Administrative Action on Contracts with Negative Slippage in Accordance with the Revised IRR of R.A. 9184

September 15, 2016

DPWH DEPARTMENT ORDER NO. 193-16

 

In line with the Department's goal to deliver projects on time, these guidelines concerning contracts with negative slippage attributable to the contractor are hereby issued, in accordance with the IRR of R.A. 9184 and related Department issuances:

A. Calibrated Actions

A.1 Negative slippage of 5% ("Early Warning" Stage): The contractor shall be given a warning and required to submit a detailed "catch-up" program on a fortnightly (two weeks) basis to eliminate the slippage. The contractor shall commit to accelerate his work and shall identify specific physical targets to be accomplished over a defined time period. Furthermore, the contractor shall be instructed to specify the additional input resources — money, manpower, materials, equipment, and management — which he should mobilize for this action program. The Implementing Office shall exercise closer supervision and meet the contractor every other week to evaluate the progress of work and resolve any problems and bottlenecks.

A.2 Negative slippage of 10% ("ICU" Stage): The contractor shall be issued a final warning and required to come-up with a more detailed program of activities with weekly physical targets, together with the required additional input resources. On-site supervision shall be intensified and evaluation of project performance shall be done at least once a week. At the same time, the Implementing Office shall prepare contingency plans for the termination of the contract and/or take-over of the work by administration or contract.

A.3 Negative slippage of 15% or more ("Terminal" Stage): In accordance with the IRR of R.A. 9184, the Implementing Offices shall initiate termination of the contract and/or take-over of the remaining work by administration or assignment to another contractor/appropriate agency. Proper transitory measures shall be taken to minimize work disruptions, e.g., take-over by administration while negotiation or rebidding is on-going. Procedures for termination of contracts under Item IV, Appendix 4-Guidelines on Termination of Contract shall be strictly followed.B. Penalty:

The procuring entity shall disqualify the contractor from participating in the bidding or award of contract for infrastructure projects if his firm incurred a delay in any of his ongoing contracts (government and private) which is considered attributable to him, pursuant to the provisions of IRR of RA 9184, in any of the following cases:

B.1 Where the firm incurred a negative slippage of at least 15% of his on-going contract in accordance with Section 34.3.b.ii of Rule X — Post Qualification, of RA 9184;

B.2 Where the delay in the completion of work has exceeded the time duration equivalent to ten percent (10%) of the specified contract time plus any approved time extension. The same shall be subject for rescission in accordance with Section 8.4 of Annex E of RA 9184; or,

B.3 Where the total sum of liquidated damages has exceeded ten per cent (10%) of the total contract price. The same shall automatically be taken over by the procuring entity or awarded to a qualified contractor through negotiation in accordance with Section 8.5 of Annex E of RA 9184.

Any approval of time suspension/extension shall strictly comply with the existing provisions under Annex E of the Revised IRR of R.A. 9184 and D.O. No. 144, series of 2016, or any latest issuance relative to the said D.O.

In all cases, the Head of the Implementing Office shall be held accountable for the success or failure of project implementation, including the slippages incurred and the elimination thereof.

The concerned Head of the Implementing Office shall see to it that this Order is strictly enforced. Failure to do so shall, after due process, make him and other officials/employees involved liable to the penalties prescribed for violation of reasonable office rules and regulations. For violation in the non-imposition of penalties under Item B — Penalty, pursuant to Section 46, F (3) of Civil Service Resolution No. 1101502 dated November 8, 2011:

1st Offense	—	Reprimand
2nd Offense	—	Suspension for 1-30 days
3rd Offense	—	Dismissal

For violation in the non-observance of calibrated actions under Item A, the guidelines provided under Item 2.0-Physical Accomplishment of the Memorandum dated November 26, 2014 (Additional Guidelines on the Imposition of Administrative Sanctions on Erring Employees Involved in Project Implementation and Processing of Project Documents) shall be imposed.

Attached herewith as Annex A-1, Annex A-2, and Annex A-3 are the standard forms in the issuance of calibrated actions on contracts with negative slippage.

