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Proposal Contractual Conditions

Chapter 3 – Contractual Conditions

3.1 General

This proposal is subject to the conclusion of a mutually satisfactory agreement defining the rights and obligations of the parties.

3.2 Responsibilities

To ensure the completion of the SERVICES within the given performance period, the CLIENT shall, immediately upon DOZON’s receipt of the Notice to Proceed with the work from the CLIENT, be responsible for the following:

  1. Providing DOZON with full information and data as to the project requirements.
  2. Providing DOZON with all available documents of the PROJECT and pertinent data, drawings/plans, reports, maps and other relevant information required for the performance of the SERVICES.
  3. Furnishing to the personnel of DOZON concerned with the PROJECT the necessary letters of authorization, clearances, permits, passes and other papers to enable them to have free access within the jurisdiction of the PROJECT.
  4. Designating the representative of the CLIENT duly authorized to deal with DOZON with respect to the PROJECT and the SERVICES.

3.3. Changes

Should the CLIENT make changes in the SERVICES to be performed, or in the basic data requirements furnished, and if such changes cause an increase or decrease in the costs, an equitable cost adjustment shall be made and DOZON shall be compensated accordingly.  Any delay or change in the schedule of the PROJECT having an impact on the cost and/or performance period of the SERVICES shall be deemed changed and shall be subject for separate compensation.

3.4   Responsibilities of DOZON

DOZON warrants that the SERVICES shall be performed by qualified personnel with skill, care and diligence and in compliance with the rules of engineering practice.  In the event that the SERVICES do not meet the terms of compliance set above, DOZON shall, at no cost to the CLIENT, rectify the deficient part of the SERVICES, if feasible, or otherwise indemnify the CLIENT for resulting damages  DOZON’s liability in this consequence shall be limited damages up to the amount received as compensation for the SERVICES directly related to this Agreement, and in all respects exclude any such liabilities relating to consequential damages, force majeure, and acts beyond DOZON’s direct control.

3.5    Termination

The AGREEMENT to be concluded between the parties may be terminated before completion of the SERVICES by either party with or without cause, but prior written notice of such termination shall be given to the other party thirty (30) days in advance.  Should such a termination be necessary, DOZON shall be fully compensated for the part of the SERVICES already performed.

In the event that after the start of the PROJECT, the CLIENT decides to terminate, abandon or shelve the PROJECT or its construction for an undetermined time, DOZON will be compensated for the SERVICES rendered from the start of the contract until pertinent papers and/or construction documents have been accomplished and turned over to the CLIENT which will take two (2) months after DOZON is informed of the termination of such PROJECT activities.

In case of any legal suit under the AGREEMENT, venue shall be at the proper courts of Manila, to the exclusion of all other venues.

3.6    Liability

DOZON shall not have any liability for loss of anticipated profits, loss of reason of PROJECT shutdown, increased expense of operation, claims by the customers of the CLIENT or by other third parties, loss of use of capital or revenue, damage to property, or for any consequential loss or damages.

The total liability of DOZON shall not exceed the contract value of the part of the SERVICES which gives rise to the claim(s).

3.7    Statement of Probable Construction Cost

Any statement of probable construction cost or any preliminary cost estimates, submitted by DOZON are accurate only up to a certain degree.  DOZON has no control over the fluctuating costs of labor and materials, or the many factors that go into competitive bidding, and DOZON shall neither guarantee nor be responsible for the resulting final project construction cost.

3.8    Measurements

Weights, measurements and dimensions shall be recorded in SI units.

3.9    Language

The official project language will be the English language.

Excerpt from the Proposal for the Mechanical Engineering Design for PAL Fuel Tank Farm in Batangas City
By: Jose I. Hizon Jr., Carlos E. Zapanta and Melvin Panganiban

Management Proposal

NCRFW Institutional Strengthening Project (NCRFW ISP) Phase II

Project Description:

The NCRFW ISP II is the second phase of partnership between CIDA and NCRFW.  The second phase of the project was re-oriented to focus on achieving an “institutionalized enabling environment in NCRFW and selected partners for gender responsive policy, planning, budgeting, implementation, monitoring and evaluation”.  Simply put, this means transforming government and its major processes to systematically respond to women’s needs and gender concerns.  In the long-term, government programs should reach and benefit women equally with men and improve their lives.  The strategy is called gender mainstreaming.

