.1.60.Termination for Default of Contractor.........................................................63
.1.66.Termination for Default of Procuring Entity...............................................64
.1.68.Termination for Other Causes......................................................................64
.1.75.Procedures for Termination of Contracts.....................................................66
.1.78.Force Majeure, Release From Performance.................................................68
.1.84.Resolution of Disputes.................................................................................69
.1.88.Suspension of Loan, Credit, Grant, or Appropriation..................................69
.1.89.Procuring Entity’s Representative’s Decisions............................................70
.1.92.Approval of Drawings and Temporary Works by the Procuring Entity’s
Representative.............................................................................................70
.1.97.Acceleration and Delays Ordered by the Procuring Entity’s Representative
.....................................................................................................................70
.1.100.Extension of the Intended Completion Date..............................................70
.1.103.Right to Vary..............................................................................................71
.1.106.Contractors Right to Claim........................................................................71

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.1.107.Dayworks...................................................................................................71
.1.111.Early Warning............................................................................................72
.1.114.Program of Work........................................................................................72
.1.121.Management Conferences..........................................................................73
.1.124.Bill of Quantities........................................................................................73
.1.129.Instructions, Inspections and Audits..........................................................73
.1.133.Identifying Defects.....................................................................................73
.1.134.Cost of Repairs...........................................................................................74
.1.135.Correction of Defects.................................................................................74
.1.140.Uncorrected Defects...................................................................................74
.1.143.Advance Payment.......................................................................................74
.1.149.Progress Payments.....................................................................................75
.1.155.Payment Certificates..................................................................................76
.1.160.Retention....................................................................................................76
.1.165.Variation Orders.........................................................................................77
.1.171.Contract Completion..................................................................................78
.1.172.Suspension of Work...................................................................................79
.1.176.Payment on Termination............................................................................79
.1.181.Extension of Contract Time.......................................................................80
.1.187.Price Adjustment........................................................................................81
.1.188.Completion.................................................................................................81
.1.189.Taking Over...............................................................................................81
.1.190.Operating and Maintenance Manuals.........................................................81

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A. General

.1.1. Scope of Bid


.1.2. The Procuring Entity as defined in the BDS, invites bids for the construction
of Works, as described in Section VI. Specifications. The name and
identification number of the Contract is provided in the BDS.

.1.3. The successful bidder will be expected to complete the Works by the intended
completion date specified in SCC Clause F.

.1.4. Source of Funds


The Procuring Entity has a budget or has applied for or received funds from the
Funding Source named in the BDS, and in the amount indicated in the BDS. It
intends to apply part of the funds received for the Project, as defined in the BDS, to
cover eligible payments under the Contract for the Works.

.1.5. Corrupt, Fraudulent, Collusive, and Coercive


Practices
.1.6. The Procuring Entity, as well as bidders and contractors, shall observe the
highest standard of ethics during the procurement and execution of the
contract. In pursuance of this policy, the Funding Source:

()a defines, for purposes of this provision, the terms set forth below as
follows:

()i "corrupt practice" means behavior on the part of officials in the


public or private sectors by which they improperly and
unlawfully enrich themselves, others, or induce others to do so,
by misusing the position in which they are placed, and includes
the offering, giving, receiving, or soliciting of anything of
value to influence the action of any such official in the
procurement process or in contract execution; entering, on
behalf of the Procuring Entity, into any contract or transaction
manifestly and grossly disadvantageous to the same, whether or
not the public officer profited or will profit thereby, and similar
acts as provided in Republic Act 3019;

()ii "fraudulent practice" means a misrepresentation of facts in


order to influence a procurement process or the execution of a
contract to the detriment of the Procuring Entity, and includes
collusive practices among Bidders (prior to or after Bid
submission) designed to establish bid prices at artificial, non-
competitive levels and to deprive the Procuring Entity of the
benefits of free and open competition;

()iii “collusive practices” means a scheme or arrangement between


two or more bidders, with or without the knowledge of the

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Procuring Entity, designed to establish bid prices at artificial,
non-competitive levels; and

()iv “coercive practices” means harming or threatening to harm,


directly or indirectly, persons, or their property to influence
their participation in a procurement process, or affect the
execution of a contract;

()b will reject a proposal for award if it determines that the bidder
recommended for award has engaged in corrupt or fraudulent practices
in competing for the Contract; and

()c will declare a firm ineligible, either indefinitely or for a stated period
of time, to be awarded Contract funded by the Funding Source if it at
any time determines that the firm has engaged in corrupt or fraudulent
practices in competing or, or in executing, a Contract funded by the
Funding Source.

.1.7. Further, the Procuring Entity will seek to impose the maximum civil,
administrative, and/or criminal penalties available under the applicable laws
on individuals and organizations deemed to be involved in any of the practices
mentioned in ITB Clause 3.1A.

.1.8. Furthermore, the Funding Source and the Procuring Entity reserve the right to
inspect and audit records and accounts of a contractor in the bidding for and
performance of a contract themselves or through independent auditors as
reflected in the GCC Clause F.

.1.9. Conflict of Interest


.1.10. All bidders found to have conflicting interests shall be disqualified to
participate in the procurement at hand, without prejudice to the imposition of
appropriate administrative, civil, and criminal sanctions. A Bidder may be
considered to have conflicting interests with another Bidder in any of the
events described in paragraphs (a) through (c) and a general conflict of interest
in any of the circumstances set out in paragraphs (d) through (g) below:

()a A Bidder has controlling shareholders in common with another Bidder;

()b A Bidder receives or has received any direct or indirect subsidy from
any other Bidder;

()c A Bidder has the same legal representative as that of another Bidder
for purposes of this Bid;

()d A Bidder has a relationship, directly or through third parties, that puts
them in a position to have access to information about or influence on
the bid of another Bidder or influence the decisions of the Procuring
Entity regarding this bidding process. This will include a firm or an
organization who lends, or temporarily seconds, its personnel to firms
or organizations which are engaged in consulting services for the

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preparation related to procurement for or implementation of the project
if the personnel would be involved in any capacity on the same project;

()e A Bidder submits more than one bid in this bidding process. However,
this does not limit the participation of subcontractors in more than one
bid;

()f A Bidder who participated as a consultant in the preparation of the


design or technical specifications of the goods and related services that
are the subject of the bid; or

()g A Bidder who lends, or temporary seconds, its personnel to firms or


organizations which are engaged in consulting services for the
preparation related to procurement for or implementation of the
project, if the personnel would be involved in any capacity on the same
project.

.1.11. In accordance with Section 47 of the IRR of RA 9184, all Bidding Documents
shall be accompanied by a sworn affidavit of the Bidder that it is not related to
the Head of the Procuring Entity, members of the Bids and Awards Committee
(BAC), members of the Technical Working Group (TWG), members of the
BAC Secretariat, the head of the Project Management Office (PMO) or the
end-user unit, and the project consultants, by consanguinity or affinity up to
the third civil degree. On the part of the bidder, this Clause shall apply to the
following persons:

()a If the Bidder is an individual or a sole proprietorship, to the Bidder


himself;

()b If the Bidder is a partnership, to all its officers and members;

()c If the Bidder is a corporation, to all its officers, directors, and


controlling stockholders; and

()d If the Bidder is a joint venture (JV), the provisions of items (a), (b), or
(c) of this Clause shall correspondingly apply to each of the members
of the said JV, as may be appropriate.

Relationship of the nature described above or failure to comply with this


Clause will result in the automatic disqualification of a Bidder.

.1.12. Eligible Bidders


.1.13. Unless otherwise indicated in the BDS, the following persons shall be eligible
to participate in this Bidding:

()a Duly licensed Filipino citizens/sole proprietorships;

()b Partnerships duly organized under the laws of the Philippines and of
which at least seventy five percent (75%) of the interest belongs to
citizens of the Philippines;

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()c Corporations duly organized under the laws of the Philippines, and of
which at least seventy five percent (75%) of the outstanding capital
stock belongs to citizens of the Philippines;

()d Cooperatives duly organized under the laws of the Philippines, and of
which at least seventy five percent (75%) of the interest belongs to
citizens of the Philippines; and

()e Persons/entities forming themselves into a JV, i.e., a group of two (2)
or more persons/entities that intend to be jointly and severally
responsible or liable for a particular contract: Provided, however, that,
in accordance with Letter of Instructions No. 630, Filipino ownership
or interest of the joint venture concerned shall be at least seventy five
percent (75%): Provided, further, that joint ventures in which Filipino
ownership or interest is less than seventy five percent (75%) may be
eligible where the structures to be built require the application of
techniques and/or technologies which are not adequately possessed by
a person/entity meeting the seventy five percent (75%) Filipino
ownership requirement: Provided, finally, that in the latter case,
Filipino ownership or interest shall not be less than twenty five percent
(25%). For this purpose Filipino ownership or interest shall be based
on the contributions of each of the members of the joint venture as
specified in their JVA.

.1.14. The Procuring Entity may also invite foreign bidders when provided for under
any Treaty or International or Executive Agreement as specified in the BDS.

.1.15. Government Corporate Entities may be eligible to participate only if they can
establish that they (a) are legally and financially autonomous, (b) operate
under commercial law, and (c) are not dependent agencies of the GOP or the
Procuring Entity.

.1.16. Unless otherwise provided in the BDS, the Bidder must have completed at
least one contract similar to the Project the value of which, adjusted to current
prices using the National Statistics Office consumer price index, must be at
least equivalent to a percentage of the ABC stated in the BDS.

For this purpose, contracts similar to the Project shall be those described in the
BDS, and completed within the period stated in the Invitation to Bid and ITB
Clause C.

.1.17. Unless otherwise provided in the BDS, the Bidder must submit a computation
of its Net Financial Contracting Capacity (NFCC) or a Commitment from a
Universal or Commercial bank to extend a credit line in its favor if awarded
the contract for this project (CLC).

The NFCC, computed using the following formula, must be at least equal to
the ABC to be bid:

NFCC = [(Current assets minus current liabilities) (K)] minus the value of
all outstanding or uncompleted portions of the projects under ongoing

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contracts, including awarded contracts yet to be started coinciding with the
contract for this Project.

Where:

K = 10 for a contract duration of one year or less, 15 for a contract


duration of more than one year up to two years, and 20 for a contract
duration of more than two years.

The CLC must be at least equal to ten percent (10%) of the ABC for this
Project. If issued by a foreign bank, it shall be confirmed or authenticated by a
Universal or Commercial Bank. In the case of local government units (LGUs),
the Bidder may also submit CLC from other banks certified by the Bangko
Sentral ng Pilipinas (BSP) as authorized to issue such financial instrument.

.1.18. Bidder’s Responsibilities


.1.19. The Bidder or its duly authorized representative shall submit a sworn
statement in the form prescribed in Section IX. Bidding Forms as required in
ITB Clause C.

.1.20. The Bidder is responsible for the following:

()a Having taken steps to carefully examine all of the Bidding


Documents;

()b Having acknowledged all conditions, local or otherwise, affecting the


implementation of the contract;

()c Having made an estimate of the facilities available and needed for the
contract to be bid, if any; and

()d Having complied with its responsibility to inquire or secure


Supplemental/Bid Bulletin/s as provided under ITB Clause B.

()e Ensuring that it is not “blacklisted” or barred from bidding by the GOP
or any of its agencies, offices, corporations, or LGUs, including
foreign government/foreign or international financing institution
whose blacklisting rules have been recognized by the GPPB;

()f Ensuring that each of the documents submitted in satisfaction of the


bidding requirements is an authentic copy of the original, complete,
and all statements and information provided therein are true and
correct;

()g Authorizing the Head of the Procuring Entity or its duly authorized
representative/s to verify all the documents submitted;

()h Ensuring that the signatory is the duly authorized representative of the
Bidder, and granted full power and authority to do, execute and
perform any and all acts necessary and/or to represent the Bidder in the
bidding, with the duly notarized Secretary’s Certificate attesting to

19
such fact, if the Bidder is a corporation, partnership, cooperative, or
joint venture;

()i Complying with the disclosure provision under Section 47 of the Act
in relation to other provisions of Republic Act 3019; and

()j Complying with existing labor laws and standards, if applicable.

Failure to observe any of the above responsibilities shall be at the risk of the
Bidder concerned.

.1.21. The Bidder, by the act of submitting its bid, shall be deemed to have inspected
the site and determined the general characteristics of the contract works and
the conditions for this Project. Unless otherwise indicated in the BDS, failure
to furnish all information or documentation required in this Bidding
Documents shall result in the rejection of the bid and the disqualification of
the Bidder.

.1.22. It shall be the sole responsibility of the prospective bidder to determine and to
satisfy itself by such means as it considers necessary or desirable as to all
matters pertaining to this Project, including: (a) the location and the nature of
the contract, project, or work; (b) climatic conditions; (c) transportation
facilities; (c) nature and condition of the terrain, geological conditions at the
site communication facilities, requirements, location and availability of
construction aggregates and other materials, labor, water, electric power and
access roads; and (d) other factors that may affect the cost, duration and
execution or implementation of the contract, project, or work.

.1.23. The Procuring Entity shall not assume any responsibility regarding erroneous
interpretations or conclusions by the prospective or eligible bidder out of the
data furnished by the procuring entity.

.1.24. Before submitting their bids, the Bidders are deemed to have become familiar
with all existing laws, decrees, ordinances, acts and regulations of the
Philippines which may affect the contract in any way.

.1.25. The Bidder shall bear all costs associated with the preparation and submission
of his bid, and the Procuring Entity will in no case be responsible or liable for
those costs, regardless of the conduct or outcome of the bidding process.

.1.26. Bidders should note that the Procuring Entity will only accept bids only from
those that have paid the nonrefundable fee for the Bidding Documents at the
office indicated in the Invitation to Bid.

.1.27. Origin of GOODS and Services


Unless otherwise indicated in the BDS, there is no restriction on the origin of Goods,
or Contracting of Works or Services other than those prohibited by a decision of the
United Nations Security Council taken under Chapter VII of the Charter of the United
Nations.

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.1.28. Subcontracts
.1.29. Unless otherwise specified in the BDS, the Bidder may subcontract portions of
the Works to an extent as may be approved by the Procuring Entity and stated
in the BDS. However, subcontracting of any portion shall not relieve the
Bidder from any liability or obligation that may arise from the contract for this
Project.

.1.30. Subcontractors must submit the documentary requirements under ITB Clause
C and comply with the eligibility criteria specified in the BDS. In the event
that any subcontractor is found by the Procuring Entity to be ineligible, the
subcontracting of such portion of the Works shall be disallowed.

.1.31. The Bidder may identify the subcontractor to whom a portion of the Works
will be subcontracted at any stage of the bidding process or during contract
implementation. If the Bidder opts to disclose the name of the subcontractor
during bid submission, the Bidder shall include the required documents as part
of the technical component of its bid.

B. Contents of Bidding Documents

.1.32. Pre-Bid Conference


.1.33. If so specified in the BDS, a pre-bid conference shall be held at the venue and
on the date indicated therein, to clarify and address the Bidders’ questions on
the technical and financial components of this Project.

.1.34. Bidders are encouraged to attend the pre-bid conference to ensure that they
fully understand the Procuring Entity’s requirements. Non-attendance of the
Bidder will in no way prejudice its bid; however, the Bidder is expected to
know the changes and/or amendments to the Bidding Documents discussed
during the pre-bid conference.

.1.35. Any statement made at the pre-bid conference shall not modify the terms of
the bidding documents unless such statement is specifically identified in
writing as an amendment thereto and issued as a Supplemental/Bid Bulletin.

.1.36. Clarification and Amendment of Bidding


Documents
.1.37. Bidders who have purchased the Bidding Documents may request for
clarification(s) on any part of the Bidding Documents or for an interpretation.
Such a request must be in writing and submitted to the Procuring Entity at the
address indicated in the BDS at least ten (10) calendar days before the
deadline set for the submission and receipt of Bids.

.1.38. Supplemental/Bid Bulletins may be issued upon the Procuring Entity’s


initiative for purposes of clarifying or modifying any provision of the Bidding
Documents not later than seven (7) calendar days before the deadline for the
submission and receipt of Bids. Any modification to the Bidding Documents
shall be identified as an amendment.

21
.1.39. Any Supplemental/Bid Bulletin issued by the BAC shall also be posted on the
Philippine Government Electronic Procurement System (PhilGEPS) and the
website of the Procuring Entity concerned, if available. It shall be the
responsibility of all Bidders who secure the Bidding Documents to inquire and
secure Supplemental/Bid Bulletins that may be issued by the BAC. However,
bidders who have submitted bids before the issuance of the Supplemental/Bid
Bulletin must be informed and allowed to modify or withdraw their bids in
accordance with ITB Clause D.

C. Preparation of Bids

.1.40. Language of Bids


The Bid, as well as all correspondence and documents relating to the Bid exchanged
by the Bidder and the Procuring Entity, shall be written in English. Supporting
documents and printed literature furnished by the Bidder may be in another language
provided they are accompanied by an accurate translation in English certified by the
appropriate embassy or consulate in the Philippines, in which case the English
translation shall govern, for purposes of interpretation of the Bid.

.1.41. Documents Comprising the Bid: Eligibility


and Technical Components
.1.42. Unless otherwise indicated in the BDS, the first envelope shall contain the
following eligibility and technical documents:

()a Eligibility Documents –

Class "A" Documents:

()i Registration certificate from the Securities and Exchange


Commission (SEC), Department of Trade and Industry (DTI)
for sole proprietorship, or Cooperative Development Authority
(CDA) for cooperatives, or any proof of such registration as
stated in the BDS;

()ii Mayor’s permit issued by the city or municipality where the


principal place of business of the prospective bidder is located;

()iii Statement of all its ongoing and completed government and


private contracts within ten (10) years from the submission of
bids, unless otherwise stated in the BDS, including contracts
awarded but not yet started, if any. The statement shall include,
for each contract, the following:

(.iii.1) name of the contract;

(.iii.2) date of the contract;

(.iii.3) contract duration;

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(.iii.4) owner’s name and address;

(.iii.5) nature of work;

(.iii.6) contractor’s role (whether sole contractor,


subcontractor, or partner in a JV) and percentage of
participation;

(.iii.7) total contract value at award;

(.iii.8) date of completion or estimated completion time;

(.iii.9) total contract value at completion, if applicable;

(.iii.10) percentages of planned and actual


accomplishments, if applicable;

(.iii.11) value of outstanding works, if applicable;

(.iii.12) the statement shall be supported by the notices


of award and/or notices to proceed issued by the
owners; and

(.iii.13) the statement shall be supported by the


Constructors Performance Evaluation System (CPES)
rating sheets, and/or certificates of completion and
owner’s acceptance, if applicable;

()iv Unless otherwise provided in the BDS, valid Philippine


Contractors Accreditation Board (PCAB) license and
registration for the type and cost of the contract for this Project;

()v Audited financial statements, showing, among others, the


prospective total and current assets and liabilities, stamped
“received” by the BIR or its duly accredited and authorized
institutions, for the preceding calendar year which should not
be earlier than two (2) years from the date of bid submission;

()vi NFCC computation or CLC in accordance with ITB Clause A;


and

Class "B" Document:

()i If applicable, valid Joint Venture Agreement (JVA) or, in lieu


thereof, duly notarized statements from all the potential joint
venture partners stating that they will enter into and abide by
the provisions of the JVA in the instance that the bid is
successful shall be included in the bid.

()b Technical Documents –

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()i Bid security as prescribed in ITB Clause C. If the Bidder opts
to submit the bid security in the form of:

(.i.1) a bank draft/guarantee or an irrevocable letter of credit


issued by a foreign bank, it shall be accompanied by a
confirmation from a Universal or Commercial Bank; or

(.i.2) a surety bond accompanied by a certification coming


from an authorized Insurance Commission that a surety
or insurance company is authorized to issue such
instrument;

()ii Project Requirements, which shall include the following:

(.ii.1) Organizational chart for the contract to be bid;

(.ii.2) List of contractor’s personnel (viz, project Manager,


Project Engineers, Materials Engineers, and Foremen),
to be assigned to the contract to be bid, with their
complete qualification and experience data; and

(.ii.3) List of contractor’s equipment units, which are owned,


leased, and/or under purchase agreements, supported by
certification of availability of equipment from the
equipment lessor/vendor for the duration of the project;
and

()iii Sworn statement in accordance with Section 25.2(b)(iv) of the


IRR of RA 9184 and using the form prescribed in Section IX.
Bidding Forms.

.1.43. Documents Comprising the Bid: Financial


Component
.1.44. Unless otherwise stated in the BDS, the financial component of the bid shall
contain the following:

()a Financial Bid Form in accordance with the form prescribed in Section
IX. Bidding Forms; and

()b Any other document required in the BDS.

.1.45. Unless indicated in the BDS, all Bids that exceed the ABC shall not be
accepted.

.1.46. Alternative Bids


.1.47. Alternative Bids shall be rejected. For this purpose, alternative bid is an offer
made by a Bidder in addition or as a substitute to its original bid which may be
included as part of its original bid or submitted separately therewith for
purposes of bidding. A bid with options is considered an alternative bid

24
regardless of whether said bid proposal is contained in a single envelope or
submitted in two (2) or more separate bid envelopes.

.1.48. Bidders shall submit offers that comply with the requirements of the Bidding
Documents, including the basic technical design as indicated in the drawings
and specifications. Unless there is a value engineering clause in the BDS,
alternative bids shall not be accepted.

.1.49. Each Bidder shall submit only one Bid, either individually or as a partner in a
JV. A Bidder who submits or participates in more than one bid (other than as
a subcontractor if a subcontractor is permitted to participate in more than one
bid) will cause all the proposals with the Bidder’s participation to be
disqualified. This shall be without prejudice to any applicable criminal, civil
and administrative penalties that may be imposed upon the persons and
entities concerned.

.1.50. Bid Prices


.1.51. The contract shall be for the whole Works, as described in ITB Clause A,
based on the priced Bill of Quantities submitted by the Bidder.

.1.52. The Bidder shall fill in rates and prices for all items of the Works described in
the Bill of Quantities. Bids not addressing or providing all of the required
items in the Bidding Documents including, where applicable, bill of quantities,
shall be considered non-responsive and, thus, automatically disqualified. In
this regard, where a required item is provided, but no price is indicated, the
same shall be considered as non-responsive, but specifying a "0" (zero) for the
said item would mean that it is being offered for free to the Government.

.1.53. All duties, taxes, and other levies payable by the Contractor under the
Contract, or for any other cause, prior to the deadline for submission of bids,
shall be included in the rates, prices, and total bid price submitted by the
Bidder.

.1.54. Unless otherwise provided in the BDS, all bid prices for the given scope of
work in the contract as awarded shall be considered as fixed prices, and
therefore not subject to price escalation during contract implementation,
except under extraordinary circumstances as indicated in the BDS and
specified in GCC Clause F and its corresponding SCC provision.

.1.55. Bid Currencies


.1.56. All bid prices shall be quoted in Philippine Pesos unless otherwise provided in
the BDS. However, for purposes of bid evaluation, bids denominated in
foreign currencies shall be converted to Philippine currency based on the
exchange rate prevailing on the day of the Bid opening.

.1.57. If so allowed in accordance with ITB Clause C, the Procuring Entity for
purposes of bid evaluation and comparing the bid prices will convert the
amounts in various currencies in which the bid price is expressed to Philippine

25
Pesos at the exchange rate as published in the BSP reference rate bulletin on
the day of the bid opening.

.1.58. Unless otherwise specified in the BDS, payment of the contract price shall be
made in Philippine Pesos.

.1.59. Bid Validity


.1.60. Bids shall remain valid for the period specified in the BDS which shall not
exceed one hundred twenty (120) calendar days from the date of the opening
of bids.

.1.61. In exceptional circumstances, prior to the expiration of the bid validity period,
the Procuring Entity may request Bidders to extend the period of validity of
their bids. The request and the responses shall be made in writing. The bid
security described in ITB Clause C should also be extended corresponding to
the extension of the bid validity period at the least. A Bidder may refuse the
request without forfeiting its bid security, but his bid shall no longer be
considered for further evaluation and award. A Bidder granting the request
shall not be required or permitted to modify its bid.

.1.62. Bid Security


.1.63. The bid security, issued in favor of the Procuring Entity, in the amount stated
in the BDS shall be equal to the percentage of the ABC in accordance with the
following schedule:

Amount of Bid
Security
Form of Bid Security (Equal to
Percentage of the
ABC)
()a Cash or
cashier’s/manager’s check issued
by a Universal or Commercial
Bank.
()b Bank
draft/guarantee or irrevocable
Two percent (2%)
letter of credit issued by a
Universal or Commercial Bank:
Provided, however, that it shall
be confirmed or authenticated by
a Universal or Commercial Bank,
if issued by a foreign bank.
()c Surety bond
callable upon demand issued by a
surety or insurance company
Five percent (5%)
duly certified by the Insurance
Commission as authorized to
issue such security; and/or

26
()d Any Proportionate to
combination of the foregoing. share of form with
respect to total
amount of security

For biddings conducted by local government units, the Bidder may also submit
bid securities in the form of cashier’s/manager’s check, bank draft/guarantee,
or irrevocable letter of credit from other banks certified by the BSP as
authorized to issue such financial statement.

.1.64. The bid security should be valid for the period specified in the BDS. Any bid
not accompanied by an acceptable bid security shall be rejected by the
Procuring Entity as non-responsive.

.1.65. No bid securities shall be returned to bidders after the opening of bids and
before contract signing, except to those that failed or declared as post-
disqualified, upon submission of a written waiver of their right to file a motion
for reconsideration and/or protest. Without prejudice on its forfeiture, Bid
Securities shall be returned only after the bidder with the Lowest Calculated
Responsive Bid has signed the contract and furnished the Performance
Security, but in no case later than the expiration of the Bid Security validity
period indicated in ITB Clause C.

.1.66. Upon signing and execution of the contract, pursuant to ITB Clause F, and the
posting of the performance security, pursuant to ITB Clause F, the successful
Bidder’s Bid security will be discharged, but in no case later than the Bid
security validity period as indicated in ITB Clause C.

.1.67. The bid security may be forfeited:

()a if a Bidder:

()i withdraws its bid during the period of bid validity specified in
ITB Clause 17;

()ii does not accept the correction of errors pursuant to ITB Clause
E;

()iii fails to submit the requirements within the prescribed period, or


a finding against their veracity, as stated in ITB Clause E; or

()iv any other reason stated in the BDS.

()b if the successful Bidder:

()i fails to sign the contract in accordance with ITB Clause F;

()ii fails to furnish performance security in accordance with ITB


Clause F; or

()iii any other reason stated in the BDS.

27
.1.68. Format and Signing of Bids
.1.69. Bidders shall submit their bids through their duly authorized representative
using the appropriate forms provided in Section IX. Bidding Forms on or
before the deadline specified in the ITB Clause D in two (2) separate sealed
bid envelopes, and which shall be submitted simultaneously. The first shall
contain the technical component of the bid, including the eligibility
requirements under ITB Clause C, and the second shall contain the financial
component of the bid.

.1.70. Forms as mentioned in ITB Clause C must be completed without any


alterations to their format, and no substitute form shall be accepted. All blank
spaces shall be filled in with the information requested.

.1.71. The Bidder shall prepare an original of the first and second envelopes as
described in ITB Clauses C and C. In addition, the Bidder shall submit copies
of the first and second envelopes. In the event of any discrepancy between the
original and the copies, the original shall prevail.

.1.72. The bid, except for unamended printed literature, shall be signed, and each and
every page thereof shall be initialed, by the duly authorized representative/s of
the Bidder.

.1.73. Any interlineations, erasures, or overwriting shall be valid only if they are
signed or initialed by the duly authorized representative/s of the Bidder.

.1.74. Sealing and Marking of Bids


.1.75. Unless otherwise indicated in the BDS, Bidders shall enclose their original
eligibility and technical documents described in ITB Clause C, in one sealed
envelope marked “ORIGINAL - TECHNICAL COMPONENT”, and the
original of their financial component in another sealed envelope marked
“ORIGINAL - FINANCIAL COMPONENT”, sealing them all in an outer
envelope marked “ORIGINAL BID”.

.1.76. Each copy of the first and second envelopes shall be similarly sealed duly
marking the inner envelopes as “COPY NO. ___ - TECHNICAL
COMPONENT” and “COPY NO. ___ – FINANCIAL COMPONENT” and
the outer envelope as “COPY NO. ___”, respectively. These envelopes
containing the original and the copies shall then be enclosed in one single
envelope.

.1.77. The original and the number of copies of the Bid as indicated in the BDS shall
be typed or written in indelible ink and shall be signed by the bidder or its duly
authorized representative/s.

.1.78. All envelopes shall:

()a contain the name of the contract to be bid in capital letters;

()b bear the name and address of the Bidder in capital letters;

28
()c be addressed to the Procuring Entity’s BAC identified in ITB Clause
B;

()d bear the specific identification of this bidding process indicated in the
Invitation to Bid; and

()e bear a warning “DO NOT OPEN BEFORE…” the date and time for
the opening of bids, in accordance with ITB Clause D.

.1.79. If bids are not sealed and marked as required, the Procuring Entity will assume
no responsibility for the misplacement or premature opening of the bid.

D. Submission and Opening of Bids

.1.80. Deadline for Submission of Bids


Bids must be received by the Procuring Entity’s BAC at the address and on or before
the date and time indicated in the BDS.

.1.81. Late Bids


Any bid submitted after the deadline for submission and receipt of bids prescribed by
the Procuring Entity, pursuant to ITB Clause D, shall be declared “Late” and shall not
be accepted by the Procuring Entity.

.1.82. Modification and Withdrawal of Bids


.1.83. The Bidder may modify its bid after it has been submitted; provided that the
modification is received by the Procuring Entity prior to the deadline
prescribed for submission and receipt of bids. The Bidder shall not be allowed
to retrieve its original bid, but shall be allowed to submit another bid equally
sealed, properly identified, linked to its original bid marked as “TECHNICAL
MODIFICATION” or “FINANCIAL MODIFICATION” and stamped
“received” by the BAC. Bid modifications received after the applicable
deadline shall not be considered and shall be returned to the Bidder unopened.

.1.84. A Bidder may, through a letter of withdrawal, withdraw its bid after it has
been submitted, for valid and justifiable reason; provided that the letter of
withdrawal is received by the Procuring Entity prior to the deadline prescribed
for submission and receipt of bids.

.1.85. Bids requested to be withdrawn in accordance with ITB Clause D shall be


returned unopened to the Bidders. A Bidder may also express its intention not
to participate in the bidding through a letter which should reach and be
stamped by the BAC before the deadline for submission and receipt of bids. A
Bidder that withdraws its bid shall not be permitted to submit another bid,
directly or indirectly, for the same contract.

.1.86. No bid may be modified after the deadline for submission of bids. No bid may
be withdrawn in the interval between the deadline for submission of bids and
the expiration of the period of bid validity specified by the Bidder on the

29
Financial Bid Form. Withdrawal of a bid during this interval shall result in the
forfeiture of the Bidder’s bid security, pursuant to ITB Clause C, and the
imposition of administrative, civil, and criminal sanctions as prescribed by RA
9184 and its IRR.