The Monitoring and Implementing Guidelines and Procedures of sanction mechanisms is provided in Annex B of this DO.

This Order takes effect immediately and supersedes the following issuances:

1) D.O. 37, series of 2015 — Disqualification of Contractors with Liquidated Damages on Ongoing DPWH Infrastructure Projects;

2) D.O. 102, series of 1988 — Calibrated Actions on Contracts with Negative Slippages;

3) D.O. 142, series of 1989 — Contracts with Negative Slippages of 15% or more; and

4) D.O. 202, series of 1993 — Right of Contractor to be Heard before Rescission of his Contract.

(SGD.) MARK A. VILLARActing Secretary

ANNEX A-1

Republic of the Philippines

________________(Date of Issuance)

_________________________(Authorized Managing Officer)Position

 

Dear Mr./Ms. (Last Name):

This refers to your contract (Name of Project) in the amount of P (Contract Amount). Please be informed that as of (date the accomplishment was computed), you have incurred a negative slippage of (-) __ % due to your fault caused by (state the reason e.g., limited equipment, materials, manpower, etc.), which now falls under the "Early Warning Stage" pursuant to Department Order No. 193, Series of 2016 — Administrative Action on Contract with Negative Slippages in Accordance with the Revised IRR of R.A. 9184.

Based on the approved PERT/CPM Network, the planned accomplishment is __ % while your actual accomplishment is only __ %. DETACa

In view hereof, you are hereby directed to submit a detailed "catch-up" program on a fortnightly (two weeks) basis to eliminate the slippage.

In the action program being required, specify therein the additional input resources such as money, manpower, materials, equipment, and management to cope up and meet the desired result accordingly.

Your immediate compliance on this matter is hereby sought.

Very truly yours,

_________________________(Head of Implementing Office)Position

ANNEX A-2

________________(Date of Issuance)

_________________________(Authorized Managing Officer)Position

 

Dear Mr./Ms. (Last Name):

This refers to your contract (Name of Project) in the amount of P (Contract Amount). Please be informed that as of (date the accomplishment was computed), you have incurred a negative slippage of (-) __ % due to your fault caused by (state the reason e.g., limited equipment, materials, manpower, etc.), which now falls under the "ICU Stage" pursuant to Department Order No. 193, Series of 2016 — Administrative Action on Contract with Negative Slippages in Accordance with the Revised IRR of R.A. 9184.

Based on the approved PERT/CPM Network, the planned accomplishment is __ % while your actual accomplishment is only __ %.

In view hereof, you are hereby directed to submit with a more detailed program of activities with weekly physical targets, together with the required additional input resources to accelerate your work accomplishment and reduce the slippage over a defined time period.

On-site supervision shall likewise be intensified and evaluation of project performance shall be done at least once a week.

Your immediate compliance on this matter is hereby sought.

Very truly yours,

_________________________(Head of Implementing Office)Position

ANNEX A-3

________________(Date of Issuance)

_________________________(Authorized Managing Officer)Position

 

Dear Mr./Ms. (Last Name):

This refers to your contract (Name of Project) in the amount of P (Contract Amount). Please be informed that as of (date the accomplishment was computed), you have an actual accomplishment of __ % versus the planned accomplishment of __ %, thus, you have incurred a negative slippage of (-) __ % due to your fault caused by (state the reason e.g., limited equipment, materials, manpower, etc.), which now falls under the "Terminal Stage".

Pursuant to Section III.A.2.a Appendix 4 of R.A. 9184 and Department Order No. 193, Series of 2016 — Administrative Action on Contract with Negative Slippages in Accordance with the Revised IRR of R.A. 9184, the implementing office shall initiate the termination of contract. aDSIHc

In view hereof, you are directed to "show cause" within seven (7) calendar days from receipt hereof why your contract should not be terminated, pursuant to Section IV.3 Appendix 4 of R.A. 9184.

Your immediate compliance on this matter is hereby sought.

