WHEREAS,
government infrastructure projects are principally funded by foreign
loans amortized by the Government at staggering sums, plus interests
and other charges, chanroblesvirtualawlibrary
WHEREAS, the completion of such infrastructure projects within the
agreed period is the prime consideration for the Government's entering
into contracts with various contractors;chanroblesvirtualawlibrary
WHEREAS, any delay in the completion of the contract work in accordance
with approved PERT/CPM and/or contract time as stipulated, will not
only dislocate the financial projections and/or the cash flow of the
Government on these projects, but also unduly prejudice the public
interest sought to be subserved by the timely completion of the
infrastructure project involved;chanroblesvirtualawlibrary
WHEREAS, numerous contractors, in their desire to obtain government
contracts, made representations as to their capability to complete
their contract work within a certain period in order to induce the
Government into awarding the contract to them, only to incur delay
later on or refuse to continue or comply with their commitments under
the contract to the prejudice of the Government and the people;chanroblesvirtualawlibrary
WHEREAS, not only are existing laws read into contracts in order to
determine the rights and obligations of the parties, but the
reservation of the essential attributes of sovereign power is also read
into contracts to secure the well-being of the people;chanroblesvirtualawlibrary
WHEREAS, government infrastructure contracts are designed to promote
the welfare of the people;chanroblesvirtualawlibrary
WHEREAS, public interest demands that there be Decree No. 1594, the
Government may take over the contract work should the contractor unduly
delay the said contract work;chanroblesvirtualawlibrary
WHEREAS, Section 11 of Presidential Decree No. 1594 should be read into
government infrastructure contracts as a valid and reasonable exercise
of police power;chanroblesvirtualawlibrary
WHEREAS, this Presidential Decree is likewise in exercise of the police
power of the State in view of the serious damage, prejudice and
inconvenience caused by unduly delayed contracts to the people and to
the Government.
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines,
by virtue of the powers vested in me by the Constitution and by law,
and in order to expedite work in all government infrastructure
projects, including on-going projects, thereby assuring their
completion within contract schedule, do hereby decree and order:cralaw:red
1. Whenever a contractor is behind schedule in its
contract work and incur 15% or more negative slippage based on its
approved PERT/CPM, the implementing agency, at the discretion of the
Minister concerned, may undertake by administration the whole or a
portion of the unfinished work, or have the whole or a portion of such
unfinished work done by another qualified contractor through negotiated
contract at the current valuation price. chanroblesvirtualawlibrary
2. Whenever a work activity in the project is not
being done on schedule per approved PERT/CPM, the Minister
concerned/Head of Implementing Agency shall notify and direct the
contractor to immediately undertake such work activity. If, within
fifteen (15) days from receipt of such notice, the contractor fails to
start to work and to show satisfactory performance, the Government may
take over the whole or a portion of such work and, at the discretion of
the Minister concerned, have such work done by administration or award
the same to another qualified contractor through negotiated contract at
the current valuation price.
3. If, at any time during the progress of the
contract work, the contractor should fail, refuse or neglect to supply
and provide the required tools, materials, supplies, equipment,
facilities and labor-workmen; or if the contract or any part thereof is
being sublet or assigned without the previous written consent of the
Government; or if the contractor is willfully violating any of the
terms, conditions covenants, agreements or technical requirements of
the project, the Government shall have the option to take over the
project in whole or in part and to complete the same. The Government,
at the discretion of the Minister/Head of Implementing Agency
concerned, may have the contract work done by administration or award
the same to another qualified contractor through negotiated contract at
the current valuation price.
4. In all instances, the cost of the work done shall
be deducted from the contract price, provided, that if the balance of
the contract price is not sufficient to cover the cost of work taken
over by the Government, the contractor shall pay the difference. chanroblesvirtualawlibrary
5. This Decree shall take effect immediately.
Done in the City of Manila,
this 12th day of July, in the year of Our Lord, nineteen hundred and
eighty-three.
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