PROCUREMENT AND USE OF CEMENT FOR DPWH INFRASTRUCTURE PROJECTS AND OTHER RELATED MATTERS

In the interest of public service and in order to rationalize the
procurement and use of imported cement for DPWH infrastructures
projects, the following guidelines and policies relative thereto are
hereby prescribed for the guidance of all concerned:

1.       DPWH contractors for infrastructure projects may use imported cement instead of domestically produced cement.

2.       As a matter of policy the DPWH does not intervene in the
procurement of cement for use of contractors in their projects.  In the
interest of public service, however, the DPWH may assist contractors in
procuring their cement requirements.  In such cases, the contractors
shall request in writing for assistance from the DPWH implementing
Office concerned.  The DPWH Implementing Office concerned, through the
DPWH Task Force to Oversee the Supply of Portland Cement (c/o The
Director, Bureau of Research and Standards, EDSA, Quezon City), shall
inform the contractors regarding arrangements on the allocation of
imported cement from the Philippine International Corporation
(PHILCEMCOR), or other cement suppliers, provided that the contractors
agree to pay for the cement in accordance with the terms and conditions
prescribed by the supplier.

3.       The written request of contractors for assistance in the
procurement of cement shall contain a manifestation that the cement
being procured thru the DPWH shall be exclusively used for specific DPWH
projects and does not exceed the cement requirements of these specific
projects.

4.       Contractors may likewise request in writing the DPWH to
advance the payment for the cement requirements of their projects using
funds obligated to cover cost of their contracts.  The contractors shall
identify the suppliers; otherwise, the DPWH will source their
requirements from the PITC, the PHILCEMCOR, or other cement suppliers
offering ready stocks and/or lower prices.  In no case will the DPWH pay
for the imported cement from a supplier that is selling cement at price
higher than that stipulated by the PITC for that week as confirmed by
the Department of Trade and Industry (DTI).  This advance payment
facility can be availed of by interested contractors only until 13
November 1990.

5.       The price ceiling for locally produce cement will follow the price ceiling set by the DTI.

6.       For the faithful repayment of the advance payment made by
the DPWH, the contractors concerned shall submit a Surety Bond issued by
a surety company acceptable to the DPWH.

7.       The contractors concerned shall liquidate or refund the
advance payment for cement made by the DPWH through deductions in their
progress billings under a definite repayment schedule mutually agreed
upon by and between DPWH and the contractors.  In case of
termination/rescission of a contract, the advance payment shall be
considered an obligation of the contractor.  In such cases of contract
termination/rescission, DPWH reserves the right to assume or not assume
eventual ownership of unused cement remaining on stock in the project
and its consequent payment or non-payment in the financial liquidation
of the terminated/rescinded project.

8.       To liquidate the advance payment, the amount to be
deducted by DPWH from the contractor’s billings (in case of imported
cement) shall not be higher than the price of cement as derived from the
price index for cement of the National Statistics Office on the date of
the bidding for the project.  For domestic cement however, the amount
to be deducted by DPWH shall be the government price ceiling for
domestic cement at the time of bidding.

9.       The contractors concerned shall be responsible for the
quality of the cement that they use. The DPWH reserves the right to
reject those which do not comply with the prescribed specifications.
Furthermore, the contractors concerned shall be fully responsible for
the proper storage of the cement, including possible damage or loss that
may occur.

10.     In calculating the price escalation to be paid to
contractors whose cement requirements were paid in advance by DPWH under
this Department Order, cement as a component of concrete shall no
longer be escalated.  Thus the factor Ci/Co in the escalation formulas
shall be 1 and the concrete fluctuation factors shall therefore be
modified accordingly.

This Order shall take effect immediately.

Adopted: 10 Sept. 1990

(SGD.) FIORELLO R. ESTUAR
Secretary