IV. COMPENSATION
For the services rendered under this Contract, NFA hereby agrees:
1. To pay the CONTRACTOR a Straight Milling Fee (SMF) of ____________ per bag of 50 kilograms rice output. Under this scheme, all rice and by-products recoveries shall accrue to the NFA.
2. To pay the CONTRACTOR in kind (PIK). Under this scheme all rice recoveries in excess of the Guaranteed Milling Recovery (GMR) as stated in paragraph I of this Contract and all by-products shall accrue to the CONTRACTOR.
IMPORTANT: Cancel mode of payment not applicable. Only one mode of payment shall be allowed for the contract per miller.
V. BOND:
To guarantee the faithful performance of all the terms and conditions of this agreement the CONTRACTOR shall file a bond which shall be in the form acceptable to NFA.
Such bond shall be equivalent to one hundred percent (100%) of the book value of the 6-day palay input capacity of the CONTRACTOR's mill on a 12-hour per day operation including its containers (sacks containing the palay) and the commensurate number of empty sacks issued for rice recoveries plus 10% allowance. The bond shall answer for the shortages/losses, expenses and/or incidental differential cost that NFA may incur in the application of the provisions of this contract, including damages, penalties, attorney's fees and cost of suit. The bond shall not be released by NFA until such time that the CONTRACTOR has been cleared by NFA management of its obligations.
VI. PROVISIONS COVERING SUBSTANDARD DELIVERIES,
1. If, through no fault of NFA the milled rice delivered does not conform with the required milling quality/specification, NFA shall accept the deliveries but shall subject the CONTRACTOR to a penalty equivalent to FIFTY CENTAVOS (P0.50) PER KILOGRAM of sub-standard rice delivered. HOWEVER, if from the substandard rice so delivered it is clearly apparent to NFA that the palay form was substituted with newly harvested palay or palay with inferior quality, the CONTRACTOR shall automatically be deemed in default under Paragraph VIII hereunder.
2. The CONTRACTOR shall not be subject to payment of the foregoing penalty if it is proven that the palay issued to the CONTRACTOR is of such inferior quality that the agreed specification/milling degree could not be attained and if written advise to this effect is given to NFA upon commencement of milling and duly received by NFA. Should the CONTRACTOR fail to submit the aforementioned written advise, this exemption shall not apply.
VII. DELAYED DELIVERIES
The CONTRACTOR shall be considered in delay if, without written jusitfication, he delivers all or a part of the milled rice, by-products, used/unused empty sacks from the 9th day to the 11th day reckoned from the date of the last WSI of a particular AI/batch under Par III sub-par 8 hereof. In this case, CONTRACTOR shall pay a penalty for delay computed at 1/10th of 1% of the book value of the undelivered stocks/sacks per day of delay.
VIII. DEFAULT:
1. The CONTRACTOR shall be considered in default upon the occurrence of any of the following incidents:
a) If the rice delivered are sub-standard and it is clearly apparent to NFA that its palay form was changed/substituted with newly harvested palay or palay of inferior quality:
b) If there is a change in the type/condition of sacks returned;
c) If the CONTRACTOR failed to deliver the stocks within the period allowed him;
d) If on any day after the issuance of stocks, no NFA stocks are in the ricemill and the CONTRACTOR has not made any delivery in whole or in part;
e) In cases of deliveries covered by ATD, if the truck/stocks do not arrive within the agreed travel time without written advise to NFA issuing warehouse and without justifiable reasons.
2. Upon the occurrence of any of the foregoing events of default, the CONTRACTOR shall, at the option of the NFA:
a) Pay the cost of the remaining undelivered recoveries and the sacks based on book value plus interest in accordance with the rate determined by the Bankers Association of the Philippines at the time of payment; OR
b) Restitute the undelivered stocks/sacks by delivering rice or palay or MTS plus pay interest at the rate pegged by the BAP at the time of payment, such interest to be paid in kind (palay or rice as the case may be):
i. If restitution shall be in rice form, the rice should be in accordance with the specification required of the stocks issued him and in such quantity that should be equivalent to the recoveries of the palay issued him plus the corresponding interest.
ii. If restitution shall be in palay form, such palay should be of the same quality as that issued to him and in such quantity that should be equivalent to the quantity issued him plus the corresponding interest.
