UNIFORM GENERAL CONDITIONS OF CONTRACT FOR contribute to the enhancement of fair contractual

PRIVATE CONSTRUCTION relationships in the construction industry.

(CIAP DOCUMENT 102)
What is a Construction Contract?
Formulated by a committee composed of A typical Construction Contract consists of an
representatives from various professional Agreement, General Conditions, Drawings,
organizations namely: Specifications, and other documents.
1 Council of Engineering Consultants of the
Philippines (CECOPHIL);  contract is used to describe the combination of
2 Construction Project Management Association of two (2) sets of documents: the agreement and the
the Philippines (CPMAP); contract documents.
3 Chamber of Real Estate and Builders Association  agreement is used to describe the agreement
(CREBA) signed by the owner and the contractor,
4 International Federation of Building and Wood excluding the contract documents.
Workers (IFBWW);  contract documents are attached to the
5 Philippine Constructors Association, Inc. (PCA); agreement identified therein as contract
6 Philippine Chamber of Commerce, Inc. (PCCI); documents, including all additions, deletions and
7 Philippine Institute of Construction Arbitrators (now modifications which generally include the
Philippine Institute of Construction Arbitrators and following: special provisions or conditions; general
Mediators or PICAM); conditions; specifications; drawings; and other bid
8 Philippine Institute of Civil Engineers (PICE); documents.
9 Subdivision and Housing Developers Association of  special provisions or conditions are instructions
the Philippines (SHDA); which are issued prior to bidding to supplement
10 United Architects of the Philippines (UAP); and/or modify the drawings, specifications and/or
11 Society of Philippine Accredited Consultants general conditions of the contract.
(SPAC); and the  specifications are the written or printed
12 Confederation of Filipino Consulting description of the work to be done describing
Organizations, Inc. (COFILCO) qualities of the material to be used, the equipment
to be installed and the mode of construction.
The first edition of CIAP Document 102 was  drawings are graphical presentations of the work,
published on 15 October 1997. The revised version was including supplementary details and shop
issued on 29 June 2004 to incorporate prevailing best drawings.
practices and the changes that evolved in the  general conditions of contract pertain to the roles,
construction industry over the years. rights and obligations of the contracting parties,
and the rules and procedures by which the parties
In 2017, DTI Undersecretary Atty. Ruth B. and everyone concerned will be able to meet
Castelo in accord with PDCM’s recommendation for their obligations and perform the works covered
CIAP to boost its efforts in promoting the use of CIAP under the contract.
Doc 102 and enhance its marketability especially to
small contractors, approved the formulation and CIAP Document 102 contains these conditions
publication of a Primer to increase the public’s which are generally applicable for all types of
awareness ab0out the existence and importance of construction contracts, to wit:
CIAP Doc 102 in promoting fair contractual  Section I. Definitions and Documents
relationships in the construction industry. (Art. 1 Definitions; Art. 2 Execution, Correlation,
Meaning of Terms and Intent of Documents; Art. 3
What is CIAP Document 102? Drawings and Specifications; Art. 4 Detail Drawings
The “Uniform General Conditions of Contract and Instructions; Art. 5 Shop Drawings)
for Private Construction” contains terms and  Section II. Laws, Regulations, Site Conditions,
conditions ordinarily established in construction Permits & Taxes
contracts. It is intended for use in contracts for private (Art. 6 Laws and Site Conditions; Art. 7 Permits, Taxes
construction in the Philippines. and Surveys)
 Section III. Equipment and Materials
What is the intent of CIAP Document 102? (Art. 8 General; Art. 9 Equipment; Art. 10 Materials,
CIAP Document 102 was formulated to Fixtures, Appliances, and Fittings Furnished by the
provide the procedures, guidelines, and criteria to be Contractor; Art. 11 Materials, Equipment, Fixtures,
used by parties in a construction Contract, or Appliances and Fittings Furnished by the Owner; Art.
reference to the Contract to address deficiencies 12 Royalties and Patents; Art. 13 Manufacturer’s
and/or any ambiguity. The CIAP Document 102 will Directions)
 Section IV. Premises and Temporary Structures The Owner, with the Contractor’s assistance,
(Art. 14 Use of Premises; Art. 15 Temporary Structures shall secure and pay all construction permits and
and Facilities) licenses necessary for the execution of the Work.
 Section V. Protection of Work and Property
(Art. 16 Protection of Work and Owner’s Property; Art. The Contractor shall secure the Final
17 Protection of Adjacent Property and Existing Occupancy Permit, but he shall not be responsible to
Utilities; Art. 18 Protection of Life, Work and Property the Owner if, without his fault, the license is not issued
During an Emergency) or there was delay in its issuance. The Contractor shall
 Section VI. Labor, Work and Payments pay all taxes as required by Laws pertinent to the
(Art. 19 Labor; Art. 20 Work; Art. 21 Time of Completion construction of the project.
of Work; Art. 22 Payments)
