The 2016 Revised Implementing Rules and Regulations – Annex “G” The 2016 Revised Implementing Rules and

16 Revised Implementing Rules and Regulations – Annex “G”

ANNEX “G” predicting its final cost until the actual commencement of construction.
GUIDELINES FOR THE PROCUREMENT AND IMPLEMENTATION OF CONTRACTS This, however, can be addressed by prescribing that the bid/contract price
FOR DESIGN AND BUILD INFRASTRUCTURE PROJECTS should not exceed the Approved Budget for Contract (ABC) of the procuring
entity and that the contract price is a fixed lump sum amount.

1. SCOPE AND APPLICATION b) Considering that the extent of the integration of design and construction of
the project is exceptionally dependent on the contractor, there may be
These guidelines shall govern the procurement and implementation of contracts for cases when the end-result may not be exactly in accordance with what the
design and build infrastructure projects and shall supplement applicable provisions of procuring entity has required. These cases can be avoided if the procuring
Republic Act No. 9184 (RA 9184) and its Revised Implementing Rules and Regulations entity adequately defines the output or performance specifications and
(IRR) in particular Section 17.6 and Annex E. parameters.

2. PURPOSE 4. DEFINITION OF TERMS

These guidelines are formulated to determine the conditions for the use of the design a. Approved Budget for the Contract (ABC). This shall be a lump sum amount
and build scheme for infrastructure projects and the procedures for the that shall cover the cost of design and construction works
implementation thereof. based on the conceptual design and performance specifications
and in accordance with applicable provisions of the law or agency guidelines.
3. GUIDING PRINCIPLES The ABC shall be calculated based on either the approximate quantities of work
of the conceptual design, from standardized designs or from cost records of
The procuring entity, prior to resorting to the design and build scheme, should previous projects of similar kind.
consider the following advantages and disadvantages of said scheme:
b. Bidding Documents for Design and Build Scheme. These shall basically be
3.1. Advantages: similar to the Bidding Documents for infrastructure projects and shall also
include the performance specifications and parameters to be followed by the
a) Since both design and construction are in the hands of the contractor, there design and build contractors and the method for allocation of risks for the design
is a single point of responsibility for quality, cost, and schedule adherence, and build contract, among others.
including the risks related to design. This precludes buck-passing and
finger-pointing between the designer and the builder. c. Conceptual Design. This shall describe the general idea of the procuring entity
with regard to the completed facility and shall identify the scope or physical
b) Because design and construction periods can overlap, the total design and components and structures, specific outputs and requirements of the structures
construction time, as well as the final project cost, will be significantly and proposed methods of construction, where necessary.
reduced.
d. Design and Build Projects. This refers to infrastructure projects where the
c) The procuring entity is assured of quality considering that the larger procuring entity awards a single contract for the architectural/engineering design
responsibility implicit in the design-build scheme serves as motivation for and construction to a single firm, partnership, corporation, joint venture or
high quality of the facility to be provided. Once the requirements of the consortium.
procuring entity are defined in performance terms, the designer-builder is
responsible for producing the results accordingly. The designer-builder e. Performance Specifications and Parameters. The procuring entity shall
warrants to the procuring entity that the design documents are complete define the required performance specifications and criteria and its means of
and free from error. measurement based on the operating outputs and in accordance with
appropriate design and construction standards, legal and technical obligations
d) The procuring entity does not need to spend much time and money in and any other relevant government commitments as required by existing laws
seeing to it that the work is done by the contractor exactly as indicated by and regulations. It shall not be drawn up to favor a particular solution, design
the design documents prepared by the designer, and in coordinating and and construction method.
arbitrating between separate design and construction contracts.
f. Preliminary Investigations. These shall include, among others, information
3.2. Disadvantages: on soil, geotechnical, hydrologic, hydraulic, seismic, traffic, and environmental
conditions that shall be used to define project design criteria, to set the basis for
a) Procuring Entities should, however, take into account that in utilizing the any changed conditions and establish preliminary project cost estimates.
design and build scheme for a particular project, contractors are given too
much discretion in determining the project cost and there is difficulty in