IX. PROVISIONS APPLICABLE TO DELIVERIES COVERED BY ATD:
In cases where the NFA requires the CONTRACTOR to deliver the milled rice to a warehouse outside of the region, the foregoing provisions of this contract together with the following shall apply:
1. Should NFA operations require, CONTRACTOR agrees and shall undertake to deliver the milled rice to a warehouse outside the region. For this purpose, the NFA shall issue the ATD the contents of which with respect to the milling degree and specification, and number of bags shall be final and conclusive. Weight of the stocks shall be final at the receiving warehouse after actual weighing.
In case of descrepancy in the classification and/or milling degree of the stocks which were covered by ATD as against the stocks received at the designated receiving warehouse, the NFA shall investigate the matter, applying the existing applicable SOP, without, however, prejudice to filing the necessary legal actions available to it to protect its interest.
2. NFA shall shoulder the hauling expenses to be incurred from the millsite to the final receiving warehouse at approved NFA rate. Prior to the departure of the truck from the point of origin, however, the NFA and the CONTRACTOR shall agree on the number of days of travel time.
3. While in transit, the provision of Par VIII Sub Par 1e hereof shall apply and all losses, damages that may be incurred on the stocks still under the custody of the CONTRACTOR shall be for his account.
4. Counting of the delivery period under Par. III Sub par 8 hereof shall be suspended from date of ATD to date of issue of WSR by the receiving warehouse except, however, when the truck/stocks does not arrive at the receiving warehouse within a reasonable period depending upon the distance between the issuing warehouse and the receiving warehouse for no justifiable reason and without written advise to the issuing warehouse. In this case, however, the counting of the delivery period shall not stop.
5. NFA shall not be liable for any additional fees or charges whatsoever in case the stocks could not be immediately received and documented by the receiving warehouse and the truck is thus forced to wait its turnfor unloading. Such waiting time shall be for CONTRACTOR's account.
6. Upon arrival of CONTRACTOR's truck within the premises of the NFA designated receiving warehouse, the driver shall notify the NFA representative of the same. The truck driver shall not remove/transfer the truck or the stocks from the NFA premises unless and until the stocks have been duly received and documented by the receiving warehouse through the issuance of the WSR.
7. Solely for the purpose of issuance of another batch of stocks for milling, the ATD shall be considered as the supporting document for the provisional liquidation of the stocks. Further, the ATD shall be without prejudice to the results of the milling report.
8. The CONTRACTOR shall submit a provisional liquidation report of all deliveries made pursuant to the ATD. Upon receipt of the provisional liquidation report, the NFA issuing warehouse may issue palay stocks for milling.
9. Under no circumstances shall NFA issue another batch of stocks if the CONTRACTOR has one batch under provisional liquidation.
X. SPECIAL PROVISIONS:
1. CONTRACTOR shall be considered as trustee of the palay and/or rice and by-products and empty sacks and shall hold the same in trust from the time the CONTRACTOR acknowledges the receipt of palay and/or rice and by-products and empty sacks until such time that all palay and/or rice and by-products and empty sacks shall have been fully delivered to and accepted by the NFA.
2. It is understood that time is of the essence of this Contract and in case of failure of the CONTRACTOR to comply with the terms and conditions set forth. CONTRACTOR shall be held liable in accordance with existing laws and decreees if the fault is attributable to him.
3. In case the CONTRACTOR has any outstanding obligations with the NFA arising from this Contract or from any other contract or transactions, the latter shall have the right to retain 100% of the money value of whatever receivables CONTRACTOR may have from NFA and apply the same by way of compensation for the obligations.
4. In case of litigation arising from this contract, the CONTRACTOR agrees to pay liquidated damages in the amount of not less than P10,000.00 plus attorney's fees and cost of suit.
5. The NFA does not warrant continuous milling during the effectivity of this contract.
6. The basis for the examination of accountability of CONTRACTOR shall be the palay and empty sacks issued.
XI. VENUE:
Any action that may arise under this Contract shall be filed in the competent court of Quezon City or elsewhere at the option of NFA.
