CIAP DOCUMENT 102

UNIFORM GENERAL CONDITIONS OF

CONTRACTFOR PRIVATE CONSTRUCTION

Submitted by: Angelica Bonus

Submitted to: Engr. Jenilyn Aquino
SECTION I
IDEFINITIONS AND DOCUMENTS
ARTICLE 1: DEFINITIONS
1.01 ACT OF GOD OR FORCE MAJEURE
Includes an event which cannot be foreseen, or which through foreseen,
was inevitable. Rain, wind, flood or other natural phenomenon of
inconsequential degree for the locality shall not be construed as an Act of
God Force and Majeure.
1.02 ADVERTISEMENT or INVITATION TO BIDS
Refers to the notice published by the Owner or the invitation issued to
prospective bidders, giving information as to the nature of the
proposed project.
1.03 AGREEMENT
Is the term used to describe the agreement signed by the Owner and
the Contractor
1.04 BID
Is the tender, or proposal, or quotation, or offer of a bidder
to perform the work described in the Contract
1.05 BID BOND
 refers to any acceptable form of bond accompanying the
Bid submitted by the bidder as a guarantee
1.06 BID DOCUMENTS
collectively refer to all documents provided or made
available to prospective bidders
1.07 BID BULLETIN
is a document containing additional information on Bid
Documents.
1.08 BREAKDOWN OF WORK AND CORRESPONDING VALUE
is a listing of the different parts of the work.
1.09 CHANGE ORDER
 Is a written order authorizing a change or variation in the work
1.10 CONTRACT
 Is the term used to describe the Agreement and the Contract Documents
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:
• Special Provisions or Conditions
• General Conditions
• Drawings
• Specifications
• Other Bid Documents
1.12 CONTRACT PRICE
 Is the amount in money or other consideration to be paid by the Owner to
the Contractor
1.13 CONTRACTOR
 Is the person or firm duly registered and licensed by the Philippine
Contractors Accreditation Board
1.14 DRAWINGS
 Are graphical presentations of the Work. They include all supplementary
details and shop drawings.
1.15 FINAL PAYMENT
Refers to the payment of the final progress billing and all approved claims
including but not limited to those variations in the work, Contract Price
Adjustments and/or escalation, acceleration of work, and others. lt does not
include the retention money.
1.16 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.
1.17 INSTRUCTION TO BIDDERS
 Refers to the list of instructions regarding the manner bids are to be
prepared and the conditions for the award of the Contract.
1.18 LAWS
 Refers to all, ordinances and other governmental rules and regulations
applicable to the project and to its execution.
1.19 OWNERS
 Is the person or entity or authorized representative thereof who signed the
Contracts as Owners.
1.20 OWNER’S REPRESENTATIVE
 Refers to the person or the entity commissioned by the Owner or
Authorized in writing by the Owner to act to his behalf.
1.21 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 to faithfully comply with the Contract in respects of
obligations arising therefrom to its workers, subcontractors, and suppliers.
1.22 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 Contractor.
1.23 SCHEDULE OF MATERIALS AND FINISHES
 Is an outline specification enumerating the type or trade names of
materials required to be used by the Contractor for the Work.
1.24 SPECIFATIONS
 Are written or pointed description of the work to be done describing
qualities of the material to be used, the equipment to be installed and
mode of construction.
 1.25 SPECIAL PROVISIONS OR CONDITIONS
 Are instructions which are issued prior to bidding to supplement
and/or modify the Drawings, Specification and/ or General
Conditions of the Contract.
 1.26 SUB-CONTRACTOR SPECIFICATIONS
 Is a contractor duly registered and licensed by the Philippine
Contractors Accreditation Board having a direct with the Contactor
who acts for or in behalf of the Contractor in executing any part of
the Contract. One who merely furnished materials without labor is
a supplier and not a Sub-Contractor.
 1.27 SUPPLEMENTARY SPECIFICATIONS
 Refers to additional information which may be issued as an
additional to or amendment of the provisions of the Specification.
1.28 SURETY
 Is the person, firm or corporation which issues the bond required
of the Contractor.
 1.29 TIME LIMIT OR COMPLETION TIME
 Is the period of time allowed by the Contract for the completion of the
project or any stipulated portions thereof.
 1.30 WRITTEN NOTICE
 Means information, advice or notification pertinent to the project delivered
in person or sent by registered mail to an individual, firm or corporation at
the latter's last known business address.
1.31 WORK
 Refers to all the Contractor-provided labor or materials or both as well as
equipment transportation, or other facilities necessary to commence and
complete the construction and to fulfill all his obligations which are called
for in the Contract.
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
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. ln 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. The various
provisions of the Contract shall be interpreted together attributing
to the doubtful ones that sense which may result from all of them
taken jointly.
 RULE 2: The provisions of the Civil Code of the Philippines on the
interpretation of contracts and of the Rules of Court Interpretation
of Documents shall be applied.
 RULE 3: Where the conflict between or among the provisions of
the Agreement and/or 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) figures written on Drawings shall prevail over the Drawings
themselves; and
• (c) calculated dimensions shall prevail over scaled dimensions.
 RULE 4:
Where the conflict cannot be resolved by applying Rule 3 0r where rule 3
does not apply, the conflict shall be resolved by giving precedence to the
agreement or to provisions of the Contract Documents higher in order of
priority among the various documents which comprise the Contact. The order
of priority among these document shall be as follows:
 (a) Agreement as modified by Notice Award of Contract. If such be the
case, and the Contactor’s conformity thereto:
 (b) Instruction to Bidders and any amendment thereto;
 (c) Addenda to Bid Documents;
 (d) Drawings;
 (e) Specifications;
 (f) Special Conditions of Contract;
 (g) General Conditions of Contract;
 (h) Other Contract Documents; and
 (i) other documents forming part of the Contractor 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. Thus, what is called for in one contract
document, although not mentioned in another Contract
Document where it should Have been mentioned, shall be
deemed to be called for by the Contract.
 RULE6:
• 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 in 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. ln 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 OF THE CONTRACT:
 The Work shall be executed in accordance with the
Contract.
 a. lf there be a variance between the Drawings and the
specifications, the provisions of the Specifications shall control. In
case of conflict between the General conditions or any
modification thereof and the detailed specification requirements,
the detailed specification requirements 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 Any work involving such discrepancies shall be
estimated by the contractor and unit prices or lump sum amounts
shall be agreed upon by the parties whenever possible before the
work is done. Any work one by the Contractor involving
discrepancies found by the Contractor and not reported to and
without the knowledge of the owner shall be considered as
having been done at the Contractor’s risk
 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.
 2.05 MEANING OF TERMS
 a. APPROVED, DIRECTED AND ACCEPTABLE : The words
"approved", "directed" and "acceptable", or words of like
import shall mean approved, directed by or acceptable to the
OWNER.
 b. FURNISH : The word "furnish" shall be understood to
mean “purchase and/or fabricate and deliver to the jobsite or
other location when so designated.”
 c. INSTALL : The word "install" shall mean to build in, mount
in positions, connect or apply any object specified ready for
the intended use.
 d. PROVIDE : The word "provide" shall be understood to
mean “furnish and install.
 e. REQUIRED OR NECESSARY : The words "required” or
“necessary” shall mean as required or necessary for the
complete execution of that portion of the Work.
