Contract Management

Pre-Construction Stage

Planning and Design
1. Planning/Programming
Pre-Construction Stage
2. Detailed Engineering Design
3. Bidding Documents
4. Environmental Impact
Assessment
5. Parcellary Survey
Note:
LOI – Letter of Interest
LCB – Lowest Calculated Bidder
LCRB – Lowest Calculated & Responsive
Bidder
BAC – Bids & Awards Committee
Pre-Construction
Stage
Bid and Award
1. Advertisement
2. LOI and Selection of Bidders
3. Issuance of Bidding Documents
4. Pre-Bid Conference and Supplemental Bid
Bulletin
5. Submit and Open Bids
6. Bid Evaluation and LCB determination
7. Post-Qualification Conduct and LCRB
Determination
8. BAC Resolution and Notice to Award
9. Finalization of Contract
Pre- Construction Stage Notice of Award

Formal notification of the awarding

of a contract to a successful bidder;
Public notification of the company
to which a contract has been
awarded, usually as the result of
competitive bidding for a publicly
funded project.

The Wiley Dictionary of Civil Engineering and Construction

 Performance
Security
Pre-Construction Stage

At the Contractor’s option, the

Performance Security is to be in any
The winning bidder shall post the
of the following forms:
required Performance Security and
Cash, Cashier’s Check, Bank Draft
enter into contract with the
or Irrevocable Letter of Credit in the
procuring entity within ten (10)
amount equivalent to five per cent
calendar days from receipt by the
(5%) of the contract price
winning bidder of the Notice of
Award. Bank guarantee in the amount
equivalent to ten per cent (10%) of
the contract price.
Surety bond in the amount
equivalent to thirty per cent (30%)
of the contract price callable upon
demand issued by any reputable
Revised IRR of RA 9184
Surety or Insurance company; and
Road Project Management and Supervision Manual Volume 1 Main
Pre- Construction Stage The Contract

The Contract is the contract Agreement in law; a commitment

between the Procuring Entity and document.
the Contractor to execute,
The term contract is used to refer
complete, and maintain the Works.
to the document itself.

Philippine Bidding Documents – Procurement of Infrastructure Project The Wiley Dictionary of Civil Engineering and Construction
 Contract
Documents
Pre-Construction Stage

Other contract documents that may be

Contract Agreement;
required by existing laws and/or the
Bidding Documents; procuring entity concerned in the
Winning bidder’s bid, including the Bidding Documents, such as the
Eligibility requirements, Technical and construction schedule and S-curve,
Financial Proposals, and all other manpower schedule, construction
documents/statements submitted; methods, equipment utilization
Performance Security; schedule, construction safety and
Credit line in accordance with the health program approved by the
provisions of this IRR, if applicable; Department of Labor and Employment,
Notice of Award of Contract; and and PERT/CPM for infrastructure
projects.

Revised IRR of RA 9184

 The Employer

Head of the Procuring Entity. Refers to:

Pre-Construction Stage

(i) the head of the agency or body, or his duly authorized official, for
NGAs and the constitutional commissions or offices, and branches of
government;
(ii) (ii) the governing board or its duly authorized official, for GOCCs,
GFIs and SUCs; or
(iii) (iii) the local chief executive, for LGUs:
Provided, however, That in an agency, department, or office where the
procurement is decentralized, the head of each decentralized unit shall
be considered as the Head of the Procuring Entity, subject to the
limitations and authority delegated by the head of the agency,
department, or office.

(Revised IRR of RA 9184

Pre-Construction Stage Engineer

“Engineer” means a qualified Likewise, person appointed by the

professional appointed or Contractor to act as Engineer for
designated by the Employer to the purposes of supervising the
render technical and/or project and named in the Special
administrative decision for the Conditions of Contract is also
purposes of supervising a project. known as “Engineer” of the
Contractor

Road Project Management and Supervision Manual Volume 1 Main

Pre- Construction Stage Contractor

The Contractor is the juridical One who agrees to perform certain

entity whose proposal has been types of work, to an agreed
accepted by the Procuring Entity schedule, and to defined standards,
and to whom the Contract to for a specified sum of money.
execute the Work was awarded.

