Module9-CeLaw

• The present policies, rules and regulations covering government contracts for infrastructure and other construction projects are generally fragmented and have been found to be inadequate to cope with the intricate and complex process involved
• There is a need to adopt a comprehensive, uniform, and updated set of policies, guidelines, rules and regulations covering government contracts for infrastructure and other construction projects in order to achieve a more efficient and effective implementation of these projects
• Policy Objectives


  • Bring about maximum efficiency in project implementation and minimize project costs and contract variations through sound practices in contract management
  • Promote a healthy partnership between the government and the private sector in furthering national development
  • Enhance the growth of the local construction industry and optimize the use of indigenous manpower, materials and other sources
• No bidding and/or award of contract for a construction project shall be made unless the detailed engineering investigations, surveys, and designs for the project have been sufficiently carried out in accordance with the standards and specifications to be established under the rules and regulations to be promulgated
• The detailed engineering documents have to be approved by the Minister of Public Works, Transportation and Communications, the Minister of Public Highways, of the Minister of Energy, as the case may be
• Prequalification of Prospective Contractors

  • Legal Requirements
  • Technical Requirements
  • Financial Requirements
  • Filipino participation
• Construction projects shall generally be undertaken by contract after competitive public bidding
• Projects may be undertaken by administration or force account or by negotiated contract only in exceptional cases where time is of the essence, or where there is lack of qualified bidders or contractors, or where there is a conclusive evidence that greater economy and efficiency would be achieved through this arrangement
• A bidder's bond shall accompany the bid to guarantee that the successful bidder shall, within a prescribed period from receipt of the notice of award, enter into account and furnish the required performance bond for the faithful and complete prosecution of the work specified in the contract documents
• The contract may be awarded to the lowest prequalified bidder whose bid as evaluated complies with all the terms and conditions in the call for bid and is the most advantageous to the Government
• To guarantee the faithful performance of the contractor, he shall, prior to the award, post a performance bond
• The contractor shall not assign, transfer, pledge, subcontract or make any other disposition of the contract or any part of interest therein except with the approval of the Minister of Public Works, Transportation and Communications, the Minister of Public Highways, or the Minister of Energy, as the case may be
• The contractor shall assume full responsibility for the contract work until its final acceptance by the Government and shall be held responsible for any damage or destruction of works except those occasioned by force majeure
• Adjustment of contract price for construction projects may be authorized by the Minister of Public Works, Transportation and Communications, the Minister of Public Highways, or the Minister of Energy, as the case may be, upon recommendation of the National Economic and Development Authority, if during the effectivity of the contract, the cost of labor, equipment, materials and supplies required for the construction should increase or decrease due to direct acts of the Government
• A change order or extra work order may be issued only for works necessary for the completion of the project and, therefore, shall be within the general scope of the contract as bidded and awarded
• Inspection of the contract work shall be made by the Government while such contract work is in progress to ascertain that the completed works comply in all respects with the standards and requirements set forth in the contract documents
• The Government may take over the contract work should the contractor abandon the contract work, or unduly delay the prosecution of the contract work, or become insolvent, or assign his assets for the benefit of his creditors, or be adjudged bankrupt, or assign the contract work without written approval by the Government, or violate any condition or term of the contract
• The Minister of Public Works, Transportation and Communications, as the lead official, the Minister of Public Highways, the Minister of Energy, and the Director-General of the National Economic and Development Authority, shall jointly promulgate the rules and regulations to implement the provisions of this Decree
• All Acts, Charters, Decrees, Letters of Instructions, Executive Orders, Proclamations, rules and regulations or parts thereof in conflict with the provisions of this Decree are hereby repealed or modified accordingly
• This Decree shall take effect immediately

  June 11, 1978