Very truly yours,

_________________________(Head of Implementing Office)Position

MONITORING AND IMPLEMENTING GUIDELINES AND PROCEDURES OF SANCTION MECHANISMS OF DEPARTMENT ORDER NO. 193, series of 2016

I. For Penalty "b", Non-observance of Calibrated Actions of the DO

Step	Guideline/Procedure	Responsible	Prescribed Time
		Office	(working day)
1.	All IOs shall reflect in the Project Monitoring System	Implementing	On or before the 30th
	(PMS)/Project Management Office-Monitoring System	Offices (IOs)	day of the month in
	(PMO-MS) under the Project Profile Module	(DEO/RO/	the PMS/PMO-MS for
	(Attachments 1 & 2) or in the Contract Management	UPMO)	FY 2015 and prior
	Module of the Project and Contract Management		years' projects
	Application (PCMA) (Attachment 3) the detailed and
	updated project information as required in the		On or before the last
	submission of Physical Status/Accomplishments for		calendar day of the
	all infrastructure projects, pertaining to specific		month in the PCMA
	reasons of project delays. The reasons of delay shall		for FY 2016 projects
	be categorically stated as whether delay is due to		and onwards
	contractor's fault or not.
2.	All IOs concerned shall submit to BOC, thru the	Implementing	On or before the 5th
	Project Monitoring Division (PMD), the list of	Offices (IOs)	day of the month
	contracts incurring (-) 10% slippage and above,
	together with the documents relative to their action
	taken, in accordance with the requirements
	stipulated in the DO for projects with delay
	attributable to the contractor (i.e., Notices, Intent to
	Terminate, catch-up plans, etc.)
3.	BOC-PMD, shall generate and validate the list of	BOC-PMD	Every 5th day of the
	projects/contracts incurring (-)10% slippage and		month
	above due to contractor's fault, based on the
	submission of the IO.
	The concerned Undersecretary/Assistant Secretary
	for Operations shall be provided copy of the list of
	projects/contracts incurring (-)10% slippage and
	above due to contractor's fault.
4.	QAU and CPES Teams who conducted project	QAU & CPES	Within five (5) days
	assessments shall furnish BOC, thru BQS, a copy of	Teams	after conduct of
	the list of implementing offices who did not comply		inspection
	with the provisions of this DO, for additional
	information and reference, aside from the reports
	coming from the IOs.
5.	BOC shall prepare a Memorandum for signature of	BOC,	Every 7th day of the
	the Undersecretary/Assistant Secretary for	U/Sec and	month
	Operations to all IOs concerned requiring them to	A/Sec for
	explain/justify their action/inaction on the	Operations
	observance of the Department Order.	concerned
6.	Concerned lOs, who were issued Memorandum for	Implementing	Five (5) days after
	non-observance/non-compliance to this DO, shall	Offices (lOs)	receipt of the BOC
	submit explanation/justification to BOC why sanction		Notice to Explain
	shall not be imposed on them.
7.	BOC, after evaluation of the documents/justification	BOC	Seven (7) days after
	submitted by the IO, shall submit a report to the		receipt of the
	concerned Undersecretary/Assistant Secretary for		documents from IOs
	Operations the list of IOs who failed to comply with
	the provisions of the DO, recommending imposition
	of corresponding sanctions/penalties.
	BOC may conduct actual field validation, if deemed
	necessary, to verify reports submitted by the IOs.
8.	Based on the evaluation report and recommendation	U/Sec or A/Sec	Within three (3) days
	submitted by BOC, the Undersecretary/Assistant	for Operations	after receipt of BOC
	Secretary shall issue Memorandum imposing the		report
	corresponding penalties prescribed under the DO.
9.	The IOs concerned may request for reconsideration	Implementing	Within five (5) days
	or an appeal on the imposed penalties under the DO.	Offices (IOs)	after receipt of the
			penalty
	The IOs shall, aside from their justification, attach
	documents as evidence/proof to support their plea.
10.	The Committee, created for the purpose, shall	Committee,	Within seven (7) days
	review and evaluate the appeal submitted by the	U/Sec or A/Sec	after receipt of
	IOs. If found lacking of merit, the Committee shall	for Operations	explanation and
	recommend that the imposed sanction/penalty as		complete documents
	stipulated in the DO shall remain, copy furnish BOC
	for reference and consolidation. If found to be
	justifiable, a warning shall be issued that repetition
	of the same shall be dealt with accordingly.
11.	BOC shall consolidate the sanctions/penalties	BOC	Quarterly
	imposed by the concerned Undersecretary/Assistant
	Secretary for Operations, to the DPWH officials
	involved for non-compliance to the DO, for
	submission to the ManCom for their information
	and reference.

