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LETTER OF INSTRUCTIONS
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LETTER OF INSTRUCTIONS NO. 763 -
DIRECTING COST REDUCTION IN THE HIGHWAYS PROGRAM |
The Minister of Economic Planning
The Minister of the Budget
The Chairman, Commission on Audit
The Chief, Presidential Management Staff
WHEREAS, the highways program is among the most significant programs of the national government, in terms of magnitude and priority;
WHEREAS, the ravages of typhoon "Kading" and anticipated increases in oil price constitute unforeseen demands on government coffers;
WHEREAS, it is necessary to institute a more aggressive program of cost reduction in the highways program, to ensure that priority projects are implemented within available funding;
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, do hereby Order and Instruct:
1.
A Committee on Standard Cost for Road and Bridge
Construction is hereby created, with the following composition:
Executive Director, Presidential Management Staff, Chairman, and as
Members, the Minister of Public Highways, the Minister of the Budget
and the Chairman, Commission on Audit.
The Committee shall be assisted
by a Technical Group consisting of representatives designated by the
agencies represented on the Committee.
2. The
Committee shall submit to the President, cost analyses of each major
highways project and recommendations on standard cost applicable to
each of the various types of road and bridge construction. In its work,
the Committee shall assess actual costs of projects implemented and the
details of costs estimates or computations made in support of
construction bids awards.
3. The
Committee shall submit its initial Report and recommendation to the
President on or before November 30, 1978, including initial standard
cost estimates that shall apply to road and bridge contracts awarded
subsequent to that date. The initial standard cost estimates shall be
at least seven per cent (7%) lower than the most recent government
estimates on roads and bridges construction projects approved as of the
date of these Instructions. Contracts awarded between the date least
seven per cent (7%) lower than government estimates approved following
present procedure.
4. The
Committee shall review and recommend improvements in the existing
standards and guidelines on the evaluation and approval of Contract
Price Adjustments and Change Orders, with the aim of minimizing
increases in costs arising out of these sources.
5. In
coordination with the Commission on Audit, the Minister of the Budget
shall develop a project accounting system for the Ministry of Public
Highways and its Regional and District Offices which shall record
actual cost information on highways projects.
6. No
contractor shall be allowed to undertake projects "at his own risk" or
in the absence of budgetary allotments released for the specific
projects. It shall be understood that contracts approved by the Office
of the President are subject to the availability of funds actually
released.
7. Advice of
Allotment and Cash Disbursement Ceilings issued by the Ministry of the
Budget for specifically identified projects shall not be diverted to
any other project/Region except as may be authorized under the
provisions of P.D. No. 1177.
Done in the City of Manila, this 8th day of November, in the year of Our Lord, nineteen hundred and seventy-eight.
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