XII. DURATION CLAUSE:
___________________________________ personally appeared this _____________________
day of ______________________, 19___.
NAME RES. CERT. DATE/PLACE
_____________________ _________________ ______________________
_____________________ _________________ ______________________
_____________________ _________________ ______________________
_____________________ _________________ ______________________
known to me to be the same persons who executed the foregoing Contract of Palay Milling consisting of __________ (___) pages including this page on which the acknowledgement is written, signed by the parties and their instrumental witnesses on each and every page hereof and acknowledged the same to be their free and voluntary act and deed as well as the entities represented.
NOTARY PUBLIC
Doc. No. _______
Page No. _______
Book No. _______
Series of 19 ___
RENEWAL OF PALAY MILLING CONTRACT
KNOW ALL MEN BY THESE PRESENTS
WHEREAS, on _________________________________________________________,
___________________________________________________ entered into a Palay Milling Contract with the National Food Authority (NFA) represented by its Regional Director, ___________
which was acknowledged before __________________________________, a Notary Public for and in __________________________, entered in his/her Notarial Registry as Doc. No. _______, Book No. _________, Page No. ____________, Series of 19 ____.
WHEREAS, under the aforementioned Palay Milling Contract, the contract shall expire on _______________________________- and the parties hereto hereby agree to renew the contract for the period from ____________________ to _____________________ under the same terms and conditions thereof:
NOW, THEREFORE, for and in consideration of the foregoing premises, the parties hereto hereby agree to renew the aforementioned Contract of Palay Milling under the following terms and conditions:
1. That this renewal contract shall be from _________________ to _______________;
2. That the actual milling by the contractor, however, shall be for the period from ______
________________ to _________________________ depending upon the requirements of NFA;
3. That contractor undertakes to secure the indorsement from the Bonding Insurance Company covering this renewal;
4. That this Renewal Contract shall form an integral part of the original Palay Milling Contract;
5. That all terms and conditions in the original contract not inconsistent hereto shall remain valid, binding and subsisting upon the parties.
IN WITNESS WHEREOF, the parties have hereunto set their signatures this _____ day of _____________________, 19___ at _____________________, Philippines.
NATIONAL FOOD AUTHORITY
_______________________ ____________________________
Regional Director (Contractor)
SIGNED IN THE PRESENCE OF :
_______________________ ____________________________
Provincial Manager
Annex B
ILLUSTRATION ON HOW TO COMPUTE THE AMOUNT
OF BOND TO BE POSTED BY A MILLER-CONTRACTOR
Assumptions:
Ricemills' six-day grain input capacity 1,980 bags of 50
on a 12-hour operation kg/bag
Book value of palay P 5.43/kg
Book value of palay container (PFR C60) 7.95/pc
Book value of rice container (PPM C50) 6.95/pc.
GMR 65%
The bond shall be computed as follows:
Book value of palay = 1980 bags x 50 kg x P5.43 P 537,570
Book value of palay container = 1980 bags x P7.95 15,741
Book value of rice container = 1980 bags x 65% x P6.95 8,944.65
---------------------------
P 562,255.65
1) Plus 10% 56,225.57
---------------------------
Total Bond P 618,481.22
===============
ANNEX C
SAMPLE COMPUTATION FOR PAYMENT OF SHORTAGES
IN MILLED STOCKS AND SACKS
The miller failed to deliver the rice recoveries equivalent to the two batches of palay input within the period allowed him, and is therefore considered in default. BAP interest rate is set at 2%/month. Book value of rice at the time of default is P8.91/kg or P445.50/bag.