The project supports NCRFW itself and its work with a wide range of partners.  These include agencies and broad responsibilities throughout government (four oversight agencies, three statistical agencies and the legislature) and selected other agencies (four line agencies, seven sub-national government units and training partners).

The project was scheduled to conclude by June 2001. Given that it took longer than anticipated to develop effective working relationships and good project proposals with partners, NCRFW has been granted two extensions, the first one up to March 2002 and a second extension up to March 2004

Project Goal:

To support the full participation and integration of women in all aspects of Philippine national development by enhancing the planning and implementation capacity of NCRFW and all other key units tasked to carry out gender mainstreaming in government.

Project Purpose:

To build leadership, systems, capacity and skills in NCRFW and its partners to lead and guide the operationalization of existing government policy on gender equality;

To mainstream gender in the structures, functions, processes and systems of key government institutions, priority line agencies, selected local government units and resource networks.

Financial Proposal

Chapter 1- Compensation

DOZON shall be compensated for the performance of the services by a lump sum fee amounting to PESOS:  ONE MILLION EIGHT HUNDRED NINETY ONE THOUSAND THREE HUNDRED & 00/00 (Pph 1,891,300.00) only with the following breakdown:

-    Design of Fuel Tank, Pumping and Piping – Php 774,300.00
-    Design of Fire Protection Systems – Php 816,800.00
-    Design of Ventilation and Air Conditioning Systems – Php 300,200.00

Total – Php 1,891,300.00

Please note that all fees presented herewith are inclusive of the 10% Value Added Tax (VAT).

Chapter 2- Commercial Provisions

2.1 Terms of Payment

Payment for the services shall be made under normal existing and acceptable practice detailed as follows:

2.1.2 Detailed Mechanical Engineering Design Services
Four (4) Months Performance Period  including Conceptual Design Stage

40% of the total cost of services as acceptance fee upon receipt by DOZON of a written Notice to Proceed with the work from the client – Php 756,520.00

40% of the total cost of services upon submission of the preliminary design and plans – Php 756,520.00

20% of the total cost of services upon submission of the final design and plans, technical specifications, bill of quantities, and design computations – Php 378,260.00

Method of Invoicing and Payment

DOZON will submit invoices in accordance with this payment schedule.  The client will arrange for payments in respect of all fees due to DOZON within fifteen (15) days after submission of invoices.

2.3 Services and Expenses Covered

The price quoted in the Financial Proposal covers the cost for the services and related expenses in connection with the implementation of the scope of services within the specified project schedule as outlined in the Technical Proposal

2.4 Price Escalation

All quotations on this Financial Proposal do not include a provision for escalation beyond this date.

From: Proposal for the Mechanical Engineering Design for PAL Fuel Tank Farm in Batangas City
By: Jose I. Hizon Jr., Carlos E. Zapanta and Melvin Panganiban

Methodology for the Proposed Services

Proposal for the Mechanical Engineering Design for PAL Fuel Tank Farm in Batangas City
By: Jose I. Hizon Jr., Carlos E. Zapanta and Melvin Panganiban

Approach and Methodology in Undertaking the Proposed Services

Scope of Works

DOZON’s first priority is to evaluate the existing condition.  This will comprise of assigning a reconnaissance team who will be responsible for the collection of all data and pertinent information relevant to the project.  This will also include verification of any existing and/or proposed development in the vicinity of the area to determine the availability of power and water supply, telecommunications and drainage system and other facilities.


  1. Ensure the designs are in accordance with applicable codes, regulations and ordinances.
  2. Finalize the Basis of Design and brief to enable the preparation of full design drawings.
  3. Finalize the design drawings for the works, taking due consideration of the requirements of each design discipline.
  4. Prepare technical specifications for the works, based upon sound engineering practice and cognizance of local requirements and methods.
  5. Prepare and submit final construction drawings and technical specifications.
  6. Prepare Bill of Quantities based on the final design suitable for procuring of materials.
  7. Attend design meeting/presentations as requested by the CLIENT.

Design of fuel tank

This includes determination of the optimum numbers, capacities, dimensions, spacing and layout of fuel tanks and auxiliary piping.  Design shall be done in accordance with he latest applicable local codes and internationally recognized standards.  Several schemes shall be considered, studied and evaluated to arrive at the optimum system design.

Design of fuel loading and unloading piping facility

Upon completion fuel tank design and upon finalization of site development and marine berth, design of associated fuel loading/unloading piping between marine berth, fuel tank farm and truck loading shed shall then be made.  Design shall be done in accordance with the latest applicable local codes and internationally recognized standards.

