GENERAL CONDITIONS

GC – 1 DEFINITION OF TERMS

a. CONTRACT shall mean the written agreement entered into between the OWNER
and the CONTRACTOR.

b. CONTRACTOR shall mean the person or entity with whom the OWNER entered
into the CONTRACT.

c. PROJECT MANAGER (PM) shall mean the entity or person who is the authorized
representative of the Owner to oversee the execution of the Work and is directly
responsible to the Owner.

d. CONTRACT DOCUMENTS shall mean the Contract, Special Conditions of Contract,

if any; this General Conditions of Contract, those stated in the Contract as Contract
Documents; and the Drawings, plans and specifications for the execution of the work,
including any and all documents which are referred to in the Contract Documents as
Contract Documents; or any modifications, revisions or alteration therein.

e. WORK shall mean the work to be performed and completed by the Contractor under
the Contract and the revisions, alterations and any work ordered to be done by the
OWNER.

f. CONTRACT AMOUNT shall mean the total amount that the OWNER is obliged to
pay the CONTRACTOR under the Contract for execution and completion of the work.
This shall include, but it is not limited to, the supply of labor, materials and
supervision and the employment of contractor-owned or provided tools, vehicles,
equipment and facilities.

g. PROJECT shall mean the place or area where the Work is or will be carried out.

GC – 2 CONTRACT DOCUMENTS INCLUDED IN CONTRACT

All Contract Documents shall form part of the Contract even if they or any of
them is not referred in as forming part of the Contract.

GC – 3 CONFLICTS OF CONTRACT AND CONTRACT DOCUMENTS

The Contract Documents, Drawings and Specifications are mutually

complementary. What is noted in one, although not shown in the other, shall be
considered contained in all. In case of conflict, the drawings shall prevail over the
Specifications. In general, the Contract Documents shall have the following
sequence of priority and importance, prevailing over the other, in so far their
statement/s or phrase/s conflicts.

a. Contract
b. Special Conditions ( if any )
c. General Conditions
d. Detailed Drawings
e. Specifications

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GC – 4 CONTRACTOR’S REPRESENTATIONS AND WARRANTIES

a. The Contractor admits that he has inspected the site where the work will be performed;
that he has informed himself fully as to the conditions which might affect the nature extent
and cost of the work required; that the Owner shall in no way develop on account of the
failure of the Contractor to make an accurate examination of present or future factors
that may affect the cost of execution of the Work.

b. The Contractor represents that in the Contract Amount agreed upon, he has taken into
account the possible escalation in the cost of labor arising from any cause. Likewise, the
contractor represents that in the Contract Amount agreed upon, he has taken into
account the escalation in the cost of contractor-supplied materials or in the cost the use
of contractor-provided tools and equipment or the escalation in the foregoing costs by
reason of any delay, whatever maybe the period. In completing the work due to or caused
by national, provincial, city or municipal government or agency or entity or official of the
government, or any firm, company or person. The Contractor represents that the
Contract Amount shall remain a firm, unalterable amount that shall not be subject to
increase for any cause or reason.

c. The Contractor warrants that he has sufficient operating capital to perform and complete
the work without relying upon advances or payments from the Owner; that he has
sufficient and adequate equipment, tools, and other materials that may be needed in the
Work; that he has the required knowledge, experience, and professional competence to
undertake the Work; that he has experienced, skilled and professionally equipped
personnel to be assigned for this purpose; that the materials he shall supply is best
available or obtainable; that the method or process he will follow, is the one that will best
accomplish the desired results; that he will provide workmanship that is first class in every
particular aspect and that he will be able to complete the Work within the completion time
as provided in the contract.

d. The Contract shall comply with all other guarantees, warranties, and other requirements
that may be found or which may be implied in the Contract Documents.

e. The Contractor admits and agrees that if any of the representations above is found to be
false, or that if it violates any of the warranties enumerated above, whether the falsity of
the representation or the violation of the warranty be done in good faith, irrespective of
the alleged insubstantial nature of the misrepresentation of the violation of the warranty,
without any regard to the progress of the manner of the execution of the Work or lack of
it sustained by the Owner, the Owner, without liability to the Contractor for such decision
and without prejudice to the employment or pursuit of other remedies including collection
of damages against the Contractor.