.1.87. Opening and Preliminary Examination of


Bids
.1.88. The BAC shall open the first bid envelopes of Bidders in public as specified
in the BDS to determine each Bidder’s compliance with the documents
prescribed in ITB Clause C. For this purpose, the BAC shall check the
submitted documents of each bidder against a checklist of required documents
to ascertain if they are all present, using a non-discretionary “pass/fail”
criterion. If a bidder submits the required document, it shall be rated “passed”
for that particular requirement. In this regard, bids that fail to include any
requirement or are incomplete or patently insufficient shall be considered as
“failed”. Otherwise, the BAC shall rate the said first bid envelope as “passed”.

.1.89. Immediately after determining compliance with the requirements in the first
envelope, the BAC shall forthwith open the second bid envelope of each
remaining eligible bidder whose first bid envelope was rated “passed”. The
second envelope of each complying bidder shall be opened within the same
day. In case one or more of the requirements in the second envelope of a
particular bid is missing, incomplete or patently insufficient, and/or if the
submitted total bid price exceeds the ABC unless otherwise provided in ITB
Clause C, the BAC shall rate the bid concerned as “failed”. Only bids that are
determined to contain all the bid requirements for both components shall be
rated “passed” and shall immediately be considered for evaluation and
comparison.

.1.90. Letters of withdrawal shall be read out and recorded during bid opening, and
the envelope containing the corresponding withdrawn bid shall be returned to
the Bidder unopened. If the withdrawing Bidder’s representative is in
attendance, the original bid and all copies thereof shall be returned to the
representative during the bid opening. If the representative is not in
attendance, the Bid shall be returned unopened by registered mail. The Bidder
may withdraw its bid prior to the deadline for the submission and receipt of
bids, provided that the corresponding letter of withdrawal contains a valid
authorization requesting for such withdrawal, subject to appropriate
administrative sanctions.

.1.91. If a Bidder has previously secured a certification from the Procuring Entity to
the effect that it has previously submitted the above-enumerated Class “A”
Documents, the said certification may be submitted in lieu of the requirements
enumerated in ITB Clause C, items (i) to (vi).

.1.92. In the case of an eligible foreign Bidder as described in ITB Clause A, the
Class “A” Documents enumerated in ITB Clause C may be substituted with
the appropriate equivalent documents, if any, issued by the country of the
foreign Bidder concerned.

30
.1.93. Each partner of a joint venture agreement shall likewise submit the documents
required in ITB Clauses C and C. Submission of documents required under
ITB Clauses C to C by any of the joint venture partners constitutes
compliance.

.1.94. A Bidder determined as “failed” has three (3) calendar days upon written
notice or, if present at the time of bid opening, upon verbal notification within
which to file a request for reconsideration with the BAC: Provided, however,
that the request for reconsideration shall not be granted if it is established that
the finding of failure is due to the fault of the Bidder concerned: Provided,
further, that the BAC shall decide on the request for reconsideration within
seven (7) calendar days from receipt thereof. If a failed Bidder signifies his
intent to file a request for reconsideration, the BAC shall keep the bid
envelopes of the said failed Bidder unopened and/or duly sealed until such
time that the request for reconsideration or protest has been resolved.

E. Evaluation and Comparison of Bids

.1.95. Process to be Confidential


.1.96. Members of the BAC, including its staff and personnel, as well as its
Secretariat and TWG, are prohibited from making or accepting any kind of
communication with any bidder regarding the evaluation of their bids until the
issuance of the Notice of Award, unless otherwise allowed in the BDS or in
the case of ITB Clause 26.

.1.97. Any effort by a bidder to influence the Procuring Entity in the Procuring
Entity’s decision in respect of Bid evaluation, Bid comparison or contract
award will result in the rejection of the Bidder’s Bid.

.1.98. Clarification of Bids


To assist in the evaluation, comparison and post-qualification of the bids, the
Procuring Entity may ask in writing any Bidder for a clarification of its bid. All
responses to requests for clarification shall be in writing. Any clarification submitted
by a Bidder in respect to its bid and that is not in response to a request by the
Procuring Entity shall not be considered

.1.99. Detailed Evaluation and Comparison of


Bids
.1.100. The Procuring Entity will undertake the detailed evaluation and comparison of
Bids which have passed the opening and preliminary examination of Bids,
pursuant to ITB Clause 24, in order to determine the Lowest Calculated Bid.

.1.101. In evaluating the Bids to get the Lowest Calculated Bid, the Procuring Entity
shall undertake the following:

()a The detailed evaluation of the financial component of the bids, to


establish the correct calculated prices of the bids; and

31
()b The ranking of the total bid prices as so calculated from the lowest to
highest. The bid with the lowest price shall be identified as the Lowest
Calculated Bid.

.1.102. The Procuring Entity's BAC shall immediately conduct a detailed evaluation
of all bids rated “passed,” using non-discretionary “pass/fail” criterion. Unless
otherwise specified in the BDS, the BAC shall consider the following in the
evaluation of bids:

()a Completeness of the bid. Unless the ITB specifically allows partial
bids, bids not addressing or providing all of the required items in the
Schedule of Requirements including, where applicable, bill of
quantities, shall be considered non-responsive and, thus, automatically
disqualified. In this regard, where a required item is provided, but no
price is indicated, the same shall be considered as non-responsive, but
specifying a "0" (zero) for the said item would mean that it is being
offered for free to the Procuring Entity; and

()b Arithmetical corrections. Consider computational errors, omissions,


and other bid modifications, if allowed in the BDS, to enable proper
comparison of all eligible bids. Any adjustment shall be calculated in
monetary terms to determine the calculated prices.

.1.103. Based on the detailed evaluation of bids, those that comply with the above-
mentioned requirements shall be ranked in the ascending order of their total
calculated bid prices, as evaluated and corrected for computational errors,
discounts and other modifications, to identify the Lowest Calculated Bid.
Total calculated bid prices, as evaluated and corrected for computational
errors, discounts and other modifications, which exceed the ABC shall not be
considered.

.1.104. Unless otherwise indicated in the BDS, the Procuring Entity’s evaluation of
bids shall only be based on the bid price quoted in the Financial Bid Form

.1.105. Bids shall be evaluated on an equal footing to ensure fair competition. For
this purpose, all bidders shall be required to include in their bids the cost of all
taxes, such as, but not limited to, value added tax (VAT), income tax, local
taxes, and other fiscal levies and duties which shall be itemized in the bid form
and reflected in the detailed estimates. Such bids, including said taxes, shall
be the basis for bid evaluation and comparison.

.1.106. Post Qualification


.1.107. The Procuring Entity shall determine to its satisfaction whether the Bidder that
is evaluated as having submitted the Lowest Calculated Bid (LCB) complies
with and is responsive to all the requirements and conditions specified in ITB
Clauses 5, C, and C.

.1.108. Within a non-extendible period of three (3) calendar days from receipt by the
Bidder of the notice from the BAC that it submitted the LCB, the Bidder shall
submit the following documentary requirements:

32
()a Tax clearance per Executive Order 398, Series of 2005;

()b Latest income and business tax returns in the form specified in the
BDS;

()c Certificate of PhilGEPS Registration; and

()d Other appropriate licenses and permits required by law and stated in
the BDS.

Failure of the Bidder declared as LCB to duly submit the requirements under
this Clause or a finding against the veracity of such, shall be ground for
forfeiture of the bid security and disqualification of the Bidder for award.

.1.109. The determination shall be based upon an examination of the documentary


evidence of the Bidder’s qualifications submitted pursuant to ITB Clauses C
and C, as well as other information as the Procuring Entity deems necessary
and appropriate, using a non-discretionary “pass/fail” criterion.

.1.110. If the BAC determines that the Bidder with the Lowest Calculated Bid passes
all the criteria for post-qualification, it shall declare the said bid as the Lowest
Calculated Responsive Bid, and recommend to the Head of the Procuring
Entity the award of contract to the said Bidder at its submitted price or its
calculated bid price, whichever is lower, subject to ITB Clause F.

.1.111. A negative determination shall result in rejection of the Bidder’s Bid, in which
event the Procuring Entity shall proceed to the next Lowest Calculated Bid to
make a similar determination of that Bidder’s capabilities to perform
satisfactorily. If the second Bidder, however, fails the post qualification, the
procedure for post qualification shall be repeated for the Bidder with the next
Lowest Calculated Bid, and so on until the Lowest Calculated and Responsive
Bid is determined for contract award.

.1.112. Within a period not exceeding seven (7) calendar days from the date of receipt
of the recommendation of the BAC, the Head of the Procuring Entity shall
approve or disapprove the said recommendation. In the case of government
owned and government-owned and/or -controlled corporations (GOCCs) and
government financial institutions (GFIs), the period provided herein shall be
fifteen (15) calendar days.

.1.113. Reservation Clause


.1.114. Notwithstanding the eligibility or post-qualification of a bidder, the Procuring
Entity concerned reserves the right to review its qualifications at any stage of
the procurement process if it has reasonable grounds to believe that a
misrepresentation has been made by the said bidder, or that there has been a
change in the Bidder’s capability to undertake the project from the time it
submitted its eligibility requirements. Should such review uncover any
misrepresentation made in the eligibility and bidding requirements, statements
or documents, or any changes in the situation of the Bidder which will affect
its capability to undertake the project so that it fails the preset eligibility or bid

33
evaluation criteria, the Procuring Entity shall consider the said Bidder as
ineligible and shall disqualify it from submitting a bid or from obtaining an
award or contract.

.1.115. Based on the following grounds, the Procuring Entity reserves the right to
reject any and all Bids, declare a Failure of Bidding at any time prior to the
contract award, or not to award the contract, without thereby incurring any
liability, and make no assurance that a contract shall be entered into as a result
of the bidding:

()a if there is prima facie evidence of collusion between appropriate public


officers or employees of the Procuring Entity, or between the BAC and
any of the bidders, or if the collusion is between or among the bidders
themselves, or between a bidder and a third party, including any act
which restricts, suppresses or nullifies or tends to restrict, suppress or
nullify competition;

()b if the Procuring Entity’s BAC is found to have failed in following the
prescribed bidding procedures; or

()c for any justifiable and reasonable ground where the award of the
contract will not redound to the benefit of the Government as follows:

()i If the physical and economic conditions have significantly


changed so as to render the project no longer economically,
financially or technically feasible as determined by the head of
the procuring entity;

()ii If the project is no longer necessary as determined by the head


of the procuring entity; and

()iii If the source of funds for the project has been withheld or
reduced through no fault of the Procuring Entity.

.1.116. In addition, the Procuring Entity may likewise declare a failure of bidding
when:

()a No bids are received;

()b All prospective bidders are declared ineligible;

()c All bids fail to comply with all the bid requirements or fail post-
qualification; or

()d The bidder with the Lowest Calculated Responsive Bid refuses,
without justifiable cause to accept the award of contract, and no award
is made.

F. Award of Contract

.1.117. Contract Award

34
.1.118. Subject to ITB Clause E, the Procuring Entity shall award the contract to the
Bidder whose Bid has been determined to be the Lowest Calculated and
Responsive Bid (LCRB).

.1.119. Prior to the expiration of the period of Bid validity, the Procuring Entity shall
notify the successful Bidder in writing that its Bid has been accepted, through
a Notice of Award received personally or sent by registered mail or
electronically, receipt of which must be confirmed in writing within two (2)
days by the LCRB and submitted personally or sent by registered mail or
electronically to the Procuring Entity.

.1.120. Notwithstanding the issuance of the Notice of Award, award of contract shall
be subject to the following conditions:

()a Submission of the following documents within the prescribed period


from receipt by the Bidder of the notice that it has the Lowest
Calculated and Responsive Bid:

()i Valid JVA, if applicable, within ten (10) calendar days;

()ii Valid PCAB license and registration for the type and cost of the
contract to be bid for foreign bidders, within thirty (30)
calendar days, if allowed under a Treaty or International or
Executive Agreement mentioned in ITB Clause C;

()b Posting of the performance security in accordance with ITB Clause F;

()c Signing of the contract as provided in ITB Clause F; and

()d Approval by higher authority, if required.

.1.121. Signing of the Contract


.1.122. At the same time as the Procuring Entity notifies the successful Bidder that its
Bid has been accepted, the Procuring Entity shall send the Contract Form to
the Bidder, which Contract has been provided in the Bidding Documents,
incorporating therein all agreements between the parties.

.1.123. Within ten (10) calendar days from receipt of the Notice of Award, the
successful Bidder shall post the required performance security, sign and date
the contract and return it to the Procuring Entity.

.1.124. The Procuring Entity shall enter into contract with the successful Bidder
within the same ten (10) calendar day period provided that all the documentary
requirements are complied with.

.1.125. The following documents shall form part of the contract:

()a Contract Agreement;

()b Bidding Documents;

35
()c Winning bidder’s bid, including the Technical and Financial Proposals,
and all other documents/statements submitted;

()d Performance Security;

()e Credit line in accordance with ITB Clause A, if applicable;

()f Notice of Award of Contract; and

()g Other contract documents that may be required by existing laws and/or
specified in the BDS.

.1.126. Performance Security


.1.127. To guarantee the faithful performance by the winning Bidder of its obligations
under the contract, it shall post a performance security within a maximum
period of ten (10) calendar days from the receipt of the Notice of Award from
the Procuring Entity and in no case later than the signing of the contract.

.1.128. The performance security shall be denominated in Philippine Pesos and posted
in favor of the Procuring Entity in an amount equal to the percentage of the
total contract price in accordance with the following schedule:

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

36
.1.129. Failure of the successful Bidder to comply with the above-mentioned
requirement shall constitute sufficient ground for the annulment of the award
and forfeiture of the bid security, in which event the Procuring Entity shall
initiate and complete the post qualification of the second Lowest Calculated
Bid. The procedure shall be repeated until the Lowest Calculated and
Responsive Bid is identified and selected for contract award. However if no
Bidder passed post-qualification, the BAC shall declare the bidding a failure
and conduct a re-bidding with re-advertisement.

.1.130. Notice to Proceed


.1.131. Within three (3) calendar days from the date of approval of the Contract by the
appropriate government approving authority, the Procuring Entity shall issue
its Notice to Proceed to the Bidder.

.1.132. The date of the Bidder’s receipt of the Notice to Proceed will be regarded as
the effective date of the Contract, unless otherwise specified in the BDS.

37
38
Section III. Bid Data Sheet

Notes on the Bid Data Sheet


This Section is intended to assist the Procuring Entity in providing the specific information
in relation to corresponding clauses in the ITB, and has to be prepared for each specific
procurement.

The PROCURING ENTITY should specify in the BDS information and requirements
specific to the circumstances of the Procuring Entity, the processing of the procurement,
the applicable rules regarding Bid price and currency, and the Bid evaluation criteria that
will apply to the Bids. In preparing this Section, the following aspects should be checked:

(a) Information that specifies and complements provisions of Section II. Instructions to
Bidders must be incorporated.

(b) Amendments and/or supplements, if any, to provisions of Section II. Instructions to


Bidders as necessitated by the circumstances of the specific procurement, must also
be incorporated.

39
Bid Data Sheet
ITB Clause
A The PROCURING ENTITY is [insert name of purchasing organization].

The name of the Contract is [insert the name of the contract].

The identification number of the Contract is [insert identification number of


the contract].

A The Funding Source is:

Select one of the following, delete the others:

If the Funding Source is GOP: The Government of the Philippines (GOP)


through [indicate source of funding and year] in the amount of [insert
amount of funds].

NOTE: In the case of National Government Agencies, the General


Appropriations Act and/or continuing appropriations; in the case of
Government-Owned and/or –Controlled Corporations, Government
Financial Institutions, and State Universities and Colleges, the Corporate
Budget for the contract approved by the governing Boards; in the case of
Local Government Units, the Budget for the contract approved by the
respective Sanggunian.

If the Funding Source is a foreign government/foreign or international


financing institution: The [indicate the foreign government/foreign or
international financing institution] through [indicate the Loan/Credit/Grant
No.] in the amount of [insert amount of funds].

The name of the Project is [Insert the name of the project or “Not
Applicable”]

A Select one, delete the other.

If the Funding Source is GOP, state here: No further instructions.

If the Funding Source is a foreign government/foreign or international


financing institution: Eligible Bidders are as defined in the [State the
applicable procurement guidelines and, if applicable, the web page where it
may be downloaded].

A Select one, delete the other.

Bidding is restricted to eligible bidders as defined in ITB Clause A.

40
Or

Foreign bidders may participate in this Project as provided in the [state the
applicable Treaty or International or Executive Agreement].

A Select one, delete the other.

If the Funding Source is GOP, maintain the ITB Clause and insert any of
the following: The Bidder must have completed, within ten (10) years from
the submission of bids, a single contract that is similar to this Project,
equivalent to at least fifty percent (50%) of the ABC.

If the Funding Source is a foreign government/foreign or international


financing institution, maintain ITB Clause and state “No further
instructions” or explain the applicable eligibility criterion.

For this purpose, similar contracts shall refer to [insert description of


similar contracts or state “No further instructions”].

A Select one, delete the other.

If the contract is funded by GOP, maintain the ITB Clause and state here:
No further instructions.

If the Funding Source is a foreign government/foreign or international


financing institution, retain ITB Clause or state the relevant eligibility
criterion.

A Select one, delete the rest.

If the Funding Source is GOP, maintain the ITB Clause and state here: No
further instructions.

If the Funding Source is a foreign government/foreign or international


financing institution, enumerate list of documents the omission of which
shall result to the outright rejection and disqualification of bids.

A Select one, delete the rest.

If the Funding Source is GOP, maintain the ITB Clause and state here: No
further instructions.

If the Funding Source is the ADB using Ordinary Capital or Special Funds
Resources: Eligible Goods and services shall have their origin in eligible
source countries as described in Guidelines for Procurement Under Asian
Development Bank Loans and as described on Asian Development Bank’s
web page www.adb.org

If the Funding Source is the JICA: Eligible Goods and services shall have
their origin in eligible source countries. In the event that the Goods offered

41
by the Bidder do not have their origin in eligible source countries the
contract will still be eligible for financing under JICA ODA Loans if the
combined costs of such Goods are less than fifty percent (50%) of the price
of the said contract.

If the Funding Source is a foreign government or a foreign/ international


financing institution, indicate the list of eligible source countries as origin
of Goods.

A Select one, delete the other.

If the Funding Source is the GOP, state either “Subcontracting is not


allowed.” or specify the portions of Works and the maximum percentage
allowed to be subcontracted.

NOTE: Only a maximum of fifty percent (50%) of the Works may be


subcontracted.

If the Funding Source is a foreign government or another foreign or


international financing institution, state here the maximum percentage of
Goods allowed to be subcontracted or “No further instructions.”

A If subcontracting is allowed, specify the eligibility criteria that subcontractors


must comply with; otherwise, state “Not applicable”.

B The Procuring Entity will hold a pre-bid conference for this Project on
[State date and time] at [State address of venue].

NOTE: The pre-bid conference shall be held at least twelve (12) calendar
days before the deadline for the submission of and receipt of bids. If the
Procuring Entity determines that, by reason of the method, nature, or
complexity of the contract to be bid, or when international participation will
be more advantageous to the GOP, a longer period for the preparation of
bids is necessary, the pre-bid conference shall be held at least thirty (30)
calendar days before the deadline for the submission and receipt of bids.

B The Procuring Entity’s address is:

[Insert full address]

[Insert name and designation of Contact person]

[Insert telephone and fax number of Contact]

[Insert email address of contact (if applicable)]

C Select one, delete the rest.

If the Funding Source is the GOP:

The first envelope shall contain the eligibility and technical documents
stated in the ITB Clause. However, if the Bidder maintains a current and

42
updated file of its Class “A” Documents with the Procuring Entity, a
certification to that effect issued by its BAC may be submitted in lieu of
the Class “A” Documents.

Or, if the Procuring Entity maintains a registry system using the


PhilGEPS or its own electronic system:

The first envelope shall contain the eligibility and technical documents
stated in the ITB Clause. However, if the Bidder maintains a current and
updated file of his Class “A” Documents with the Procuring Entity, a
written letter of intent may be submitted in lieu of the Class “A”
Documents; otherwise, it shall submit an application for eligibility and its
latest Class “A” Documents on or before [insert date]. Any application
for eligibility or updates submitted after the deadline for the submission
of the letter of intent shall not be considered for the bidding at hand.

If the Funding Source is ADB or WB: No eligibility check. During Bid


opening, Technical Proposals that lack any of the following documents shall
be rejected and returned to the Bidder together with its unopened Price
Proposal:

a) Technical Proposal Submission Sheet;

b) Evidence of financial, technical, and production capability;

c) Audited Financial Statements;

d) NFCC or Credit Line Certificate;

e) Bid Security; and

f) Authority of the Signatory.

If the Funding Source is JICA, state the following: No eligibility check. All
documents described in ITB Clause C shall be included in the Technical
Proposal.

If the Funding Source is a foreign government/foreign or international


financing institution, other than those mentioned above, maintain the ITB
Clause and state “No further instructions” or state the corresponding
eligibility requirements, if any.

C List any additional acceptable proof of registration mentioned in the ITB


Clause or state “No other acceptable proof of registration is recognized.”

C Select one, delete the other.

If the Funding Source is GOP: No further instructions.

If the Funding Source is a foreign government/foreign or international


financing institution: The statement of all ongoing and completed
government and private contracts shall include all such contracts within

43
[state relevant period as provided in the Invitation to Bid] prior to the
deadline for the submission and receipt of bids.

C Select one, delete the other.

No further instructions.

Or

Foreign bidders may submit their valid Philippine Contractors Accreditation


Board (PCAB) license and registration for the type and cost of the contract
for this Project as a pre-condition for award as provided in [state relevant
provision of the applicable Treaty or International or Executive Agreement].

C List any additional requirements or state “No additional Requirements”

C Select one, delete the other.

If the Funding Source is the GOP: The ABC is [insert amount]. Any bid
with a financial component exceeding this amount shall not be accepted.

If the Funding Source is a foreign government/foreign or international


financing institution, adopt the provision for GOP or state the applicable
rule.

C Insert value engineering clause if allowed, otherwise state “No further


instructions.”

C Select one, delete the other.

If the Funding Source is the GOP or WB: Bid Prices shall be fixed.
Adjustable price proposals shall be treated as non-responsive and shall be
rejected.

If the Funding Source is the GOP, add the following to the first paragraph
above: Price escalation may be allowed in extraordinary circumstances as
may be determined by the National Economic and Development Authority
in accordance with the Civil Code of the Philippines, and upon the
recommendation of the Procuring Entity.

If the Funding Source is JICA or ADB, and the contract is of over twelve
(12) months duration, insert the appropriate special condition of contract
and state the following: Adjustments are authorized in accordance with the
price adjustment provisions specified in the GCC Clause F.

If the Funding Source is a foreign government or a foreign or international


financing institution other than those already mentioned, insert the relevant
provision and the conditions thereto, if any, or state “No further
instructions.”

C Select one, delete the other:

44
The bid prices shall be quoted in Philippine Pesos.

Or

The bid prices shall be quoted either in Philippine Pesos or United States
Dollars at the discretion of the Bidder.

C Select one, delete the other.

If the Funding Source is GOP, maintain the ITB Clause and state here: No
further instructions.

If the Funding Source is a foreign government/foreign or international


financing institution: Payment shall be made in [insert currency].

C Bids will be valid until [insert date].

C Select one, delete the rest.

If the Funding Source is the GOP or WB: The bid security shall be in the
following amount:

1. [Insert 2% of ABC], if bid security is in cash,


cashier’s/manager’s check, bank draft/guarantee or irrevocable letter
of credit;

2. [Insert 5% of ABC] if bid security is in Surety Bond; or

3. Any combination of the foregoing proportionate to the share


of form with respect to total amount of security.

If the Funding Source is the ADB or JICA: The bid security shall be in the
following amount [insert 2.5% of the ABC].

If the Funding Source is a foreign government/foreign or international


financing institution, retain the ITB Clause and state “No further
instructions”, or state the acceptable form/s of bid security and the amount
thereof.

C The bid security shall be valid until [insert date].

C If the Funding Source is GOP or WB, maintain the ITB clause and include
the following as additional grounds for forfeiture of bid security:

1. Submission of
eligibility requirements containing false information or falsified
documents.

2. Submission of bids that


contain false information or falsified documents, or the concealment
of such information in the bids in order to influence the outcome of

45
eligibility screening or any other stage of the public bidding.

3. Allowing the use of


one’s name, or using the name of another for purposes of public
bidding.

4. Withdrawal of a bid, or
refusal to accept an award, or enter into contract with the
Government without justifiable cause, after the Bidder had been
adjudged as having submitted the Lowest Calculated and Responsive
Bid.

5. Refusal or failure to
post the required performance security within the prescribed time.

6. Refusal to clarify or
validate in writing its bid during post-qualification within a period of
seven (7) calendar days from receipt of the request for clarification.

7. Any documented
unsolicited attempt by a bidder to unduly influence the outcome of
the bidding in his favor.

8. Failure of the potential


joint venture partners to enter into the joint venture after the bid is
declared as successful.

9. All other acts that tend


to defeat the purpose of the competitive bidding, such as habitually
withdrawing from bidding, submitting late Bids or patently
insufficient bid, for at least three (3) times within a year, except for
valid reasons.

If the Funding Source is ADB, maintain the ITB Clause and state here: No
further instructions.

If the Funding Source is a foreign government/foreign or international


financing institution, maintain the ITB Clause and state “No further
instructions” or state additional grounds for forfeiture of bid security.

C Select one, delete the other.

If the Funding Source is GOP, ADB, or WB, maintain the ITB clause and
state here: No further instructions.

If the Funding Source is JICA, state the following: Failure to enter into a JV
in the form submitted as part of the Bidders Bid if the Bid is made by two or
more potential JV partners.

If the Funding Source is a foreign government/foreign or international


financing institution, retain ITB Clause and state “No further instructions”,
or list the additional grounds for forfeiture of bid security of a successful

46
Bidder.

C Select one, delete the other.

If the Funding Source is GOP, maintain the ITB Clause and state here: No
further instructions.

If the Funding Source is a foreign government/foreign or international


financing institution, maintain the ITB Clause and state “No further
instructions”, or state the applicable procedure for the sealing and marking
of bids.

C Each Bidder shall submit [insert required number] original and [insert
required number] copies of the first and second components of its bid.

D The address for submission of bids is [insert address].

The deadline for submission of bids is [insert time and date].

D The place of bid opening is [insert address].

The date and time of bid opening is [insert time and date].

E Select one, delete the other.

If the Funding Source is GOP, maintain the ITB Clause and state here: No
further instructions.

If the Funding Source is a foreign government/foreign or international


financing institution, maintain the ITB Clause and state “No further
instructions”, or specify the additional conditions and/or exceptions to the
rule, if any.

E Select one, delete the other.

If the Funding Source is GOP, maintain the ITB Clause and state here: No
further instructions.

If the Funding Source is a foreign government/foreign or international


financing institution, maintain the ITB Clause and state “No further
instructions”, or state the applicable evaluation criteria.

E State whether bid modification is allowed or not.

E Select one, delete the other.

If the Funding Source is GOP, maintain the ITB Clause and state here: No
further instructions.

If the Funding Source is a foreign government/foreign or international


financing institution, maintain the ITB Clause and state “No further

47
instructions”, or state other basis of evaluation.

E Specify whether Bidders have option to submit manually filed tax returns or
tax returns filed through the Electronic Filing and Payments System
(EFPS).

NOTE: The latest income and business tax returns are those within the last
six months preceding the date of bid submission.

E List licenses and permits relevant to the Project and the corresponding law
requiring it.

F List additional contract documents relevant to the Project that may be


required by existing laws and/or the Procuring Entity, such as construction
schedule and S-curve, manpower schedule, construction methods,
equipment utilization schedule, construction safety and health program
approved by the Department of Labor and Employment, and PERT/CPM.

F The effective date of the Contract is [insert date].

48
Section IV. General Conditions of Contract

Notes on the General Conditions of Contract


The details in the GCC and SCC, and submission thereof, along with other required
documents listed therein, expressing all the rights and obligations of the parties, should be
complete.

The GCC herein shall not be altered. Any changes and complementary information, which
may be needed, shall be introduced only through the SCC.

