Gov't take over delayed infra projects PD 1870

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PRESIDENTIAL DECREE NO. 1870: Gov't take over delayed infra projects PD 1870

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Title Supreme Court: Gov't take over delayed infra projects PD 1870

Law: Presidential Decree No. 1870

Decision Date: Jul 12, 1983

Presidential Decree No. 1870 allows the government to take over or award contracts for delayed infrastructure projects funded by foreign loans in the Philippines, ensuring their timely completion and protecting the public interest. Contractors who cause delays or fail to comply may face consequences such as the government taking over the project or deducting the cost of work done from the contract price.

government authorization

delayed infrastructure projects

A

Impact of Delay on Government and Public Interest

Delay disrupts government financial plans and cash flow.
Delay prejudices the public interest served by timely project completion.

Contractor Misrepresentations and Resultant Delays

Some contractors misrepresent capabilities to secure contracts.
Such misrepresentations lead to delays or refusal to fulfill contractual commitments.
This causes prejudice to both the Government and the public.

Sovereign Power and Public Welfare in Government Contracts

Existing laws and sovereign power principles are implied in contracts.
Infrastructure contracts are designed to promote public welfare.
Remedies are necessary against contractors causing undue delays.

Legal Basis for Government Takeover of Delayed Contracts

Presidential Decree No. 1594 Section 11 authorizes government takeover for undue delays.
Reading Section II of PD No. 1594 into contracts affirms validity under police power.
This decree exercises police power due to damage caused by delays.

Conditions for Government Takeover or Reassignment of Contract Work

Contractor incurs 15% or more negative slippage based on approved PERT/CPM.
Implementing agency’s Minister may administer unfinished work or award to a qualified contractor.
Replacement contract to be at current valuation price.

Procedure for Notification and Government Intervention

Minister or Head of Agency notifies contractor if work activity is behind schedule.
Contractor has 15 days to start work and prove satisfactory performance.
Failure to comply allows government takeover and either administration or reassignment.

Grounds for Government Takeover Beyond Delay

Contractor fails or refuses to provide required tools, materials, supplies, equipment, facilities, or labor.
Unauthorized subcontracting or assignment without government consent.
Willful violation of contract terms, conditions, covenants, agreements, or technical requirements.
Government may then complete project by administration or through another qualified contractor.

Financial Implications and Settlement of Costs

Costs of government-completed work deducted from contract price.
If contract balance insufficient, contractor must pay the difference.

Effectivity and Enforcement

The decree takes effect immediately upon issuance.
Aimed to expedite and ensure completion of government infrastructure projects efficiently within schedules.

END