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defects liability period

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defects liability period

Post by vines on Wed Jul 25, 2012 1:53 pm

query on defects liability period and certificate of final acceptance. If the contractor has not made any request for the issuance of Certificate of final acceptance from the procuring entity 1 year after completion date, say it has already been 1 year and 5 months:
1. does this mean the defects liability still exists and extended until the issuance of certificate of final acceptance?
2. Is it right to say that the defects liability ends from the time the certificate is issued?
3. If this is correct, can the procuring entity require the contractor to extend the validity of its performance bond and the retention (which are both in the form of surety bond) if the defects liability is extended for a certain period of more than 1 year just because the contractor never requested for the certificate of final acceptance from the procuring entity?

please help po. thanks.
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Re: defects liability period

Post by engrjhez® on Wed Jul 25, 2012 2:07 pm

msc wrote:query on defects liability period and certificate of final acceptance. If the contractor has not made any request for the issuance of Certificate of final acceptance from the procuring entity 1 year after completion date, say it has already been 1 year and 5 months:
1. does this mean the defects liability still exists and extended until the issuance of certificate of final acceptance?
2. Is it right to say that the defects liability ends from the time the certificate is issued?
3. If this is correct, can the procuring entity require the contractor to extend the validity of its performance bond and the retention (which are both in the form of surety bond) if the defects liability is extended for a certain period of more than 1 year just because the contractor never requested for the certificate of final acceptance from the procuring entity?

please help po. thanks.

My take:

  1. No.
  2. No. It is clearly defined as 1-year from project completion. (Sec.62.2.2, IRR)
  3. There is no need. Performance security clearly covers the defects liability period. (Sec.62.2.2.2, IRR)


After the 1-year period, warranty securities as defined under 62.2.3 of the IRR must be posted.
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Re: defects liability period

Post by vines on Wed Jul 25, 2012 2:21 pm

so you mean engjhez, regardless of the issuance of the certificate or regardless the contractor requests for it or not, it would be the obligation of the procuring entity to coordinate with the contractor to post the warranty security once 1 year has lapsed from completion date?
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Re: defects liability period

Post by engrjhez® on Wed Jul 25, 2012 3:58 pm

msc wrote:so you mean engjhez, regardless of the issuance of the certificate or regardless the contractor requests for it or not, it would be the obligation of the procuring entity to coordinate with the contractor to post the warranty security once 1 year has lapsed from completion date?

Yes.

62.2.2.1. The contractor shall undertake the repair works, at his own expense, of
any damage to the infrastructure on account of the use of materials of
inferior quality, within ninety (90) days from the time the Head of the
Procuring Entity has issued an order to undertake repair. In case of failure
or refusal to comply with this mandate, the procuring entity shall
undertake such repair works and shall be entitled to full reimbursement of
expenses incurred therein upon demand.

We (procuring entities) do not want to end up in the situation as underlined above. It is the duty of the procuring entity to ensure that warranty securities are posted. Otherwise, we will be at mercy of the contractors especially after the defects liability period.

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.
To be consistent with the provisions, an obligation on the part of procuring entities is implied.
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Re: defects liability period

Post by vines on Wed Jul 25, 2012 5:38 pm

salamat po.
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