General conditions of contract IMPORTANT NOTES TO

slide1. General conditions of contract IMPORTANT NOTES TO CONSIDER<br>
slide2. ITEM 1 (a) ; OWNER refers to the DSWD FO-IX as REPRESENTED BY its REGIONAL DIRECTOR.

ITEM 1 (j) ; DAYS are in CALENDAR DAYS ; MONTHS are in CALENDAR MONTHS.<br>
slide3. ITEM 1 (K) ; The DEFECTS LIABILITY PERIOD for infrastructure projects shall be ONE YEAR FROM PROJECT COMPLETION UP TO FINAL ACCEPTANCE by the DSWD FO-IX.
…contractor shall undertake the REPAIR WORK AT HIS OWN EXPENSE, of any damage to the infrastructure projects on the account of the use of MATERIALS OF INFERIOR QUALITY within 45 DAYS from the time the DSWD Regional Director has issued an order to undertake repair. In case of failure or refusal to comply with this mandate, the DSWD FO-IX shall undertake the repair works and shall be entitled to full reimbursement of expenses incurred thereon upon demand.
Any contractor who fails to comply with the preceding paragraph shall be PERPETUALLY DISQUALIFIED from participating in any public bidding and his property or properties will be subjected to attachment or garnishment proceedings to recover the costs. ALL PAYABLE of DSWD FO-IX, in the contractor’s favor SHALL BE OFFSET TO RECOVER THE COST.<br>
slide4. ITEM 2 ; CONFORMITY TO GOVERNMENT REGULATIONS
The Contract shall conform to the provisions of any national or local government laws and regulations which may be applicable to the works. Among such regulations or laws are:
Employment of unskilled local labor
Traffic regulations
Environmental protection.<br>
slide5. ITEM 3 ; COMMUNICATIONS
COMMUNICATION BETWEEN PARTIES that are referred to in these conditions SHALL BE EFFECTIVE ONLY WHEN MADE IN WRITING. A NOTICE SHALL BE EFFECTIVE ONLY WHEN IT IS DELIVERED, actually or constructively.<br>
slide6. ITEM 4 ; CONTRACTOR’S RISK
From the Starting Date until DSWD FO-IX has issued a certificate for the correction of any defects, THE RISKS of personal injury, death, and loss or damage to property and adjacent property (including, without limitation, the works, materials and equipment) ARE CONTRACTOR’S RISKS.<br>
slide7. ITEM 6 ; SAFETY
The Contractor shall be responsible for the safety of all construction personnel on-site during construction.<br>
slide8. ITEM 7 ; PERMITS AND CLEARANCES
The CONTRACTOR SHALL BEAR ALL EXPENSES in the acquisition of necessary permits, clearances and performance bond with the DPWH, city office, local and national government clearances and other documents for the implementation of the project including incidental expenses. 
ALL PERMITS SHALL BE TANGIBLY ACQUIRED by the contractor before the project implementation commences. Permit application on account nor on-going processing for the same will not be considered.<br>
slide9. ITEM 8 ; EXTENSION OF THE COMPLETION DATE
The DSWD FO-IX has already considered the number of Sundays, and 15% non-workable days which includes holidays and possible rainy days. Moreover, there are circumstances to be considered for contract time extension under IRR Annex E:
1. MAJOR CALAMITIES such as exceptionally destructive typhoons, floods and earthquakes, and epidemics;
2. NON-DELIVERY ON TIME OF MATERIALS, working drawings, or written information to be furnished by the procuring entity;
3. NON-ACQUISITION OF PERMIT to enter private properties within the right-of-way resulting in complete paralysis of construction activities;<br>
slide10. ITEM 6 ; EXTENSION OF THE COMPLETION DATE
4. REGIONWIDE OR NATIONWIDE SHORTAGE OF CONSTRUCTION MATERIALS, as certified by the DTI Secretary;
5. REGIONWIDE OR NATIONWIDE GENERAL LABOR STRIKES, as certified by the DOLE Secretary; and
6. SERIOUS PEACE AND ORDER PROBLEMS as certified by the DILG, or AFP Provincial Commander and approved by the DND Secretary.
The department SHALL NOT EXTEND the completion date, UNLESS variation of work was issued and that the abovementioned circumstances will transpire. Extension of completion date is SUBJECT TO PRIOR APPROVAL FROM THE REGIONAL DIRECTOR.<br>
slide11. ITEM 9 ; DELAYS ORDERED BY DSWD FO IX
The DSWD FO-IX MAY INSTRUCT the Contractor THROUGH THE SITE ENGINEER to delay the start or progress of any activity within the works, provided consultation has been made with the Regional Director.
In cases where the delay reaches 5% of the planned activities, the contractor shall receive a letter of notice from the DSWD.
The contractor shall also submit a CATCH UP PLAN the following day reckoned from the date of the delay incurred. The “catch-up plan” shall cover the left-behind activities of the preceding week and the remaining works.

