25 May 2006

Memorandum No. SSC-06-027

To: All Deans, Direcotrs, Heads of Units

Subject: Revised Guidelines for the Implementation of 
 Infrastructure Projects by Administration/Pakyaw Contracts

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In conformity with the rules, and regulations set by the Government 
 Procurement Policy Board (GPPB), the University of the Philippines 
 hereby adopts the following procedures for implementing infrastructure 
 projects by administration/pakyaw contract:

1.Projects by administration/pakyaw contracts are composed of two (2) 
 components: the procurement of materials, and procurement of labor.

2. The maximum amount of the project that may be implemented by the 
 administration/pakyaw contract shall be TWO HUNDRED THOUSAND PESOS 
 (200,000.00). This amount includes both labor and material costs.

3. Any unit that decides to implement a project (with available funding) by
 administration/pakyaw contract must first request the approval thereof by 
 the Chancellor. The request should also name the person designated as 
 Project Facilitator who shall be responsible for the coordination of 
 the procurement of materials and labor. The request should be accompanied 
 by the following documentary requirements:

a. Detailed plans prepared by the Office of the Campus Architect (OCA) 
 (or prepared by any licensed building professional and approved by the OCA);

b. Detailed estimates showing labor and materials costs prepared by the OCA 
 (or prepared by any licensed building professional and approved by the OCA)

c. A manpower schedule prepared by the OCA (or prepared by any licensed building
 professional and approved by the OCA) showing the approximate number of personnel 
 needed to execute the project.

4. Upon approval by the Chancellor, the implementing unit shall procure the materials 
 and labor needed for the project.

a. The materials shall be procured through public bidding, through the Supply and 
 Property Management Office (SPMO). However, when the project is recognized/approved 
 as “emergency” or “urgent” by the Chancellor, “ Shopping” may be resorted to by 
 directly requesting the submission of at least three (3) price quotations from 
 suppliers of known qualifications provided that the total materials cost of the 
 entire project shall not exceed Fifty Thousand Pesos (50,000).

b. For the labor component, the implementing unit has two options: it may request 
 the Campus Maintenance Office (CMO) to provide the personnel needed for the project, 
 or it may procure labor through the Pakyaw contracting system.


Pakyaw works are awarded through competitive selection from at least three (3) 
 Pakyaw Groups participating. The competitive selection shall be done on a 
 “per-output” basis, through the solicitation of cost quotations. The awardee 
 of Pakyaw Contract shall be determined based on the lowest lump sum cost, within 
 the required period.

Pakyaw labor is drawn from the informal sector and shall not be a regular or 
 licensed contractor or organized by and/or under the management of a regular 
 or licensed contractor. It is composed of semi-skilled workers. A Pakyaw Group 
 is headed by a Group Leader who enters into a contract with the University, though 
 the implementing unit. For this purpose, Deans, Directors and Heads of Units are 
 hereby authorized to enter into pakyaw contracts (labor contracts only) involving 
 amounts not exceeding SEVENTY FIVE THOUSAND PESOS (75,000.00).

For projects costing more than One Hundred Thousand Pesos (100,000.00) for both 
 labor and materials, the Pakyaw Contract should state that retention money equivalent 
 to ten percent (10%) of the billing shall be withheld. The retention money shall 
 cover for cost of repairs of defects discovered within thirty (30) days from date 
 of acceptance of the project, as well as third party liabilities. The retention 
 money shall be due for release only after the expiration of the thirty (30) day 
 period and after the defects, if any, have been corrected.

5. Upon completion of the project, the implementing unit shall request the OCA to 
 (1) inspect the same and ascertain compliance with the approved plans and specifications, 
 and to (2) certify that the Pakyaw Group has satisfactorily completed the works 
 contracted under the Pakyaw contract.

6. Upon obtaining the necessary certifications, the implementing unit prepares 
 the necessary documents to effect payment to the Pakyaw Group.

The authority given to the Deans, Directors, and Heads of Units under these 
 guidelines notwithstanding, procurement by all units shall still be subject to 
 existing accounting and auditing rules and regulations.

For your guidance.
 
SERGIO S. CAO
Chancellor