LYCEUM OF THE PHILIPPINES UNIVERSITY – LAGUNA

COLLEGE OF ENGINEERING AND COMPUTER STUDIES

CIAP DOCUMENT 102

UNIFORM GENERAL CONDITIONS OF
CONTRACT FOR PRIVATE CONSTRUCTION

SUBMITTED BY:

AGUSTIN, JERARD MARIUS V.

BORLAZA, VANEZA M.
DALISAY, MA. ALIAH DARAH E.
NAVARETTE, HENLYN JOY H.
PALOS, MIKAELA M.
SANTIAGO, MARIANNE JOY Q.

BSCE 5-1
SECTION 1:
DEFINITIONS AND DOCUMENTS

ART. 1: DEFINITIONS

1.01 ACT OF GOD OR FORCE MAJEURE shall mean any event beyond the reasonable control of the
Owner or the Contractor, as the case may be, and which is unavoidable notwithstanding the
reasonable care of the party affected and shall include, without limitation, the following:
[a] war
[b] rebellion
[c] confiscation under the order of any government or de jure or de facto authority or ruler or any
other act or failure to act of any local or state or national government authority;
[d] strike, sabotage, lock-out, embargo, import restriction, port congestion, lack of usual means of
public transportation and communication, industrial dispute, shipwreck, shortage or restriction
of power supply, epidemics, quarantine, plague;
[e] natural or physical disaster;
[f] shortage of labor, materials or utilities
1.02 ADVERTISEMENT or INVITATION TO BID
1.03 AGREEMENT
1.04 BID
1.05 BID BOND refers to any acceptable form of bond accompanying the Bid submitted by the bidder as
a guarantee that the bidder will enter into the Contract with the Owner for the construction of the
Work, if the Contract is awarded to him.
1.06 BID DOCUMENTS collectively refer to all documents provided or made available to prospective
bidders which include the Invitation to Bid and a copy of the Contract which the winning bidders
would be required to sign with the Owner.
1.07 BID BULLETIN is a document containing additional information on Bid Documents issued to bidders
before date of bidding.
1.08 BREAKDOWN OF WORK AND CORRESPONDING VALUE
1.09 CHANGE ORDER is a written order to the Contractor issued by the Owner after the execution of the
Contract, authorizing a change or variation in the work or an adjustment in the Contract Price or
Contract time.
1.10 CONTRACT
1.11 CONTRACT DOCUMENTS are the documents attached to the Agreement identified therein as
Contract Documents, including all additions, deletions and modifications incorporated therein.
These generally include the following documents:
a. Special Provisions or Conditions
b. General Conditions
c. Specifications
d. Drawings
e. Other Bid Documents
1.12 CONTRACT PRICE
1.13 CONTRACTOR
1.14 COST means all expenditures properly incurred or to be incurred, whether on or off the site,
including overhead and other charges properly allocable thereto but does not include any
allowance for profit.
1.15 DRAWINGS
1.16 FINAL PAYMENT refers to the payment of the final progress billing and all approved claims including
but not limited to variations in the work, Contract Price adjustments and/or escalation, acceleration
of work, and others. It does not include the retention money.
1.17 GUARANTEE BOND is the approved form of security furnished by the Contractor and his Surety as a
guarantee of the quality of the materials provided, the equipment installed, and the workmanship
performed by the Contractor.
1.18 INSTRUCTION TO BIDDERS
1.19 LAWS
1.20 OWNER
1.21 OWNER'S REPRESENTATIVE
1.22 PAYMENT BOND is the approved form of security furnished by the Contractor and his Surety as a
guarantee of good faith on the part of the Contractor to faithfully comply with the Contract in
respect of its obligations arising therefrom to its workers, subcontractors, and suppliers.
1.23 PERFORMANCE BOND is the approved form of security furnished by the Contractor and his Surety
as a guarantee of good faith on the part of the Contractor to execute the Work in accordance with
the Contract.
1.24 SCHEDULE OF MATERIALS AND FINISHES
1.25 SPECIFICATIONS
1.26 SPECIAL PROVISIONS OR CONDITIONS
1.27 SUB-CONTRACTOR
1.28 SUPPLEMENTARY SPECIFICATIONS
1.29 SURETY is the person, firm or corporation which issues the bond required of the Contractor
1.30 TIME LIMIT OR COMPLETION TIME
1.31 WRITTEN NOTICE
1.32 WORK

ART. 2: EXECUTION, CORRELATION, MEANING OF TERMS, AND INTENT OF DOCUMENTS

2.01 INTENT OF CONTRACT: The intent of the Contract is to include all labor and materials, equipment
and transportation necessary for the proper execution of the Work.

2.02 STANDARD OF CONDUCT: Each party to the Contract acknowledges that, in the exercise of his
rights and in the performance of his duties, he must act with justice, give the other party his due, and
observe honesty and good faith.
2.03 INTERPRETATION OF CONTRACT

a. In case of conflict between the provisions of the Agreement or of any Contract Document, or
between the provisions of one of the Contract Documents and the provisions of another Contract
Document, or in case of discrepancy, defective description, error or omission in the Contract, the
following rules shall be followed:

RULE 1: The Agreement and the Contract Documents shall be taken as mutually explanatory of
one another.

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

RULE 3: Where the conflict between or among the provisions of the Agreement and/or the
Contract Documents cannot be resolved by Rules 1 and 2, it shall be understood that: (a) the Detailed
Drawings shall prevail over the General Drawings; (b) words and figures shall prevail over the Drawings;
(c) words shall prevail over figures in Contract Documents; (d) written dimensions shall prevail over
measured dimensions.

RULE 4: Where the conflict cannot be resolved by applying Rule 3 or where Rule 3 does not
apply, the conflict shall be resolved by giving precedence to the Agreement or to provisions of a
Contract Document higher in order of priority. The order of priority among these documents shall be as
follows: (a) Agreement as modified by Notice of Award of Contract (b) Instruction to Bidders and any
amendment (c) Addenda to Bid Documents; (d) Specifications; (e) Drawings; (f) Special Conditions of
Contract; (g) General Conditions of Contract; (h) Other Contract Documents; and (i) Other documents
forming part of the Contract attached thereto or incorporated therein by reference.

RULE 5: Where there is discrepancy, defective description, error or omission in any Contract
Document, the Contract Documents shall be interpreted as being complementary to each other.

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

RULE 7: Rules 1 to 6 shall yield to specific rules of interpretation in this document or in the
Contract.

b. The Owner shall resolve the conflict, or interpret or explain such discrepancy, defective
description, error or omission with due regard to Article 2.04 below.

c. The interpretation of or explanation by the Owner shall be issued in the form of instructions
to the Contractor. Where the Owner fails to issue the instruction in writing, the execution of that part of
work affected by the interpretation or explanation without a timely objection or protest of the Owner
shall be deemed to have been executed in accordance with the Owner's explanation or interpretation.
 d. In all cases where a device, item or part of equipment is referred to in the singular number, it
is intended that such reference shall apply to as many such devices, items, or parts as are required to
complete the work.