The contractor will be notified before they reach a 10% delay in the project. ONCE THE PROJECT REACHED 10%, the DSWD has the RIGHT TO SUSPEND THE WORK AND RESCIND THE CONTRACT.<br>
slide12. ITEM 10 ; DEFECTS

If the CONTRACTOR HAS NOT CORRECTED a defect within the time specified by the DSWD FO-IX RPMT Engineer’s notice, the DSWD FO-IX RPMT ENGINEERS will ASSESS THE COST of having the defect corrected. The CONTRACTOR WILL PAY THIS AMOUNT. DSWD FO-IX shall recover these amounts by DEDUCTING FROM THE AMOUNTS DUE TO THE CONTRACTOR. FAILURE BY THE CONTRACTOR TO PAY the DSWD FO-IX will be a ground to DISQUALIFY them from participating from other DSWD projects.<br>
slide13. ITEM 10 ; DEFECTS

After final acceptance of the project, the CONTRACTOR SHALL BE HELD RESPONSIBLE for structural defects and/or failure of the completed project within the warranty period (as provided in Sec. 62 of the Revised IRR 9184) from final acceptance, except those occasioned by force majeure and those caused by other parties.<br>
slide14. ITEM 11 ; PROGRAM
WITHIN SEVEN (7) DAYS of the written notification of award, the CONTRACTOR SHALL SUBMIT to the DSWD FO-IX for approval a program showing the GENERAL METHODS, ARRANGEMENTS, ORDER, and TIMING FOR ALL ACTIVITIES OF THE WORK…

ITEM 12 ; ACTIVITY SCHEDULES
The CONTRACTOR SHALL PROVIDE updated Activity Schedules within ten (10) days of being instructed by the DSWD FO-IX.<br>
slide15. ITEM 13 ; CHANGES IN QUANTITIES
A Variation order may be issued by the DSWD to cover any increase/decrease in quantities, including the:
Introduction of a new work items that are not included in the original contract: or
Reclassification of work items either due to change of plans, design, or alignment to suit actual field conditions resulting in disparity between the preconstruction plans and the “as staked plans” or construction drawings prepared after a joint survey by the contractor and the DSWD after award of the contract.<br>
slide16. ITEM 13 ; CHANGES IN QUANTITIES

Provided however, that the cummulative amount of the positive or additive Variation Order DOES NOT EXCEED TEN PERCENT (10%) of the original price. The addition/deletion of works under Variation Orders should be within the general scope of works as bid and awarded.
A Variation Order may either be in the form of a CHANGE ORDER OR EXTRA WORK ORDER. A change Order covers any increase/decrease in quantities of original work of items in the contract.<br>
slide17. ITEM 13 ; CHANGES IN QUANTITIES
The issuance of a Variation Order must conform to the following:
That there will not be any short changes in the original design;
That it will not affect the structural integrity and usefulness of the structure; and
That it is covered by a Certificate of Availability of funds (CAF), if necessary.
Under no circumstances can a contractor proceed to commence work under any Change Order or Extra Work Order UNLESS THE REGIONAL DIRECTOR HAS APPROVED the order on the recommendation of the PE or RE.<br>
slide18. ITEM 13 ; CHANGES IN QUANTITIES
The Regional Director may, subject to the issuance of the CAF, authorize the immediate start of work under any Change or Extra Work Order, subject to any or all of the following conditions:
In the event of any emergency where the prosecution of the work is urgent to avoid any detriment to public service, or damage to life and/or property; and/or
When time is of the essence, for works in the critical path based on the approved GANTT Chart;<br>
slide19. ITEM 13 ; CHANGES IN QUANTITIES
However, the approval is valid on work done up to the point where the cumulative increase in value of work on the project which has not yet been fully approved does not exceed five percent (5%) of the adjusted original contract price, whichever is less. Furthermore, immediately after the start of work, the corresponding Change Order or Extra Work Order must be prepared and submitted for approval in accordance with the above rules here in set.
For a Change Order or Extra Work Order involving a cumulative amount exceeding five percent (5%) of the original contract, no work may be commenced unless said Change Order or Extra Work Order has been approved by the Regional Director on the recommendation of the PE and the RE.<br>
slide20. ITEM 13 ; CHANGES IN QUANTITIES

