Contract Price and Payment Quiz

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Questions and Answers

Who determines price escalation based on the Civil Code of the Philippines?

NEDA

What currency must contract prices be denominated in?

Philippine currency

What must the entity requesting price escalation provide to NEDA?

Proof and necessary documentation

How are bid denominated in foreign currency converted for bid comparison and evaluation?

Converted to Philippine currency using the exchange rate established by BSP Signup and view all the answers

What are the two main methods of payment specified in a contract?

Unit price or lump-sum Signup and view all the answers

When must payments be made according to the Procurement Payment Guidelines?

No later than 45 days after contractor's invoice or claim submission Signup and view all the answers

Can the contractor request an advance payment?

Yes Signup and view all the answers

How can the Procuring Entity recover the advance payment made to a contractor?

<ol> <li>Deduct 15% from contractor's progress payments. 2. Recover advance within contract duration. 3. Reduce contractor's standby credit or guarantee/surety instrument.</li> </ol> Signup and view all the answers

Are incentive bonuses allowed?

No incentives allowed Signup and view all the answers

How are progress payments made to contractors?

First payment after 20% work completion, followed by monthly payments upon submission of Progress Billing or payment request, verified and approved by government project engineer. Signup and view all the answers

What is 'retention money' and why is it withheld?

10% withheld from progress payments to cover defects and third-party liabilities, collected until 50% of works' value is achieved, released after defects liability period if work is satisfactory and on schedule. Signup and view all the answers

In what manner are the final payments for a project made?

Final payment made upon 100% completion of work, with 10% retention for defects and maintenance costs for one-year post-project, reduced by remaining balance to return 15% advance payment to government. Signup and view all the answers