1 June 2005

Memorandum No. SSC-05-028

To: All Deans, Head of Units, The Bids and Awards Committee

Subject: Policy on Change Orders for Infrastructure Porjects

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It has come to the attendtion of this Office that a prevailing attitude
 towards savings earned from the difference between contractors' bid
 price and the approved budget for any given project overlooked upon as
 savings of the end-user and is thereafter utilized for change orders or
 request for additional worlks.

This Office would like to correct such miconception by clarifying
 that this difference between bid and budget are savings of the
 University. Thus, the difference automatically reverts to University
 funds as such.

There are situatuions, however, that justify change orders under the
 law. Under the IRR of RA 9184, Annex E paragraph 1, sub-paragraph 3:

"3 An extra Work Order may be issued by the implementing official to
 cover the introduction of new work necessary for the
 completion, improvement or protection of the project which were not
 included as items of work in the original contract, such as, where there
 are subsurface or latent physical conditions at the site differing,
 materially from those indicated in the contract, or where there are duly
 known physical conditions at the site of an unusual nature differing
 materially from those ordinarily encountered and generally recognized as
 inherent in the work or character provided for in the contract."

Effective upon circulation of this Memorandum, therefore, all
 funding requests for change orders and/or additional works on
 infrastructuree projects shall be processed as new requests.

For your information and guidance.

Sergio S. Cao
Chancellor