2.04 CONFORMITY TO THE CONTRACT: The Work shall be executed in accordance with the Contract.

a. If there be a variance between the Drawings and the Specifications, the provisions of the
Specifications shall control.

b. Any discrepancy found between the Drawings and Specifications and site conditions or any
error or omission in the Drawings or Specifications shall be immediately reported to the Owner, who
shall promptly correct such discrepancy, error, or omission.

c. The Owner shall be fully responsible for adequacy of the design and for sufficiency of the
Drawings and Specifications. The complete requirements of the Work shall be set forth in Drawings and
Specifications to be supplied by the Owner.

d. In the event that any part or whole of the Works, when agreed upon, are designed by the
Contractor, then all responsibilities assigned to the Owner for the said design shall automatically be
assigned to the Contractor as his responsibility.

2.05 MEANING OF TERMS

a. APPROVED, DIRECTED AND ACCEPTABLE

b. FURNISH

c. INSTALL

d. PROVIDE

e. REQUIRED OR NECESSARY

2.06 TIMELY EXERCISE OF ADMINISTRATIVE RESPONSIBILITIES.

Whenever under the Contract, the Owner is required to exercise his discretion by:

a. giving his decision, opinion or consent,

b. expressing his satisfaction and approval,

c. determining value,

d. providing drawings,

e. supplying equipment or materials,

f. otherwise taking action which may affect the Contractor's timely completion of the Work,
 - shall exercise such discretion fairly and in a timely manner

- required to give notice, submit data, catalogs, samples, order or import materials or equipment,
prepare and submit the construction schedule or notify the Owner that a change has been
ordered

- shall provide a sufficient number of inspectors at the project site while work is in progress

2.07 DEFECTIVE EQUIPMENT, MATERIALS, OR WORK. Even with the exercise of due diligence, the Owner
could not have discovered the use of inferior materials and equipment or the defective work, the Owner
may condemn it upon discovery, and the Contractor shall bear all the cost of removing and replacing the
defective or inferior material or equipment or the defective work.

2.08 REVIEW OF CONTRACT. The Contractor shall:

- carefully study and compare the various documents and shall report to the Owner any error,
inconsistency or omission that may be discovered in its provisions.

- shall not be liable to the Owner for any damage resulting from any such error, inconsistency or
omission in the Contract.

- shall follow the Drawings and Specification and all additional detail drawings and instruction issued by
the Owner

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

2.09 DOCUMENTS AND SAMPLES AT THE SITE. The Contractor shall maintain in good order at the Project
site on a current basis one record copy of all Drawings, Specifications, addenda, Change Orders and
other modifications, and change smade during construction, including approved shop drawings, product
data and samples.

2.10 OWNERSHIP OF CONTRACT AND MODELS: The Drawings, Specifications and models, are not to be
used by the Contractor on any other work. They shall be returned to the Owner upon completion of the
Work before Final Payment to the Contractor is made.

ART. 3: DRAWINGS AND SPECIFICATIONS

3.01 COPIES OF DRAWINGS AND SPECIFICATIONS: The Owner shall furnish the Contractor, free of
charge, three sets of Drawings and Specifications

3.02 COORDINATION OF DRAWINGS AND SPECIFICATIONS: All Drawings and models are to be read and
understood together with the Specifications, to form a part thereof.
3.03 CLARIFICATION OF MEANING OF DRAWINGS AND SPECIFICATIONS: The Owner shall provide the
Contractor directions and explanations necessary and proper to make more definite and certain any
requirement of the Drawings (including notes thereon) or of the provisions of the Specifications.

3.04 DISCREPANCY IN DRAWINGS: The Contractor shall report to the Owner any discrepancy in the
figures in the drawings immediately upon its discovery.

ART. 4: DETAIL DRAWINGS AND INSTRUCTIONS

4.01 SUPPLEMENTARY DRAWINGS AND INSTRUCTIONS: The Owner shall furnish additional detail
drawings and instructions essential to their proper interpretation and proper execution of the Work. All
such additional drawings and instructions are to be considered of equal force as those which originally
accompany the Specifications.

ART. 5: SHOP DRAWINGS

5.01 CONDITIONS IN THE PREPARATION OF SHOP DRAWINGS: The Contractor shall prepare at his own
expense and submit two copies of all shop or setting drawings, templates, patterns and models and the
Owner shall pass upon them making desired corrections, if any.

5.02 IDENTIFICATION: Shop drawings which shall be numbered consecutively shall represent:

a. All working and erection dimensions.

b. Arrangement and sectional views.

c. Necessary details, including complete information for making connections with other work.

d. Kinds of materials and finishes.

Shop drawings shall be dated and contain (a) the name of project, (b) the descriptive names of
equipment, materials, and classified item numbers and (c) the location at which materials or equipment
are to be installed in the Work.

5.03 LETTER OF TRANSMITTAL: Submission of shop drawings shall be accompanied by a letter of

transmittal in duplicate, containing the name of the project, the Contractor's name, number drawings,
titles, and other pertinent data.

5.04 CORRECTIONS, CHANGES AND VARIATIONS: The Contractor shall submit three sets of prints of shop
drawings to the Owner for approval. Should shop drawings be disapproved by the Owner, one set of
such shop drawings will be returned to the Contractor indicating therein the corrections and changes to
be made.
 a. The Contractor shall make the required corrections and changes and resubmit the shop
drawings, in duplicate, until the Owner's approval is obtained.

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

c. No work called for by the shop drawings shall be executed by the Contractor until the Owner's
approval is given.

d. If the shop drawingsshow variationsfrom the Contract requirements because of standard

shop practice or other reasons, the Contractor shall make specific mention of such variations in his letter
of submittal.

5.05 RESPONSIBILITY FOR ACCURACY: If the Contractor is a specialty contractor or is engaged by the
Owner as a specialty contractor, the Owner's approval of shop drawings will be general. The Owner's
approval of such drawings or schedule shall not relieve the specialty contractor from responsibility for
deviations from the Drawings or Specifications, unless he has, in writing, called the Owner's attention to
such deviations at the time of submission and secured the Owner's written approval.

5.06 OWNER’S APPROVAL: Unless specified, shop drawing approval by the Owner shall be made within
seven (7) working days of submission by the Contractor.
SECTION 2:
LAWS, REGULATIONS, SITE CONDITIONS, PERMITS AND TAXES

ART. 6: LAWS AND CONDITIONS

6.01 LAWS AND REGULATIONS: In general, the Contractor shall comply with all Laws in so far as they are
binding upon or affect the parties thereto, or the Work.

6.02 SITE CONDITIONS: Before the bidding and the awarding of the Contract, the Contractor is expected
to have visited the project site and made his own estimate of the facilities required in and difficulties
attending the execution of the Work, on account of local conditions and all other contingencies.

ART. 7: PERMITS, TAXES AND SURVEYS

7.01 PERMITS AND LICENSE: The Owner, with the Contractor's assistance, shall secure and pay all
construction permits and licenses necessary for the execution of the Work or of any temporary work
and easements in relation thereto.

7.02 TAXES: Wherever the law of the place where the project is located requires sales, consumer, use, or
other similar tax related or pertinent only to the construction of the project, the Contractor shall pay
such tax.

7.03 CONSTRUCTION STAKES AND REFERENCE MARK: The Owner shall furnish all surveys describing the
physical characteristics, legal limitations, and utility locations of the site.