49
TABLE OF CONTENTS
.1.1.SCOPE OF BID....................................................15
.1.4.SOURCE OF FUNDS...............................................15
.1.5.CORRUPT, FRAUDULENT, COLLUSIVE, AND COERCIVE PRACTICES
......................................................................15
.1.9.CONFLICT OF INTEREST...........................................16
.1.12.ELIGIBLE BIDDERS .............................................17
.1.18.BIDDER’S RESPONSIBILITIES....................................19
.1.27.ORIGIN OF GOODS AND SERVICES..........................20
.1.28.SUBCONTRACTS.................................................21
.1.32.PRE-BID CONFERENCE.........................................21
.1.36.CLARIFICATION AND AMENDMENT OF BIDDING DOCUMENTS...21
.1.40.LANGUAGE OF BIDS.............................................22
.1.41.DOCUMENTS COMPRISING THE BID: ELIGIBILITY AND TECHNICAL
COMPONENTS .......................................................22
.1.43.DOCUMENTS COMPRISING THE BID: FINANCIAL COMPONENT..24
.1.46.ALTERNATIVE BIDS.............................................24
.1.50.BID PRICES.....................................................25
.1.55.BID CURRENCIES................................................25
.1.59.BID VALIDITY...................................................26
.1.62.BID SECURITY ..................................................26
.1.68.FORMAT AND SIGNING OF BIDS ...............................28
.1.74.SEALING AND MARKING OF BIDS..............................28
.1.80.DEADLINE FOR SUBMISSION OF BIDS..........................29
.1.81.LATE BIDS......................................................29
.1.82.MODIFICATION AND WITHDRAWAL OF BIDS....................29
.1.87.OPENING AND PRELIMINARY EXAMINATION OF BIDS ..........30
.1.95.PROCESS TO BE CONFIDENTIAL ................................31
.1.98.CLARIFICATION OF BIDS .......................................31
.1.99.DETAILED EVALUATION AND COMPARISON OF BIDS ...........31
.1.106.POST QUALIFICATION ........................................32

50
.1.113.RESERVATION CLAUSE........................................33
.1.117.CONTRACT AWARD ...........................................34
.1.121.SIGNING OF THE CONTRACT..................................35
.1.126.PERFORMANCE SECURITY ....................................36
.1.130.NOTICE TO PROCEED.........................................37
1.DEFINITIONS .........................................................54
.1.1.INTERPRETATION..................................................56
.1.4.GOVERNING LANGUAGE AND LAW................................56
.1.7.COMMUNICATIONS................................................56
.1.8.POSSESSION OF SITE.............................................57
.1.13.THE CONTRACTOR’S OBLIGATIONS.............................57
.1.24.PERFORMANCE SECURITY.......................................58
.1.32.SUBCONTRACTING...............................................59
.1.36.LIQUIDATED DAMAGES..........................................59
.1.39.SITE INVESTIGATION REPORTS..................................60
.1.40.THE PROCURING ENTITY, LICENSES AND PERMITS............60
.1.41.CONTRACTOR’S RISK AND WARRANTY SECURITY..............60
.1.50.LIABILITY OF THE CONTRACTOR.................................62
.1.51.PROCURING ENTITY’S RISK....................................62
.1.53.INSURANCE......................................................63
.1.60.TERMINATION FOR DEFAULT OF CONTRACTOR.................64
.1.66.TERMINATION FOR DEFAULT OF PROCURING ENTITY...........65
.1.68.TERMINATION FOR OTHER CAUSES.............................65
.1.75.PROCEDURES FOR TERMINATION OF CONTRACTS...............67
.1.78.FORCE MAJEURE, RELEASE FROM PERFORMANCE.............69
.1.84.RESOLUTION OF DISPUTES......................................70
.1.88.SUSPENSION OF LOAN, CREDIT, GRANT, OR APPROPRIATION 70
.1.89.PROCURING ENTITY’S REPRESENTATIVE’S DECISIONS.........71
.1.92.APPROVAL OF DRAWINGS AND TEMPORARY WORKS BY THE
PROCURING ENTITY’S REPRESENTATIVE............................71
.1.97.ACCELERATION AND DELAYS ORDERED BY THE PROCURING
ENTITY’S REPRESENTATIVE..........................................71

51
.1.100.EXTENSION OF THE INTENDED COMPLETION DATE...........71
.1.103.RIGHT TO VARY...............................................72
.1.106.CONTRACTORS RIGHT TO CLAIM..............................72
.1.107.DAYWORKS....................................................72
.1.111.EARLY WARNING.............................................73
.1.114.PROGRAM OF WORK..........................................73
.1.121.MANAGEMENT CONFERENCES.................................74
.1.124.BILL OF QUANTITIES..........................................74
.1.129.INSTRUCTIONS, INSPECTIONS AND AUDITS....................74
.1.133.IDENTIFYING DEFECTS.........................................74
.1.134.COST OF REPAIRS............................................75
.1.135.CORRECTION OF DEFECTS.....................................75
.1.140.UNCORRECTED DEFECTS......................................75
.1.143.ADVANCE PAYMENT...........................................75
.1.149.PROGRESS PAYMENTS........................................76
.1.155.PAYMENT CERTIFICATES......................................77
.1.160.RETENTION....................................................77
.1.165.VARIATION ORDERS...........................................78
.1.171.CONTRACT COMPLETION......................................79
.1.172.SUSPENSION OF WORK.......................................80
.1.176.PAYMENT ON TERMINATION...................................80
.1.181.EXTENSION OF CONTRACT TIME..............................81
.1.187.PRICE ADJUSTMENT...........................................82
.1.188.COMPLETION..................................................82
.1.189.TAKING OVER.................................................82
.1.190.OPERATING AND MAINTENANCE MANUALS...................82

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1. Definitions
For purposes of this Clause, boldface type is used to identify defined terms.

.1.1. The Arbiter is the person appointed jointly by the Procuring Entity and the
Contractor to resolve disputes in the first instance, as provided for in GCC
Clause F.

.1.2. Bill of Quantities refers to a list of the specific items of the Work and their
corresponding unit prices, lump sums, and/or provisional sums.

.1.3. The Completion Date is the date of completion of the Works as certified by
the Procuring Entity’s Representative, in accordance with GCC Clause F.

.1.4. The Contract is the contract between the Procuring Entity and the Contractor
to execute, complete, and maintain the Works.

.1.5. The Contract Price is the price stated in the Letter of Acceptance and
thereafter to be paid by the Procuring Entity to the Contractor for the
execution of the Works in accordance with this Contract.

.1.6. Contract Time Extension is the allowable period for the Contractor to
complete the Works in addition to the original Completion Date stated in this
Contract.

.1.7. The Contractor is the juridical entity whose proposal has been accepted by
the Procuring Entity and to whom the Contract to execute the Work was
awarded.

.1.8. The Contractor’s Bid is the signed offer or proposal submitted by the
Contractor to the Procuring Entity in response to the Bidding Documents.

.1.9. Days are calendar days; months are calendar months.

.1.10. Dayworks are varied work inputs subject to payment on a time basis for the
Contractor’s employees and Equipment, in addition to payments for associated
Materials and Plant.

.1.11. A Defect is any part of the Works not completed in accordance with the
Contract.

.1.12. The Defects Liability Certificate is the certificate issued by Procuring


Entity’s Representative upon correction of defects by the Contractor.

.1.13. The Defects Liability Period is the one year period between project
completion and final acceptance within which the Contractor assumes the
responsibility to undertake the repair of any damage to the Works at his own
expense.

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.1.14. Drawings are graphical presentations of the Works. They include all
supplementary details, shop drawings, calculations, and other information
provided or approved for the execution of this Contract.

.1.15. Equipment refers to all facilities, supplies, appliances, materials or things


required for the execution and completion of the Work provided by the
Contractor and which shall not form or are not intended to form part of the
Permanent Works.

.1.16. The Intended Completion Date refers to the date specified in the SCC when
the Contractor is expected to have completed the Works. The Intended
Completion Date may be revised only by the Procuring Entity’s
Representative by issuing an extension of time or an acceleration order.

.1.17. Materials are all supplies, including consumables, used by the Contractor for
incorporation in the Works.

.1.18. The Notice to Proceed is a written notice issued by the Procuring Entity or the
Procuring Entity’s Representative to the Contractor requiring the latter to
begin the commencement of the work not later than a specified or
determinable date.

.1.19. Permanent Works all permanent structures and all other project features and
facilities required to be constructed and completed in accordance with this
Contract which shall be delivered to the Procuring Entity and which shall
remain at the Site after the removal of all Temporary Works.

.1.20. Plant refers to the machinery, apparatus, and the like intended to form an
integral part of the Permanent Works.

.1.21. The Procuring Entity is the party who employs the Contractor to carry out
the Works stated in the SCC.

.1.22. The Procuring Entity’s Representative refers to the Head of the


Procuring Entity or his duly authorized representative, identified in the SCC,
who shall be responsible for supervising the execution of the Works and
administering this Contract.

.1.23. The Site is the place provided by the Procuring Entity where the Works shall
be executed and any other place or places which may be designated in the
SCC, or notified to the Contractor by the Procuring Entity’s Representative as
forming part of the Site.

.1.24. Site Investigation Reports are those that were included in the Bidding
Documents and are factual and interpretative reports about the surface and
subsurface conditions at the Site.

.1.25. Slippage is a delay in work execution occurring when actual accomplishment


falls below the target as measured by the difference between the scheduled and
actual accomplishment of the Work by the Contractor as established from the
work schedule. This is actually described as a percentage of the whole Works.

54
.1.26. Specifications means the description of Works to be done and the qualities of
materials to be used, the equipment to be installed and the mode of
construction.

.1.27. The Start Date, as specified in the SCC, is the date when the Contractor is
obliged to commence execution of the Works. It does not necessarily coincide
with any of the Site Possession Dates.

.1.28. A Subcontractor is any person or organization to whom a part of the Works


has been subcontracted by the Contractor, as allowed by the Procuring Entity,
but not any assignee of such person.

.1.29. Temporary Works are works designed, constructed, installed, and removed
by the Contractor that are needed for construction or installation of the
Permanent Works.

.1.30. Work(s) refer to the Permanent Works and Temporary Works to be executed
by the Contractor in accordance with this Contract, including (i) the furnishing
of all labor, materials, equipment and others incidental, necessary or
convenient to the complete execution of the Works; (ii) the passing of any
tests before acceptance by the Procuring Entity’s Representative; (iii) and the
carrying out of all duties and obligations of the Contractor imposed by this
Contract as described in the SCC.

.1.1. Interpretation
.1.2. In interpreting the Conditions of Contract, singular also means plural, male
also means female or neuter, and the other way around. Headings have no
significance. Words have their normal meaning under the language of this
Contract unless specifically defined. The Procuring Entity’s Representative
will provide instructions clarifying queries about the Conditions of Contract.

.1.3. If sectional completion is specified in the SCC, references in the Conditions of


Contract to the Works, the Completion Date, and the Intended Completion Date
apply to any Section of the Works (other than references to the Completion Date
and Intended Completion Date for the whole of the Works).

.1.4. Governing Language and Law


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

.1.6. This Contract shall be interpreted in accordance with the laws of the Republic
of the Philippines.

.1.7. Communications

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

.1.8. Possession of Site


.1.9. On the date specified in the SCC, the Procuring Entity shall grant the
Contractor possession of so much of the Site as may be required to enable it to
proceed with the execution of the Works. If the Contractor suffers delay or
incurs cost from failure on the part of the Procuring Entity to give possession
in accordance with the terms of this clause, the Procuring Entity’s
Representative shall give the Contractor a Contract Time Extension and certify
such sum as fair to cover the cost incurred, which sum shall be paid by
Procuring Entity.

.1.10. If possession of a portion is not given by the date stated in the SCC Clause F,
the Procuring Entity will be deemed to have delayed the start of the relevant
activities. The resulting adjustments in contact time to address such delay
shall be in accordance with GCC Clause F.

.1.11. The Contractor shall bear all costs and charges for special or temporary right-
of-way required by it in connection with access to the Site. The Contractor
shall also provide at his own cost any additional facilities outside the Site
required by it for purposes of the Works.

.1.12. The Contractor shall allow the Procuring Entity’s Representative and any
person authorized by the Procuring Entity’s Representative access to the Site
and to any place where work in connection with this Contract is being carried
out or is intended to be carried out.

.1.13. The Contractor’s Obligations


.1.14. The Contractor shall carry out the Works properly and in accordance with this
Contract. The Contractor shall provide all supervision, labor, Materials, Plant
and Contractor's Equipment, which may be required. All Materials and Plant
on Site shall be deemed to be the property of the Procuring Entity.

.1.15. The Contractor shall commence execution of the Works on the Start Date and
shall carry out the Works in accordance with the Program of Work submitted
by the Contractor, as updated with the approval of the Procuring Entity’s
Representative, and complete them by the Intended Completion Date.

.1.16. The Contractor shall be responsible for the safety of all activities on the Site.

.1.17. The Contractor shall carry out all instructions of the Procuring Entity’s
Representative that comply with the applicable laws where the Site is located.

.1.18. The Contractor shall employ the key personnel named in the Schedule of Key
Personnel, as referred to in the SCC, to carry out the supervision of the
Works. The Procuring Entity will approve any proposed replacement of key

56
personnel only if their relevant qualifications and abilities are equal to or
better than those of the personnel listed in the Schedule.

.1.19. If the Procuring Entity’s Representative asks the Contractor to remove a


member of the Contractor’s staff or work force, for justifiable cause, the
Contractor shall ensure that the person leaves the Site within seven (7) days
and has no further connection with the Work in this Contract.

.1.20. During Contract implementation, the Contractor and his subcontractors shall
abide at all times by all labor laws, including child labor related enactments,
and other relevant rules.

.1.21. The Contractor shall submit to the Procuring Entity for consent the name and
particulars of the person authorized to receive instructions on behalf of the
Contractor.

.1.22. The Contractor shall cooperate and share the Site with other contractors,
public authorities, utilities, and the Procuring Entity between the dates given
in the schedule of other contractors particularly when they shall require access
to the Site. The Contractor shall also provide facilities and services for them
during this period. The Procuring Entity may modify the schedule of other
contractors, and shall notify the Contractor of any such modification thereto.

.1.23. Should anything of historical or other interest or of significant value be


unexpectedly discovered on the Site, it shall be the property of the Procuring
Entity. The Contractor shall notify the Procuring Entity’s Representative of
such discoveries and carry out the Procuring Entity’s Representative’s
instructions in dealing with them.

.1.24. Performance Security


.1.25. Unless otherwise specified in the SCC, within ten (10) calendar days from
receipt of the Notice of Award from the Procuring Entity but in no case later
than the signing of the contract by both parties, the Contractor shall furnish the
performance security in any the forms prescribed in ITB Clause F.

.1.26. The performance security posted in favor of the Procuring Entity shall be
forfeited in the event it is established that the Contractor is in default in any of
its obligations under the Contract.

.1.27. The performance security shall remain valid until issuance by the Procuring
Entity of the Certificate of Final Acceptance.

.1.28. The performance security may be released by the Procuring Entity and
returned to the Contractor after the issuance of the Certificate of Final
Acceptance subject to the following conditions:

()a There are no pending claims against the Contractor or the surety
company filed by the Procuring Entity;

57
()b The Contractor has no pending claims for labor and materials filed
against it; and

()c Other terms specified in the SCC.

.1.29. The Contractor shall post an additional performance security following the
amount and form specified in ITB Clause F to cover any cumulative increase
of more than ten percent (10%) over the original value of the contract as a
result of amendments to order or change orders, extra work orders and
supplemental agreements, as the case may be. The Contractor shall cause the
extension of the validity of the performance security to cover approved
contract time extensions.

.1.30. In case of a reduction in the contract value or for partially completed Works
under the contract which are usable and accepted by the Procuring Entity the
use of which, in the judgment of the implementing agency or the Procuring
Entity, will not affect the structural integrity of the entire project, the
Procuring Entity shall allow a proportional reduction in the original
performance security, provided that any such reduction is more than ten
percent (10%) and that the aggregate of such reductions is not more than fifty
percent (50%) of the original performance security.

.1.31. The Contractor, by entering into the Contract with the Procuring Entity,
acknowledges the right of the Procuring Entity to institute action pursuant to
Act 3688 against any subcontractor be they an individual, firm, partnership,
corporation, or association supplying the Contractor with labor, materials
and/or equipment for the performance of this Contract.

.1.32. Subcontracting
.1.33. Unless otherwise indicated in the SCC, the Contractor cannot subcontract
Works more than the percentage specified in ITB Clause A.

.1.34. Subcontracting of any portion of the Works does not relieve the Contractor of
any liability or obligation under this Contract. The Contractor will be
responsible for the acts, defaults, and negligence of any subcontractor, its
agents, servants or workmen as fully as if these were the Contractor’s own
acts, defaults, or negligence, or those of its agents, servants or workmen.

.1.35. Subcontractors disclosed and identified during the bidding may be changed
during the implementation of this Contract, subject to compliance with the
required qualifications and the approval of the Procuring Entity.

.1.36. Liquidated Damages


.1.37. The Contractor shall pay liquidated damages to the Procuring Entity at the rate
per day stated in the SCC for each day that the Completion Date is later than
the Intended Completion Date. The total amount of liquidated damages shall
not exceed the amount defined in the SCC. The Procuring Entity may deduct
liquidated damages from payments due to the Contractor. Payment of
liquidated damages shall not affect the Contractor. Once the cumulative

58
amount of liquidated damages reaches ten percent (10%) of the amount of this
Contract, the Procuring Entity shall rescind this Contract, without prejudice to
other courses of action and remedies open to it.

.1.38. If the Intended Completion Date is extended after liquidated damages have
been paid, the Engineer of the Procuring Entity shall correct any overpayment
of liquidated damages by the Contractor by adjusting the next payment
certificate. The Contractor shall be paid interest on the overpayment,
calculated from the date of payment to the date of repayment, at the rates
specified in GCC Clause F.

.1.39. Site Investigation Reports


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

.1.40. The Procuring Entity, Licenses and Permits


The Procuring Entity shall, if requested by the Contractor, assist him in applying for
permits, licenses or approvals, which are required for the Works.

.1.41. Contractor’s Risk and Warranty Security


.1.42. The Contractor shall assume full responsibility for the Works from the time
project construction commenced up to final acceptance by the Procuring
Entity and shall be held responsible for any damage or destruction of the
Works except those occasioned by force majeure. The Contractor shall be
fully responsible for the safety, protection, security, and convenience of his
personnel, third parties, and the public at large, as well as the Works,
Equipment, installation, and the like to be affected by his construction work.

.1.43. The defects liability period for infrastructure projects shall be one year from
project completion up to final acceptance by the Procuring Entity. During this
period, the Contractor shall undertake the repair works, at his own expense, of
any damage to the Works on account of the use of materials of inferior quality
within ninety (90) days from the time the Head of the Procuring Entity has
issued an order to undertake repair. In case of failure or refusal to comply
with this mandate, the Procuring Entity shall undertake such repair works and
shall be entitled to full reimbursement of expenses incurred therein upon
demand.

.1.44. In case the Contractor fails to comply with the preceding paragraph, the
Procuring Entity shall forfeit its performance security, subject its property
(ies) to attachment or garnishment proceedings, and perpetually disqualify it
from participating in any public bidding. All payables of the GOP in his favor
shall be offset to recover the costs.

.1.45. After final acceptance of the Works by the Procuring Entity, the Contractor
shall be held responsible for “Structural Defects”, i.e., major
faults/flaws/deficiencies in one or more key structural elements of the project
which may lead to structural failure of the completed elements or structure, or

59
“Structural Failures”, i.e., where one or more key structural elements in an
infrastructure facility fails or collapses, thereby rendering the facility or part
thereof incapable of withstanding the design loads, and/or endangering the
safety of the users or the general public:

()a Contractor – Where Structural Defects/Failures arise due to faults


attributable to improper construction, use of inferior
quality/substandard materials, and any violation of the contract plans
and specifications, the contractor shall be held liable;

()b Consultants – Where Structural Defects/Failures arise due to faulty


and/or inadequate design and specifications as well as construction
supervision, then the consultant who prepared the design or undertook
construction supervision for the project shall be held liable;

()c Procuring Entity’s Representatives/Project Manager/Construction


Managers and Supervisors – The project owner’s representative(s),
project manager, construction manager, and supervisor(s) shall be held
liable in cases where the Structural Defects/Failures are due to his/their
willful intervention in altering the designs and other specifications;
negligence or omission in not approving or acting on proposed changes
to noted defects or deficiencies in the design and/or specifications; and
the use of substandard construction materials in the project;

()d Third Parties - Third Parties shall be held liable in cases where
Structural Defects/Failures are caused by work undertaken by them
such as leaking pipes, diggings or excavations, underground cables and
electrical wires, underground tunnel, mining shaft and the like, in
which case the applicable warranty to such structure should be levied
to third parties for their construction or restoration works.

()e Users - In cases where Structural Defects/Failures are due to


abuse/misuse by the end user of the constructed facility and/or non–
compliance by a user with the technical design limits and/or intended
purpose of the same, then the user concerned shall be held liable.

.1.46. The warranty against Structural Defects/Failures, except those occasioned on


force majeure, shall cover the period specified in the SCC reckoned from the
date of issuance of the Certificate of Final Acceptance by the Procuring Entity.

.1.47. The Contractor shall be required to put up a warranty security in the form of
cash, bank guarantee, letter of credit, GSIS or surety bond callable on demand,
in accordance with the following schedule:

Minimum Amount in
Form of Warranty Percentage (%) of Total
Contract Price
()a Cash or letter of
credit issued by Universal or
Five Percent (5%)
Commercial bank: provided, however,
that the letter of credit shall be

60
confirmed or authenticated by a
Universal or Commercial bank, if
issued by a foreign bank
()b Bank guarantee
confirmed by Universal or
Commercial bank: provided, however,
that the letter of credit shall be Ten Percent (10%)
confirmed or authenticated by a
Universal or Commercial bank, if
issued by a foreign bank
()c Surety bond callable
upon demand issued by GSIS or any
Thirty Percent (30%)
surety or insurance company duly
certified by the Insurance Commission

.1.48. The warranty security shall be stated in Philippine Pesos and shall remain
effective for one year from the date of issuance of the Certificate of Final
Acceptance by the Procuring Entity, and returned only after the lapse of said
one year period.

.1.49. In case of structural defects/failure occurring during the applicable warranty


period provided in GCC Clause F, the Procuring Entity shall undertake the
necessary restoration or reconstruction works and shall be entitled to full
reimbursement by the parties found to be liable for expenses incurred therein
upon demand, without prejudice to the filing of appropriate administrative,
civil, and/or criminal charges against the responsible persons as well as the
forfeiture of the warranty security posted in favor of the Procuring Entity.

.1.50. Liability of the Contractor


Subject to additional provisions, if any, set forth in the SCC, the Contractor’s liability
under this Contract shall be as provided by the laws of the Republic of the
Philippines.

.1.51. Procuring Entity’s Risk


.1.52. From the Start Date until the Certificate of Final Acceptance has been issued,
the following are risks of the Procuring Entity:

()a The risk of personal injury, death, or loss of or damage to property


(excluding the Works, Plant, Materials, and Equipment), which are due
to:

()i any type of use or occupation of the Site authorized by the


Procuring Entity after the official acceptance of the works; or

()ii negligence, breach of statutory duty, or interference with any


legal right by the Procuring Entity or by any person employed
by or contracted to him except the Contractor.

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()b The risk of damage to the Works, Plant, Materials, and Equipment to
the extent that it is due to a fault of the Procuring Entity or in the
Procuring Entity’s design, or due to war or radioactive contamination
directly affecting the country where the Works are to be executed.

.1.53. Insurance
.1.54. The Contractor shall, under his name and at his own expense, obtain and
maintain, for the duration of this Contract, the following insurance coverage:

()a Contractor’s All Risk Insurance;

()b Transportation to the project Site of Equipment, Machinery, and


Supplies owned by the Contractor;

()c Personal injury or death of Contractor’s employees; and

()d Comprehensive insurance for third party liability to Contractor’s direct


or indirect act or omission causing damage to third persons.

.1.55. The Contractor shall provide evidence to the Procuring Entity’s


Representative that the insurances required under this Contract have been
effected and shall, within a reasonable time, provide copies of the insurance
policies to the Procuring Entity’s Representative. Such evidence and such
policies shall be provided to the Procuring Entity’s through the Procuring
Entity’s Representative.

.1.56. The Contractor shall notify the insurers of changes in the nature, extent, or
program for the execution of the Works and ensure the adequacy of the
insurances at all times in accordance with the terms of this Contract and shall
produce to the Procuring Entity’s Representative the insurance policies in
force including the receipts for payment of the current premiums.

The above insurance policies shall be obtained from any reputable insurance
company approved by the Procuring Entity’s Representative.

.1.57. If the Contractor fails to obtain and keep in force the insurances referred to
herein or any other insurance which he may be required to obtain under the
terms of this Contract, the Procuring Entity may obtain and keep in force any
such insurances and pay such premiums as may be necessary for the purpose.
From time to time, the Procuring Entity may deduct the amount it shall pay for
said premiums including twenty five percent (25%) therein from any monies
due, or which may become due, to the Contractor, without prejudice to the
Procuring Entity exercising its right to impose other sanctions against the
Contractor pursuant to the provisions of this Contract.

.1.58. In the event the Contractor fails to observe the above safeguards, the
Procuring Entity may, at the Contractor’s expense, take whatever measure is
deemed necessary for its protection and that of the Contractor’s personnel and
third parties, and/or order the interruption of dangerous Works. In addition,

62
the Procuring Entity may refuse to make the payments under GCC Clause F
until the Contractor complies with this Clause.

.1.59. The Contractor shall immediately replace the insurance policy obtained as
required in this Contract, without need of the Procuring Entity’s demand, with
a new policy issued by a new insurance company acceptable to the Procuring
Entity for any of the following grounds:

()a The issuer of the insurance policy to be replaced has:

()i become bankrupt;

()ii been placed under receivership or under a management


committee;

()iii been sued for suspension of payment; or

()iv been suspended by the Insurance Commission and its license to


engage in business or its authority to issue insurance policies
cancelled; or

()v Where reasonable grounds exist that the insurer may not be
able, fully and promptly, to fulfill its obligation under the
insurance policy.

.1.60. Termination for Default of Contractor


.1.61. The Procuring Entity shall terminate this Contract for default when any of the
following conditions attend its implementation:

.1.62. Due to the Contractor’s fault and while the project is on-going, it has incurred
negative slippage of fifteen percent (15%) or more in accordance with
Presidential Decree 1870, regardless of whether or not previous warnings and
notices have been issued for the Contractor to improve his performance;

.1.63. Due to its own fault and after this Contract time has expired, the Contractor
incurs delay in the completion of the Work after this Contract has expired; or

.1.64. The Contractor:

()a abandons the contract Works, refuses or fails to comply with a valid
instruction of the Procuring Entity or fails to proceed expeditiously and
without delay despite a written notice by the Procuring Entity;

()b does not actually have on the project Site the minimum essential
equipment listed on the Bid necessary to prosecute the Works in
accordance with the approved Program of Work and equipment
deployment schedule as required for the project;

()c does not execute the Works in accordance with this Contract or
persistently or flagrantly neglects to carry out its obligations under this
Contract;

63
()d neglects or refuses to remove materials or to perform a new Work that
has been rejected as defective or unsuitable; or

()e sub-lets any part of this Contract without approval by the Procuring
Entity.

.1.65. All materials on the Site, Plant, Equipment, and Works shall be deemed to be
the property of the Procuring Entity if this Contract is rescinded because of the
Contractor’s default.

.1.66. Termination for Default of Procuring Entity


.1.67. The Contractor may terminate this Contract with the Procuring Entity if the
works are completely stopped for a continuous period of at least sixty (60)
calendar days through no fault of its own, due to any of the following reasons:

()a Failure of the Procuring Entity to deliver, within a reasonable time,


supplies, materials, right-of-way, or other items it is obligated to
furnish under the terms of this Contract; or

()b The prosecution of the Work is disrupted by the adverse peace and
order situation, as certified by the Armed Forces of the Philippines
Provincial Commander and approved by the Secretary of National
Defense.

.1.68. Termination for Other Causes


.1.69. The Procuring Entity may terminate this Contract, in whole or in part, at any
time for its convenience. The Head of the Procuring Entity may terminate this
Contract for the convenience of the Procuring Entity if he has determined the
existence of conditions that make Project Implementation economically,
financially or technically impractical and/or unnecessary, such as, but not
limited to, fortuitous event(s) or changes in law and National Government
policies.

.1.70. The Procuring Entity or the Contractor may terminate this Contract if the other
party causes a fundamental breach of this Contract.

.1.71. Fundamental breaches of Contract shall include, but shall not be limited to, the
following:

()a The Contractor stops work for twenty eight (28) days when no
stoppage of work is shown on the current Program of Work and the
stoppage has not been authorized by the Procuring Entity’s
Representative;

()b The Procuring Entity’s Representative instructs the Contractor to delay


the progress of the Works, and the instruction is not withdrawn within
twenty eight (28) days;

64
()c The Procuring Entity shall terminate this Contract if the Contractor is
declared bankrupt or insolvent as determined with finality by a court of
competent jurisdiction. In this event, termination will be without
compensation to the Contractor, provided that such termination will
not prejudice or affect any right of action or remedy which has accrued
or will accrue thereafter to the Procuring Entity and/or the Contractor.
In the case of the Contractor's insolvency, any Contractor's Equipment
which the Procuring Entity instructs in the notice is to be used until the
completion of the Works;

()d A payment certified by the Procuring Entity’s Representative is not


paid by the Procuring Entity to the Contractor within eighty four (84)
days from the date of the Procuring Entity’s Representative’s
certificate;

()e The Procuring Entity’s Representative gives Notice that failure to


correct a particular Defect is a fundamental breach of Contract and the
Contractor fails to correct it within a reasonable period of time
determined by the Procuring Entity’s Representative;

()f The Contractor does not maintain a Security, which is required;

()g The Contractor has delayed the completion of the Works by the
number of days for which the maximum amount of liquidated damages
can be paid, as defined in the GCC Clause F; and

()h In case it is determined prima facie by the Procuring Entity that the
Contractor has engaged, before or during the implementation of the
contract, in unlawful deeds and behaviors relative to contract
acquisition and implementation, such as, but not limited to, the
following:

()i corrupt, fraudulent, collusive and coercive practices as defined


in ITB Clause 3.1A;

()ii drawing up or using forged documents;

()iii using adulterated materials, means or methods, or engaging in


production contrary to rules of science or the trade; and

()iv any other act analogous to the foregoing.

.1.72. The Funding Source or the Procuring Entity, as appropriate, will seek to
impose the maximum civil, administrative and/or criminal penalties available
under the applicable law on individuals and organizations deemed to be
involved with corrupt, fraudulent, or coercive practices.

.1.73. When persons from either party to this Contract gives notice of a fundamental
breach to the Procuring Entity’s Representative in order to terminate the
existing contract for a cause other than those listed under GCC Clause F, the
Procuring Entity’s Representative shall decide whether the breach is
fundamental or not.

65
.1.74. If this Contract is terminated, the Contractor shall stop work immediately,
make the Site safe and secure, and leave the Site as soon as reasonably
possible.

.1.75. Procedures for Termination of Contracts


.1.76. The following provisions shall govern the procedures for the termination of
this Contract:

()a Upon receipt of a written report of acts or causes which may constitute
ground(s) for termination as aforementioned, or upon its own initiative,
the Implementing Unit shall, within a period of seven (7) calendar
days, verify the existence of such ground(s) and cause the execution of
a Verified Report, with all relevant evidence attached;

()b Upon recommendation by the Implementing Unit, the Head of the


Procuring Entity shall terminate this Contract only by a written notice
to the Contractor conveying the termination of this Contract. The
notice shall state:

()i that this Contract is being terminated for any of the ground(s)
afore-mentioned, and a statement of the acts that constitute the
ground(s) constituting the same;

()ii the extent of termination, whether in whole or in part;

()iii an instruction to the Contractor to show cause as to why this


Contract should not be terminated; and

()iv special instructions of the Procuring Entity, if any.

The Notice to Terminate shall be accompanied by a copy of the


Verified Report;

()c Within a period of seven (7) calendar days from receipt of the Notice
of Termination, the Contractor shall submit to the Head of the
Procuring Entity a verified position paper stating why the contract
should not be terminated. If the Contractor fails to show cause after
the lapse of the seven (7) day period, either by inaction or by default,
the Head of the Procuring Entity shall issue an order terminating the
contract;

()d The Procuring Entity may, at anytime before receipt of the Bidder’s
verified position paper to withdraw the Notice to Terminate if it is
determined that certain items or works subject of the notice had been
completed, delivered, or performed before the Contractor’s receipt of
the notice;

()e Within a non-extendible period of ten (10) calendar days from receipt
of the verified position paper, the Head of the Procuring Entity shall
decide whether or not to terminate this Contract. It shall serve a

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written notice to the Contractor of its decision and, unless otherwise
provided in the said notice, this Contract is deemed terminated from
receipt of the Contractor of the notice of decision. The termination
shall only be based on the ground(s) stated in the Notice to Terminate;
and

()f The Head of the Procuring Entity may create a Contract Termination
Review Committee (CTRC) to assist him in the discharge of this
function. All decisions recommended by the CTRC shall be subject to
the approval of the Head of the Procuring Entity.

