liquidated damages

jun b wrote:re : computation of liquidated damages. You have different views sir amang and sir ruel. whats the exact formula, gentlemen. Thanks to both of you.

Clause 9.1 of the Special Conditions of the Contract under the old PBD. (This is for Infrastructure only.

Liquidated damages is equivalent to an amount to be determined in accordance with the following formula until the work is completed and accepted or taken over by the PROCURING ENTITY:

TLD = VUUP x [ (1+ OCC)n - 1] x K
VUUP = TCP – VCUP
WHERE:
TLD = Total Liquidated Damages, In Pesos
VUUP = value of the uncompleted and unusable portions of the contract work, as of the expiry date of the contract, in pesos
TCP = Total Contract Price, In Pesos
VCUP = value of the completed and usable portion of the contract work, as of the expiry date of the contract, in pesos
OCC = prevailing opportunity cost of capital for government projects set by NEDA, which is currently pegged at 15%
n = total number of years that the contract work is delayed after the expiry date of the contract
K = adjustment factor to cover additional losses
= 1 + C + ( i x n)
WHERE:
C = cost of construction supervision as a percentage, not exceeding 10%, of construction cost
i = annual inflation rate as defined by NEDA

The Head of the PROCURING ENTITY may also impose additional liquidated damages on the contractor provided such is prescribed in the Instructions to Bidders.
A project or a portion thereof may be deemed usable when it starts to provide the desired benefits as certified by the targeted end-users and the concerned PROCURING ENTITY.
To be entitled to such liquidated damages, the PROCURING ENTITY does not have to prove that it has incurred actual damages. Such amount shall be deducted from any money due or which may become due the contractor under the contract and/or collect such liquidated damages from the retention money or other securities posted by the contractor whichever is convenient to the PROCURING ENTITY.
In case that the delay in the completion of the work exceeds a time duration equivalent to ten percent (10%) of the specified contract time plus any time extension duly granted to the contractor, the procuring entity concerned may rescind the contract, forfeit the contractor’s performance security and takeover the prosecution of the project or award the same to a qualified contractor through negotiated contract.
In no case however, shall the total sum of liquidated damages exceed ten percent (10%) of the total contract price, in which event the contract shall automatically be taken over by the procuring entity concerned or award the same to a qualified contractor through negotiation and the erring contractor’s performance security shall be forfeited. The amount of the forfeited performance security shall be aside from the amount of the liquidated damages that the contractor shall pay the government under the provisions of this clause and impose other appropriate sanctions.

Section 68. Liquidated Damages of the New rules for infra and goods

All contracts executed in accordance with the Act and this IRR shall contain a provision on
liquidated damages which shall be payable by the contractor in case of breach thereof. For
the procurement of goods, infrastructure projects and consulting services, the amount of the
liquidated damages shall be at least equal to one-tenth of one percent (0.1%) of the cost of
the unperformed portion for every day of delay. Once the cumulative amount of liquidated
damages reaches ten percent (10%) of the amount of the contract, the procuring entity
shall rescind the contract, without prejudice to other courses of action and remedies open to it.

77.2. In cases where the advertisements or invitations for bids were issued before the
effectivity of this IRR, Procuring Entities may continue adopting the procurement
procedures, rules, and regulations provided in the IRR Part A or other applicable
laws, as the case may be.(a)]

jun b wrote:What I mean is you have different views on what formula shall be used in our computation of the LD the old or the new. You said we could not change the horse in the middle of the race while sir amang said the new since the old has been superseded. Thanks again

jun b wrote:by the way sir ruel what is now the annual inflation rate as defined by NEDA, for us to compute the LD based on the old IRR

sunriser431 wrote:For purpose of Discussion
Since the LD will definitely form part of the BAC Funds, can this be shared with the Inspection Committee Team? considering they are the ones computing, imposing this provision.