GC – 5 CONTRACT AMOUNT

a. The Contract Amount shall be that which is fixed and agreed upon in the Contract. This
shall be deemed to include all costs to the contractor for materials, tools, equipment,
labor, overhead, and profits and specially shall include, but not limited to, bonds and
insurance premiums, escalation cost of materials, contingencies ( other than force
majeure ), overtime work, site delivery charges, warehouse off site, purchasing costs,
local and national taxes, corporate and personal taxes for and of his employees.

b. No placements shall be made by the Owner to the Contractor unless the Contractor first
submits for approval the bonds and/or policies under GC-16 and the Owner finds that
the bonds and/or policies comply with the conditions set forth in the GC-16.

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GC – 6 TERMS OF PAYMENT

a. Unless the Contract provides otherwise, the Contract shall be paid by the Owner on the
basis of every 2 weeks of progress billings based on actual work accomplished as
certified and duly approved by the Project Manager, payable within fifteen (15) days after
the approval by the Project Manager and presentation of corresponding invoices, less a
proportionate liquidation or repayment of the down payment, in any, and less by ten
percent ( 10 % ) retention.

b. All progress billings, after twenty percent ( 20% ) project completion, including the billing
for the ten percent ( 10% ) retention, shall be accompanied by the Contractor’s affidavit
stating that all claims and obligations for labor, services, materials, suppliers, equipment,
and tools furnished by the Contractor in executing the Work have been fully and finally
settled and paid by him.

GC – 7 RELEASE OF RETENTION

The ten percent ( 10% ) retained amount shall be paid by the Owner to the
Contractor, without interest, Six (6) months after written acceptance of the Work by
the Owner subject to the formal request of the Contractor.

GC – 8 EFFECT OF PAYMENT

The payment of the progress billing and the release to the Contractor of the retained
amount shall not be construed as an admission by the Owner that the Contractor
has satisfactorily performed or satisfactorily performing the work in accordance with
the plans and specifications, or that such free from defects of any kind, hidden or
otherwise, or that the Contractor is not guilty of violating, or that the Contractor is
complying or has complied with the provisions, terms and conditions of the Contract
or of any the Contractor’s obligations there under.

GC – 9 WITHHOLDING OF PAYMENT

GC-6 and GC-7 above not with-standing, the Owner shall have the right to withhold
any payment in case of any claim against the Contractor for labor, services,
supplies, and/or materials, or the rentals for the use of tools and equipment, or in
any case of non-compliance or defective or irregular compliance with any of the
Contractor’s obligations under the Contract.

GC – 10 PERIOD OF COMPLETION

a. Time is of essence in a Contract. The Contractor shall complete every portion of the work
in conformity with the Work Schedule stated in or appended to and forming part of the
Contract.

b. Without limiting the full extent of the Contractor’s liability under the Contract, the
Contractor’s agrees to pay the Owner, as liquidated damages for every calendar day of
delay, an amount equivalent to one percent (1%) of the Contract Amount. Liquidated
damages shall be automatically deductible from any amount due and payable to the
Contractor under the Contract.

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 c. The period of completion shall be extended only if due causes for which delays are
excused under the Contract and only when the Owner approves the extensions in writing.
The Contractor shall inform the Owner in writing of any delay within five (5) days from
the date it occurs.

GC – 11 EXTRA/ADDITIONAL WORK

Any variation in or of the scope of Works as defined in the Contract shall be deemed
as an alteration. The Owner may make any alteration in or of the form, quality, or
quantity of the Work or any part thereof that may, in its opinion, be necessary and
desirable, and shall have the power to order the contractor to do and the latter shall
do, any of the following: decrease or increase the quantity of any work included in
the Contract; omit any such work; change the levels, positions, and dimensions of
any part of the work; and execute alterations of any kind necessary for the completion
of the Work.

Any Work clearly independent of and not included in the Scope of Work as defined
in the Contract, although related thereof shall be the subject of negotiations between
the parties and no extra work shall be paid by the Owner unless authorized by written
agreement of the parties specifically stating the extra work to be performed, the
Contract Amount, and the date of completion. If the extra work can be performed
separately from the work, such extra work shall be deemed to be completely
separate work under a separate contract.

