ETWB TC(W) No. 50/2002 Contractor Joint Ventures · 2017-01-25 · previous memo ref (019JP-01-4)...

[]

MEMOFrom Secretary for Development To Distribution

Ref (02VVW-01-1) in DEVB(W) 510/83/05 (Attn : )

Tel. No. 3509 8337 Your Ref.

Fax No. dated

Email Fax No.

Date

2521 9682

[email protected]

24 January 2017 Total Pages 2 + Encl

SCT 4 – Contractors’ Joint Venture

Upon review, we have revised the standard SCT 4 promulgated in our previous memo ref (019JP-01-4) in ETWB(W)510/83/05 dated 2.11.2006. Please find at annexes the revised SCT 4 :

(i) SCT 4 for contracts adopting prequalified tendering (Annex 1)

(ii) SCT 4 for contracts not adopting prequalified tendering (Annex 2)

2. The revised SCT 4 shall apply to all public works contracts for which tendersare invited on or after 15 February 2017.

3. Should you have any queries, please contact our Mr Andy LOK, AS(WP)12at 3509 8382 or Ms Emily L F Chan, AS(WP)2 at tel. 3509 8302.

( Edwin WONG ) for Secretary for Development

- 2 -

Distribution

DArch S DCED D of DS DEMS D of Hy DWS

c.c. DAFC DB DEP DFEH DHA D of H D of Lands DLCS D of Plan C for T CE/W, HAD SE/QM and Std., CEDD Sr Quantity Survey/CA2, HD

Internal DLA(W)2 AS(WP)2 AS(WP)12

Annex 1

Standard SCT 4 on Contractors’ Joint Venture

for Contracts Adopting Prequalified Tendering

Page 1 of 2

SCT 4 Contractors' Joint Venture Remarks/Guidelines

(1) Tenders from an incorporated joint venture or

an unincorporated joint venture will not be

considered unless the incorporated joint

venture or the unincorporated joint venture

itself is a prequalified tenderer.

This version of SCT4 should be used for

prequalified tendering.

(2) Where the tenderer is an unincorporated joint

venture it shall, subject to General Conditions

of Tender Clause 25, submit to the

*Engineer/Supervising Officer/Surveyor/

Maintenance Surveyor designate a Letter of

Undertaking in the form set out in Appendix

[ ]# to these Special Conditions of Tender

duly executed by all the participants of the

unincorporated joint venture. Failure to

comply with this sub-clause by an

unincorporated joint venture shall render his

tender invalid.

The percentages of financial participation

of each participant as submitted in the

prequalification application or, if any

revision is proposed, the latest of the

percentages of financial participation as

approved by the Employer shall be used

for technical assessment. Project officers

are reminded of this requirement in

preparing the Marking Scheme for tender

evaluation.

(3) Where the tenderer is an incorporated joint

venture it shall, subject to General

Conditions of Tender Clause 25, submit to

the *Engineer/ Supervising Officer

/Surveyor/ Maintenance Surveyor designate

a Letter of Undertaking in the form set out

in Appendix [ ]## to these Special

Conditions of Tender duly executed by all

the shareholders of the incorporated joint

venture. Failure to comply with this

sub-clause by an incorporated joint venture

tenderer shall render his tender invalid.

* Delete as appropriate.

# The form in Appendix A shall be used

## The form in Appendix B shall be used

Annex 1

Page 2 of 2

SCT 4 Contractors' Joint Venture Remarks/Guidelines

(4) No tenderer is permitted to submit more

than one tender for each contract. For the

purpose of this Clause, a tenderer who

submits a tender on its own behalf and as a

participant or shareholder of a joint venture

or as a participant or shareholder of more

than one joint venture in response to a

tender exercise shall be regarded as having

submitted more than one tender. A

holding company and its subsidiaries are

considered as one and the same tenderer.

The existence of a holding-subsidiary

relationship shall be determined as at the

date set for the close of tender, or if this has

been extended, the extended date, and in

accordance with the provisions in Sections

13 to 15 of the Companies Ordinance (Cap.

622). Tenders submitted from a tenderer on

his own behalf who is found to be in breach

of this sub-clause or from a joint venture or

joint ventures in which any participant or

shareholder is found to be in breach of this

sub-clause shall not be considered.

Letter of Undertaking (for unincorporated joint ventures) Appendix A

Page 1

[Reference: Special Conditions of Tender on Contractors’ joint venture for use in

connection with prequalified tendering]

To : The Government of the Hong Kong Special Administrative Region (“The

Employer”) From : [ ] Date : [ ] Dear Sirs Letter of Undertaking Contract No. [ ] Contract Title : [ ] We refer to the tender ("the tender") submitted to you by [ ] ("the tenderer"), for the above Contract. In consideration of your agreeing to consider the tender we hereby undertake not to make any changes to the percentage participation of each participant as submitted in our prequalification application for the above Contract or, if subsequent to our prequalification application we had submitted application(s) for change of our composition, the latest of our such subsequent application for change of composition which had been approved by the Employer. If changes are necessary for the reasons stated in the Contract, we undertake to notify and to obtain consent from the Employer in accordance with the Contract before these changes are made. This letter of undertaking shall be governed by and construed in accordance with the laws for the time being in force in the Hong Kong Special Administrative Region and we hereby submit to the non-exclusive jurisdiction of the courts of the Hong Kong Special Administrative Region. IN WITNESS WHEREOF this Undertaking has been executed as a deed by the participants of the tenderer on the date first above written.

(a)

#SIGNED, SEALED and DELIVERED by [name of participant] being a participant of the [name of the unincorporated joint venture] in the presence of: ........................................................................ [Name] [Occupation] [Address]

) ) ) ) ) ) ) ) )

[Signature of the participant]1

or

(b) #SIGNED, SEALED and DELIVERED by [name of partner] and [name of partner]3 being the partners of [name of participant] being a participant of the [name of the unincorporated joint venture] in the presence of: ........................................................................ [Name] [Occupation] [Address]

) ) ) ) ) ) ) ) ) ) ) )

[Signature of the individual partner]1 [Signature of the individual partner]1

or

(c) #Executed and delivered as a deed and the COMMON SEAL of [name of participant] being a participant of the [name of the unincorporated joint venture] was affixed in the presence of [ ] its [director(s) or director and secretary or person(s) authorized to sign the Undertaking by its board of directors]2 in the presence of a witness: .......................................................................... [Name] [Occupation] [Address]

) ) ) ) ) ) ) ) ) ) ) ) ) ) ) )

[Signature of the director(s) etc]1

or

L.S

L.S

L.S

Common

Seal

Notes: (for preparation of but not inclusion in the engrossment of this document) (a) For use where the joint venture participant is a sole proprietor. (b) For use where the joint venture participant is a partnership. (c) For use where the joint venture participant is a company incorporated in Hong Kong and executes

the deed with a Common Seal. (d) For use where the joint venture participant is a company incorporated in Hong Kong and executes

the deed without a Common Seal. (e) For use where the joint venture participant executes the deed under a power of attorney. # Select the appropriate form or forms and REPEAT FOR EACH PARTICIPANT of the

unincorporated joint venture. 1 The italic parts are not part of the execution clause. They are for guidance or information only. 2 Select the correct expression for use. If none is applicable, insert an appropriate expression. 3 The deed shall be executed by all the partners. Add more names if required.

(d) #Executed and delivered as a deed by [name of participant] being a participant of the [name of the unincorporated joint venture] acting through [ ] (its sole director) or [ ] and [ ] (its directors) or [ ] (its director) and [ ] (its company secretary)2 in the presence of a witness: .......................................................................... [Name] [Occupation] [Address]

) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) )


or

(e) #SIGNED, SEALED and DELIVERED by [name of participant] being a participant of the [name of the unincorporated joint venture] by [ ] his/her/its2 attorney under power of attorney dated [ ] in the presence of: ......................................................................... [Name] [Occupation] [Address]

) ) ) ) ) ) ) ) ) ) )

[Signature of the attorney]1

L.S

Letter of Undertaking (for incorporated joint ventures) Appendix B

Page 1

[Reference: Special Conditions of Tender on Contractors’ joint venture for use in

connection with prequalified tendering]


Employer”) From : [ ] Date : [ ] Dear Sirs Letter of Undertaking Joint Venture Guarantee for Contract No. [ ] Contract Title : [ ] We refer to the tender ("the tender") submitted to you by [ ] ("the tenderer"), for the above Contract. In consideration of your agreeing to consider the tender we hereby irrevocably and unconditionally undertake to duly execute and provide to you the joint venture guarantee in the form as set out in Appendix [ ] to the Special Conditions of Contract within 14 days of your letter of acceptance of the tender (if the tender is indeed accepted by you). We hereby irrevocably and unconditionally agree to indemnify you against all losses, damages, costs and expenses you may incur or suffer as a result of our failing to abide by our above undertaking. We agree that we shall be jointly and severally liable for our obligations under this undertaking and all references to “we” shall take effect as references to all of us or any of us and the words “us” and “our” shall be construed accordingly. We hereby represent that, with respect to our obligations, liabilities or any other matter under or arising out of or in connection with this letter of undertaking, neither we nor any of our properties or assets have, in the Hong Kong Special Administrative Region, or in any other jurisdiction, any right of immunity on the grounds of sovereignty or otherwise from any legal action, suit or proceedings; from the giving of relief in any legal action, suit or proceedings; from set-off or counterclaim; from the jurisdiction of any court, in the Hong Kong Special Administrative Region or in any other jurisdiction; from service of process upon us or any agent; from attachment prior to judgment in order to obtain satisfaction thereof; from attachment after judgment or from execution or any other process for the endorsement of any judgment or other legal process in any jurisdiction; and to the extent that we are or become entitled to any immunity as aforesaid, in the Hong Kong Special Administrative Region or in any other jurisdiction with respect to our obligations, liabilities or any other matter under or arising out of or in connection with this letter of undertaking, we hereby and will irrevocably and unconditionally waive and agree not to plead or claim any such immunity. We further consent to the giving of any relief in any legal action, suit or proceeding and to execution and or any other form of process for the enforcement of any judgment against us or our assets.

We acknowledge that we comprise all the shareholders of [name of the tenderer]. This letter of undertaking shall be applicable whether the tender accepted by you comprises the conforming or any alternative tender or with any amendments modification or change thereto agreed between the tenderer and yourself. We hereby further undertake not to make any changes to the percentage participation of each shareholder as submitted in our prequalification application for the above Contract or, if subsequent to our prequalification application we had submitted application(s) for change of our composition, the latest of our such subsequent application for change of composition which had been approved by the Employer. If changes are necessary for the reasons stated in the Contract, we undertake to notify and to obtain prior written consent from the Employer in accordance with the Contract before these changes are made. This letter of undertaking shall be governed by and construed in accordance with the laws for the time being in force in the Hong Kong Special Administrative Region and we hereby submit to the non-exclusive jurisdiction of the courts of the Hong Kong Special Administrative Region and irrevocably appoint the tenderer to act as our duly appointed agent for the service of process at the address shown in the tender. IN WITNESS WHEREOF this Undertaking has been executed as a deed by the shareholders of the tenderer on the date first above written.

(a) #Executed and delivered as a deed and the COMMON SEAL of [name of the shareholder] was affixed in the presence of [ ] its [director(s) or director and secretary or person(s) authorized to sign the Undertaking by its board of directors]2

in the presence of a witness: ................................................................................

