L1: Introduction and Overview of Fundamental
Laws
Branches of Government
1. Executive – headed by the president,
enforces laws
2. Legislative – House of Representatives and
Senate (Congress) – makes the laws
3. Judicial – (through the Supreme Court and
lower courts est. by Congress), aka
judiciary, interprets laws
Laws in CE Profession
Construction Regulatory
 RA 4566 – Contractors’ License Law
An act creating the Philippine Licensing
Board for contractors, prescribing its
powers, duties and functions, providing
funds therefore, and for other purposes.
 PD 1746 – Creating the Construction
Industry Authority of the Philippines (CIAP)
 PD 1167
Developing and regulating the overseas
construction industry, providing incentives
therefore, and for other purposes.
 RA 9184 – Government Procurement Act
An act providing for the modernization,
standardization and regulation of the
procurement activities of the government.
Design and Construction Codes
 PD 1096 – National Building Code
Implementing Rules and Regulations
 PD 1185 – Fire Code of the Philippines
 PD 856 – Code on Sanitation of the
Philippines
Implementing Rules and Regulations
 BP 344 – Accessibility Law
An act to enhance the mobility of disabled
persons by requiring certain buildings,
institutions, establishments and public
utilities to install facilities and other
devices.
REPUBLIC ACT 544
An act to regulate the practice of Civil Engineering in
the Philippines
Article 1
 Services in the form of consultation, design,
preparation of plans, specifications,
estimates, erection, installation and
supervision of the construction of streets,
bridges, highways, etc.
 “Civil Engineer” – a person duly registered
with the Board of Examiners for Civil
Engineers
Article 2
 Board of Examiners for Civil Engineers
Section 3. Composition of Board – referred
to as the Board, composed of a chairman
and two members who shall be appointed
by the Secretary of Public Works and
Communications
Article 3
 Examination and Registration
Section 8. Examination Requirement – all
applicants for registration for the practice
of civil engineering shall be required to pass
a technical examination as hereinafter
provided.
Section 12. Qualifications for examination
(a) Be at least twenty-one years of age
(b) Be a citizen of the Philippines
(c) Be of good reputation and moral
character
(d) Be a graduate of a four-year course in
civil engineering from a school,
institute, college or university
recognized by the Government
L2: Introduction to Ethics
Ethics – study of the characteristics of morals, and
involves the moral choices made by individuals as
they interact with other persons.
Engineering Ethics – rules and standards governing
the conduct of engineers in their roles as
professionals
Ethical Theories Based on Philosophical Scholars
1. Utilitarianism
a. John Stuart Mill (1806-1873)
b. Balance of good and bad
consequences for everyone
affected
c. Actions are good that serve to
promote human well-being
d. Cost-Benefit analysis – application
e. Consideration of most benefit to
the most people outweighs needs
of few individuals
f. Core idea: whether actions are
morally right or wrong depends on
their effects
 g. “maximizes utility”, action that
produces largest amount of good
2. Duty Ethics
a. Immanuel Kant (1724-1804)
b. Deontological (duty-based) –
concerned with what people do,
not with the consequences of their
actions
c. There are duties that should be
performed regardless of whether
these acts do the most good or
not.
3. Rights Ethics
a. John Locke (1632-1704)
b. People have fundamental rights
(life, liberty, property) that others
have a duty to respect
c. The rights set forth by a society are
protected and given the highest
priority
d. Rights are considered to be
ethically correct and valid since a
large or ruling population endorses
them
e. Individuals may also bestow rights
upon others if they have the ability
and resources to do so
4. Virtue Ethics
a. Actions are considered right if they
support good character traits
(virtues) and wrong if they support
bad character traits (vices)
b. Closely tied to personal honor
c. Judges a person by his character
rather than by an action that may
deviate from his normal behavior.
It takes the person’s morals,
reputation and motivation into
account when rating an unusual
and irregular behavior that is
considered unethical.