7.04 SERVICES OF GEODETIC ENGINEER: The Contractor shall, at his option or when so required under
the Contract, engage the services of a licensed Geodetic Engineer to confirm and certify the location of
column centers, piers, walls, pits, trenches, pipe work, utility lines and work of a similar nature.
SECTION 3:
EQUIPMENT AND MATERIALS

ART. 8: GENERAL

● All materials and equipment must conform to all Laws now or which may be in force and
applicable during the period of construction. The Contractor shall bear all damages by reason of
any delay in the Work arising from his failure to comply with this provision. Where any revision
or amendment to such Laws is made during the construction period which affects the cost or
time of completion of the Contract, a constructive change in the Work shall be recognized and a
corresponding Contract Price and Completion Time adjustment shall be made.

ART. 9: EQUIPMENT

9.01 QUALITY OF EQUIPMENT: In order to establish standards of quality, the Owner, in the detailed
Specifications may have referred to certain equipment by name and catalog number.

9.02 EQUIPMENT SUBSTITUTION: The Contractor shall furnish the complete list of proposed
substitutions preferably prior to the signing of the Contract together with such engineering and catalog
data as the Owner may require.

ART. 10:MATERIALS, FIXTURES, APPLIANCES, AND FITTINGS FURNISHED BY THE CONTRACTOR

10.01 SAMPLES OF MATERIALS

10.02 TRADE NAME MATERIALS AND SUBSTITUTES

10.03TESTING SAMPLES OF MATERIALS

10.04 QUALITY OF MATERIALS

10.05 STORAGE AND STOCKPILING OF MATERIALS

10.06 DEFECTIVE MATERIALS

10.07 IMPORTED MATERIALS, FIXTURES AND EQUIPMENT

10.08 OWNER’S APPROVAL

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

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

ART. 12: ROYALTIES AND PATENTS

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

ART. 13: MANUFACTURER’S DIRECTIONS

● All manufactured articles, materials, equipment, appliances, fixtures and fittings supplied by the
Contractor shall be applied, installed, connected, erected, used, cleaned, and conditioned by
him, in accordance with manufacturer’s printed directions. Where reference is made to the
manufacturer’s directions, the Contractor shall submit the specified number of copies of such
directions to the Owner.
SECTION 4:
PREMISES AND TEMPORARY STRUCTURES

ART. 14: USE OF PREMISES

14.01 LIMITATION OF USE: The Contractor shall confine his apparatus, the storage of materials, and the
operations of his workmen to limits indicated by Law or directions of the Owner and shall not
unreasonably encumber the work premises with his materials.

14.02 SAFEGUARD FOR STRUCTURE: The Contractor shall not load or permit any part of the structure to
be loaded with a weight that will endanger its safety. The Contractor shall enforce the Owner’s safety
instructions regarding signs, advertisements, fires and smoking.

ART. 15:TEMPORARY STRUCTURES AND FACILITIES

15.01 TEMPORARY OFFICE AND CONTRACTOR’S BUILDING

15.02 TEMPORARY HOUSING FOR WORKERS

15.03 SAFETY AND SANITATION

15.04 TEMPORARY SIGNS

15.05TEMPORARY OR TRIAL USAGE

SECTION 5:
PROTECTION OF WORK AND SAFETY

ART. 16: PROTECTION OF WORK AND OWNER'S PROPERTY

16.01 SAFEGUARD MEASURES

16.02 OLD MATERIALS

16.03 TREES AND OTHER PLANTS

16.04 DRAINAGE

ART. 17: PROTECTION OF ADJACENT PROPERTY AND EXISTING UTILITIES

17.01 CONTRACTOR'S RESPONSIBILITY: The Contractor shall adequately protect adjacent property as
provided by Law and the Contract. Any neighboring property or building which may be jeopardized in
any manner must be thoroughly and substantially protected against damage during construction at the
Contractor's expense.
17.03 CONDITION SURVEY: Prior to commencement of the Works, the Contractor shall, insofar as is
legally and physically possible, survey and ascertain the condition of any existing adjacent
properties or buildings and record the results thereof through photographic record or by any other
means.

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

18.01 AUTHORIZATION TO CONTRACTOR: In an emergency endangering life, the Work or the

adjoining property, the Contractor, even without special instruction or authorization from the
Owner, shall act, at his discretion, to prevent or minimize such threatened loss or injury.
Emergency work performed by the Contractor shall be treated as one performed under a Change
Order unless the emergency was caused or brought about by his fault or negligence.
SECTION 6:
LABOR, WORK AND PAYMENTS

ART. 19: LABOR

19.01 CHARACTER OF WORKMEN: The Contractor shall employ only competent and duly qualified
professionals, technical personnel, foremen, mechanics and workers to supervise or execute the Work.

ART. 20: WORK

20.01 METHODS AND APPLIANCES: The Contractor shall use such methods and appliances for the
performance of the Work as will ensure the completion of the Work of the required quality within the
Completion Time.

20.02 LAYING OUT THE WORK: All stakes and benchmarks placed by the Contractor in laying out the
work and approved by the Owner shall be carefully guarded and preserved by the Contractor. Unless
such stakes or marks are displaced or rendered useless through the carelessness or neglect of the
Owner or of his agents or employees, they shall be replaced by the Contractor at his expense.

20.03 DEFECTIVE WORK: Work that fails to comply with the Contract is defective. Defective work shall
be condemned by the Owner upon discovery, and when such work has been condemned it shall be
immediately removed by the Contractor and replaced in accordance with the Drawings and
Specifications.

20.04 INSPECTION OF WORK

a. The Owner shall have access, at all times, to the Work. The Owner shall provide a sufficient number of
inspectors while Work is in progress to ensure its timely inspection.

b. The Contractor shall furnish without additional charge all reasonable facilities, labor and materials
necessary for the convenient inspection and tests that may be required by the inspectors.

c. The Owner shall provide inspectors authorized to witness the pouring of concrete and the absence of
the Owner's inspectors at any time during the progress of the work shall be an implicit approval of the
quality of the cement mix and the authority to pour it.

d. If the Specifications, the Owner's instructions, the Laws, or any public authority requires any work to
be specifically tested or approved, the Contractor shall give timely notice to the Owner and other parties
required making or being present at the inspection of the date and time of such inspection. Inspection
by the Owner shall be made, where practicable, at the source of supply.

e. If any work should be covered up without timely notice to the Owner, or before the Owner can make
a timely inspection thereof, it must, if required by the Owner, be uncovered for examination at the
Contractor's expense. However, notwithstanding the failure of the Owner to make a timely inspection of
the work before it is covered, its re-examination may be ordered by the Owner and if so ordered, the
work must be uncovered by the Contractor at the Owner's expense but if such work be found not in
accordance with the Contract, the Contractor shall shoulder the cost of uncovering and re-doing the
work.

f. If there are indications that the work done is not in accordance with the Drawings and Specifications,
the Owner may at any time before final acceptance of the Work make an examination of the portion
already completed by removing or tearing out the same. The Contractor shall, on request, furnish all
necessary facilities, labor, and materials. If such work is found to be defective in any material respect
due to fault of the Contractor or his sub-contractors, the Contractor shall defray all the costs of such
examination and of satisfactory reconstruction. If, however, such work is found to meet the
requirements of the Contract, the actual cost of labor and materials necessarily involved in the
examination and replacement plus 15 percent (15%), shall be allowed the Contractor and he shall, in
addition, if completion of the work has been delayed thereby, be granted a suitable extension of time on
account of the additional work involved.

g. All inspection and tests shall be performed as not to delay the work unnecessarily.

