Limit Progress Payment to 90% for Local Projects

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DPWH DEPARTMENT ORDER NO. 31, S. 2011: Limit Progress Payment to 90% for Local Projects

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Title Supreme Court: Limit Progress Payment to 90% for Local Projects

Law: Dpwh Department Order No. 31, S. 2011

Decision Date: May 16, 2011

DPWH Department Order No. 31, S. 2011 mandates that progress billings for locally-funded projects be capped at 90% of the total contract cost to ensure contractor accountability and project completion.

progress billing

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Issues with Contractor Completion Priorities and Performance Security

Contractors tended to prioritize activities other than actual project completion once payments neared full amount.
Performance security exists to penalize default but its forfeiture process is lengthy and judicial in nature.

Policy Directive and Its Implementation

All heads of Project Implementing Offices, including Project Management, Regional, and District Engineering Offices, must enforce a maximum cumulative or lump sum progress billing cap of 90% of the total contract amount for locally-funded projects.
This limitation aims to align payment collection with contractual and legal provisions, encouraging timely and complete project delivery.

Incorporation into Existing Payment Guidelines and Legal Effect

This directive is integrated into the payment rules and procedures under Department Order No. 207, series of 2000 concerning payment processes for contractors' claims on civil works.
The Order amends prior issuances related to contractor payments.
It took effect immediately upon issuance on May 16, 2011.

Administrative Authority and Enforcement

The Secretary of the Department of Public Works and Highways (DPWH) issued and adopted this Order.
Compliance with this Order is mandatory across all relevant DPWH implementing units involved with locally-funded projects.

END