warranty security

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warranty security

Post by ruby buenaventura on Fri Feb 24, 2012 10:59 pm

Please make this clear for us: (Infrastructure Projects - IRR SECTION 62)
1. Do we need to secure a warranty security (Surety Bonds) @ 30% of the contract amount for projects completed from the date of completion to date of acceptance? Certificate of Completion at DPWH projects is being issued upon completion while Certificate of Acceptance is being issued after a year of completion.
2. Is the above warranty security (Surety Bonds) a requirement for final payment of the completed projects?
3. Do we still need to secure a ANOTHER warranty security (Surety Bonds @ 30% of Contract Amount)for a year from date of issuance of Certificate of Acceptance (or 1 year after project is completed)?
4. Do we still need to secure a warranty security (surety bond @ 30% of contract amount) if project is completed 2 or 3 years ago?
5. please... we need clarifications of IRR 62.2.

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Re: warranty security

Post by RDV @ GP3i on Sat Feb 25, 2012 7:47 am

ruby buenaventura wrote:Please make this clear for us: (Infrastructure Projects - IRR SECTION 62)
1. Do we need to secure a warranty security (Surety Bonds) @ 30% of the contract amount for projects completed from the date of completion to date of acceptance? Certificate of Completion at DPWH projects is being issued upon completion while Certificate of Acceptance is being issued after a year of completion.
Yes, you need to secure a warranty security after acceptance (1 year after completion.)

ruby buenaventura wrote:2. Is the above warranty security (Surety Bonds) a requirement for final payment of the completed projects?
Warranty Security is mandatory. It may not be a requirement for final payment, but maybe it is being used so that the contractor should post the required warranty security. It replaces the performance security you have posted.

ruby buenaventura wrote:3. Do we still need to secure a ANOTHER warranty security (Surety Bonds @ 30% of Contract Amount)for a year from date of issuance of Certificate of Acceptance (or 1 year after project is completed)?
Yes, because your performance security is good only from start of project until the issuance of certificate of acceptance. The warranty security will be good for one (1) year from acceptance.

ruby buenaventura wrote:4. Do we still need to secure a warranty security (surety bond @ 30% of contract amount) if project is completed 2 or 3 years ago?
5. please... we need clarifications of IRR 62.2.
No more, but it is still covered by the warranty period, so that, in case there is structural defect or structural failure on the project not caused by force majeure, you will still be responsible for those defects/failures even if it is no longer covered by any warranty security more than one (1) after acceptance.
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Re: warranty security

Post by engrjhez® on Sat Feb 25, 2012 1:36 pm

I think a lot of people are confused about this. One of the questions: is the term "acceptance" be taken differently from "final acceptance"?. In the usual practice, the certificate of acceptance is being required prior to payment. I have my own interpretations though, that the correct case is either of the two:
1. That final acceptance is different from acceptance itself; or
2. They are just the same, and that acceptance should not be a requisite for payment but for the release of retention money.
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