Contract Validity

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Contract Validity

Post by cristem on Thu Aug 02, 2012 2:53 pm

Correct me please if I am wrong.. Smile And your advice will be highly appreciated.

I take it that contract validity is the same as contract duration. So if the contract duration says 150 calendar days, the validity period of the contract ends on the 151st day (granting there were no time extensions.)

There is this contract that a contractor has failed to complete the project satisfactorily, and the performance bond has already lapsed (so it can't be called) and the contractor's verbal commitment to finish the project was never fulfilled. This is actually already funny because original contract expired 4 years ago. It is obvious that the contract is no longer in effect thus it can't be rescinded. Can government takeover proceed? And what steps should be followed?

Under the circumstances, the contractor will still be paid for the accomplished portion with LD up to 10%. Is there a way to compensate the government in this case?

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Re: Contract Validity

Post by engrjhez® on Thu Aug 02, 2012 8:18 pm

cristem wrote:Correct me please if I am wrong.. Smile And your advice will be highly appreciated.

I take it that contract validity is the same as contract duration. So if the contract duration says 150 calendar days, the validity period of the contract ends on the 151st day (granting there were no time extensions.)

There is this contract that a contractor has failed to complete the project satisfactorily, and the performance bond has already lapsed (so it can't be called) and the contractor's verbal commitment to finish the project was never fulfilled. This is actually already funny because original contract expired 4 years ago. It is obvious that the contract is no longer in effect thus it can't be rescinded. Can government takeover proceed? And what steps should be followed?

Under the circumstances, the contractor will still be paid for the accomplished portion with LD up to 10%. Is there a way to compensate the government in this case?

Four (4) years is a very long time for such inaction. While it is true that the contractor is liable for the LD, the (government) officials who also caused undue injury to the government is likewise liable. By the time the LD reached 10% of the contract price, the contract should have been rescinded and the takeover may be possible.

At this point, you must demand the LD amount to be paid in favor of the agency. It starts there. If the contractor is non-responsive, you may sue the contractor. But take in mind that by suing the contractor, the officials who erred and have neglected their duty to the process shall also be pursued. Smile
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Re: Contract Validity

Post by RDV @ GP3i on Sun Aug 05, 2012 11:16 am

cristem wrote:Correct me please if I am wrong.. Smile And your advice will be highly appreciated.

I take it that contract validity is the same as contract duration. So if the contract duration says 150 calendar days, the validity period of the contract ends on the 151st day (granting there were no time extensions.)

There is this contract that a contractor has failed to complete the project satisfactorily, and the performance bond has already lapsed (so it can't be called) and the contractor's verbal commitment to finish the project was never fulfilled. This is actually already funny because original contract expired 4 years ago. It is obvious that the contract is no longer in effect thus it can't be rescinded. Can government takeover proceed? And what steps should be followed?

Under the circumstances, the contractor will still be paid for the accomplished portion with LD up to 10%. Is there a way to compensate the government in this case?

Contract duration and contract validity are not the same. The first refers to the period by which the contractor has to complete the contract implementation plus any time extension granted to the contractor.

Contract validity is much longer. It is normally stated in the contract. For infra, the one-year defects liability period after completion of the project is still part of contract validity, until the return of the Performance Security.
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Re: Contract Validity

Post by leobcaleja on Thu Mar 06, 2014 4:43 pm

Is the Original Contract still valid under the ff. circumstances:

1. Original fund for the project is fully disbursed;
2. The PE is processing additional fund for the project prior to the full disbursement of the original fund but approval is delayed;
3. The PE issued time extensions to the contractor while waiting for the approval and availability of the additional fund;
4. The contractor stopped working after the full disbursement of the original fund; and
5. The contractor has substantially accomplished the works chargeable against the additional fund.
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