CASH PAYMENT FOR SHORTAGES, ASSUMING A ONE MONTH DEFAULT
1980 bags x 65% x P445.50 = P573,358.50
Plus 2% interest 11,467.17
--------------------
Cash Payment for Milled Recoveries P584,825.67
--------------------
PLUS: Cash Payment for Shortages in Sacks
PPR C60 = 1980 pcs. x P7.95 P15,741.00
PPM C50 = 1287 pcs. x 6.95 8,944.65
-----------------
24,685.65
Plus 2% interest 493.7l 25,179.36
----------------- ---------------
Total payment for shortages in milled
recoveries and sacks P610,005.03
===========
RESTITUTION IN RICE FORM
P584,825.67
= 1313 bags of rice
445.50
RESTITUTION IN PALAY FORM
1313
-------- = 2020 bags of palay
65%
Shortages in sacks shall also be replaced with sacks of the same specifications issued by NFA or may be paid in cash amounting to P25,179.36.
EXHIBIT A
NATIONAL FOOD AUTHORITY
Province _________________
SURVEY FORM FOR PROSPECTIVE MILLER
Date ________________________________
RICEMILL ___________________________________________________________________
LOCATION __________________________________________________________________
RICEMILL OWNER ____________________________________________________________
TYPE OF MILL _______________________________________________________________
INPUT CAPACITY PER 12 HOUR OPERATION _________________________________TONS
NEAREST NFA WAREHOUSE _________________DISTANCE ______________________KM
PERCENT MILLING RECOVERY:
WELL-MILLED REGULAR MILLED
---------------------- ----------------------------
AVERAGE _____________ ________________
GUARANTEED _____________ ________________
MILLING FEE/BAG OUTPUT _____________ ________________
OTHER TERMS AND CONDITIONS:
________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________
CERTIFIED CORRECT: NOTED:
______________________ _____________________
Ricemill Owner/ Canvasser
Representative
EXHIBIT B
NATIONAL FOOD AUTHORITY
Quezon City
____________________________
Date
RESULT OF LABORATORY ANALYSIS OF MILLING
RICE SAMPLE
------------------------------------------------------------------------------
SOURCE : ______________________________ LOCATION : ____________________
VARIETY : ______________________________ NO. OF BAGS: ____________________
Percent
1. Head Rice .............................................................................................
2. Brokens ...........................................................................................
3. Binlid ...........................................................................................
4. Yellow and Damaged Kernels ..............................................................
5. Chalky and Immature Kernels ..............................................................
6. Paddy (No. per 100 grams) ..................................................................
7. Other varieties ...............................................................................
8. Red Rice ...........................................................................................
9. Foreign Matter ...............................................................................
10. Milling Degree ...............................................................................
11. Moisture Content ...............................................................................
NOTE:
1. Percentage are on weight basis
2. Analysis was based on sample submitted
REMARKS:
___________________________________________________________
___________________________________________________________
___________________________________________________________
___________________________________________________________
Analyzed by :
__________________
Note by:
______________________________
EXHIBIT C
LETTER-AGREEMENT FOR TEST MILLING
DATE : ____________________________________________________
NAME : ____________________________________________________
RICEMILL : ____________________________________________________
ADDRESS : ____________________________________________________
Sir/Madam:
In connection with NFA's system of utilizing private ricemill facilities for the test milling of NFA palay and as a prerequisite to the contract of milling, it would be necessary to familiarize you with the following terms and conditions:
1. Quantity: ________________ bags of palay of fifty (50) kilograms per bag of the ________________variety shall be tested in your mill.
2. Milling Degree _______________________________________________
3. Milling Fee P ___________________ per bag of 50 kilograms net rice output
4. Milling to commence on : ____________________________
Milling to end on : ____________________________
5. Container for finished products and by-products shall be supplied by NFA.
6. The NFA shall shoulder handling expenses incurred from its pile to the carrier (truck) upon withdrawal of palay, and from the carrier (truck) to NFA's pile upon receipt of rice recoveries.
7. The NFA shall shoulder trucking/hauling expenses from the NFA warehouse to the contractor's mill, and from the contractor's mill to designate NFA warehouse.
8. The miller shall be liable for all losses/damages while the stocks are in his custody, exept for losses/damages by fire, typhoon or other natural calamities.
9. NFA and the miller shall designate milling supervisors at the contractor's mill to monitor test milling operations.
If these terms and conditions are acceptable to you, please signify your conformity by signing on the space provided below.
Conforme: Very truly yours,
__________________________ ______________________________
Owner Manager of Ricemill PM/OIC