Design of fire protection system for the fuel tank farm and marine berth

Upon owner’s approval of the fuel tank and pipe layouts and upon finalization of site development plan and marine berth, design of fire protection system shall be made  This includes design of fire hydrant system for entire facility, design of foam system for fuel tank farm and marine dock, design of water spray for fuel tanks exposure protection.  Likewise, design shall be done in accordance with the latest applicable local codes and internationally recognized standards.

Design of fire protection, ventilation and/or air conditioning system for ancillary structures

Upon owner’s approval of the architectural concept of the administration building, laboratory, employees’ quarters and other ancillary structure, design of fire protection, ventilation and/or air conditioning system for these structures shall then be made based on the latest applicable building codes.


1.    Major Service Requirements

a.    Study of existing site facilities and utilities
b.    Coordination with the architects and other engineering consultants
c.    Space allocation for fuel tank farm, equipment rooms, and fire storage tank
d.    Equipment layout
e.    Equipment selection including pumps, air conditioning units, etc.

2.    Cost estimate: review concept against budget for conformity
3.    Outline design criteria
4.    Finalized electrical site distribution routing and sub-station design
5.    Finalized air conditioning, ventilation, fuel piping, and fire protection plan, tank farm layout, equipment layout, equipment schedule, schematic line diagrams for ducting and piping

Engineering Support During Construction

  1. Coordinate closely with the CLIENT and other disciplines involved in the construction to ensure strict compliance of the construction with the design plans and specifications.
  2. Assist the CLIENT and the contractor in the interpretation of the design plans and specifications.
  3. Organize and lead job site meetings and others which may be required by the CLIENT.
  4. Review and approve all shop drawings, catalogues, and samples prepared by the contractors to ensure compatibility with design and specification requirements.

Sample Technical Proposal

Proposal for the Mechanical Engineering Design for PAL Fuel Tank Farm in Batangas City
By: Jose I. Hizon Jr., Carlos E. Zapanta and Melvin Panganiban

Part 1 Technical Proposal

Chapter 1 – Project Understanding

1.1    The Project

Philippine Airlines intends to develop the remaining part of the 60 hectare land located at Pinamucan, Batanga City, Province of Batangas.  The first part was develop as Himmel Industries, a chemical storage farm.  From the site inspection conducted last September 24, 2001 and the subsequent technical meeting with Philippines Airlines representatives led by Mr. Elvis Yao, it is anticipated that the Proposed Philippine Airline Aviation Fuel Tank Farm shall be provided with the following amenities features:

  • tanks with a total capacity of sixty (60) million liters of aviation fuel oil.
  • support facilities such as administration building, workshop, laboratory, substation and emergency generator set, elevated water tank, pump house, foam house, dormitory, recreation building, outdoor basketball and lawn tennis courts, guardhouse and helipad
  • four (4) loading truck sheds
  • outdoor and covered parking areas for visitors and employees
  • slop tank for initial discharge prior to storage to the fuel tanks
  • deep well water supply
  • lighting for the site
  • oil separator prior to discharge of oil waste
  • loading arm for the connection of vessel
  • new marine berth for the loading and unloading of fuel oil from the fuel tankers to the slop tank if the existing berth is not capable of accommodating the fuel tankers.

As envisioned to supply its own aircraft aviation fuel requirement, including that of Air Philippines, a Philippine Airlines has invited Trans-Asia (Philippines), Inc. to submit a Technical and Financial Proposal for the Detailed Architectural and Engineering Design and Project Construction Management Services for the above mentioned project.  Trans-Asia invited their mechanical designer, DOZON Engineering and Construction Services to submit proposal for the detailed mechanical engineering design for fuel tank, fuel pump/piping facilities, fire protection, ventilation and air conditioning system.

