NPM 019-2009

Requesting Entity: Liberty Builders Architecture Contractual Project Management

Issues Concern: Advance Payment



Whether Liberty Builders Architecture Contractor Project Management may be entitled to advance payment, in relation to the Calamba Shopping Center Rehabilitation Project it entered into with the city of Calamba, Laguna

[I]t may be inferred from the foregoing (Sec. 4.1, Annex "E", IRR-A) that Liberty may validly request for advance payment provided that an Advance Payment Schedule is included in the Instructions to Bidders and other relevant bidding documents. To reiterate, although the Contract between Liberty and the LGU does not prohibit the filing of request for advance payment, R.A. 9184 similarly, does not provide for its automatic endowment. The IRR-A of R.A. 9184 requires that bidding documents, such as the Instructions to Bidders and the General and Special Conditions of the Contract, contain stipulations providing for the schedule and manner of its payment, for the request to prosper.

Advance payment shall be made only upon the submission to and acceptance by the procuring entity of an irrevocable standby letter of credit of equivalent value from a commercial bank, a bank guarantee or a surety bond callable upon demand, issued by a surety or insurance company duly licensed by the insurance commission, and confirmed by the procuring entity. It shall be repaid by the contractor by deducting fifteen percent (15%) from his periodic progress payments.