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g. Preliminary Survey and Mapping. These shall determine boundaries and 7. PRELIMINARY DESIGN AND CONSTRUCTION STUDIES
provide stationing along control lines to establish feature and design criteria
location, and identify existing and future right-of-way limits and construction No bidding and award of design and build contracts shall be made unless the required
easements associated with the procuring entity’s conceptual design. preliminary design and construction studies have been sufficiently carried out and duly
approved by the Head of the Procuring Entity that shall include, among others, the
h. Project Description. This shall define the objectives, purpose, limitations or following:
constraints, as well as the allocation of risks between the procuring entity and
the winning bidder. i. Project Description
ii. Conceptual Design
i. Utility Locations. The procuring entity shall provide information on existing iii. Performance Specifications and Parameters
utilities in and around the project’s area. iv. Preliminary Survey and Mapping
v. Preliminary Investigations
5. CONDITIONS FOR THE USE OF THE DESIGN AND BUILD SCHEME vi. Utility Locations
vii. Approved Budget for the Contract
5.1. The Design and Build scheme shall be applied under any of the following cases: viii. Proposed Design and Construction Schedule
ix. Minimum requirements for a Construction Safety and Health Program for the
a. For flagship, priority and fast track projects that need to be completed on a project being considered
tight completion schedule, as included in the Medium Term Public x. Tender/Bidding Documents, including Instructions to Bidders and Conditions
Investment Program (MTPIP) for national projects and in the Regional of Contract
Development Investment Plan (RDIP) for regional and provincial projects;
The above data are for reference only. The procuring entity does not guarantee that
b. For infrastructure projects requiring advanced engineering or construction these data are fully correct, up to date, and applicable to the project at hand. The
technologies or whose intellectual property rights belong to private contractor is responsible for the accuracy and applicability of all data, including the
companies; above, that it will use in its design and build proposal and services.

c. For infrastructure projects where design, equipment, plant and construction The acquisition of right-of-way and the conduct of eminent domain proceedings shall
can be provided exclusively by a company or where manufacturer’s know- still be the responsibility of the procuring entity, which shall include a preliminary
how is important in the construction of such facility; or budget for this purpose.

d. For small projects where there are previously approved drawings or 8. DETAILED ENGINEERING REQUIREMENTS
standardized designs and an innovation in design and construction methods
under the design and build scheme will result in lower costs and higher 8.1. Upon award of the design and build contract, the winning bidder shall be
quality projects. Examples of these are school buildings, rural health units, responsible for the preparation and submission of all necessary detailed
among others. engineering investigations, surveys and designs in accordance with the
provisions of Annex “A” of this IRR (with the exception of the Bidding
5.2. All design and build projects shall be included in the Annual Procurement Plan Documents and the ABC).
(APP) of the procuring entity concerned and shall be subject to prior approval
by the Head of the Procuring Entity or his/her duly authorized representative. 8.2. The procuring entity shall ensure that all the necessary schedules with regard
to the submission, confirmation and approval of the detailed engineering design
6. CREATION OF DESIGN and BUILD COMMITTEE and the details of the construction methods and procedures shall be included in
the contract documents.
The procuring entity may create a Design and Build Committee (DBC) composed of
highly technical personnel experienced in the field of architecture, engineering and 8.3. The procuring entity shall review, order rectification, and approve or disapprove
construction in the particular type of project to be bid. The DBC shall assist the project – for implementation only - the submitted plans within these schedules. All
management office (PMO) in the preparation of the conceptual design and instructions for rectification shall be in writing stating the reasons for such
performance specifications and parameters, review of detailed engineering design and rectification. The design and build contractor shall be solely responsible for the
supervision of the project. It shall, likewise, assist the Bids and Awards Committee integrity of the detailed engineering design and the performance of the
(BAC) and the Technical Working Group (TWG) in the evaluation of technical proposals structure irrespective of the approval/confirmation by the procuring entity.
in accordance with the criteria set in the Bidding Documents.

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9. ELIGIBILITY REQUIREMENTS Filipino ownership or interest shall not be less than twenty-five percent
(25%): that when the design services in which the joint
9.1. The eligibility requirements for Design and Build infrastructure projects shall venture wishes to engage involve the practice of professions regulated
comply with the applicable provisions of Sections 23 to 24 of IRR. by law, all those who will actually perform the services shall be Filipino
citizens and registered professionals authorized by the appropriate
9.2. A modified set of requirements integrating eligibility documents and criteria for regulatory body to practice those professions and allied professions and
infrastructure projects and consulting services shall be adopted, as follows: where foreign designers are required, the foreign designer must be
authorized by the appropriate Philippine Government professional
i. Class “A” Documents (Legal, Technical and Financial Documents) and regulatory body to engage in the practice of those professions and allied
Class “B” Documents professions.