Code of Ethics
 Framework for ethical judgment for a
professional
 Starting point for ethical decision making
 Express the commitment to ethical conduct
shared by members of a profession
 Defines roles and responsibilities of
professionals
 Primary concern: health and safety
Civil Engineering Code of Ethics in the Philippines
Civil Engineers should uphold and advance the
integrity, honor and dignity of the civil engineering
profession by:
 Using their knowledge and skill for the
enhancement of human welfare and the
environment
 Being honest and impartial and serving
with fidelity the public, their
employers/employees and clients
 Striving to increase the competence and
prestige of the civil engineering profession
 Supporting the professional and technical
societies of their discipline
Fundamental Canons
1. Civil Engineers shall hold paramount the
safety, health and welfare of the public and
shall strive to comply with principles of
sustainable development in the
performance of duties
2. Civil Engineers shall perform services only in
area of their competence
3. Civil Engineers shall issue public statements
only in an objective and truthful manner
4. Civil Engineers shall act in professional
matters for each employer or client as
faithful agents or trustees, and shall avoid
conflict of interest
5. Civil Engineers shall build their professional
reputation on the merit of their services
and shall not compete unfairly with others
6. Civil Engineers shall act in such a manner as
to uphold and enhance the honor, integrity
and dignity of the civil engineering
profession
7. Civil Engineers shall continue their
professional development throughout their
careers, and shall provide opportunities for
the professional development of those civil
engineers under their supervision
Professional Responsibility
 To be given the responsibility for studying,
conceiving, designing, and observing
construction, and assisting in the
programming for operating and
maintaining engineering works
L3: Civil Engineering Profession
 First “Civil Engineer” - Englishman, John
Smeaton 1761
 Philippine Society of Civil Engineers (PSCE)
 1928; Engr. Marcial Kasilag was first. - PRC
Registration Number 1
 August 2, 1935, Act Number 4211 - under-
aged can take boards but can only practice
at 21 years old
 Philippine Association of Civil Engineers
(PACE) (Private); Engr. Enrique Sto. Tomas
Cortes was first president.
 June 17, 1950, Philippine Institute of
Architects passed first law, RA 545 and
PACE passed RA 544, through efforts of
PACE Pres Alberto Guevarra
 1961, Association of Structural Engineers of
the Philippines (ASEP) was founded.
 1971, PACE Pres Engr. Cesar A. Caliwara
exerted effort to merge PACE and PSCE
 June 1973, Marcos issued Presidential
Decree 223 - Professional Regulation
Commission (PRC)
Civil Engineering Process (PDCOR)
 Planning
 Design
 Construction
 Operation/Maintenance
 Rehabilitation
Civil Engineering Specialties (CEGSSH)
 Construction Management/Materials
 Environmental/Energy
 Geotechnical
 Structural
 Surveying/Transportation
 Hydraulics/Water Resources
L4: Introduction to Obligations and Contracts
Obligations
 Art. 1156: Obligation – juridical necessity to
give to, do to, or not to do/
 Arises from:
o Law
o Contracts
o Quasi-contracts
o Acts or omission punished by law
o Quasi-delicts
Element of Obligation
 Active Subject – power to demand the
prestation (oblige/creditor)
 Passive Subject – bound to perform the
prestation (obligor/debtor)
 Prestation or Object – not a thing but a
particular conduct of the debtor
Kinds of Prestation
 To Give – delivery of movable or immovable
thing, to create a real right or for the use of
the recipient or for its simple possession or
in order to return to its owner
 To Do – works or services, whether mental
or physical
 Not To Do – abstaining from some act, “not
to give”, both being negative obligations
By Law
 Obligations derived from law are not
presumed
 Governed by the Law itself
 Agreement of the part is not necessary (e.g.
Tax)
 Not presume. Only expressly provided are
enforceable
By Contract
 Obligations from contracts have that force
of law between the contracting parties and
should be complied in good faith
Contract
 Art. 1305: Contract – meeting of mind
between two persons whereby one bind
himself, with respect to the other, to give
something or to render some service.
 Art. 1306: may establish stipulations,
clauses, terms and conditions… provided
they are not contrary to law, morals, good
customs, public order, or public policy.