 2.06 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, or
• b. expressing his satisfaction and approval, or
• c. determining value, or
• d. providing drawings, or
• e. supplying equipment or materials, or
• f. otherwise taking action which may affect the contractor’s
timely completion of the work, he shall exercise such
discretion fairly and in a timely manner taking due regard of
completion Time and the approved construction schedule
notwithstanding any provision in the Contract requiring the
Contractor to notify the owner when such action is due or
when such equipment or materials are due.
• Whenever in the Contract, the Contractor is 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
or an event causing a change has occurred or been
discovered, the Contractor shall do so in a timely manner so
as to avoid any delay in the completion of the Work.
• Whenever the Contract or accepted industry practice
requires that before any part of the Work is covered, it must
be inspected and approved, the Owner shall provide a
sufficient number of inspectors at the project site while work
is in progress and the failure of the Owner to provide such
inspectors shall be understood as a waiver of the Owner to
inspect and approve that part of the Work.
2.07 DEFECTIVE EQUIPMENT, MATERIALS, OR
WORK.
Whenever the Contract or the General Conditions provide
that the Owner may require the Contractor to remove or
replace defective or inferior materials or equipment or to
replace bad or defective work, the Owner, if he is
represented by a professional duly authorized to supervise
the Contractor's work and to exercise the discretion and
authority of the owner, shall condemn such materials,
equipment or work in order to minimize the damage or loss
of the Contractor. However, where even with the exercise
of due diligence, the Owner could not have discovered the
use of inferior materials and equipment or the defective
work, the owner may condemn it upon discovery, and the
contractor shall bear all the cost of removing and replacing
the defective or inferior materials or equipment or the
defective work.
 2.08 REVIEW OF CONTRACT.
The Contractor shall carefully study and compare the various
documents that comprise the contract and shall report to the
owner any error, inconsistency or omission that may be
discovered in its provisions. The Contractor, however, shall not
be liable to the Owner for any damage resulting from any such
error, inconsistency or omission in the Contract. The Contractor
shall follow the Drawings and Specification and all additional
detail drawings and instruction issued by the Owner as being in
full and strict conformity with the Contract and the requirements
of the work. Except for shop drawings, product data and samples
for any portion of the work provided or supplied by a specialty
contactor, the Owner's approval thereof shall be construed as the
owner's acknowledgment that the approved shop drawings,
product data and sample comply with the Contract. The
Contractor shall not be liable to the Owner for undetected error,
inconsistency or omission in the Contract or for complying with
instructions or following Drawings or Specifications, or for using
or following the approved shop drawings, product data or sample.
2.09 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 changes
made during construction, including approved shop drawings,
product data and samples. These documents and samples shall
be available to the Owner for the letter's inspection. The contractor
shall advise the owner, on a current basis and in writing, of
changes in the work made during construction, except those made
in accordance with Change Orders or Owner's instruction.

2.10 OWNERSHIP OF CONTRACT AND MODELS:

The Drawings, Specifications and models, including all additional
instructions and copies thereof, furnished to the contractor shall
remain the property of the owner. They are not to be used by the
contractor on any other work, and with the exception of the signed
Contract inclusive of Contact Documents, 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 as required by the Contractor will be
furnished to him at cost of reproduction.
 3.02 COORDINATION OF DRAWING AND SPECIFICATIONS:
 All drawings and models are to be read and understood together
with the specifications, to form a part thereof. Where figures are
given, they are to be followed in preference to measurements by
scale. Anything shown on the drawing but not mentioned in the
specifications, or vice versa, or anything not expressly set forth in
either but which is reasonable implied, shall be furnished as a
specifically shown and mentioned in both.
 3.03 CLARIFICATION OF MEANING OF DRAWINGS AND SPECIFICATION:
 Upon request of the contractor, the owner will explain the meaning of
the drawing or of the specifications, or any obscurity to the wording of
the specifications. The owner shall provide the contractor directions
and explanations necessary and proper to make more definite and
certain any requirement of the Drawings or of the provisions of the
Specifications.
 3.04 DISCREPANCY lN DRAWINGS:
 The Contractor shall report to the Owner any discrepancy
in the figures in the drawings immediately upon its
discovery. The Owner shall make the necessary correction,
The Contractor shall not be entitled to an adjustment of his
Contract Price and Completion Time should his work be
ordered re-done if such work was made without notifying
the Owner of the discovery of the discrepancy and before
the Owner makes the necessary correction
ART. 5: SHOP DRAWINGS
 5.01 CONDITIONS lN THE PREPARATION 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. The Contractor shall make the corrections in the shop drawings
required by the Owner and file with the latter three (3) corrected copies
thereof.
 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:
 Submissions of shopping shall be accompanied by a letter of
transmittal in duplicate, containing the name of the project, the
Contractor’s name, number drawings, titles, and the number of
the pertinent data.
 5.04 CORRECTIONS, CHANGES AND VARIATIONS:
 The Contractor shall submit three sets of prints of shop drawings
to the Owner for approval. Satisfactory shop drawings will be so
identified by the owner, dated, and one copy thereof returned to
the contractor. Should stop drawings be disapproved by the
Owner, one set of 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 to the approval, the Contractor shall insert the
date of approval on the tracing and promptly furnish the owner
with three additional prints of approval drawings.
  c. No work called for the stop drawings shall be executed by the
contractor until the Owner’s approval is given.
 d. If the shop drawing show variations of 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 OF THE 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. It shall not relieve the contractor
responsibility for accuracy of such as drawings, nor for proper
fitting and construction of work, nor for furnishing of materials or
work required by the contract and not indicated on the shop
drawings. The owner’s approval such as drawings or schedule of
drawing or schedule shall not relieve the specialty contractor of
responsibility for deviations from the drawings or specifications,
unless he is, in writing, called the owner’s attention to such
deviation as the time of submissions and secured the owner’s
written approval.
SECTlON ll

LAWS, REGULATIONS, SITE CONDITIONS, PERMITS

AND TAXES
 ART. 6: LAWS AND SITE CONDITIONS
 6.01 LAWS AND REGULATIONS:
 ln general, the contractor shall comply with all Laws in so far as
they are binding upon or affect the parties thereto, or the Work.
He shall also comply with regulations of firms furnishing utilities
such as water, gas, telephone and electricity for the project. lf the
Contractor performs any work contrary to such Laws or utilities
‘regulations, he shall bear all additional costs arising therefrom.'
 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. The owner shall, however,
furnish the contractor a geodetic survey and sub-surface
exploration which the Contractor may rely in the preparation of
his Bid.
 ART. 7: PERMITS, TAXES AND SURVEYS
7.01PERMITS AND LICENSES:
 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.
 The Contractor shall secure the final occupancy permit but he
shall not be responsible to the Owner if, without his fault, the
license is not issued or there was delay in its issuance.