Variation Orders may be issued by the DSWD at any time during contract implementation. However, the adjustment provided for in these orders must be necessary to fully meet the requirement of the project.
The net cumulative amount of the Variation Order SHOULD NOT EXCEED MORE THAN TEN PERCENT (10%) of the original project cost.<br>
slide21. ITEM 13 ; CHANGES IN QUANTITIES
If the adjustment provided for in a Variation Order costs more than ten percent (10%) of the original project costs, these shall be the subject of another contract to be procured pit of the works are separable (not part of the work to complete the original scope of work) from the original contract. However, if these adjustments are urgently necessary to complete the original scope of work, the Regional Director, on the recommendation of the PE and the RE May authorize the Variation Order beyond ten percent (10%) but not more than twenty percent (20%). Clearance from the Regional Director is required prior to commencement of any variation orders.<br>
slide22. ITEM 13 ; CHANGES IN QUANTITIES
The payment to the contractor for additional work under Variation Orders must be derived based on the following:
For additional/extra works duly covered by Change Orders involving work items which are exactly the same or similar to those in the original contract, the applicable unit prices of work items in the original contract shall be used.
For additional/extra works duly covered by Extra Works Orders involving new work items that are not in the original contract (e.g., unit cost of cement, rebars, form lumber, labor rate, equipment rental, etc.). all new components of the new work item shall be fixed prices, provided the same is acceptable to both the DSWD and the contractor. The direct unit costs of new components must also be based on the contractor’s estimate as validated by the DSWD. The DSWD must validate these prices through a documented canvass among three eligible suppliers in accordance with existing rules and regulations…<br>
slide23. ITEM 13 ; CHANGES IN QUANTITIES

The request for payment by the contractor for any extra work must be accompanied by a statement of work accomplished, with the approved supporting forms, giving detailed accounting and record of amount for which, he claims payment. This request for payment must be included in the contractor’s statement for progress payment.<br>
slide24. ITEM 13 ; CHANGES IN QUANTITIES
The following must be undertaken in issuing a Variation Order:
With seven (7) calendar days after the contractor discovers that there is a need for a variation order, the said contractor must communicate the same to the DSWD by giving it notice of the findings. Afterwards, the contractor has twenty-eight (28) days to submit a full documentation of the variation order. Failure to provide either of such notices in the time stipulated shall constitute a waiver by the contractor for any claim.<br>
slide25. ITEM 13 ; CHANGES IN QUANTITIES
If the PE an RE finds that a Change Order or Extra Work Order is justified, he/she must prepare the proposed order, accompanied with the following: 
Notices submitted by the contractor;
The plans to affect the adjustment;
The contractor’s computations as to the quantities of the additional works involved per item indicating the specific stations where such works are needed;
A detailed estimate of the unit cost of such items of work, together with his justifications for the need of such Change Order of Extra Work Order.<br>
slide26. ITEM 13 ; CHANGES IN QUANTITIES
The PE or RE, upon receipt of the proposed Change Order or Extra Work Order shall immediately conduct an on-the-spot investigation to verify the need for the work to be prosecuted.
After being satisfied that such Change Order or Extra Work Order is justified and necessary, the PE or RE shall review the estimated quantities and prices.
If, after review of the plans, quantities and estimated unit cost of the items of the work involved, the PE or RE finds that the Change Order or Extra Work Order is in order and covered by the CAF, the same shall be approved.<br>
slide27. ITEM 13 ; CHANGES IN QUANTITIES