 Section VII. Contractor-Separate Contractor- Who is in charge of the safety and sanitation in the
Subcontractors Relationship work premises?
(Art. 23 Separate Contracts with Other Contractors; Pursuant to Section IV & VI, the Contractor is in
Art. 24 Contractor-Separate Contractors Relations; charge of the safety and sanitation at the work site
Art. 25 Sub-Contracts) during and upon completion of work.
 Section VIII. Suspension of Work and Termination of
Contract Who has the obligation to protect the Work and the
(Art. 26 Contractor’s Rights to Suspend Work or Owner’s property from damage?
Terminate Contract; Art. 27 Owner’s Right to Suspend Section V (Protection of Work and Property)
the Work; Art. 28 Owner’s Right to Terminate Contract; provides that it is the obligation of the Contractor to
Art. 29 Owner’s Right to proceed with the Work After protect the work and the Owner’s property from
Reduction in Contractor’s Scope of Work, Partial damage.
Takeover from Contractor)
 Section IX. Responsibilities and Liabilities of Who is responsible for accidents in the work premises?
Contractor and of Owner Section IX, Article 30 (Contractor’s
(Art. 30 Contractor’s Responsibility for Accidents and Responsibility for Accidents and Damages) states that
Damages; Art. 31 Contractor’s Insurance and Bonds; the Contractor shall be primarily responsible for all
Art. 32 Owner’s Responsibilities and Liabilities; Art. 33 safety measures in
Liens, Disputes and Arbitration) executing the Work.
 Section X. Owner’s Representative
 Section XI. Schedule of Time Limit What are the bonds and guarantees required of the
Contractor?
Section IX, Article 31 (Contractor’s Insurance
What is the importance of clear contract terms and and Bonds), enumerates the insurance,
harmonized contract documents? bonds, and guarantees required of the contractor, to
To avoid disputes that may affect the wit:
completion of the Work and strain the relationship of 1 Contractor’s Liability Insurance (Contractor,
the parties, it is important that contract documents Subcontractors and Owner)
objectively reflect the agreement and true intent of 2 Accident Insurance for Workers
the parties. 3 Contractor’s Fire Insurance
4 Contractor’s Performance and Payment Bonds
Section I (Definitions and Documents) provides 5 Contractor’s Guarantee Bond
the definitions of the terms used and the execution, 6 Contractor’s Guarantee-Warranty
correlation, and intent of contract documents, as well
as the rules to be followed in case of conflict or Is the Owner required to obtain insurance?
discrepancy. Article 32.02 states that the owner may opt to
obtain an insurance that will protect him from his
What are the obligations of the contracting parties contingent liability.
when it comes to permits and licenses, ang payment
of taxes? Is the subcontractor also require to obtain bonds and
Section II (Laws, Regulations, Site Conditions, insurance?
Permits and Taxes) stipulates compliance with all Laws Article 33.03 provides that the Subcontract
in so far as they are binding upon or affect the parties must require the Subcontractor to obtain the same
to the Contract. bonds and insurance coverage as are required of the
Contractor.
What is the difference in the contractual relationship What constitutes Change Order and adjustment of
between the Owner and “Separate Contractor” and contract price?
between the Contractor and the “Subcontractor”? Section VI, Article 20 (Work) describes the
The Owner shall provide for the coordination of circumstances that are covered by a Change Order
the work performed by the Separate Contractor with and that warrant adjustment in contract price and, if
the Work of the Contractor. necessary, corresponding adjustment in completion
time.
The Contractor is fully responsible to the
Owner for the acts and omissions of his What are the conditions for the release of payment to
Subcontractors. the Contractor?
Art. 22.01 provides that the Contractor shall
Is there a contractual relationship between the owner submit to the Owner the Breakdown of Work and
and the subcontractor? Corresponding Value of the Contract Amount
The consent of the owner to the contractor’s showing the value assigned to each part of the Work.
engagement of a subcontractor shall not create any
contractual relation between the subcontractor and What is Progress Payment?
the owner. The Contractor may submit periodically but
not more than once each month a Request for
Is the required to appoint an owner’s representative? Payment for work done.
Section X, article 34 (owner’s representative)
provides for the appointment of the representative of Each request for progress payment shall be
the owner, and the extent and limitation of the computed from the work completed on all items listed
authority granted to the representative. in the Breakdown of Work and Corresponding Value,
less a retention of 10% of the progress payment to the
Is the Owner required to make advance payment to Contractor.
the Contractor?
Article 32 (Owner’s Responsibilities and What is Retention Money?
Liabilities) provides that the Owner shall pay the Progress payments are subject to retention of
Contractor an advance payment, which shall be used ten percent (10%). The purpose of retention is to cover
for mobilization, purchase of materials, and shall be uncorrected discovered defects and third-party
recouped pro rata in the progress billings. liabilities. (Not in CIAP Doc. 102)