7.02 TAXES:
 Wherever the law of the place where the project is located
requires a 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. He shall
also furnish rights-of-way for access to the site. The Owner shall be
responsible for the establishment of lot lines, boundary lines, easements
and benchmarks which shall be made by a certified surveyor. The
Owner may request the Contractor to verify before the start of the
construction the result of such surveys, provided the Owner shall pay for
the cost of such verification. The Owner shall also pay for any damage
or cost to the Contractor brought about by errors in date furnished.

All other grade, lines, levels, and benchmarks necessary for the
prosecution of the work shall be established and maintained by the
Contractor.

The Contractor shall provide and maintain well-built batterboards at all

corners. He shall establish benchmarks in not less than two widely
separated places, As work progresses, the Contractor shall establish
benchmarks at each floor giving exact levels of various floors, and shall
lay-out the exact locations of all partitions as a guide to all trades.
 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.
 The Geodetic Engineer shall also verify and certify the lines and
levels of any part of the Work at any time if so required by the
Owner.
 The certification shall be provided the Owner and the Contractor.
If the Geodetic Engineer finds any deviation from the Drawings in
the Work of the Contractor, he shall report his findings to the
Owner within 24 hours from discovery.
 The Contractor shall be responsible for loss or damage caused
by the act or omission of the Geodetic Engineer. However,
without exempting the Contractor from liability, but in mitigation of
it, the Geodetic Engineer’s certification shall be regarded as an
independent and disinterested verification of such lay-out.
SECTlON lll
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:
ln order to establish standards of quality, the Owner, in the
detailed Specifications may have referred to certain equipment by
name and catalog number. This procedure is not to be construed
as eliminating from competition other products of equal or better
quality by other manufacturers where they are fully suitable in
design.
9.02 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.
All requests for substitution of equipment shall be in writing. The
Owner will approve or disapprove the request in writing. No
substitute equipment shall be used unless approved in writing by the
Owner. The Contractor shall abide by the Owner's judgment as to
which proposed substitute items of equipment are judged to be
acceptable.
 ART. 10: MATERIALS, FIXTURES, APPLIANCES, AND
FITTINGS FURNISHED BY THE CONTRACTOR
 10.01 SAMPLES OF MATERIALS:
The Contractor shall furnish for approval samples as specified or
required. The work shall be in accordance with approved samples.
Unless otherwise specified, three samples shall be submitted, of
adequate size to show quality, type, color, range, finish, and texture
of material. Each sample shall be labelled, bearing the material's
name and quality, the Contractor's name, date, project name, and
other pertinent data.
 C. Where the Specifications require the manufacturer’s printed
installation directions, such directions shall accompany the samples
submitted for approval.
 D. A letter of transmittal in triplicate from the Contractor requesting
approval shall accompany all sets of samples.
 E. Materials requiring prior approval of the Owner shall not be
ordered until such approval in writing is given by the owner. All
materials shall furnished substantially equal in every respect as the
approved samples.
 10.02 TRADE NAME MATERIALS AND SUSBTITUTES:
 A. Whenever an item or class of materials is specified exclusively by
trade name, by manufacturer’s name or by catalog reference, only such
item shall be used except as provided in paragraph (b) hereof.
 B. No substitution shall be made of any material, article, or process
required under the Contract unless the substitution is approved in writing
by the Owner.
 C. The Contractor shall be responsible for materials and articles installed
or used without such approval.
 D. Samples of materials for use in reinforced concrete work such as steel
bars, cement, and aggregates and their certificates of origin shall be
approved by the Owner.
10.3 TESTING SAMPLES OF MATERIALS:
 The Contractor shall submit to the Owner as many samples as
may be needed for purposed of testing. Testing of all samples
shall comply with the Specifications and government standards
and shall be performed by a competent entity or testing
laboratory approved by the Owner.
 All costs of shipment, delivery, handling and testing of
Contractor-supplied samples are to be paid by the Contractor.
10.04 QUALITY OF MATERIALS:
 Unless otherwise specified, all materials shall be new and their
quality shall be of the best grade of their respective kinds taking
into account the nature of the project and requirements of the
Contract.
 10.05 STORAGE AND STOCKPILING OF MATERIALS:
 a. The Owner shall provide the Contractor, at or near the project
site sufficient space for the Contractor's and Sub-contractors' use
for storage of their materials and for erection of their sheds and
tool houses.
 b. All cement, lime, and other materials affected by moisture
shall be stored on platforms and protected from the weather. The
materials shall be so stored as to ensure the preservation of their
quality and fitness for the work. Stored materials shall be so
located so as to facilitate prompt inspection.
 c. Should it be necessary al any time to move material, sheds, or
storage platforms, the Contractor shall do so at his own expense.
 10.06 DEFECTIVE MATERIALS:
 All materials not conforming to the Specifications shall be
considered defective. The Contractor shall remove or replace
defective materials when ordered to do so by the Owner. Upon
the Contractor's failure to do so, the Owner may remove and
replace them and deduct the cost of removal and replacement
from any money due or to become due the Contractor. No
materials, the defects of which have been subsequently corrected
shall be used until the Owner's approval is given. Should the
Specifications, Drawings, Special Provisions and Supplementary
Specifications fail to provide any detail or description concerning
the nature and quality of the Work to be performed it should be
understood that generally accepted construction practice shall be
followed.
 10.07 IMPORTED MATERIALS, FIXTURES AND
EQUIPMENT:
 The Contractor, taking into consideration the Completion Time, shall
make timely arrangements for the purchase and delivery of all specified
imported materials, fixtures, appliances and equipment in order to avoid
delay in the completion of the Work. No extension of time shall be
allowed if, due to negligence or inadvertence of the Contractor, such
imported items arrive late.
 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.
  Owner shall be deemed acceptable for the purpose intended. The
Contractor may continues to use them until otherwise directed in
writing by the Owner. No further test shall be required unless the
Owner directs otherwise and pays the cost of such test. If the
Contractor discovers any defect in materials furnished by the Owner,
he shall advise the Owner in writing. The Contractor shall be
responsible for material loss of or damage to any owner-provided
material, equipment, fixture, appliance or fitting in his custody.
 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 supplies by the contractor shall be applied, installed,
connected, 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 IV

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
15.0l TEMPORARY OFFICE AND CONTRACTOR'S
BUILDING:
 The Contractor shall, taking into account the location and size of
the site, at all times provide and maintain an adequate weather tight
temporary office with necessary basic facilities such as water, light,
and telephone. When practicable or depending upon the nature and
complexity of the project, the Owner may require the Contractor to
comply with other requirements for temporary structures and
facilities as provided for in the Contract.
15.02 TEMPORARY HOUSING FOR WORKERS:
The temporary buildings for housing men, or the erection of tents or
other forms of protection will be permitted only at such places as the
Owner shall designate; provided, however, that if no particular area
is designated, the Contractor may use his own discretion in
determining such areas in consultation with the Owner. The sanitary
condition of the grounds in or about such structures at the project
site shall at all times be maintained in a manner satisfactory to the
Owner. Nobody shall be allowed to sleep or cook within the building
line of the project under construction.
