Amendment of RA 5979 Sec 10 on Contract Price Adjustment

Readjustment may occur if the Government imposes, abolishes, or modifies taxes, customs duties, licenses, fees, or other similar charges.
Changes in laws affecting labor conditions such as permissible working hours or wages, which impact construction costs, also trigger readjustment.
Crucially, any abnormal or extraordinary increase or decrease in construction material costs beyond either party's control justifies contract adjustment.

A specialized Committee is created to determine the appropriate readjustment of the contract amount.
Committee membership includes:
- Chairman: Secretary of Public Works, Transportation and Communications.
- Co-Chairman: Secretary of Public Highways.
- Members: Representative from the National Economic and Development Authority (NEDA), the head of the Bureau or Agency concerned, and a Commission on Audit representative.
The Committee's role is to assess applications and make fair adjustments to contract amounts based on submitted evidence.

The party requesting contract readjustment must apply in writing.
The application must specify the reasons justifying the change.
It must include detailed data and computations to accurately determine the adjusted amount.
No adjustment consideration is allowed for projects behind schedule unless a valid extension of time has been granted.

All laws, decrees, orders, and regulations inconsistent with this decree are repealed or modified accordingly.
The decree took effect immediately upon issuance.

Ensures fairness by allowing contract price adjustments responsive to economic realities, especially sudden material cost escalations.
Enhances coordination of economic and fiscal policies affecting public works contracts through revised committee membership.
Protects contractors from undue financial burdens while maintaining government oversight and accountability through designated committee members and procedural safeguards.