Can the Contractor commence with the Work even What are the documents to be submitted by the
without the consent of the Owner? Contractor to the Owner before final payment?
Article 21.01 (Notice to Proceed, when  Certificate of Final Building Occupancy;
required) states that premature commencement of  Certificate of Final Inspection of electrical,
construction shall be at the Contractor’s risk, and the telephone, sanitary, mechanical, water, gas,
Owner gives the Contractor express or implied safety and other utilities;
authority to do so.  Original and three (3) sets of prints of “As-Built
Drawings” of electrical, sanitary, gas, telephone,
How can the Owner ensure the quality and efficient and mechanical works;
execution of the Work?  Three (3) copies of Directory of Panel Boards and
Section VI (Labor, Work and Payments) list of circuits;
provides that the Owner shall at all times have access  Three (3) copies of Instructions and Manual for
to the Work and shall provide sufficient number of operating and maintaining of fixtures and
inspectors while Work is in progress to ensure quality. equipment;
 Three (3) copies of Keying Schedule; and
Is substitution of materials and equipment allowed?  Release of liens arising under the Contract (Sworn
Section III (Equipment and Materials) provides Statement or Indemnity Bond).
that all materials and equipment must conform to all
Laws that are in force and applicable during the Does the release of final payment relieve the
period of construction, and that the Contractor shall Contractor of liability for any defect in the Work?
bear all damages by reason of any delay in the Work After release of final payment and
arising from failure to comply with such Laws. acceptance by the Owner of the Work, the
Contractor is still liable for any defect in the Work, if:
 the defect is hidden;
 the Owner’s acceptance of the Work was made
with reservations to specific portion of the Work;
 inferior work or work which does not comply with What is a punch list?
the Drawings and Specifications and is apparent Punch list, as defined under Article 20.11 C (a),
upon inspection by the Owner within one year is the list of defects found or discovered on the
from final payment; and completed work and which should be received by the
 hidden defect discovered within the warranty Contractor not later than 30 days from date of
period or within one year from posting of the substantial completion.
Guarantee Bond.
What are the grounds for the suspension of the Work
The Contractor is likewise liable for damages if or termination of the Contract?
the edifice falls, within fifteen years from completion Section 8 (Suspension of Work and Termination
of the structure, on account of defects in the of Contract) illustrates the conditions by which the
construction or the use of materials of inferior quality Contractor or the Owner may suspend the Work or
or due to any violation of the terms of the contract as terminate the Contract.
provided in article 1723 of the Civil Code of the
Philippines. Are there prescribed periods within which the
contracting parties shall perform their respective
When shall the Owner release the retention money? obligations under the Contract?
The amount retained by the Owner under the CIAP Document 102 provides the prescribed
provision of the Contract shall be released not later time limits for the execution of the contract conditions
than the expiration of the “Period of Making Good of in order to facilitate the performance of the Works
Known Defects”. covered under the Contract [Section XI (Schedule of
Time Limits)].
What does “Period of Making Good of Known Defects”
mean? What circumstances necessitate an extension of
The expression “Period of Making Good of time?
Known Defects” shall mean a period of not more than Article 21.04 (Extension of Time) provides that
thirty (30) calendar days, calculated from the date of the Contractor shall be entitled to an equitable
receipt by the Contractor of the last item in the punch adjustment of completion time subject to certain
list. conditions.

