Price Escalation Fund Allocation and Obligation
- Amount allocated for price escalation must be obligated and supported by a separate Report of Available Appropriation (ROA).
- A separate Certificate of Availability of Funds (CAF) is required specifically for the price escalation fund.
Use and Management of Unused Funds
- Unused price escalation funds at year-end or project completion may be applied to unpaid contractor claims related to the same project.
- Any remaining balance after settling claims shall revert to the unappropriated surplus.
Handling of Unobligated Allotments
- Unobligated allotments from completed projects can cover deficiencies in price escalation costs for the same project through additional obligations or CAF.
Addressing Price Escalation Deficiencies Beyond Project Funds
- Deficiencies in price escalation costs not covered in the original contract and insufficient project funds may be sourced from savings in other projects, per the General Appropriations Act provisions.
Relation to Existing Regulations
- This order supplements Department Order No. 36, Series of 1989, ensuring continued adherence to existing government financial and procurement rules.
Summary of Legal Implications
- Ensures financial preparedness for inflation-induced construction cost increases.
- Establishes clear financial management and accountability procedures for the use of escalation funds.
- Provides mechanisms for funds reallocation and deficit coverage within government projects.
- Enhances contract and fund management transparency and compliance.