CHAPTER FOUR: Contract-Writing and Engineering Specifications

In the preceding chapter, the law on obligations and contracts has been discussed to give an
engineer or architect a panoramic view of the varying types of contacts with their essentials and
requirements. True, a lawyer may be employed to draft such engineering contract; however, it would be
very helpful if the engineer himself has had the background of contract-writing. It must be noted that the
assistance of the engineer in contract-writing is very much needed especially in the preparation of plans
and specifications which would form part of the contract.

CHARACTERISTICS OF CONTRACT-WRITING
In contract-writing the following characteristics should serve as essential guidelines to any
person engaged as a contract-writer.

1. It must be worded in plain language. The use of too technical words which may admit different
interpretations is an aspect in contract-writing which must be avoided. It has been the practice of some
contract-writers to draft the agreement in a language too difficult to comprehend. This practice has
fomented so many lawsuits among the parties to the contract. Also, specifications must be written in plain
language to prevent different interpretations and possibly perhaps to preclude friction between the
engineer and the contractor as a result of vaguely worded specifications.

2. It must be concise. The contract itself must be brief. However, important considerations in the contract
must not be sacrificed for brevity. It must be noted that, although brief, it must be comprehensive. Thus,
repetitious display of words and phrases in contract-writing is allowed as steps to clarity in meaning. In
other words, brevity may be sacrificed to pave the way for certainty and clarity. Otherwise, confusion
may arise which would inevitably lead to court litigation.

3. It must include all the legal requirements. The most important among the characteristics is the
inclusion in the contract all the requirements required by law. This is essential for its validity.

COMPONENTS OF A CONSTRUCTION CONTRACT

Usually a contract embraces two main divisions, to wit: (a) the proper agreement; and (b) the-
general conditions.

The first category includes the following clauses:

1. The prologue or opening clause. This is introduced by the phrase "This Agreement Witnesseth", or
"This Contract". It describes the agreement and what is all about.

2. The contracting parties. It provides data as to the identities of the parties and in what capacity are
they contracting. Example: This CONTRACT made in Manila, Philippines, this 5th day of February,
2006, by and between BETA PUBLICATIONS, a corporation duly organized under the laws of the
Philippines and with business address at Second Floor, Duranlo Bldg. Magallanes St., Intramuros,
Manila, herein after referred to as OWNER and S.A.P. CONSTRUCTION CO. also a corporation
organized under the laws of the Philippines and with business address at 414 Elizalde Bldg. Ayala Ave.,
Makati, Metro Manila, hereinafter referred to as CONTRACTOR.

3. The subject-matter. It provides a description of the subject matter, the scope and location of the work
to be performed. Example: That the CONTRACTOR shall construct a condominium building on a lot
located at Block 24, Ayala Avenue, Makati, Metro Manila, Philippines, in accordance with the hereto
attached agreed plans and specifications forming part of this contract; and shall provide for all labor,
materials, and necessary tools and equipment to complete the same.

4. The term of the contract. A clause provision where the contract becomes operative and the time when
it shall terminate. Example: That the CONTRACTOR shall start the construction on February 16, 2006
to be finished the same on or before December 30, 2006.

5. The contract price. A clause which provides the consideration to be paid. Example: That the OWNER
binds himself to pay the CONTRACTOR the total sum of ONE MILLION PESOS (P1,000,000.00),
Philippine Currency.

6. The attestation clause. A clause mandating the parties and their witnesses to sign the agreement under
seal before a notary public or any person authorized by law to authenticate documents.