If after release to the Contractor of final payment or Article 21.04 (D) states that delay in the
retention there are still unpaid claims of payment of any progress billing shall automatically
Subcontractors and/or suppliers, is the Owner obliged extend the Completion Time by a period equal to the
to pay such claims? delay.
Section IX, Article 33.01 provides that, as a
condition to final payment and/or release of the What is the penalty for delay?
retention, the Contractor shall release the Work from Article 21.05 provides that upon failure of the
any legal liens. Contractor to complete the Work within the
Completion Time, the Contractor shall pay the Owner
Can the Owner take possession of and use any liquidated damages in the amount stipulated in the
completed portion of the Work prior to overall Contract as indemnity but shall not exceed ten
completion? percent (10%) of the total contract price [Art. 29.06
Section VI, Article 20.10 (Use of Completed (3)].
Portions of Work) provides that the Owner may take
possession of and use any completed or partially In case of disagreements in the interpretation and
completed portion of the Work prior to overall implementation of the contract conditions, how can
completion, and shall issue a Certificate of CIAP help resolve such disputes?
Completion for such portion taken over and release Section IX, Article 33.04 provides that in case of
retention as required by the disagreements, the parties may engage the services
Contract. of an adjudicator to resolve their disputes, and that if
either of the party disagrees with the resolution of the
What is substantial completion? adjudicator, the parties may submit such disputes to
Section VI, Article 20.11 (Substantial arbitration.
Completion and its Effect) provides that there is
substantial completion when the Contractor One of the implementing arms of the CIAP, the
completes ninety five percent (95%) of the Work. Construction Industry Arbitration Commission (CIAC),
is tasked to provide alternative dispute resolution
facilities for the speedy and equitable settlement of
claims and disputes arising from, or connected with, Commission, by [indicate number: one or three]
construction contracts in the Philippines. CIAC offers arbitrator(s) to be appointed in accordance with such
mediation and arbitration as ways of reconciling Rules. The place of arbitration shall be [indicate
differences between disputants with the help of place].
people who are familiar/knowledgeable with the
construction industry. By negotiation among the parties (w/ time frame),
Mediation and Arbitration (by CIAC):
What is Mediation? Any dispute or differences arising out or in
Mediation, as defined under Section 6 of the connection with this contract shall be settled by
CIAC Mediation Rules, shall mean a voluntary process negotiation within a non-extendible period of 30 days
in which a mediator, selected by the disputing parties, from written demand by either party. If such
facilitates communication and negotiation, and negotiation should fail, the same shall be referred to
assists the parties in reaching a voluntary agreement the Construction Industry Arbitration Commission
regarding a dispute. (CIAC) for settlement; first, through mediation under its
Mediation Rules within a non-extendible period of 48
What is Arbitration? days; or failing which, by arbitration under its Rules of
Arbitration is defined as the investigation and Procedure Governing Construction Arbitration by
determination of matters of differences between [indicate number: one or three] arbitrator(s). The
contending parties by one or more unofficial persons, appointment of mediator or arbitrator/s shall be made
called arbitrators or referees, chosen by the parties. It in accordance with such Rules promulgated by the
is intended to avoid the formalities, the delay, the CIAC. The place of mediation or arbitration shall be
expense and vexation of ordinary litigation. [indicate place].