 15.03 SAFETY AND SANITATION:
 The Contractor shall from the commencement of the Work and
until its completion:
 (a) furnish and put up all temporary barricades and guard lights
necessary for the protection, proper prosecution and completion
of the work,
 (b) maintain guard lights at the top of the false work tower,
barricades, ratings, etc.
 (c) provide and maintain ample sanitary toilet accommodation
and other necessary conveniences including water connections
for the use of personnel and laborers on the work properly
scheduled from public observation in such manner and at such
points as shall be approved by the owner, and their use shall be
strictly enforced;
 (d) keep such places clean and free from flies; and
 (e) remove all connections and appliances connected therewith
prior to the completion of the work.
 15.04 TEMPORARY SIGNS:
 No signs or advertisements will be allowed to be displayed without
the owner’s approval. The contractor may erect one painted sign,
giving the names and addresses of the owner, the contractor, and
the various sub-contractors. The owner shall approve the size,
color, lettering, and location of such temporary signs.
 10.05 TEMPORARY OR TRIAL USAGE:
 Temporary or trial usage by the owner of any mechanical device,
machinery, apparatus, equipment, or any work or materials supplied
by the contractor before final completion and written acceptance by
the owner shall not construed as evidence that the owner has
accepted it.
 Such test run shall be made by the owner for such reasonable
length of time as the owner shall deem necessary. The owner shall
not be liable for injury to or breaking of any part of such work which
may be caused by weakness or inaccuracy of structural parts or by
defective material or workmanship.
 The contractor may, at his own expense, make such trial usage
with prior notice to for the benefit of the owner.
 SECTION V

PROTECTION OF WORK AND PROPERTY

 ART. 16: PROTECTION OF WORK AND OWNER’S PROPERTY
16.01 SAFEGUARD MEASURES:
 The contractor shall:
A. take all reasonable measures to protect from damage the works, the
owner’s property, and the equipment, materials, appliances and fixtures
supplied or paid for by the owner and shall make good any damage,
injury or loss thereto, except such as may be caused by agents or
employees of the owner, or due to causes considered Act of God;
 b. Provide reliable and competent watchmen to guard the site and
premises, provide all doorways with locks under his control and lock
such doors as the close of each day’s work; provided, however, that if
the owner deems the security service inadequate or incompetent, the
contractor shall increase or change the security personnel.
 c. Prohibit smoking at the site and signs to this effect be posted
conspicuously;
 d. prohibit fires built on the site except express consent of the owner;
and
 e. provide and maintain good working order an adequate number of
fire-fighting equipment and such equipment shall not be used for any
other purpose.
 16.02 OLD MATERIALS:
 All old materials of value as determined through a joint inventory
by the owner and contractor found at the work site shall be
carefully stored at the place designated by the owner; and
contractor shall be responsible for their safekeeping until final
acceptance of the work.
 16.03 TREES AND OTHER PLANTS:
 Existing trees, plants, shrubs, etc., which are to remain at the
site shall be boxed and otherwise protect from damage. No trees
within the site located outside building lines shall be cut or
removed without the specific approval from the owner.
 a. When specifically included in the contractor’s scope of work, all
trees and other plants that need to be transplanted elsewhere shall be
done by the contractor in accordance with instructions of the owner.
 b. Damage to trees, plants, shrubs, streets, sidewalks, etc., resulting
from fault or negligence of the contractor in connection with the
execution of the work shall be made good and/or replaced or repaired
by the contractor at his own expense.
 16.04 DRAINAGE
 If it should be necessary in the prosecution of the work to
interrupt or obstruct the natural flow of rivers or streams, the
drainage of the surface, or the flow of artificial drains, the
contractor shall do so in such a way that no damage shall result
to either public or private interests. For his neglect to provide
other means of drainage for any existing natural or artificial
drainage which he may have obstructed or interrupted, the
contractor shall be liable for all damages which may result
therefrom.
 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.
 The contractor shall be liable for and pay for all damages to
adjacent and existing utilities occasioned in any manner by his
act or neglect, or by that of his agents, employees, or workmen.
 ART. 18: PROTECTION OF LIFE, WORK AND
PROPERTY DURING AN EMERGENCY
18.01 AUTORIZATION 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.
 SECTION VI
LABOR, WORK AND PAYMENTS
 ART. 19: LABOR
 19.01 CHARACTED OF WORKMEN:
 The contractor shall employ only competent and duly qualified
professionals, technical personnel, foremen, mechanics and
workers to supervise or execute the work. Upon written request
of the owner, the contractor shall remove from the site an
employee who is careless or incompetent or obstructs the
progress of the work or acts contrary to instructions of conducts
himself improperly.
 ART. 20: WORK
20.01 METHODS AND APPLIANCES
 The contractors 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 useless through the carelessness or neglect of the
owner or of his agents or employees, they shall be replaced by
the contractor at his expenses.
20.03 DEFECTIVE WORK:
 All staked 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 takes 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.
 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 contractors and replaced in accordance with the
drawings and specifications.
20.04 INSPECTION OF WORK
 a. The owner shave have access, at all time, 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 test that may be required by the
inspector.
 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 instruction, 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
to make or be present at the inspection of the date and time of such
inspection. Inspection of the owner shall be made, where practicable, at
the source of supply.
 f. lf 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 expenses 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%, 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.
 All inspection and test 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
10.01 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 if calling for vids, 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 the work of
the contractor shall be covered by a change order. Work done by
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 required of contract price and completion time
shall be at his own risk and expense.
 20.07 CHANGES IN THE WORK
 A. CHANCES ORDERED BY OWNER:
 The owner may at any time order work or make changes by
altering, adding to or deducting from his scope of work within the
general scope thereof; provided however that the insulting
overruns or underruns from the quantities or cost in the bid do not
exceed 25%. Such changes shall be ordered by the owner in
writing.
 The issuance by the owner of the revised drawings or
supplemental specifications changing the nature or work to be
performed or of the materials, equipment, appliances or fixtures
to be provided shall be treated as sufficient written instruction of
the owner to the contractor to execute the change.
 b. CHANGE OF SUB-SURFACE CONDITIONS:
 If, during the progress of the work, sun-surface conditions at the site
materially different from those shown on the drawings or indicated in the
specifications or in any contract document, are discovered or
encountered, the attention of the owner shall be called to such conditions
before they are disturbed. The owner shall thereupon investigate the
conditions, and if he finds that they materially differ from those shown on
the drawing or indicated in the specifications or in the report of the
owners geodetic survey and sub-surface exploration, he shall make such
changes in the drawings and specifications as he may find necessary.
 If as a result of sub-surface conditions, additional or a different type of
work be required, although no chance in the drawings or specifications
may be required, a change order shall be necessary and issued to the
contractor.
 c. ADJUSTMENT OF CONTRACT: The work shall be executed under
the conditions of the contract. If changes under paragraphs A and B shall
cause an increase or decrease in the amount due under the contract, or
in the time required for or manner of its performance, an equitable
adjustment shall be made and the contract modified accordingly. In the
event that the work is increase by such changes, the contractor shall
furnish proportion additional performance bond.
