Contractor shall submit to NIA once a month or for an accomplishment of at least P1.0 million as the case maybe, a statement in a format approved by NIA showing the estimated Contract value of the Works executed and Contractor will, subject to the provisions hereunder, be paid on the Certification of NIA.

1. Retention Money - Monthly or periodic progress payment shall be subject to a retention of ten percent (10%) herein referred to as "the retention money". Said retention shall be based on the total amount due to Contractor and shall be retained from every monthly or periodic progress payments until fifty percent (50%) of the value of the works, as determined by the NIA, are completed. If 50% of the Works have been completed and on schedule, no additional retention shall be made; otherwise 10% retention on all collections shall be continued until the final collection.
2. The total retention money shall be due for release upon final acceptance of the works as provided for in Article GC-60, FINAL INSPECTION, FINAL ACCEPTANCE, FINAL STATEMENT AND FINAL PAYMENT. The contractor may however request for the substitution of the retention money for each progress billing with surety bonds callable on demand of amounts equivalent to the retention money substituted for and acceptable to NIA, provided that the project is on schedule and is satisfactorily undertaken. Otherwise, the ten percent (10%) retention shall be made. Said surety bonds, to be posted in favor of NIA, shall be valid for a duration to be determined by the NIA and will answer for the purpose for which the ten percent (10%) retention is intended, i.e., to cover uncorrected discovered defects and third party liabilities, and after the Contractor has posted a Guarantee Bond issued by the GSIS, pursuant to COA Circular No. 76-112 dated August 30, 1979 to insure the repair of any defects in the completed project within one year from the date of acceptance which are attributable to faulty construction or use or inferior quality materials or non-compliance with the specifications.

The Guarantee Bond, to be secured from the GSIS, in an amount equivalent to ten percent (10%) of the contract price, shall be effective for one year starting from the date of acceptance of the Contract Work.
 

3. Payment - Payment upon each certificate shall be made by NIA within 60 calendar days after the date of delivery of the certificate. In the event the NIA shall fail to pay the certificate within the period stated then NIA shall pay to Contractor interest at the rate of seven percent (7%) per annum upon all overdue payment starting from the expiration of the said 60 calendar days.

1. Modification of Certification - The NIA shall have the right to deduct from the Contractor's progress billing such amount as may be necessary to cover third party liabilities, as well as uncorrected discovered defects in the project.

NIA may, by any certificate, make any correction or modification in any previous certificate which it may have issued and shall have power to withhold such application portion of any certificate if any part of the work are not being carried out to NIA's satisfaction.
 

2. Ownership of Permanent Works - All portions of the Permanent Works (fully completed but not yet accepted by NIA in writing covered by any monthly or periodic progress payment made as herein mentioned) shall thereupon become the property of NIA, but this provision shall not relieve Contractor from the sole responsibility for the maintenance and repair of the Permanent Works upon which payments have been made or as waiving the right of NIA to require the fulfilment of all the terms of this Contract.