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Is the Procuring Entity allowed to pay more than 15% mobilization?

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Is the Procuring Entity allowed to pay more than 15% mobilization?

Post by acct_watcher on Wed Sep 29, 2010 4:34 pm

Hello to everyone, perhaps you can give more insights regarding IRR-A Annex "F"- payment of NOT EXCEEDING 15%mobilization to contractors. Do you know any exception to this rule? If the agency give more than 15% advances, what are the legal implications of this act?
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Re: Is the Procuring Entity allowed to pay more than 15% mobilization?

Post by RDV @ GP3i on Wed Sep 29, 2010 6:47 pm

acct_watcher wrote:Hello to everyone, perhaps you can give more insights regarding IRR-A Annex "F"- payment of NOT EXCEEDING 15%mobilization to contractors. Do you know any exception to this rule? If the agency give more than 15% advances, what are the legal implications of this act?

I think there is no exception to the rule if we are referring to Advance Payment for Mobilization, whether for Infra projects (Annex E of IRR) or Consulting Services (Annex F of IRR).

Both Annexes are couched in mandatories with the use of the words "shall" and sets the advance payment in an amount not exceeding 15% of the contract price.

If the provision is violated, the responsible official could be held criminally liable under the Anti-Graft Law for causing undue injury to the government, aside from any administrative penalties that could be imposed.

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Re: Is the Procuring Entity allowed to pay more than 15% mobilization?

Post by acct_watcher on Thu Sep 30, 2010 11:09 am

RDV @ GP3i wrote:
acct_watcher wrote:Hello to everyone, perhaps you can give more insights regarding IRR-A Annex "F"- payment of NOT EXCEEDING 15%mobilization to contractors. Do you know any exception to this rule? If the agency give more than 15% advances, what are the legal implications of this act?

I think there is no exception to the rule if we are referring to Advance Payment for Mobilization, whether for Infra projects (Annex E of IRR) or Consulting Services (Annex F of IRR).

Both Annexes are couched in mandatories with the use of the words "shall" and sets the advance payment in an amount not exceeding 15% of the contract price.

If the provision is violated, the responsible official could be held criminally liable under the Anti-Graft Law for causing undue injury to the government, aside from any administrative penalties that could be imposed.


Thanks RDV! Very Happy In relation to this; What if the granting of mobilization more than 15% was integrated/stipulated in the contract? will their be a breach of contract if at the end the IRR-A annex "F"(for consultancy) will be followed?
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Re: Is the Procuring Entity allowed to pay more than 15% mobilization?

Post by RDV @ GP3i on Thu Sep 30, 2010 5:20 pm

acct_watcher wrote:
RDV @ GP3i wrote:
acct_watcher wrote:Hello to everyone, perhaps you can give more insights regarding IRR-A Annex "F"- payment of NOT EXCEEDING 15%mobilization to contractors. Do you know any exception to this rule? If the agency give more than 15% advances, what are the legal implications of this act?

I think there is no exception to the rule if we are referring to Advance Payment for Mobilization, whether for Infra projects (Annex E of IRR) or Consulting Services (Annex F of IRR).

Both Annexes are couched in mandatories with the use of the words "shall" and sets the advance payment in an amount not exceeding 15% of the contract price.

If the provision is violated, the responsible official could be held criminally liable under the Anti-Graft Law for causing undue injury to the government, aside from any administrative penalties that could be imposed.


Thanks RDV! Very Happy In relation to this; What if the granting of mobilization more than 15% was integrated/stipulated in the contract? will their be a breach of contract if at the end the IRR-A annex "F"(for consultancy) will be followed?

I am not a lawyer, but I believe that if the contract is violative of the provision of the IRR, which sets the limit for advance payment at not more than 15% of the contract price, then the contract could be considered void as it is contrary to law, morals, good customs, public order or public policy.

Therefore, if the contract is not followed, there could be not breach of contract for the contract is void ab initio.
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Re: Is the Procuring Entity allowed to pay more than 15% mobilization?

Post by acct_watcher on Thu Sep 30, 2010 5:36 pm

RDV @ GP3i wrote:
acct_watcher wrote:
RDV @ GP3i wrote:
acct_watcher wrote:Hello to everyone, perhaps you can give more insights regarding IRR-A Annex "F"- payment of NOT EXCEEDING 15%mobilization to contractors. Do you know any exception to this rule? If the agency give more than 15% advances, what are the legal implications of this act?

I think there is no exception to the rule if we are referring to Advance Payment for Mobilization, whether for Infra projects (Annex E of IRR) or Consulting Services (Annex F of IRR).

Both Annexes are couched in mandatories with the use of the words "shall" and sets the advance payment in an amount not exceeding 15% of the contract price.

If the provision is violated, the responsible official could be held criminally liable under the Anti-Graft Law for causing undue injury to the government, aside from any administrative penalties that could be imposed.


Thanks RDV! Very Happy In relation to this; What if the granting of mobilization more than 15% was integrated/stipulated in the contract? will their be a breach of contract if at the end the IRR-A annex "F"(for consultancy) will be followed?

I am not a lawyer, but I believe that if the contract is violative of the provision of the IRR, which sets the limit for advance payment at not more than 15% of the contract price, then the contract could be considered void as it is contrary to law, morals, good customs, public order or public policy.

Therefore, if the contract is not followed, there could be not breach of contract for the contract is void ab initio.

Well explained sir, this information would help a lot. thank you! Very Happy
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Re: Is the Procuring Entity allowed to pay more than 15% mobilization?