 VALUE OF EXTRA WORK
 The value of any extra work or change shall be determined by
the owner in any one or more of the following ways.
 a. By a lump sum acceptable to the contractor
 b. By unit prices either stipulated in the contract or subsequently
agreed upon, provided the aggregate value of the changes does
not exceed 25% of the original contract price of the particular pay
item.
 c. By actual direct cost plus value added tax, if any, plus 15% for
contractor's profit and overhead
 Changes required by the owner which in the aggregate exceed
25% for overruns shall be covered by a supplemental contract.
The contractor shall not be obliged to execute such changes in
accordance with the unit rate specified in his bid, a
supplementary contract being treated as one separate from and
independent of the contract.
 Where the aggregate value of all changes per pay item exceed
25% and the contractor, without demanding the execution of a
supplemental contract executes the additional work required with
objection or protest, the value of the changes shall be determined
in accordance with subparagraph (b) above.
 Under case (c) above, the contractor shall keep and present, in
such form as the owner may direct, a correct account of the direct
cost together with vouchers other supporting documents.
 E. AWARD OF EXTRA TO OTHER CONTRACTORS:
 In case any extra work shall be required in the proper performance of
the work, and the contractor and the owner shall fail to arrive at any
agreement as to the adjustment of contract price and/or completion
time, the owner may award such extra to another contractor.
 20.08 CLAIMS FOR EXTRA COST:
 If the contractor claims that any instructions by the owner the
drawings or specifications issued after submission of the bid, involved
a change, he shall give the owner written notice within 15days after
the receipt of such instruction, drawings or specification, as much as
possible, before proceeding to execute the work, except in emergency
endangering life or property provided for in Article 18.01.
 In like manner, if the contractor incurs a delay in the mobilization
and/or in the progress of his work for reasons attribute to the owner.
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
relate thereto, he shall give the owner written notice thereof within 15
days after recognition of such delay.
  The amount due to the contractor under this article shall be paid
by the owner in the same manner as any other sum to which the
contractor may be entitled under the contract, particularly under
Article 20.06, 20.07, 22.05 and 22.10. Delay in said payment
shall entitle the contractor to an extension of time and to payment
of interest in accordance will Article 22.05. Refusal or
unreasonable delay by the owner to pay the amount due shall
entitle the contractor to suspend or terminate the contract
whenever permitted under Article 27.
 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 cause 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.
 All dirt, stains, and the like on all finishing of floors, walls and
ceiling ,decorative work, finishing hardware and fixtures shall be
removed.
  All woodwork, finishing hardware and all metal works shall be cleaned
and polished.
 All glazing, marble and tile work shall be washed and cleaned. The
contractor shall also clean the site as shown in the drawings and all
areas which the contractor used in the execution of the project.
 If the contractors fails to clean up after due notice at the completion of
the contractor.
If a dispute arises between the contractor and separate contractors as
to their responsibility for cleaning up, the owner may clean up the site
and charge the cost thereof to the contractors responsible therefore as
the owner shall determine to be just.
 20.10 USE 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. Neither shall it be deemed a waiver by
the owner of the right to claim damages due to delays the completion
of uncompleted work or causes refinishing or completed work, the
contractor shall be entilted to extra compensation or extension of time
or both.
 20.10 USE OF COMPELTED 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.
Neither shall it be deemed a waiver by the owner of the right to
claim damages due to delay in the completion of the work. If such
prior use increases the cost or delays in the completion of the
work. If such prior use increases the cost or delays the
completion of the work. If such prior use increases the cost or
delays the completion of uncompleted work or causes refinishing
of completed work, the contractor shall be entitled to extra
compensation or extension of time or both
 20.11 SUBSTANTIAL COMPLETION AND ITS EFFECT:
 A. (a). There is substantial completion when the contractor
completes 95% of the work, provided that the remaining work and
the performance of the work necessary to complete the work
shall not prevent the normal use of the completed portion.
 (b) The approval by the owner of the contractor’s billing for completing
at least 95% of the work shall be deemed the owner’s
acknowledgement that the contractor has substantially completed the
work unless the owner can establish that the unfinished work prevents
the normal use of the completed portion.
 (c) The owner may also issue to the contractor a written
acknowledgement of substantial completion which may be in the form
of a certificate of substantial completion or equivalent document but the
date of this document shall not be controlling if substantial completion
is shown to have been made at an earlier date, unless the contractor
accepts the certificate without taking exceptions thereto in writing within
15 days from receipt.
 B. (a) Notwithstanding paragraph A above, the equipment, fixtures and
utilities furnished and/or installed by the contractor which the contract
requires to be test-run prior to acceptance shall be test-run successfully
before the work can be accepted as substantially completed.
 (b) The owner shall, without delay, cause the test-run of the facility.
Should the contractor be unable to completely install or furnish and
test-run the facility through no fault of his, the contractor shall
automatically be entitled to extension of completion time equal to the
period of delay.
 C. (a) The owner shall issue to the contractor one or more lists if
defects found or discovered on the completed work, otherwise known
as a punch list or lists, which the contractor must receive from the
owner not later than thirty days from date of substantial completion.
(b) The owner may add to punch list items but only as to corrective
work on the items in the original punchlist or list not later that 60 days
from date of substantial completion.
D. (a) No liquidated damages for delay beyond the completion time
shall accrue after the date of substantial completion of the work.
 If the targeted date of completion has arrive the contractor cannot
achieve 95% completion of the work due to uncompleted facility
cause by the owner’s fault, negligence or delay of the owner, the
contractor shall be deemed to have achieved substantial completion
provided the contractor has completed at least 95% of the work
minus the uncompleted facility, and the contractor has completed the
work required on the facility but for that which is directly affected by
the owner’s fault, negligence or delay. The owner shall release to the
contractor the contract price less the cost of the uncompleted portion
of the work and the amounts mentioned in Article 22.03.
  E. The purpose of this Article is to ensure that the contractor is
paid for work completed and for the owner to retain such portion
of the contract price which, together with the performance bond,
Is sufficient to complete the work without additional cost to the
owner.
 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 30 days, calculated
from the date of receipt by the contractor of the last item in the
punch list submitted during the period provided in Article 20.11 C
(b), 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) within the period stated in Article
20.12.
  If, in the opinion of the owner, the defect or fault in the punch list is due to
a cause attributable to the owner, the value of such work shall be
ascertained and paid of as if it were additional work.
 If the contractor shall fail to do any such corrective work, the owner shall,
upon written notice to the contractors, 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:
 A. There shall be added to or deducted from the Contract Price
such sums in respect of the rise or fall of the cost of labor and
materials and such other matters affecting the execution of the
Work caused by any of the following: an event of force majeure
including abnormal changes in costs of materials, increases in
labor costs mandated by law or wage order increase in the cost
of oil, and the deterioration of peace and order.
B. Adjust of prices due to escalation or reduction of costs of
executing the work shall be made using a parametric formula to
be agreed upon by the parties. In default of such agreement, the
parametric formula used to implement Presidential Decree No.
1594 shall be applied. Such adjustment shall be made to provide
equitable relief to both the owner and the Contractor, allowing
neither to gain nor to lose by such fluctuation. Adjustment of the
Contract Price due to escalation shall be for the sole purpose of
compensating the Contractor for the increase in the direct cost of
his labor and materials used for the work, plus value-added tax.