) ) ) ) ) ) ) ) ) ) ) ) )


[Name] [Occupation] [Address]

or

Common

Seal

(b) #Executed and delivered as a deed by [name of the shareholder] acting through [ ] (its sole director) or [ ] and [ ] (its directors) or [ ] (its director) and [ ] (its company secretary)2

in the presence of a witness: .......................................................................... [Name] [Occupation] [Address]

) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) )


or

(c) #SIGNED, SEALED AND DELIVERED by [name of the shareholder] by [ ] his/her/its3 attorney under power of attorney dated [ ] in the presence of:

.......................................................................... [Name] [Occupation] [Address]

) ))))) ) ) ) ) )

[Signature of the attorney] 1

Note: (a) For use where the shareholder of the incorporated joint venture is a company incorporated

in Hong Kong and executes the deed with a Common Seal. (b) For use where the shareholder of the incorporated joint venture is a company incorporated

in Hong Kong and executes the deed without a Common Seal. (c) For use where the shareholder of the incorporated joint venture executes the deed under a

power of attorney. # Delete the inappropriate attestation clause options and REPEAT FOR EACH

SHAREHOLDER of the incorporated joint venture. Delete the guidance wording, lettering and numbers against the remaining appropriate option.

1 The italic parts are not part of the execution clause. They are for guidance or information only.

2 Select the correct expression for use. If none is applicable, insert an appropriate expression. 3 Delete as appropriate. All Guidance Notes above, in bold lettering, should be deleted when preparing this document for signature.

L.S.

Annex 2

Page 1 of 12

Standard SCT 4 for on Contractors’ Joint Venture

for Contracts not adopting Prequalified Tendering

Clause Remarks/Guidelines

SCT 4 Contractors' Joint Venture

Tenders from an incorporated joint venture or an

unincorporated joint venture will not be considered

unless the incorporated joint venture or the

unincorporated joint venture is itself separately listed

on its own account in [to be inserted1] on the List of

Approved Contractors for Public Works/separately

listed on its own account on the List of Approved

Suppliers of Materials and Specialist Contractors for

Public Works [to be inserted2].

This SCT clause is extracted from

Appendix A2 in ETWB TCW No.

50/2002. It should be used if joint

venture is not allowed to tender.

Note:(1)

Insert the appropriate Category(ies),

Group(s), and/or status of Contractors on

the List of Approved Contractors for

Public Works that are permitted to tender

for this Contract. It should be the same

as that stipulated in the Gazette Notice or

Tender Notice for invitation to tender for

this Contract.

Note:(2)

Insert the appropriate Category(ies),

Group(s), Classes(es) and/or status of

Contractors on the List of Approved

Suppliers of Materials and Specialist

Contractors for Public Works that are

permitted to tender for this Contract. It

should be the same as that stipulated in

the Gazette Notice or Tender Notice for

invitation to tender for this Contract.

[OR]

SCT 4 Contractors' Joint Venture

(1) Tenderers may submit their tender in the form

of a joint venture provided:

Ref.: ETWB TCW No. 50/2002,

ETWB memos ref. (019JP-01-4) in

ETWB(W) 510/83/05 dated 2.11.2006,

ref. (01656-01-03) in ETWB(W)

510/83/05 dated 4.8.2006,

ref. (02VFJ-01-2) in DEVB(W)

(a) the participants or shareholders in the

joint venture collectively satisfy the

qualification requirements; and

Annex 2

Page 2 of 12


(b) each participant or shareholder in the

joint venture is technically capable for

that part of the Works it undertakes.

510/83/05 dated 30.11.2016 and

ref. (02VVW-01-1) in DEVB(W)

510/83/05 dated 24.1.2017

ETWB TCW No. 50/2002 stipulates that

joint ventures shall be permitted to tender

for contracts covered by the WTO GPA.

For contracts not covered by the WTO

GPA, departments may decide whether or

not to allow joint ventures to tender.

This SCT Clause is to be used for tenders

that allow joint ventures to participate.

For tenders adopting open tendering

procedures, project officers are advised to

note the necessary amendments and to

stipulate criteria on evaluation of

technical capabilities or to consider using

Stage 1 Screening. Please note that the

amendments in curly brackets (or square

brackets as the case may be) are only

applicable to tenders with an estimated

contract value equal to or greater than

HK$2 billion.

(2) Where the tenderer is an unincorporated joint

venture, it must:

(a) subject to General Conditions of Tender

Clause 21 nominate a lead participant

whose proposed value of work in the

joint venture pursuant to sub-clause (4)

below shall be more than that of any

other participant in the joint venture

[The lead participant must be a

confirmed* Group [ ] contractor in the

List of Approved Contractors for Public

Works for Buildings*, Port Works*,

Roads and Drainage*, Site Formation*

and*/or* Waterworks* (see Note 1).]

{There must be at least one participant

The submission required under sub-clause

(2)(a) of this Clause is an essential

requirement and shall be mentioned in the

GCT 21 on essential requirements.

Note 1: Insert the appropriate description

in the event that the contract is invited

from the List of Approved Suppliers of

Materials and Specialist Contractors for

Public Works. [Words in square brackets

are not applicable to open tendering.]


Annex 2

Page 3 of 12


in the joint venture who is a confirmed*

Group [ ] contractor in the List of

Approved Contractors for Public Works

for Buildings*, Port Works*, Roads and

Drainage*, Site Formation* and*/or*

Waterworks* (see Note 1). The total

percentage participation of participants

who are contractors included in the List

of Approved Contractors for Public

Works for Buildings*, Port Works*,


and*/or* Waterworks* (see Note 1)

shall be at least 40% pursuant to

sub-clause (4) below. The percentage

participation of the lead participant who

is not a contractor included in the List of

Approved Contractors for Public Works

for Buildings*, Port Works*, Roads and


Waterworks* (see Note 1) shall be no

more than 60%.**}; and

(b) subject to General Conditions of Tender

Clause 25, submit to the

*Engineer/Architect/Surveyor/

Maintenance Surveyor designate a

Letter of Undertaking in the form set out

in Appendix# to these Special

Conditions of Tender duly executed by

all the participants of the unincorporated

joint venture.

Failure to comply with this sub-clause by an

unincorporated joint venture shall render his

tender invalid.

# The form in Appendix B2 in ETWB

memo of 4.8.2006 shall be used.

**The words in curly brackets are not

applicable to open tendering and are only



HK$2 billion and shall replace the words

in square brackets.

Annex 2

Page 4 of 12


(3) Where the tenderer is an incorporated joint

venture it shall, subject to General

Conditions of Tender Clause 25, submit to

the *Engineer/Architect/Surveyor/

Maintenance Surveyor designate a Letter of

Undertaking in the form set out in

Appendix# to these Special Conditions of

Tender duly executed by all the

shareholders of the incorporated joint

venture. [There must be at least one

shareholder who is a confirmed* Group [ ]

contractor in the List of Approved

Contractors for Public Works for

Buildings*, Port Works*, Roads and


Waterworks* (see Note 1) and the proposed

value of work of that shareholder

(hereinafter referred to as the major

shareholder) in the joint venture pursuant to

sub-clause (4) below shall be more than that

of any other shareholder in the joint

venture##.]{There must be at least one

shareholder who is a confirmed* Group [ ]

contractor in the List of Approved

Contractors for Public Works for



Waterworks* (see Note 1). The shareholder

who undertakes the largest share of

proposed value of work shall be referred to

as the major shareholder. The total

percentage participation of shareholders

who are contractors included in the List of

Approved Contractors for Public Works for



Waterworks* (see Note 1) shall be at least

40% pursuant to sub-clause (4) below.

* Delete as appropriate. # The form in Appendix B1 in ETWB

memo dated 4.8.2006 shall be used.

## For open tendering, the words in

square brackets are not applicable and

shall be amended as appropriate for

compatibility with sub-clause (4)

regarding the determination of the major

shareholder.

**The words in curly brackets are only



HK$2 billion and shall replace the words

in square brackets. [For open tendering,

the words in curly brackets are not

applicable and shall be amended as

appropriate for compatibility with

sub-clause (4) regarding the determination

of the major shareholder.]

Annex 2

Page 5 of 12


The percentage participation of the major

shareholder who is not a contractor included

in the List of Approved Contractors for

Public Works for Buildings*, Port Works*,


and*/or* Waterworks* (see Note 1) shall be

no more than 60%. **} Failure to comply

with this sub-clause by an incorporated joint

venture tenderer shall render his tender

invalid.

(4)A Where the tenderer is a joint venture (whether

incorporated or unincorporated), the tenderer

shall, subject to General Conditions of Tender

Clause 21, provide with its tender details of

the proposed value (and portion)*** of work

to be undertaken by each participant or

shareholder in the joint venture. The

percentage participation of each participant or

shareholder in a joint venture shall be

calculated by reference to the proposed value

of (his portion of work against the corrected

tender sum. Any portions of work not

specifically undertaken by any participants or

shareholders are)** deemed to be undertaken

by the lead participant or the major

shareholder. [Where a joint venture

participant or shareholder undertakes more

than one category of works given in the List

of Approved Contractors for Public Works or

the List of Approved Suppliers of Materials

and Specialist Contractors for Public Works,


to be undertaken by such participant or


sub-divided into each category of work he

undertakes (see Note 2).] If the total

percentage participation of all the participants

or shareholders in a joint venture is less than

Sub-clause (4)A should be used for tenders

using the formula approach for tender

evaluation.

The submissions on the value of work

proposed to be undertaken by each

participant or shareholder required under

sub-clause (4)A of this Clause are essential

requirements and shall be mentioned in the


** For term contracts without a tender

sum, the estimated total contract

expenditure stated in the Notes to

Tenderers/Form of Tender as

appropriate should be used.

Replace the bracketed words with

“work against the estimated total

expenditure stated in the tender

documents. Any work not

specifically undertaken by any

participants or shareholders is”

Departments should in such a case

state the estimated total expenditure

instead of the estimated annual

contract expenditure in the Notes to


Annex 2

Page 6 of 12


100%, the difference shall be attributed to the

lead participant nominated or the major

shareholder# determined under sub-clauses

(2) and (3) of this SCT as the case may be

such that the total percentage participation of

the participants or shareholders shall be

100%. If the total percentage participation

of the participants or shareholders in a joint

venture is more than 100%, the percentage

participation of each participant or

shareholder shall be reduced proportionately


the participants or shareholders shall add up

to 100%.

[If the proposed value of work to be

undertaken by a participant or shareholder

in a joint venture submitted by the tenderer

does not tally with the proposed portion of

work to be undertaken by him, the

*Engineer/Architect/Surveyor/Maintenance

Surveyor designate may seek clarification

from the tenderer and if the difference in

value remain irreconcilable after

clarification, the tender shall not be

considered further. (See Note 3)]

appropriate.

*** For term contracts without a tender sum, delete the bracketed words “and portion”.

# The reference to major shareholder

is not applicable to open tendering.

Note 2: The words in square brackets are

not needed for open tendering.

Note 3: The words in square brackets are

not needed for term contracts without a

tender sum.

(4)B Where the tenderer is a joint venture (whether

incorporated or unincorporated), the tenderer

shall, subject to General Conditions of Tender

Clause 21, provide with its tender details of

the proposed percentage participation,

proposed value (and portion)*** of work to

be undertaken by each participant or

shareholder in the joint venture. The

proposed value of work to be undertaken by

each participant or shareholder in the joint

venture shall be submitted in the “Tender

Price Documents” required under General

Sub-clause (4)B should be used for tenders

using the marking scheme approach for

tender evaluation.

The submissions on the proposed

percentage participation and value of

works proposed to be undertaken by each

participant or shareholder required under

sub-clause (4)B of this Clause are essential

requirements and shall be mentioned in


Annex 2

Page 7 of 12


Conditions of Tender Clause 4. (See Note

4)

The proposed percentage participation shall

be used for technical assessment. After

completion of the technical assessment, the

“Tender Price Documents” shall be opened.

The proposed percentage participation of

each participant or shareholder in a joint

venture shall then be adjusted by reference to

the proposed value of his (portion of work

against the corrected tender sum. Any

portions of work not specifically undertaken

by any participants or shareholders are)**

deemed to be undertaken by the lead

participant or the major shareholder#. If the

adjusted percentage participation based on the

proposed value of work, after it became

known are different to the proposed

percentage participation submitted by the

tenderer, this will be regarded as error of form

and the technical scores shall be adjusted

using the adjusted percentage participation

instead of the proposed percentage

participation.