Post by sunriser431 on Thu Sep 30, 2010 6:36 pm

acct_watcher wrote:Hello to everyone, perhaps you can give more insights regarding IRR-A Annex "F"- payment of NOT EXCEEDING 15%mobilization to contractors. Do you know any exception to this rule? If the agency give more than 15% advances, what are the legal implications of this act?
For your guidance
Excerpt from PD#1445
Section 88. Prohibition against advance payment on government contracts.
1. Except with the prior approval of the President (Prime Minister) the government
shall not be obliged to make an advance payment for services not yet rendered
or for supplies and materials not yet delivered under any contract therefor. No
payment, partial or final, shall be made on any such contract except upon a
certification by the head of the agency concerned to the effect that the services
or supplies and materials have been rendered or delivered in accordance with the
terms of the contract and have been duly inspected and accepted.
For additional information try this
LINK bounce
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Re: Is the Procuring Entity allowed to pay more than 15% mobilization?

Post by acct_watcher on Fri Oct 01, 2010 12:11 pm

sunriser431 wrote:
acct_watcher wrote:Hello to everyone, perhaps you can give more insights regarding IRR-A Annex "F"- payment of NOT EXCEEDING 15%mobilization to contractors. Do you know any exception to this rule? If the agency give more than 15% advances, what are the legal implications of this act?
For your guidance
Excerpt from PD#1445
Section 88. Prohibition against advance payment on government contracts.
1. Except with the prior approval of the President (Prime Minister) the government
shall not be obliged to make an advance payment for services not yet rendered
or for supplies and materials not yet delivered under any contract therefor. No
payment, partial or final, shall be made on any such contract except upon a
certification by the head of the agency concerned to the effect that the services
or supplies and materials have been rendered or delivered in accordance with the
terms of the contract and have been duly inspected and accepted.
For additional information try this
LINK bounce

Thanks sunriser431! Very Happy
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Re: Is the Procuring Entity allowed to pay more than 15% mobilization?

Post by engrjhez® on Fri Oct 01, 2010 9:33 pm

RDV @ GP3i wrote:I am not a lawyer, but I believe that if the contract is violative of the provision of the IRR, which sets the limit for advance payment at not more than 15% of the contract price, then the contract could be considered void as it is contrary to law, morals, good customs, public order or public policy.

Therefore, if the contract is not followed, there could be not breach of contract for the contract is void ab initio.

I am not a lawyer too, but I believe there's a difference between void and voidable. I think the case above refers to the latter and may not necessarily mean void 'from the beginning'. If the violation was in the process as expressly required or prohibited, then the contract may be void. But contract is an agreement only, and somehow principle of quantum meruit may still apply. Smile
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Re: Is the Procuring Entity allowed to pay more than 15% mobilization?

Post by sunriser431 on Fri Oct 01, 2010 10:15 pm

acct_watcher wrote:
sunriser431 wrote:
acct_watcher wrote:Hello to everyone, perhaps you can give more insights regarding IRR-A Annex "F"- payment of NOT EXCEEDING 15%mobilization to contractors. Do you know any exception to this rule? If the agency give more than 15% advances, what are the legal implications of this act?
For your guidance
Excerpt from PD#1445
Section 88. Prohibition against advance payment on government contracts.
1. Except with the prior approval of the President (Prime Minister) the government
shall not be obliged to make an advance payment for services not yet rendered
or for supplies and materials not yet delivered under any contract therefor. No
payment, partial or final, shall be made on any such contract except upon a
certification by the head of the agency concerned to the effect that the services
or supplies and materials have been rendered or delivered in accordance with the
terms of the contract and have been duly inspected and accepted.
For additional information try this
LINK bounce

Thanks sunriser431! Very Happy
As always you are welcome "acct_watcher". Smile
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Re: Is the Procuring Entity allowed to pay more than 15% mobilization?

Post by RDV @ GP3i on Sat Oct 02, 2010 12:58 am

engrjhez® wrote:
RDV @ GP3i wrote:I am not a lawyer, but I believe that if the contract is violative of the provision of the IRR, which sets the limit for advance payment at not more than 15% of the contract price, then the contract could be considered void as it is contrary to law, morals, good customs, public order or public policy.

Therefore, if the contract is not followed, there could be not breach of contract for the contract is void ab initio.

I am not a lawyer too, but I believe there's a difference between void and voidable. I think the case above refers to the latter and may not necessarily mean void 'from the beginning'. If the violation was in the process as expressly required or prohibited, then the contract may be void. But contract is an agreement only, and somehow principle of quantum meruit may still apply. Smile

You are probably right that it could be voidable contract and not necessarily void ab initio, although my answer was premised on the contract being contrary to public policy. Whatever it is, the point I was driving out is if the procuring entity insists on not giving advance payment more than 15%, it could put as a defense (that the contract is either void or voidable, or even unenforceable); hence, it could not be forced to do so, even if that is what is stipulated in the contract.

I don't think, however, that quantum meruit would be applicable at this time as there was no indication at all that performance of the contract was already undertaken by the consultant/contractor, because the issue is still on the advance payment.
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Re: Is the Procuring Entity allowed to pay more than 15% mobilization?

Post by engrjhez® on Mon Oct 04, 2010 11:10 am

RDV @ GP3i wrote:
x x x
I don't think, however, that quantum meruit would be applicable at this time as there was no indication at all that performance of the contract was already undertaken by the consultant/contractor, because the issue is still on the advance payment.

True. But in actual practice, some goods, are delivered, services or works are rendered even prior to the processing of the advanced payment. If that happens, then probably, quantum meruit may be invoked. Smile
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