The second division (general conditions) embraces the following component parts:

1. Scope of contract. The nature and scope of the work must be unequivocally defined. Here, the
contractor binds himself to furnish all the labor, materials, and the equipment necessary for the
project's completion. The contract price and the manner of payment should also be clearly stated to
preclude any misunderstanding between the parties. Also, the parties bind themselves to perform the
terms and conditions of the contract in good faith. The contractor should therefore carry out its work
according to the agreed plans and specifications.
2. Contract duration. This provision consists of the time when to commence and when to complete
the work. Time is of the essence in any contract. Thus, it must be pointed out in clear and categorical
statement known as "contract duration" such as Ninety (90) calendar days.
3. Plans and specifications. Plans and specifications may include those documents, reference or by
incorporation mutually agreed upon by the parties. Note that under this category, the contractor must
perform the work consistent with the plans and specifications. Although errors may have been
committed, neither the first party nor the second party should take advantage of such errors.
4. Workmanship. The agreement may provide that the contractor shall perform the work in a work
manlike manner according to agreed plans and specifications. Workmanship should comply with proper
standards. However, if the quality is not specified, what is customarily required for such particular work
is the acceptable quality of workmanship.
5. Materials. The materials must be acceptable and passes the proper requirements for materials and
testing. The contractor cannot therefore choose those of inferior quality. Under the Civil Code, if there
is no agreement, the contractor is not required to deliver one with superior nor one with inferior quality.
Then what has to be delivered? The materials of standard quality.
Under this section, it may also be agreed upon that the contractor should protect all materials
and shall provide for facilities where work may be done free from injury. In the construction area,
defective work or materials must be removed to avoid injury to life, limb, or property.
6. Conduct of Work. The party must stipulate controls in conducting work methodology. The principal
interest of the owner includes the following: a) the work must be performed according to plans and
specifications; b) the work must be completed in accordance with the period stipulated; and c) proper
safeguards are employed to prevent injury to life, limb, or property. Necessary precautions should be
exercised at all times to' prevent accident or injury. Thus, the parties may stipulate a clause provision
in the contract regarding "health and safety" requirements.
7. Contractual changes. A provision giving rights to the owner to terminate or stop the work for breach
of contract by the contractor. If a contractor cannot continue the work satisfactorily or shall assign
contract, or the progress of work is so slow that it could not be finished within the period stipulated, the
owner should not be prejudiced. Thus, the owner is given the right to terminate the contract. It must be
observed that not in all instances, assignment of contract is a cause for termination of contract. Sub-
contracting is allowed by law provided the parties agree. But as to the completion and quality of the
work, the principal contractor is still liable.
8. Payments. Parties in a construction contract usually provide for terms of payment to support the
progress of work, this is otherwise known as "progress billing". Agreement also provide "retention
money" normally equivalent to 10% of the progress payment. This amount is withheld to cover any
defective work if not repaired by the contractor or his subcontractors. Retention money are release to
the contractor one year after the project turn-over, and after it is proven that the defects were completely
done and remedied- by the contractor. Note that although partial payment is agreed upon, a provision
on final payment should be clearly stated.
9. Extra-work. If there is an additional work to be performed necessary for the completion of the
project or defective works or changes that are not fully specified on plans and specification, the
contractor should give a written notice of claims. The addition/deletion or change in the scope of work
is known as "Change Order". This deviations is subject to additional payment or adjustment in contract
price depending on the payment scheme agreed by both parties
10. Contractor's risks and obligations. The contractor is obliged to secure all permits, licenses
required by existing laws and ordinances. Furthermore, he shall hire experienced foremen, carpenters,
masons, and other artisans to carry out the work. The contractor may bind himself to .pay the owner
an amount equivalent to 1/10 of 1% of the remaining balance of work per day of delay until the project
is completed. The delay entitles the owner for damages known as "liquidated damages" for his failure
to deliver the project as to the agreed completion date.
11. Contract security. To secure faithful performance of the terms of the contract, the contractor is
usually required to post a Performance Bond normally equivalent to 10% of the contract amount The
contractor is also required to post a Surety Bond equal' in amount to the "Down payment" before the
advance payment is released and a Guarantee Bond may also be required equivalent to 10% of the
contract amount to be posted as a requisite in the release of retention money. This is to safeguard the
interest of the owner in case there is breach.
12. Contractor's liability for injuries. The contractor is required to agree that he shall indemnify the
owner from any and all claims, suits, action, proceedings, damages, etc., which may be brought against
the owner on account of injury to persons or properties as a result of acts or omissions of the contractor
including his duly authorized representatives and employees under his control and supervision. The
contract may also require a Contractors All Risk Insurance (CARI) secured from reputable insurance
company which shall cover all damages in case accident occurs during the construction works.
13. Disputes and arbitration. Disputes arising from disagreement between the contractor and the
owner on all matters involving the 'work or in respect of the rights or obligations of either parties shall
be submitted to the board of arbiters usually chosen by the parties themselves. As a penalty, arbitration
expenses shall be borne by the party against whom the decision is rendered.
14. Definition of terms. This is necessary in every contract to avoid future litigations. Many words
used in ordinary, conversational language may havedifferent and special meanings when used in the
contract. For convenience, such tern must be clearly defined in the document itself. Thus, in case of
conflict the same may be resolved with dispatch by resorting to the definition of terms.
15. Rights of way. To insure the faithful prosecution of the work, the owner must provide camp sites
and other facilities such as right of way. However, the contractor may still construct additional camps
and/or facility at the latter's expense.
16. Inspection of the work. Excellent progress of the work is sometimes the result of daily site
inspection in accordance with the contract. The parties or their duly-authorized representatives should
have an access to the construction site purposely for inspection from time to time. If in the course of
inspection, defective materials are discovered by either of the parties, the same should be removed
from the work premises. A coordination or technical meeting is usually conducted to thresh out/clarify
problems which need immediate solution while the construction is in progress.
17. Engineer's authority. The "Engineer" normally refers to "Owners Representative, Resident
Engineer, Works Engineers or the Consultant" is usually given the power to supervise and monitor of
the work. He has the power to stop or continue the work if it is inconsistent with the contract. Also,
he could order the work corrected if found not in accordance with the plans/specifications which would
violate the contract.