The prospective bidder shall submit all the required Class “A” and Class 10. SUBMISSION AND RECEIPT OF BIDS
“B” documents for infrastructure projects and the following:
10.1. In the submission of bids, the first envelope (Technical Proposal) shall contain
a) relevant statements of all on-going, completed, awarded but not all the required documents for infrastructure projects under Section 25.2(b) of
yet started design/design and build related contracts, curriculum the IRR of R.A 9184 and the following additional documents:
vitae of key staff, partners or principal officers; and
i. Preliminary Conceptual Design Plans in accordance with the degree of
b) valid licenses issued by the Professional Regulatory Commission details specified by the procuring entity;
(PRC) for design professionals.(a)
ii. Design and construction methods;
ii. Eligibility Criteria
iii. List of design and construction personnel, to be assigned to the contract
a) The eligibility of design and build contractors shall be based on to be bid, with their complete qualification and experience data; and
the legal, technical and financial requirements abovementioned.
In the technical requirements, the design and build contractor (as iv. Value engineering analysis of design and construction method.
solo or in joint venture/consortia) should be able to comply with
the experience requirement under the IRR of R.A. 9184, where 10.2. The second envelope (Financial Proposal) shall contain all the required
one of the parties (in a joint venture/consortia) should have at documents for infrastructure projects under Section 25.3 of the IRR of R.A
least one similar project, both in design and construction, with at 9184 and the following additional documents:
least 50% of the cost of the ABC.
i. Lump sum bid prices, which shall include the detailed engineering cost,
b) If the bidder has no experience in design and build projects on its in the prescribed Bid Form;
own it may enter into subcontracting, partnerships, or joint
venture with design or engineering firms for the design portion of ii. Detailed estimates including a summary sheet indicating the unit prices
the contract. of construction materials, labor rates and equipment rentals used in
coming up with the bid; and
c) The relevant provisions under Section 23.4.2 of the IRR of R.A,
9184 on eligibility requirements shall be observed, with the iii. Cash flow by the quarter and payments schedule.
following exceptions:
11. BID EVALUATION
Joint ventures/consortia among Filipino contractors and consultants or
among Filipino contractors and foreign consultants shall be allowed For the detailed evaluation of the design and build proposals a two-step procedure
subject to pertinent laws and the relevant provisions of the IRR of R.A. shall be adopted by the BAC, which may be undertaken with the assistance of the
9184. The joint venture/consortia shall be jointly and severally DBC.
responsible for the obligations and the civil liabilities arising from the
design and build contract: That Filipino ownership or 11.1. First-Step Procedure:
interest thereof shall be at least seventy five percent (75%):
That joint ventures/consortia in which Filipino ownership or i. The first step of the evaluation shall involve the review of the
interest is less than seventy-five percent (75%) may be eligible where preliminary conceptual designs and track record submitted by the
the structures to be built require the application of techniques and/or contractor as indicated in the Bidding Documents using a non-
technologies which are not adequately possessed by Filipinos and that

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discretionary “pass/fail” criteria that involve compliance with the 12.3. The Head of the Procuring Entity concerned shall award the contract to the
following requirements: said bidder pursuant to the provisions of Section 37, Rule XI of this IRR.

a. Adherence of preliminary design plans to the required 13. CONTRACT IMPLEMENTATION

performance specifications and parameters and degree of details;
As a rule, contract implementation guidelines for the procurement of infrastructure
b. Concept of approach and methodology for detailed engineering, projects shall comply with Annex “E” of this IRR. The following provisions shall
design and construction with emphasis on the clarity, feasibility, supplement these procedures:
innovativeness and comprehensiveness of the plan approach, and
the quality of interpretation of project problems, risks, and 13.1. No works shall commence unless the contractor has submitted the required
suggested solutions; documentary requirements and the procuring entity has given written
approval. Work execution shall be in accordance with reviewed and approved
c. Quality of personnel to be assigned to the project which covers documents.
suitability of key staff to perform the duties of the particular
assignments and general qualifications and competence including 13.2. The contractor shall be responsible for obtaining all necessary information as
education and training of the key staff; to risks, contingencies and other circumstances which may affect the works
and shall prepare and submit all necessary documents specified by the
ii. For complex or unique undertakings, such as those involving highly procuring entity to meet all regulatory approvals as specified in the contract
specialized or advanced engineering technology, eligible bidders may be documents.
required, at the option of the agency concerned, to make an oral
presentation within fifteen (15) calendar days after the deadline for 13.3. The Contractor shall submit a detailed program of work within fourteen (14)
submission of technical proposals. calendar days after the issuance of the Notice to Proceed for approval by the
procuring entity that shall include, among others:
11.2. Second-Step Procedure:
i. The order in which it intends to carry out the work including
Only those bids that passed the above criteria shall be subjected to the anticipated timing for each stage of design/detailed engineering and
second step of evaluation. construction;