GC – 12 COMPLETION AND ACCEPTANCE

Upon completion of the Work, written notice thereof shall be served by the Contractor
to the Owner. Upon receipt of the said notice, the Owner shall inspect the Work to
determine if it has been satisfactorily performed and completed in accordance with
the Contract. If the Owner determines that the Work has not been satisfactorily
performed and completed, it shall so advise the Contractor and specify the
unsatisfactory portion or portions of the Work; where upon, the Contractor shall
proceed to perform and complete the Work accordingly. If the Owner determines that
the Work has been satisfactorily performed and completed, it shall be so advise the
Contractor. The period of warranty stated in GC-21 shall be effective from the date
the Work is accepted in writing by the Owner.

GC – 13 REMOVAL OF UNFIT EMPLOYEES

The Project Manager (PM) shall have the right to object to and require the Contractor
to remove from the project site any person employed by the Contractor
in the execution of the Work who, in the opinion of the said PM misconduct himself
or is incompetent or negligent in the proper performance of his duties and whose
employment is otherwise considered by said PM to be undesirable. Such employee
so removed shall not again be employed in the execution of the Work and shall
immediately replace by a competent substitute approved by the PM.

GC – 14 MATERIALS AND WORKMANSHIP

All materials and workmanship shall be of the respective kinds described in the
Contract and in the plans and specifications and in accordance with instructions of
the Project Manager, and shall be subjected from time to time to such tests as the

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 Owner may direct. The Contractor shall provide such assistance, instruments,
machines, labor and materials as are normally required for examining, measuring,
and testing of work. The costs of such tests, including samples, shall be for the
account of the Contractor. During the progress of the work, the Owner shall have the
power to order in writing from time to time the Contractor to remove from the project
site any materials which, in the opinion of the Owner/Architect are not in accordance
with the Contract, to substitute the proper and suitable materials; and to remove and
re-execute any work, which in respect to the materials or workmanship, which is not
in accordance with the Contract.

GC – 15 CONTRACTOR’S LIABILITY

a. In case materials provided by the Owner are turned over to the custody, safekeeping,
and/or use of the Contractor, or in any case the Owner allows the Contractor to use
owner-provided tools and equipment or materials, for the purpose of executing the Work
or any part thereof, are lost and damaged due to circumstance not directly attributable to
the fault of the Owner, the Contractor shall pay to the Owner the cost or value of the
materials, tools and equipment lost or damaged immediately upon the demand of the
Owner at such cost as determined exclusively by the Owner.

b. It is clearly understood that the employees or workers of the Contractor are not or shall
never be deemed the employees or workers of the Owner. The Contractor warrants to
pay its employees or workers in accordance with the Labor Code of the Philippines, as
amended by applicable decrees, rules and regulations, especially as regards to minimum
wage, hours of work and compulsory allowances. The Contractor hereby undertakes to
have its employees or workers covered by the SSS, the Medicare Act, and Employees
Compensation Fund. Accordingly, the Contractor hereby holds the Owner free and
harmless against any and all claims of its employees or workers under said laws,
decrees, rules and regulations, as well as under the provisions of the Contract.

c. The Contractor shall take all the necessary precautions and exercise due care and
diligence in the execution of the Work contracted for herein so as not to cause injury,
damage, or loss to person and property. The Contractor shall hold the Owner free and
harmless from all claims for injuries, damages, or losses to persons and property, and
shall indemnify it for whatever payments, fines, or damages it is made to pay or suffer
or attributable to the fault, negligence or deliberate act of the Contractor or any of its
employees or workers in the execution of the Work. Accordingly, the Contractor shall
obtain and keep in force during the lifetime of the Contract adequate insurance coverage
including third party liability and All Risk Insurance coverage.

d. Any damage to or loss of property sustained by the Contractor and any injury or death
suffered by its employees or workers in the performance of the Work herein contracted
for shall be the sole responsibility and liability of the Contractor.