The DSWD shall notify the contractor to proceed with the work/delivery of items in accordance with the amendment.
The contractor shall proceed with the work/delivery of items in accordance with the amended contract.<br>
slide28. ITEM 14 ; PAYMENT CERTIFICATE
The DSWD FO-IX RPMT Engineers shall check the Contractor’s executed work and certify the amount to be paid to the Contractor. The value of work executed shall comprise the value of completed items of work or activities in the Activity Schedule.
ITEM 15 ; PAYMENTS
Payments shall be adjusted for deductions on account of advance payments and retention money. DSWD FO-IX shall pay the Contractor the amounts certified by DSWD FO-IX RPMT Engineers within thirty (30) days of the date of each certificate. The Contractor may request payment every substantial accomplishment not below 20% of total contract amount.<br>
slide29. ITEM 16 ; RETENTION
Retention fee refers to the 10% amount retained from all progress billings to cover uncorrected discovered defects and third-party liabilities. This is mandatory for all contracts with Php 1M or more in addition to performance Security. For contracts with less than Php 1M, retention fee is only deducted from the progress billing when there is no Performance Security posted. The retention fee, if not called shall be refunded to the contractor after the expiration of the warranty period. The refund shall not be subjected to Withholding Tax.<br>
slide30. ITEM 17 ; TAXES
The Contractor is responsible for all taxes in accordance with Philippine laws and ordinances of the local government units.
ITEM 18 ; ADVANCE PAYMENT
The DSWD FO IX may make advance payment to the Contractor in the amount up to fifteen (15) percent of the Initial Contract Price only after the DSWD FO-IX RPMT Engineers had certified materials and equipment presence on site.
The advance payment shall be repaid by making deductions for every progress billing with consideration that it is fully recoup upon reaching 80% physical accomplishment. The first recoupment shall start when accomplishment has reached more than 20% of the total contract price.<br>
slide31. ITEM 21 ; SUSPENSION
IRR-A Annex E provides the rules of by which suspension of contract may be implemented.
THE DEPARTMENT has the authority to suspend the work wholly or partly by written order
due to the following:
1. Force majeure or any fortuitous event;
2. Failure on the part of the contractor to:
a. Correct bad conditions which are unsafe for workers or for the general public;
b. Carry out valid orders given by the Procuring Entity; or
c. Perform any provisions of the contract; or
3. Adjustment of plans to suit field conditions as found necessary during construction.<br>
slide32. ITEM 21 ; SUSPENSION
THE CONTRACTOR or its duly authorized representative has the right to suspend work operation on any or all projects/activities along the critical path of activities due to any of the following: 
There exist right-of-away problems that prohibit the contractor from performing work in accordance with the approved construction schedule;
Requisite construction plans, which must be furnished by the Procuring Entity, are not issued to the contractor, in the process precluding any work called by such plans.
Peace and order conditions make it extremely dangerous, if not impossible, to work, such conditions having been certified in writing by the PNP station which has responsibility over the affected area and confirmed by the DILG Regional Director;<br>
slide33. ITEM 21 ; SUSPENSION
4. There is a failure on the part of the Procuring Entity to deliver government– furnished materials and equipment as stipulated in the contract; or
5. The payment of the contractor’s claim for progress billing beyond forty-five (45) calendar days from the time the claim has been certified by the Procuring Entity’s authorized representative as having been supported by complete documentation, unless there are justifiable reasons thereof which shall be communicated in writing to the contractor.
The contractor may suspend work fifteen (15) calendar days after the DSWD FO-IX RPMT Engineers have received a written notice of the suspension of work.<br>
slide34. ITEM 22 ; TERMINATION
Termination of Contract for Default
The Regional Director may terminate a contract for default when any of the following conditions attend its implementation:
Due to the contractor’s fault and while the project is ongoing, it has INCURRED NEGATIVE SLIPPAGE OF FIFTEEN PERCENT (15%) or more, without acceptable justification;
Due to the contractor’s fault and after the contract time has expired, it has INCURRED NEGATIVE SLIPPAGE OF FIFTEEN PERCENT (15%) or more in the completion of the work, without acceptable justification; or<br>
slide35. ITEM 22 ; TERMINATION
The contractor:
Abandons the contract works, refuses or fails to comply with a valid instruction of the DSWD or fails to proceed expeditiously and without delay despite a written notice by the DSWD;
Does not actually have on the project site the minimum essential equipment listed on the bid/quotation necessary to prosecute the works in accordance with the approved work plan and equipment deployment schedule as required for the project;<br>
slide36. ITEM 22 ; TERMINATION

Does not execute the works in accordance with the contract or persistently or flagrantly neglects to carry out its obligations under the contract;
Neglects or refuses to remove materials or to perform a new work that has been rejected as defective or unsuitable; or
Sub-lets any part of the contract works without approval by the DSWD.<br>
slide37. ITEM 22 ; TERMINATION