 C. The adjustment of prices shall be determined on the basis of
the original Contract unit of labor and materials and such unit
prices in effect during the relevant period of work
accomplishment.
 D. The Contract Price shall be adjusted, not oftener than once a
month, due to increase or decrease of the direct cost of labor and
materials of more than five percent (5%) of the original Contract
unit prices of the relevant items of work. The adjustment shall
include the first five percent (5%).
 E. In case the project is behind schedule by more than fifteen
percent (15%) from the approved construction schedule, not due
toe excusable delays, the payment for work accomplished shall
be made on the basis of the Contract Price as adjusted in
accordance with the escalation rate applicable during the period
in which it should have been accomplished.
 F. This Article 20.16 shall not apply to an increase or decrease in
the cost materials and services provided or supplied by the
Owner.
 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:
A Notice to Proceed shall be issued by the Owner to the
Contractor only when Contract so provides. Premature
commencement of construction shall be at the Contractor’s risk
unless it is due to their mutual desire to have the Contractor
commence the work early, and the owner gives the Contractor
express or implied authority to do so.
 21.02 COMPLETION TIME:
The Contractor shall complete the Work in accordance with the Contract within the
period fixed therein and as adjusted due to changes both directed and constructive. If
the contractor is directed to commence the Work after receipt of the Notice to Proceed
to be issued by the Owner, such shall begin on the seventh (7 th) day from receipt of the
Notice to Proceed, unless the Notice to Proceed provides for a later date for
commencement of the Work.
 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 the 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, and 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 by –
[a] the act, neglect, delay or fault of the Owner, or any other contractor
employed by the Owner on the Work; 32
[b] third-party strikes or lockouts or strikes by employees other than the
Contractor's employees or a lockout by an employer other than the
Contractor;
[c] an act of God or force majeure;
 [d] unsuitable weather conditions which render the work impracticable or
impossible or which slow down the prosecution of the Work;
[e] peace and order conditions;
 [f] changes ordered or authorized by the Owner or authorized under the
Contract; and
[g] delay authorized by the Owner pending arbitration of an unresolved
dispute between the Owner and the Contractor.
[h] The Contractor shall be entitled to substantiated prolongation costs only
in respect of [a], [f] and [g], and of [d] when Changes or Variations by the
Owner caused the works to be executed in a period of inclement weather
conditions which is different from that envisaged at the bidding stage.
 B. For delay caused by paragraphs A [b], [c], [d], [e] and [f] of this
Article 21.04, the 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] For delay caused by paragraphs A [a] and [g], and in default
of an agreement between the Owner and the Contractor, 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 34 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 35 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 Subcontractor, 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. 36
 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
 A. The Owner shall then, except for causes herein specified, pay to the
Contractor within the period stated in Article 22.05 above, the amount, which shall
be found due, excepting therefrom such sum or sums as may be lawfully retained
under any of the provisions of the Contract; provided that final payment on the
Contract shall not be made until the Contractor has submitted a statement sworn
to before an officer duly authorized to administer oath, showing that all taxes due
from him in connection with this Contract have been duly paid.
 B. In case the Owner has reasonable grounds of belief that the Contractor has not
remitted to the appropriate government agency the employer's and employee's
contributions to the Social Security System or to Medicare, or the withholding tax
on the employees' wages, the Owner may require evidence of remittance of such
contributions or withholding tax in addition to the sworn statement mentioned
above, and withholding release of the amount sufficient to cover such payments
until the evidence required by the Owner is provided by the Contractor.
 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.
  C. The acceptance by the Contractor of final payment shall
constitute a waiver of all his claims against the Owner, except the
following:
 (a) a claim covered by a prior notice to the Owner reserved by
the Contractor to be filed in accordance with the Contract
 (b) a claim pending before 37 and unresolved by the Owner at
the time the request for final payment is made;
 (c) a dispute referred to arbitration in accordance with Article
34.05; and
 (d) a claim which the Owner acknowledges with the payment not
to be covered by it.
 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:
  [a] The defect is hidden and the Owner could not have
discovered the defect even with the exercise of reasonable
diligence.
 [b] The Owner accepted the Work with express reservations
seasonably made as to the specific portion of the Work which
was found defective and which requires replacement or
correction. A reservation which fails to specify the portion which is
alleged to be defective and state in as much detail as possible
the nature and extent of the defect shall be considered a general
reservation and shall be ineffective.
 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 VII
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 VIII
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 fifteen (15) days'
written notice to the Owner for any of the following reasons:
 a. If an order of any court or other public authority caused the work to be stopped or
suspended for an aggregate period of ninety (90) days through no act or fault of the
Contractor or his employees.
 b. If the Owner shall fail to pay the Contractor the approved Request for Payment as
provided in Article 22.05.
 c. If the Owner shall fail to pay the Contractor any sum within thirty (30) days after its
award by arbitration.
 d. If the Owner suspends the work without just cause for more than the aggregate period
of fifteen (15) days without the Contractor's consent.
 e. If the Owner fails to deliver at the construction site Owner supplied/furnished
construction materials and/or equipment, for the scope of work along the critical path,
beyond fifteen (15) days after its scheduled date for delivery as provided for in the
Contract.
 f. If approval of Variation Orders for additional works along the critical path is delayed
beyond fifteen (15) days after submission for approval by the Owner or by his duly
designated Representative.
If the suspension is necessary for the proper execution of the Work or by reason of
weather or other conditions affecting the safety of the works and/or the Contractor’s
workers, the Contractor may request the Owner to suspend work in accordance with the
applicable provision or provisions of Art. 27.02.
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
 27.01 SUSPENSION WITHOUT CAUSE:
 The Owner may, at any time and without cause, suspend the
work or any portion thereof for a period of not more than the
aggregate period of fifteen (15) days by notice in writing to the
Contractor and shall fix the date on which work shall be resumed.
The Contractor shall resume the work on the date so fixed. The
Contractor will 42 be allowed an adjustment in the Contract Price
to include demobilization and remobilization costs and/or stand-
by time as applicable as well as adjustment of Completion Time
which shall not be less than the period of suspension and shall
include the delay due to remobilization of equipment and
personnel. The Owner may not suspend the work without just
cause for more than an aggregate period of fifteen (15) days
without the Contractor's consent.
 27.02 JUST CAUSES FOR SUSPENSION OF WORK:
 The Owner, by a written order, may direct the Contractor to stop the work or any portion thereof, in
any of the following cases until the cause for such order has been eliminated:
 [a] Unsuitable weather or other conditions considered unfavorable for the prosecution of the work;
 [b] Failure of the Contractor to correct conditions which constitute a danger to his workers or the
general public, or to correct defective work;
 [c] Failure of the Contractor to carry out valid orders issued by the Owner or to comply with any
provision of the Contract, or his persistent failure to carry out the Works in accordance with the
Contract;
 [d] The necessity for adjusting the Drawings to suit 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 Owner-supplied/furnished materials on time, where such failure is
due to causes beyond the reasonable control of the Owner;
 [g] Delay by the Owner in obtaining a right-of-way, where such obligation is assumed by the Owner
under the Contract, and the delay is not due to the fault or negligence by the Owner;
 [h] Force majeure or fortuitous event;
 [i] Peace and order problems; or
 [j] Any condition similar to the 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 or periods and in such manner as the Owner may direct, and during such suspension
shall properly protect and secure the Work.
