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Final Acceptance of Infrastructure Project

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Final Acceptance of Infrastructure Project

Post by regina avelino on Wed May 23, 2012 12:23 pm

hello to all forum members. Please see queries below:

1. Who will initiate the issuance of Final Acceptance for infrastructure project, it is the procuring entity or the contractor?
2. If the contractor fails to post warranty security, what will be the remedy of the procuring entity?
3. If the defects liability period of one year has lapsed and the performance security (surety bond) has also lapsed, and there is no final acceptance yet, and warranty security has not yet been posted, what will be the remedy of the procuring entity in case of defects?

thanks in advance

regina avelino
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Re: Final Acceptance of Infrastructure Project

Post by regina avelino on Thu May 24, 2012 4:58 pm

requesting for comments po. this is based on actual current scenario of our company. we are apprehensive actually on our next move because we do not know if our our next move is acceptable or not. thanks po in advance.

regina avelino
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Re: Final Acceptance of Infrastructure Project

Post by jcolas on Thu May 24, 2012 6:36 pm

"regina avelino wrote"

hello to all forum members. Please see queries below:

1. Who will initiate the issuance of Final Acceptance for infrastructure project, it is the procuring entity or the contractor?
2. If the contractor fails to post warranty security, what will be the remedy of the procuring entity?
3. If the defects liability period of one year has lapsed and the performance security (surety bond) has also lapsed, and there is no final acceptance yet, and warranty security has not yet been posted, what will be the remedy of the procuring entity in case of defects?

thanks in advance.

1. The contractor initiates final payment by submitting request letter to PE together with Report of Accomplishment.
2. If the Contractor failed to post Warranty Security, the PE is to be blamed. I advise that if its not yet late, then require the contractor to post one or for every billing, deduct Retention Money which will answer for any defects that will be found out during inspection.
3. That is a big blunder on the part of the PE. Did that really happen? I advise that in that case, you strengthen the inspection activity. Come up with punch list, require the contractor to repair those that is in the punch list before final payment.. That is my take on the matter.
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Re: Final Acceptance of Infrastructure Project

Post by regina avelino on Fri May 25, 2012 9:25 am

sir, the defects liability period has lapsed 2 months ago. with it is the expiration of the performance security by way of a surety bond. there is no final acceptance yet and no warranty security posted yet. the contractor has not demanded for the final billing as of this time. medyo naguguluhan po ang PE namin what steps to do first......

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Re: Final Acceptance of Infrastructure Project

Post by REZIE on Fri May 25, 2012 1:03 pm

1. it is the contractor who will initiate for an acceptance.
3. are there damages that occured? If none, I think the PE has no problem, just as what jcolas said "strengthen the inspection committee", I am only wondering why (as per my analysis) the contractor is not yet demanding for final payment and acceptance when in fact the duration of the project has lapsed.

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Re: Final Acceptance of Infrastructure Project

Post by regina avelino on Fri May 25, 2012 2:57 pm

thank you mam Rez, so far our engineering department has not reported any structural defects. we are also surprised why the contractor has not made any demands for the final billings. as of now, the defects liability and the performance security have both lapsed already and no warranty security has been posted yet. good afternoon.

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Re: Final Acceptance of Infrastructure Project

Post by myrights on Sat May 26, 2012 11:55 pm

is it right for the procuring entity to delay payments and make the payment on installment basis even if the the project was long been completed? The certificate of completion and acceptance was submitted almost a year ago together with Surety bond as replacement for the retention. Not to mention, the final inspection was already done by several government agencies (the procuring entity, the beneficiaries, DBM, COA, 3rd party inspector like the AFP) without any adverse findings. Now, my worries the surety bond is only good for a year but still we are not paid even of our final billings, are we going to secure another surety bond to claim for our retention? PLEASE PLEASE HELP...


Last edited by myrights on Sun May 27, 2012 12:29 am; edited 1 time in total (Reason for editing : wrong grammar)

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Re: Final Acceptance of Infrastructure Project

Post by alpha1 on Thu Jun 21, 2012 4:47 pm

[quote="jcolas"]"regina avelino wrote"

hello to all forum members. Please see queries below:

1. Who will initiate the issuance of Final Acceptance for infrastructure project, it is the procuring entity or the contractor?
2. If the contractor fails to post warranty security, what will be the remedy of the procuring entity?
3. If the defects liability period of one year has lapsed and the performance security (surety bond) has also lapsed, and there is no final acceptance yet, and warranty security has not yet been posted, what will be the remedy of the procuring entity in case of defects?

thanks in advance.

Good day to everyone!

1. It should be the responsibility of the PE to issue the Certificate of Final Acceptance after one (1) year from the date of completion and the final billing had already been paid. This is the period for which the 10% retention is being withheld to cover-up expenses for any defects.

2. The PE should not issue any certificate of final acceptance if the the contractor has not posted the required warranty security for the period covered and defends on the kind of structure that had been constructed to wit:

Section 62.2.3.2. The warranty against Structural Defects and Failures shall cover the following periods from final acceptance, except those occasioned by force majeure:

a) Permanent Structures: Fifteen (15) years

Buildings of types 4 and 5 as classified under the National Building Code of the Philippines and other structures made of steel, iron, or concrete which comply with relevant structural codes (e.g., DPWH Standard Specifications), such as, but not limited to, steel/concrete bridges, flyovers, aircraft movement areas, ports, dams, tunnels, filtration and treatment plants, sewerage systems, power plants, transmission and communication towers, railway system, and other similar permanent structures;

b) Semi-Permanent Structures: Five (5) years

Buildings of types 1, 2, and 3 as classified under the National Building Code of the Philippines, concrete/asphalt roads, concrete river control, drainage, irrigation lined canals, river landing, deep wells, rock causeway, pedestrian overpass, and other similar semi-permanent structures; and

c) Other Structures: Two (2) years

Bailey and wooden bridges, shallow wells, spring developments, and other similar structures.(a)

3. If the contractor failed to post the required warranty then the PE might have made some lapses on the particular procurement at hand and I don't know if the following provision maybe use.

Section 62.2.4. In case of Structural Defects/Failure occurring during the applicable warranty period provided in Section 62.2.3.2 hereof, the procuring entity shall undertake the necessary restoration or reconstruction works and shall be entitled to full reimbursement by the parties found to be liable for expenses incurred therein upon demand, without prejudice to the filing of appropriate administrative, civil, and/or criminal charges against the responsible persons as well as the forfeiture of warranty securities posted in favor of the procuring entity.(a)

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Re: Final Acceptance of Infrastructure Project

Post by alpha1 on Thu Jun 21, 2012 5:08 pm

myrights wrote:is it right for the procuring entity to delay payments and make the payment on installment basis even if the the project was long been completed? The certificate of completion and acceptance was submitted almost a year ago together with Surety bond as replacement for the retention. Not to mention, the final inspection was already done by several government agencies (the procuring entity, the beneficiaries, DBM, COA, 3rd party inspector like the AFP) without any adverse findings. Now, my worries the surety bond is only good for a year but still we are not paid even of our final billings, are we going to secure another surety bond to claim for our retention? PLEASE PLEASE HELP...

Welcome to the Forum!

Please refer to this particular section of the GCC for your reference and probably for your appropriate action.

GENERAL CONDITIONS OF THE CONTRACT

40.3. Payments shall be adjusted by deducting therefrom the amounts for advance payments and retention. The Procuring Entity shall pay the Contractor the amounts certified by the Procuring Entity’s Representative within twenty eight (28) days from the date each certificate was issued. No payment of interest for delayed payments and adjustments shall be made by the Procuring Entity.
(emphasis mine)
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