DEFINITION OF SPECIFICATIONS
According to Mr. J. Tucker, specification "is a general statement of the work to be performed,
a description of the materials, the quality required, the class of workmanship to be performed, with
definite limits as to what test must be made in order to determine compliance with the requirements
of the contract, or what defects would be sufficient cause for rejection".
Legally speaking, specifications are integral parts of a contract either by incorporation by
reference or physical incorporation. It has been said that sometimes documents have become
voluminous but they have to be integrated with the contract to avoid ambiguity. Without necessarily
attaching the voluminous documents to the contract the same can be incorporated by reference, that
is, making a written document a part of another by referring to the first document in such a way as to
adopt its provisions, obviously making them integral parts, of the second document. Under the concept
of physical incorporation, plans, specifications and other documents are incorporated in the contract
itself in the form of annexes. Thus, document number (1) may be attached as Annex "A", document
number (2) may be incorporated as referring to Annex "B", etc. Purposely this approach is for
simplicity and convenience.
Purposes of specifications. Primarily, the purpose of specifications is to give the contractor
a clear and complete knowledge of the work he is going to perform, the materials he is going to furnish
and to enable the contractor to make an accurate estimate in advance so that he could hand-in a
reasonable bid. Other purposes include: (a) to augment and amplify the plans and the contract by
enumerating and describing in particular detail every item within the scope of its performance; (b) in
competitive bidding to furnish a single definite and established basis of competition; and (c) to serve
as guidelines for engineers, architects, draftsmen, foremen engaged in prosecuting, supervising, or
inspecting the work.
Specification writing is an art. It has been observed that specification writing is not an easy
job. It requires a great amount of experience and knowledge on the broad scope of specification
writing. A specification writer must be a person with broad technical expertise and sufficient know -
how on the different aspects of construction including the various instruction materials to be used. In
most cases the methodology adopted differs depending on the ideas or experience acquired. In other
words, "as ideas and methods change and improve as a result of experience, so specifications should
be changed to keep abreast of the times".
 True economy in specification. In specification writing, true economy must be the primary
factor. To achieve this, the engineer has to devise a specification "designed to set t he contractors
requirement at the engineer's intent". Purposely, the engineer writes his specification to fit not 'the
honest and reputable contractor but to fit the dishonest and crooked contractor. Admittedly, an
engineer may be obliged to let the work to the crooked, and wishes to secure all possible hold upon
him. Thus, if the specification leaves the engineer unlimited discretion as to accepting the work, the
engineer feels that he could better control the sharp contractor who wanted to take unfair advantage of
every loophole.
Qualifications of a specification writer. As discussed earlier, specification writing is an art
which requires maturity, practical experience, and acquisition of new ideas. He must know latest or
modern methods and materials, which should be injected in the specification. Also, he should acquire
broad engineering background to; be able to comprehend present and future technological advances.
In other words, if possible, he should have an advanced training in the branch of engineering he would
like to excel. Although an engineer is not a lawyer; it is suggested that he should acquire at least some
knowledge of law because this is very significant in specification writing. It must be noted that
specification is an integral part of a construction contract.
Engineer's task: To prevent litigation. The engineer should always keep in mind that in the
preparation of specification, his primary task is to avoid litigation. It must be observed that prosecuting
a lawsuit is very expensive and time consuming. Thus, the engineer as writer must prepare a
specification in a manner that does not create ambiguities which may lead to different interpretations.
Otherwise, lawsuit will inevitably follow. Engineers and contractors unanimously agree that these
lawsuits are just products of hasty and ill-prepared contracts and specifications. As a remedy therefore,