20.05 WORK DURING AN EMERGENCY: The Contractor shall perform any work and shall furnish and
install all materials and equipment necessary during an emergency endangering life or property. In such
cases, Article 18.01 shall apply.

20.06 INCREASED OR DECREASED QUANTITIES OF WORK: Adjustments in working drawings to suit field
conditions which cannot be foreseen at the time of calling for bids, may be necessary during
construction. It is the essence of the Contract to recognize such changes in Drawings as normal. The
resulting change in quantities or the increase in the scope of work of the Contractor shall be covered by
a Change Order. Work done by the Contractor without timely notice to the Owner that an adjustment is
required of Contract Price and Completion Time shall be at his own risk and expense.

20.07 CHANGES IN THE WORK:

a. CHANGES ORDERED BY OWNER

b. CHANGE OF SUB-SURFACE CONDITIONS
c. ADJUSTMENT OF CONTRACT
d. VALUE OF EXTRA WORK
e. AWARD OF EXTRA WORK TO OTHER CONTRACTORS

20.08 CLAIMS FOR EXTRA COST: If the Contractor claims that any instructions by the Owner or the
Drawings or Specifications issued after submission of the Bid, involve a change, he shall give the Owner
written notice thereof within fifteen (15) days after the receipt of such instruction, Drawings or
Specifications, as much as possible.

In like manner, if the Contractor incurs a delay in the mobilization and/or in the progress of his work for
reasons attributable to the Owner, such as but not limited to Owner-supplied materials not arriving on
time, movements or work executed by the Owner which interfere with the progress of the Contractor's
work, delayed decisions by the Owner and other matters related thereto, he shall give the Owner
written notice thereof within fifteen (15) days after recognition of such delay.
20.09 CLEANING UP AT COMPLETION OF WORK: The Contractor shall at all times keep the premises free
from accumulations of waste materials or rubbish caused by his employees. Rubbish shall not be thrown
from windows or other parts of the structure without the use of rubbish chutes. At the completion of
the Work, he shall remove all temporary work, his rubbish therefrom and all his tools, scaffolding and
surplus materials and turn over the work for occupancy.

20.10 USE OF COMPLETED PORTIONS OF WORK: The Owner may take possession of and use any
completed or partially completed portion of the Work, although the time for completing it or portions
thereof may not have expired; but such taking of possession and use shall not be deemed an acceptance
of any work not completed in accordance with the Contract.

20.11 SUBSTANTIAL COMPLETION AND ITS EFFECT:

20.12 PERIOD OF MAKING GOOD OF KNOWN DEFECTS OR FAULTS: The expression "Period of Making
Good of Known Defects or Faults" shall mean a period of not more than thirty (30) calendar days,
calculated from the date of receipt by the Contractor of the last item in the punch list submitted during
the period, during which the Contractor shall complete the corrective works.

20.13 MAKING GOOD OF KNOWN DEFECTS OR FAULTS: The Contractor shall execute at his own expense
all works necessary for making good of known defects, imperfections or faults (wear and tear excepted).
If the Contractor shall fail to do any such corrective work, the Owner shall, upon written notice to the
Contractor, be entitled to carry out such work by his own workmen or by other contractors, and charge
the cost thereof to the Contractor. The Owner may withhold an amount not exceeding the Contract cost
of executing such work from the payment to the Contractor.

20.14 SPECIAL TEST AND INSPECTION: Special test, inspection or approval, not otherwise required in the
Contract which the Owner instructs the Contractor to perform after the date of substantial completion
shall be treated as a separate work which shall be covered by a supplemental agreement.

20.15 ACCEPTANCE OF NON-CONFORMING WORK: If the Owner accepts defective or non-conforming

work, instead of requiring its removal and correction, the Owner shall issue to the Contractor a change
order to reflect a reduction in the Contract Price where appropriate by an amount not exceeding the
value of the unfinished work as determined in the Breakdown of Work and Corresponding Value. Such
adjustment shall be effected whether or not final payment has been made.

20.16 ADJUSTMENT OF PRICES:

20.17 PAYMENT IN LEGAL TENDER: Payments in money under the Contract shall be made in the
currency stipulated; and if it is not legally possible to deliver such currency, then in the currency
which is legal tender in the Philippines.

ART. 21: TIME OF COMPLETION OF WORK

21.01 NOTICE TO PROCEED, WHEN REQUIRED

21.02 COMPLETION TIME

21.03 SCHEDULE OF CONSTRUCTION WORK

A. The Contractor, immediately after the Contract has taken effect, shall submit for approval a
construction schedule in a form acceptable to the Owner indicating the approximate date each pay item
will be started and completed, the equipment to be used and number of men to be employed to
complete it in accordance with the schedule. The progress of the work shall be at a rate sufficient to
complete the Work in an acceptable manner within the Completion Time.

B. In case of slippage, the Owner may call for meetings with the Contractor and other contractors
involved to determine the possible cause/s contributing to the slow progress of the construction work,
and if such slippage is due to the fault or negligence of the Contractor, the Owner may require the
Contractor to submit a catch-up schedule which shall be subject to approval by the Owner.

C. The Owner may order the acceleration of work to meet a desired completion date. Acceleration of
work for the benefit or convenience of the Owner or caused by the fault of or delay by the Owner, shall
be treated as extra work for which a Change Order shall be issued and the Contractor shall be paid for
the cost of such acceleration. However, where the reason for acceleration is due to the fault of the
Contractor, such additional cost for acceleration shall be borne by the Contractor alone.

21.04 EXTENSION OF TIME:

A. the Contractor shall be entitled to an equitable adjustment of Completion Time where the Contractor
is obstructed or delayed in the prosecution or completion of the Work

B. Contractor shall within fifteen (15) days from the occurrence of the event which caused the delay,
notify the Owner and the Owner shall, not later than fifteen (15) days from receipt of such notice, give
the Contractor an equitable adjustment of the Completion Time. The failure of the Owner to reply to the
Contractor or to give an equitable adjustment of the Completion Time shall be deemed an approval by
the Owner of the adjustment requested by the Contractor.

C.[a]. the Contractor shall be entitled to an adjustment of Completion Time equal to the delay caused by
such factor/s. However, the Contractor shall not be entitled to extension of Completion Time due to the
alleged failure of the Owner to furnish materials or information or provide drawings, unless in the
construction schedule approved by the Owner, they are necessary to prosecute the Work in the order
required, and the failure of the Owner to provide them caused a delay in the work of the Contractor.

[b] The Owner, taking into account the construction schedule approved by him and the progress of the
work of the Contractor, is conclusively presumed to know when materials, equipment or supplies or
drawings to be provided by the Owner shall be required by the Contractor, and the failure of the
Contractor to give prior or timely notice to the Owner of the date when such material, equipment or
supplies or drawings shall be required shall not be a ground for denying the Contractor an adjustment of
Completion Time.

[c] The failure of the Owner to reply to the Contractor's request for adjustment of Completion Time
within fifteen (15) days from the date of receipt of the request shall be deemed an approval by the
Owner of the adjustment requested by the Contractor. Such request shall be deemed a formality which
does not affect the right of the Contractor to an equitable adjustment of Completion Time as provided
in this paragraph C.

