MALACAÑANG

Manila

MEMORANDUM CIRCULAR NO. 817

AMENDING SECTIONS 56 (PAYMENTS) AND 58 (FINAL PAYMENTS) OF THE STANDARD FORM OF GOVERNMENT CONTRACT AND REQUIRING THEIR INCORPORATION IN ALL PUBLIC WORKS CONTRACTS.

It has been observed that private contractors, specially those of public works constructions, usually sublet the work on the projects contracted by them to other contractors. This arrangement exposes the Government to claims and court suits by subcontractors who are not paid by the principal contractors for the work accomplished or labor and materials furnished in connection with the construction of public works projects. To forestall these unwarranted claims and litigations, all heads of departments and chiefs of bureaus and offices including government-owned and controlled corporations and local subdivisions, are hereby directed to incorporate either in the main or special provisions of all public works and contracts entered into by them Sections 56 (Payments) and 58 (Final Payments), both under payments, of the Standard Form of Government Contract which are hereby amended to read as follows.

“Payments will be made monthly based upon the estimates of work satisfactorily completed by the contractor and accepted by the Director, (Government) during the preceding month. Upon such estimates the Government shall pay to the Contractor a sum equal to ninety (90%) per centum therefore up to and until such time as the total work shall have been completed or the contract cancelled, as herein above provided. WHERE THE CONTRACTOR HAS SUBLET ANY PART OF THE WORK UNDER THE CONTRACT PURSUANT TO GC 14 AND 15 (LABOR), THE CONTRACTOR SHALL LIKEWISE SUBMIT A SWORN STATEMENT EXECUTED BY THE SUBCONTRACTORS, IF ANY, ATTESTING TO THE FACT THAT THE LATTER HAVE BEEN FULLY PAID BY THE CONTRACTOR FOR THE WORK ACCOMPLISHED, LABOR AND MATERIALS FURNISHED UNDER THE SUBCONTRACT PERFORMED AND COMPLETED DURING THE PERIOD SPECIFIED. (Section 56, Payments.)

“Whenever this contract, in the opinion of the Director, shall be completely performed on the part of the contractor, the Director shall proceed promptly to measure the work, shall make the final estimates, shall certify as to the completion of the work, and accept the same. The government shall then, excepting for the causes herein specified, pay to the contractor promptly, after the execution of said certificate, the remainder which shall be found due, excepting there from such sum or sums as may be lawfully retained under any of the provisions if this contract:

PROVIDED, That Final Payment on the Contract shall not be made until the Contractor has submitted a Statement Sworn to Before an Office Duly Authorized to Administer Oath, Showing That all Taxes Due From Him, and All Obligations For Materials Used and Labor Employed in Connection With This Contract Have Been Duly Paid: AND PROVIDED, THAT WHERE THE CONTRACTOR HAS SUBLET ANY PART OF THE WORK UNDER THE CONTRACT PURSUANT TO GC 14 AND 15 (LABOR), THE CONTRACTOR SHALL LIKEWISE SUBMIT A SWORN STATEMENT DULY EXECUTED BY HIS SUB-CONTRACTORS, IF ANY, ATTESTING TO THE FACT THAT THE LATTER HAVE BEEN FULLY PAID BY THE CONTRACTOR FOR THE WORK ACCOMPLISHED, LABOR AND MATERIALS FURNISHED UNDER THE SUBCONTRACT AND PERFORMED AND COMPLETED DURING THE PERIOD SPECIFIED, AND PROVIDED FINALLY, That nothing herein contained shall be construed to waive the right of the Director hereby reserved to reject the whole or any portion of the aforesaid work, should the same be found to have been constructed in violation of the plans and specifications or any of the conditions or convenants of this contract.” (Section 58, Final Payments.)

This Circular shall take effect immediately.

By authority of the President:

(SGD.) ALEJANDRO MELCHOR

Executive Secretary

Manila, April 1, 1975

Source: Presidential Management Staff