 Art. 1308: The contract must bind both
contracting parties; its validity or
compliance cannot be left to the will of one
of them.
Valid Contracts
 Enforceability
 Changes – existing contract can be altered
by mutual agreement
Terms and Conditions of Contracts
 Expressed Terms – written in contract
 Implied Terms – valid conditions which are
not explicitly stated
 Often rely on established customs and
practice
 Obvious terms
Contract Interpretation
 Method of communication
 Rule of Contraproferentem – interpreted
against the party that drafted it
 Read contract
Construction Contract
Major Clauses
 Contracting Parties
 Name and Location of Project
 Contract Duration
 Contract Amount
 Manner/Terms of Payment
o Down payment
o Progress Billing
 Recoupment of Downpayment (Pro-rated to
Progress Billing)
 Retention Money
o Money held by employer/client as
a safeguard against defects which
may develop, and contractor may
fail to remedy
o Either 10% of the works or 5% in
(usually larger) contracts.
Percentage deducted from all
interim payments made to main
contractor
 Liquidated Damages
Contract Violation
Breach of Contract
 When either party fails to comply with their
respective obligations
o Owner’s obligation to pay for work
done
o Contractor’s duty to perform work
o Any other obligation contained in
the contract document either
expressly or implied
 Does not enable injured party to avoid their
own obligations
Remedies for Contract Violation
Damages
 A non-defaulting party is entitled to
damages incurred if it can be established
that:
1. There has been a breach of contract
2. The party has suffered a loss
3. The loss is a result of the breach
 Purpose of damages is to return the injured
part to the position it would be in if the
breach had not occurred i.e., damages are
what is reasonably contemplated or agreed
at the time the contract is formed
Direct Damages
 Losses directly suffered as a result of the
breach
Indirect Damages
 Losses consequential to the breach
 Must have been reasonably foreseeable
when the contract was contemplated
 Liquidated damage clauses must be
genuine estimates of potential losses
 Penalty payments not enforceable
 Liability limiting clauses enforceable
Liquidated Damages
 Price the contractor must pay per day for
working beyond the required completion
dates
 Estimated LD: 1/10 of 1% of amount of
remaining works for every day of delay
beyond the required completion date
L5: Contract Documents and Bidding
Bidding Process
1. Design
a. Scope definition
b. Conceptual design
c. Design approval
d. Construction documentation
2. Bid
a. Bid packages
b. Bid invitation
c. Bid period
d. Contractor selection
3. Construct
a. Project authorization
b. Construction
c. Turnover
d. Owner acceptance
Qualification of Bidders
Pre-qualification documents:
 Information about firm
o Owners
o Organization chart
o Company background
o General office location
 Business license
o Business permits
o SEC/DTI registration documents
o BIR registration
o Contractors license
o SSS/Pag-ibig registration
 Technical capabilities
o Years of experience
o List of projects completed
o List of technical personnel
o List of equipment
o Experience in related projects
 Financial capabilities
o Financial Statements
  Balance sheet and Income o May include the ff:
statements  Name of contractor
o List of accredited suppliers with  Price both in numbers and
credit lines in words
o Bank references with credit lines  Price breakdown for major
Bidding Information trades, which can guide
 Bid documents are sent out to qualified progress payments
bidders  Amount of bonds
 Contents:  Fees for additional work
o Invitation to Bid  Unit prices if quantities are
 Request for pricing, with unclear
assistance of designer or  Key subcontractors
construction manager  Legal status: Single
 Contains: proprietor, Corporation or
 Type Partnership
 Size  Signature of authorized
 Location representative of the firm,
 Bid due date title and date
 Start and Contractual Information
Completion dates  Agreement
 Bonds o Identification of the parties
 Document o Description of project and work
location o Date of start
 Legal o Date of substantial completion
requirements o Liquidated damages
o Instruction to Bidders o Contract sum
 Usually bound in o Progress payments
specification o Interest rate
 Concerned with: o Retainage (retention money)
 Bid due date  General Conditions
o To establish legal responsibilities,
 Instruction about
obligations, authority, and rights of
filling out the
all parties involved
form
 Special Conditions
 Places to indicate
o Sometimes called supplementary
fees for
conditions or special provisions of
additional work
the contract
 Unit prices
o To supplement general conditions
 Location to
and are project-specific
deliver the bid
o Include additional owner
 Method of
requirements such as provisions for
awarding
prevailing wages and additional
contracts
insurance requirements
 Expected dates of
 Sample of Bonds
award and start
-Protects the owner
of project
o Bid bonds
o Bid Forms
 Furnished with bids and
 Document on which the
guarantee that the
bidder submits the price
contractor will enter into a
 Usually prepared by
contract for the price of
designer with blanks left
the bid
to be filled out by the
o Performance bonds
bidder
  Guarantee that contractor o Written description of the quality of
will perform contract with the project
terms of agreement o Materials, equipment, and
 If contractor goes workmanship
bankrupt or otherwise o Types:
cannot complete work,  Design specifications
bonding company  Aka descriptive
becomes liable spec.