D. Delay in the payment of any progress billing as required in Article 22.05 shall automatically extend
the Completion Time by a period equal to the delay. The Contractor shall not be required to give notice
to the Owner nor be required to establish that such delay actually delayed the prosecution of the Work
or delayed the Contractor to a period equal to the delay in the payment of the billing.

21.05 DELAY IN COMPLETION OF THE WORK:

[a] It is understood that time is an essential feature of the Contract.

[b] Upon failure of the Contractor to complete the Work within the Completion Time, the Contractor
shall pay the Owner liquidated damages in the amount stipulated in the Contract as indemnity. The
Owner may deduct from any sum due the Contractor the amount which has accrued as liquidated
damages. Liquidated damages shall accrue from the first day of delay in completing the work within the
Completion Time until the date of substantial completion as determined under Article 20.11.

[c] The amount of damages for corrective works uncompleted within the Period of Making Good of
Known Defects shall be based on the value of such uncompleted corrective work in the Breakdown of
Work and Corresponding Value for approved billings.

[d] Upon failure of the Owner to pay the Contractor for approved billings, the Contractor shall have the
right to suspend performance of the Work under the conditions provided in Article 27 (b), (c) and (d)
and be entitled to the payment of interest under Article 22.05.

ART. 22: PAYMENTS

22.01 BREAKDOWN OF CONTRACT AMOUNT:

Except in cases where unit prices form the basis for payment under the Contract, the Contractor shall,
within fifteen (15) days from the receipt of Notice to Proceed, or from commencement of the Work
submit a Breakdown of Work and Corresponding Value of the Contract Amount showing the value
assigned to each part of the work. The Breakdown of Work and Corresponding Value as approved by the
Owner, shall be used as the basis for all Requests for Payment, and for determining the value of
uncompleted work or corrective works.

22.02 REQUESTS FOR PAYMENT: The Contractor may submit periodically but not more than once each
month a Request for Payment for work done. The Contractor shall furnish the Owner all reasonable
facilities required for obtaining the necessary information relative to the progress and execution of the
Work. Each Request for Payment shall be computed from the work completed on all items listed in the
Breakdown of Work and Corresponding Value, less a retention of 10% of the progress payment to the
Contractor. When 50% of the Contract has been accomplished, no further retention shall be made on
progress billings for the balance of the Work. In general, and unless the Contract provides otherwise,
no payment shall be made for materials or items not incorporated in the work, except where such
immediate acquisition is made necessary due to shortages or import or transportation difficulties, in
which case, payment shall be made conditioned upon the submission by the Contractor of bills of sale or
upon compliance with such other procedures as will establish the Owner's title to such material or item
or otherwise adequately protect the Owner's interest.

22.03 AUTHORIZED DEDUCTIONS FROM VALUE OF COMPLETED WORK.

The Owner may deduct from any payment due the Contractor for -

a. The estimated cost of defective work not remedied;

b. The amount of substantiated and unpaid claims by subcontractors employed in and suppliers of
materials and labor for the Work unjustifiably withheld by the Contractor; and

c. The amount which has accrued as liquidated damages.

22.04 CONDITIONS RELATIVE TO PAYMENTS:

The Owner shall estimate the value of work accomplished by the Contractor using as basis the schedule
stipulated in the Breakdown of Work and Corresponding Value. Such estimate of the Owner of the
amount of work performed shall be taken as the basis for the compensation to be received by the
Contractor. While such preliminary estimates of amount and quantity shall not be required to be made
by strict measurement or with exactness, they must be made as close as possible to the actual
percentage of work accomplishment.

22.05 OWNER'S ACTION ON REQUESTS FOR PAYMENT:

Within thirty (30) days after a receipt of request for payment from the Contractor, the Owner shall pay
the amount as certified. The 30-day period shall be inclusive of the period required in evaluating and
certifying the Contractor’s accomplishment. In case the Owner fails to pay on time the amount due, the
Owner shall pay, in addition to the amount due, interest thereon computed from the due date in
accordance with the 30-day regular loan rate of the Land Bank of the Philippines prevailing on due date.

22.06 PAYMENT OF UNPAID LABOR, SUB-CONTRACTORS AND SUPPLIERS:

The Contractor shall pay punctually all workmen employed by him on the project at not less than such
rates as are provided by existing laws. He shall also pay promptly all materials purchased by him,
equipment used by him on the project and all taxes due from him. He shall remit as required by law all
amounts legally required to be withheld from the salaries or wages of his employees or workmen.

22.07 PAYMENTS OVER 90 PERCENT:

No payment shall be made in excess of ninety percent (90%) of the Contract Price, unless a statement
sworn to before any officer duly authorized to administer oaths is submitted by the Contractor to the
effect that all bills for labor, other than current wages, and all bills for materials have been duly paid by
the Contractor and his Sub- contractor, if any, excepting only such bills as may be enumerated in such
sworn statement. The Contractor shall render the Owner free and harmless from any claims and
payment of such bills, and shall indemnify the Owner the cost of defending himself against such claims.

22.08 OTHER REQUIREMENTS BEFORE FINAL PAYMENT:

The Contractor shall submit (aside from those which may be provided in the Contract) the following, as
applicable, before final payment is made:

a. Certificate of Final Building Occupancy unless such certificate cannot be obtained through no fault of
the Contractor.

b. Certificate of Final Inspection of electrical, telephone, sanitary, mechanical, water, gas, safety and
other utilities unless such certificate cannot be obtained through no fault of the Contractor.

c. Original and three (3) sets of prints of "As-Built Drawings" of Electrical, Sanitary, Gas, Telephone and
Mechanical works, if such works are within the scope of the Contract. "As-Built Drawings" are the
working drawings showing the system and actual locations of outlets, fixtures, services and equipment
that were installed.

d. Three (3) copies of Directory of Panel Boards and list of circuits.

e. Three (3) copies of Instructions and Manual for operating and maintaining of fixtures and equipment.
f. Three (3) copies of Keying Schedule.

g. A release of liens arising under the Contract as provided in Article 34.01, and the sworn statements
required in Article 22.09 (A) and Article 22.07.

22.09 ACCEPTANCE AND FINAL PAYMENT:

Whenever the Contractor notifies the Owner that the Work under the Contract has been completely
performed by the Contractor, the Owner shall proceed to verify the work, shall make the final estimates,
certify to the completion of the work, and accept the same.

22.10 CORRECTIONS OF WORK BEFORE OR AFTER FINAL PAYMENT:

A. Acceptance by the Owner of the Work of the Contractor shall relieve the Contractor of liability for any
defect in the Work unless

B. Paragraph A shall apply notwithstanding the issuance of the final certificate of completion or of full
payment.

C. Poor or inferior work or work which does not comply with the Drawings and Specifications which is
apparent upon inspection by the Owner or by the technical representatives and inspectors employed by
the Owner shall forthwith be condemned and the Contractor notified thereof to give the Contractor an
opportunity without loss of time and without incurring unnecessary cost, to correct, remove and replace
the defective work. Work not so condemned within one year from final payment cannot later be
rejected by the Owner. If the Owner instructs the Contractor to remove or replace it thereafter, the
instruction shall be treated as a change order.

