Construction Management

“Labor, Work & Payments”

General Conditions

A. Definition of Terms –Section VI-VIII

1. Competent workmen- engineers, superintendents, foremen, mechanics, laborers, or artisans

having adequate abilities and the qualification to function in a designated construction work,
not careless or obstructive in the progress of work;
2. Project supervisor – a licensed engineer or architect who shall represent the contractor and
all directions given to him shall be binding; he has full authority to execute the orders or
directions of the Architect without delay and to order promptly the supply such materials,
tools, plants, equipment, and labor as may be required;
3. Laying out – to plan in detail, prepare and install all stakes, benchmarks, etc. to mark lines
and grades of the work to be done;
4. Inspection (of work) - examining or measuring to verify whether an construction activity,
building component or service conforms to specified requirements[PMBOK Guide, 2004];
5. Defective work – an imperfection or deficiency in a project component where that
component does not meet its requirements or specifications and needs to be either
replaced or repaired[PMBOK Guide, 2004];
6. Change order – requests to expand or reduce the project scope, modify policies, processes,
plans, or procedures, modify costs or budgets or revise schedules; requests for a change can
be direct or indirect, externally or internally initiated, and legally or contractually mandated
or optional, but, only formally documented requested changes are processed and only
approved changes requests are implemented [PMBOK Guide, 2004];
7. Clean-up – keeping the construction site free from accumulations of waste materials or
rubbish caused by the employees or work; at the completion of the work, the contractor
shall:
 remove rubbish
 remove tools, scaffoldings, surplus materials
 remove dirt, stains
 polish woodwork, finishing hardware and metal works

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  wash and polish glazing, marble and tile work
8. Certificate of completion – an attestation by the AOR that work have been substantially
completed and has satisfactorily passed final test of materials prescribed in the contract;
Substantial completion – value of work completed is not less than 98% of the CA and the
remaining unfinished work is of minor nature only;
9. Notice to proceed – instruction to the contractor to commence work;
10. Contract time – the total project duration to complete the works stipulated in the contract
expressed in calendar days, and starts on the 7th day from the receipt of the NTP;
11. Schedule of completion – the planned date(s) for performing work or activities and the
planned dates for meeting milestones the schedule must be presented in a schematic
display of the logical relationships among the project activities, always drawn from left to
right to reflect project work chronology [PMBOK Guide, 2004]; to include the following data:
 Starting and completion dates of each item of work
 Equipment to be used
 Number of men to be employed
 Budget
 Progress rate
12. Extension of time – an increase in the length of contract time, allowed on the following
conditions:
 Owner’s default
 Strikes
 Force majeure
 Pending arbitration
13. Liquidated damages – payment to the Owner for every of delay of the completion of work
by the contractor (failure to complete work within the contract time);
14. Breakdown of work & corresponding value – document showing the value assigned to
each part of the work including allowance for profit and overhead and will be used as basis
for all requests for payment;
15. Request for payment – amount computed from the work completed on all items in the
BWCV, less 10% retention and previous payments, that a contractor may submit to the
Owner periodically;

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 16. Progress billing – request for payment equal to the completed items of work; computation
and progress photographs as supporting documents;
17. Contractor’s obligations – contractor will pay punctually all workmen employed by him for
the project at rates provided by lay; to pay all taxes, materials and equipment (evidences:
signed payroll, receipts, etc...);
18. Correction of work – to replace and re-execute work that failed to conform to the contract;
Retention period – 6 months to one year;
19. Acceptance – the act of formally receiving or acknowledging a building (or portions thereof)
and regarding it as being true, sound, suitable or complete in conformance to contract
specifications[PMBOK Guide, 2004];
20. Retention fee – a portion of a contract payment that is withheld until contract completion
to ensure full performance of the contract terms;
21. Indemnity – a security against damage which exempts the Owner from all losses and all
claims, demands, payments, suits, actions, recoveries, and judgment of every nature and
description brought or recovered against him, by reason of any act or omission of said
Contractor, his agents or employees, in the execution of the work or the guarding of it;
22. Liability – a pecuniary obligation including contingencies or action plan to fulfil this
obligation in accordance with the contract; debts or obligations owed to others;
23. Lien – a charge upon a property or item of work that had been satisfactorily complied
according to contract; claim;
24. Dispute – to call into question an item of work which was deemed as not conforming to
specification; argument between Owner and contractor;
25. Arbitration - the hearing and determination of a case in controversy, i.e. dispute;

B. Enumeration:

1. Requirements before final payment:

a. Certificate of Final Building Occupancy
b. Certificate of Final Inspection of all Utilities (electrical, telephone, sanitary, water, gas,
safety)
c. Original and 3 sets of As-built Drawings
d. 3 copies of Directory of Panel of Boards and list of circuits
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 e. 3 copies of Instructions and Manual for O&M of fixtures and equipment
f. 3 copies of Keying schedule
g. Guarantee bond equal to 30% of the contract price covering a period of one year
after the Final Acceptance

2. Reasons for suspension of work & termination of contract:

a. By the Contractor:
i. Court order or public authority caused the work to be stopped;
ii. AOR fails to act on a Request for Payment within 15 days;
iii. Owner fails to act on a request for payment 15 days after it was certified by
the AOR;
iv. Owner fails to pay the contractor within 30 days after its award;
b. By the Owner:
i. (Contractor) declares bankruptcy;
ii. Contractor’s breach of contract;
iii. Contractor fails to supply proper materials and competent workmen;
iv. Contractor fails to make prompt payment to sub-contractors, workmen and
material suppliers;

3. Owner’s responsibilities:
a. Protection of employees and professionals performing services for the Owner
b. Optional insurance

4. Contractor’s responsibilities;
a. Safety measures
b. Insurance: Liability and Fire
c. Performance and Payment Bonds
d. Guaranty-Warranty

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