[Where a joint venture participant or

shareholder undertakes more than one

category of works given in the List of

Approved Contractors for Public Works or

the List of Approved Suppliers of Materials

and Specialist Contractors for Public Works,


to be undertaken by such participant or


sub-divided into each category of work he

undertakes. (See Note 2 above)]

Note 4: This submission requirement

should be listed under GCT 4 (1)(c).

** For term contracts without a tender

sum, the estimated total contract

expenditure stated in the Notes to


appropriate should be used. Replace

the bracketed words with “work

against the estimated total expenditure

stated in the tender documents. Any

work not specifically undertaken by

any participants or shareholders is”.

Departments should in such a case

state the estimated total expenditure

instead of the estimated annual

contract expenditure in the Notes to


appropriate.

*** For term contracts without a tender

sum, delete the bracketed words “and

portion”.

# The reference to major shareholder is

not applicable to open tendering.

Annex 2

Page 8 of 12


If the total percentage participation of all the

participants or shareholders in a joint venture

is less than 100%, the difference shall be

attributed to the lead participant nominated or

the major shareholder# determined under

sub-clauses (2) and (3) of this SCT as the

case may be such that the total percentage

participation of the participants or

shareholders shall add up to 100%. If the

total percentage participation of the

participants or shareholders in a joint venture

is more than 100%, the percentage

participation of each participant or

shareholder shall be reduced proportionately


the participants or shareholders shall add up

to 100%.

[If the proposed value of work to be

undertaken by a participant or shareholder in

a joint venture submitted by the tenderer does

not tally with the proposed portion of work to

be undertaken by him, the

*Engineer/Architect/Surveyor/Maintenance

Surveyor designate may seek clarification

from the tenderer and if the difference in

value remain irreconcilable after clarification,

the tender shall not be considered further.

(See Note 3 above)]

(5) (See Note 5) Without prejudice to any other

General Conditions of Tender and Special

Conditions of Tender, a participant or

shareholder in a joint venture will be

considered as technically capable of

undertaking the Works or part of the Works as

required under sub-clause (1)(b) of this SCT,

if:

(a)(i) the participant or shareholder in the

Note 5 : Sub-clause (5) is not needed for

open tendering. Project officer must state

specific criteria needed to assess technical

capabilities in open tendering to suit

specific contract needs or to adopt Stage 1

Screening.

The submissions required under

sub-clauses 5(b), 5(c) and, if applicable,

Annex 2

Page 9 of 12


joint venture is a contractor included in

the List of Approved Contractors for

Public Works or the List of Approved

Suppliers of Materials and Specialist

Contractors for Public Works (“the

List”); and

(ii) the proposed (portion of work)* to be

undertaken by the participant or

shareholder is of the same category of

the List in which the participant or

shareholder is included unless there is no

such category in the List which could

match such work; and

(iii) the proposed value of work to be

undertaken by the participant or

shareholder does not exceed the values

of contract or works that may be

undertaken by a contractor listed in the

same category and group in which the

participant or shareholder is included,

the details of which are set out in the

Contractor Management Handbook

“CMH” published by the Development

Bureau. For the purpose of the

application of this sub-clause,

probationary contractors will be treated

in the same manner as confirmed

contractors and the limits on the values

of contract or works that may be

undertaken by probationary contractors

as set out in the CMH will not apply

except for the lead participant or major

shareholder; or

(b) the participant or shareholder[, who is

not the lead participant or the major

shareholder,**] in the joint venture is

NOT a contractor included in the List,

sub-clause (5)(d) of this Clause are not

essential requirements and shall be

mentioned in GCT 25 on Submission of

further information.

* For term contracts without a tender

sum, replace the bracketed words with

“work”.

** For tenders with an estimated contract

value equal to or greater than HK$2

billion, insert the words in square

brackets.

Annex 2

Page 10 of 12


the proposed value of work to be

undertaken by this participant or

shareholder does not exceed the limits

described in sub-clause (5)(a)(iii) of this

SCT, as if this participant or shareholder

were included in the relevant category,

group and if applicable, class on the List

to which it would have been eligible

provided that this participant or

shareholder satisfies the minimum

technical and management criteria set

out in the CMH for direct entry to the

respective category, group and, if

applicable, class on the List for the

category of work it proposed to

undertake either on a probationary

status, or as a confirmed contractor if the

category of work concerned has no

probationary status.

[In the case of the lead participant or

major shareholder who is NOT a

contractor included in the List, the lead

participant or the major shareholder

shall satisfy the criteria of satisfactory

completion as the main contractor of

two relevant contracts, each of a value

equal to or greater than the limit on the

values of contract or works that may be

undertaken by Group C (probationary)

contractors in the List as set out in the

CMH, within the past 7 years. **].

For this purpose, only the number of

contract(s) and their respective contract

value(s) specified under the respective

category, group and, if applicable, class

on the List shall be assessed and the

experience gained in contracts overseas

(government or non-government) will

Annex 2

Page 11 of 12


be counted. The joint venture

tenderer shall submit, subject to General

Condition of Tender Clause 25, together

with its tender, documentary evidence,

in the form of a certificate of completion

and articles of agreement and the like to

the satisfaction of the *Engineer/

Architect/Surveyor/Maintenance

Surveyor designate, supporting their job

experience; or

(c) the participant or shareholder in the joint

venture is a contractor included in the

List and this participant or shareholder

wishes to take up work in excess of the

value governed by sub-clause (5)(a)(iii)

of this SCT in the category and group in

which the participant or shareholder is

included, the proposed value of work to

be undertaken by this participant or

shareholder does not exceed the

governing values referred to in

sub-clause (5)(b) of this SCT.

Submission of documentary evidence,

subject to General Condition of Tender

Clause 25, will also be required; or*

(d) (See Note 6) the participant or

shareholder in the joint venture,

irrespective of whether it is a contractor

included in the List, wishes to take up

“trenchless replacement and

rehabilitation work” under the Contract,

the value of such work it proposed to

undertake does not exceed the governing

values referred to in sub-clause (5)(b) of

this SCT. The “trenchless replacement

and rehabilitation work” will be

regarded as waterworks and the

requirements for direct entry to the

* Delete “; or” if (d) is not used and end

the sentence with “.”.

Note 6: Where there are specific work in a

contract of which there is no exact match in

the List, such as “trenchless replacement

and rehabilitation work” in a water supplies

or drainage contract, the project officer

shall, upon consultation with the Managing

Department of the relevant category,

determine and state the assessment criteria

in this sub-clause. Otherwise this

sub-clause is not necessary. Sub-clause

(d) is provided here as an example.

Annex 2

Page 12 of 12


respective group on the List for

Waterworks category shall apply for the

purpose of assessment. The experience

gained in “trenchless replacement and

rehabilitation works” will be regarded as

mainlaying experience and the

assessment criteria and submissions set

out and required under sub-clause (5)(b)

of this SCT shall apply.

Failure to comply with the submission

requirements under this sub-clause by a

joint venture tenderer shall render his tender

invalid.

(6) No tenderer is permitted to submit more

than one tender for each contract. For the

purpose of this Clause, a tenderer who

submits a tender on its own behalf and as a

participant or shareholder of a joint venture

or as a participant or shareholder of more

than one joint venture in response to a

tender exercise shall be regarded as having

submitted more than one tender. A

holding company and its subsidiaries are

considered as one and the same tenderer.

The existence of a holding-subsidiary

relationship shall be determined as at the

date set for the close of tender, or if this has

been extended, the extended date, and in

accordance with the provisions in Sections

13 to 15 of the Companies Ordinance (Cap.

622). Tenders submitted from a tenderer on

his own behalf who is found to be in breach

of this sub-clause or from a joint venture or

joint ventures in which any participant or

shareholder is found to be in breach of this

sub-clause shall not be considered.

[]

MEMO

From Secretary for the Environment, Transport and Works To Distribution

Ref (019JP-01-4) in ETWB(W) 510/83/05 (Attn : )


Fax No. 2536 9299 dated

Email [email protected] Fax No.

Date 2 November 2006 Total Pages 2 + encl.

ETWB TC(W) No. 50/2002 Contractor Joint Ventures

Reference is made to my memo of 4.8.2006 of even reference on the same subject matter. 2. Since the issue of the subject memo, we have further review the policy on Joint Venture (J/V) tenderers and in order to provide more flexibility on the treatment of J/V participants, non-listed contractors will be allowed to team up with listed contractors to form a J/V in submitting tenders for public works. In brief, the policy on J/V is as follows:- (A) For selective tendering in which only listed contractors are allowed to

submit a bid:- (i) The lead J/V participant must itself be qualified to submit a bid on

its own. (ii) All other participants of the J/V are subject to the limitations set

out in the attached SCT. (iii) The approach to performance ratio calculations remain unchanged

as set out in TCW 8/2004, i.e. on the basis of the value of works the J/V participant is allowed to undertake as provided in the attached SCT.

(B) For open tendering, departments are still required to stipulate their own

evaluation criteria on technical capabilities. In so doing, departments can make reference to the methodology set out in the attached SCT for guidance. Again Stage 1 Screening can be used if considered appropriate.

--------

- 2 -

3. A revised SCT is attached herewith for your immediate use. This SCT replaces the one issued under my memo of 4.8.2006 of even reference. The other documents attached to my 4.8.2006 continue to remain in force. 4. ETWB TC(W) No. 50/2002 will be amended in due course to take account of these changes.

(signed)

(James S O Chan) for Secretary for the Environment,

Transport and Works

Distribution

D Arch S DCED D of DS DEMS D of Hy DWS

c.c. Members, Conditions of Contract Committee

SECA/WSD (Mr C B Cheung) Fax. No. 2824 6179 CAd/EMSD (Mr P C Chan) 2241 4082 CAd1/ArchSD (Mr M K Fok) 2524 7847 SPM224/ArchSD (Mr Jackle Miu) 2804 6805 SQSCA/HD (Mr K M Yeung) 2761 6710 SECA/HyD (Ms Mo Sau) 2714 5216 SECA/CEDD (Mr Michael C Y Chan) 2711 7571 SECA/DSD (Mr John K S Kwong) 2827 9352 LAD(W) (Mr Lawrence C H Wong) 2802 3762

All contract advisors (not included in the above)

CAd2/ArchSD (Mr Vincent Y B Wu) 2290 2480 CAd I/CEDD (Mr K W Tsui) 2577 5040 CAd II/CEDD (Mr K K Kwok) 2693 2918 CAd III/CEDD (Mr C S Wong) 2739 0076 ECAd/HyD (Mr Frankie K C Chan) 2760 4671 ECAd2/HyD (Mr C C Lo) 2714 5216

Appendix A1 ETWB TC(W) 50/2002A

- 1 -

Special Condition of Tender on Joint Venture

SCT 4 Contractors' Joint Venture Remarks

(1) Tenderers may submit their tender in the form of a joint venture provided:

ETWB TCW No. 50/2002 stipulates that joint ventures shall be permitted to tender for contracts covered by the WTO GPA. For contracts not covered by the WTO GPA, departments may decide whether or not to allow joint ventures to tender.This SCT Clause is to be used for tenders that allow joint ventures to participate. For tenders adopting open tendering procedures, project officers are advised to note the necessary amendments and to stipulate criteria on evaluation of technical capabilities or to consider using Stage 1 Screening.

(i) the participants or shareholders in the joint venture collectively satisfy the qualification requirements; and

(ii) each participant or shareholder in the joint venture is technically capable for that part of the Works it undertakes.

(2) Where the tenderer is an unincorporated joint venture, it must:

(i) subject to General Conditions of Tender Clause 21 nominate a lead participant whose proposed value of work in the joint venture pursuant to sub-clause (4) below shall be more than that of any other participant in the joint venture. [The lead participant must be a confirmed* Group C contractor in the List of Approved Contractors for Public Works for Buildings*, Port Works*, Roads and Drainage*, Site Formation* and*/or* Waterworks* (see Note 1).]; and

The submission required under sub-clause (2)(i) of this Clause is an essential requirement and shall be mentioned in the GCT 21 on essential requirements.