Philippine Bidding Documents – Procurement of Infrastructure Project The Wiley Dictionary of Civil Engineering and Construction
Pre-Construction Stage Notice to Proceed

The Notice to Proceed is a written

notice issued by the Procuring Entity or However, for infrastructure projects with
the Procuring Entity’s Representative to an Approved Budget for the Contract
the Contractor requiring the latter to (ABC) of fifty (50) million and below, the
begin the commencement of the work maximum period is two (2) calendar days.
not later than a specified or
determinable date. All notices called for by the terms of the
Contract shall be effective only at the
time of receipt thereof by the successful
The Implementing Office shall issue the
bidder.
NTP together with a copy or copies of
the approved Contract to the
If the effectivity date is provided in the
successful bidder within three (3)
Notice to Proceed by the Implementing
calendar days from the date of
Office concerned, such date shall not be
approval of the Contract by the later than seven (7) calendar days from
appropriate government approving issuance thereof
Philippine Bidding Documents – Procurement of Infrastructure Project
authority.
Road Project Management and Supervision Manual Volume 1 Main
Text(DPWH) Road Project Management and Supervision Manual Volume 1 Main
 Contract Time or
Duration
Pre-Construction Stage
In the preparation of the Bidding
Documents, the agency shall make an
estimate of the actual number of working
days required to complete the project
through PERT/CPM analysis of the project
activities and corrected for holidays and
weekends.
Likewise, the agency shall make an
estimate of the number of
rainy/unworkable days considered
unfavourable for the prosecution of the
works at the site, based on the records of
PAGASA, and incorporate the same in the
corrected actual number of working days
determined above, which shall be made
the basis of the total contract time.
Philippine Bidding Documents – Procurement of Infrastructure Project
The estimated number of
rainy/unworkable days considered
unfavourable for the prosecution of the
works at the site shall be made known
before the date of bidding through the
Instructions to Bidders for the purpose of
guiding the contractor in preparing his
bid and as reference to both the GOP
and winning contractors taking action on
the requests for time extensions.
Without the estimated number of
rainy/unworkable days established
before the bidding date and made known
to all participating bidders, the contract
time is presumed to have excluded the
unfavourable conditions.
 Contract Management in Stages of Road Construction Implementation
Road Construction Stage

Road Project Management and Supervision Manual Volume 1 Main

 Statement of Work Accomplishment

Final Inspection
Post-Construction Stage

Certificate of Completion

Final Acceptance

Final Billing

As-Built Plan

Post-Audit
Post-Construction Stage Warranty

From the time project

construction commenced up to
final acceptance, the contractor
shall assume full responsibility for the
following:
a) any damage or destruction of the
works except those occasioned by
force majeure; and
b) safety, protection, security, and
convenience of his personnel, third
parties, and the public at large, as
well as the works, equipment,
installation and the like to be affected
by his construction work
Post-Construction Stage Warranty
One (1) year from project completion up to
final acceptance or the defects liability
period.
The contractor shall undertake the repair works,
at his own expense, of any damage to the
infrastructure on account of the use of materials
of inferior quality, within ninety (90) days from
the time the HOPE has issued an order to
undertake repair. In case of failure or refusal to
comply with this mandate, the procuring entity
shall undertake such repair works and shall be
entitled to full reimbursement of expenses
incurred therein upon demand.
The defects liability period shall be covered by
the Performance Security of the contractor which
shall guarantee that the contractor performs his
responsibilities.
If the contractor fails to comply with its
obligations the procuring entity shall forfeit its
performance security, subject its property(ies) to
attachment or garnishment proceedings, and
perpetually disqualify it from participating in any
public bidding.
Post-Construction Stage Warranty
From final acceptance of the project
up to the period prescribed in this
IRR
The following shall be held responsible
for “Structural Defects”, i.e., major
faults/flaws/deficiencies in one or more
key structural elements of the project
which may lead to structural failure of
the completed elements or structure, or
“Structural Failures”, i.e., where one or
more key structural elements in an
infrastructure facility fails or collapses,
thereby rendering the facility or part
thereof incapable of withstanding the
design loads, and/or endangering the
safety of the users or the general public:
a) Contractor – Where Structural
Defects/Failures arise due to faults
attributable to improper construction,
use of inferior quality/substandard
materials, and any violation of the
contract plans and specifications, the
contractor shall be held liable;
b) Consultants – Where Structural
Defects/Failures arise due to faulty
and/or inadequate design and
specifications as well as construction
supervision, then the consultant who
prepared the design or undertook
construction supervision for the
project shall be held liable;
Post-Construction Stage Warranty

