Requesting Entity: Gendiesel Philippines Inc. (GPI)
Issues Concern: Computation of Liquidated Damages and Net Amount of Retention Money
Assistance or guidance on the computation of the net amount of retention money approved by the Court of Tax Appeals (CTA) in connection with the GPI's supply, delivery, installation of one (1) generator set with automatic transfer switch (ATS) for the CTA Building II Project.
Section 68 of the revised Implementing Rules and Regulations (IRR) of Republic Act (RA) 9184 provides that the amount of the liquidated damages shall be at least equal to one-tenth of one percent (0.1%) of the cost of the unperformed portion for every day of delay for the procurement of goods, infrastructure projects, and consulting services.
A similar provision is found in Section 3.1 of Annex "D" of the same IRR, which states that "the supplier shall be liable for damages for the delay and shall pay the procuring entity liquidated damages, not by way of penalty, in an amount equal to one-tenth (1/10) of one percent (1%) of the cost of delayed goods scheduled for delivery for everyday of delay until such goods are finally delivered and accepted by the procuring entity concerned.
In line with these provisions, the General Conditions of Contract and Special Conditions of Contract for the project also provide that CTA shall deduct from the contract price the sum equivalent to one tenth (1/10) of one percent of the cost of unperformed portion for every day of delay as liquidated damages.
Based on the foregoing, the basis for the computation of liquidated damages is the cost of the unperformed portion or the cost of the delayed goods scheduled for delivery instead of the actual contract price.