o Payment bond  Detailed
 aka labor and material description of
bonds materials,
 assure contractor will pay workmanship,
all bills, thus leaving the installation,
owner unharmed by erection
claims and liens procedures
o Guarantee bond  Performance
 Guarantee that contractor specifications
will guarantee quality of  Lay out expected
work completed within a results, leave
period of one year prior to methods to
release of retention contractor
money to contractor  May be
 Insurance requirements expressed in
-to be purchased by contractor as required terms of
by contract to protect the contractor against Operation
risks during construction period capacity,
o Workers’ compensation Functional
 Covers disability and qualities,
medical treatments for Appearance,
injuries from accidents Finish, Color,
during construction Texture,
o Comprehensive liability Structural
 Provides protection from tolerance
third-party claims  Proprietary specifications
 Covers injury to non-  Open specifications
workers at the site, Bidding Process
damage caused by 1. Qualified Responsive Bidders
construction vehicles, a. Upper Limit: AAE x 120%
damage caused by sub- b. Lower Limit: AAE x 60%
contractors 2. Average Qualified Responsive Bidders
o Contractor’s All Risk (CAR) 3. Approved Agency Estimate (AGE)
 Essentially property a. AGE = (AAE+ ARB)/2
insurance for building 4. Maximum Bid Price
while it is under the a. Whichever is higher AAE or AGE
control of contractor 5. Minimum Bid Price
 Covers losses from fire, a. 70 & of AGE
smoke, water, explosions, 6. Winning Bid Price
vandalism, and theft a. Lowest qualified bidder
Technical Information
Presented in two formats: drawing and specifications
 Technical Specifications
L6: Contract and Obligations – Law on Torts
Tort
 Wrong to another person
 Injury other than a breach of contract for
which recovery of damages is permitted by
the law
 May be committed intentionally or
unintentionally, with or without force
 Liability may arise where “services” are
performed gratuitously
 No contract need exist for Tort liability to
occur
 Concurrent liability: tort liability where
there is contract
Law of Tort
Fundamental Purpose
 To compensate victims of torts
 Not to punish wrongdoers
 A person who by his or her fault causes
damage to another may be held responsible
Types of Torts
1. Trespass
a. Act of knowingly entering another
person’s property without
permission
2. Defamation
a. Intentional false communication,
either written or spoken, that
harms a person’s reputation
b. Libel – written
c. Slander – spoken
3. Nuisance
a. Unreasonable and/or substantial
interference with a person’s use
and enjoyment of her real property
by actions on nearby property.