D. The Contractor shall be liable to the Owner for any hidden defect discovered and notified to the
Contractor which the Contractor receives from the Owner within the warranty period as provided in the
Contract, or in default of any provision fixing the warranty period, within one year from the posting of
the Guarantee Bond.

E. Nothing herein shall be deemed to limit the liability of the Contractor to third persons due to any loss
or damage resulting from the collapse of the Work due to defects in the construction or the use of
materials of inferior quality or due to any violation of the terms of the Contract in accordance with
Article 1723 of the Civil Code of the Philippines.

22.11 RELEASE OF RETENTION:

Subject to Article 33.01 herein, the amount retained by the Owner under the provision of the Contract
shall be released not later than the expiration of the Period of Making Good of Known Defects as
provided in Article 20.12 upon the posting of the Contractor's Guarantee Bond.
SECTION 7:
CONTRACTOR-SEPARATE CONTRACTORS-SUBCONTRACTORS
RELATIONS

ART. 23: SEPARATE CONTRACTS WITH OTHER CONTRACTORS

23.01

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

ART. 24: CONTRACTOR-SEPARATE CONTRACTORS RELATIONS

24.01 STORAGE OF MATERIALS AND WORK COORDINATION:

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

24.02 CUTTING, PATCHING AND DIGGING:

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

24.03 DEFECTIVE WORK BY SEPARATE CONTRACTORS:

If any part of the Contractor's work depends for proper execution or results upon the work of any other
contractor, the Contractor shall inspect and promptly report it to the Owner. His failure to inspect and
report it shall constitute an acceptance of the other contractor's work as fit and proper for the reception
of his work, except as to defects which may develop in the other contractor's work after the execution
of the Contractor's work. To insure the proper execution of his subsequent work the Contractor shall
verify work already in place and shall at once report to the Owner any discrepancy noticed between the
executed work and the drawings.
24.04 DAMAGE CAUSED BY CONTRACTOR TO SEPARATE CONTRACTORS:

Should the Contractor cause damage to the work of any separate contractor, the Contractor agrees to
relieve the Owner of any liability which may arise therefrom.

24.05 DAMAGE CAUSED BY SEPARATE CONTRACTORS TO CONTRACTOR:

Should any separate contractor cause damage to the Contractor’s work, then the Owner shall hold
harmless the Contractor in respect thereof.

ART. 25: SUB-CONTRACTS

25.01 GENERAL:

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

25.02 CONTRACTOR'S RESPONSIBILITY:

The Contractor agrees that he is as fully responsible to the Owner for the acts and omissions of his sub-
contractors and the persons either directly or indirectly employed by them, as he is for the acts and
omissions of persons directly employed by him.
SECTION 8:
SUSPENSION OF WORK AND TERMINATION OF CONTRACT

ART. 26: CONTRACTOR’S RIGHT TO SUSPEND WORK OR TERMINATE CONTRACT

The Contractor may suspend work or terminate the contract upon 15 days’ written notice to the Owner
for any of the following reasons:

a. If an order from other court or public authority caused the delay of work for a total period of 90 days
through no act or fault of the Contractor or his employees

If the Owner fails to pay the Contractor:

b. The approved Request for Payment as discussed in Article 22.05

c. Any sum within 30 days after its award by arbitration

d. If the Owner suspends work without just cause for more than the total period of 15 days without the
contractors consent

e. The Owner fails to deliver his supplied /furnished construction materials and/or equipment at the
construction site, beyond 15 days after its scheduled delivery as stated in the Contract

f. If the approval of Variation Orders for additional works along the critical path is delayed beyond 15
days after the assigned date for approval by the Owner or his designated Representative

Contractor may request the Owner to suspend work in accordance with the applicable provisions of
Article 27.2:

 If the suspension is necessary for a proper execution of the work o

 by reason of weather or other conditions affecting the safety of the work and the workers

The Contractor shall be entitled to an equitable adjustment of Completion Time and/or Contract Price
for suspension of work due to the above circumstances.

ART. 27: OWNER’S RIGHT TO SUSPEND THE WORK

27.1 SUSPENSION WITHOUT CAUSE:

 The Owner may suspend the work or any portion thereof for a period of not more than the total
period of 15 days notice in writing to the Contract and shall fix the date in which the work shall
be resumed.

 The Contractor shall resume the work on the assigned date set by the Owner.
  The Contractor will be allowed to adjust the Contract Price to include demobilization and
remobilization costs or stand-by time

 The Contractor will also be allowed to adjust the Completion Time which should not be less
than the period of suspension; shall include the delay due to remobilization of equipment and
personnel

 THE OWNER MAY NOT SUSPEND THE WORK WITHOUT JUST CAUSE FOR MORE THAN THE TOTAL
PERIOD OF 15 DAYS WITHOUT THE CONTRACTOR’S CONSENT

27.2 JUST CAUSES FOR SUSPENSION OF WORK: The Owner, by a written order, may direct the
Contractor to stop the work if any of the following cases takes place:

a. Unsuitable weather or other conditions considered unfavorable for the accomplishment of the
work

Failure of the Contractor to:

b. Correct conditions which can begin danger to his workers or to the general public

c. Carry out valid orders issued by the Owner or to comply with any provision of the Contract, or
his persistent failure to carry out works in accordance with the Contract

d. the necessity for adjusting the Drawings to suite the site conditions found during construction or
in case of a change in drawings and specifications

e. Failure of the Contractor to supply sufficient skilled workmen or suitable materials or equipment

f. Failure of the Owner to supply his furnished materials on time, where such failure is due to
causes beyond the reasonable control of the Owner

g. Delay in obtaining a right-of-way, where in the Owner assumed the obligation was on the
Contract; the delay is not due to the fault or negligence of the Owner

h. fortuitous event

i. Peace and order problems; or

j. Any condition similar to the topic discussed above beyond the control of the Owner

 The Contractor shall immediately comply with such order to suspend the work or any part
thereof for such period and in such manner as the Owner may direct, and during such
suspension, the Contractor shall properly protect and secure the Work.

 The Contractor shall be entitled to a fair adjustment of Completion Time and Contract Price for
suspension of work due to Items [a], [d], [f], [g], [h], [i] & [j].
  However, for Item [a], no such adjustment shall be allowed if unsuitable weather conditions
were taken into account in determining the Completion Time as provided in the Bid Documents.
If the actual number of days of unsuitable weather exceeds the period taken into account in the
Bid Documents, the Contractor shall be entitled to an adjustment of Completion Time and
Contract Price.

ART. 28: OWNER’S RIGHT TO TERMINATE CONTRACT

28.1 TERMINATION WITH CAUSE: The Owner may immediately terminate the Contract, without prior
notice to the Contractor, upon the occurrence of any of the following events:

If the Contractor:

a. Is determined bankrupt or insolvent

b. Makes a general assignment for his assets for the advantage of his creditors

c. If a receiver is appointed for the Contractor or for any of the Contractor's property

d. If the Contractor files a petition for suspension of payments

 Article 28: owner’s right to terminate contract

 28.2 Other Grounds for Termination with Cause: The Owner may terminate the Contract upon
the occurrence of any of the following events:

The Contractor repeatedly fails:

a. to supply, based on the construction schedule, the sufficient number of skilled workmen or
suitable materials or equipment

b. to make just cause without prompt payments to subcontractors for labor, materials or
equipment, and completion of the Work is being delayed

c. The Contractor disregards the Laws or orders of any public body having authority

d. The Contractor otherwise violates any considerable provisions of the Contract

e. Slippage of the Contractor in excess of 25% on the accomplishment of work per agreed
construction schedule and/or PERT/CPM plus any time adjustment properly granted to the
Contractor.