.1.77. Pursuant to Section 69(f) of RA 9184 and without prejudice to the imposition
of additional administrative sanctions as the internal rules of the agency may
provide and/or further criminal prosecution as provided by applicable laws,
the procuring entity shall impose on contractors after the termination of the
contract the penalty of suspension for one (1) year for the first offense,
suspension for two (2) years for the second offense from participating in the
public bidding process, for violations committed during the contract
implementation stage, which include but not limited to the following:

()a Failure of the contractor, due solely to his fault or negligence, to


mobilize and start work or performance within the specified period in
the Notice to Proceed (“NTP”);

()b Failure by the contractor to fully and faithfully comply with its
contractual obligations without valid cause, or failure by the contractor
to comply with any written lawful instruction of the procuring entity or
its representative(s) pursuant to the implementation of the contract.
For the procurement of infrastructure projects or consultancy contracts,
lawful instructions include but are not limited to the following:

()i Employment of competent technical personnel, competent


engineers and/or work supervisors;

()ii Provision of warning signs and barricades in accordance with


approved plans and specifications and contract provisions;

()iii Stockpiling in proper places of all materials and removal from


the project site of waste and excess materials, including broken
pavement and excavated debris in accordance with approved
plans and specifications and contract provisions;

()iv Deployment of committed equipment, facilities, support staff


and manpower; and

()v Renewal of the effectivity dates of the performance security


after its expiration during the course of contract
implementation.

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()c Assignment and subcontracting of the contract or any part thereof or
substitution of key personnel named in the proposal without prior
written approval by the procuring entity.

()d Poor performance by the contractor or unsatisfactory quality and/or


progress of work arising from his fault or negligence as reflected in the
Constructor's Performance Evaluation System (“CPES”) rating sheet.
In the absence of the CPES rating sheet, the existing performance
monitoring system of the procuring entity shall be applied. Any of the
following acts by the constructor shall be construed as poor
performance:

()i Negative slippage of 15% and above within the critical path of
the project due entirely to the fault or negligence of the
contractor; and

()ii Quality of materials and workmanship not complying with the


approved specifications arising from the contractor's fault or
negligence.

()e Willful or deliberate abandonment or non-performance of the project


or contract by the contractor resulting to substantial breach thereof
without lawful and/or just cause.

In addition to the penalty of suspension, the performance security posted by


the contractor shall also be forfeited.

.1.78. Force Majeure, Release From Performance


.1.79. For purposes of this Contract the terms “force majeure” and “fortuitous event”
may be used interchangeably. In this regard, a fortuitous event or force
majeure shall be interpreted to mean an event which the Contractor could not
have foreseen, or which though foreseen, was inevitable. It shall not include
ordinary unfavorable weather conditions; and any other cause the effects of
which could have been avoided with the exercise of reasonable diligence by
the Contractor.

.1.80. If this Contract is discontinued by an outbreak of war or by any other event


entirely outside the control of either the Procuring Entity or the Contractor, the
Procuring Entity’s Representative shall certify that this Contract has been
discontinued. The Contractor shall make the Site safe and stop work as
quickly as possible after receiving this certificate and shall be paid for all
works carried out before receiving it and for any Work carried out afterwards
to which a commitment was made.

.1.81. If the event continues for a period of eighty four (84) days, either party may
then give notice of termination, which shall take effect twenty eight (28) days
after the giving of the notice.

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.1.82. After termination, the Contractor shall be entitled to payment of the unpaid
balance of the value of the Works executed and of the materials and Plant
reasonably delivered to the Site, adjusted by the following:

()a any sum to which the Contractor is entitled under GCC Clause F;

()b the cost of his suspension and demobilization;

()c any sum to which the Procuring Entity is entitled.

.1.83. The net balance due shall be paid or repaid within a reasonable time period
from the time of the notice of termination.

.1.84. Resolution of Disputes


.1.85. If any dispute or difference of any kind whatsoever shall arise between the
parties in connection with the implementation of the contract covered by the
Act and this IRR, the parties shall make every effort to resolve amicably such
dispute or difference by mutual consultation.

.1.86. If the Contractor believes that a decision taken by the PROCURING


ENTITY’s Representative was either outside the authority given to the
PROCURING ENTITY’s Representative by this Contract or that the decision
was wrongly taken, the decision shall be referred to the Arbiter indicated in
the SCC within fourteen (14) days of the notification of the PROCURING
ENTITY’s Representative’s decision.

.1.87. Any and all disputes arising from the implementation of this Contract covered
by the R.A. 9184 and its IRR shall be submitted to arbitration in the
Philippines according to the provisions of Republic Act No. 876, otherwise
known as the “ Arbitration Law” and Republic Act 9285, otherwise known as
the “Alternative Dispute Resolution Act of 2004”: Provided, however, That,
disputes that are within the competence of the Construction Industry
Arbitration Commission to resolve shall be referred thereto. The process of
arbitration shall be incorporated as a provision in this Contract that will be
executed pursuant to the provisions of the Act and its IRR-A: Provided,
further, That, by mutual agreement, the parties may agree in writing to resort
to other alternative modes of dispute resolution. Additional instructions on
resolution of disputes, if any, shall be indicated in the SCC.

.1.88. Suspension of Loan, Credit, Grant, or


Appropriation
In the event that the Funding Source suspends the Loan, Credit, Grant, or
Appropriation to the Procuring Entity, from which part of the payments to the
Contractor are being made:

()a The Procuring Entity is obligated to notify the Contractor of such


suspension within seven (7) days of having received the suspension notice.

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()b If the Contractor has not received sums due it for work already done
within forty five (45) days from the time the Contractor’s claim for payment
has been certified by the Procuring Entity’s Representative, the Contractor
may immediately issue a suspension of work notice in accordance with SCC
Clause F.

.1.89. Procuring Entity’s Representative’s


Decisions
.1.90. Except where otherwise specifically stated, the Procuring Entity’s
Representative will decide contractual matters between the Procuring Entity
and the Contractor in the role representing the Procuring Entity’s

.1.91. The Procuring Entity’s Representative may delegate any of his duties and
responsibilities to other people, except to the Arbiter, after notifying the
Contractor, and may cancel any delegation after notifying the Contractor.

.1.92. Approval of Drawings and Temporary


Works by the Procuring Entity’s Representative
.1.93. All Drawings prepared by the Contractor for the execution of the Temporary
Works, are subject to prior approval by the Procuring Entity’s Representative
before its use.

.1.94. The Contractor shall be responsible for design of Temporary Works.

.1.95. The Procuring Entity’s Representative’s approval shall not alter the
Contractor’s responsibility for design of the Temporary Works.

.1.96. The Contractor shall obtain approval of third parties to the design of the
Temporary Works, when required by the Procuring Entity.

.1.97. Acceleration and Delays Ordered by the


Procuring Entity’s Representative
.1.98. When the Procuring Entity wants the Contractor to finish before the Intended
Completion Date, the Procuring Entity’s Representative will obtain priced
proposals for achieving the necessary acceleration from the Contractor. If the
Procuring Entity accepts these proposals, the Intended Completion Date will
be adjusted accordingly and confirmed by both the Procuring Entity and the
Contractor.

.1.99. If the Contractor’s Financial Proposals for an acceleration are accepted by the
Procuring Entity, they are incorporated in the Contract Price and treated as a
Variation.

.1.100. Extension of the Intended Completion Date


.1.101. The Procuring Entity’s Representative shall extend the Intended Completion
Date if a Variation is issued which makes it impossible for the Intended

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Completion Date to be achieved by the Contractor without taking steps to
accelerate the remaining work, which would cause the Contractor to incur
additional costs. Unless specified in the SCC, no payment shall be made for
any event which may warrant the extension of the Intended Completion Date.

.1.102. The Procuring Entity’s Representative shall decide whether and by how much
to extend the Intended Completion Date within twenty one (21) days of the
Contractor asking the Procuring Entity’s Representative for a decision thereto
after fully submitting all supporting information. If the Contractor has failed
to give early warning of a delay or has failed to cooperate in dealing with a
delay, the delay by this failure shall not be considered in assessing the new
Intended Completion Date.

.1.103. Right to Vary


.1.104. The Procuring Entity’s Representative with the prior approval of the Procuring
Entity may instruct Variations, up to a maximum cumulative amount of ten
percent (10%) of the original contract cost.

.1.105. Variations shall be valued as follows:

()a At a lump sum price agreed between the parties;

()b where appropriate, at rates in this Contract;

()c in the absence of appropriate rates, the rates in this Contract shall be
used as the basis for valuation; or failing which

()d at appropriate new rates, equal to or lower than current industry rates
and to be agreed upon by both parties and approved by the Head of the
Procuring Entity.

.1.106. Contractors Right to Claim


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

.1.107. Dayworks
.1.108. Subject to GCC Clause F on Variation Order, and if applicable as indicated in
the SCC, the Dayworks rates in the Contractor’s Bid shall be used for small
additional amounts of work only when the Procuring Entity’s Representative
has given written instructions in advance for additional work to be paid for in
that way.

.1.109. All work to be paid for as Dayworks shall be recorded by the Contractor on
forms approved by the Procuring Entity’s Representative. Each completed
form shall be verified and signed by the Procuring Entity’s Representative
within two days of the work being done.

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.1.110. The Contractor shall be paid for Dayworks subject to obtaining signed
Dayworks forms.

.1.111. Early Warning


.1.112. The Contractor shall warn the Procuring Entity’s Representative at the earliest
opportunity of specific likely future events or circumstances that may
adversely affect the quality of the work, increase the Contract Price, or delay
the execution of the Works. The Procuring Entity’s Representative may
require the Contractor to provide an estimate of the expected effect of the
future event or circumstance on the Contract Price and Completion Date. The
estimate shall be provided by the Contractor as soon as reasonably possible.

.1.113. The Contractor shall cooperate with the Procuring Entity’s Representative in
making and considering proposals for how the effect of such an event or
circumstance can be avoided or reduced by anyone involved in the work and
in carrying out any resulting instruction of the Procuring Entity’s
Representative.

.1.114. Program of Work


.1.115. Within the time stated in the SCC, the Contractor shall submit to the
Procuring Entity’s Representative for approval a Program of Work showing
the general methods, arrangements, order, and timing for all the activities in
the Works.

.1.116. An update of the Program of Work shall the show the actual progress achieved
on each activity and the effect of the progress achieved on the timing of the
remaining work, including any changes to the sequence of the activities.

.1.117. The Contractor shall submit to the Procuring Entity’s Representative for
approval an updated Program of Work at intervals no longer than the period
stated in the SCC. If the Contractor does not submit an updated Program of
Work within this period, the PROCURING ENTITY’s Representative may
withhold the amount stated in the SCC from the next payment certificate and
continue to withhold this amount until the next payment after the date on
which the overdue Program of Work has been submitted.

.1.118. The Procuring Entity’s Representative’s approval of the Program of Work


shall not alter the Contractor’s obligations. The Contractor may revise the
Program of Work and submit it to the Procuring Entity’s Representative again
at any time. A revised Program of Work shall show the effect of any approved
Variations; and if allowed, any Compensation Event.

.1.119. When the Program of Work is updated, the Contractor shall provide the
Procuring Entity’s Representative with an updated cash flow forecast. The
cash flow forecast shall include different currencies, as defined in the
Contract, converted as necessary using the Contract exchange rates.

.1.120. All Variations shall be included in updated Program of Work produced by the
Contractor.

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.1.121. Management Conferences
.1.122. Either the Procuring Entity’s Representative or the Contractor may require the
other to attend a Management Conference. The Management Conference shall
review the plans for remaining work and deal with matters raised in
accordance with the early warning procedure.

.1.123. The Procuring Entity’s Representative shall record the business of


Management Conferences and provide copies of the record to those attending
the Conference and to the Procuring Entity . The responsibility of the parties
for actions to be taken shall be decided by the PROCURING ENTITY’s
Representative either at the Management Conference or after the Management
Conference and stated in writing to all who attended the Conference.

.1.124. Bill of Quantities


.1.125. The Bill of Quantities shall contain items of work for the construction,
installation, testing, and commissioning of work to be done by the Contractor.

.1.126. The Bill of Quantities is used to calculate the Contract Price. The Contractor
is paid for the quantity of the work done at the rate in the Bill of Quantities for
each item.

.1.127. If the final quantity of any work done differs from the quantity in the Bill of
Quantities for the particular item and is not more than twenty five percent
(25%) of the original quantity, provided the aggregate changes for all items do
not exceed ten percent (10%) of the Contract price, the Procuring Entity’s
Representative shall make the necessary adjustments to allow for the changes
subject to applicable laws, rules, and regulations.

.1.128. If requested by the Procuring Entity’s Representative, the Contractor shall


provide the Procuring Entity’s Representative with a detailed cost breakdown
of any rate in the Bill of Quantities.

.1.129. Instructions, Inspections and Audits


.1.130. The Procuring Entity’s personnel shall at all reasonable times during
construction of the Work be entitled to examine, inspect, measure and test the
materials and workmanship, and to check the progress of the construction.

.1.131. If the Procuring Entity’s Representative instructs the Contractor to carry out a
test not specified in the Specification to check whether any work has a defect
and the test shows that it does, the Contractor shall pay for the test and any
samples. If there is no defect, the test shall be a Compensation Event.

.1.132. The Contractor shall permit the Funding Source named in the SCC to inspect
the Contractor’s accounts and records relating to the performance of the
Contractor and to have them audited by auditors appointed by the Funding
Source, if so required by the Funding Source.

.1.133. Identifying Defects

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The Procuring Entity’s Representative shall check the Contractor’s work and notify
the Contractor of any defects that are found. Such checking shall not affect the
Contractor’s responsibilities. The Procuring Entity’s Representative may instruct the
Contractor to search uncover defects and test any work that the Procuring Entity’s
Representative considers below standards and defective.

.1.134. Cost of Repairs


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

.1.135. Correction of Defects


.1.136. The Procuring Entity’s Representative shall give notice to the Contractor of
any defects before the end of the Defects Liability Period, which begins at
Completion Date up to final acceptance by the Procuring Entity’s unless
otherwise specified in the SCC. The Defects Liability Period shall be
extended for as long as defects remain to be corrected.

.1.137. Every time notice of a defect is given, the Contractor shall correct the notified
defect within the length of time specified in the Procuring Entity’s
Representative’s notice.

.1.138. The Contractor shall correct the defects which he notices himself before the
end of the Defects Liability Period.

.1.139. The Procuring Entity shall certify that all defects have been corrected. If the
Procuring Entity considers that correction of a defect is not essential, he can
request the Contractor to submit a quotation for the corresponding reduction in
the Contract Price. If the Procuring Entity accepts the quotation, the
corresponding change in the SCC is a Variation.

.1.140. Uncorrected Defects


.1.141. The Procuring Entity shall give the Contractor at least fourteen (14) days
notice of his intention to use a third party to correct a Defect. If the Contractor
does not correct the Defect himself within the period, the Procuring Entity
may have the Defect corrected by the third party. The cost of the correction
will be deducted from the Contract Price.

.1.142. The use of a third party to correct defects that are uncorrected by the
Contractor will in no way relieve the Contractor of its liabilities and warranties
under the Contract.

.1.143. Advance Payment


.1.144. The Procuring Entity shall, upon a written request of the contractor which
shall be submitted as a contract document, make an advance payment to the
contractor in an amount not exceeding fifteen percent (15%) of the total

74
contract price, to be made in lump sum or, at the most two, installments
according to a schedule specified in the SCC.

.1.145. The advance payment shall be made only upon the submission to and
acceptance by the Procuring Entity of an irrevocable standby letter of credit of
equivalent value from a commercial bank, a bank guarantee or a surety bond
callable upon demand, issued by a surety or insurance company duly licensed
by the Insurance Commission and confirmed by the Procuring Entity.

.1.146. The advance payment shall be repaid by the Contractor by an amount equal to
the percentage of the total contract price used for the advance payment.

.1.147. The contractor may reduce his standby letter of credit or guarantee instrument
by the amounts refunded by the Monthly Certificates in the advance payment.

.1.148. The Procuring Entity will provide an Advance Payment on the Contract Price
as stipulated in the Conditions of Contract, subject to the maximum amount
stated in SCC Clause F.

.1.149. Progress Payments


.1.150. The Contractor may submit a request for payment for Work accomplished.
Such request for payment shall be verified and certified by the Procuring
Entity’s Representative/Project Engineer. Except as otherwise stipulated in
the SCC, materials and equipment delivered on the site but not completely put
in place shall not be included for payment.

.1.151. The Procuring Entity shall deduct the following from the certified gross
amounts to be paid to the contractor as progress payment:

()a Cumulative value of the work previously certified and paid for.

()b Portion of the advance payment to be recouped for the month.

()c Retention money in accordance with the condition of contract.

()d Amount to cover third party liabilities.

()e Amount to cover uncorrected discovered defects in the works.

.1.152. Payments shall be adjusted by deducting therefrom the amounts for advance
payments and retention. The Procuring Entity shall pay the Contractor the
amounts certified by the Procuring Entity’s Representative within twenty eight
(28) days from the date each certificate was issued. Unless otherwise
indicated in the SCC, no payment of interest for delayed payments and
adjustments shall be made by the Procuring Entity.

.1.153. The first progress payment may be paid by the Procuring Entity to the
Contractor provided that at least twenty percent (20%) of the work has been
accomplished as certified by the Procuring Entity’s Representative.

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.1.154. Items of the Works for which a price of “0” (zero) has been entered will not be
paid for by the Procuring Entity and shall be deemed covered by other rates
and prices in the Contract.

.1.155. Payment Certificates


.1.156. The Contractor shall submit to the Procuring Entity’s Representative monthly
statements of the estimated value of the work executed less the cumulative
amount certified previously.

.1.157. The Procuring Entity’s Representative shall check the Contractor’s monthly
statement and certify the amount to be paid to the Contractor.

.1.158. The value of Work executed shall:

()a be determined by the Procuring Entity’s Representative;

()b comprise the value of the quantities of the items in the Bill of
Quantities completed; and

()c include the valuations of approved variations.

.1.159. The Procuring Entity’s Representative may exclude any item certified in a
previous certificate or reduce the proportion of any item previously certified in
any certificate in the light of later information.

.1.160. Retention
.1.161. The Procuring Entity shall retain from each payment due to the Contractor an
amount equal to a percentage thereof using the rate as specified in SCC
Clause F.

.1.162. Progress payments are subject to retention of ten percent (10%), unless
otherwise specified in the SCC, referred to as the “retention money.” Such
retention shall be based on the total amount due to the Contractor prior to any
deduction and shall be retained from every progress payment until fifty
percent (50%) of the value of Works, as determined by the Procuring Entity,
are completed. If, after fifty percent (50%) completion, the Work is
satisfactorily done and on schedule, no additional retention shall be made;
otherwise, the ten percent (10%) retention shall again be imposed using the
rate specified therefor.

.1.163. The total “retention money” shall be due for release upon final acceptance of
the Works. The Contractor may, however, request the substitution of the
retention money for each progress billing with irrevocable standby letters of
credit from a commercial bank, bank guarantees or surety bonds callable on
demand, of amounts equivalent to the retention money substituted for and
acceptable to the Procuring Entity, provided that the project is on schedule and
is satisfactorily undertaken. Otherwise, the ten (10%) percent retention shall
be made. Said irrevocable standby letters of credit, bank guarantees and/or
surety bonds, to be posted in favor of the Government shall be valid for a

76
duration to be determined by the concerned implementing office/agency or
Procuring Entity and will answer for the purpose for which the ten (10%)
percent retention is intended, i.e., to cover uncorrected discovered defects and
third party liabilities.

.1.164. On completion of the whole Works, the Contractor may substitute retention
money with an “on demand” Bank guarantee in a form acceptable to the
Procuring Entity.

.1.165. Variation Orders


.1.166. Variation Orders may be issued by the Procuring Entity to cover any
increase/decrease in quantities, including the introduction of new work items
that are not included in the original contract or reclassification of work items
that are either due to change of plans, design or alignment to suit actual field
conditions resulting in disparity between the preconstruction plans used for
purposes of bidding and the “as staked plans” or construction drawings
prepared after a joint survey by the Contractor and the Procuring Entity after
award of the contract, provided that the cumulative amount of the Variation
Order does not exceed ten percent (10%) of the original project cost. The
addition/deletion of Works should be within the general scope of the project as
bid and awarded. The scope of works shall not be reduced so as to
accommodate a positive Variation Order. A Variation Order may either be in
the form of a Change Order or Extra Work Order.

.1.167. A Change Order may be issued by the implementing official to cover any
increase/decrease in quantities of original Work items in the contract.

.1.168. An Extra Work Order may be issued by the implementing official to cover the
introduction of new work necessary for the completion, improvement or
protection of the project which were not included as items of Work in the
original contract, such as, where there are subsurface or latent physical
conditions at the site differing materially from those indicated in the contract,
or where there are duly unknown physical conditions at the site of an unusual
nature differing materially from those ordinarily encountered and generally
recognized as inherent in the Work or character provided for in the contract.

.1.169. Any cumulative Variation Order beyond ten percent (10%) shall be subject of
another contract to be bid out if the works are separable from the original
contract. In exceptional cases where it is urgently necessary to complete the
original scope of work, the Head of the Procuring Entity may authorize a
positive Variation Order go beyond ten percent (10%) but not more than
twenty percent (20%) of the original contract price, subject to the guidelines to
be determined by the GPPB: Provided, however, That appropriate sanctions
shall be imposed on the designer, consultant or official responsible for the
original detailed engineering design which failed to consider the Variation
Order beyond ten percent (10%).

.1.170. In claiming for any Variation Order, the Contractor shall, within seven (7)
calendar days after such work has been commenced or after the circumstances
leading to such condition(s) leading to the extra cost, and within twenty-eight

77
(28) calendar days deliver a written communication giving full and detailed
particulars of any extra cost in order that it may be investigated at that time.
Failure to provide either of such notices in the time stipulated shall constitute a
waiver by the contractor for any claim. The preparation and submission of
Variation Orders are as follows:

()a If the Procuring Entity’s representative/Project Engineer believes that a


Change Order or Extra Work Order should be issued, he shall prepare
the proposed Order accompanied with the notices submitted by the
Contractor, the plans therefore, his computations as to the quantities of
the additional works involved per item indicating the specific stations
where such works are needed, the date of his inspections and
investigations thereon, and the log book thereof, and a detailed
estimate of the unit cost of such items of work, together with his
justifications for the need of such Change Order or Extra Work Order,
and shall submit the same to the Head of the Procuring Entity for
approval.

()b The Head of the Procuring Entity or his duly authorized representative,
upon receipt of the proposed Change Order or Extra Work Order shall
immediately instruct the technical staff of the Procuring Entity’s to
conduct an on-the-spot investigation to verify the need for the Work to
be prosecuted. A report of such verification shall be submitted directly
to the Head of the Procuring Entity or his duly authorized
representative.

()c The, Head of the Procuring Entity or his duly authorized


representative, after being satisfied that such Change Order or Extra
Work Order is justified and necessary, shall review the estimated
quantities and prices and forward the proposal with the supporting
documentation to the Head of Procuring Entity for consideration.

()d If, after review of the plans, quantities and estimated unit cost of the
items of work involved, the proper office of the procuring entity
empowered to review and evaluate Change Orders or Extra Work
Orders recommends approval thereof, Head of the Procuring Entity or
his duly authorized representative, believing the Change Order or Extra
Work Order to be in order, shall approve the same.

()e The timeframe for the processing of Variation Orders from the
preparation up to the approval by the Head of the Procuring Entity
concerned shall not exceed thirty (30) calendar days.

.1.171. Contract Completion


Once the project reaches an accomplishment of ninety five (95%) of the total contract
amount, the Procuring Entity may create an inspectorate team to make preliminary
inspection and submit a punch-list to the Contractor in preparation for the final
turnover of the project. Said punch-list will contain, among others, the remaining
Works, Work deficiencies for necessary corrections, and the specific duration/time to

78
fully complete the project considering the approved remaining contract time. This,
however, shall not preclude the claim of the Procuring Entity for liquidated damages.

.1.172. Suspension of Work


.1.173. The Procuring Entity shall have the authority to suspend the work wholly or
partly by written order for such period as may be deemed necessary, due to
force majeure or any fortuitous events or for failure on the part of the
Contractor to correct bad conditions which are unsafe for workers or for the
general public, to carry out valid orders given by the Procuring Entity or to
perform any provisions of the contract, or due to adjustment of plans to suit
field conditions as found necessary during construction. The Contractor shall
immediately comply with such order to suspend the work wholly or partly.

.1.174. The Contractor or its duly authorized representative shall have the right to
suspend work operation on any or all projects/activities along the critical path
of activities after fifteen (15) calendar days from date of receipt of written
notice from the Contractor to the district engineer/regional director/consultant
or equivalent official, as the case may be, due to the following:

()a There exist right-of-way problems which prohibit the Contractor from
performing work in accordance with the approved construction
schedule.

()b Requisite construction plans which must be owner-furnished are not


issued to the contractor precluding any work called for by such plans.

()c Peace and order conditions make it extremely dangerous, if not


possible, to work. However, this condition must be certified in writing
by the Philippine National Police (PNP) station which has
responsibility over the affected area and confirmed by the Department
of Interior and Local Government (DILG) Regional Director.

()d There is failure on the part of the Procuring Entity to deliver


government-furnished materials and equipment as stipulated in the
contract.

()e Delay in the payment of Contractor’s claim for progress billing beyond
forty-five (45) calendar days from the time the Contractor’s claim has
been certified to by the procuring entity’s authorized representative
that the documents are complete unless there are justifiable reasons
thereof which shall be communicated in writing to the Contractor.

.1.175. In case of total suspension, or suspension of activities along the critical path,
which is not due to any fault of the Contractor, the elapsed time between the
effective order of suspending operation and the order to resume work shall be
allowed the Contractor by adjusting the contract time accordingly.

.1.176. Payment on Termination

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.1.177. If the Contract is terminated because of a fundamental breach of Contract by
the Contractor, the Procuring Entity’s Representative shall issue a certificate
for the value of the work done and Materials ordered less advance payments
received up to the date of the issue of the certificate and less the percentage to
apply to the value of the work not completed, as indicated in the SCC.
Additional Liquidated Damages shall not apply. If the total amount due to the
Procuring Entity exceeds any payment due to the Contractor, the difference
shall be a debt payable to the Procuring Entity.

.1.178. If the Contract is terminated for the Procuring Entity’s convenience or because
of a fundamental breach of Contract by the Procuring Entity, the Procuring
Entity’s Representative shall issue a certificate for the value of the work done,
Materials ordered, the reasonable cost of removal of Equipment, repatriation
of the Contractor’s personnel employed solely on the Works, and the
Contractor’s costs of protecting and securing the Works, and less advance
payments received up to the date of the certificate.

.1.179. The net balance due shall be paid or repaid within twenty eight (28) days from
the notice of termination.

.1.180. If the Contractor has terminated the Contract under GCC Clauses F or F, the
Procuring Entity shall promptly return the Performance Security to the
Contractor.

.1.181. Extension of Contract Time


.1.182. Should the amount of additional work of any kind or other special
circumstances of any kind whatsoever occur such as to fairly entitle the
contractor to an extension of contract time, the Procuring Entity shall
determine the amount of such extension; provided that the Procuring Entity is
not bound to take into account any claim for an extension of time unless the
Contractor has, prior to the expiration of the contract time and within thirty
(30) calendar days after such work has been commenced or after the
circumstances leading to such claim have arisen, delivered to the Procuring
Entity notices in order that it could have investigated them at that time. Failure
to provide such notice shall constitute a waiver by the Contractor of any claim.
Upon receipt of full and detailed particulars, the Procuring Entity shall
examine the facts and extent of the delay and shall extend the contract time
completing the contract work when, in the Procuring Entity’s opinion, the
findings of facts justify an extension.

.1.183. No extension of contract time shall be granted the Contractor due to (a)
ordinary unfavorable weather conditions and (b) inexcusable failure or
negligence of Contractor to provide the required equipment, supplies or
materials.

.1.184. Extension of contract time may be granted only when the affected activities
fall within the critical path of the PERT/CPM network.

.1.185. No extension of contract time shall be granted when the reason given to
support the request for extension was already considered in the determination

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of the original contract time during the conduct of detailed engineering and in
the preparation of the contract documents as agreed upon by the parties before
contract perfection.

.1.186. Extension of contract time shall be granted for rainy/unworkable days


considered unfavorable for the prosecution of the works at the site, based on
the actual conditions obtained at the site, in excess of the number of
rainy/unworkable days pre-determined by the Procuring Entity in relation to
the original contract time during the conduct of detailed engineering and in the
preparation of the contract documents as agreed upon by the parties before
contract perfection, and/or for equivalent period of delay due to major
calamities such as exceptionally destructive typhoons, floods and earthquakes,
and epidemics, and for causes such as non-delivery on time of materials,
working drawings, or written information to be furnished by the Procuring
Entity, non-acquisition of permit to enter private properties within the right-of-
way resulting in complete paralyzation of construction activities, and other
meritorious causes as determined by the Procuring Entity’s Representative and
approved by the Head of the Procuring Entity. Shortage of construction
materials, general labor strikes, and peace and order problems that disrupt
construction operations through no fault of the Contractor may be considered
as additional grounds for extension of contract time provided they are publicly
felt and certified by appropriate government agencies such as DTI, DOLE,
DILG, and DND, among others. The written consent of bondsmen must be
attached to any request of the Contractor for extension of contract time and
submitted to the Procuring Entity for consideration and the validity of the
Performance Security shall be correspondingly extended.

.1.187. Price Adjustment


Except for extraordinary circumstances as determined by NEDA and approved by the
GPPB, no price adjustment shall be allowed unless otherwise specified in the SCC.

.1.188. Completion
The Contractor shall request the Procuring Entity’s Representative to issue a
certificate of Completion of the Works, and the Procuring Entity’s Representative will
do so upon deciding that the work is completed.

.1.189. Taking Over


The Procuring Entity shall take over the Site and the Works within seven (7) days
from the date the Procuring Entity’s Representative issues a certificate of Completion.

.1.190. Operating and Maintenance Manuals


.1.191. If “as built” Drawings and/or operating and maintenance manuals are required,
the Contractor shall supply them by the dates stated in the SCC.

.1.192. If the Contractor does not supply the Drawings and/or manuals by the dates
stated in the SCC, or they do not receive the Procuring Entity’s

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Representative’s approval, the Procuring Entity’s Representative shall
withhold the amount stated in the SCC from payments due to the Contractor.

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Section V. Special Conditions of Contract
Notes on the Special Conditions of Contract
Similar to the Section III. Bid Data Sheet, the clauses in this Section are intended to assist
the Procuring Entity in providing contract-specific information in relation to corresponding
clauses in the GCC.

The provisions of this Section complement the GCC, specifying contractual requirements
linked to the special circumstances of the Procuring Entity, the Procuring Entity’s country,
the sector, and the Works procured. In preparing this Section, the following aspects should
be checked:

()a Information that complements provisions of Section IV. General


Conditions of Contract must be incorporated.

()b Amendments and/or supplements to provisions of Section IV.


General Conditions of Contract, as necessitated by the circumstances of the specific
project, must also be incorporated.

However, no special condition which defeats or negates the general intent and purpose of
the provisions of Section IV. General Conditions of Contract should be incorporated
herein.