Note 1: Insert the appropriate description in the event that the contract is invited from the List of Approved Suppliers of Materials and Specialist Contractors for Public Works. [Words in square brackets are not applicable to open tendering.]



- 2 -

(ii) subject to General Conditions of Tender Clause 25, it shall submit to the Engineer designate a Letter of Undertaking in the form set out in Appendix# to these Special Conditions of Tender duly executed by all the participants of the unincorporated joint venture.

Failure to comply with this sub-clause by an unincorporated joint venture shall render his tender invalid.

# The form in Appendix B2 shall be used.

(3) Where the tenderer is an incorporated joint venture it shall, subject to General Conditions of Tender Clause 25, submit to the Engineer designate a Letter of Undertaking in the form set out in Appendix# to these Special Conditions of Tender duly executed by all the shareholders of the incorporated joint venture. [There must be at least one shareholder who is a confirmed* Group C contractor in the List of Approved Contractors for Public Works for Buildings*, Port Works*, Roads and Drainage*, Site Formation* and*/or* Waterworks* (see Note 1) and the proposed value of work of that shareholder (hereinafter referred to as the major shareholder) in the joint venture pursuant to sub-clause (4) below shall be more than that of any other shareholder in the joint venture##.] Failure to comply with this sub-clause by an incorporated joint venture tenderer shall render his tender invalid.

* Delete as appropriate. # The form in Appendix B1 shall

be used.

## For open tendering, the words in

square brackets are not applicable and shall be amended as appropriate for compatibility with sub-clause (4) regarding the determination of the major shareholder.

(4)A Where the tenderer is a joint venture (whether incorporated or unincorporated), the tenderer shall, subject to General conditions of

Sub-clause (4)A should be used for tenders using the formula approach for tender evaluation.


- 3 -

Contract Clause 21, provide with its tender details of the proposed value (and portion)*** of work to be undertaken by each participant or shareholder in the joint venture. The percentage participation of each participant or shareholder in a joint venture shall be calculated by reference to the proposed value of (his portion of work against the corrected tender sum. Any portions of work not specifically undertaken by any participants or shareholders are)** deemed to be undertaken by the lead participant or the major shareholder. [Where a joint venture participant or shareholder undertakes more than one category of works given in the List of Approved Contractors for Public Works or the List of Approved Suppliers of Materials and Specialist Contractors for Public Works, the proposed value (and portion)*** of work to be undertaken by such participant or shareholder in a joint venture shall be sub-divided into each category of work he undertakes (see Note 2).] If the total percentage participation of all the participants or shareholders in a joint venture is less than 100%, the difference shall be attributed to the lead participant nominated or the major shareholder# determined under sub-clauses (2) and (3) of this SCT as the case may be such that the total percentage participation of the participants or shareholders shall be 100%. If the total percentage participation of the participants or shareholders in a joint venture is more than 100%, the percentage participation

The submissions on the value of work proposed to be undertaken by each participant or shareholder required under sub-clause (4)A of this Clause are essential requirements and shall be mentioned in the GCT 21 on essential requirements.

** For term contracts without a tender sum, the estimated total contract expenditure stated in the Notes to Tenderers/Form of Tender as appropriate should be used. Replace the bracketed words with “work against the estimated total expenditure stated in the tender documents. Any work not specifically undertaken by any participants or shareholders is” Departments should in such a case state the estimated total expenditure instead of the estimated annual contract expenditure in the Notes to Tenderers/Form of Tender as appropriate.


# The reference to major

shareholder is not applicable to open tendering.

Note 2: The words in square brackets are not needed for open tendering.


- 4 -

of each participant or shareholder shall be reduced proportionately such that the total percentage participation of the participants or shareholders shall add up to 100%.

[If the proposed value of work to be undertaken by a participant or shareholder in a joint venture submitted by the tenderer does not tally with the proposed portion of work to be undertaken by him, the Engineer designate may seek clarification from the tenderer and if the difference in value remain irreconcilable after clarification, the tender shall not be considered further. (See Note 3)]

Note 3: The words in square brackets are not needed for term contracts without a tender sum.

(4)B Where the tenderer is a joint venture (whether incorporated or unincorporated), the tenderer shall, subject to General Conditions of Contract Clause 21, provide with its tender details of the proposed percentage participation, proposed value (and portion)*** of work to be undertaken by each participant or shareholder in the joint venture. The proposed value of work to be undertaken by each participant or shareholder in the joint venture shall be submitted in the “Tender Price Documents” required under General Conditions of Tender Clause 4. (See Note 4)

The proposed percentage participation shall be used for technical assessment. After completion of the technical assessment, the “Tender Price Documents” shall be opened. The

Sub-clause (4)B should be used for tenders using the marking scheme approach for tender evaluation.

The submissions on the proposed percentage participation and value of works proposed to be undertaken by each participant or shareholder required under sub-clause (4)B of this Clause are essential requirements and shall be mentioned in GCT 21 on essential requirements.

Note 4: This submission requirement should be listed under GCT 4 (1)(c).

** For term contracts without a tender sum, the estimated total contract expenditure stated in the Notes to Tenderers/Form of Tender as appropriate should be used. Replace the bracketed


- 5 -

proposed percentage participation of each participant or shareholder in a joint venture shall then be adjusted by reference to the proposed value of his (portion of work against the corrected tender sum. Any portions of work not specifically undertaken by any participants or shareholders are)** deemed to be undertaken by the lead participant or the major shareholder#. If the adjusted percentage participation based on the proposed value of work, after it became known are different to the proposed percentage participation submitted by the tenderer, this will be regarded as error of form and the technical scores shall be adjusted using the adjusted percentage participation instead of the proposed percentage participation.

[Where a joint venture participant or shareholder undertakes more than one category of works given in the List of Approved Contractors for Public Works or the List of Approved Suppliers of Materials and Specialist Contractors for Public Works, the proposed value (and portion)*** of work to be undertaken by such participant or shareholder in a joint venture shall be sub-divided into each category of work he undertakes. (See Note 2 above)]

If the total percentage participation of all the participants or shareholders in a joint venture is less than 100%, the difference shall be attributed to the lead participant nominated or the major

words with “work against the estimated total expenditure stated in the tender documents. Any work not specifically undertaken by any participants or shareholders is”. Departments should in such a case state the estimated total expenditure instead of the estimated annual contract expenditure in the Notes to Tenderers/Form of Tender as appropriate.





- 6 -

shareholder# determined under sub-clauses (2) and (3) of this SCT as the case may be such that the total percentage participation of the participants or shareholders shall add up to 100%. If the total percentage participation of the participants or shareholders in a joint venture is more than 100%, the percentage participation of each participant or shareholder shall be reduced proportionately such that the total percentage participation of the participants or shareholders shall add up to 100%.

[If the proposed value of work to be undertaken by a participant or shareholder in a joint venture submitted by the tenderer does not tally with the proposed portion of work to be undertaken by him, the Engineer designate may seek clarification from the tenderer and if the difference in value remain irreconcilable after clarification, the tender shall not be considered further. (See Note 3 above)]



(5) (See Note 5) Without prejudice to any other General Conditions of Tender and Special Conditions of Tender, a participant or shareholder in a joint venture will be considered as technically capable of undertaking the Works or part of the Works as required under sub-clause (1)(ii) of this SCT, if:

(i)(a) the participant or shareholder in the joint venture is a contractor included in the List of Approved Contractors for Public Works or

Note 5 : Sub-clause (5) is not needed for open tendering. Project officer must state specific criteria needed to assess technical capabilities in open tendering to suit specific contract needs or to adopt Stage 1 Screening.

The submissions required under sub-clauses 5(ii), 5(iii) and, if applicable, sub-clause (5)(iv) of this Clause are essential requirements and shall be mentioned in GCT 21


- 7 -

the List of Approved Suppliers of Materials and Specialist Contractors for Public Works (“the List”); and

(b) the proposed (portion of work)* to be undertaken by the participant or shareholder is of the same category of the List in which the participant or shareholder is included unless there is no such category in the List which could match such work; and

(c) the proposed value of work to be undertaken by the participant or shareholder does not exceed the values of contract or works that may be undertaken by a contractor listed in the same category and group in which the participant or shareholder is included, the details of which are set out in the Contractor Management Handbook “CMH” published by the Environment, Transport and Works Bureau. For the purpose of the application of this sub-clause, probationary contractors will be treated in the same manner as confirmed contractors and the limits on the values of contract or works that may be undertaken by probationary contractors as set out in the CMH will not apply except for the lead participant or major shareholder; or

(ii) if the participant or shareholder in the joint venture is NOT a contractor included in the List, the

on essential requirements.

* For term contracts without a tender sum, replace the bracketed words with “work”.


- 8 -

proposed value of work to be undertaken by this participant or shareholder does not exceed the limits described in sub-clause (5)(i)(c) of this SCT, as if this participant or shareholder were included in the relevant category, group and if applicable, class on the List to which it would have been eligible provided that this participant or shareholder satisfies the minimum technical and management criteria set out in the CMH for direct entry to the respective category, group and, if applicable, class on the List for the category of work it proposed to undertake either on a probationary status, or as a confirmed contractor if the category of work concerned has no probationary status. For this purpose, experience gained in contracts overseas (government or non-government) will be counted. The joint venture tenderer shall submit, subject to General Condition of Tender Clause 21, together with its tender, documentary evidence, in the form of a certificate of completion and articles of agreement and the like to the satisfaction of the Engineer designate, supporting their job experience; or

(iii) if the participant or shareholder in the joint venture is a contractor included in the List and if this participant or shareholder wishes to take up work in excess of the


- 9 -

value governed by sub-clause (5)(i)(c) of this SCT in the category and group in which the participant or shareholder is included, the proposed value of work to be undertaken by this participant or shareholder does not exceed the governing values referred to in sub-clause (5)(ii) of this SCT. Submission of documentary evidence, subject to General Condition of Tender Clause 21, will also be required; or*

(vi) (See Note 6) if the participant or shareholder in the joint venture, irrespective of whether it is a contractor included in the List, wishes to take up “trenchless replacement and rehabilitation work” under the Contract, the value of such work it proposed to undertake does not exceed the governing values referred to in sub-clause (5)(ii) of this SCT. The “trenchless replacement and rehabilitation work” will be regarded as waterworks and the requirements for direct entry to the respective group on the List for Waterworks category shall apply for the purpose of assessment. The experience gained in “trenchless replacement and rehabilitation works” will be regarded as mainlaying experience and the assessment criteria and submissions set out and required under sub-clause (5)(ii) of this

* Delete “; or” if (iv) is not used and end the sentence with “.”.

Note 6: Where there are specific work in a contract of which there is no exact match in the List, such as “trenchless replacement and rehabilitation work” in a water supplies or drainage contract, the project officer shall, upon consultation with the Managing Department of the relevant category, determine and state the assessment criteria in this sub-clause. Otherwise this sub-clause is not necessary. Sub-clause (iv) is provided here as an example.


- 10 -

SCT shall apply.

Failure to comply with the submission requirements under this sub-clause by a joint venture tenderer shall render his tender invalid.

(6) No tenderer is permitted to submit more than one tender for each contract. For the purpose of this Clause, a tenderer who submits a tender on its own behalf and as a participant or shareholder of a joint venture or as a participant or shareholder of more than one joint venture in response to a tender exercise shall be regarded as having submitted more than one tender. A holding company and its subsidiaries are considered as one and the same tenderer. Tenders submitted from a tenderer on his own behalf who is found to be in breach of this sub-clause or from a joint venture or joint ventures in which any participant or shareholder is found to be in breach of this sub-clause shall not be considered.

[]

MEMO

From Secretary for the Environment, Transport and Works To Distribution

Ref (01656-01-3) in ETWB(W) 510/83/05 (Attn : )


Fax No. 2536 9299 dated

Email [email protected] Fax No.