The Contractor shall be entitled to an equitable 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 for 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
 28.01 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:
 a) If Contractor is adjudged bankrupt or insolvent;
 b) If Contractor makes a general assignment of his assets for the
benefit of his creditors
 c) If a trustee or receiver is appointed for the Contractor or for
any of the Contractor's property; or
 d) If the Contractor files a petition for suspension of payments, or
to reorganize under the bankruptcy or similar laws.
 28.02 OTHER GROUNDS FOR TERMINATION WITH CAUSE.
 The Owner may terminate the Contract upon the occurrence of any of the
following events:
 a) The Contractor repeatedly fails to supply, based on the construction schedule,
the sufficient number of skilled workmen or suitable materials or equipment;
 b) The Contractor repeatedly fails to make without just cause 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
jurisdiction;
 d) The Contractor otherwise violates in any substantial way any provision of the
Contract; or
 e) Slippage of the Contractor in excess of 25% in the prosecution of work per
agreed construction schedule and/or PERT/CPM plus any time adjustment duly
granted to the Contractor.
 The Owner may, after giving Contractor and his surety 15 days' written notice,
terminate the services of the Contractor, exclude the Contractor 44 from the site
and take possession of the Work and of all the Contractor's tools, appliances,
construction equipment and machinery at the site and use the same and
incorporate into the work all materials and equipment stored at the site including
those stored elsewhere for which the Owner has paid the Contractor, and finish
the work as Owner may deem expedient. In such case the Contractor shall not
be entitled to receive any further payment until the work is finished.
 28.03 TERMINATION WITHOUT CAUSE.
 Upon 15 days written notice to the Contractor, the Owner may, without prejudice to any
other right or remedy, elect to abandon the work and terminate the Contract. In such case,
the Contractor shall be paid for all work executed and any expense sustained plus
reasonable termination costs.
 ART. 29: OWNER'S RIGHT TO PROCEED WITH THE WORK AFTER
REDUCTION IN CONTRACTOR'S SCOPE OF WORK; PARTIAL TAKEOVER
FROM CONTRACTOR
29.01 OWNER'S RIGHT TO CARRY OUT THE WORK:
 If the Contractor:
 a) Repeatedly fails to supply sufficient skilled workmen or suitable materials or equipment;
 b) Repeatedly fails to make prompt payments to subcontractors for labor, materials or
equipment;
 c) Fails within a mutually agreed time after written notice of the Owner to carry out remedial
or repair work;
 d) Fails despite repeated remedial work to rectify the defects or the result of remedial work
does not conform to the specifications;
 e) Fails to perform the Work in accordance with the Contract.
 the Owner may, after seven (7) days following receipt by the Contractor of written notice
and without prejudice to any other remedy the Owner may have and without terminating the
Contract, make good such deficiencies. In such case an appropriate change order shall be
issued deducting from the payments then or thereafter due the Contractor the cost of
correcting such deficiencies, including compensation of additional services made necessary
by such default, neglect or failure. If the payments then or thereafter due the Contractor are
not sufficient to cover such amount, the Contractor shall pay the difference to the Owner.
 29.02 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, 45 to the
Owner. All materials, plant, appliances and other essential
equipment as may be needed for the construction of the project,
shall, at the option of the Owner, remain on the site until the Work
is completed and credit the Contractor a reasonable rental for the
use the same. In case such materials and/or equipment do not
belong to the Contractor, then the Owner, provided it does not
violate the lease contract of the Contractor, shall have the option
to retain them for use in the project and pay reasonable rent
directly to the lessor for their use, chargeable against the
Contractor.
 29.03 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.
 29.04 EVALUATION OF COST OF WORK:
 Upon such termination of this Contract, the Owner will ascertain
and fix the value of the work completed by the Contractor and not
paid for by the Owner and of all usable materials of the Contractor
taken over by the Owner at the time of said termination.
 a. If the cost to the Owner of completing the work, inclusive of
reasonable administrative and managerial services and the
charges against the project prior to termination of the Contract are
not in excess of the Contract Price, then the difference between
them may be applied to settle claims filed against the Contractor,
and the balance, if any, may be paid to the Contractor. No amount
in excess of the combined value of the unpaid completed work,
retained percentage and usable materials taken over by the
Owner at the time of the termination of the Contract shall be paid
to the Contractor until the completion of the work.
 b. In case of suspension of work, all unpaid work executed
including costs incurred during suspension shall be charged to the
Owner.
 29.05 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 construed 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 extent of the damages for which the Contractor
and/or his sureties shall be liable shall include:
 a. Liquidated damages which may have accrued up to and
including the day immediately before the date the Owner
effectively takes over the work or the date of substantial
completion whichever occurs earlier;
 b. The excess cost incurred by the Owner in the completion of
the project over the Contract Price inclusive of re-letting the
same; 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 incurred from the
time the Owner effectively took over the work by administration.
 29. 06 LIQUIDATED DAMAGES
 1. Where the Contractor refuses or fails to satisfactorily complete the
Work within the specified Contract time, including any time adjustment
duly granted, the Contractor shall pay the Owner liquidated damages in
the amount stipulated in the Contract. Liquidated damages shall accrue
from the first day of delay in completing the Work until the date of
substantial completion as determined under Article 20.11.
 2. To be entitled to such liquidated damages, the Owner does not have
to prove that it has incurred actual damages. Such amount shall be
deducted from any money due or which may become due the Contractor
under the Contract. The Owner may collect such liquidated damages
from the retention money or other securities posted by the Contractor,
whichever is convenient to the Owner.
 3. In no case, however, shall 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 or section
of the Work has been certified by the Owner’s Engineer or
Representative as completed and occupied or used by the Owner, the
liquidated damages for delay shall be reduced in the proportion which the
value of the part or section so certified bears to the value of the whole of
the Work, unless a contrary provision is stipulated in the Contract.
 SECTION IX
RESPONSIBILITIES AND LIABILITIES OF
CONTACTOR AND OF OWNER
 ART. 30: CONTRACTOR'S RESPONSIBILITY FOR
ACCIDENTS AND DAMAGES
 30.01 SAFEGUARDS TO BE UNDERTAKEN BY
CONTRACTOR:
 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. The Contractor shall erect and properly
maintain at all times, as required by the conditions and progress of the
work, such barriers, shoring, supports, braces, lights, danger signs and
necessary safeguards, as will protect workmen and the public and as
will effectively prevent any injury to persons and damage to property in
consequence of his work. The Contractor shall designate a responsible
member of his organization at the site, whose duty shall be the
prevention of accidents and damage to the Work, the Owner's property
and adjoining property. The name and position of the person so
designated shall be reported by the Contractor in writing to the Owner.
The Contractor shall be primarily responsible for all safety measures in
prosecuting the Work in accordance with the safety manual approved
by the Construction Industry Authority of the Philippines (CIAP).