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Special Conditions of Contract

GCC Clause
F The Intended Completion Date is [Insert date].
F The Procuring Entity is [Insert full name and address of the Procuring
Entity].
F The Procuring Entity’s Representative is [Name, address, and name
of authorized representative].
F The Site is located at [insert location] and is defined in drawings No.
[Insert Number].

List here locations of other Sites, if any.


F The Start Date is [Insert date].
F The Works consist of [insert a brief summary, including relationship to
other contracts under this Project].
F If different dates are specified for completion of the Works by section
(“sectional completion”), these dates should be listed here
F The Procuring Entity shall give possession of all parts of the Site to the
Contractor [insert date].
F The Contractor shall employ the following Key Personnel:

[List key personnel by name and designation]


F Select one, delete the other.

If the Funding Source is GOP, maintain the GCC Clause and state here:
No further instructions.

If the Funding Source is a foreign government/foreign or international


financing institution, maintain the GCC Clause and state “No further
instructions,” otherwise, specify the acceptable form(s) with the
corresponding amount(s) of the performance security.
F Specify additional conditions, if any, that must be met prior to the
release of the performance security, otherwise, state “No further
instructions”.
F Select one, delete the other.

If the Funding Source is the GOP, maintain the GCC Clause and state
here: No further instructions.

If the Funding Source is ADB, JICA, or WB, state here the maximum
percentage of Works allowed to be subcontracted. If the maximum

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percentage of Works allowed to be subcontracted is fifty percent (50%),
leave the GCC Clause unchanged and delete this clause.
F The applicable liquidated damages is at least one tenth (1/10) of one
percent of the cost of the unperformed portion for every day of delay.

The maximum deduction shall be ten percent (10%) of the amount of the
contract, the Procuring Entity shall rescind the contract, without
prejudice to other courses of action and remedies open to it.
F The site investigation reports are: [list here or state none]
F Select one, delete the other.

In case of permanent structures, such as buildings of types 4 and 5 as


classified under the National Building Code of the Philippines and other
structures made of steel, iron, or concrete which comply with relevant
structural codes (e.g., DPWH Standard Specifications), such as, but not
limited to, steel/concrete bridges, flyovers, aircraft movement areas,
ports, dams, tunnels, filtration and treatment plants, sewerage systems,
power plants, transmission and communication towers, railway system,
and other similar permanent structures: Fifteen (15) years.

In case of semi-permanent structures, such as buildings of types 1, 2, and


3 as classified under the National Building Code of the Philippines,
concrete/asphalt roads, concrete river control, drainage, irrigation lined
canals, river landing, deep wells, rock causeway, pedestrian overpass,
and other similar semi-permanent structures: Five (5) years.

In case of other structures, such as Bailey and wooden bridges, shallow


wells, spring developments, and other similar structures: Two (2) years.
F State here “No additional provision.” or, if the Contractor is a joint
venture, “All partners to the joint venture shall be jointly and severally
liable to the Procuring Entity.”
F The Arbiter is: [Insert name]

[Insert address]
F Select one delete, the other.

If the Funding Source is GOP or WB, maintain the GCC Clause and
state here: No further instructions.

If the Funding is ADB or JICA, insert the following:

All disputes arising in connection with the present Contract between a


foreign contractor and the Procuring Entity shall be finally settled under
the Rules of Conciliation and Arbitration of the International Chamber
of Commerce by one or more arbitrators appointed in accordance with
said Rules.

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F Select one, delete the other:

If the Funding Source is GOP or WB, maintain the GCC Clause and
state here: No further instructions.

If the Funding Source is ADB or JICA, state the following:

If any of the Compensation Events enumerated below would cause


additional cost or would prevent the work being completed before the
Intended Completion Date, the Intended Completion Date shall be
extended and/or the Contract Price shall be increased. The Procuring
Entity’s Representative shall decide whether and by how much the
Intended Completion Date shall be extended and whether and by how
much the Contract Price shall be increased.

The following shall be Compensation Events:

(a) The Procuring Entity does not give access to a part of the Site by
the Site Possession Date stated in GCC Clause F.
(b) The Procuring Entity modifies the Schedule of Other Contractors
in a way that affects the work of the Contractor under the Contract.
(c) The Procuring Entity’s Representative orders a delay or does not
issue Drawings, Specifications, or instructions required for execution of
the Works on time.
(d) The Procuring Entity’s Representative instructs the Contractor to
uncover or to carry out additional tests upon work, which is then found to
have no Defects.
(e) The Procuring Entity’s Representative unreasonably does not
approve a subcontract to be let.
(f) Ground conditions are substantially more adverse than could
reasonably have been assumed before issuance of the Letter of
Acceptance from the information issued to Bidders (including the Site
Investigation Reports), from information available publicly and from a
visual inspection of the Site.
(g) The Procuring Entity’s Representative gives an instruction for
dealing with an unforeseen condition, caused by the Procuring Entity or
additional work required for safety or other reasons.
(h) Other contractors, public authorities, utilities, or the Procuring
Entity does not work within the dates and other constraints stated in the
Contract, and they cause delay or extra cost to the Contractor.
(i) The advance payment is delayed.
(j) The effects on the Contractor of any of the Procuring Entity’s
Risks.
(k) The Procuring Entity’s Representative unreasonably delays
issuing a Certificate of Completion.

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(l) Other Compensation Events described in the Contract or
determined by the Procuring Entity’s Representative shall apply.

As soon as information demonstrating the effect of each Compensation


Event upon the Contractor’s forecast cost has been provided by the
Contractor, it shall be assessed by the Procuring Entity’s Representative,
and the Contract Price shall be adjusted accordingly. If the Contractor’s
forecast is deemed unreasonable, the Procuring Entity’s Representative
shall adjust the Contract Price based on the Procuring Entity’s
Representative’s own forecast. The Procuring Entity’s Representative
will assume that the Contractor will react competently and promptly to
the event.

The Contractor shall not be entitled to compensation to the extent that


the Procuring Entity’s interests are adversely affected by the
Contractor’s not having given early warning or not having cooperated
with the Procuring Entity’s Representative.
F Select one, delete the other:

Dayworks are applicable at the rate shown in the Contractor’s original


Bid.

Or

No dayworks are applicable to the contract.


F The Contractor shall submit the Program of Work to the Procuring
Entity’s Representative within [insert number] days of delivery of the
Letter of Acceptance.
F The period between Program of Work updates is [insert number] days.

The amount to be withheld for late submission of an updated Program of


Work is [insert amount].
F The Funding Source is the [Government of the Philippines/World
Bank/Asian Development Bank/Japan Bank for International
Cooperation]
F Select one and delete the other.

If the Funding Source is GOP, maintain the GCC Clause and state here:
No further instructions.

If the Funding Source is ADB, JICA, or WB, state the following: The
defects liability period is [insert period of between one and five years]
F The amount of the advance payment is [insert amount as percentage of
the Contract Price and schedule of payment]
F Select one and delete the other.

If the Funding Source is GOP, maintain the GCC Clause and state here:

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No further instructions.

If the Funding Source is ADB, JICA, or WB, state the following if


applicable; otherwise delete this clause: Materials and equipment
delivered on the site but not completely put in place shall be included for
payment.
F Select one, delete the other.

If the Funding Source is GOP or WB, maintain the GCC Clause and
state here: No further instructions.

If the Funding Source is ADB or JICA, state the following: If the


Procuring Entity delays payment, the Contractor shall be paid interest on
such payment. Interest shall be calculated from the date by which the
payment should have been made up to the date when the late payment is
made at the annual rate of [insert percentage rate].

If an amount certified is increased in a later certificate or as a result of an


award by the Adjudicator or an Arbitrator, the Contractor shall be paid
interest upon the delayed payment as set out in this clause. Interest shall
be calculated from the date upon which the increased amount would
have been certified in the absence of dispute.
F Select one and delete the other.

If the Funding Source is GOP, maintain the GCC Clause and state here:
No further instructions.

If the Funding Source is ADB, JICA, or WB, state the following: The
amount of retention is [insert amount of between five (5%) and ten
percent (10%) of the contract value].
F Select one, delete the other.

If the Funding Source is GOP or WB, maintain the GCC Clause and
state here: No further instructions.

If the Funding Source is ADB or JICA, state the following: The Contract
[specify “is” or “is not”] subject to price adjustment and the following
information regarding coefficients [specify “does” or “does not”] apply.

The coefficients for adjustment of prices are:

For currency [type of currency]:

(i) [percent] percent non-adjustable element (coefficient A).

(ii) [percent] percent adjustable element (coefficient B).

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For currency [type of currency]:

(i) [percent] percent non-adjustable element (coefficient A).

(ii) [percent] percent adjustable element (coefficient B).

The Procuring Entity’s Representative shall adjust the Contract Price if


taxes, duties, and other levies are changed within the period between
twenty eight (28) days before the submission of Bids for the Contract
and the date of the last Completion certificate. The adjustment shall be
the change in the amount of tax payable by the Contractor, provided
such changes are not already reflected in the Contract Price or are a
result of GCC Clause F.
F The date by which operating and maintenance manuals are required is
[date].

The date by which “as built” drawings are required is [date].


F The amount to be withheld for failing to produce “as built” drawings
and/or operating and maintenance manuals by the date required is
[amount in local currency].

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Section VI. Specifications
Notes on Specifications
A set of precise and clear specifications is a prerequisite for Bidders to respond realistically
and competitively to the requirements of the Procuring Entity without qualifying or
conditioning their Bids. In the context of international competitive bidding, the
specifications must be drafted to permit the widest possible competition and, at the same
time, present a clear statement of the required standards of workmanship, materials, and
performance of the goods and services to be procured. Only if this is done will the
objectives of economy, efficiency, and fairness in procurement be realized, responsiveness
of Bids be ensured, and the subsequent task of Bid evaluation facilitated. The
specifications should require that all goods and materials to be incorporated in the Works
be new, unused, of the most recent or current models, and incorporate all recent
improvements in design and materials unless provided otherwise in the Contract.

Samples of specifications from previous similar projects are useful in this respect. The use
of metric units is mandatory. Most specifications are normally written specially by the
Procuring Entity or its representative to suit the Works at hand. There is no standard set of
Specifications for universal application in all sectors in all regions, but there are
established principles and practices, which are reflected in these PBDs.

There are considerable advantages in standardizing General Specifications for repetitive


Works in recognized public sectors, such as highways, ports, railways, urban housing,
irrigation, and water supply, in the same country or region where similar conditions
prevail. The General Specifications should cover all classes of workmanship, materials,
and equipment commonly involved in construction, although not necessarily to be used in
a particular Works Contract. Deletions or addenda should then adapt the General
Specifications to the particular Works.

Care must be taken in drafting specifications to ensure that they are not restrictive. In the
specification of standards for goods, materials, and workmanship, recognized international
standards should be used as much as possible. Where other particular standards are used,
whether national standards or other standards, the specifications should state that goods,
materials, and workmanship that meet other authoritative standards, and which ensure
substantially equal or higher quality than the standards mentioned, will also be acceptable.
The following clause may be inserted in the SCC.

Sample Clause: Equivalency of Standards and Codes

Wherever reference is made in the Contract to specific standards and codes to be met by
the goods and materials to be furnished, and work performed or tested, the provisions of
the latest current edition or revision of the relevant standards and codes in effect shall
apply, unless otherwise expressly stated in the Contract. Where such standards and codes
are national, or relate to a particular country or region, other authoritative standards that
ensure a substantially equal or higher quality than the standards and codes specified will be
accepted subject to the Procuring Entity’s Representative’s prior review and written

91
consent. Differences between the standards specified and the proposed alternative
standards shall be fully described in writing by the Contractor and submitted to the
Procuring Entity’s Representative at least twenty eight (28) days prior to the date when the
Contractor desires the Procuring Entity’s Representative’s consent. In the event the
Procuring Entity’s Representative determines that such proposed deviations do not ensure
substantially equal or higher quality, the Contractor shall comply with the standards
specified in the documents.

These notes are intended only as information for the PRO Procuring Entity or the person
drafting the Bidding Documents. They should not be included in the final Bidding
Documents.

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Section VII. Drawings

Insert here a list of Drawings. The actual Drawings, including site plans, should be
attached to this section or annexed in a separate folder.

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Section VIII. Bill of Quantities

Notes on the Bill of Quantities


Objectives
The objectives of the Bill of Quantities are:
(a) to provide sufficient information on the quantities of Works to be performed to
enable Bids to be prepared efficiently and accurately; and
(b) when a Contract has been entered into, to provide a priced Bill of Quantities for use
in the periodic valuation of Works executed.
In order to attain these objectives, Works should be itemized in the Bill of Quantities in
sufficient detail to distinguish between the different classes of Works, or between Works of
the same nature carried out in different locations or in other circumstances which may give
rise to different considerations of cost. Consistent with these requirements, the layout and
content of the Bill of Quantities should be as simple and brief as possible.

Daywork Schedule
A Daywork Schedule should be included only if the probability of unforeseen work,
outside the items included in the Bill of Quantities, is high. To facilitate checking by the
Entity of the realism of rates quoted by the Bidders, the Daywork Schedule should
normally comprise the following:
(a) A list of the various classes of labor, materials, and Constructional Plant for which
basic daywork rates or prices are to be inserted by the Bidder, together with a
statement of the conditions under which the Contractor will be paid for work
executed on a daywork basis.

(b) Nominal quantities for each item of Daywork, to be priced by each Bidder at
Daywork rates as Bid. The rate to be entered by the Bidder against each basic
Daywork item should include the Contractor’s profit, overheads, supervision, and
other charges.

Provisional Sums
A general provision for physical contingencies (quantity overruns) may be made by
including a provisional sum in the Summary Bill of Quantities. Similarly, a contingency
allowance for possible price increases should be provided as a provisional sum in the
Summary Bill of Quantities. The inclusion of such provisional sums often facilitates
budgetary approval by avoiding the need to request periodic supplementary approvals as
the future need arises. Where such provisional sums or contingency allowances are used,

95
the SCC should state the manner in which they will be used, and under whose authority
(usually the Procuring Entity’s Representative’s).
The estimated cost of specialized work to be carried out, or of special goods to be supplied,
by other contractors (refer to GCC Clause F) should be indicated in the relevant part of the
Bill of Quantities as a particular provisional sum with an appropriate brief description. A
separate procurement procedure is normally carried out by the Procuring Entity to select
such specialized contractors. To provide an element of competition among the Bidders in
respect of any facilities, amenities, attendance, etc., to be provided by the successful
Bidder as prime Contractor for the use and convenience of the specialist contractors, each
related provisional sum should be followed by an item in the Bill of Quantities inviting the
Bidder to quote a sum for such amenities, facilities, attendance, etc.

These Notes for Preparing a Bill of Quantities are intended only as information for the
Procuring Entity or the person drafting the Bidding Documents. They should not be
included in the final documents.

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Section IX. Bidding Forms

TABLE OF CONTENTS
SECTION I. INVITATION TO BID...........................................5
SECTION II. INSTRUCTIONS TO BIDDERS................................11
A. GENERAL...............................................................................................................................15
.1.1. Scope of Bid.................................................................................................15
.1.2. The Procuring Entity as defined in the BDS, invites bids for the
construction of Works, as described in Section VI. Specifications. The
name and identification number of the Contract is provided in the BDS.. .15
.1.3. The successful bidder will be expected to complete the Works by the
intended completion date specified in SCC Clause F.................................15
.1.4. Source of Funds............................................................................................15
The Procuring Entity has a budget or has applied for or received funds from the
Funding Source named in the BDS, and in the amount indicated in the
BDS. It intends to apply part of the funds received for the Project, as
defined in the BDS, to cover eligible payments under the Contract for the
Works..........................................................................................................15
.1.5. Corrupt, Fraudulent, Collusive, and Coercive Practices..............................15
.1.6. The Procuring Entity, as well as bidders and contractors, shall observe the
highest standard of ethics during the procurement and execution of the
contract. In pursuance of this policy, the Funding Source: .......................15
()a defines, for purposes of this provision, the terms set forth below as follows:
.....................................................................................................................15
()i "corrupt practice" means behavior on the part of officials in the public or
private sectors by which they improperly and unlawfully enrich themselves,
others, or induce others to do so, by misusing the position in which they are
placed, and includes the offering, giving, receiving, or soliciting of
anything of value to influence the action of any such official in the
procurement process or in contract execution; entering, on behalf of the
Procuring Entity, into any contract or transaction manifestly and grossly
disadvantageous to the same, whether or not the public officer profited or
will profit thereby, and similar acts as provided in Republic Act 3019; ....15
()ii "fraudulent practice" means a misrepresentation of facts in order to influence
a procurement process or the execution of a contract to the detriment of the
Procuring Entity, and includes collusive practices among Bidders (prior to
or after Bid submission) designed to establish bid prices at artificial, non-
competitive levels and to deprive the Procuring Entity of the benefits of
free and open competition;..........................................................................15

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()iii “collusive practices” means a scheme or arrangement between two or more
bidders, with or without the knowledge of the Procuring Entity, designed to
establish bid prices at artificial, non-competitive levels; and......................15
()iv “coercive practices” means harming or threatening to harm, directly or
indirectly, persons, or their property to influence their participation in a
procurement process, or affect the execution of a contract; ......................16
()b will reject a proposal for award if it determines that the bidder recommended
for award has engaged in corrupt or fraudulent practices in competing for
the Contract; and .........................................................................................16
()c will declare a firm ineligible, either indefinitely or for a stated period of time,
to be awarded Contract funded by the Funding Source if it at any time
determines that the firm has engaged in corrupt or fraudulent practices in
competing or, or in executing, a Contract funded by the Funding Source.. 16
.1.7. Further, the Procuring Entity will seek to impose the maximum civil,
administrative, and/or criminal penalties available under the applicable
laws on individuals and organizations deemed to be involved in any of the
practices mentioned in ITB Clause 3.1A.....................................................16
.1.8. Furthermore, the Funding Source and the Procuring Entity reserve the right
to inspect and audit records and accounts of a contractor in the bidding for
and performance of a contract themselves or through independent auditors
as reflected in the GCC Clause F................................................................16
.1.9. Conflict of Interest.......................................................................................16
.1.10. All bidders found to have conflicting interests shall be disqualified to
participate in the procurement at hand, without prejudice to the imposition
of appropriate administrative, civil, and criminal sanctions. A Bidder may
be considered to have conflicting interests with another Bidder in any of the
events described in paragraphs (a) through (c) and a general conflict of
interest in any of the circumstances set out in paragraphs (d) through (g)
below: .........................................................................................................16
()a A Bidder has controlling shareholders in common with another Bidder; .....16
()b A Bidder receives or has received any direct or indirect subsidy from any
other Bidder; ...............................................................................................16
()c A Bidder has the same legal representative as that of another Bidder for
purposes of this Bid; ...................................................................................16
()d A Bidder has a relationship, directly or through third parties, that puts them
in a position to have access to information about or influence on the bid of
another Bidder or influence the decisions of the Procuring Entity regarding
this bidding process. This will include a firm or an organization who lends,
or temporarily seconds, its personnel to firms or organizations which are
engaged in consulting services for the preparation related to procurement
for or implementation of the project if the personnel would be involved in
any capacity on the same project; ..............................................................16
()e A Bidder submits more than one bid in this bidding process. However, this
does not limit the participation of subcontractors in more than one bid; ...17

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()f A Bidder who participated as a consultant in the preparation of the design or
technical specifications of the goods and related services that are the
subject of the bid; or....................................................................................17
()g A Bidder who lends, or temporary seconds, its personnel to firms or
organizations which are engaged in consulting services for the preparation
related to procurement for or implementation of the project, if the personnel
would be involved in any capacity on the same project..............................17
.1.11. In accordance with Section 47 of the IRR of RA 9184, all Bidding
Documents shall be accompanied by a sworn affidavit of the Bidder that it
is not related to the Head of the Procuring Entity, members of the Bids and
Awards Committee (BAC), members of the Technical Working Group
(TWG), members of the BAC Secretariat, the head of the Project
Management Office (PMO) or the end-user unit, and the project
consultants, by consanguinity or affinity up to the third civil degree. On the
part of the bidder, this Clause shall apply to the following persons:..........17
()a If the Bidder is an individual or a sole proprietorship, to the Bidder himself;
.....................................................................................................................17
()b If the Bidder is a partnership, to all its officers and members;.......................17
()c If the Bidder is a corporation, to all its officers, directors, and controlling
stockholders; and.........................................................................................17
()d If the Bidder is a joint venture (JV), the provisions of items (a), (b), or (c) of
this Clause shall correspondingly apply to each of the members of the said
JV, as may be appropriate...........................................................................17
Relationship of the nature described above or failure to comply with this Clause
will result in the automatic disqualification of a Bidder.............................17
.1.12. Eligible Bidders .........................................................................................17
.1.13. Unless otherwise indicated in the BDS, the following persons shall be
eligible to participate in this Bidding: ........................................................17
()a Duly licensed Filipino citizens/sole proprietorships;.....................................17
()b Partnerships duly organized under the laws of the Philippines and of which at
least seventy five percent (75%) of the interest belongs to citizens of the
Philippines;..................................................................................................17
()c Corporations duly organized under the laws of the Philippines, and of which
at least seventy five percent (75%) of the outstanding capital stock belongs
to citizens of the Philippines;......................................................................18
()d Cooperatives duly organized under the laws of the Philippines, and of which
at least seventy five percent (75%) of the interest belongs to citizens of the
Philippines; and...........................................................................................18
()e Persons/entities forming themselves into a JV, i.e., a group of two (2) or more
persons/entities that intend to be jointly and severally responsible or liable
for a particular contract: Provided, however, that, in accordance with Letter
of Instructions No. 630, Filipino ownership or interest of the joint venture
concerned shall be at least seventy five percent (75%): Provided, further,
that joint ventures in which Filipino ownership or interest is less than

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seventy five percent (75%) may be eligible where the structures to be built
require the application of techniques and/or technologies which are not
adequately possessed by a person/entity meeting the seventy five percent
(75%) Filipino ownership requirement: Provided, finally, that in the latter
case, Filipino ownership or interest shall not be less than twenty five
percent (25%). For this purpose Filipino ownership or interest shall be
based on the contributions of each of the members of the joint venture as
specified in their JVA..................................................................................18
.1.14. The Procuring Entity may also invite foreign bidders when provided for
under any Treaty or International or Executive Agreement as specified in
the BDS.......................................................................................................18
.1.15. Government Corporate Entities may be eligible to participate only if they
can establish that they (a) are legally and financially autonomous, (b)
operate under commercial law, and (c) are not dependent agencies of the
GOP or the Procuring Entity.......................................................................18
.1.16. Unless otherwise provided in the BDS, the Bidder must have completed at
least one contract similar to the Project the value of which, adjusted to
current prices using the National Statistics Office consumer price index,
must be at least equivalent to a percentage of the ABC stated in the BDS.
.....................................................................................................................18
.1.17. Unless otherwise provided in the BDS, the Bidder must submit a
computation of its Net Financial Contracting Capacity (NFCC) or a
Commitment from a Universal or Commercial bank to extend a credit line
in its favor if awarded the contract for this project (CLC). .......................18
The NFCC, computed using the following formula, must be at least equal to the
ABC to be bid:.............................................................................................18
.1.18. Bidder’s Responsibilities...........................................................................19
.1.19. The Bidder or its duly authorized representative shall submit a sworn
statement in the form prescribed in Section IX. Bidding Forms as required
in ITB Clause C...........................................................................................19
.1.20. The Bidder is responsible for the following:..............................................19
()a Having taken steps to carefully examine all of the Bidding Documents;.....19
()b Having acknowledged all conditions, local or otherwise, affecting the
implementation of the contract;...................................................................19
()c Having made an estimate of the facilities available and needed for the
contract to be bid, if any; and......................................................................19
()d Having complied with its responsibility to inquire or secure
Supplemental/Bid Bulletin/s as provided under ITB Clause B...................19
()e Ensuring that it is not “blacklisted” or barred from bidding by the GOP or
any of its agencies, offices, corporations, or LGUs, including foreign
government/foreign or international financing institution whose blacklisting
rules have been recognized by the GPPB;...................................................19

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()f Ensuring that each of the documents submitted in satisfaction of the bidding
requirements is an authentic copy of the original, complete, and all
statements and information provided therein are true and correct;............19
()g Authorizing the Head of the Procuring Entity or its duly authorized
representative/s to verify all the documents submitted;..............................19
()h Ensuring that the signatory is the duly authorized representative of the
Bidder, and granted full power and authority to do, execute and perform
any and all acts necessary and/or to represent the Bidder in the bidding,
with the duly notarized Secretary’s Certificate attesting to such fact, if the
Bidder is a corporation, partnership, cooperative, or joint venture;............19
()i Complying with the disclosure provision under Section 47 of the Act in
relation to other provisions of Republic Act 3019; and..............................20
()j Complying with existing labor laws and standards, if applicable...................20
.1.21. The Bidder, by the act of submitting its bid, shall be deemed to have
inspected the site and determined the general characteristics of the contract
works and the conditions for this Project. Unless otherwise indicated in the
BDS, failure to furnish all information or documentation required in this
Bidding Documents shall result in the rejection of the bid and the
disqualification of the Bidder......................................................................20
.1.22. It shall be the sole responsibility of the prospective bidder to determine
and to satisfy itself by such means as it considers necessary or desirable as
to all matters pertaining to this Project, including: (a) the location and the
nature of the contract, project, or work; (b) climatic conditions; (c)
transportation facilities; (c) nature and condition of the terrain, geological
conditions at the site communication facilities, requirements, location and
availability of construction aggregates and other materials, labor, water,
electric power and access roads; and (d) other factors that may affect the
cost, duration and execution or implementation of the contract, project, or
work.............................................................................................................20
.1.23. The Procuring Entity shall not assume any responsibility regarding
erroneous interpretations or conclusions by the prospective or eligible
bidder out of the data furnished by the procuring entity.............................20
.1.24. Before submitting their bids, the Bidders are deemed to have become
familiar with all existing laws, decrees, ordinances, acts and regulations of
the Philippines which may affect the contract in any way..........................20
.1.25. The Bidder shall bear all costs associated with the preparation and
submission of his bid, and the Procuring Entity will in no case be
responsible or liable for those costs, regardless of the conduct or outcome
of the bidding process. ................................................................................20
.1.26. Bidders should note that the Procuring Entity will only accept bids only
from those that have paid the nonrefundable fee for the Bidding Documents
at the office indicated in the Invitation to Bid. ...........................................20
.1.27. Origin of GOODS and Services.................................................................20
Unless otherwise indicated in the BDS, there is no restriction on the origin of
Goods, or Contracting of Works or Services other than those prohibited by

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a decision of the United Nations Security Council taken under Chapter VII
of the Charter of the United Nations...........................................................20
.1.28. Subcontracts...............................................................................................21
.1.29. Unless otherwise specified in the BDS, the Bidder may subcontract
portions of the Works to an extent as may be approved by the Procuring
Entity and stated in the BDS. However, subcontracting of any portion shall
not relieve the Bidder from any liability or obligation that may arise from
the contract for this Project..........................................................................21
.1.30. Subcontractors must submit the documentary requirements under ITB
Clause C and comply with the eligibility criteria specified in the BDS. In
the event that any subcontractor is found by the Procuring Entity to be
ineligible, the subcontracting of such portion of the Works shall be
disallowed. .................................................................................................21
.1.31. The Bidder may identify the subcontractor to whom a portion of the
Works will be subcontracted at any stage of the bidding process or during
contract implementation. If the Bidder opts to disclose the name of the
subcontractor during bid submission, the Bidder shall include the required
documents as part of the technical component of its bid.............................21
B. CONTENTS OF BIDDING DOCUMENTS........................................................................................21
.1.32. Pre-Bid Conference....................................................................................21
.1.33. If so specified in the BDS, a pre-bid conference shall be held at the venue
and on the date indicated therein, to clarify and address the Bidders’
questions on the technical and financial components of this Project. ........21
.1.34. Bidders are encouraged to attend the pre-bid conference to ensure that
they fully understand the Procuring Entity’s requirements. Non-attendance
of the Bidder will in no way prejudice its bid; however, the Bidder is
expected to know the changes and/or amendments to the Bidding
Documents discussed during the pre-bid conference. ................................21
.1.35. Any statement made at the pre-bid conference shall not modify the terms
of the bidding documents unless such statement is specifically identified in
writing as an amendment thereto and issued as a Supplemental/Bid
Bulletin........................................................................................................21
.1.36. Clarification and Amendment of Bidding Documents...............................21
.1.37. Bidders who have purchased the Bidding Documents may request for
clarification(s) on any part of the Bidding Documents or for an
interpretation. Such a request must be in writing and submitted to the
Procuring Entity at the address indicated in the BDS at least ten (10)
calendar days before the deadline set for the submission and receipt of
Bids. ...........................................................................................................21
.1.38. Supplemental/Bid Bulletins may be issued upon the Procuring Entity’s
initiative for purposes of clarifying or modifying any provision of the
Bidding Documents not later than seven (7) calendar days before the
deadline for the submission and receipt of Bids. Any modification to the
Bidding Documents shall be identified as an amendment. ........................21

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.1.39. Any Supplemental/Bid Bulletin issued by the BAC shall also be posted on
the Philippine Government Electronic Procurement System (PhilGEPS)
and the website of the Procuring Entity concerned, if available. It shall be
the responsibility of all Bidders who secure the Bidding Documents to
inquire and secure Supplemental/Bid Bulletins that may be issued by the
BAC. However, bidders who have submitted bids before the issuance of the
Supplemental/Bid Bulletin must be informed and allowed to modify or
withdraw their bids in accordance with ITB Clause D................................22
C. PREPARATION OF BIDS............................................................................................................22
.1.40. Language of Bids.......................................................................................22
The Bid, as well as all correspondence and documents relating to the Bid
exchanged by the Bidder and the Procuring Entity, shall be written in
English. Supporting documents and printed literature furnished by the
Bidder may be in another language provided they are accompanied by an
accurate translation in English certified by the appropriate embassy or
consulate in the Philippines, in which case the English translation shall
govern, for purposes of interpretation of the Bid........................................22
.1.41. Documents Comprising the Bid: Eligibility and Technical Components .22
.1.42. Unless otherwise indicated in the BDS, the first envelope shall contain the
following eligibility and technical documents:...........................................22
()a Eligibility Documents –..................................................................................22
()i Registration certificate from the Securities and Exchange Commission (SEC),
Department of Trade and Industry (DTI) for sole proprietorship, or
Cooperative Development Authority (CDA) for cooperatives, or any proof
of such registration as stated in the BDS;....................................................22
()ii Mayor’s permit issued by the city or municipality where the principal place
of business of the prospective bidder is located; ........................................22
()iii Statement of all its ongoing and completed government and private contracts
within ten (10) years from the submission of bids, unless otherwise stated
in the BDS, including contracts awarded but not yet started, if any. The
statement shall include, for each contract, the following:...........................22
(.iii.1) name of the contract;.................................................................................22
(.iii.2) date of the contract;...................................................................................22
(.iii.3) contract duration;......................................................................................22
(.iii.4) owner’s name and address;.......................................................................23
(.iii.5) nature of work;..........................................................................................23
(.iii.6) contractor’s role (whether sole contractor, subcontractor, or partner in a
JV) and percentage of participation;............................................................23
(.iii.7) total contract value at award;....................................................................23
(.iii.8) date of completion or estimated completion time;....................................23
(.iii.9) total contract value at completion, if applicable;......................................23
(.iii.10) percentages of planned and actual accomplishments, if applicable; ......23