How can interested parties avail of CIAC facilities? What are the issues that can be submitted for
If a dispute arises, a party may initiate the mediation or arbitration?
mediation by delivering a written Request for The jurisdiction of the CIAC may include, but is
Mediation to the other party in accordance with the not limited to, the following:
CIAC Mediation Rules, or if mediation fails, a Request  violation of specifications for materials and
for Arbitration in accordance with the CIAC Rules of workmanship;
Procedure Governing Construction Arbitration.  violation of the terms of agreement;
 interpretation and/or application of contractual
Are there recommended dispute resolution clauses? provisions;
For parties entering into a Contract who wish  commencement time and delays;
to have future disputes referred to mediation and/or  maintenance and defects;
arbitration, the following dispute resolution clauses  changes in contract cost
may be included:  payment default of employer or contractor; and
 amount of damages and penalties.
Mediation and Arbitration (by CIAC):
Any dispute or differences arising out or in
connection with this contract shall be referred to the
Construction Industry Arbitration Commission (CIAC)
for settlement, first through mediation under its
Mediation Rules; or failing which, by arbitration under
its Rules of Procedure Governing Construction
Arbitration by [indicate number; one or three]
arbitrator(s). The appointment of mediator or
arbitrator/s shall be made in accordance with such
Rules. The place of mediation or arbitration shall be
[indicate place].

Purely Arbitration (by CIAC):

Any dispute arising out of or in connection with
this contract, including any question regarding its
existence, validity or termination shall be referred to
and finally resolved by arbitration under the Rules of
Procedure Governing Construction Arbitration
promulgated by the Construction Industry Arbitration
 SECTION XI
SCHEDULE OF TIME LIMITS

The Contractor shall perform his work subject to certain Time Limits. This indexed section, as based on the
entire General Conditions, is provided for in order to facilitate the execution of his work.
No. & Title Time Limit Reference
Article No.
1 CONTRACT TIME The Contractor shall commence the Work within seven (7) 21.02
1.1 Contract Time Reckoning days from receipt of Notice to Proceed (NTP) unless NTP
1.2 Request for Time provides for a later date 21.04
To be filed within fifteen (15) days from occurrence of
event which caused delay (par. B)
2 CONTRACT SUM To be submitted within fifteen days from receipt 22.01
2.1 Breakdown of Work & of the Notice to Proceed
Corresponding Value Notice to be given to Owner within fifteen (15) days 20.08
2.2 Claim for Extra Cost (1) after receipt of instruction involving extra cost, or
(2) after recognition of delay due to Owner’s fault
3 PROGRESS/ FINAL PAYMENT
3.1 Owner’s Action on Payment To be made within thirty (30) days after receipt 22.05
Request of request for payment
3.2 Owner’s Action on Final To act within thirty (30) days from receipt of the 22.05
Payment Request request for payment