 

II. For Penalty "a", Non-imposition of penalties under Item B — Penalty of the DO

Step	Guideline/Procedure	Responsible	Prescribed Time
		Office	(working day)
1.	The Implementing Office shall disqualify the	Head of IOs	As needed
	contractor from participating in any bidding or award
	of contract for infrastructure projects if their firm
	incurred delays in their contracts which is considered
	attributable to them, as indicated in Items B.1, B.2,
	and B.3 under Item B Penalty clause of this DO.
2.	The BAC of concerned IO shall submit list of these	Implementing	On or before every
	disqualified contractors to the Procurement Service	Offices' BAC	5th day of the month
	(PrS) for information and validation.
	The concerned Undersecretary/Assistant Secretary
	for Operations and BOC shall be provided copy of the
	list of these disqualified contractors.
3.	PrS shall check/validate the submitted list of	Procurement	Within three (3) days
	contractors who have been disqualified from	Service (PrS)	after receipt of report
	participating in any bidding or award of contract for		from BAC of IOs
	infrastructure projects against the data from the Civil
	Works Registry (CWR).
	If a particular contractor was not penalized, and/or
	the IO failed to observed the penalties as stipulated
	in Item B of the DO, PrS shall require the IO, thru a
	Memorandum, to justify their action/inaction.
4.	Concerned lOs, who did not observe/comply to this	Head of IOs	Within five (5) days
	DO, shall submit explanation/justification to PrS why		after receipt of
	sanction shall not be imposed on them.		Memorandum from PS
5.	PrS, after evaluation of the documents/justification	Procurement	Seven (7) days after
	submitted by the IO, shall submit a report to the	Service(PrS)	receipt of the
	concerned Undersecretary/Assistant Secretary for		documents from IOs
	Support Services the list of IOs who failed to comply
	with the provisions of the DO, recommending
	imposition of corresponding sanctions/penalties.
6.	Based on the evaluation report and recommendation	U/Sec or A/Sec	Within three (3) days
	submitted by PrS, the Undersecretary/Assistant	for Support	after receipt of BOC
	Secretary shall issue Memorandum imposing the	Services	report
	corresponding penalties prescribed under the DO.
7.	The IOs concerned may request for reconsideration	Implementing	Within five (5) days
	or an appeal on the imposed penalties under the DO.	Offices (lOs)	after receipt of the
			penalty
8.	The Committee, created for the purpose, shall review	Committee,	Within seven (7)
	and evaluate the appeal submitted by the IOs. If	U/Sec or A/Sec	days after receipt of
	found lacking of merit, the Committee shall	for Support	explanation and
	recommend that the imposed sanction/penalty as	Services	complete documents
	stipulated in the DO shall remain, copy furnish PrS
	and BOC for reference and consolidation. If found to
	be justifiable, a warning shall be issued that
	repetition of the same shall be dealt with accordingly.
9.	PrS shall consolidate the sanctions/penalties imposed	Procurement	Quarterly
	to the IOs for non-compliance to the DO, for	Service (PrS)
	submission to the ManCom for their information and
	reference.

 

III. Committee to Review and Evaluate the Appeal submitted by the IOs

The Committee, created for this purpose, shall be composed of the following officials:

Chairman	:	Concerned Assistant Secretary for Operations
		Undersecretary for UPMO Operations (in case of
		UPMO projects)
Vice-Chairman	:	Assistant Director, BOC
Members	:	Director, Legal Service
		Director, Planning Service
		Assistant Director, BOD
		Assistant Director, BQS
		Division Chief, Civil Works Division, PrS

 

Attachment 1

Attachment 2

Attachment 3