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(.iii.11) value of outstanding works, if applicable;..............................................23
(.iii.12) the statement shall be supported by the notices of award and/or notices
to proceed issued by the owners; and..........................................................23
(.iii.13) the statement shall be supported by the Constructors Performance
Evaluation System (CPES) rating sheets, and/or certificates of completion
and owner’s acceptance, if applicable;........................................................23
()iv Unless otherwise provided in the BDS, valid Philippine Contractors
Accreditation Board (PCAB) license and registration for the type and cost
of the contract for this Project;....................................................................23
()v Audited financial statements, showing, among others, the prospective total
and current assets and liabilities, stamped “received” by the BIR or its duly
accredited and authorized institutions, for the preceding calendar year
which should not be earlier than two (2) years from the date of bid
submission; .................................................................................................23
()vi NFCC computation or CLC in accordance with ITB Clause A; and............23
Class "B" Document:..........................................................................................23
()i If applicable, valid Joint Venture Agreement (JVA) or, in lieu thereof, duly
notarized statements from all the potential joint venture partners stating that
they will enter into and abide by the provisions of the JVA in the instance
that the bid is successful shall be included in the bid..................................23
()b Technical Documents – ................................................................................23
()i Bid security as prescribed in ITB Clause C. If the Bidder opts to submit the
bid security in the form of: .........................................................................24
(.i.1) a bank draft/guarantee or an irrevocable letter of credit issued by a foreign
bank, it shall be accompanied by a confirmation from a Universal or
Commercial Bank; or..................................................................................24
(.i.2) a surety bond accompanied by a certification coming from an authorized
Insurance Commission that a surety or insurance company is authorized to
issue such instrument;..................................................................................24
()ii Project Requirements, which shall include the following:.............................24
(.ii.1) Organizational chart for the contract to be bid;..........................................24
(.ii.2) List of contractor’s personnel (viz, project Manager, Project Engineers,
Materials Engineers, and Foremen), to be assigned to the contract to be bid,
with their complete qualification and experience data; and........................24
(.ii.3) List of contractor’s equipment units, which are owned, leased, and/or
under purchase agreements, supported by certification of availability of
equipment from the equipment lessor/vendor for the duration of the project;
and...............................................................................................................24
()iii Sworn statement in accordance with Section 25.2(b)(iv) of the IRR of RA
9184 and using the form prescribed in Section IX. Bidding Forms............24
.1.43. Documents Comprising the Bid: Financial Component............................24

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.1.44. Unless otherwise stated in the BDS, the financial component of the bid
shall contain the following:.........................................................................24
()a Financial Bid Form in accordance with the form prescribed in Section IX.
Bidding Forms; and.....................................................................................24
()b Any other document required in the BDS. ....................................................24
.1.45. Unless indicated in the BDS, all Bids that exceed the ABC shall not be
accepted.......................................................................................................24
.1.46. Alternative Bids.........................................................................................24
.1.47. Alternative Bids shall be rejected. For this purpose, alternative bid is an
offer made by a Bidder in addition or as a substitute to its original bid
which may be included as part of its original bid or submitted separately
therewith for purposes of bidding. A bid with options is considered an
alternative bid regardless of whether said bid proposal is contained in a
single envelope or submitted in two (2) or more separate bid envelopes.. .24
.1.48. Bidders shall submit offers that comply with the requirements of the
Bidding Documents, including the basic technical design as indicated in the
drawings and specifications. Unless there is a value engineering clause in
the BDS, alternative bids shall not be accepted..........................................25
.1.49. Each Bidder shall submit only one Bid, either individually or as a partner
in a JV. A Bidder who submits or participates in more than one bid (other
than as a subcontractor if a subcontractor is permitted to participate in more
than one bid) will cause all the proposals with the Bidder’s participation to
be disqualified. This shall be without prejudice to any applicable criminal,
civil and administrative penalties that may be imposed upon the persons
and entities concerned.................................................................................25
.1.50. Bid Prices...................................................................................................25
.1.51. The contract shall be for the whole Works, as described in ITB Clause A,
based on the priced Bill of Quantities submitted by the Bidder..................25
.1.52. The Bidder shall fill in rates and prices for all items of the Works
described in the Bill of Quantities. Bids not addressing or providing all of
the required items in the Bidding Documents including, where applicable,
bill of quantities, shall be considered non-responsive and, thus,
automatically disqualified. In this regard, where a required item is
provided, but no price is indicated, the same shall be considered as non-
responsive, but specifying a "0" (zero) for the said item would mean that it
is being offered for free to the Government. ..............................................25
.1.53. All duties, taxes, and other levies payable by the Contractor under the
Contract, or for any other cause, prior to the deadline for submission of
bids, shall be included in the rates, prices, and total bid price submitted by
the Bidder....................................................................................................25
.1.54. Unless otherwise provided in the BDS, all bid prices for the given scope of
work in the contract as awarded shall be considered as fixed prices, and
therefore not subject to price escalation during contract implementation,
except under extraordinary circumstances as indicated in the BDS and
specified in GCC Clause F and its corresponding SCC provision..............25

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.1.55. Bid Currencies............................................................................................25
.1.56. All bid prices shall be quoted in Philippine Pesos unless otherwise
provided in the BDS. However, for purposes of bid evaluation, bids
denominated in foreign currencies shall be converted to Philippine currency
based on the exchange rate prevailing on the day of the Bid opening........25
.1.57. If so allowed in accordance with ITB Clause C, the Procuring Entity for
purposes of bid evaluation and comparing the bid prices will convert the
amounts in various currencies in which the bid price is expressed to
Philippine Pesos at the exchange rate as published in the BSP reference rate
bulletin on the day of the bid opening.........................................................25
.1.58. Unless otherwise specified in the BDS, payment of the contract price shall
be made in Philippine Pesos........................................................................26
.1.59. Bid Validity................................................................................................26
.1.60. Bids shall remain valid for the period specified in the BDS which shall not
exceed one hundred twenty (120) calendar days from the date of the
opening of bids............................................................................................26
.1.61. In exceptional circumstances, prior to the expiration of the bid validity
period, the Procuring Entity may request Bidders to extend the period of
validity of their bids. The request and the responses shall be made in
writing. The bid security described in ITB Clause C should also be
extended corresponding to the extension of the bid validity period at the
least. A Bidder may refuse the request without forfeiting its bid security,
but his bid shall no longer be considered for further evaluation and award.
A Bidder granting the request shall not be required or permitted to modify
its bid...........................................................................................................26
.1.62. Bid Security ...............................................................................................26
.1.63. The bid security, issued in favor of the Procuring Entity, in the amount
stated in the BDS shall be equal to the percentage of the ABC in
accordance with the following schedule:....................................................26
Form of Bid Security...........................................................................................26
Amount of Bid Security......................................................................................26
(Equal to Percentage of the ABC).......................................................................26
()a Cash or cashier’s/manager’s check issued by a Universal or Commercial
Bank.............................................................................................................26
Two percent (2%)................................................................................................26
()b Bank draft/guarantee or irrevocable letter of credit issued by a Universal or
Commercial Bank: Provided, however, that it shall be confirmed or
authenticated by a Universal or Commercial Bank, if issued by a foreign
bank.............................................................................................................26
()c Surety bond callable upon demand issued by a surety or insurance company
duly certified by the Insurance Commission as authorized to issue such
security; and/or............................................................................................26
Five percent (5%)................................................................................................26

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()d Any combination of the foregoing.................................................................27
Proportionate to share of form with respect to total amount of security.............27
For biddings conducted by local government units, the Bidder may also submit
bid securities in the form of cashier’s/manager’s check, bank
draft/guarantee, or irrevocable letter of credit from other banks certified by
the BSP as authorized to issue such financial statement.............................27
.1.64. The bid security should be valid for the period specified in the BDS. Any
bid not accompanied by an acceptable bid security shall be rejected by the
Procuring Entity as non-responsive. ..........................................................27
.1.65. No bid securities shall be returned to bidders after the opening of bids and
before contract signing, except to those that failed or declared as post-
disqualified, upon submission of a written waiver of their right to file a
motion for reconsideration and/or protest. Without prejudice on its
forfeiture, Bid Securities shall be returned only after the bidder with the
Lowest Calculated Responsive Bid has signed the contract and furnished
the Performance Security, but in no case later than the expiration of the Bid
Security validity period indicated in ITB Clause C.....................................27
.1.66. Upon signing and execution of the contract, pursuant to ITB Clause F, and
the posting of the performance security, pursuant to ITB Clause F, the
successful Bidder’s Bid security will be discharged, but in no case later
than the Bid security validity period as indicated in ITB Clause C............27
.1.67. The bid security may be forfeited:.............................................................27
()a if a Bidder:......................................................................................................27
()i withdraws its bid during the period of bid validity specified in ITB Clause 17;
.....................................................................................................................27
()ii does not accept the correction of errors pursuant to ITB Clause E;...............27
()iii fails to submit the requirements within the prescribed period, or a finding
against their veracity, as stated in ITB Clause E; or....................................27
()iv any other reason stated in the BDS...............................................................27
()b if the successful Bidder:.................................................................................27
()i fails to sign the contract in accordance with ITB Clause F;............................27
()ii fails to furnish performance security in accordance with ITB Clause F; or. .27
()iii any other reason stated in the BDS...............................................................27
.1.68. Format and Signing of Bids ......................................................................28
.1.69. Bidders shall submit their bids through their duly authorized representative
using the appropriate forms provided in Section IX. Bidding Forms on or
before the deadline specified in the ITB Clause D in two (2) separate sealed
bid envelopes, and which shall be submitted simultaneously. The first shall
contain the technical component of the bid, including the eligibility
requirements under ITB Clause C, and the second shall contain the
financial component of the bid. ..................................................................28

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.1.70. Forms as mentioned in ITB Clause C must be completed without any
alterations to their format, and no substitute form shall be accepted. All
blank spaces shall be filled in with the information requested....................28
.1.71. The Bidder shall prepare an original of the first and second envelopes as
described in ITB Clauses C and C. In addition, the Bidder shall submit
copies of the first and second envelopes. In the event of any discrepancy
between the original and the copies, the original shall prevail...................28
.1.72. The bid, except for unamended printed literature, shall be signed, and each
and every page thereof shall be initialed, by the duly authorized
representative/s of the Bidder......................................................................28
.1.73. Any interlineations, erasures, or overwriting shall be valid only if they are
signed or initialed by the duly authorized representative/s of the Bidder. . 28
.1.74. Sealing and Marking of Bids......................................................................28
.1.75. Unless otherwise indicated in the BDS, Bidders shall enclose their original
eligibility and technical documents described in ITB Clause C, in one
sealed envelope marked “ORIGINAL - TECHNICAL COMPONENT”,
and the original of their financial component in another sealed envelope
marked “ORIGINAL - FINANCIAL COMPONENT”, sealing them all in
an outer envelope marked “ORIGINAL BID”. .........................................28
.1.76. Each copy of the first and second envelopes shall be similarly sealed duly
marking the inner envelopes as “COPY NO. ___ - TECHNICAL
COMPONENT” and “COPY NO. ___ – FINANCIAL COMPONENT”
and the outer envelope as “COPY NO. ___”, respectively. These envelopes
containing the original and the copies shall then be enclosed in one single
envelope. .....................................................................................................28
.1.77. The original and the number of copies of the Bid as indicated in the BDS
shall be typed or written in indelible ink and shall be signed by the bidder
or its duly authorized representative/s. ......................................................28
.1.78. All envelopes shall:....................................................................................28
()a contain the name of the contract to be bid in capital letters;..........................28
()b bear the name and address of the Bidder in capital letters;............................28
()c be addressed to the Procuring Entity’s BAC identified in ITB Clause B;......29
()d bear the specific identification of this bidding process indicated in the
Invitation to Bid; and...................................................................................29
()e bear a warning “DO NOT OPEN BEFORE…” the date and time for the
opening of bids, in accordance with ITB Clause D.....................................29
.1.79. If bids are not sealed and marked as required, the Procuring Entity will
assume no responsibility for the misplacement or premature opening of the
bid................................................................................................................29
D. SUBMISSION AND OPENING OF BIDS..........................................................................................29
.1.80. Deadline for Submission of Bids...............................................................29
.1.81. Late Bids....................................................................................................29

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.1.82. Modification and Withdrawal of Bids........................................................29
.1.83. The Bidder may modify its bid after it has been submitted; provided that
the modification is received by the Procuring Entity prior to the deadline
prescribed for submission and receipt of bids. The Bidder shall not be
allowed to retrieve its original bid, but shall be allowed to submit another
bid equally sealed, properly identified, linked to its original bid marked as
“TECHNICAL MODIFICATION” or “FINANCIAL MODIFICATION”
and stamped “received” by the BAC. Bid modifications received after the
applicable deadline shall not be considered and shall be returned to the
Bidder unopened. .......................................................................................29
.1.84. A Bidder may, through a letter of withdrawal, withdraw its bid after it has
been submitted, for valid and justifiable reason; provided that the letter of
withdrawal is received by the Procuring Entity prior to the deadline
prescribed for submission and receipt of bids. ...........................................29
.1.85. Bids requested to be withdrawn in accordance with ITB Clause D shall be
returned unopened to the Bidders. A Bidder may also express its intention
not to participate in the bidding through a letter which should reach and be
stamped by the BAC before the deadline for submission and receipt of bids.
A Bidder that withdraws its bid shall not be permitted to submit another
bid, directly or indirectly, for the same contract.........................................29
.1.86. No bid may be modified after the deadline for submission of bids. No bid
may be withdrawn in the interval between the deadline for submission of
bids and the expiration of the period of bid validity specified by the Bidder
on the Financial Bid Form. Withdrawal of a bid during this interval shall
result in the forfeiture of the Bidder’s bid security, pursuant to ITB Clause
C, and the imposition of administrative, civil, and criminal sanctions as
prescribed by RA 9184 and its IRR.............................................................29
.1.87. Opening and Preliminary Examination of Bids ........................................30
.1.88. The BAC shall open the first bid envelopes of Bidders in public as
specified in the BDS to determine each Bidder’s compliance with the
documents prescribed in ITB Clause C. For this purpose, the BAC shall
check the submitted documents of each bidder against a checklist of
required documents to ascertain if they are all present, using a non-
discretionary “pass/fail” criterion. If a bidder submits the required
document, it shall be rated “passed” for that particular requirement. In this
regard, bids that fail to include any requirement or are incomplete or
patently insufficient shall be considered as “failed”. Otherwise, the BAC
shall rate the said first bid envelope as “passed”.........................................30
.1.89. Immediately after determining compliance with the requirements in the
first envelope, the BAC shall forthwith open the second bid envelope of
each remaining eligible bidder whose first bid envelope was rated “passed”.
The second envelope of each complying bidder shall be opened within the
same day. In case one or more of the requirements in the second envelope
of a particular bid is missing, incomplete or patently insufficient, and/or if
the submitted total bid price exceeds the ABC unless otherwise provided in
ITB Clause C, the BAC shall rate the bid concerned as “failed”. Only bids
that are determined to contain all the bid requirements for both components

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shall be rated “passed” and shall immediately be considered for evaluation
and comparison............................................................................................30
.1.90. Letters of withdrawal shall be read out and recorded during bid opening,
and the envelope containing the corresponding withdrawn bid shall be
returned to the Bidder unopened. If the withdrawing Bidder’s
representative is in attendance, the original bid and all copies thereof shall
be returned to the representative during the bid opening. If the
representative is not in attendance, the Bid shall be returned unopened by
registered mail. The Bidder may withdraw its bid prior to the deadline for
the submission and receipt of bids, provided that the corresponding letter of
withdrawal contains a valid authorization requesting for such withdrawal,
subject to appropriate administrative sanctions...........................................30
.1.91. If a Bidder has previously secured a certification from the Procuring Entity
to the effect that it has previously submitted the above-enumerated Class
“A” Documents, the said certification may be submitted in lieu of the
requirements enumerated in ITB Clause C, items (i) to (vi). ....................30
.1.92. In the case of an eligible foreign Bidder as described in ITB Clause A, the
Class “A” Documents enumerated in ITB Clause C may be substituted with
the appropriate equivalent documents, if any, issued by the country of the
foreign Bidder concerned............................................................................30
.1.93. Each partner of a joint venture agreement shall likewise submit the
documents required in ITB Clauses C and C. Submission of documents
required under ITB Clauses C to C by any of the joint venture partners
constitutes compliance.................................................................................31
.1.94. A Bidder determined as “failed” has three (3) calendar days upon written
notice or, if present at the time of bid opening, upon verbal notification
within which to file a request for reconsideration with the BAC: Provided,
however, that the request for reconsideration shall not be granted if it is
established that the finding of failure is due to the fault of the Bidder
concerned: Provided, further, that the BAC shall decide on the request for
reconsideration within seven (7) calendar days from receipt thereof. If a
failed Bidder signifies his intent to file a request for reconsideration, the
BAC shall keep the bid envelopes of the said failed Bidder unopened
and/or duly sealed until such time that the request for reconsideration or
protest has been resolved. ...........................................................................31
E. EVALUATION AND COMPARISON OF BIDS..................................................................................31
.1.95. Process to be Confidential .........................................................................31
.1.96. Members of the BAC, including its staff and personnel, as well as its
Secretariat and TWG, are prohibited from making or accepting any kind of
communication with any bidder regarding the evaluation of their bids until
the issuance of the Notice of Award, unless otherwise allowed in the BDS
or in the case of ITB Clause 26. ................................................................31
.1.97. Any effort by a bidder to influence the Procuring Entity in the Procuring
Entity’s decision in respect of Bid evaluation, Bid comparison or contract
award will result in the rejection of the Bidder’s Bid.................................31
.1.98. Clarification of Bids ..................................................................................31

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.1.99. Detailed Evaluation and Comparison of Bids ...........................................31
.1.100. The Procuring Entity will undertake the detailed evaluation and
comparison of Bids which have passed the opening and preliminary
examination of Bids, pursuant to ITB Clause 24, in order to determine the
Lowest Calculated Bid................................................................................31
.1.101. In evaluating the Bids to get the Lowest Calculated Bid, the Procuring
Entity shall undertake the following:..........................................................31
()a The detailed evaluation of the financial component of the bids, to establish
the correct calculated prices of the bids; and...............................................31
()b The ranking of the total bid prices as so calculated from the lowest to highest.
The bid with the lowest price shall be identified as the Lowest Calculated
Bid...............................................................................................................32
.1.102. The Procuring Entity's BAC shall immediately conduct a detailed
evaluation of all bids rated “passed,” using non-discretionary “pass/fail”
criterion. Unless otherwise specified in the BDS, the BAC shall consider
the following in the evaluation of bids: ......................................................32
()a Completeness of the bid. Unless the ITB specifically allows partial bids, bids
not addressing or providing all of the required items in the Schedule of
Requirements including, where applicable, bill of quantities, shall be
considered non-responsive and, thus, automatically disqualified. In this
regard, where a required item is provided, but no price is indicated, the
same shall be considered as non-responsive, but specifying a "0" (zero) for
the said item would mean that it is being offered for free to the Procuring
Entity; and...................................................................................................32
()b Arithmetical corrections. Consider computational errors, omissions, and
other bid modifications, if allowed in the BDS, to enable proper
comparison of all eligible bids. Any adjustment shall be calculated in
monetary terms to determine the calculated prices.....................................32
.1.103. Based on the detailed evaluation of bids, those that comply with the
above-mentioned requirements shall be ranked in the ascending order of
their total calculated bid prices, as evaluated and corrected for
computational errors, discounts and other modifications, to identify the
Lowest Calculated Bid. Total calculated bid prices, as evaluated and
corrected for computational errors, discounts and other modifications,
which exceed the ABC shall not be considered..........................................32
.1.104. Unless otherwise indicated in the BDS, the Procuring Entity’s evaluation
of bids shall only be based on the bid price quoted in the Financial Bid
Form............................................................................................................32
.1.105. Bids shall be evaluated on an equal footing to ensure fair competition.
For this purpose, all bidders shall be required to include in their bids the
cost of all taxes, such as, but not limited to, value added tax (VAT), income
tax, local taxes, and other fiscal levies and duties which shall be itemized in
the bid form and reflected in the detailed estimates. Such bids, including
said taxes, shall be the basis for bid evaluation and comparison. ..............32
.1.106. Post Qualification ....................................................................................32

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.1.107. The Procuring Entity shall determine to its satisfaction whether the
Bidder that is evaluated as having submitted the Lowest Calculated Bid
(LCB) complies with and is responsive to all the requirements and
conditions specified in ITB Clauses 5, C, and C. .......................................32
.1.108. Within a non-extendible period of three (3) calendar days from receipt by
the Bidder of the notice from the BAC that it submitted the LCB, the
Bidder shall submit the following documentary requirements:..................32
()a Tax clearance per Executive Order 398, Series of 2005;...............................33
()b Latest income and business tax returns in the form specified in the BDS;....33
()c Certificate of PhilGEPS Registration; and.....................................................33
()d Other appropriate licenses and permits required by law and stated in the
BDS.............................................................................................................33
.1.109. The determination shall be based upon an examination of the
documentary evidence of the Bidder’s qualifications submitted pursuant to
ITB Clauses C and C, as well as other information as the Procuring Entity
deems necessary and appropriate, using a non-discretionary “pass/fail”
criterion........................................................................................................33
.1.110. If the BAC determines that the Bidder with the Lowest Calculated Bid
passes all the criteria for post-qualification, it shall declare the said bid as
the Lowest Calculated Responsive Bid, and recommend to the Head of the
Procuring Entity the award of contract to the said Bidder at its submitted
price or its calculated bid price, whichever is lower, subject to ITB Clause
F...................................................................................................................33
.1.111. A negative determination shall result in rejection of the Bidder’s Bid, in
which event the Procuring Entity shall proceed to the next Lowest
Calculated Bid to make a similar determination of that Bidder’s capabilities
to perform satisfactorily. If the second Bidder, however, fails the post
qualification, the procedure for post qualification shall be repeated for the
Bidder with the next Lowest Calculated Bid, and so on until the Lowest
Calculated and Responsive Bid is determined for contract award..............33
.1.112. Within a period not exceeding seven (7) calendar days from the date of
receipt of the recommendation of the BAC, the Head of the Procuring
Entity shall approve or disapprove the said recommendation. In the case of
government owned and government-owned and/or -controlled corporations
(GOCCs) and government financial institutions (GFIs), the period provided
herein shall be fifteen (15) calendar days....................................................33
.1.113. Reservation Clause...................................................................................33
.1.114. Notwithstanding the eligibility or post-qualification of a bidder, the
Procuring Entity concerned reserves the right to review its qualifications at
any stage of the procurement process if it has reasonable grounds to believe
that a misrepresentation has been made by the said bidder, or that there has
been a change in the Bidder’s capability to undertake the project from the
time it submitted its eligibility requirements. Should such review uncover
any misrepresentation made in the eligibility and bidding requirements,
statements or documents, or any changes in the situation of the Bidder

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which will affect its capability to undertake the project so that it fails the
preset eligibility or bid evaluation criteria, the Procuring Entity shall
consider the said Bidder as ineligible and shall disqualify it from
submitting a bid or from obtaining an award or contract............................33
.1.115. Based on the following grounds, the Procuring Entity reserves the right to
reject any and all Bids, declare a Failure of Bidding at any time prior to the
contract award, or not to award the contract, without thereby incurring any
liability, and make no assurance that a contract shall be entered into as a
result of the bidding: ...................................................................................34
()a if there is prima facie evidence of collusion between appropriate public
officers or employees of the Procuring Entity, or between the BAC and any
of the bidders, or if the collusion is between or among the bidders
themselves, or between a bidder and a third party, including any act which
restricts, suppresses or nullifies or tends to restrict, suppress or nullify
competition;.................................................................................................34
()b if the Procuring Entity’s BAC is found to have failed in following the
prescribed bidding procedures; or...............................................................34
()c for any justifiable and reasonable ground where the award of the contract will
not redound to the benefit of the Government as follows: .........................34
()i If the physical and economic conditions have significantly changed so as to
render the project no longer economically, financially or technically
feasible as determined by the head of the procuring entity; .......................34
()ii If the project is no longer necessary as determined by the head of the
procuring entity; and ...................................................................................34
()iii If the source of funds for the project has been withheld or reduced through
no fault of the Procuring Entity...................................................................34
.1.116. In addition, the Procuring Entity may likewise declare a failure of
bidding when:..............................................................................................34
()a No bids are received;......................................................................................34
()b All prospective bidders are declared ineligible;.............................................34
()c All bids fail to comply with all the bid requirements or fail post-qualification;
or..................................................................................................................34
()d The bidder with the Lowest Calculated Responsive Bid refuses, without
justifiable cause to accept the award of contract, and no award is made....34
F. AWARD OF CONTRACT............................................................................................................34
.1.117. Contract Award .......................................................................................34
.1.118. Subject to ITB Clause E, the Procuring Entity shall award the contract to
the Bidder whose Bid has been determined to be the Lowest Calculated and
Responsive Bid (LCRB)..............................................................................35
.1.119. Prior to the expiration of the period of Bid validity, the Procuring Entity
shall notify the successful Bidder in writing that its Bid has been accepted,
through a Notice of Award received personally or sent by registered mail or
electronically, receipt of which must be confirmed in writing within two (2)

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days by the LCRB and submitted personally or sent by registered mail or
electronically to the Procuring Entity..........................................................35
.1.120. Notwithstanding the issuance of the Notice of Award, award of contract
shall be subject to the following conditions:...............................................35
()a Submission of the following documents within the prescribed period from
receipt by the Bidder of the notice that it has the Lowest Calculated and
Responsive Bid:...........................................................................................35
()i Valid JVA, if applicable, within ten (10) calendar days;................................35
()ii Valid PCAB license and registration for the type and cost of the contract to
be bid for foreign bidders, within thirty (30) calendar days, if allowed under
a Treaty or International or Executive Agreement mentioned in ITB Clause
C;.................................................................................................................35
()b Posting of the performance security in accordance with ITB Clause F;........35
()c Signing of the contract as provided in ITB Clause F; and..............................35
()d Approval by higher authority, if required.......................................................35
.1.121. Signing of the Contract............................................................................35
.1.122. At the same time as the Procuring Entity notifies the successful Bidder
that its Bid has been accepted, the Procuring Entity shall send the Contract
Form to the Bidder, which Contract has been provided in the Bidding
Documents, incorporating therein all agreements between the parties.......35
.1.123. Within ten (10) calendar days from receipt of the Notice of Award, the
successful Bidder shall post the required performance security, sign and
date the contract and return it to the Procuring Entity.................................35
.1.124. The Procuring Entity shall enter into contract with the successful Bidder
within the same ten (10) calendar day period provided that all the
documentary requirements are complied with............................................35
.1.125. The following documents shall form part of the contract:.......................35
()a Contract Agreement;.......................................................................................35
()b Bidding Documents;.......................................................................................35
()c Winning bidder’s bid, including the Technical and Financial Proposals, and
all other documents/statements submitted;..................................................36
()d Performance Security;....................................................................................36
()e Credit line in accordance with ITB Clause A, if applicable;..........................36
()f Notice of Award of Contract; and...................................................................36
()g Other contract documents that may be required by existing laws and/or
specified in the BDS....................................................................................36
.1.126. Performance Security ..............................................................................36
.1.127. To guarantee the faithful performance by the winning Bidder of its
obligations under the contract, it shall post a performance security within a
maximum period of ten (10) calendar days from the receipt of the Notice of

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Award from the Procuring Entity and in no case later than the signing of
the contract..................................................................................................36
.1.128. The performance security shall be denominated in Philippine Pesos and
posted in favor of the Procuring Entity in an amount equal to the
percentage of the total contract price in accordance with the following
schedule:......................................................................................................36
Form of Performance Security............................................................................36
Amount of Performance Security........................................................................36
(Equal to Percentage of the Total Contract Price)..............................................36
()a Cash or cashier’s/manager’s check issued by a Universal or Commercial
Bank.............................................................................................................36
Five percent (5%)................................................................................................36
()b Bank draft/guarantee or irrevocable letter of credit issued by a Universal or
Commercial Bank: Provided, however, that it shall be confirmed or
authenticated by a Universal or Commercial Bank, if issued by a foreign
bank.............................................................................................................36
()c Surety bond callable upon demand issued by a surety or insurance company
duly certified by the Insurance Commission as authorized to issue such
security; and/or............................................................................................36
Thirty percent (30%)...........................................................................................36
()d Any combination of the foregoing.................................................................36
Proportionate to share of form with respect to total amount of security.............36
.1.129. Failure of the successful Bidder to comply with the above-mentioned
requirement shall constitute sufficient ground for the annulment of the
award and forfeiture of the bid security, in which event the Procuring
Entity shall initiate and complete the post qualification of the second
Lowest Calculated Bid. The procedure shall be repeated until the Lowest
Calculated and Responsive Bid is identified and selected for contract
award. However if no Bidder passed post-qualification, the BAC shall
declare the bidding a failure and conduct a re-bidding with re-
advertisement...............................................................................................37
.1.130. Notice to Proceed.....................................................................................37
.1.131. Within three (3) calendar days from the date of approval of the Contract
by the appropriate government approving authority, the Procuring Entity
shall issue its Notice to Proceed to the Bidder............................................37
.1.132. The date of the Bidder’s receipt of the Notice to Proceed will be regarded
as the effective date of the Contract, unless otherwise specified in the BDS.
.....................................................................................................................37
SECTION III. BID DATA SHEET........................................39
SECTION IV. GENERAL CONDITIONS OF CONTRACT....................49
1. Definitions .......................................................................................................53

