Requirement for Detailed Engineering Prior To Bidding
- Detailed engineering investigations, surveys, and designs must be completed according to established standards
- Detailed engineering documents require approval from appropriate Minister (Public Works, Public Highways, or Energy)
- Purpose is to avoid quantity and cost overruns, change orders, and extra work orders
Prequalification of Prospective Contractors
- Must be licensed under Republic Act No. 4566 and comply with tax and legal requirements
- Compliance with Administrative Order No. 66 and other applicable laws
- Technical requirements: competence and experience of contractor and key personnel, availability of equipment
- Financial capability: meet net worth and liquid assets requirements or cover deficiency via a bank line of credit
- Government promotes maximum Filipino contractor participation
Competitive Bidding as the General Rule
- Government contracts generally awarded through competitive public bidding
- Exceptions for administration, force account, or negotiated contracts only with valid justification and high-level approvals
- Bidders must post a bid bond guaranteeing contract award compliance, including performance bond
Award and Contract Execution
- Contract awarded to lowest prequalified bidder who complies with all bid terms
- Contractor must post a performance bond prior to award
- Approval of contract and award by concerned Minister
Restrictions on Assignment and Subcontracting
- No assignment, transfer, pledge, or subcontracting without prior Ministerial approval
- Subcontracting does not relieve main contractor of obligations nor establishes direct contract with government for subcontractor
Contractor's Responsibilities
- Full liability for contract work until final government acceptance
- Responsible for damage except force majeure
- Responsible for safety and security of personnel, third parties, works, equipment during construction
Adjustment of Contract Price
- Allowed upon recommendation of National Economic and Development Authority
- Adjustments only when labor, equipment, material costs change due to government acts
- Adjustments calculated via approved formulas as per implementing rules
Change Orders and Extra Work Orders
- Allowed only for works necessary to complete project within general contract scope
- Subject to approval of the appropriate Minister
Inspection and Quality Control
- Government inspects contract work during construction
- Contractor remains responsible for acceptability of finished work
- Contractor must promptly replace defective materials or correct noncompliant work
Government's Right to Take Over Contract Work
- Can take over if contractor abandons work, delays unduly, is insolvent or bankrupt, assigns assets improperly, or breaches contract
- Termination of contractor and takeover occurs after notice to contractor and sureties
Promulgation of Implementing Rules and Regulations
- Ministers of Public Works, Public Highways, and Energy, plus NEDA Director-General to issue rules
- Implementing rules apply to all government agencies and government-owned or controlled corporations
- Require Presidential approval
Separability Clause
- If any provision is declared unconstitutional, other provisions remain in force
Repealing Clause
- All conflicting laws and issuances are repealed or modified accordingly
Effectivity
- Decree takes effect immediately upon issuance