The rescission of the contract shall be accompanied by the confiscation by the DSWD of the contractor’s performance security. The contractor will also be RECOMMENDED FOR BLACKLISTING in all DSWD procurements. The contractor shall be paid on a quantum merit basis.<br>
slide38. ITEM 22 ; TERMINATION
Termination of Contract for Unlawful Acts
The DSWD may terminate the contract in case it is determined prima facie that the contractor has engaged, before or during the implementation of the contract, in unlawful deeds and behaviors relative to contract acquisition and implementation. Unlawful acts include, but are not limited to, the following:
Corrupt, fraudulent, collusive and coercive practices;
Drawing up or using forged documents; Using adulterated materials, means or methods, or engaging in production contrary to rules of science or the trade; and
Any other act analogous to the foregoing. The contractor shall be paid on a quantum merit basis.<br>
slide39. ITEM 22 ; TERMINATION
Termination of Contract by Reason of Insolvency
The Regional Director should terminate the contract if the contractor is declared bankrupt or insolvent as determined with finality by a court of competent jurisdiction. In this event, termination will be without compensation to the contractor, provided that such termination will not prejudice or affect any right of action or remedy which has accrued or will accrue thereafter to the DSWD and/or the contractor.<br>
slide40. ITEM 22 ; TERMINATION
Termination of Contract at the Instance of the Contractor
The contractor may terminate its contract with the DSWD if the works are completely stopped for a continuous period of at least sixty (60) calendar days through no fault of its own, due to any of the following reasons:
Failure of the DSWD to deliver, within a reasonable time, supplies, materials, right of way, or other items it is obligated to furnish under the terms of the contract; or
The prosecution of the work is disrupted by the adverse peace and order situation, as certified and approved by the Municipal/City Chief of Police.
The contractor must serve a written notice to DSWD of its intention to terminate the contract at least thirty (30) calendar days before its intended termination. The contract is deemed terminated if it is not resumed in thirty (30) calendar days after the receipt of such notice by the Regional Director. In cases of termination, the DSWD shall return to the contractor its performance security and shall pay unpaid claims on a “quantum merit” basis.<br>
slide41. ITEM 22 ; TERMINATION
Termination of Contract for Convenience
The Regional Director, by written notice sent to the contractor, may terminate the contract, in whole or in part, at any time for its convenience. The notice of termination shall specify that the termination is for the DSWD’s convenience, the extent to which performance of the contractor under the contract is terminated, and the date upon which such termination becomes effective. Any of the following circumstances may constitute sufficient grounds to terminate contract for convenience:
If physical and economic conditions have significantly changed so as to render the project no longer economically, financially or technically feasible, as determined by the Regional Director;<br>
slide42. ITEM 22 ; TERMINATION

The Regional Director has determined the existence of conditions that make project implementation impractical and/or unnecessary, such as, but not limited to,
fortuitous event/s, changes in laws and government policies;
Funding for the project has been withheld or reduced by higher authorities through no fault of the DSWD;
Failure of the DSWD to acquire the necessary right-of-way; or
Any circumstance analogous to the foregoing.<br>
slide43. ITEM 23 ; FORCE MAJEURE

Either party may terminate the Contract by giving a thirty (30) days’ notice to the other for events beyond the party’s control, such as Wars and acts of God such as earthquakes, floods, fires, etc.<br>
slide44. ITEM 24 ; PAYMENT UPON TERMINATION
If the Contract is terminated because of a fundamental breach of Contract by the Contractor, the DSWD FO-IX shall issue a certificate for the value of the work completed and for the materials already ordered LESS the advance payments received up to the date of the issue of the certificate. If the total amount payable to the DSWD FO-IX exceeds any payment due to the Contractor, the difference shall be a debt payable by the Contractor to the DSWD FO-IX. As such, the performance security will be forfeited and shall be used by the DSWD FO-IX for the remaining works or for further improvement of the project.<br>
slide45. ITEM 25 ; PROPERTY
All materials and construction equipment on the site, temporary works, and works shall be deemed to be the property of the DSWD FO-IX if the Contract is terminated because of the Contractor’s default.
ITEM 26 ; PENALTIES
Failure by the Contractor to complete the works within the implementation period or any extended period approved by the DSWD FO-IX shall render the Contractor liable to forfeit 1/10 of 1% of the value of uncompleted works per calendar day of delay. Total penalty shall not exceed 10% of the total contract price.<br>
slide46. ITEM 27 ; RESOLUTION OF DISPUTES
The DSWD FO-IX and the Contractor shall make every effort to resolve amicably by direct negotiations any disagreement or dispute arising between them under or in connection with the Contract. The disagreement may also be presented to appropriate Agency/Body. In case of further disagreement either party can take the matter to arbitration in accordance with the Law governing the Contract.<br>
slide47. Additional Note:

DPWH D.O. 39 S. 2020
Revised Construction Safety Guidelines for the Implementation of Infrastructure Projects During the COVID-19 Public Health Crisis, repealing Department Order No. 35, Series of 2020<br>