It shall be the Contractor’s duty to protect itself, at its own expense, with adequate
insurance coverage for such responsibility and liability until the Work is satisfactorily
completed and accepted by the Owner.

e. Nothing herein provided shall preclude the right of the Owner to recover the value of any
loss on the insurance policy or policies drawn by the Contractor as required under GC-
16 even in those cases where there was direct fault or negligence on the part of the
Owner’s consultants, officers and employees.

GC – 16 BONDS AND INSURANCES

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 Unless otherwise specifically provided in the Contract, the Contractor shall post the
following bonds and secure them from a bonding company acceptable to the Owner.

The companies acceptable to the Owner are the top ten (10) non-life insurance
companies as follows:

i. Malayan Insurance Company, Inc.

ii. FGU Insurance Corp.
iii. Prudential Guarantee and Assurance Corp.
iv. BPI/MS Insurance Corp
v. Pioneer insurance and Surety Corp.
vi. Standard Insurance Company, Inc.
vii. Chartis Phils. Insurance
viii. UCPB General Insurance Co., Inc.
ix. Mapfre Insular Insurance Corp.
x. Federal Phoenix Assurance Co., Inc.

a. Down payment Guarantee or Surety Bond – to guarantee the return of the unliquidated
portion of any down payment, mobilization fee, and/or advance payment, in any amount
equivalent to the amount received. The Contractor shall present and deliver to the Owner
the date of effectivity of the Contract and the same shall remain in force until said down
payment, mobilization fee, and/or advance payment is fully liquidated or paid by the
Contractor.

b. Performance Bond – in amount equivalent to twenty percent ( 20% ) of the Contract

Amount, to guarantee the following : the faithful and satisfactory performance of the Work
and all other undertakings and obligations of the Contractor under the Contract; the
payment of salaries and wages of employees employed in the work; the payment of
materials supplied by third persons and used in the execution of the work; underpayment
of liquidated damages and other claims due and present and deliver to the Owner the
Performance Bond within ten (10) days from the date of effectivity of the Contract and
he same shall remain in force until the work is satisfactorily completed and accepted by
the Owner.

c. Retention or Guarantee Bond – in amount equivalent to ten percent (10%) of the value
of the Contract or the amount of retention, whichever is bigger, to guarantee the
performance of the warranty obligations of the Contractor under GC-20. The posting of
bond shall be a requisite to the release of retained amount for the retention. It shall be in
force for the period of the Contractor’s warranty.

d. Contractor’s All Risk (CARI) Insurance – in an amount equivalent to the Contract Amount;
to relieve the Owner of any and all liability and responsibility for the damages to the Work,
the person/s or property of third parties. The insurance cover shall include a Third Party
Liability (TPL) of Pesos: THREE MILLION ONE HUNDRED FIFTY THOUSAND
(Php3,150,000.00) single limit for death, bodily injury and property damages. The
Contractor shall present and deliver to the Owner the CAR insurance Policy within ten
(10) days from the date of effectivity of the Contract, and the same shall remain in force
until the work is satisfactorily completed and accepted by the Owner.

e. The Contractor shall likewise obtain and keep in force during the lifetime of the Contract
adequate insurance coverage against loss or damage to his materials, supplies, tools,
equipment and vehicles, and against injury or death to his workmen used or utilized in
the execution of the Work. The said insurance coverage shall relieve the Owner of any
kind and all liability and responsibility for any loss or damage or injury or death.

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 f. The bond or bonds and/or policy or policies shall include a provision that the same shall
continue to be in full force and effect not with-standing the occurrence or one or more or
all or the following events: (1) the revision of the contract by the change decrease or
increase in the scope of work, (2) the change or extension of the completion time, (3)
modification, increase, or decrease in the Contract Amount, (4) cancellation or rescission
of the contract if the continuation of the life of the bond/policy is necessary to enforce any
liability or obligation of the Contractor (5) any other event similar to any of the foregoing,
it being the intention of the parties that for so long as the Contractor has an obligation to
or incurred a liability in favor of the Owner, the bonding company through the bond or
bonds shall be solidarity liable to the Owner.

GC – 17 TAXES

The Contractor shall pay for all the taxes, fees, and assessments that may be
imposed by the national, provincial, city, municipal or barangay government for the
performance of the work as well as for all taxes, levies, or fees that may be imposed
upon his employees.