the qualified engineer-writer must exercise prudence in the preparation and writing of specifications.
Essential requisites to be considered in preparing specifications. In the preparation and
writing of specifications, the following points must be considered:
1. Technical adequacy. It is required that specification should embrace: (a) the general
provisions; and (b) the technical sections. The general provisions relate to legal and administrative
matters, such as interpretation, liabilities, responsibilities, rights etc. Under technical sections, the
specification writer must know the materials involved, their physical and chemical characteristi cs,
their peculiar suitability and adaptabilities. Also, he must know every step of construction procedures
including the safeguard to be imposed in such procedures. In other words, the engineer -writer should
have acquired extensive technical knowledge in every phase of construction work.
2. Definiteness and Certainty. A common fault. in specification writing is indefiniteness of
description; perhaps due to the fact that the engineer lacks sufficient knowledge on the work or
materials he is attempting to describe. Admittedly, there are evils which result from the use of
ambiguous and uncertain words. Firstly, ambiguities in a specification render it impossible for any
contractor to make an intelligent bid because he does not know what is required of him. This may be
taken advantage by an unscrupulous contractor for the ambiguity provides him to demand extra
payment or to justify the use of inferior materials. Secondly, ambiguity or indefiniteness renders it
possible to "play favorites" by giving favorite contractors "inside information" as to the real intent'
and meaning of the requirements. Thirdly, it may serve to "brand" the engineer as ignorant of the basic
requirements which will give the "crooked" contractor a chance to bluff and bulldoze his way into a
further easing up or lowering of the standards or quality of workmanship.
To achieve clarity and definiteness in writing specification, the following basic rules are
suggested:
a. Avoid long and cumbersome sentences. Each sentence should express one thought and one only.
b. Never attempt to cover more than one item, requirement or stipulation in a single clause or
paragraph. If what was described is the size and character of the stone, it is advisable to segregate
them under different headings, such as: 1) size of stone; 2) character of the stone.
c. Avoid verbosity and repetitious use of synonyms such as "the material shall be dense, compact,
durable, and stable".
d. Avoid the use of synonyms where repetition of the same word will add to the clarity of meaning.
e. Avoid conflicts, uncertainty and confusion by carefully outlining the set of the specifications before
being placed in final form.
f. Avoid the use of any word or phrase whose meaning is not absolutely clear. Example: The use in a
specification of the term "holiday" meaning bare or uncovered spot-coined by an old-time painter
should be avoided.
g. Avoid ambiguity by defining completely all terms. Example: Thirty days may mean "thirty working
days".
h. Avoid any attempt to "show off" or to be "unduly original" in style and expression. Adopt the
methods of expression which have been tested by time and commonly used by brothers in the
profession.
3. Just and equitable in application and purpose. Any specification should. be just, fair and
reasonable. It must not be discriminatory to the disadvantage of one of the contractors. In other words,
it should not play favorites. Admittedly, this unscrupulous practice is patently a violation of the rules
of fair play, and plain decency.
4. Economical in its operation. Economy in operation must be considered in preparing
specification. The engineer as agent of the owner should exert his utmost efforts to protect the interest
of the latter. To this end, the following are the methods of introducing economy in a set of
specifications, to wit: (a) by eliminating extravagant or unnecessarily exacting requirements, without
however sacrificing quality and (b) by removing hazard and uncertainty whenever possible, such as
"specification guaranties" which would be advantageous to the successful bidder-contractor.
5. Legally enforceable with a minimum of friction anti misunderstanding. Any
specification prepared with due regard to legal requirements may seldom be rendered voidable or
unenforceable. This is the reason why a specification writer should have at least a minimum of "legal"
background. However, if there is any ambiguity in the specification provisions, the rules on
interpretation discussed in the chapter, "Law on Contracts" shall be consulted.