i. Noise
ii. Dust
iii. Odor
iv. Insects
v. Rodents
b. Public Nuisance – minor crimes
that threaten the welfare of a
community
c. Private Nuisance
4. Deceit
a. Intentional imparting of a false
impression
b. Misrepresentation of fact
5. Negligence
a. Causing harm through negligent
conduct
b. Consist of a failure to follow such a
pattern of behavior, of doing what
a reasonable person would not
have pursued
Principles of Tort
 Plaintiff (Complainant) must establish:
o Defendant owed the plaintiff a
duty of care
o Defendant breached that duty by
his conduct and ought to have
known that damage to the plaintiff
would be reasonably foreseeable
o Defendant’s conduct caused the
damage to plaintiff
o The plaintiff has the burden of
proof
L7: RA 9184 – Government Procurement Reform
Act
 Modernization, standardization and
regulation of the procurement activities of
government and for other purposes
Governing Principles
a. Transparency in the procurement process
and in the implementation of procurement
contracts
b. Competitiveness by extending equal
opportunity
c. Streamline procurement – process shall be
simple and made adaptable to advanced
technology to ensure effectiveness and
efficiency
d. System of accountability where public
officials (directly or indirectly involved in
the process), private parties are
investigated and held liable for their actions
e. Public monitoring of procurement process
and implementation of awarded contracts
Scope and Application
 Apply to procurement of Infrastructure
Projects, Goods, and Consulting Services,
regardless of source of funds, whether local
or foreign, by all branches and
instrumentalities of government
Definition of Terms
 Approved Budget for the Contract (ABC) –
budget for contract duly approved by the
Head of the Procuring Entity
 BAC – Bids and Awards Committee,
established in acc. with Art. V
  Bidding Documents – documents issued by
Procuring Entity as the basis for Bids
 Bid – signed offer or proposal submitted by
a supplier, manufacturer, distributor,
contractor or consultant
 Competitive Bidding – method of
procurement open to participation by any
interested party
 Consulting Services – services for
Infrastructure Projects and other types of
projects or activities of the government
requiring adequate external technical and
professional expertise
 Infrastructure Projects – construction
improvement, rehabilitation, demolition,
repair, restoration or maintenance…
 Procurement – acquisition of Goods,
Consulting Services, and contracting for
Infrastructure Projects by the Procuring
Entity
 Procuring Entity – any branch, department,
office, agency, instrumentality of the
government
Receipt and Opening of Bids
 Bid Security – accompanies bids, serve as a
guarantee that the winning bidder shall
enter into contract with Procuring Entity
within stipulated time and furnish required
performance security. IRR – prescribes
specific amounts and allowable forms of the
Bid Security
 Bid Validity – for Bids and Bid Securities
indicated in Bidding Documents. Duration
shall take into account the time involved in
process of Bid evaluation and award of
contract
 Bid Opening - BAC shall publicly open all
bids at the time, date, and place specified.
Minutes shall be publicly available upon
written request and payment of a specified
fee
Bid Evaluation
 Bid for the Procurement of Goods and
Infrastructure Projects – BAC evaluates
financial components of the bids. Passer
shall be ranked from lowest to highest in
terms of their corresponding calculated
prices. Lowest Calculated Bid.
 Post-qualification – stage where bidder with
Lowest Calculated Bid undergoes
verification and validation whether he has
passed all requirements and conditions as
specified in Bidding Documents. If bidder
fails to comply, post-qualification will be
conducted on bidder with second Lowest
Calculated Bid
 Failure of Bidding
a. No bids are received
b. No bid qualifies as the Lowest
Calculated Responsive Bid
c. Whenever the bidder with lowest
calculated responsive vid refuses,
without justifiable cause to accept the
award of contractor
Award, Implementation and Termination of the
Contract
 Notice and Execution of Award – within 15
days from determination and declaration by
the BAC of the Lowest Calculated
Responsive Bid, and the recommendation
of the award
 Within 10 days from receipt of the Notice of
Award, winning bidder shall formally enter
into contract with Procuring Entity
 Notice to Proceed – shall be issued to
winning bidder not later than 7 days from
date of approval of the contract by the
appropriate authority
 Period of Action on Procurement Activities
– procurement process from opening of
bids up to award of contract shall not
exceed 3 months or a shorter period to be
determined by the procuring entity
Settlement of Disputed
 Arbitration – any and all disputes arising
from the implementation of a contract
covered by this Act shall be submitted to
arbitration in the Philippines according to
RA 876 (Arbitration Law)