GC – 18 ASSIGNMENT/SUBCONTRACTING

The Contractor shall not assign, transfer, pledge, subcontract, or make any other
disposition of the Contract or any part thereof or any interest therein without prior
consent and approval of the Owner. Such consent and approval, if given, shall not
in any way, relieve the Contractor from liability, obligation or responsibility under the
Contract and he shall be fully responsible to the Owner for the acts and omissions
of his employees. It is expressly understood that nothing herein shall create any
contractual relation between any subcontractor of the Contractor and the Owner.
GC – 19 CONTRACTORS TO KEEP PREMISES CLEAN

The Contractor shall, at all times, keep the premises free from accumulation of waste
materials or rubbish caused by his employees. Upon completion of the Work, the
Contractor shall, as directed by the Owner, remove from the project site all temporary
structures, rubbish, tools, scaffoldings, and waste materials and shall leave the Work
in a clean state. In case the Contractor fails to do so, the Owner may undertake the
cleaning and charge expenses incurred to the Contractor.

GC – 20 WARRANTY

The Contractor shall guarantee the Work against all defects in workmanship and
materials furnished by him for a period of twelve (12) months from the date of written
acceptance of the Work by the Owner. In the event that the work or part thereof is
found defective and/or not in compliance with the Contract and the Contract
Documents within said period, the Contractor, shall, at his own expense, promptly
carry out remedial/corrective measures to correct the defects, errors or omissions
pointed by the Owner or his representative, to the satisfaction of the Owner. If the
Contractor fails to undertake said remedial/corrective work within a reasonable
period after due notice, the Owner shall undertake the Work or have the same
undertaken by other contractors, the expenses and costs for which shall be paid and
borne by the Contractor and which the Owner may deduct from any amount due to
the Contractor under the Contract and/or from the retention, without to other forms
of collection should the foregoing be insufficient.

GC – 21 FORCE MAJEURE/CONTRACT TIME EXTENSION

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a. Claim for time extension of the Contract period due to force majeure shall be subject
to approval by the Owner, at no additional cost to the Owner. Events of force majeure or Acts of God
include Earthquake, Typhoon, Flood, Cyclone, Revolution, War, Tidal wave and other cataclysmic
phenomena of nature and misfortune, which are beyond human prudence and foresight.

b. Rain, Wind, Flood, or natural phenomena of inconsequential degree for the locality
of the project site shall not be entitled to indemnity nor compensation for damages resulting there
from the Owner.

c. Strikes shall be considered force majeure only if national or regional scale. However,
strikes or other work stoppages caused by concerted mass action on the part of the Contractor’s
employees which are illegal per se or later determined to be illegal by the National Labor Relations
Commission (NLRC) may be ground for contract time extension; provided that strikes arising out of
unfair labor practice as determined by NLRC shall not be considered as case of force majeure.

GC – 22 ARBITRATION

Either party for resolution or decision to a Board of Arbitrators composed of three (3)
members to be chosen as follows shall submit any dispute arising from interpretation
of Contract Documents, which the Owner and the Contractor are unable to resolve
between themselves:

a. One (1) member each shall be chosen by the Owner and the Contractor. The two
members shall in turn select a third party member acceptable to both of them. The decision of the
Board of Arbitrators shall, as much as possible, be made within fifteen (15) days from the first meeting
of the board. The decision reached through the affirmative vote of at least two (2) members of the
board shall be final and binding upon the Owner and the Contractor.

b. Matters not otherwise provide for in the Contract or in Special Agreement between
the Owner and the Contractor shall be governed by the provisions of the Construction Arbitration Law
of the Philippines. The Arbitration or the process thereof shall not be the reason of the Contractor to
suspend Work nor shall it affect the period of completion stated in GC-10 except portion of the Work
subject to arbitration.

GC – 23 SEPARABILITY

The invalidity in whole or in part, of any provision of the General Conditions of the
Contract shall not affect the validity of other provisions hereof.

GC – 24 NOTICES AND COMMUNICATIONS

All notices and communications by one party to the other, unless the contrary be
provided elsewhere, shall be sent by penal delivery or registered mail to :

Both parties may change the persons authorized to receive notices and
communications and such change shall take effect only on the date of receipt of a
notice in writing by one party to the other.