The BAC shall open the financial proposal of each “passed” bidder and shall ii. Periods for review of specific outputs and any other submissions and
evaluate it using non-discretionary criteria - including arithmetical corrections approvals;
for computational errors - as stated in the Bidding Documents, and thus
determine the correct total calculated bid prices. The BAC shall automatically iii. Sequence of timing for inspections and tests as specified in the
disqualify any total calculated bid price which exceeds the ABC. The total contract documents;
calculated bid prices (not exceeding the ABC) shall be ranked, in ascending
order, from lowest to highest. The bid with the lowest total calculated bid iv. General description of the design and construction methods to be
price shall be identified as the Lowest Calculated Bid (LCB). adopted;

12. POST-QUALIFICATION and AWARD OF THE CONTRACT v. Number and names of personnel to be assigned for each stage of the
work;
12.1. The LCB shall be subject to post-qualification in accordance with Section 34,
Rule X of this IRR to determine its responsiveness to the eligibility and bid vi. List of equipment required on site for each major stage of the work;
requirements. If after post-qualification the Lowest Calculated Bid is and
determined to be post-qualified it shall be considered the Lowest Calculated
and Responsive Bid (LCRB) and the contract shall be awarded to the bidder. vii. Description of the quality control system to be utilized for the project.
In case of post-disqualification of the LCB, the procedure under Section 34
shall also be followed. 13.4. Any errors, omissions, inconsistencies, inadequacies or failure submitted by
the contractor that do not comply with the requirements shall be rectified,
12.2. The Head of the Procuring Entity shall approve or disapprove the resubmitted and reviewed at the contractor’s cost. If the Contractor wishes to
recommendations of the BAC within a period not exceeding fifteen (15) modify any design or document which has been previously submitted,
calendar days from the determination and declaration by the BAC of the reviewed and approved, the contractor shall notify the procuring entity within
LCRB. a reasonable period of time and shall shoulder the cost of such changes.

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13.5. As a rule, changes in design and construction requirements shall be limited

only to those that have not been anticipated in the contract documents prior
to contract signing and approval. The following guidelines shall govern
approval for change or variation orders:

i. Change Orders resulting from design errors, omissions or non-

conformance with the performance specifications and parameters and
the contract documents by the contractor shall be implemented by the
contractor at no additional cost to the procuring entity.

ii. Provided that the contractor suffers delay and/or incurs costs due to
changes or errors in the procuring entity’s performance specifications
and parameters, he shall be entitled to either one of the following:

a. an extension of time for any such delays under Section 10 of

Annex “E”; or

b. payment for such costs as specified in the contract documents,

provided, that the cumulative amount of the variation order does
not exceed ten percent (10%) of the original contract price.

13.6. The contract documents shall include the manner and schedule of payment
specifying the estimated contract amount and installments in which the
contract price will be paid.

13.7. The contractor shall be entitled to advance payment subject to the provisions
of Section 4 of Annex “E”.

13.8. The procuring entity shall define the quality control procedures for the design
and construction in accordance with agency guidelines and shall issue the
proper certificates of acceptance for sections of the works or the whole of the
works as provided for in the contract documents.

13.9. The contractor shall provide all necessary equipment, personnel, instruments,
documents and others to carry out specified tests.

13.10. All design and build projects shall have a minimum Defects Liability Period of
one (1) year after contract completion or as provided for in the contract
documents. This is without prejudice, however, to the liabilities imposed upon
the engineer/architect who drew up the plans and specification for a building
sanctioned under Article 1723 of the New Civil Code of the Philippines.

13.11. The contractor shall be held liable for design and structural defects and/or
failure of the completed project within the warranty periods specified in
Section 62.2.3.2 of the IRR.

14. AMENDMENTS AND FORMS

In the implementation of these guidelines, the GPPB may issue additional guidelines
or introduce modifications thereto through the amendment of its specific provisions
as the need arises, as well as, formulate, approve and disseminate standard Bidding
Documents, forms and evaluation documents, whenever necessary.

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