 30.02 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, for any damage done by or to Contractor's plant or
materials from any source or cause; and for damages caused by the
Contractor or his employees to any property of the Owner and adjoining
property.
 a. The Contractor shall indemnify and save harmless the Owner from and
against all losses and all claims, demands, payments, suits, actions,
recoveries, and judgement of every nature and description brought or
recovered against him, for any act or omission of said Contractor, or of his
agents or employees, in the execution of the Work or the guarding of it.
 b. Claims for payment and repairs for damages for which the Contractor is
liable shall be settled by the Contractor at his own expense. In the event
of failure of the Contractor to repair such damages, and pay other claims,
the Owner may repair the same and pay the claims, and deduct the entire
cost of such repairs and claims from the payments due the Contractor.
 30.03 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
 31.01 CONTRACTOR'S LIABILITY INSURANCE:
 The Contractor shall secure and maintain insurance coverage from an
insurance company acceptable to the Owner as 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. The Contractor shall
not commence work under the Contract until he has obtained the insurance
coverage required and shall have filed the insurance policy or the certified
copy of the insurance policy with the Owner. Such insurance policy shall
contain a clause providing that it shall not be cancelled by the insurance
company without written notice to and approval of the Owner. The nature,
extent and amount of such insurance coverage shall be as agreed upon
between the Owner and the Contractor. The Contractor shall ensure that such
insurance policy is effective during the execution of the Work.
 31.02 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 without regard to their
tenure of employment as permanent or regular workers, project workers or
casual employees performing work at the project site in an amount of not less
than P100,000.00 per officer, employee or laborer. The premiums to be paid
on the insurance policy shall be paid by the Contractor and without cost to
those covered by the policy.
31.03 CONTRACTOR'S FIRE INSURANCE:
 In addition to such Fire Insurance as the Contractor elects to
carry for his work, he 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. These policies shall be
secured from a company which is satisfactory to the Owner and
delivered to the Owner. A Contractor's All Risk Policy or any
insurance for third party liability of the Contractor shall not include
the Owner as co-insured but as a third party.
31.04 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. Such bonds shall be in the form of
49 surety bond as approved by the Owner, and shall remain in
effect until replaced by the Contractor's guarantee bond.
31.05 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 be for a period of one (1)
year commencing from the date of posting as a guarantee that all
materials and workmanship installed under the Contract are of
acceptable quality.
 31.06 CONTRACTOR'S GUARANTEE-WARRANTY:
 a. The Contractor shall, in case of work performed by his sub-
contractors and where guarantees are required, secure
guarantees from said subcontractors and deliver copies of same
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 which guarantees are required.
 c. The Contractor shall guarantee for a period of one year, or for
a longer period where so provided in the Specifications, all
materials and workmanship installed under the Contract to be of
acceptable quality in every respect and to remain so during the
guarantee period.
 d. Should 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. Such repairs
and corrective works shall be done by the Contractor at his
exclusive expense and shall be commenced within five (5) days
after receipt of written notice by the Owner.
 e. In case the Contractor fails to commence or do the work so
ordered, the Owner may have the work done by another
contractor and charge the cost thereof against monies retained
as provided for in the Contract and/or against his sureties.
 f. The foregoing remedies shall be without prejudice to the rights
of the Owner under the New Civil Code and other laws now or
hereafter that may be applicable.
 31.07 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 for in the
Contract is deemed conclusively to have accepted the following
mandatory conditions, and any 50 provision in the bond thereby
issued or in any document made prior to, concurrent with, or after
the issuance of the bond which tends to nullify, modify, or limit by
time or otherwise, any right of the Owner shall be void and shall
not prevail over 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. Where the Contract
provides that the Contractor shall obtain the approval of the
surety or bondsman to any such adjustment, the required
approval shall be deemed to be a mere formality, the absence of
which shall not affect the obligation and liability of the surety or
bondsman under the bond.
 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.
This is without prejudice to the right of the surety or bondsman to demand from
the Contractor the payment of the premium on the bond or to the right of the
Owner to pay such unpaid premium for the Contractor. The additional premium
on the bond for an extension of the Contract time due to reasons other than the
fault or negligence of the Contractor shall be billed at cost to the Owner. The
bond may not be cancelled or otherwise terminated by the bondsman or surety
without the express written consent of both the Owner and the Contractor. The
right of the surety shall be limited to demand the payment of unpaid premium.
 c. The Owner shall have a right of recourse against the surety on the bond until
(a) it is cancelled by the Owner and returned to the Contractor 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
to the Contractor an unconditional Certificate of Acceptance of the Work.
 d. Until the Owner takes over the Work (not only a part thereof) or otherwise
terminates the Contract, the Contractor shall not be deemed in default,
notwithstanding the reduction of the Contractor's scope of work and any
assistance provided by the Owner to enable the Contractor to catch up and
complete the remaining work. The Owner's assistance to the Contractor shall
not prejudice nor limit the right of the Owner to have a later recourse against the
bond
 ART. 32: OWNER'S RESPONSIBILITIES AND LIABILITIES
 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. The Contractor shall use the advance payment for mobilization, purchase of
materials, and the like for the project. This shall be recouped pro rata in the progress
billings.
 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
33.01 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. Should any of such claims remain unpaid as of the
time of executing the sworn statement, or if the Contractor is unable to
furnish the Owner with proof of full payment to any subcontractor or
supplier, the Contractor shall furnish the Owner with an indemnity bond
equal to the amount of the claims still unpaid. The indemnity bond may
be issued by the surety which previously issued the Contractor's
performance bond or any other bond required under the Contract or by
any other surety acceptable 52 to the Owner. The Owner may recover
against the Contractor and/or the surety, on the latter's indemnity bond,
any amount paid by the Owner to discharge such liens, including costs
incurred incident thereto and a reasonable amount of attorney's fees.
 33.02 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. The latter
shall in all such matters act as agent of the Owner whose determination binds
the Owner.
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
arising from the foregoing determination by the Owner or by his
representative. If either of the party disagrees with the resolution of the
adjudicator, such shall be deemed as a dispute which may be submitted to
arbitration.
 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. SUBSTITUTED 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, paragraph [A] above.
Such party shall be served with the claim referred to in Article
34.05, paragraph [A] and other notices and processes incident
thereto upon such claim being served upon or filed with his co-
venturer, partner or authorized representative, notwithstanding any
statement to the contrary in the Agreement, Contract Documents,
or any other communication to the other party or after entering into
the Contract, unless he has filed with the Construction Industry
Arbitration Commission an irrevocable special power of attorney
authorizing another person or entity to receive by personal service
at a definite address in Metro Manila, Philippines, such claim,
notice and processes. In case a party, his co-venturer, or
authorized representative declines service of such claim, notice or
process or cannot be found at his given address such service shall
be made upon the said party by filing the same with the
Construction Industry Authority of the Philippines (CIAP) at its 54
office address, and filing the claim, notice or process shall
complete the service upon the party concerned.
 SECTION X
OWNER’S REPRESENTATIVE
 ART. 34:
 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 XI
SCHEDULE OF TIME LIMITS