Date 4 August 2006 Total Pages 2 + encl.

ETWB TC(W) No. 50/2002 Contractor Joint Ventures

It has been brought to our attention that there have been recent cases of Joint Venture (J/V) tenderers with participants comprising contractors from the ETWB’s Approved List taking up works well in excess of the allowable values governed by the Contractor Management Handbook (CMH). The purpose was to take advantage of their relatively good performance ratings hence leading to a higher overall score. Whilst we agree that good performers should be suitably rewarded, we wish to maintain the policy of governing the listed contractors to the restrictions set out under the CMH in respect of the maximum value/number of contracts they can undertake. Accordingly we have made amendments to the SCT issued under Appendix A1 of the subject circular. 2. In brief, the policy in respect of J/V tenderers is summarised as follows:-

(a) All participants must be on the list;

(b) All participants must only be allowed to take up works of the same category to which they are listed;

(c) Only the value of the works of the same category will be accounted for in the calculation on performance ratios;

(d) Lead participant must itself be qualified (C or B or A depending on the selected list for that contract);

(e) Stage 1 Screening can also be used (optional) in conjunction with this SCT; and

(f) Open tendering will need to have their own evaluation criteria on technical capabilities drawn up as well as to use Stage 1 Screening if considered necessary.

- 2 -

3. In addition, we feel that there is a need to require the J/V contractor to undertake not to change the composition of the J/V during the contract unless it has obtained the Employer’s prior consent. At the moment, we do not have such an undertaking and J/V contractors are free to change their compositions which may not be in the Employer’s best interest and intention. Accordingly we have revised the standard form of undertaking issued under the current Appendix B of the subject TCW to Appendix B1 for incorporated J/Vs and introduced a new form of undertaking under Appendix B2 for unincorporated J/Vs. The requirements are now set out in a revised SCC under Appendix C. Appendix D is also revised to account for a few minor modifications. 4. The revised appendices which include Appendices A1, B1, B2, C and D are attached for immediate application to tenders where J/Vs are permitted to participate. ETWB TC(W) 50/2002 will be amended in due course to take account of the above changes.

(signed)

(James S O Chan) for Secretary for the Environment,

Transport and Works Distribution

D Arch S DCED D of DS DEMS D of Hy DWS c.c. Members, Conditions of Contract Committee

SECA/WSD (Mr C B Cheung) Fax. No. 2824 6179 CAd/EMSD (Mr P C Chan) 2241 4082 CAdI/ArchSD (Mr M K Fok) 2524 7847 SPM224/ArchSD (Mr Jackle Miu) 2804 6805 SQSCA/HD (Mr K M Yeung) 2761 6710 SECA/HyD (Ms Mo Sau) 2714 5216 SECA/CEDD (Mr Michael C Y Chan) 2711 7571 SECA/DSD (Mr John K S Kwong) 2827 9352 LAD(W) (Mr Lawrence C H Wong) 2802 3762


- 1 -

Special Condition of Tender on Joint Venture

SCT 4 Contractors' Joint Venture Remarks

(1) Tenderers may submit their tender in the form of a joint venture provided:

ETWB TCW No. 50/2002 stipulates that joint ventures shall be permitted to tender for contracts covered by the WTO GPA. For contracts not covered by the WTO GPA, departments may decide whether or not to allow joint ventures to tender. This SCT Clause is to be used for tenders that allow joint ventures to participate. For tenders adopting open tendering procedures, project officers are advised to note the necessary amendments and to stipulate criteria on evaluation of technical capabilities or to consider using Stage 1 Screening.

(i) the participants or shareholders in the joint venture collectively satisfy the qualification requirements; and


(2) Where the tenderer is an unincorporated joint venture, it must:

(i) subject to General Conditions of Tender Clause 21 nominate a lead participant whose percentage participation in the joint venture as calculated pursuant to sub-clause (4) below shall be more than that of any other participant in the joint venture. [The lead participant must be a confirmed* Group C contractor in the List of Approved Contractors for Public Works for Buildings*, Port Works*, Roads and Drainage*, Site Formation* and*/or* Waterworks* (see Note 1).]; and

The submission required under sub-clause (2)(i) of this Clause is an essential requirement.

Note 1: Insert the appropriate description in the event that the contract is invited from the List of Approved Suppliers of Materials and Specialist Contractors for Public Works. [Words in square brackets are not applicable to open tendering.]



- 2 -

(ii) subject to General Conditions of Tender Clause 25, it shall submit to the Engineer designate a Letter of Undertaking in the form set out in Appendix (#) to these Special Conditions of Tender duly executed by all the participants of the unincorporated joint venture.

Failure to comply with this sub-clause by an unincorporated joint venture shall render his tender invalid.

The submissions under sub-clause (2)(ii) are non-essential requirements.


(3) Where the tenderer is an incorporated joint venture it shall, subject to General Conditions of Tender Clause 25, submit to the Engineer designate a Letter of Undertaking in the form set out in Appendix (#) to these Special Conditions of Tender duly executed by all the shareholders of the incorporated joint venture. [There must be at least one shareholder who is a confirmed* Group C contractor in the List of Approved Contractors for Public Works for Buildings*, Port Works*, Roads and Drainage*, Site Formation* and*/or* Waterworks* (see Note 1) and the percentage participation of that shareholder (hereinafter referred to as the major shareholder) in the joint venture as calculated pursuant to sub-clause (4) below shall be more than that of any other shareholder in the joint venture.] Failure to comply with this sub-clause by an incorporated joint venture tenderer shall render his tender invalid.

The submissions under sub-clause (3) are non-essential requirements.



(4) Where the tenderer is a joint venture, the tenderer shall provide with its tender

The submissions on the value of works proposed to be undertaken by


- 3 -

details of the proposed value and portion of works to be undertaken by each participant or shareholder in the joint venture. The percentage participation of each participant or shareholder in a joint venture shall be calculated by reference to the proposed value of his portion of work against the corrected tender sum. All the unidentified portions of work are deemed to be undertaken by the lead participant or the major shareholder. [Where a joint venture participant or shareholder undertakes more than one category of works given in the List of Approved Contractors for Public Works or the List of Approved Suppliers of Materials and Specialist Contractors for Public Works, the proposed value and portion of work to be undertaken by such participant or shareholder in a joint venture shall be sub-divided into each category of work he undertakes (see Note 2).] If the total percentage participation of all the participants or shareholders in a joint venture is less than 100%, the difference shall be attributed to the lead participant nominated or the major shareholder determined under sub-clause (3) of this SCT as the case may be such that the total percentage participation of the participants or shareholders shall be 100%. If the total percentage participation of the participants or shareholders in a joint venture is more than 100%, the percentage participation of each participant or shareholder shall be reduced proportionately such that the total percentage participation of the

each participant or shareholder required under sub-clause (4) of this Clause are essential requirements and shall be mentioned in the GCT 21 on essential requirements.

Note 2 : The words in square brackets are not needed for open tendering.


- 4 -

participants or shareholders shall add up to 100%.

If the proposed value of works to be undertaken by a participant or shareholder in a joint venture submitted by the tenderer does not tally with the proposed portion of work to be undertaken by him, the Engineer designate may seek clarification from the tenderer and if the difference in value remain irreconcilable after clarification, the tender shall not be considered further.

(5) (See Note 3) Without prejudice to any other General Conditions of Tender and Special Conditions of Tender, a participant or shareholder in a joint venture will be considered as technically capable of undertaking the Works or part of the Works as required under sub-clause(1)(ii) of this SCT, if:

(i) the participant or shareholder in the joint venture is a contractor included in the List of Approved Contractors for Public Works or the List of Approved Suppliers of Materials and Specialist Contractors for Public Works; and

(ii) the proposed portion of work to be undertaken by the participant or shareholder are of the same category of the List in which the participant or shareholder is included unless there is no such category in the Lists which could match such work; and

(iii) the proposed value of works to be undertaken by the participant or shareholder does not exceed the

Note 3 : Sub-clause (5) is not needed for open tendering. Project officer must state specific criteria needed to assess technical capabilities in open tendering to suit specific contract needs or to adopt Stage 1 Screening.


- 5 -

values of contract or Works that may be undertaken by a contractor listed in the category and the Group in which the participant or shareholder is included, the details of which are set out in the Contractor Management Handbook “CMH” published by the Environment, Transport and Works Bureau. For the purpose of this sub-clause, the CMH rules on determining the value of contract on Works that a confirmed or probationary contractor may undertake will apply to the participant or shareholder, as the case may be. For the purpose of applying the CMH rules, the works proposed to be undertaken by the participant or shareholder in this contract shall be regarded as a separate contract.

Failure to comply with this sub-clause by a joint venture tenderer shall render his tender invalid.

(6) No tenderer is permitted to submit more than one tender for each contract. For the purpose of this Clause, a tenderer who submits a tender on its own behalf and as a participant or shareholder of a joint venture or as a participant or shareholder of more than one joint venture in response to a tender exercise shall be regarded as having submitted more than one tender. A holding company and its subsidiaries are considered as one and the same tenderer. Tenders submitted from a tenderer on his own behalf who is found


- 6 -

to be in breach of this sub-clause or from a joint venture or joint ventures in which any participant or shareholder is found to be in breach of this sub-clause shall not be considered.

Appendix B1 ETWB TC(W) 50/2002A

- 1 -

Letter of Undertaking

(For incorporated joint ventures) To : The Government of the Hong Kong Special Administrative Region (“The

Employer”) From : [ ] Date : [ ] Dear Sirs

Letter of Undertaking Joint Venture Guarantee for Contract No. [ ] Contract Title : [ ] We refer to the tender ("the tender") submitted to you by [ ] ("the tenderer"), for the above Contract. In consideration of your agreeing to consider the tender we hereby irrevocably and unconditionally undertake to duly execute and provide to you the joint venture guarantee in the form as set out in Appendix [ ] to the Special Conditions of Contract within 14 days of your letter of acceptance of the tender (if the tender is indeed accepted by you). We hereby irrevocably and unconditionally agree to indemnify you against all losses, damages, costs and expenses you may incur or suffer as a result of our failing to abide by our above undertaking. We agree that we shall be jointly and severally liable for our obligations under this undertaking and all references to “we” shall take effect as references to all of us or any of us and the words “us” and “our” shall be construed accordingly.


- 2 -

We hereby represent that, with respect to our obligations, liabilities or any other matter under or arising out of or in connection with this letter of undertaking, neither we nor any of our properties or assets have, in the Hong Kong Special Administrative Region, or in any other jurisdiction, any right of immunity on the grounds of sovereignty or otherwise from any legal action, suit or proceedings; from the giving of relief in any legal action, suit or proceedings; from set-off or counterclaim; from the jurisdiction of any court, in the Hong Kong Special Administrative Region or in any other jurisdiction; from service of process upon us or any agent; from attachment prior to judgment in order to obtain satisfaction thereof; from attachment after judgment or from execution or any other process for the endorsement of any judgment or other legal process in any jurisdiction; and to the extent that we are or become entitled to any immunity as aforesaid, in the Hong Kong Special Administrative Region or in any other jurisdiction with respect to our obligations, liabilities or any other matter under or arising out of or in connection with this letter of undertaking, we hereby and will irrevocably and unconditionally waive and agree not to plead or claim any such immunity. We further consent to the giving of any relief in any legal action, suit or proceeding and to execution and or any other form of process for the enforcement of any judgment against us or our assets. We acknowledge that we comprise all the shareholders of [name of the tenderer]. This letter of undertaking shall be applicable whether the tender accepted by you comprises the conforming or any alternative tender or with any amendments modification or change thereto agreed between the tenderer and yourself. We hereby further undertake not to make any changes to the percentage participation of each shareholder and the portion of the Works for which each shareholder is responsible as submitted in the tender. If changes are necessary for the reasons stated in the Contract, we undertake to notify and to obtain prior written consent from the Employer in accordance with the Contract before these changes are made. This letter of undertaking shall be governed by and construed in accordance with the laws for the time being in force in the Hong Kong Special Administrative Region and we hereby submit to the non-exclusive jurisdiction of the courts of the Hong Kong Special Administrative Region and irrevocably appoint the tenderer to act as our duly appointed agent for the service of process at the address shown in the tender. IN WITNESS WHEREOF this Undertaking has been executed as a deed by the shareholders of the tenderer on the date first above written.