 The Owner may terminate the services of the Contractor, exclude the Contractor, from the site
and take possession of the Work and of all the Contractor's tools, appliances, construction
equipment and machinery at the site, after giving the Contractor and his surety a 15 days
written notice.
  In such case the Contractor shall not be entitled to receive any further payment until the work is
finished.

ART. 29: OWNER'S RIGHT TO PROCEED WITH THE WORK AFTER REDUCTION IN CONTRACTOR'S SCOPE
OF WORK; PARTIAL TAKEOVER FROM CONTRACTOR

29.1 OWNER’S RIGHT TO CARRY OUT THE WORK:

If the Contractor:

a. Repeatedly fails to supply skilled workmen or suitable materials or equipment

b. Repeatedly fails to make prompt payments to subcontractors for labor, materials or equitable

c. Fails within a mutually agreed time after written notice of the Owner to carry out remedial or
repair works

d. Fails repeated repair work to correct defected materials or equipment

e. Fails to perform the work in accordance with the Contract

In such case an appropriate change of order shall be issued deducting the payments then or thereafter
the cost of correcting such deficiencies, including compensation of additional services made necessary
by such default, neglect or failure from the Contractor . If the payments then or thereafter from the
Contractor are not sufficient to cover such amount, the Contractor shall pay the difference to the
Owner.

29.2 USE OF MATERIALS AND EQUIPMENT AT SITE:

 The Contractor, upon receiving notice of termination of the Contract, shall vacate the site and
deliver possession of the Work, or the parts thereof specified in the notice to the owner

 All material and equipment needed for the construction work shall remain at the site until the
work is completed and credit the Contractor a reasonable rental. (option of the Owner)

 In such cases wherein the materials or the equipment do not belong to the Contractor, the
owner shall have the option to retain them to be use in the project and pay reasonable rent
directly to the lessor for their use, chargeable against the Contractor

29.3 OWNER TO COMPLETE WORK:

 The Owner shall then take over the work, and use such tools, appliances and materials of every
description as may be found at the site for the purpose of completing the Work.
29.4 EVALUATION OF COST OF WORK: Upon such termination of the Contract, the Owner will evaluate
and fix the value of the work completed by the Contractor.

a. If the charges against the project prior to termination of the Contract are not in excess on the
Contract Price, then the difference between them may be applied to settle claims filed against the
Contractor.

b. In case of suspension of work, all unpaid executed work including costs liable during suspension shall
be charged to the Owner.

29.5 OWNER'S RIGHT TO RECOVER DAMAGES:

 Neither the taking over by the Owner of the work for completion by administration nor the re-
letting of the same to another Contractor shall be translated as a waiver of the Owner's rights
to recover damages against the original Contractor and/or his sureties for the failure to
complete the work as stipulated.

In such case, the full liability extent of the damages for which the Contractor and/or his sureties shall
include:

a. Liquidated damages which may accumulate up to the date the Owner effectively takes over the
work or the date of substantial completion (whichever occurs earlier)

b. If the Owner completes the work by administration, the direct cost of completing the work shall
include the reasonable cost of managerial and administrative services obtain from the time the
Owner effectively took over the work by administration.

29.6 LIQUIDATED DAMAGES

1. When the Contractor fails to satisfactorily complete the Work within the specified Contract time

2. To be entitled to such liquidated damages, the owner does not have to prove that it has obtain
actual damages. Such amount shall be deducted from any money due or may become payable
to the Contractor under the Contract.

3. In no case, however, the total sum of liquidated damages exceed ten percent (10%) of the total
contract price.

4. If, before the completion of the whole of the Work, any part of the Work has been certified by
the Owner’s Engineer or Representative as used by the Owner, the liquidated damages for the
delay shall be reduced in which the value of the part certified carries the value of the whole
Work, unless a contrary provision is stipulated in the Contract.
SECTION 9:
SUSPENSION OF WORK AND TERMINATION OF CONTRACT

ART. 30: CONTRACTOR'S RESPONSIBILITY FOR ACCIDENTS AND DAMAGES

30.1 SAFEGUARDS TO BE UNDERTAKEN BYC ONTRACTOR:

The Contractor shall:

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

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

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

30.2 OWNER NOT TO BE RESPONSIBLE: The Contractor shall render the Owner free and harmless for
the death of, the disease contracted or injury received by the Contractor or any of his employees or
laborers and for damages caused by the Contractor or his employees to any property of the Owner and
adjoining property.

a. The Contractor shall compensate and save the Owner against all losses and all claim for any act
or omission of said Contractor, or of his agents or employees, in the execution of the Work or
the guarding of it.

b. Claims for payment and repairs for damages for which the Contractor is liable shall be settled by
the Contractor at his own expense. If the Contractor fails to repair such damages and other
claims; the Owner may repair and pay the claims and deduct the entire cost of such repairs from
the payments warranted to the Contractor.

30.3 CONTRACTOR'S DEFAULT:

The Owner shall have the right to undertake reasonable safety and protection measures in case
of Contractor's default, and charge the cost of such measures to the Contractor.

ART. 31: CONTRACTOR’S INSURANCE AND BONDS

31.1 CONTRACTOR'S LIABILITY INSURANCE: The Contractor shall secure and maintain insurance
coverage from an insurance company acceptable to the Owner that will protect himself, his sub-
contractors, and the Owner from claims for bodily injury, death or property damage which may arise
from work under the Contract.
31.2 ACCIDENT INSURANCE FOR WORKERS: The Contractor shall, in addition to compulsory coverage of
workers under the workmen's compensation law, obtain insurance coverage for accidental death or
injury of his officers, employees and laborers.

31.3 CONTRACTOR'S FIRE INSURANCE: The shall secure and maintain the policies upon such structures
and materials and in such amounts as shall be designated in the joint names of the Contractor and the
Owner as their respective interest may appear.

31.4 CONTRACTOR'S PERFORMANCE AND PAYMENT BONDS: The Contractor, prior to signing the
Contract, shall furnish a Performance Bond equal to 15% of the Contract amount for the faithful
performance of his work and 15% bond covering Contractor's obligations arising from the Contract to its
workers, subcontractors and suppliers.

31.5 CONTRACTOR’S GUARANTEE BOND: The Performance and Payment Bonds will be released by the
Owner upon posting by the Contractor of a Guarantee Bond equivalent to the amount of the retention
released to the Contractor.

The Guarantee Bond shall last for a period of one (1) year starting from the date of posting as a
guarantee that all materials and workmanship installed under the Contract are of acceptable quality.

31.06 CONTRACTOR'S GUARANTEE-WARRANTY:

a. The Contractor shall performed by his sub-contractors in case of work and when guarantees
are required, secure guarantees from said sub-contractors and deliver copies to the Owner upon
completion of work. The term "guarantee" shall include "warranty".

b. The Contractor shall and thereby guarantees all work performed by him directly and for when
guarantees are required.

c. The Contractor shall guarantee for a period of one year, or longer wherein provided in the
Specifications of materials and workmanship installed under the Contract to have an acceptable
quality in every aspect during the guarantee period

d. If there is any defect develop in aforesaid work, within the guarantee period due to fault in
material and/or workmanship, the Contractor shall make all repairs and do all necessary work to
correct defective work to the Owner's satisfaction.