Cost Analysis of Comparative Analysis of Physico-Chemical Characteristics

Product Cost

The following data shows the prices of identified fuel oil

Bunker Fuel = 14.2617 php/liter
CME  = 70 php/liter

Cost per liter of Bunker Oil with 20% CME

1 liter = 1000 ml
1000 ml – 200 ml = 800 ml
800 ml (0.0142617 php/ml) = 12.55 php
200 ml (0.07 php/ml) = 14.00 php
Total Cost = 26.55 php

Cost per liter of Bunker Oil with 25% CME

1 liter = 1000 ml
1000 ml – 250 ml = 750 ml
750 ml (0.0142617 php/ml) = 10.70 php
250 ml (0.07 php/ml) = 17.50 php
Total Cost = 28.20 php

Evaluation and Benefits of the Project

The study will serve as a platform in providing technical support the widespread and efficient use of bio-diesel/bunker blended fuel.  Promoting the widespread use of bio-fuel blend will improve our environment while reducing dependence on foreign oil, stretching our fossil fuel reserves and providing value added markets for our coconut industry.

This sample cost analysis is taken from the project study entitled, “Comparative Analysis of Physico-Chemical Characteristics between 20% and 25% CME Blend by Volume on Bunker Fuel and the Effect of Exhaust Gas Emission” by: Kristian G. Barario, Rhio C. Dimakiling, Orley G. Fadriquel and Manuel Robles.

Introduction for the Project Proposal Study

The Philippines is poised to join other rapidly industrializing nations of the world.  This impending process also brings with it the spectra of more pollution and environmental degradation.  Depreciating air quality is impairs the health and welfare of a large proportions of the population, in particular that of the 20  million residents in Metro Manila its surrounding air shed.

The concentration of several dangerous pollutants has reached critical levels that are well above those that commonly affect human health.  The primary causes of air pollution come from emissions from industrial processes and combustion of fuels in power plants.  Close to 3,000 industries and commercial establishments located within Metro Manila have expanded rapidly.  Annual estimates of emission show that 116,000 tons of PM (particulate matter) and 39,000 tons of Sulfur Oxide (SOx) are being produced every year.  Studies indicated total Suspended Particulates (TSP10), exceeds national ambient air quality standards, which are comparable to WHO guidelines.  Such great number of emission creates impact on public health where road users someone prone to chest ailments, children with high blood lead levels and poor are most adversely affected.  If not addressed, unfavorable effects of air pollution will significantly wear down the gains of social and economic development.

The government interventions are still obviously inadequate and needs intensified judging from monitoring data registered for the period.  Air quality must be improved through the reduction of air pollution, enhancing the fuel quality and promoting the use of alternative and clean fuel.

This sample introduction is taken from the project proposal entitled,  “Comparative Analysis of Physico-Chemical Characteristics between 20% and 25% CME Blend by Volume on Bunker Fuel and the Effect of Exhaust Gas Emission” by: Kristian G. Barario, Rhio C. Dimakiling, Orley G. Fadriquel and Manuel Robles.


The study used bunker fuel mixed with 25 percent of CME to be run in to a water tube boiler with a maximum pressure of 10 kg/cm2.  By means of a flue gas analyzer to be inserted in to the exhaust of the boiler, the elements contained by the exhaust gas will be recorded.  There are two parts of the project; (a) physico – chemical characterization of potential viable blends; (b) emission testing using identified test blend.

In Physico-chemical characterization there is blending of 20% and 25% CME by volume on the controlled samples of bunker fuel.

Sample formulations were done with different proportions by mixing bunker fuel with coconut methyl ester CME.

a)    Bunker fuel with 20% CME
b)    Bunker fuel with 25% CME

In emission testing, exhaust gas sample will be taken in the stack during burning of pure diesel fuel or bunker fuel as a base line data while the boiler pressure and fuel temperature is at 4 kg/cm2 and 85 degree centigrade, then the next exhaust gas sample will be taken in burning CME-IDO/bunker fuel blends.  A bunker fuel should be firs tested to be the base line data.

This sample methodology is taken from the project proposal entitled,  “Comparative Analysis of Physico-Chemical Characteristics between 20% and 25% CME Blend by Volume on Bunker Fuel and the Effect of Exhaust Gas Emission” by: Kristian G. Barario, Rhio C. Dimakiling, Orley G. Fadriquel and Manuel Robles.

Review of Related Literature

Countries depended on imported fossils fuels, like the Philippines, feel the pinch caused by the rising cost of crude oil and petroleum excise duties.  Add to that, 70% of mineral oil deposits are located in politically unstable areas.

The mounting pressure from environment groups for cleaner air also gives more urgency for the concerned agencies look for ways to make alternative fuel commercially viable.  Especially since its raw materials could be locally sourced. Coconut bio-fuel advocates have stressed that coconut methyl este (CME) is the most viable as transport fuels compared to compressed natural gases and Alco diesel.