SEPARATE DOCUMENTS INCORPORATED BY REFERENCE

In addition to specifications proper and supplemental specifications, there are other separate
documents that are incorporated by reference. Among them are: a) Advertisement for bids; b)
Instructions to bidders; c) Proposal; d) Standard specifications; e) Plans; f) Contract proper; and g)
Performance bond.
Advertisement for bids. In the world of construction business, advertisement for bids is a
procedure whereby the proposed letting or public bidding is brought to the attention of prospective
bidders and interested parties such as contractors and manufacturers. This is usually published in
newspapers of general circulation and/or in the .internet for the information of all parties interested.
Legally, the requirement of publication is a statutory mandate especially if what is being advertised is
a government project; amount of the Approved Budget Cost (ABC) and the classification of the
contractor. Also, the publication is one of the voluminous documents permanently included in the
contract document proper.
Advertisement for bids should state, inter alia, the following: a) the time and place for
receiving bids; b) the particular party, firm, corporation or public body by whom they are to be
received; c) the character and extent of the work; d) the location of plans and specifications so that
they may be examined by prospective bidders; e) the party or official to whom the request for bidding
plans and specifications should be addressed; f) charges for plans, specification and proposal forms;
g) data as to prequalification of bidders; h) other data necessary to ,guide prospective bidders and
interested parties. (Appendix "E")
Instructions to bidders. These are set of instructions designed to guide prospective bidders
and interested parties in the preparation of the requirements affecting the submission of proposals and
bids, without which interested parties may not make and submit intelligent bid or l owest calculated
responsive bid. Instructions to bidders include the following: a) a description of the work; b) time and
place of receiving bids; c) instructions on receiving proposals; d) information regarding the proposal
guaranty required; e) information regarding the qualifications of bidders: f) information on the type
and amount of guaranty required; g) the right of the owner to reject proposals; and h) other information
necessary to guide bidders so that the latter could submit intelligent bids. (Appendix "G")
Proposal. Taking the "instructions to bidders" as guidelines, a prospective bidder may now
make a proposal in the form of a "formal offer" or Letter Of Intent (LOI) to perform the work at the
price he quotes. A proposal may include the following: a) the names of all the persons or parties
making the proposal; b) the proposal is made without collusion; c) the bidder has carefully examined
all the plans and specifications and that he submits his proposal in accordance therewith. (Appendix
"F")
Standard specifications. This particular document is composed of: a) General provisions; and
b) Technical section. Briefly discussed, general provisions are concerned with legal relationships and
responsibilities, and all other matters relating to administrative and legal import. Technical section, on
the other hand, is concerned with the provisions on: a) testing and selection of the needed materials;
b) the prosecution of the construction itself: and c) requirements necessary for the completion of the
work. (Appendices "D" & "D-1")
Plans. They take the form of drawings, reproduction of drawings, details of construction,
Sketches, and others submitted by the contractor
Contract proper. It is the official document of agreement signed by the contracting parties.
This has been discussed earlier. (Appendices "H", "I", "J", & "K")
Performance bond. A performance bond or completion bond is given to insure public
authority that the contract once awarded will be completed as awarded within fixed period of time.
Similarly, it guarantees that contractor will perform contract and guarantees against breach of contract.
It may be in cash, manager/cashier's check, bank draft, irrevocable Letter of Credit, hank guarantee,
surety on GSIS Bonds. (Appendix "G" no. 8)