 Article 31: Contractor’s insurance and bonds

e. In case the Contractor fails to commence or do the work as ordered, the Owner may have the
work done by another contractor and charge the cost thereof against money retained as
provided for in the Contract and/or against his sureties.

f. The former remedies shall not have favor to the rights of the Owner under the New Civil Code
and other laws now or hereafter may be applicable.
31.7 MANDATORY CONDITIONS OF BONDS: The bonds required of the Contractor shall be subject to
the following mandatory conditions which shall form part of said bonds.

A surety or bondsman issuing any bond called in the Contract is consider conclusively to have
accepted the following mandatory conditions, and any provision in the bond thereby issued or limit by
time or otherwise, any right of the Owner shall be void and shall not prevail over these mandatory
conditions:

a. The surety or bondsman agrees in advance to future novation/s of the bond either by adjusting
the scope of the work of the Contractor caused by directed or constructive changes, the
Completion Time or the Contract Price

b. The bond issued by surety or bondsman under the Contract shall continue to have force and
effect beyond the effectivity period stated in the bond if the work or the obligation for which it
was issued has not been completely performed.

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

d. Until the Owner takes over the Work (not only a part thereof) or otherwise terminates the
Contract, the Contractor shall not be considered default . The Owner's assistance to the
Contractor shall not prejudice nor limit the right of the Owner to have a later recourse against
the bond.

ART. 32: OWNER’S RESPONSIBILITIES AND LABILITIES

32.01 ADVANCE PAYMENT

An advance payment in an amount to be mutually agreed upon shall be paid by the Owner to
the Contractor, provided that the Contractor shall post a surety bond of equivalent amount
callable on demand and acceptable to the Owner to guarantee its repayment.

32.02 PROTECTION OF EMPLOYEES AND PROFESSIONALS PERFORMING SERVICES FOR THE OWNER

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

The Owner may maintain such insurance as will protect him from his contingent liability for
damages, for personal injury, including death, which may arise from the work under the
Contract.

32.04 ADDITIONAL INFORMATION AND SERVICES REQUIRED OF THE OWNER

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

ART. 33: LIENS, DISPUTES AND aRBITRATION

32.01 LIENS
As a condition to final payment and/or the release of the retention, the Contractor shall
release the Work from any legal liens attaching therewith as a result of unpaid claims of
subcontractors and/or suppliers for the supply of materials and/or equipment to the
Contractor for the project in the form of a sworn statement by the Contractor or a duly
authorized officer of the Contractor stating that all such claims have been fully paid; and
furnishing the Owner, when required, with receipts or acknowledgments of payment issued by
the subcontractors and/or suppliers.

32.02 ASSIGNMENT
A. The Contract may not be assigned in whole or in part. Any purported assignment made of the
Contract or any part thereof without the consent of either party shall be void and ineffective.
B. The Owner may nevertheless exact full compliance from both the Contractor and his assignee
without waiving the Owner's right at any time thereafter to reduce the Contractor's scope of
work by removing from the Contractor the part of the work which was assigned and giving it to
any other contractor and/or terminating the Contract in either case, without any further cause
than the assignment.
C. Any contract, agreement or binding written commitment entered into by the Contractor
either before or after the execution of the Contract, with any other person as cooperator,
consortium member, joint venture member, or supplier of equipment, technology, materials or
services for the joint execution of the Work, shall be provided to the Owner at the latter's
request. If the Owner finds that the contract, agreement or binding written commitment is a
disguised assignment of the Contract, the Owner shall so notify the Contractor and shall have
the rights under paragraph [B] above.
33.03 SUBCONTRACTING
A. The Contractor may subcontract any part of the Contract with the approval of the Owner.
B. The Owner may require the Contractor as a condition for the approval of the subcontract (1)
that the subcontract shall be submitted to the Owner and the subcontract must require the
subcontractor to obtain the same bonds and insurance coverage as are required of the
Contractor under the Contract, and (2) that the Contractor furnish the Owner copies of these
insurance policies and bonds.

33.04 DISPUTES
A. All matters which under the Contract shall be accepted, approved or decided by the Owner
may be entrusted by the Owner to his authorized representative for determination within a
period of fifteen (15) days.
B. If the Contractor disagrees with the determination by the Owner or by his representative,
such disagreement shall be brought before an adjudicator, who shall be jointly engaged by the
Owner and the Contractor, not later than fifteen (15) days before the commencement of the
Work to resolve conflicts.

33.05 SETTLEMENT OF DISPUTES

A. DISPUTE OR DISAGREEMENT SUBMITTED TO ARBITRATION
Any dispute arising out of or in connection with the Contract including any
question regarding its existence, validity or termination not resolved as provided above
shall be referred to and finally resolved by arbitration under the Rules of Procedure
Governing Construction Arbitration promulgated pursuant to Executive Order No. 1008
(Construction Industry Arbitration Law) by panel of three (3) arbitrators appointed in
accordance with such Rules. The place of arbitration shall be in Metro Manila, Philippines.
Resort to arbitration shall be made by filing a claim with the Construction Industry
Arbitration Commission.

B. SUBSITUTED SERVICE
A party to the Contract shall, by entering into the same, be deemed to be
submitting himself to the jurisdiction of the Construction Industry Arbitration Commission
with regard to any dispute arising out or in connection with the Contract as provided in
Article 33.05
SECTION 10:
OWNER’S REPRESENTATIVE

The Owner's Representative shall either be the Architect, the Engineer, Construction Manager or other
person designated by the Owner as the Owner's Representative.

The Owner's Representative shall have the full authority to act for and on behalf of the Owner in all
matters which under the Contract the Owner shall give his consent, approval or decision.

The Owner shall give the Contractor at the time of the Notice to Proceed or any time thereafter the
notice of appointment of the Owner's Representative. Unless the Contractor is notified in writing by the
Owner of the limits of authority of the Owner's Representative, it shall be understood that the authority
of the latter to act for and on behalf of the Owner is full and unqualified.

In the absence of a written communication by the Owner to the Contractor notifying the latter of the
designation of a particular person as Owner's Representative, the Architect shall perform the functions
and have the authority of the Owner's Representative if the project or work involves the construction of
a building; but if the project or work involves the construction of an engineering structure, other than a
building, or the construction of a building if such constitutes only a minor portion of the project, the
Engineer shall perform the functions and have the authority of an Owner's Representative.

The Owner's Representative shall also perform the function of Construction Manager unless the Owner
designates another person as Construction Manager. If the Owner shall designate a Construction
Manager and define his functions, those functions of a Construction Manager not delegated to the latter
shall be performed by the Owner's Representative. Notwithstanding the designation by the Owner of an
Architect, Engineer and/or Construction Manager, communications between the Contractor and the
Owner shall be made only through the Owner's Representative.
SECTION 10:
SCHEDULE OF TIME LIMITS

The Contractor shall perform his work subject to certain Time Limits. This indexed section, as based on
the entire General Conditions, is provided for in order to facilitate the execution of his work.
.