Gov't take over delayed infra projects PD 1870

The decree is premised on the need to ensure timely completion of government infrastructure projects funded by foreign loans amortized by the Government and burdened by interest and other charges.
The decree treats project completion within the agreed period as the prime consideration for Government contracting.
The decree states that contract delays under approved PERT/CPM and contract time dislocate financial projections/cash flow and prejudice the public interest.
The decree declares a remedy for contractor conduct described as causing delay or refusing to continue or comply with commitments to the prejudice of the Government and the people.

The decree expressly links its remedy to Section 11 of Presidential Decree No. 1594, which allows the Government to take over contract work upon undue delay by the contractor.
The decree states that Section II of Presidential Decree No. 1594 should be read into government infrastructure contracts as a valid and reasonable exercise of police power.
The decree states that its enactment is also an exercise of police power due to the serious damage and inconvenience caused by unduly delayed contracts.

The decree applies when a contractor is behind schedule in its government infrastructure project work.
The decree applies to situations where a work activity is not being done on schedule according to approved PERT/CPM.
The decree applies during the progress of the contract work and covers contractor nonperformance and specified contract breaches.
The decree authorizes takeover not only of the entire project work but also the whole or a portion of the unfinished work and the whole or a portion of work activities.

The Government may take over when the contractor is behind schedule and incurs 15% or more negative slippage based on its approved PERT/CPM.
The authority to act is vested in the implementing agency, at the discretion of the Minister concerned.
Upon the trigger, the implementing agency may undertake by administration the whole or a portion of the unfinished work.
Alternatively, the implementing agency may have the whole or a portion of unfinished work done by another qualified contractor through a negotiated contract at the current valuation price.

When a work activity in the project is not being done on schedule per approved PERT/CPM, the Minister concerned / Head of Implementing Agency must notify and direct the contractor to immediately undertake the work activity.
The contractor is given 15 days from receipt of such notice to start the work and show satisfactory performance.
If the contractor fails within 15 days to start and show satisfactory performance, the Government may take over the whole or a portion of the work.
After takeover, the Minister concerned may have the work done by administration or by another qualified contractor through a negotiated contract at the current valuation price.

The Government must have takeover options if the contractor fails, refuses, or neglects to supply and provide the required tools, materials, supplies, equipment, facilities and labor-workmen.
The Government may take over if the contract (or any part) is sublet or assigned without the previous written consent of the Government.
The Government may take over if the contractor is wilfully violating any terms, conditions, covenants, agreements, or technical requirements of the project.
The Government’s option covers taking over the project in whole or in part and completing it.
The Minister/Head of Implementing Agency concerned, at its discretion, may have contract work done by administration or via another qualified contractor through a negotiated contract at the current valuation price.

The decree authorizes two completion methods: (1) administration and (2) negotiated contract with another qualified contractor.
When using another contractor, the decree requires the contract to be negotiated at the current valuation price.
The decree authorizes the Government to select these methods at the discretion of the Minister concerned or the Head of Implementing Agency concerned in the situations described.

In all cases, the cost of the work done by the Government shall be deducted from the contract price.
If the remaining balance of the contract prices is not sufficient to cover the cost of the work taken over by the Government, the contractor must pay the difference.

The decree does not impose criminal or specific monetary penalties; instead, it enforces performance through Government takeover and completion by administration or another contractor.
The practical consequence of a takeover is that the Government completes the work and the resulting cost is applied against the contractor’s contract price, with payment of any shortfall by the contractor.
The decree’s enforcement is triggered by quantified schedule failure (15% or more negative slippage) and by a defined notice-and-failure period (15 days) for unscheduled activities.

The decree applies to ongoing projects as well as future government infrastructure projects, to expedite completion within the contract schedule.
The decree is structured to ensure that takeover powers can be exercised during the progress of the contract work.