G.R. No. 191591 - DEPARTMENT OF PUBLIC WORKS AND HIGHWAYS, VS. FOUNDATION SPECIALISTS, INC..

Ruling

accordingly with a copy to the Employer. " [12] The DPWH denied any liability for FSI's claims and asserted that under Sub-Clause 42.2, Part II of the Conditions of Particular Application, FSI bound itself not to claim for damages as a result of any delay when it requested for five (5) extensions. According to the DPWH, the provision reads: Failure to Give Possession "If the contractor suffers delay and/or incurs costs from failure on the part of the Employer to give possession in accordance with the terms of Sub-Clause 42.2, the Engineer, shall, after due consultation with the Employer and the Contractor, determine any extension of time to which the Contractor is entitled under Clause 44, and shall notify the Contractor accordingly, with a copy to the Employer. No amount of such costs shall be added to the contract price ." (Emphasis Supplied) [13] These averments of DPWH, however, were not substantiated by any documentary evidence showing that such provision indeed exists in the Contract. [14] The DPWH also argued that the delays were due to FSI's fault. Based on the final report of the Project Manager, the following were the reasons for the Project's delayed completion: 1) FSI's equipment breakdown for ten (10) months; 2) FSI's insufficient manpower and/or labor problems for thirteen (13) months; 3) insufficient financial support from FSI for seven (7) months; 4) insufficient materials from FSI for eight (8) months; and 5) insufficient fuel for FSI's equipment for two (2) months. Also out of the 39 monthly evaluations made on FSI from January 1993 to March 1996, it registered unsatisfactory performance for 28 months. [15] Ruling of the CIAC In a Decision [16] dated September 1, 2005, the CIAC ruled in favor of FSI. It held that the modified Sub-Clause 42.2 alleged by DPWH was not substantiated with any documentary proof. Hence, DPWH cannot use it to avoid liability for the costs and damages incurred by FSI as a result of the delay in the construction of the Project. Consequently, FSFs money claims were granted except for the Extended Rental Costs for Various Equipment for failure of FSI to present credible and correct computations. The computation submitted by FSI was found grossly erroneous owing to the large discrepancies between it and the data shown in the "Contractor's Field Equipment Report on Site." The CIAC decision disposed, thus: WHEREFORE, judgment is hereby rendered and AWARD made on the monetary claims of [FSI] as follows: 1. Standby Rental Cost for the Rotary Equipment - P 355,582.60 2. Overhead Costs during the periods of delay - 15,379,790.11 3. Extended Rental Costs of various equipment - 4. Interest - 8,876,310.93 5. Attorney's Fees - 300,000.00 ------------------ Total P 24,911,683.64 [DPWH] is hereby directed to pay [FSI] the sum of PESOS TWENTY-FOUR MILLION NINE HUNDRED ELEVEN THOUSAND SIX HUNDRED EIGHTY-THREE and 64/100 (P24,911,683.64) plus the reimbursement of the cost of Arbitration, advanced by [FSI] to the [CIAC] the