3.3 Delayed Payment Delay in payment of the amount due shall entitle the
3.4 Release of Retention Contractor to interest from due date based on the thirty
(30) day loan rate of the Land Bank of the Philippines
To be released not later than sixty (60) days from 22.11
substantial completion upon posting of Contractor’s
Guarantee Bond.
4 SUBSTANTIAL COMPLETION and its Substantial Completion is attained if the Contractor 20.11
EFFECTS completes ninety-five percent (95%)of the works; or the
Owner approves the Contractor’s billing for completing at
least 95% of the works unless the Owner can establish that
the unfinished portion prevents the normal use of the
completed portion [par. A (a) & (b)].
The Owner may issue a Certificate of Substantial
Completion or equivalent document but the date of
document is not controlling if substantial completion is
shown to have been attained earlier, unless the
Contractor accepts the certificate without taking any
exceptions thereto in writing within fifteen (15) days from
receipt of the certificate [par. A (c)].
5 CORRECTION OF WORK
5.1 Issuance of Punch list The Owner shall issue the punch list/s which the Contractor 20.11
must receive not later than thirty (30) days from date of
substantial completion [par C (a)].
The Owner may add to the punch list items but only as to
corrective work in the original punch list/s not later than
sixty (60) days from substantial completion [par. C (b)].

5.2 Correction Before or After Poor or inferior work, apparent upon inspection to be 22.10
Final Payment condemned & Contractor notified to enable him to
correct, remove & replace the same. Owner has one year
from date of final payment to condemn poor or inferior
work, otherwise, instructions to remove or replace such
shall be treated as change order.
5.3 Making Good of Known Thirty (30) days from receipt by the Contractor 20.12 &
defects of the last item in the punchlist. 20.13
6 CONTRACTOR’S RIGHT TO Contractor may suspend work or terminate Contract 26.00
SUSPEND WORK OR TERMINATE upon 15 days written notice to Owner, for any of the
CONTRACT following reasons:

(1) If any court or other public authority orders work to be

stopped or suspended for ninety (90) days through no
fault of the Contractor or his employees;
(2) If Owner fails to pay Contractor the approved request
for payment within thirty (30) days from receipt.
(3) If Owner fails to pay Contractor the agreed sum within
thirty (30) days after its award by arbitrators.
(4) If the Owner suspends the work without cause for more
than fifteen (15) days without Contractor’s consent.
(5) If the Owner fails to deliver at the construction site
Owner-supplied/furnished materials and/or equipment,
for work along the critical path beyond fifteen (15) days
after its scheduled delivery date.
(6) If approval of Variation Orders for additional works
along the critical path is delayed beyond fifteen (15) days
after submission for approval by the Owner.
7 OWNER’S RIGHT TO TERMINATE May be done immediately and without notice if 28.01
CONTRACT Contractor should:
(1) Declare bankruptcy, become insolvent or assigns his
assets for the benefit of his creditors or appointment of
trustee/receiver for Contractor or any of its property.
May be done after giving fifteen (15) days written notice 28.02
to Contractor or to his Surety if Contractor should:
(1) Disregard or violate provisions of the Contract
Documents or Owner’s instructions;
(2) Fail to provide skilled superintendent, workmen or
suitable materials or equipment;
(3) Fail to make prompt payment to subcontractors, for
labor or materials or equipment;
(4) Disregard the authority of the Owner’s
Representative;
(5) Violates in any substantial way any provisions of the
Contract Documents;
(6) Repeatedly delays prosecution of work per agreed
Construction Schedule and/or PERT/CPM plus any time
extension duly granted the Contractor
8 DISPUTES The Owner or his representative shall act within a period 33.04 &
of fifteen (15) days on all matters under the Contract 33.05
requiring the Owner’s approval, acceptance, or decision.
If the Contractor disagrees with the determination by the
Owner or his representative, the same shall be submitted
to an adjudicator to be jointly engaged by the parties
within 15 days before the commencement of the work. If
either party disagrees with the resolution of the
adjudicator, such shall be deemed a dispute that may be
submitted to arbitration.
9 GUARANTEE 31.05
9.1 Contractor’s Guarantee To be furnished the Owner upon release of retention and
bond shall be effective for a period of one year commencing
from the date of acceptance as a guarantee that all
materials and workmanship installed are of good quality.