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For purposes of this Clause, boldface type is used to identify defined terms.....53
.1.1. Interpretation................................................................................................55
.1.2. In interpreting the Conditions of Contract, singular also means plural, male
also means female or neuter, and the other way around. Headings have no
significance. Words have their normal meaning under the language of this
Contract unless specifically defined. The Procuring Entity’s
Representative will provide instructions clarifying queries about the
Conditions of Contract................................................................................55
.1.3. If sectional completion is specified in the SCC, references in the Conditions
of Contract to the Works, the Completion Date, and the Intended
Completion Date apply to any Section of the Works (other than references
to the Completion Date and Intended Completion Date for the whole of the
Works).........................................................................................................55
.1.4. Governing Language and Law.....................................................................55
.1.5. This Contract has been executed in the English language, which shall be the
binding and controlling language for all matters relating to the meaning or
interpretation of this Contract. All correspondence and other documents
pertaining to this Contract which are exchanged by the parties shall be
written in English........................................................................................55
.1.6. This Contract shall be interpreted in accordance with the laws of the
Republic of the Philippines.........................................................................55
.1.7. Communications..........................................................................................55
Communications between parties that are referred to in the Conditions shall be
effective only when in writing. A notice shall be effective only when it is
received by the concerned party..................................................................56
.1.8. Possession of Site.........................................................................................56
.1.9. On the date specified in the SCC, the Procuring Entity shall grant the
Contractor possession of so much of the Site as may be required to enable it
to proceed with the execution of the Works. If the Contractor suffers delay
or incurs cost from failure on the part of the Procuring Entity to give
possession in accordance with the terms of this clause, the Procuring
Entity’s Representative shall give the Contractor a Contract Time
Extension and certify such sum as fair to cover the cost incurred, which
sum shall be paid by Procuring Entity.........................................................56
.1.10. If possession of a portion is not given by the date stated in the SCC Clause
F, the Procuring Entity will be deemed to have delayed the start of the
relevant activities. The resulting adjustments in contact time to address
such delay shall be in accordance with GCC Clause F...............................56
.1.11. The Contractor shall bear all costs and charges for special or temporary
right-of-way required by it in connection with access to the Site. The
Contractor shall also provide at his own cost any additional facilities
outside the Site required by it for purposes of the Works...........................56
.1.12. The Contractor shall allow the Procuring Entity’s Representative and any
person authorized by the Procuring Entity’s Representative access to the

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Site and to any place where work in connection with this Contract is being
carried out or is intended to be carried out..................................................56
.1.13. The Contractor’s Obligations.....................................................................56
.1.14. The Contractor shall carry out the Works properly and in accordance with
this Contract. The Contractor shall provide all supervision, labor, Materials,
Plant and Contractor's Equipment, which may be required. All Materials
and Plant on Site shall be deemed to be the property of the Procuring
Entity...........................................................................................................56
.1.15. The Contractor shall commence execution of the Works on the Start Date
and shall carry out the Works in accordance with the Program of Work
submitted by the Contractor, as updated with the approval of the Procuring
Entity’s Representative, and complete them by the Intended Completion
Date..............................................................................................................56
.1.16. The Contractor shall be responsible for the safety of all activities on the
Site...............................................................................................................56
.1.17. The Contractor shall carry out all instructions of the Procuring Entity’s
Representative that comply with the applicable laws where the Site is
located..........................................................................................................56
.1.18. The Contractor shall employ the key personnel named in the Schedule of
Key Personnel, as referred to in the SCC, to carry out the supervision of the
Works. The Procuring Entity will approve any proposed replacement of
key personnel only if their relevant qualifications and abilities are equal to
or better than those of the personnel listed in the Schedule........................56
.1.19. If the Procuring Entity’s Representative asks the Contractor to remove a
member of the Contractor’s staff or work force, for justifiable cause, the
Contractor shall ensure that the person leaves the Site within seven (7) days
and has no further connection with the Work in this Contract....................57
.1.20. During Contract implementation, the Contractor and his subcontractors
shall abide at all times by all labor laws, including child labor related
enactments, and other relevant rules...........................................................57
.1.21. The Contractor shall submit to the Procuring Entity for consent the name
and particulars of the person authorized to receive instructions on behalf of
the Contractor..............................................................................................57
.1.22. The Contractor shall cooperate and share the Site with other contractors,
public authorities, utilities, and the Procuring Entity between the dates
given in the schedule of other contractors particularly when they shall
require access to the Site. The Contractor shall also provide facilities and
services for them during this period. The Procuring Entity may modify the
schedule of other contractors, and shall notify the Contractor of any such
modification thereto.....................................................................................57
.1.23. Should anything of historical or other interest or of significant value be
unexpectedly discovered on the Site, it shall be the property of the
Procuring Entity. The Contractor shall notify the Procuring Entity’s
Representative of such discoveries and carry out the Procuring Entity’s
Representative’s instructions in dealing with them.....................................57

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.1.24. Performance Security.................................................................................57
.1.25. Unless otherwise specified in the SCC, within ten (10) calendar days from
receipt of the Notice of Award from the Procuring Entity but in no case
later than the signing of the contract by both parties, the Contractor shall
furnish the performance security in any the forms prescribed in ITB Clause
F...................................................................................................................57
.1.26. The performance security posted in favor of the Procuring Entity shall be
forfeited in the event it is established that the Contractor is in default in any
of its obligations under the Contract. .........................................................57
.1.27. The performance security shall remain valid until issuance by the
Procuring Entity of the Certificate of Final Acceptance.............................57
.1.28. The performance security may be released by the Procuring Entity and
returned to the Contractor after the issuance of the Certificate of Final
Acceptance subject to the following conditions:.........................................57
()a There are no pending claims against the Contractor or the surety company
filed by the Procuring Entity;......................................................................57
()b The Contractor has no pending claims for labor and materials filed against it;
and...............................................................................................................58
()c Other terms specified in the SCC...................................................................58
.1.29. The Contractor shall post an additional performance security following the
amount and form specified in ITB Clause F to cover any cumulative
increase of more than ten percent (10%) over the original value of the
contract as a result of amendments to order or change orders, extra work
orders and supplemental agreements, as the case may be. The Contractor
shall cause the extension of the validity of the performance security to
cover approved contract time extensions....................................................58
.1.30. In case of a reduction in the contract value or for partially completed
Works under the contract which are usable and accepted by the Procuring
Entity the use of which, in the judgment of the implementing agency or the
Procuring Entity, will not affect the structural integrity of the entire project,
the Procuring Entity shall allow a proportional reduction in the original
performance security, provided that any such reduction is more than ten
percent (10%) and that the aggregate of such reductions is not more than
fifty percent (50%) of the original performance security............................58
.1.31. The Contractor, by entering into the Contract with the Procuring Entity,
acknowledges the right of the Procuring Entity to institute action pursuant
to Act 3688 against any subcontractor be they an individual, firm,
partnership, corporation, or association supplying the Contractor with
labor, materials and/or equipment for the performance of this Contract.. . .58
.1.32. Subcontracting............................................................................................58
.1.33. Unless otherwise indicated in the SCC, the Contractor cannot subcontract
Works more than the percentage specified in ITB Clause A......................58
.1.34. Subcontracting of any portion of the Works does not relieve the Contractor
of any liability or obligation under this Contract. The Contractor will be

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responsible for the acts, defaults, and negligence of any subcontractor, its
agents, servants or workmen as fully as if these were the Contractor’s own
acts, defaults, or negligence, or those of its agents, servants or workmen.. 58
.1.35. Subcontractors disclosed and identified during the bidding may be
changed during the implementation of this Contract, subject to compliance
with the required qualifications and the approval of the Procuring Entity.
.....................................................................................................................58
.1.36. Liquidated Damages...................................................................................58
.1.37. The Contractor shall pay liquidated damages to the Procuring Entity at the
rate per day stated in the SCC for each day that the Completion Date is
later than the Intended Completion Date. The total amount of liquidated
damages shall not exceed the amount defined in the SCC. The Procuring
Entity may deduct liquidated damages from payments due to the
Contractor. Payment of liquidated damages shall not affect the Contractor.
Once the cumulative amount of liquidated damages reaches ten percent
(10%) of the amount of this Contract, the Procuring Entity shall rescind this
Contract, without prejudice to other courses of action and remedies open to
it...................................................................................................................58
.1.38. If the Intended Completion Date is extended after liquidated damages have
been paid, the Engineer of the Procuring Entity shall correct any
overpayment of liquidated damages by the Contractor by adjusting the next
payment certificate. The Contractor shall be paid interest on the
overpayment, calculated from the date of payment to the date of repayment,
at the rates specified in GCC Clause F........................................................59
.1.39. Site Investigation Reports..........................................................................59
.1.40. The Procuring Entity, Licenses and Permits..............................................59
.1.41. Contractor’s Risk and Warranty Security..................................................59
.1.42. The Contractor shall assume full responsibility for the Works from the
time project construction commenced up to final acceptance by the
Procuring Entity and shall be held responsible for any damage or
destruction of the Works except those occasioned by force majeure. The
Contractor shall be fully responsible for the safety, protection, security, and
convenience of his personnel, third parties, and the public at large, as well
as the Works, Equipment, installation, and the like to be affected by his
construction work. ......................................................................................59
.1.43. The defects liability period for infrastructure projects shall be one year
from project completion up to final acceptance by the Procuring Entity.
During this period, the Contractor shall undertake the repair works, at his
own expense, of any damage to the Works on account of the use of
materials of inferior quality within ninety (90) days from the time the Head
of the Procuring Entity has issued an order to undertake repair. In case of
failure or refusal to comply with this mandate, the Procuring Entity shall
undertake such repair works and shall be entitled to full reimbursement of
expenses incurred therein upon demand......................................................59
.1.44. In case the Contractor fails to comply with the preceding paragraph, the
Procuring Entity shall forfeit its performance security, subject its property

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(ies) to attachment or garnishment proceedings, and perpetually disqualify
it from participating in any public bidding. All payables of the GOP in his
favor shall be offset to recover the costs. ...................................................59
.1.45. After final acceptance of the Works by the Procuring Entity, the
Contractor shall be held responsible for “Structural Defects”, i.e., major
faults/flaws/deficiencies in one or more key structural elements of the
project which may lead to structural failure of the completed elements or
structure, or “Structural Failures”, i.e., where one or more key structural
elements in an infrastructure facility fails or collapses, thereby rendering
the facility or part thereof incapable of withstanding the design loads,
and/or endangering the safety of the users or the general public:...............59
()a Contractor – Where Structural Defects/Failures arise due to faults attributable
to improper construction, use of inferior quality/substandard materials, and
any violation of the contract plans and specifications, the contractor shall
be held liable;..............................................................................................60
()b Consultants – Where Structural Defects/Failures arise due to faulty and/or
inadequate design and specifications as well as construction supervision,
then the consultant who prepared the design or undertook construction
supervision for the project shall be held liable;...........................................60
()c Procuring Entity’s Representatives/Project Manager/Construction Managers
and Supervisors – The project owner’s representative(s), project manager,
construction manager, and supervisor(s) shall be held liable in cases where
the Structural Defects/Failures are due to his/their willful intervention in
altering the designs and other specifications; negligence or omission in not
approving or acting on proposed changes to noted defects or deficiencies in
the design and/or specifications; and the use of substandard construction
materials in the project;...............................................................................60
()d Third Parties - Third Parties shall be held liable in cases where Structural
Defects/Failures are caused by work undertaken by them such as leaking
pipes, diggings or excavations, underground cables and electrical wires,
underground tunnel, mining shaft and the like, in which case the applicable
warranty to such structure should be levied to third parties for their
construction or restoration works................................................................60
()e Users - In cases where Structural Defects/Failures are due to abuse/misuse by
the end user of the constructed facility and/or non–compliance by a user
with the technical design limits and/or intended purpose of the same, then
the user concerned shall be held liable........................................................60
.1.46. The warranty against Structural Defects/Failures, except those occasioned
on force majeure, shall cover the period specified in the SCC reckoned
from the date of issuance of the Certificate of Final Acceptance by the
Procuring Entity. .........................................................................................60
.1.47. The Contractor shall be required to put up a warranty security in the form
of cash, bank guarantee, letter of credit, GSIS or surety bond callable on
demand, in accordance with the following schedule:..................................60
.1.48. The warranty security shall be stated in Philippine Pesos and shall remain
effective for one year from the date of issuance of the Certificate of Final

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Acceptance by the Procuring Entity, and returned only after the lapse of
said one year period.....................................................................................61
.1.49. In case of structural defects/failure occurring during the applicable
warranty period provided in GCC Clause F, the Procuring Entity shall
undertake the necessary restoration or reconstruction works and shall be
entitled to full reimbursement by the parties found to be liable for expenses
incurred therein upon demand, without prejudice to the filing of appropriate
administrative, civil, and/or criminal charges against the responsible
persons as well as the forfeiture of the warranty security posted in favor of
the Procuring Entity.....................................................................................61
.1.50. Liability of the Contractor..........................................................................61
.1.51. Procuring Entity’s Risk..............................................................................61
.1.52. From the Start Date until the Certificate of Final Acceptance has been
issued, the following are risks of the Procuring Entity:..............................61
()a The risk of personal injury, death, or loss of or damage to property (excluding
the Works, Plant, Materials, and Equipment), which are due to:................61
()i any type of use or occupation of the Site authorized by the Procuring Entity
after the official acceptance of the works; or..............................................61
()ii negligence, breach of statutory duty, or interference with any legal right by
the Procuring Entity or by any person employed by or contracted to him
except the Contractor...................................................................................61
()b The risk of damage to the Works, Plant, Materials, and Equipment to the
extent that it is due to a fault of the Procuring Entity or in the Procuring
Entity’s design, or due to war or radioactive contamination directly
affecting the country where the Works are to be executed..........................62
.1.53. Insurance....................................................................................................62
.1.54. The Contractor shall, under his name and at his own expense, obtain and
maintain, for the duration of this Contract, the following insurance
coverage:......................................................................................................62
()a Contractor’s All Risk Insurance;....................................................................62
()b Transportation to the project Site of Equipment, Machinery, and Supplies
owned by the Contractor;............................................................................62
()c Personal injury or death of Contractor’s employees; and...............................62
()d Comprehensive insurance for third party liability to Contractor’s direct or
indirect act or omission causing damage to third persons...........................62
.1.55. The Contractor shall provide evidence to the Procuring Entity’s
Representative that the insurances required under this Contract have been
effected and shall, within a reasonable time, provide copies of the insurance
policies to the Procuring Entity’s Representative. Such evidence and such
policies shall be provided to the Procuring Entity’s through the Procuring
Entity’s Representative................................................................................62
.1.56. The Contractor shall notify the insurers of changes in the nature, extent, or
program for the execution of the Works and ensure the adequacy of the

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insurances at all times in accordance with the terms of this Contract and
shall produce to the Procuring Entity’s Representative the insurance
policies in force including the receipts for payment of the current
premiums.....................................................................................................62
.1.57. If the Contractor fails to obtain and keep in force the insurances referred to
herein or any other insurance which he may be required to obtain under the
terms of this Contract, the Procuring Entity may obtain and keep in force
any such insurances and pay such premiums as may be necessary for the
purpose. From time to time, the Procuring Entity may deduct the amount it
shall pay for said premiums including twenty five percent (25%) therein
from any monies due, or which may become due, to the Contractor, without
prejudice to the Procuring Entity exercising its right to impose other
sanctions against the Contractor pursuant to the provisions of this Contract.
.....................................................................................................................62
.1.58. In the event the Contractor fails to observe the above safeguards, the
Procuring Entity may, at the Contractor’s expense, take whatever measure
is deemed necessary for its protection and that of the Contractor’s
personnel and third parties, and/or order the interruption of dangerous
Works. In addition, the Procuring Entity may refuse to make the payments
under GCC Clause F until the Contractor complies with this Clause.........62
.1.59. The Contractor shall immediately replace the insurance policy obtained as
required in this Contract, without need of the Procuring Entity’s demand,
with a new policy issued by a new insurance company acceptable to the
Procuring Entity for any of the following grounds:....................................63
()a The issuer of the insurance policy to be replaced has: ..................................63
()i become bankrupt; ...........................................................................................63
()ii been placed under receivership or under a management committee; ............63
()iii been sued for suspension of payment; or......................................................63
()iv been suspended by the Insurance Commission and its license to engage in
business or its authority to issue insurance policies cancelled; or ..............63
()v Where reasonable grounds exist that the insurer may not be able, fully and
promptly, to fulfill its obligation under the insurance policy......................63
.1.60. Termination for Default of Contractor.......................................................63
.1.61. The Procuring Entity shall terminate this Contract for default when any of
the following conditions attend its implementation:...................................63
.1.62. Due to the Contractor’s fault and while the project is on-going, it has
incurred negative slippage of fifteen percent (15%) or more in accordance
with Presidential Decree 1870, regardless of whether or not previous
warnings and notices have been issued for the Contractor to improve his
performance;................................................................................................63
.1.63. Due to its own fault and after this Contract time has expired, the
Contractor incurs delay in the completion of the Work after this Contract
has expired; or.............................................................................................63
.1.64. The Contractor:..........................................................................................63

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()a abandons the contract Works, refuses or fails to comply with a valid
instruction of the Procuring Entity or fails to proceed expeditiously and
without delay despite a written notice by the Procuring Entity;.................63
()b does not actually have on the project Site the minimum essential equipment
listed on the Bid necessary to prosecute the Works in accordance with the
approved Program of Work and equipment deployment schedule as
required for the project;...............................................................................63
()c does not execute the Works in accordance with this Contract or persistently
or flagrantly neglects to carry out its obligations under this Contract;.......63
()d neglects or refuses to remove materials or to perform a new Work that has
been rejected as defective or unsuitable; or.................................................64
()e sub-lets any part of this Contract without approval by the Procuring Entity. 64
.1.65. All materials on the Site, Plant, Equipment, and Works shall be deemed to
be the property of the Procuring Entity if this Contract is rescinded because
of the Contractor’s default...........................................................................64
.1.66. Termination for Default of Procuring Entity.............................................64
.1.67. The Contractor may terminate this Contract with the Procuring Entity if
the works are completely stopped for a continuous period of at least sixty
(60) calendar days through no fault of its own, due to any of the following
reasons:........................................................................................................64
()a Failure of the Procuring Entity to deliver, within a reasonable time, supplies,
materials, right-of-way, or other items it is obligated to furnish under the
terms of this Contract; or.............................................................................64
()b The prosecution of the Work is disrupted by the adverse peace and order
situation, as certified by the Armed Forces of the Philippines Provincial
Commander and approved by the Secretary of National Defense..............64
.1.68. Termination for Other Causes....................................................................64
.1.69. The Procuring Entity may terminate this Contract, in whole or in part, at
any time for its convenience. The Head of the Procuring Entity may
terminate this Contract for the convenience of the Procuring Entity if he has
determined the existence of conditions that make Project Implementation
economically, financially or technically impractical and/or unnecessary,
such as, but not limited to, fortuitous event(s) or changes in law and
National Government policies.....................................................................64
.1.70. The Procuring Entity or the Contractor may terminate this Contract if the
other party causes a fundamental breach of this Contract...........................64
.1.71. Fundamental breaches of Contract shall include, but shall not be limited
to, the following:.........................................................................................64
()a The Contractor stops work for twenty eight (28) days when no stoppage of
work is shown on the current Program of Work and the stoppage has not
been authorized by the Procuring Entity’s Representative;........................64
()b The Procuring Entity’s Representative instructs the Contractor to delay the
progress of the Works, and the instruction is not withdrawn within twenty
eight (28) days;............................................................................................64

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()c The Procuring Entity shall terminate this Contract if the Contractor is
declared bankrupt or insolvent as determined with finality by a court of
competent jurisdiction. In this event, termination will be without
compensation to the Contractor, provided that such termination will not
prejudice or affect any right of action or remedy which has accrued or will
accrue thereafter to the Procuring Entity and/or the Contractor. In the case
of the Contractor's insolvency, any Contractor's Equipment which the
Procuring Entity instructs in the notice is to be used until the completion of
the Works;...................................................................................................65
()d A payment certified by the Procuring Entity’s Representative is not paid by
the Procuring Entity to the Contractor within eighty four (84) days from the
date of the Procuring Entity’s Representative’s certificate;........................65
()e The Procuring Entity’s Representative gives Notice that failure to correct a
particular Defect is a fundamental breach of Contract and the Contractor
fails to correct it within a reasonable period of time determined by the
Procuring Entity’s Representative;..............................................................65
()f The Contractor does not maintain a Security, which is required; ..................65
()g The Contractor has delayed the completion of the Works by the number of
days for which the maximum amount of liquidated damages can be paid, as
defined in the GCC Clause F; and...............................................................65
()h In case it is determined prima facie by the Procuring Entity that the
Contractor has engaged, before or during the implementation of the
contract, in unlawful deeds and behaviors relative to contract acquisition
and implementation, such as, but not limited to, the following: ................65
()i corrupt, fraudulent, collusive and coercive practices as defined in ITB Clause
3.1A; ...........................................................................................................65
()ii drawing up or using forged documents; ........................................................65
()iii using adulterated materials, means or methods, or engaging in production
contrary to rules of science or the trade; and ..............................................65
()iv any other act analogous to the foregoing.......................................................65
.1.72. The Funding Source or the Procuring Entity, as appropriate, will seek to
impose the maximum civil, administrative and/or criminal penalties
available under the applicable law on individuals and organizations deemed
to be involved with corrupt, fraudulent, or coercive practices....................65
.1.73. When persons from either party to this Contract gives notice of a
fundamental breach to the Procuring Entity’s Representative in order to
terminate the existing contract for a cause other than those listed under
GCC Clause F, the Procuring Entity’s Representative shall decide whether
the breach is fundamental or not.................................................................65
.1.74. If this Contract is terminated, the Contractor shall stop work immediately,
make the Site safe and secure, and leave the Site as soon as reasonably
possible........................................................................................................66
.1.75. Procedures for Termination of Contracts...................................................66

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.1.76. The following provisions shall govern the procedures for the termination
of this Contract:...........................................................................................66
()a Upon receipt of a written report of acts or causes which may constitute
ground(s) for termination as aforementioned, or upon its own initiative, the
Implementing Unit shall, within a period of seven (7) calendar days, verify
the existence of such ground(s) and cause the execution of a Verified
Report, with all relevant evidence attached;................................................66
()b Upon recommendation by the Implementing Unit, the Head of the Procuring
Entity shall terminate this Contract only by a written notice to the
Contractor conveying the termination of this Contract. The notice shall
state:.............................................................................................................66
()i that this Contract is being terminated for any of the ground(s) afore-
mentioned, and a statement of the acts that constitute the ground(s)
constituting the same;..................................................................................66
()ii the extent of termination, whether in whole or in part; .................................66
()iii an instruction to the Contractor to show cause as to why this Contract should
not be terminated; and.................................................................................66
()iv special instructions of the Procuring Entity, if any.......................................66
()c Within a period of seven (7) calendar days from receipt of the Notice of
Termination, the Contractor shall submit to the Head of the Procuring
Entity a verified position paper stating why the contract should not be
terminated. If the Contractor fails to show cause after the lapse of the
seven (7) day period, either by inaction or by default, the Head of the
Procuring Entity shall issue an order terminating the contract; .................66
()d The Procuring Entity may, at anytime before receipt of the Bidder’s verified
position paper to withdraw the Notice to Terminate if it is determined that
certain items or works subject of the notice had been completed, delivered,
or performed before the Contractor’s receipt of the notice; .......................66
()e Within a non-extendible period of ten (10) calendar days from receipt of the
verified position paper, the Head of the Procuring Entity shall decide
whether or not to terminate this Contract. It shall serve a written notice to
the Contractor of its decision and, unless otherwise provided in the said
notice, this Contract is deemed terminated from receipt of the Contractor of
the notice of decision. The termination shall only be based on the
ground(s) stated in the Notice to Terminate; and........................................66
()f The Head of the Procuring Entity may create a Contract Termination Review
Committee (CTRC) to assist him in the discharge of this function. All
decisions recommended by the CTRC shall be subject to the approval of
the Head of the Procuring Entity.................................................................67
.1.77. Pursuant to Section 69(f) of RA 9184 and without prejudice to the
imposition of additional administrative sanctions as the internal rules of the
agency may provide and/or further criminal prosecution as provided by
applicable laws, the procuring entity shall impose on contractors after the
termination of the contract the penalty of suspension for one (1) year for
the first offense, suspension for two (2) years for the second offense from

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participating in the public bidding process, for violations committed during
the contract implementation stage, which include but not limited to the
following:....................................................................................................67
()a Failure of the contractor, due solely to his fault or negligence, to mobilize and
start work or performance within the specified period in the Notice to
Proceed (“NTP”);........................................................................................67
()b Failure by the contractor to fully and faithfully comply with its contractual
obligations without valid cause, or failure by the contractor to comply with
any written lawful instruction of the procuring entity or its representative(s)
pursuant to the implementation of the contract. For the procurement of
infrastructure projects or consultancy contracts, lawful instructions include
but are not limited to the following:............................................................67
()i Employment of competent technical personnel, competent engineers and/or
work supervisors;.........................................................................................67
()ii Provision of warning signs and barricades in accordance with approved plans
and specifications and contract provisions;.................................................67
()iii Stockpiling in proper places of all materials and removal from the project
site of waste and excess materials, including broken pavement and
excavated debris in accordance with approved plans and specifications and
contract provisions;.....................................................................................67
()iv Deployment of committed equipment, facilities, support staff and
manpower; and............................................................................................67
()v Renewal of the effectivity dates of the performance security after its
expiration during the course of contract implementation............................67
()c Assignment and subcontracting of the contract or any part thereof or
substitution of key personnel named in the proposal without prior written
approval by the procuring entity..................................................................68
()d Poor performance by the contractor or unsatisfactory quality and/or progress
of work arising from his fault or negligence as reflected in the Constructor's
Performance Evaluation System (“CPES”) rating sheet. In the absence of
the CPES rating sheet, the existing performance monitoring system of the
procuring entity shall be applied. Any of the following acts by the
constructor shall be construed as poor performance:..................................68
()i Negative slippage of 15% and above within the critical path of the project due
entirely to the fault or negligence of the contractor; and.............................68
()ii Quality of materials and workmanship not complying with the approved
specifications arising from the contractor's fault or negligence..................68
()e Willful or deliberate abandonment or non-performance of the project or
contract by the contractor resulting to substantial breach thereof without
lawful and/or just cause...............................................................................68
.1.78. Force Majeure, Release From Performance...............................................68
.1.79. For purposes of this Contract the terms “force majeure” and “fortuitous
event” may be used interchangeably. In this regard, a fortuitous event or
force majeure shall be interpreted to mean an event which the Contractor

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could not have foreseen, or which though foreseen, was inevitable. It shall
not include ordinary unfavorable weather conditions; and any other cause
the effects of which could have been avoided with the exercise of
reasonable diligence by the Contractor.......................................................68
.1.80. If this Contract is discontinued by an outbreak of war or by any other
event entirely outside the control of either the Procuring Entity or the
Contractor, the Procuring Entity’s Representative shall certify that this
Contract has been discontinued. The Contractor shall make the Site safe
and stop work as quickly as possible after receiving this certificate and
shall be paid for all works carried out before receiving it and for any Work
carried out afterwards to which a commitment was made..........................68
.1.81. If the event continues for a period of eighty four (84) days, either party
may then give notice of termination, which shall take effect twenty eight
(28) days after the giving of the notice........................................................68
.1.82. After termination, the Contractor shall be entitled to payment of the unpaid
balance of the value of the Works executed and of the materials and Plant
reasonably delivered to the Site, adjusted by the following:.......................69
()a any sum to which the Contractor is entitled under GCC Clause F;................69
()b the cost of his suspension and demobilization;..............................................69
()c any sum to which the Procuring Entity is entitled..........................................69
.1.83. The net balance due shall be paid or repaid within a reasonable time period
from the time of the notice of termination...................................................69
.1.84. Resolution of Disputes...............................................................................69
.1.85. If any dispute or difference of any kind whatsoever shall arise between the
parties in connection with the implementation of the contract covered by
the Act and this IRR, the parties shall make every effort to resolve
amicably such dispute or difference by mutual consultation......................69
.1.86. If the Contractor believes that a decision taken by the PROCURING
ENTITY’s Representative was either outside the authority given to the
PROCURING ENTITY’s Representative by this Contract or that the
decision was wrongly taken, the decision shall be referred to the Arbiter
indicated in the SCC within fourteen (14) days of the notification of the
PROCURING ENTITY’s Representative’s decision..................................69
.1.87. Any and all disputes arising from the implementation of this Contract
covered by the R.A. 9184 and its IRR shall be submitted to arbitration in
the Philippines according to the provisions of Republic Act No. 876,
otherwise known as the “ Arbitration Law” and Republic Act 9285,
otherwise known as the “Alternative Dispute Resolution Act of 2004”:
Provided, however, That, disputes that are within the competence of the
Construction Industry Arbitration Commission to resolve shall be referred
thereto. The process of arbitration shall be incorporated as a provision in
this Contract that will be executed pursuant to the provisions of the Act and
its IRR-A: Provided, further, That, by mutual agreement, the parties may
agree in writing to resort to other alternative modes of dispute resolution.