Coconut Methyl Ester is the most practical of the alternative fuels because is easy to make and easy to apply and is biogradable.  The use of fuel such as coconut methyl ester significantly stabilizes carbon dioxide emission and prevents its increase because carbon dioxide is locked into a closed circuit.  Since coconut methyl ester is plant origin, it produces carbon dioxide when it and it goes back to the plant, therefore, it has no global effects on global warming. Both the environment and health concerns will benefit because fuel blends with CME thereby, reducing particulate matters.  Thus the black exhaust gas that it emits can cause diseases.  It has been proven that plant base fuel when burned produces carbon neutral gas.

Air is the source we breathe.  Air supplies us with oxygen which is essential for our bodies to live.  Air is 99.9 nitrogen, oxygen, water vapor and inert gas.  Human actions can release substances into the air thus causing harmful for humans, plants, and animals.  Several main kinds of pollution include acid rain, smog, the greenhouse effect and “holes” in the ozone layer.  Each of these harmful problems has serious implications to our health and the environment.  One kind of air pollution is the release of particles into the air from burning fuel for energy.  Diesel smoke is one of a good example of this particular matter.  The particles are very small pieces of matter measuring about 2.5 microns or about 0.0001 inches.  This kind of pollution is referred to as “black carbon” pollution.  The exhaust from – burning fuels in automobiles, homes, and industries is a major source of pollution in the air.  The release of noxious gases is another type of air pollution, such as carbon monoxide (CO), sulfur dioxide (SoX), Nitrogen Oxide (NoX),  Particulate matter (PM), and chemical vapors.  These can take chemical reactions once they are in the atmosphere forming smog and acid rain.  Air pollution is also inside our homes, offices, and schools.  Some of these pollutants can be created by indoor activities such as smoking and cooking.  In some countries like the United States, they spend about 80-90% of their time inside the buildings so exposure to indoor pollutants can seriously be harmful.

Air pollution can affect our health in many ways.  Human beings are affected by air pollution in different ways.  People are much more sensitive to pollutants.  Young children and elderly people often suffer more from the effects of air pollution.  Individuals with health problems such as asthma, heart and lung disease may also suffer more when the air is polluted.

This sample review of related literature is taken from the project proposal entitled,  “Comparative Analysis of Physico-Chemical Characteristics between 20% and 25% CME Blend by Volume on Bunker Fuel and the Effect of Exhaust Gas Emission” by: Kristian G. Barario, Rhio C. Dimakiling, Orley G. Fadriquel and Manuel Robles.

Background of the Study

The air of the future is the air we breathe today.  It is our source of life, tomorrow’s generation depends on it.  Air is composed of 78.084 Nitrogen, 20.946 Oxygen, 0.934 Argon, 0.033 Carbon Dioxide, 0.003 rare gases (all are in mole %).  The breakdown of air composition, water vapor and inert gases, cause it to lose its purity.

Air pollution is everyone’s burden.  Not only have human beings experienced the effect it brings.  But different groups of individuals are likewise, affected by air pollution in different ways.  Some individuals are much more sensitive to pollutants than others.  Young children and elderly people often suffer more from the effects of air pollution.  People with health problems such as asthma, heart and lung diseases may also suffer more when the air is polluted.  The pollutants coming from different sources affect primarily our health.  Particulate Matter (PM) a type of pollutant composed of particles found in the air, including dust, soot, smoke and liquid droplets can be suspended in the air for long periods of time.  Some particles are large dark enough to be seen as soot or smoke.  This may cause a wide variety of impacts on health and environment.  Some of the health effects occur in the respiratory system, which results to difficulty in breathing, aggravated asthma, chronic bronchitis or even premature death.  PM also causes the reduction of visibility.  Even the water people drink can be exposed to the particles carried over long distances by wind.

A colorless, odorless gas formed when carbon in fuel is not burned completely is another common pollutant, popularly known as Carbon Monoxide (CO).  Found in the motor vehicle exhaust and in metal and chemical manufacturing industries it contributes more than 85-95% of all CO emissions nationwide.

This sample background of study is excerpt from the project proposal entitled,  “Comparative Analysis of Physico-Chemical Characteristics between 20% and 25% CME Blend by Volume on Bunker Fuel and the Effect of Exhaust Gas Emission” by: Kristian G. Barario, Rhio C. Dimakiling, Orley G. Fadriquel and Manuel Robles