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#SEALED with the COMMON SEAL of [the shareholder ] and SIGNED by [ ] its[director(s) or director/secretary or person(s) authorized to sign the Undertaking by its board of directors]2 in the presence of: ................................................................................

)))))))))))))))


[Name]

[Occupation]

[Address] OR

#3SIGNED, SEALED AND DELIVERED by

[name of shareholder] by [ ],

his/her/its2 attorney under power of attorney

dated [ ]

in the presence of:

...................................................................

[Name]

[Occupation]

[Address]

))))))))))

[Signature of the

attorney] 1

# Select the appropriate form or forms and REPEAT FOR EACH SHAREHOLDER of the incorporated joint

venture. 1 The italic parts are not part of the execution clause. They are for guidance or information only. 2 Select the correct expression for use. If none is applicable, insert an appropriate expression. 3 For use where the shareholder of the incorporated joint venture executes by an attorney.

Common

L.S.


- 1 -

Letter of Undertaking (For unincorporated joint ventures)


Employer”) From : [ ] Date : [ ] Dear Sirs

Letter of Undertaking Contract No. [ ] Contract Title : [ ] We refer to the tender ("the tender") submitted to you by [ ] ("the tenderer"), for the above Contract. In consideration of your agreeing to consider the tender we hereby undertake not to make any changes to the percentage participation of each participant and the portion of the Works for which each participant is responsible as submitted in the tender. If changes are necessary for the reasons stated in the Contract, we undertake to notify and to obtain consent from the Employer in accordance with the Contract before these changes are made. This letter of undertaking shall be governed by and construed in accordance with the laws for the time being in force in the Hong Kong Special Administrative Region and we hereby submit to the non-exclusive jurisdiction of the courts of the Hong Kong Special Administrative Region. IN WITNESS WHEREOF this Undertaking has been executed as a deed by the participants of the tenderer on the date first above written.


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(a)

#SIGNED, SEALED and DELIVERED )by [name of participant] being a participant )of the [name of the unincorporated joint venture] ) in the presence of: ) )........................................................................ )[Name] )[Occupation] )[Address] )

[Signature of the

participant]**

(b) #SIGNED, SEALED and DELIVERED by ) [name of a participant] being a participant of the [name of the unincorporated joint venture] )by [ ], ) his/her/its* attorney under power of attorney ) dated [ ] ) in the presence of: ) ) ......................................................................... ) [Name] ) [Occupation] ) [Address] )

[Signature of the

attorney]**

(c) #SEALED with the COMMON SEAL of ) [name of participant] ) being a particpiant of the [name of the unincorporated joint venture] ) and SIGNED by ) [ ] its [diretor(s) or director and ) secretary or person(s) authorized to ) sign the contract by its board of directors] ) in the presence of: ) ) .......................................................................... ) [Name] ) [Occupation] ) [Address] )

[Signature(s) of the

directors etc]**

L.S.

L.S.

Common


- 3 -

Notes: (for preparation use only) (a) For use where an individual joint venture participant is a sole proprietor or is a

partnership itself.

(b) For use where an individual joint venture participant, whether a firm or an incorporated company, executes through an attorney.

(c) For use where an individual joint venture participant which is an incorporated company executes under its common seal.

# Select the appropriate form or forms and REPEAT FOR EACH PARTICIPANT

of the unincorporated joint venture. ** The italic parts are not part of the execution clause. They are for guidance or

information only.


Appendix C ETWB TC(W) 50/2002A

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Special Condition of Contract

Contractors' Joint Venture (1) Where the Contractor is an incorporated joint venture it shall within fourteen (14)

days of the acceptance of the Tender provide to the Employer a joint venture guarantee in the form set out in Appendix [ ] executed by all the shareholders of the Contractor. For the purposes of this Clause, the expressions “incorporated joint venture” and “shareholder” appearing herein shall bear the same meanings as those given in paragraph 6 of the Environment, Transport and Works Bureau Technical Circular (Works) No. 50/2002 on Contractors’ Joint Venture.

(2) Notwithstanding any other provisions of the Contract, failure by the Contractor to

provide a joint venture guarantee in strict accordance with sub-clause (1) of this Clause shall constitute a breach of the Contract entitling the Employer to damages and shall entitle the Employer to terminate the Contract forthwith by notice in writing to that effect and the Contractor shall not be entitled to any compensation whatsoever as a consequence of such termination.

(3) The Contractor shall not make any changes to the following during the

continuance of the Contract unless prior written consent from the Employer is obtained in accordance with sub-clause (4) of this Clause:-

(a) The percentage participation of each participant or shareholder in a joint

venture; and (b) The portion of the Works for which each participant or shareholder in a joint

venture is responsible. (4) In the event that the Contractor considers a change to the details referred to in

sub-clause (3)(a) or (b) of this Clause is necessary because (a) any participant or shareholder in a joint venture shall become bankrupt or

have a receiving order made against him or shall present his petition in bankruptcy or shall make an arrangement with or assignment in favour of his creditors or shall agree to carry out the Contract under a committee of inspection of his creditors or (being a corporation) shall go into liquidation

[ ] insert the relevant appendix to the tender documentation. See Appendix D for the Form of Joint

Venture Guarantee.

Appendix C ETWB TC(W) 50/2002A

- 2 -

(other than a voluntary liquidation for the purposes or amalgamation or reconstruction); and

(b) satisfactory completion of the Works, the Contractor shall write to the Employer with detailed substantiation requesting

the Employer’s consent before any changes are made. The Employer may in his absolute discretion accept or reject the request but shall within 14 days from the date of receipt of such request inform the Contractor in writing whether consent is given.

Appendix D ETWB TC(W) 50/2002A

- 1 -

FORM OF JOINT VENTURE GUARANTEE

THE GOVERNMENT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION

CONTRACT NO. / /

TITLE

THIS GUARANTEE is made the [ ] day of [ ] [ ] BETWEEN : (1) The Government of the Hong Kong Special Administrative Region ("the

Employer"); and (2) [ ] whose registered office is at [ ] and

[ ] whose registered office is at [ ] and ..... (hereinafter collectively called "the Guarantors").

WHEREAS (A) By a contract between the Employer and [ ] (hereinafter called "the

Contractor") dated [ ] (hereinafter called "the Contract"), the Employer and the Contractor undertook certain obligations towards each other in relation to the execution and completion of certain works ("the Works") upon the terms and conditions contained in the Contract.

(B) Pursuant to the terms of the Contract, the Contractor agreed to procure the

provision of a guarantee in the terms hereof. (C) The Guarantors are shareholders of the Contractor and at the request of the

Contractor have agreed to guarantee jointly and severally the due performance of the Contract by the Contractor in the manner hereinafter appearing.


- 2 -

IT IS HEREBY AGREED AS FOLLOWS 1. In consideration of the Employer entering into the Contract with the Contractor,

the Guarantors hereby irrevocably and unconditionally guarantee to the Employer as a primary obligation and not as a surety punctual true and faithful performance and observance by the Contractor of the obligations, terms, conditions and liabilities to be performed, observed and assumed by the Contractor under the provisions of the Contract and of any further agreement entered into between the Employer and the Contractor in connection with the Contract and in furtherance of this guarantee irrevocably and unconditionally undertake and guarantee that on demand by the Employer the Guarantors shall perform, observe and assume those obligations, terms, conditions and liabilities.

2. The Guarantors irrevocably and unconditionally indemnify the Employer

against all losses, damages, costs and expenses suffered or incurred by the Employer arising by reason of any act, default or omission on the part of the Contractor in the performance, observance and assumption of the Contractor's obligations, terms, conditions and liabilities under the provisions of the Contract and of any further agreement entered into between the Employer and the Contractor in connection with the Contract.

3. The Guarantors irrevocably and unconditionally indemnify the Employer

against all losses, damages, costs and expenses suffered or incurred by the Employer arising by reason of any act, default or omission on the part of the Guarantors in the performance and observance of their obligations hereunder.

4. This Guarantee and the Guarantors' obligations hereunder shall remain in full

force and effect and shall not be affected or discharged by :- 4.1 any alteration (whether or not made with the Guarantors' consent) to the

terms of the Contract made by agreement between the Employer and the Contractor in the extent or nature of the works or services to be carried out thereunder;

4.2 any suspension of the Works or extension of time being given to the

Contractor or by any other indulgence or concession to the Contractor or by any forbearance, forgiveness or any other thing done, omitted or neglected to be done under the Contract;


- 3 -

4.3 any other bond, security or guarantee now or hereafter held by the Employer for all or any part of the obligations of the Contractor under the Contract or any release or waiver thereof;

4.4 the voluntary or involuntary liquidation, bankruptcy, dissolution, sale of

assets, receivership, general assignment for benefit of creditors, insolvency, reorganisation, arrangement, compensation or other proceedings of or affecting the Contractor or his assets, or any change in the constitution or shareholdings of the Contractor;

4.5 any assignment by the Contractor of any or all of the obligations, terms

and conditions to be performed and observed under the Contract whether or not any such assignment has been consented to; and

4.6 without prejudice to the generality of the foregoing any fact or event

(whether similar to any of the foregoing or not) which in the absence of this provision can, would or might constitute or afford a legal or equitable discharge or release of or defence to a guarantor, other than the express written release by the Employer of the Guarantors' obligations.

5. The Guarantors shall not on any ground whatsoever claim or recover by the

institution of proceedings or the threat of proceedings or otherwise or claim any set-off or counterclaim against the Contractor or prove in competition with the Employer for the recovery of any payment by the Guarantors hereunder or be entitled in competition with the Employer to claim or have the benefit of any security which the Employer holds or may hold for any money or liabilities due or incurred by the Contractor to the Employer and in case the Guarantors receive any sums from the Contractor in respect of any payment by the Guarantors hereunder the Guarantors shall hold such monies in trust for the Employer so long as any sums are payable (contingently or otherwise) hereunder.

6. The Guarantors shall not be released from liability under this Guarantee by

reason of the unenforceability, invalidity or termination of the Contract for any reason whatsoever.

7. The Guarantors hereby represent that, with respect to their obligations, liabilities

or any other matter under or arising out of or in connection with this Guarantee, neither they nor any of their properties or assets have, in the Hong Kong Special


- 4 -

Administrative Region, or in any other jurisdiction, any right of immunity on the grounds of sovereignty or otherwise from any legal action, suit or proceedings; from the giving of relief in any legal action, suit or proceedings; from set-off or counterclaim; from the jurisdiction of any court, in the Hong Kong Special Administrative Region or in any other jurisdiction; from service of process upon them or any agent; from attachment prior to judgment or from execution or any other process for the enforcement of any judgment or other legal process in any jurisdiction; and to the extent that the Guarantors are or become entitled to any immunity as aforesaid, in the Hong Kong Special Administrative Region or in any other jurisdiction in respect of their obligations, liabilities or any other matter under or arising out of or in connection with this Guarantee, they do hereby and will irrevocably and unconditionally waive and agree not to plead or claim any such immunity. The Guarantors further consent to the giving of any relief in any legal action, suit or proceeding and to execution or any other form of process for the enforcement of any judgment against them or their assets.

8. The Guarantors shall be jointly and severally liable for their obligations under

this Guarantee and all reference to the Guarantors shall take effect as references to all the Guarantors or any of them.

9. This Guarantee shall be governed by and interpreted in all respects according to

the laws for the time being in force in the Hong Kong Special Administrative Region and the Guarantors hereby agree to submit to the non-exclusive jurisdiction of the courts of the Hong Kong Special Administrative Region and irrevocably appoint the Contractor to act as their duly appointed agent for acceptance of the service of process.


