Amending The Provisions Of Section 10 (B) Of Republic Act No. 5979 To Authorize Adjustment Or Contract Prices For Government Projects Under Certain Conditions
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Amending The Provisions Of Section 10 (B) Of Republic Act No. 5979 To Authorize Adjustment Or Contract Prices For Government Projects Under Certain Conditions
Presidential Decree No. 454
May 14, 1974
Case Overview and Summary
Summary of Presidential Decree No. 454Adjustment of Contract Prices for Government Projects
- Allows adjustment of contract prices for government public works projects under certain conditions. (Section 1)
Conditions for Price Adjustment:
• If during the contract period, the cost of labor, materials, equipment rentals, and supplies increases or decreases due to direct government acts. Increase in gasoline, fuel oils, and cement prices are considered direct government acts. (Section 1a)
• If during the contract period, the total cost of labor, equipment rentals, construction materials, and supplies increases or decreases by more than 5% compared to the total contract price. (Section 1b)
Adjustment Mechanism:
• The increase or decrease in contract price shall be determined by applying appropriate official indices. (Section 1)
• Additive or deductive adjustments shall be made to unit prices every six (6) months from the date of bidding. (Section 2)
Existing Contracts:
• All existing contracts upon the decree's effectivity shall be reviewed and revised based on current costs of labor, equipment rentals, materials, and supplies. (Section 3)
• Adjustments for existing contracts shall apply only to the outstanding work as of May 1, 1974, and shall be further adjusted every six months. (Section 3)
• Only bid items with a price change of more than 5% shall be adjusted. (Section 3)
• Specific agreed provisions shall govern for certain items. (Section 3)
Implementation:
• Necessary rules and regulations shall be contained in a Letter of Implementation. (Section 4)
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labor costs
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equipment rental costs
fuel prices
cement prices
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Amending The Provisions Of Section 10 (B) Of Republic Act No. 5979 To Authorize Adjustment Or Contract Prices For Government Projects Under Certain Conditions
Presidential Decree No. 454
•May 14, 1974
MALACAÑANGM a n i l a
PRESIDENTIAL DECREE No. 454 May 14, 1974
AMENDING THE PROVISIONS OF SECTION 10 (b) OF REPUBLIC ACT NO. 5979 TO AUTHORIZE ADJUSTMENT OR CONTRACT PRICES FOR GOVERNMENT PROJECTS UNDER CERTAIN CONDITIONS
WHEREAS, the present provisions of Section 10(b) of Republic Act No. 5979 allow the adjustment of contract prices if during the effectivity of the contract, the cost of labor, materials and supplies for construction should increase due to acts of the government, such as increase in the minimum wage, imposition of additional taxes on construction materials, etc;
WHEREAS, under the existing government policies, adjustment of contract prices is effected only after the completion of the project involved and subject to the approval of the Adjustment Committee composed of the Auditor General, as Chairman and the Secretary of Public Works. Transportation and Communications and the Budget Commissioner as Members;
WHEREAS, because of continuing worldwide economic dislocations resulting not only in the scarcity of commodities, materials and supplies, but also in unprecedented variances in the costs thereof, the provisions of...
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