Question & AnswerQ&A (DPWH DEPARTMENT ORDER NO. 31, S. 2011)
Under DPWH Department Order No. 31, s. 2011, the total payment for progress billings of all locally-funded projects is limited to a maximum of ninety percent (90%) of their respective total contract costs.
The Department observed that allowing contractors to claim up to 98% of the contract amount led to lack of priority in completing the project, resulting in failure to finish physical work or other contractual requirements, hence the limit to 90% to encourage proper completion.
No, the Order specifically limits progress billings only for locally-funded projects.
Performance security can be forfeited if the contractor defaults on contractual obligations, but the forfeiture process is lengthy as it is usually done through the courts, hence the need for limiting progress billings to 90%.
All heads of the various Project Implementing Offices (Project Management/Regional/District Engineering Offices) of the DPWH are responsible for implementing the 90% limit.
Yes, this Order forms part of the existing rules and procedures under Department Order No. 207, series of 2000, and amends previous issuances regarding payment of contractors' claims for civil works projects.
It took effect immediately upon adoption on May 16, 2011.
Collecting beyond 90% is against this Order, may lead to withholding of payments, and enforcement actions to ensure completion of contractual obligations, although specific penalties are governed by other existing laws and contracts.
The forfeiture procedure involves a longer period as it normally requires judicial action, delaying enforcement against contractors in default.
Limiting progress billings incentivizes contractors to complete physical work and contractual requirements, reducing project delays and ensuring proper use of government funds.