- 5 -

IN WITNESS WHEREOF this Guarantee has been executed as a deed by the Guarantors on

the date first above written.

#SEALED with the COMMON SEAL of )

[the Guarantor ] and

SIGNED by [ ] its

)

)

[director(s) or director/secretary or person(s)

authorized to sign the guarantee by its board of

di t ]2

)

)

)

[Signature of the director(s)

etc]1

in the presence of:

)

)

)

................................................................................. )

[Name] )

[Occupation] )

[Address] )

OR

#3SIGNED, SEALED AND DELIVERED by

[name of the Guarantor] by [ ],

his/her/its2 attorney under power of attorney

dated [ ]

in the presence of:

...................................................................

[Name]

[Occupation]

[Address]

))))))))))


# Select the appropriate form or forms and repeat for each Guarantor.

1. The italic parts are not part of the execution clause. They are for guidance or information only. 2 Select the correct expression for use. If none is applicable, insert an appropriate expression. 3 For use where the Guarantor executes by an attorney.

Common

L.S.

政府總部

環境運輸及工務局運輸及工務科

香港花園道美利大廈

Environment, Transport and Works Bureau

Government Secretariat Transport and Works Branch

Murray Building, Garden Road, Hong Kong

香港特別行政區政府 The Government of the Hong Kong Special Administrative Region

Ref : ETWB(W) 510/83/05 Group : 2, 3, 15

16 December 2002

Environment, Transport and Works Bureau Technical Circular (Works) No. 50/2002

Contractors' Joint Ventures

Scope This Circular sets out the policy and general guidelines in respect of a joint venture tendering for contracts, where the joint venture is not a contractor on the List of Approved Contractors for Public Works (the List) and/or the List of Approved Suppliers of Materials and Specialist Contractors for Public Works (the Specialist List) on its own account. Effective Date 2. This Circular takes immediate effect. Effect on Existing Circulars 3. This Circular supersedes WBTC No. 27/2001. The expression “incorporated joint venture” has now been defined in place of “joint venture company” and it will be used as from the date of this Circular. Where there are references to “joint venture company(ies)” in any existing Works Bureau Technical Circular or Environment, Transport and Works Bureau Technical Circular (Works), such references shall be taken as referring to “incorporated joint venture(s)”. Policy 4. Contractors may, for commercial considerations, form joint ventures to tender for a contract. This Circular sets out the policy that a joint venture, either in the form of an unincorporated joint venture or an incorporated joint venture, may tender for a ETWB TCW No. 50/2002 Page 1 of 5

contract even though the joint venture is not on its own account a contractor on the List and/or the Specialist List provided that the joint venture has satisfied the conditions laid down in this Circular. For the meaning of the expressions "unincorporated joint venture" and "incorporated joint venture" please see paragraph 6 below. 5. Joint ventures satisfying the conditions laid down in this Circular should always be permitted to tender for contracts which are covered by the provisions of the Agreement on Government Procurement of the World Trade Organisation (WTO GPA). For contracts not covered by the WTO GPA, departments may decide whether or not to allow joint ventures to tender. Formation 6. A joint venture is usually in the form of: (a) sole proprietors, firms and/or companies joining together as partners within

the meaning of a partnership under the Partnership Ordinance (Cap. 38) or as independent contractors under a purely contractual arrangement (collectively the “unincorporated joint venture” and each individual party in the unincorporated joint venture the “participant”); or

(b) sole proprietors, firms and/or companies incorporating as a company

pursuant to statute, with each participating party as a shareholder of the company (the “incorporated joint venture”).

7. In open or selective tendering, contractors may submit tenders in the form of a joint venture provided that: (a) the participants or shareholders in the joint venture collectively satisfy the

qualification requirements; and (b) each participant or shareholder in the joint venture is technically capable

for that part of the Works it undertakes. 8. To ensure that the composition of the joint venture is suitable for the type of work called for, when a joint venture tenders for a contract, the joint venture shall provide with its tender details of the percentage participation of each participant or shareholder in the joint venture. The percentage participation of each participant or shareholder in a joint venture shall be calculated by comparing its share of work against the sum offered by the joint venture in its tender for the execution of the Works. The tenderer shall provide details about the portion of the Works for which each joint venture participant or shareholder is responsible.

ETWB TCW No. 50/2002 Page 2 of 5

9. An unincorporated joint venture must nominate a lead participant who shall act on behalf of the unincorporated joint venture in all transactions with the Employer. The lead participant should have financial and management participation not

less than that of any other participant in the joint venture. 10. No contractor is permitted to submit more than one tender in each tendering exercise. For the purpose of this paragraph, a contractor which submits a tender on its own behalf and as a participant or shareholder of a joint venture, or as a participant or shareholder of more than one joint venture, shall be regarded as having submitted more than one tender. A holding company and its subsidiaries are considered as one and the same contractor. A contractor in breach of this paragraph shall have its tenders disqualified. The joint venture(s) in which any participant or shareholder is found to be in breach of this paragraph shall also have its or their tender(s) disqualified. Rules for Administration of Joint Venture 11. Where a joint venture is on the List and/or the Specialist List, the rules for the administration of contractors on such lists shall apply to the joint venture in the same manner as to other contractors on such lists, but not to individual participants or shareholders in the joint venture. Where a joint venture is not on the List and/or the Specialist List but its participants or shareholders are, the rules for the administration of contractors on such lists shall apply to all participants or shareholders which are on such lists. In addition, the following specific rules apply: (a) Report on Contractor's Performance It is not necessary to prepare a report on the contractor's performance for

each participant or shareholder of the joint venture. Instead, one report on the joint venture's performance, with comments on the input and information on the value of the share of the Works of the participants or shareholders, shall be prepared. The report shall be copied to all managing departments of the categories of works undertaken and also to the individual files of the joint venture participants or shareholders. Department is only required to upload the report on the joint venture to the Contractor Management Information System as usual and the same report will be made applicable to each participant or shareholder by the Environment, Transport and Works Bureau.

(b) Regulating action Regulating action to be taken against the joint venture arising from the

contract shall follow the guidelines and procedures set out in the Contractor Management Handbook promulgated under Works Bureau Technical Circular No. 25/2002 and other relevant technical circulars. The managing department of the predominant category shall co-ordinate and keep the managing departments of other categories of works informed of any regulating action taken.


(c) 3-year tender rule

For the purposes of satisfying Paragraph 5.1.3(ii) of the Contractor

Management Handbook, participation in a joint venture is considered to satisfy the requirements of the 3-year tender rule for all participants or shareholders involved.

(d) Holding companies and subsidiaries Paragraphs 2.11 and 3.11 of the Contractor Management Handbook apply

to companies whether as participants or shareholders in joint ventures. Tenders Invited from Prequalified Tenderers 12. For prequalification invitations, a joint venture will be allowed to apply to be prequalified as a single contractor in accordance with the standard prequalification procedures set out in ETWB TCW No. 36/2002. Prequalified joint ventures are then eligible for tendering for the contract for which the prequalification exercise has been undertaken. For prequalification where there is no limit on the number of prequalified tenderers, which is usually the case except for design-and-build contracts, a contractor may apply to be prequalified on its own account and at the same time participate in more than one joint venture in a prequalification process and in the event it succeeds in more than one application, department should draw its attention to the Special Condition of Tender at Appendix A1 that it is not permitted to submit more than one tender. For prequalification where there is a limit on the number of prequalified tenderers, a contractor will not be permitted to apply to be prequalified on its own account and at the same time participate in a joint venture or participate in more than one joint venture where the joint venture(s) also apply(ies) to be prequalified. Special Condition of Tender 13. Where joint ventures are permitted to tender for a contract, the Special Condition of Tender in Appendix A1 and the form of Letter of Undertaking set out in Appendix B shall be included in the tender documents.

Appendix B

Appendix A1

14. Where joint ventures are to be prohibited from tendering for a contract, the Special Condition of Tender in Appendix A2 shall be used.

Appendix A2

Special Condition of Contract 15. Where joint ventures are permitted to tender for a contract, the Special Condition of Contract in Appendix C and the form of Joint Venture Guarantee set out in Appendix D shall be included in the tender documents.

Appendix C

Appendix D


Articles of Agreement

16. Where a contract is awarded to an unincorporated joint venture, the revised Articles of Agreement at Appendix E shall be used. Where the contractor is an incorporated joint venture the ordinary form of Articles of Agreement shall be used.

Appendix E

Clearance by Legal Advisory Division (Works) of Environment, Transport and Works Bureau 17. Substantive amendments to the standard tender documentation (including the Articles of Agreement) shall be referred to Legal Advisory Division (Works) (LAD(W)) of Environment, Transport and Works Bureau for clearance. 18. A joint venture may take various forms under the law. If on receipt of tenders there is any doubt whether a particular tenderer is an incorporated joint venture and should therefore be required to provide a joint venture guarantee, project officers are advised to seek legal opinion from LAD(W).

( W S Chan ) Deputy Secretary for the Environment,

Transport and Works (Transport and Works) W2


Appendix A1

Special Condition of Tender The following Special Condition of Tender shall be included in the tender documents where joint ventures are allowed to tender for a contract: Contractors' Joint Venture (a) For the purposes of this Special Condition of Tender, the expressions

“unincorporated joint venture”, “participant”, “incorporated joint venture” and “shareholder” appearing herein shall bear the same meanings as those given in paragraph 6 of the Environment, Transport and Works Bureau Technical Circular (Works) No. 50/2002 on Contractors’ Joint Venture.

(b) Contractors may submit their tender in the form of a joint venture provided: (i) the participants or shareholders in the joint venture collectively satisfy the

qualification requirements; and


(c) No tenderer is permitted to submit more than one tender for each contract. For the

purpose of this clause, a tenderer which submits a tender on its own behalf and as a participant or shareholder of a joint venture or as a participant or shareholder of more than one joint venture in response to a tender exercise shall be regarded as having submitted more than one tender. A holding company and its subsidiaries are considered as one and the same tenderer. A tenderer in breach of this clause shall have its tenders disqualified. The joint venture or joint ventures in which any participant or shareholder is found to be in breach of this clause shall also have its or their tender or tenders disqualified.

(d) Where the tenderer is a joint venture, the tenderer shall provide with its tender

details of the percentage participation of each participant or shareholder in the joint venture. The percentage participation of each participant or shareholder in a joint venture shall be calculated by comparing his share of work against the sum offered by the joint venture in its tender for the execution of the Works. The tenderer shall provide details about the portion of the Works for which each joint venture participant or shareholder is responsible.

(e) Where the tenderer is an unincorporated joint venture, the participants therein

must nominate a lead participant whose financial and management participation shall be not less than that of any other participant in the joint venture.

(f) Where the tenderer is an incorporated joint venture it shall submit with its tender a

Letter of Undertaking in the form set out in Appendix (*) to this Special Condition of Tender duly executed by all the shareholders of the incorporated joint venture.

{(*) - the standard form shown in Appendix B to this circular shall be used.}

ETWB TCW No. 50/2002 Appendix A1 Page A1-1 of 1

Appendix A2

Special Condition of Tender The following Special Condition of Tender shall be included in the tender documents where joint ventures are not allowed to tender for a contract: Contractors’ Joint Venture Tenders from an incorporated joint venture or an unincorporated joint venture will not be considered unless the incorporated joint venture or the unincorporated joint venture is itself separately listed on its own account in [to be inserted3] on the List of Approved Contractors for Public Works/separately listed on its own account on the List of Approved Suppliers of Materials and Specialist Contractors for Public Works [to be inserted4]. For the purposes of this Special Condition of Tender, the expressions “unincorporated joint venture” and “incorporated joint venture” appearing herein shall bear the same meanings as those given in paragraph 6 of the Environment, Transport and Works Bureau Technical Circular (Works) No. 50/2002 on Contractors’ Joint Venture 3 Insert the appropriate Class(es), Group(s) and Category(ies) of Contractors on the List of Approved

Contractors for Public Works that are permitted to tender for this Contract. It should be the same as the stipulated in the Gazette Notice for invitation to tender for this Contract.