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Additional instructions on resolution of disputes, if any, shall be indicated
in the SCC....................................................................................................69
.1.88. Suspension of Loan, Credit, Grant, or Appropriation................................69
In the event that the Funding Source suspends the Loan, Credit, Grant, or
Appropriation to the Procuring Entity, from which part of the payments to
the Contractor are being made:....................................................................69
()a The Procuring Entity is obligated to notify the Contractor of such suspension
within seven (7) days of having received the suspension notice.................69
()b If the Contractor has not received sums due it for work already done within
forty five (45) days from the time the Contractor’s claim for payment has
been certified by the Procuring Entity’s Representative, the Contractor may
immediately issue a suspension of work notice in accordance with SCC
Clause F.......................................................................................................70
.1.89. Procuring Entity’s Representative’s Decisions..........................................70
.1.90. Except where otherwise specifically stated, the Procuring Entity’s
Representative will decide contractual matters between the Procuring
Entity and the Contractor in the role representing the Procuring Entity’s . 70
.1.91. The Procuring Entity’s Representative may delegate any of his duties and
responsibilities to other people, except to the Arbiter, after notifying the
Contractor, and may cancel any delegation after notifying the Contractor.70
.1.92. Approval of Drawings and Temporary Works by the Procuring Entity’s
Representative.............................................................................................70
.1.93. All Drawings prepared by the Contractor for the execution of the
Temporary Works, are subject to prior approval by the Procuring Entity’s
Representative before its use. .....................................................................70
.1.94. The Contractor shall be responsible for design of Temporary Works.......70
.1.95. The Procuring Entity’s Representative’s approval shall not alter the
Contractor’s responsibility for design of the Temporary Works.................70
.1.96. The Contractor shall obtain approval of third parties to the design of the
Temporary Works, when required by the Procuring Entity........................70
.1.97. Acceleration and Delays Ordered by the Procuring Entity’s Representative
.....................................................................................................................70
.1.98. When the Procuring Entity wants the Contractor to finish before the
Intended Completion Date, the Procuring Entity’s Representative will
obtain priced proposals for achieving the necessary acceleration from the
Contractor. If the Procuring Entity accepts these proposals, the Intended
Completion Date will be adjusted accordingly and confirmed by both the
Procuring Entity and the Contractor............................................................70
.1.99. If the Contractor’s Financial Proposals for an acceleration are accepted by
the Procuring Entity, they are incorporated in the Contract Price and treated
as a Variation...............................................................................................70
.1.100. Extension of the Intended Completion Date............................................70

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.1.101. The Procuring Entity’s Representative shall extend the Intended
Completion Date if a Variation is issued which makes it impossible for the
Intended Completion Date to be achieved by the Contractor without taking
steps to accelerate the remaining work, which would cause the Contractor
to incur additional costs. Unless specified in the SCC, no payment shall be
made for any event which may warrant the extension of the Intended
Completion Date..........................................................................................70
.1.102. The Procuring Entity’s Representative shall decide whether and by how
much to extend the Intended Completion Date within twenty one (21) days
of the Contractor asking the Procuring Entity’s Representative for a
decision thereto after fully submitting all supporting information. If the
Contractor has failed to give early warning of a delay or has failed to
cooperate in dealing with a delay, the delay by this failure shall not be
considered in assessing the new Intended Completion Date.......................71
.1.103. Right to Vary............................................................................................71
.1.104. The Procuring Entity’s Representative with the prior approval of the
Procuring Entity may instruct Variations, up to a maximum cumulative
amount of ten percent (10%) of the original contract cost..........................71
.1.105. Variations shall be valued as follows:......................................................71
()a At a lump sum price agreed between the parties; ..........................................71
()b where appropriate, at rates in this Contract;...................................................71
()c in the absence of appropriate rates, the rates in this Contract shall be used as
the basis for valuation; or failing which......................................................71
()d at appropriate new rates, equal to or lower than current industry rates and to
be agreed upon by both parties and approved by the Head of the Procuring
Entity...........................................................................................................71
.1.106. Contractors Right to Claim......................................................................71
.1.107. Dayworks.................................................................................................71
.1.108. Subject to GCC Clause F on Variation Order, and if applicable as
indicated in the SCC, the Dayworks rates in the Contractor’s Bid shall be
used for small additional amounts of work only when the Procuring
Entity’s Representative has given written instructions in advance for
additional work to be paid for in that way...................................................71
.1.109. All work to be paid for as Dayworks shall be recorded by the Contractor
on forms approved by the Procuring Entity’s Representative. Each
completed form shall be verified and signed by the Procuring Entity’s
Representative within two days of the work being done.............................71
.1.110. The Contractor shall be paid for Dayworks subject to obtaining signed
Dayworks forms..........................................................................................72
.1.111. Early Warning..........................................................................................72
.1.112. The Contractor shall warn the Procuring Entity’s Representative at the
earliest opportunity of specific likely future events or circumstances that
may adversely affect the quality of the work, increase the Contract Price, or
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may require the Contractor to provide an estimate of the expected effect of
the future event or circumstance on the Contract Price and Completion
Date. The estimate shall be provided by the Contractor as soon as
reasonably possible......................................................................................72
.1.113. The Contractor shall cooperate with the Procuring Entity’s
Representative in making and considering proposals for how the effect of
such an event or circumstance can be avoided or reduced by anyone
involved in the work and in carrying out any resulting instruction of the
Procuring Entity’s Representative...............................................................72
.1.114. Program of Work......................................................................................72
.1.115. Within the time stated in the SCC, the Contractor shall submit to the
Procuring Entity’s Representative for approval a Program of Work showing
the general methods, arrangements, order, and timing for all the activities in
the Works.....................................................................................................72
.1.116. An update of the Program of Work shall the show the actual progress
achieved on each activity and the effect of the progress achieved on the
timing of the remaining work, including any changes to the sequence of the
activities.......................................................................................................72
.1.117. The Contractor shall submit to the Procuring Entity’s Representative for
approval an updated Program of Work at intervals no longer than the period
stated in the SCC. If the Contractor does not submit an updated Program of
Work within this period, the PROCURING ENTITY’s Representative may
withhold the amount stated in the SCC from the next payment certificate
and continue to withhold this amount until the next payment after the date
on which the overdue Program of Work has been submitted......................72
.1.118. The Procuring Entity’s Representative’s approval of the Program of
Work shall not alter the Contractor’s obligations. The Contractor may
revise the Program of Work and submit it to the Procuring Entity’s
Representative again at any time. A revised Program of Work shall show
the effect of any approved Variations; and if allowed, any Compensation
Event............................................................................................................72
.1.119. When the Program of Work is updated, the Contractor shall provide the
Procuring Entity’s Representative with an updated cash flow forecast. The
cash flow forecast shall include different currencies, as defined in the
Contract, converted as necessary using the Contract exchange rates..........72
.1.120. All Variations shall be included in updated Program of Work produced
by the Contractor.........................................................................................72
.1.121. Management Conferences........................................................................73
.1.122. Either the Procuring Entity’s Representative or the Contractor may
require the other to attend a Management Conference. The Management
Conference shall review the plans for remaining work and deal with
matters raised in accordance with the early warning procedure..................73
.1.123. The Procuring Entity’s Representative shall record the business of
Management Conferences and provide copies of the record to those
attending the Conference and to the Procuring Entity . The responsibility

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of the parties for actions to be taken shall be decided by the PROCURING
ENTITY’s Representative either at the Management Conference or after
the Management Conference and stated in writing to all who attended the
Conference...................................................................................................73
.1.124. Bill of Quantities......................................................................................73
.1.125. The Bill of Quantities shall contain items of work for the construction,
installation, testing, and commissioning of work to be done by the
Contractor....................................................................................................73
.1.126. The Bill of Quantities is used to calculate the Contract Price. The
Contractor is paid for the quantity of the work done at the rate in the Bill of
Quantities for each item...............................................................................73
.1.127. If the final quantity of any work done differs from the quantity in the Bill
of Quantities for the particular item and is not more than twenty five
percent (25%) of the original quantity, provided the aggregate changes for
all items do not exceed ten percent (10%) of the Contract price, the
Procuring Entity’s Representative shall make the necessary adjustments to
allow for the changes subject to applicable laws, rules, and regulations....73
.1.128. If requested by the Procuring Entity’s Representative, the Contractor
shall provide the Procuring Entity’s Representative with a detailed cost
breakdown of any rate in the Bill of Quantities..........................................73
.1.129. Instructions, Inspections and Audits........................................................73
.1.130. The Procuring Entity’s personnel shall at all reasonable times during
construction of the Work be entitled to examine, inspect, measure and test
the materials and workmanship, and to check the progress of the
construction. ...............................................................................................73
.1.131. If the Procuring Entity’s Representative instructs the Contractor to carry
out a test not specified in the Specification to check whether any work has a
defect and the test shows that it does, the Contractor shall pay for the test
and any samples. If there is no defect, the test shall be a Compensation
Event............................................................................................................73
.1.132. The Contractor shall permit the Funding Source named in the SCC to
inspect the Contractor’s accounts and records relating to the performance of
the Contractor and to have them audited by auditors appointed by the
Funding Source, if so required by the Funding Source...............................73
.1.133. Identifying Defects...................................................................................73
.1.134. Cost of Repairs.........................................................................................74
.1.135. Correction of Defects...............................................................................74
.1.136. The Procuring Entity’s Representative shall give notice to the Contractor
of any defects before the end of the Defects Liability Period, which begins
at Completion Date up to final acceptance by the Procuring Entity’s unless
otherwise specified in the SCC. The Defects Liability Period shall be
extended for as long as defects remain to be corrected...............................74

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.1.137. Every time notice of a defect is given, the Contractor shall correct the
notified defect within the length of time specified in the Procuring Entity’s
Representative’s notice................................................................................74
.1.138. The Contractor shall correct the defects which he notices himself before
the end of the Defects Liability Period........................................................74
.1.139. The Procuring Entity shall certify that all defects have been corrected. If
the Procuring Entity considers that correction of a defect is not essential, he
can request the Contractor to submit a quotation for the corresponding
reduction in the Contract Price. If the Procuring Entity accepts the
quotation, the corresponding change in the SCC is a Variation..................74
.1.140. Uncorrected Defects.................................................................................74
.1.141. The Procuring Entity shall give the Contractor at least fourteen (14) days
notice of his intention to use a third party to correct a Defect. If the
Contractor does not correct the Defect himself within the period, the
Procuring Entity may have the Defect corrected by the third party. The cost
of the correction will be deducted from the Contract Price.........................74
.1.142. The use of a third party to correct defects that are uncorrected by the
Contractor will in no way relieve the Contractor of its liabilities and
warranties under the Contract......................................................................74
.1.143. Advance Payment.....................................................................................74
.1.144. The Procuring Entity shall, upon a written request of the contractor which
shall be submitted as a contract document, make an advance payment to the
contractor in an amount not exceeding fifteen percent (15%) of the total
contract price, to be made in lump sum or, at the most two, installments
according to a schedule specified in the SCC.............................................74
.1.145. The advance payment shall be made only upon the submission to and
acceptance by the Procuring Entity of an irrevocable standby letter of credit
of equivalent value from a commercial bank, a bank guarantee or a surety
bond callable upon demand, issued by a surety or insurance company duly
licensed by the Insurance Commission and confirmed by the Procuring
Entity...........................................................................................................75
.1.146. The advance payment shall be repaid by the Contractor by an amount
equal to the percentage of the total contract price used for the advance
payment.......................................................................................................75
.1.147. The contractor may reduce his standby letter of credit or guarantee
instrument by the amounts refunded by the Monthly Certificates in the
advance payment.........................................................................................75
.1.148. The Procuring Entity will provide an Advance Payment on the Contract
Price as stipulated in the Conditions of Contract, subject to the maximum
amount stated in SCC Clause F...................................................................75
.1.149. Progress Payments...................................................................................75
.1.150. The Contractor may submit a request for payment for Work
accomplished. Such request for payment shall be verified and certified by
the Procuring Entity’s Representative/Project Engineer. Except as

132
otherwise stipulated in the SCC, materials and equipment delivered on the
site but not completely put in place shall not be included for payment. ...75
.1.151. The Procuring Entity shall deduct the following from the certified gross
amounts to be paid to the contractor as progress payment:.........................75
()a Cumulative value of the work previously certified and paid for....................75
()b Portion of the advance payment to be recouped for the month......................75
()c Retention money in accordance with the condition of contract.....................75
()d Amount to cover third party liabilities...........................................................75
()e Amount to cover uncorrected discovered defects in the works......................75
.1.152. Payments shall be adjusted by deducting therefrom the amounts for
advance payments and retention. The Procuring Entity shall pay the
Contractor the amounts certified by the Procuring Entity’s Representative
within twenty eight (28) days from the date each certificate was issued.
Unless otherwise indicated in the SCC, no payment of interest for delayed
payments and adjustments shall be made by the Procuring Entity.............75
.1.153. The first progress payment may be paid by the Procuring Entity to the
Contractor provided that at least twenty percent (20%) of the work has been
accomplished as certified by the Procuring Entity’s Representative..........75
.1.154. Items of the Works for which a price of “0” (zero) has been entered will
not be paid for by the Procuring Entity and shall be deemed covered by
other rates and prices in the Contract..........................................................76
.1.155. Payment Certificates................................................................................76
.1.156. The Contractor shall submit to the Procuring Entity’s Representative
monthly statements of the estimated value of the work executed less the
cumulative amount certified previously......................................................76
.1.157. The Procuring Entity’s Representative shall check the Contractor’s
monthly statement and certify the amount to be paid to the Contractor.....76
.1.158. The value of Work executed shall:...........................................................76
()a be determined by the Procuring Entity’s Representative;..............................76
()b comprise the value of the quantities of the items in the Bill of Quantities
completed; and.............................................................................................76
()c include the valuations of approved variations................................................76
.1.159. The Procuring Entity’s Representative may exclude any item certified in
a previous certificate or reduce the proportion of any item previously
certified in any certificate in the light of later information.........................76
.1.160. Retention..................................................................................................76
.1.161. The Procuring Entity shall retain from each payment due to the
Contractor an amount equal to a percentage thereof using the rate as
specified in SCC Clause F...........................................................................76
.1.162. Progress payments are subject to retention of ten percent (10%), unless
otherwise specified in the SCC, referred to as the “retention money.” Such

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retention shall be based on the total amount due to the Contractor prior to
any deduction and shall be retained from every progress payment until fifty
percent (50%) of the value of Works, as determined by the Procuring
Entity, are completed. If, after fifty percent (50%) completion, the Work is
satisfactorily done and on schedule, no additional retention shall be made;
otherwise, the ten percent (10%) retention shall again be imposed using the
rate specified therefor..................................................................................76
.1.163. The total “retention money” shall be due for release upon final
acceptance of the Works. The Contractor may, however, request the
substitution of the retention money for each progress billing with
irrevocable standby letters of credit from a commercial bank, bank
guarantees or surety bonds callable on demand, of amounts equivalent to
the retention money substituted for and acceptable to the Procuring Entity,
provided that the project is on schedule and is satisfactorily undertaken.
Otherwise, the ten (10%) percent retention shall be made. Said irrevocable
standby letters of credit, bank guarantees and/or surety bonds, to be posted
in favor of the Government shall be valid for a duration to be determined
by the concerned implementing office/agency or Procuring Entity and will
answer for the purpose for which the ten (10%) percent retention is
intended, i.e., to cover uncorrected discovered defects and third party
liabilities......................................................................................................76
.1.164. On completion of the whole Works, the Contractor may substitute
retention money with an “on demand” Bank guarantee in a form acceptable
to the Procuring Entity.................................................................................77
.1.165. Variation Orders.......................................................................................77
.1.166. Variation Orders may be issued by the Procuring Entity to cover any
increase/decrease in quantities, including the introduction of new work
items that are not included in the original contract or reclassification of
work items that are either due to change of plans, design or alignment to
suit actual field conditions resulting in disparity between the
preconstruction plans used for purposes of bidding and the “as staked
plans” or construction drawings prepared after a joint survey by the
Contractor and the Procuring Entity after award of the contract, provided
that the cumulative amount of the Variation Order does not exceed ten
percent (10%) of the original project cost. The addition/deletion of Works
should be within the general scope of the project as bid and awarded. The
scope of works shall not be reduced so as to accommodate a positive
Variation Order. A Variation Order may either be in the form of a Change
Order or Extra Work Order.........................................................................77
.1.167. A Change Order may be issued by the implementing official to cover any
increase/decrease in quantities of original Work items in the contract.......77
.1.168. An Extra Work Order may be issued by the implementing official to
cover the introduction of new work necessary for the completion,
improvement or protection of the project which were not included as items
of Work in the original contract, such as, where there are subsurface or
latent physical conditions at the site differing materially from those
indicated in the contract, or where there are duly unknown physical

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conditions at the site of an unusual nature differing materially from those
ordinarily encountered and generally recognized as inherent in the Work or
character provided for in the contract..........................................................77
.1.169. Any cumulative Variation Order beyond ten percent (10%) shall be
subject of another contract to be bid out if the works are separable from the
original contract. In exceptional cases where it is urgently necessary to
complete the original scope of work, the Head of the Procuring Entity may
authorize a positive Variation Order go beyond ten percent (10%) but not
more than twenty percent (20%) of the original contract price, subject to
the guidelines to be determined by the GPPB: Provided, however, That
appropriate sanctions shall be imposed on the designer, consultant or
official responsible for the original detailed engineering design which
failed to consider the Variation Order beyond ten percent (10%)...............77
.1.170. In claiming for any Variation Order, the Contractor shall, within seven
(7) calendar days after such work has been commenced or after the
circumstances leading to such condition(s) leading to the extra cost, and
within twenty-eight (28) calendar days deliver a written communication
giving full and detailed particulars of any extra cost in order that it may be
investigated at that time. Failure to provide either of such notices in the
time stipulated shall constitute a waiver by the contractor for any claim.
The preparation and submission of Variation Orders are as follows:.........77
()a If the Procuring Entity’s representative/Project Engineer believes that a
Change Order or Extra Work Order should be issued, he shall prepare the
proposed Order accompanied with the notices submitted by the Contractor,
the plans therefore, his computations as to the quantities of the additional
works involved per item indicating the specific stations where such works
are needed, the date of his inspections and investigations thereon, and the
log book thereof, and a detailed estimate of the unit cost of such items of
work, together with his justifications for the need of such Change Order or
Extra Work Order, and shall submit the same to the Head of the Procuring
Entity for approval.......................................................................................78
()b The Head of the Procuring Entity or his duly authorized representative, upon
receipt of the proposed Change Order or Extra Work Order shall
immediately instruct the technical staff of the Procuring Entity’s to conduct
an on-the-spot investigation to verify the need for the Work to be
prosecuted. A report of such verification shall be submitted directly to the
Head of the Procuring Entity or his duly authorized representative...........78
()c The, Head of the Procuring Entity or his duly authorized representative, after
being satisfied that such Change Order or Extra Work Order is justified and
necessary, shall review the estimated quantities and prices and forward the
proposal with the supporting documentation to the Head of Procuring
Entity for consideration...............................................................................78
()d If, after review of the plans, quantities and estimated unit cost of the items of
work involved, the proper office of the procuring entity empowered to
review and evaluate Change Orders or Extra Work Orders recommends
approval thereof, Head of the Procuring Entity or his duly authorized

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representative, believing the Change Order or Extra Work Order to be in
order, shall approve the same......................................................................78
()e The timeframe for the processing of Variation Orders from the preparation up
to the approval by the Head of the Procuring Entity concerned shall not
exceed thirty (30) calendar days..................................................................78
.1.171. Contract Completion................................................................................78
.1.172. Suspension of Work.................................................................................79
.1.173. The Procuring Entity shall have the authority to suspend the work wholly
or partly by written order for such period as may be deemed necessary, due
to force majeure or any fortuitous events or for failure on the part of the
Contractor to correct bad conditions which are unsafe for workers or for the
general public, to carry out valid orders given by the Procuring Entity or to
perform any provisions of the contract, or due to adjustment of plans to suit
field conditions as found necessary during construction. The Contractor
shall immediately comply with such order to suspend the work wholly or
partly............................................................................................................79
.1.174. The Contractor or its duly authorized representative shall have the right
to suspend work operation on any or all projects/activities along the critical
path of activities after fifteen (15) calendar days from date of receipt of
written notice from the Contractor to the district engineer/regional
director/consultant or equivalent official, as the case may be, due to the
following:....................................................................................................79
()a There exist right-of-way problems which prohibit the Contractor from
performing work in accordance with the approved construction schedule. 79
()b Requisite construction plans which must be owner-furnished are not issued to
the contractor precluding any work called for by such plans......................79
()c Peace and order conditions make it extremely dangerous, if not possible, to
work. However, this condition must be certified in writing by the
Philippine National Police (PNP) station which has responsibility over the
affected area and confirmed by the Department of Interior and Local
Government (DILG) Regional Director......................................................79
()d There is failure on the part of the Procuring Entity to deliver government-
furnished materials and equipment as stipulated in the contract.................79
()e Delay in the payment of Contractor’s claim for progress billing beyond forty-
five (45) calendar days from the time the Contractor’s claim has been
certified to by the procuring entity’s authorized representative that the
documents are complete unless there are justifiable reasons thereof which
shall be communicated in writing to the Contractor...................................79
.1.175. In case of total suspension, or suspension of activities along the critical
path, which is not due to any fault of the Contractor, the elapsed time
between the effective order of suspending operation and the order to
resume work shall be allowed the Contractor by adjusting the contract time
accordingly..................................................................................................79
.1.176. Payment on Termination..........................................................................79

136
.1.177. If the Contract is terminated because of a fundamental breach of Contract
by the Contractor, the Procuring Entity’s Representative shall issue a
certificate for the value of the work done and Materials ordered less
advance payments received up to the date of the issue of the certificate and
less the percentage to apply to the value of the work not completed, as
indicated in the SCC. Additional Liquidated Damages shall not apply. If
the total amount due to the Procuring Entity exceeds any payment due to
the Contractor, the difference shall be a debt payable to the Procuring
Entity...........................................................................................................80
.1.178. If the Contract is terminated for the Procuring Entity’s convenience or
because of a fundamental breach of Contract by the Procuring Entity, the
Procuring Entity’s Representative shall issue a certificate for the value of
the work done, Materials ordered, the reasonable cost of removal of
Equipment, repatriation of the Contractor’s personnel employed solely on
the Works, and the Contractor’s costs of protecting and securing the
Works, and less advance payments received up to the date of the certificate.
.....................................................................................................................80
.1.179. The net balance due shall be paid or repaid within twenty eight (28) days
from the notice of termination.....................................................................80
.1.180. If the Contractor has terminated the Contract under GCC Clauses F or F,
the Procuring Entity shall promptly return the Performance Security to the
Contractor....................................................................................................80
.1.181. Extension of Contract Time.....................................................................80
.1.182. Should the amount of additional work of any kind or other special
circumstances of any kind whatsoever occur such as to fairly entitle the
contractor to an extension of contract time, the Procuring Entity shall
determine the amount of such extension; provided that the Procuring Entity
is not bound to take into account any claim for an extension of time unless
the Contractor has, prior to the expiration of the contract time and within
thirty (30) calendar days after such work has been commenced or after the
circumstances leading to such claim have arisen, delivered to the Procuring
Entity notices in order that it could have investigated them at that time.
Failure to provide such notice shall constitute a waiver by the Contractor of
any claim. Upon receipt of full and detailed particulars, the Procuring
Entity shall examine the facts and extent of the delay and shall extend the
contract time completing the contract work when, in the Procuring Entity’s
opinion, the findings of facts justify an extension.......................................80
.1.183. No extension of contract time shall be granted the Contractor due to (a)
ordinary unfavorable weather conditions and (b) inexcusable failure or
negligence of Contractor to provide the required equipment, supplies or
materials......................................................................................................80
.1.184. Extension of contract time may be granted only when the affected
activities fall within the critical path of the PERT/CPM network...............80
.1.185. No extension of contract time shall be granted when the reason given to
support the request for extension was already considered in the
determination of the original contract time during the conduct of detailed

137
engineering and in the preparation of the contract documents as agreed
upon by the parties before contract perfection............................................80
.1.186. Extension of contract time shall be granted for rainy/unworkable days
considered unfavorable for the prosecution of the works at the site, based
on the actual conditions obtained at the site, in excess of the number of
rainy/unworkable days pre-determined by the Procuring Entity in relation
to the original contract time during the conduct of detailed engineering and
in the preparation of the contract documents as agreed upon by the parties
before contract perfection, and/or for equivalent period of delay due to
major calamities such as exceptionally destructive typhoons, floods and
earthquakes, and epidemics, and for causes such as non-delivery on time of
materials, working drawings, or written information to be furnished by the
Procuring Entity, non-acquisition of permit to enter private properties
within the right-of-way resulting in complete paralyzation of construction
activities, and other meritorious causes as determined by the Procuring
Entity’s Representative and approved by the Head of the Procuring Entity.
Shortage of construction materials, general labor strikes, and peace and
order problems that disrupt construction operations through no fault of the
Contractor may be considered as additional grounds for extension of
contract time provided they are publicly felt and certified by appropriate
government agencies such as DTI, DOLE, DILG, and DND, among others.
The written consent of bondsmen must be attached to any request of the
Contractor for extension of contract time and submitted to the Procuring
Entity for consideration and the validity of the Performance Security shall
be correspondingly extended.......................................................................81
.1.187. Price Adjustment......................................................................................81
.1.188. Completion...............................................................................................81
.1.189. Taking Over.............................................................................................81
.1.190. Operating and Maintenance Manuals.......................................................81
.1.191. If “as built” Drawings and/or operating and maintenance manuals are
required, the Contractor shall supply them by the dates stated in the SCC.81
.1.192. If the Contractor does not supply the Drawings and/or manuals by the
dates stated in the SCC, or they do not receive the Procuring Entity’s
Representative’s approval, the Procuring Entity’s Representative shall
withhold the amount stated in the SCC from payments due to the
Contractor....................................................................................................81
SECTION V. SPECIAL CONDITIONS OF CONTRACT......................83
SECTION VI. SPECIFICATIONS..........................................91
SECTION VII. DRAWINGS...............................................93
SECTION VIII. BILL OF QUANTITIES...................................95
SECTION IX. BIDDING FORMS..........................................97
Bid Form...........................................................................................................140
Form of Contract Agreement............................................................................142

138
Omnibus Sworn Statement...............................................................................144

139
Bid Form

Date: ________________________
IAEB5 No: ____________________

To: [name and address of PROCURING ENTITY]


Address: [insert address]

We, the undersigned, declare that:

(a) We have examined and have no reservation to the Bidding Documents, including
Addenda, for the Contract [insert name of contract];

(b) We offer to execute the Works for this Contract in accordance with the Bid and Bid Data
Sheet, General and Special Conditions of Contract accompanying this Bid;

The total price of our Bid, excluding any discounts offered in item (d) below is: [insert
information];

The discounts offered and the methodology for their application are: [insert
information];

(c) Our Bid shall be valid for a period of [insert number] days from the date fixed for the
Bid submission deadline in accordance with the Bidding Documents, and it shall remain
binding upon us and may be accepted at any time before the expiration of that period;

(d) If our Bid is accepted, we commit to obtain a Performance Security in the amount of
[insert percentage amount] percent of the Contract Price for the due performance of the
Contract;

(e) Our firm, including any subcontractors or suppliers for any part of the Contract, have
nationalities from the following eligible countries: [insert information];

(f) We are not participating, as Bidders, in more than one Bid in this bidding process, other
than alternative offers in accordance with the Bidding Documents;

(g) Our firm, its affiliates or subsidiaries, including any subcontractors or suppliers for any
part of the Contract, has not been declared ineligible by the Funding Source;

(h) We understand that this Bid, together with your written acceptance thereof included in
your notification of award, shall constitute a binding contract between us, until a formal
Contract is prepared and executed; and

5 If ADB, JICA and WB funded projects, use IFB.

140
(i) We understand that you are not bound to accept the Lowest Evaluated Bid or any other
Bid that you may receive.

Name:

In the capacity of:

Signed:

Duly authorized to sign the Bid for and on behalf of:

Date: ___________

141
Form of Contract Agreement

THIS AGREEMENT, made this [insert date] day of [insert month], [insert year]
between [name and address of PROCURING ENTITY] (hereinafter called the“Entity”) and
[name and address of Contractor] (hereinafter called the “Contractor”).

WHEREAS, the Entity is desirous that the Contractor execute [name and
identification number of contract] (hereinafter called “the Works”) and the Entity has
accepted the Bid for [insert the amount in specified currency in numbers and words] by the
Contractor for the execution and completion of such Works and the remedying of any defects
therein.

NOW THIS AGREEMENT WITNESSETH AS FOLLOWS:

1. In this Agreement, words and


expressions shall have the same meanings as are respectively assigned to them
in the Conditions of Contract hereinafter referred to.

2. The following documents shall be attached, deemed to form, and be


read and construed as part of this Agreement, to wit:

(a) General and Special Conditions of Contract;


(b) Drawings/Plans;
(c) Specifications;
(d) Invitation to Apply for Eligibility and to Bid;
(e) Instructions to Bidders;
(f) Bid Data Sheet;
(g) Addenda and/or Supplemental/Bid Bulletins, if any;
(h) Bid form, including all the documents/statements contained in the
Bidder’s bidding envelopes, as annexes;
(i) Eligibility requirements, documents and/or statements;
(j) Performance Security;
(k) Credit line issued by a licensed bank, if any;
(l) Notice of Award of Contract and the Bidder’s conforme thereto;
(m) Other contract documents that may be required by existing laws and/or
the Entity.

142
3. In consideration of the payments to be made by the Entity to the
Contractor as hereinafter mentioned, the Contractor hereby covenants with the
Entity to execute and complete the Works and remedy any defects therein in
conformity with the provisions of this Contract in all respects.

4. The Entity hereby covenants to pay the Contractor in consideration of


the execution and completion of the Works and the remedying of defects
wherein, the Contract Price or such other sum as may become payable under
the provisions of this Contract at the times and in the manner prescribed by
this Contract.

IN WITNESS whereof the parties thereto have caused this Agreement to be executed
the day and year first before written.

Signed, sealed, delivered by the (for the Entity)

Signed, sealed, delivered by the (for the


Contractor).

Binding Signature of PROCURING ENTITY

________________________________________________

Binding Signature of Contractor

_____________________________________________

[Addendum showing the corrections, if any, made during the Bid evaluation should be
attached with this agreement]

143
Omnibus Sworn Statement

REPUBLIC OF THE PHILIPPINES )


CITY/MUNICIPALITY OF ______ ) S.S.

AFFIDAVIT

I, [Name of Affiant], of legal age, [Civil Status], [Nationality], and residing at [Address
of Affiant], after having been duly sworn in accordance with law, do hereby depose and state
that:

1. Select one, delete the other:

If a sole proprietorship: I am the sole proprietor of [Name of Bidder] with office


address at [address of Bidder];

If a partnership, corporation, cooperative, or joint venture: I am the duly authorized


and designated representative of [Name of Bidder] with office address at [address of
Bidder];

2. Select one, delete the other:

If a sole proprietorship: As the owner and sole proprietor of [Name of Bidder], I have
full power and authority to do, execute and perform any and all acts necessary to
represent it in the bidding for [Name of the Project] of the [Name of the Procuring
Entity];

If a partnership, corporation, cooperative, or joint venture: I am granted full power


and authority to do, execute and perform any and all acts necessary and/or to
represent the [Name of Bidder] in the bidding as shown in the attached [state title of
attached document showing proof of authorization (e.g., duly notarized Secretary’s
Certificate issued by the corporation or the members of the joint venture)];

3. [Name of Bidder] is not “blacklisted” or barred from bidding by the


Government of the Philippines or any of its agencies, offices, corporations, or Local
Government Units, foreign government/foreign or international financing institution
whose blacklisting rules have been recognized by the Government Procurement
Policy Board;

4. Each of the documents submitted in satisfaction of the bidding requirements is


an authentic copy of the original, complete, and all statements and information
provided therein are true and correct;

144
5. [Name of Bidder] is authorizing the Head of the Procuring Entity or its duly
authorized representative(s) to verify all the documents submitted;

6. Select one, delete the rest:

If a sole proprietorship: I am not related to the Head of the Procuring Entity,


members of the Bids and Awards Committee (BAC), the Technical Working Group,
and the BAC Secretariat, the head of the Project Management Office or the end-user
unit, and the project consultants by consanguinity or affinity up to the third civil
degree;

If a partnership or cooperative: None of the officers and members of [Name of


Bidder] is related to the Head of the Procuring Entity, members of the Bids and
Awards Committee (BAC), the Technical Working Group, and the BAC Secretariat,
the head of the Project Management Office or the end-user unit, and the project
consultants by consanguinity or affinity up to the third civil degree;

If a corporation or joint venture: None of the officers, directors, and controlling


stockholders of [Name of Bidder] is related to the Head of the Procuring Entity,
members of the Bids and Awards Committee (BAC), the Technical Working Group,
and the BAC Secretariat, the head of the Project Management Office or the end-user
unit, and the project consultants by consanguinity or affinity up to the third civil
degree;

7. [Name of Bidder] complies with existing labor laws and standards; and

8. [Name of Bidder] is aware of and has undertaken the following


responsibilities as a Bidder:

a) Carefully examine all of the Bidding Documents;

b) Acknowledge all conditions, local or otherwise, affecting the implementation


of the Contract;

c) Made an estimate of the facilities available and needed for the contract to be
bid, if any; and

d) Inquire or secure Supplemental/Bid Bulletin(s) issued for the [Name of the


Project].

IN WITNESS WHEREOF, I have hereunto set my hand this __ day of ___, 20__ at
____________, Philippines.

_____________________________________
Bidder’s Representative/Authorized Signatory

145
[JURAT]

146
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