The warranty against Structural Defects and b) Semi-Permanent Structures: Five

Failures shall cover the following periods from (5) years
final acceptance, except those occasioned by
force majeure: Buildings of types 1, 2, and 3 as
a) Permanent Structures: Fifteen (15) years
classified under the National Building
Code of the Philippines,
Buildings of types 4 and 5 as classified under the
National Building Code of the Philippines and other
concrete/asphalt roads, concrete
structures made of steel, iron, or concrete which comply river control, drainage, irrigation lined
with relevant structural codes (e.g., DPWH Standard canals, river landing, deep wells, rock
Specifications), such as, but not limited to,
steel/concrete bridges, flyovers, aircraft movement causeway, pedestrian overpass, and
areas, ports, dams, tunnels, filtration and treatment other similar semi-permanent
plants, sewerage systems, power plants, transmission
and communication
structures; and
Other Structures: Two (2) years
Bailey and wooden bridges, shallow
wells, spring developments, and other
similar structures.
Road Construction Stage Progress Payment

Once a month, the contractor may

submit a statement of work
accomplished (SWA) or progress
billing and corresponding request
for progress payment for work
accomplished. The SWA should
show the amounts which the
contractor considers itself to be
entitled to up to the end of the
month, to cover
 (a) the cumulative value of the works it
executed to date, based on the items in
the Bill of Quantities, and
 (b) adjustments made for approved
variation orders executed.
Road Construction Stage Suspension of Work

The procuring entity shall have the

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

The contractor or its duly There exist right-of-way

authorized representative shall problems which prohibit the
have the right to suspend work contractor from performing work in
operation on any or all accordance with the approved
projects/activities along the critical construction schedule.
path of activities after fifteen (15)
Requisite construction plans
calendar days from date of receipt which must be owner-furnished are
of written notice from the not issued to the contractor
contractor to the district precluding any work called for by
engineer/regional such plans.
director/consultant or equivalent
official, as the case may be, due to
the following:
Road Construction Stage Suspension of Work

There is failure on the part of the Delay in the payment of

procuring entity to deliver
government-furnished materials
and equipment as stipulated in the
contract.
contractor's claim for progress
billing beyond forty-five (45)
calendar days from the time the
contractor's claim has been
certified to by the procuring entity’s
authorized representative that the
documents are complete unless
there are justifiable reasons thereof
which shall be communicated in
writing to the contractor.
Road Construction Stage Suspension of Work

In case of total suspension, or

suspension of activities along the
critical path, which is not due to
any fault of the contractor, the
elapsed time between the effective
order of suspending operation and
the order to resume work shall be
allowed the contractor by adjusting
the contract time accordingly.
Road Construction Stage Contract Completion

Once the project reaches an Said punch-list will contain,

accomplishment of ninety five among others, the remaining
(95%) of the total contract amount, works, work deficiencies for
necessary corrections, and the
the procuring entity may create an specific duration/time to fully
inspectorate team to make complete the project considering
preliminary inspection and submit a the approved remaining contract
punch-list to the contractor in time.
preparation for the final turnover of
the project.