4 Insert the appropriate Category(ies) of Contractors on the List of Approved Suppliers of Materials and

Specialist Contractors for Public Works that are permitted to tender for this Contract. It should be the same as that stipulated in the Gazette Notice for invitation to tender for this Contract.

ETWB TCW No 50/2002 Appendix A2 Page A2-1 of 1

Appendix B

Letter of Undertaking To : The Government of the Hong Kong Special Administrative Region From : [ ] Date : [ ] Dear Sirs Letter of Undertaking Joint Venture Guarantee for Contract No. [ ] Contract Title : [ ] We refer to the tender ("the tender") submitted to you by [ ] ("the tenderer"), for the above Contract. In consideration of your agreeing to consider the tender we hereby irrevocably and unconditionally undertake to duly execute and provide to you the joint venture guarantee in the form as set out in Appendix [ ] to the Special Conditions of Contract within 14 days of your letter of acceptance of the tender (if the tender is indeed accepted by you). We hereby irrevocably and unconditionally agree to indemnify you against all losses, damages, costs and expenses you may incur or suffer as a result of our failing to abide by our above undertaking. We agree that we shall be jointly and severally liable for our obligations under this undertaking and all references to “we” shall take effect as references to all of us or any of us and the words “us” and “our” shall be construed accordingly. We hereby represent that, with respect to our obligations, liabilities or any other matter under or arising out of or in connection with this letter of undertaking, neither we nor any of our properties or assets have, in the Hong Kong Special Administrative Region, or in any other jurisdiction, any right of immunity on the grounds of sovereignty or otherwise from any legal action, suit or proceedings; from the giving of relief in any legal action, suit or proceedings; from set-off or counterclaim; from the jurisdiction of any court, in the Hong Kong Special Administrative Region or in any other jurisdiction; from service of process upon us or any agent; from attachment prior to judgment in order to obtain satisfaction thereof; from attachment after judgment or from execution or any other process for the endorsement of any judgment or other legal process in any jurisdiction; and to the extent that we are or become entitled to any immunity as aforesaid, in the Hong Kong Special Administrative Region or in any other jurisdiction with respect to our obligations, liabilities or any other matter under or arising out of or in connection with this letter of undertaking, we hereby and will irrevocably and unconditionally waive and agree not to plead or claim any such immunity. We further consent to the giving of any relief in any legal action, suit or proceeding and to execution and or any other form of process for the enforcement of any judgment against us or our assets.

ETWB TCW No. 50/2002 Appendix B Page B1 of 2

Appendix B We acknowledge that we comprise all the shareholders of [name of the tenderer]. This letter of undertaking shall be applicable whether the tender accepted by you comprises the conforming or any alternative tender or with any amendments modification or change thereto agreed between the tenderer and yourself. This letter of undertaking shall be governed by and construed in accordance with the laws for the time being in force in the Hong Kong Special Administrative Region and we hereby submit to the non-exclusive jurisdiction of the courts of the Hong Kong Special Administrative Region and irrevocably appoint the tenderer to act as our duly appointed agent for the service of process at the address shown in the tender. IN WITNESS WHEREOF this Undertaking has been executed as a deed by the shareholders of the tenderer on the date first above written. #SEALED with the COMMON SEAL of

[the shareholder ] and SIGNED by [ ] its[director(s) or director/secretary or person(s) authorized to sign the Undertaking by its board of directors]2 in the presence of: ................................................................................


[Name] [Occupation]

[Address] OR

)))))))))))))))

#3SIGNED, SEALED AND DELIVERED by [name of shareholder] by [ ], his/her/its2 attorney under power of attorney dated [ ] in the presence of: ................................................................... [Name] [Occupation] [Address]

))))))))))

[Signature of the attorney] 1

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L.S.

# Select the appropriate form or forms and REPEAT FOR EACH SHAREHOLDER of the incorporated joint

venture. 1 The italic parts are not part of the execution clause. They are for guidance or information only. 2 Select the correct expression for use. If none is applicable, insert an appropriate expression. 3 For use where the shareholder of the incorporated joint venture executes by an attorney.

ETWB TCW No. 50/2002 Appendix B Page B2 of 2

Appendix C

Special Condition of Contract

Contractors' Joint Venture (1) Where the Contractor is an incorporated joint venture it shall within fourteen (14)

days of the acceptance of the Tender provide to the Employer a joint venture guarantee in the form set out in Appendix [ ] executed by all the shareholders of the Contractor. For the purposes of this Clause, the expressions “incorporated joint venture” and “shareholder” appearing herein shall bear the same meanings as those given in paragraph 6 of the Environment, Transport and Works Bureau Technical Circular (Works) No. 50/2002 on Contractors’ Joint Venture.

(2) Notwithstanding any other provisions of the Contract, failure by the Contractor to

provide a joint venture guarantee in strict accordance with sub-clause (1) of this Clause shall constitute a breach of the Contract entitling the Employer to damages and shall entitle the Employer to terminate the Contract forthwith by notice in writing to that effect and the Contractor shall not be entitled to any compensation whatsoever as a consequence of such termination.

[ ] insert the relevant appendix to the tender documentation. See Appendix D for the Form of Joint Venture Guarantee.

ETWB TCW No. 50/2002 Appendix C Page C1 of 1

Appendix D

FORM OF JOINT VENTURE GUARANTEE


CONTRACT NO. / /

TITLE THIS GUARANTEE is made the [ ] day of [ ] [ ] BETWEEN : (1) The Government of the Hong Kong Special Administrative Region (together with

its successors and assigns, hereinafter called "the Employer"); and (2) [ ] whose registered office is at [ ] and [ ] whose registered

office is at [ ] and ..... (hereinafter collectively called "the Guarantors").

WHEREAS (A) By a contract between the Employer and [ ] (hereinafter called "the

Contractor") dated [ ] (hereinafter called "the Contract"), the Employer and the Contractor undertook certain obligations towards each other in relation to the execution and completion of certain works ("the Works") upon the terms and conditions contained in the Contract.

(B) Pursuant to the terms of the Contract, the Contractor agreed to procure the

provision of a guarantee in the terms hereof. (C) The Guarantors are shareholders of the Contractor and at the request of the

Contractor have agreed to guarantee jointly and severally the due performance of the Contract by the Contractor in the manner hereinafter appearing.

IT IS HEREBY AGREED AS FOLLOWS 1. In consideration of the Employer entering into the Contract with the Contractor,

the Guarantors hereby irrevocably and unconditionally guarantee to the Employer as a primary obligation and not as a surety punctual true and faithful performance and observance by the Contractor of the obligations, terms, conditions and liabilities to be performed, observed and assumed by the Contractor under the provisions of the Contract and of any further agreement entered into between the

ETWB TCW No. 50/2002 Appendix D Page D1 of 4

Appendix D

Employer and the Contractor in connection with the Contract and in furtherance of this guarantee irrevocably and unconditionally undertake and guarantee that on demand by the Employer the Guarantors shall perform, observe and assume those obligations, terms, conditions and liabilities.

2. The Guarantors irrevocably and unconditionally indemnify the Employer against

all losses, damages, costs and expenses suffered or incurred by the Employer arising by reason of any act, default or omission on the part of the Contractor in the performance, observance and assumption of the Contractor's obligations, terms, conditions and liabilities under the provisions of the Contract and of any further agreement entered into between the Employer and the Contractor in connection with the Contract.

3. The Guarantors irrevocably and unconditionally indemnify the Employer against

all losses, damages, costs and expenses suffered or incurred by the Employer arising by reason of any act, default or omission on the part of the Guarantors in the performance and observance of their obligations hereunder.

4. This Guarantee and the Guarantors' obligations hereunder shall remain in full

force and effect and shall not be affected or discharged by :- 4.1 any alteration (whether or not made with the Guarantors' consent) to the

terms of the Contract made by agreement between the Employer and the Contractor in the extent or nature of the works or services to be carried out thereunder;

4.2 any suspension of the Works or extension of time being given to the

Contractor or by any other indulgence or concession to the Contractor or by any forbearance, forgiveness or any other thing done, omitted or neglected to be done under the Contract;

4.3 any other bond, security or guarantee now or hereafter held by the

Employer for all or any part of the obligations of the Contractor under the Contract or any release or waiver thereof;

4.4 the voluntary or involuntary liquidation, bankruptcy, dissolution, sale of

assets, receivership, general assignment for benefit of creditors, insolvency, reorganisation, arrangement, compensation or other proceedings of or affecting the Contractor or his assets, or any change in the constitution or shareholdings of the Contractor;

4.5 any assignment by the Contractor of any or all of the obligations, terms

and conditions to be performed and observed under the Contract whether or not any such assignment has been consented to; and


4.6 without prejudice to the generality of the foregoing any fact or event

Appendix D

(whether similar to any of the foregoing or not) which in the absence of this provision can, would or might constitute or afford a legal or equitable discharge or release of or defence to a guarantor, other than the express written release by the Employer of the Guarantors' obligations.

5. The Guarantors shall not on any ground whatsoever claim or recover by the

institution of proceedings or the threat of proceedings or otherwise or claim any set-off or counterclaim against the Contractor or prove in competition with the Employer for the recovery of any payment by the Guarantors hereunder or be entitled in competition with the Employer to claim or have the benefit of any security which the Employer holds or may hold for any money or liabilities due or incurred by the Contractor to the Employer and in case the Guarantors receive any sums from the Contractor in respect of any payment by the Guarantors hereunder the Guarantors shall hold such monies in trust for the Employer so long as any sums are payable (contingently or otherwise) hereunder.

6. The Guarantors shall not be released from liability under this Guarantee by reason

of the unenforceability, invalidity or termination of the Contract for any reason whatsoever.

7. The Guarantors hereby represent that, with respect to their obligations, liabilities

or any other matter under or arising out of or in connection with this Guarantee, neither they nor any of their properties or assets have, in the Hong Kong Special Administrative Region, or in any other jurisdiction, any right of immunity on the grounds of sovereignty or otherwise from any legal action, suit or proceedings; from the giving of relief in any legal action, suit or proceedings; from set-off or counterclaim; from the jurisdiction of any court, in the Hong Kong Special Administrative Region or in any other jurisdiction; from service of process upon them or any agent; from attachment prior to judgment or from execution or any other process for the enforcement of any judgment or other legal process in any jurisdiction; and to the extent that the Guarantors are or become entitled to any immunity as aforesaid, in the Hong Kong Special Administrative Region or in any other jurisdiction in respect of their obligations, liabilities or any other matter under or arising out of or in connection with this Guarantee, they do hereby and will irrevocably and unconditionally waive and agree not to plead or claim any such immunity. The Guarantors further consent to the giving of any relief in any legal action, suit or proceeding and to execution or any other form of process for the enforcement of any judgment against them or their assets.

8. The Guarantors shall be jointly and severally liable for their obligations under this

Guarantee and all reference to the Guarantors shall take effect as references to all the Guarantors or any of them.


9. This Guarantee shall be governed by and interpreted in all respects according to the laws for the time being in force in the Hong Kong Special Administrative Region and the Guarantors hereby agree to submit to the non-exclusive

Appendix D

jurisdiction of the courts of the Hong Kong Special Administrative Region and irrevocably appoint the Contractor to act as their duly appointed agent for acceptance of the service of process.

IN WITNESS WHEREOF this Guarantee has been executed as a deed by the Guarantors on the date first above written. #SEALED with the COMMON SEAL of )

[the Guarantor ] and SIGNED by [ ] its

) )

[director(s) or director/secretary or person(s) authorized to sign the guarantee by its board ofdirectors]2

) ) )


in the presence of:

) )

) ................................................................................. ) [Name] ) [Occupation] ) [Address] )

OR

#3SIGNED, SEALED AND DELIVERED by [name of the Guarantor] by [ ], his/her/its2 attorney under power of attorney dated [ ] in the presence of: ................................................................... [Name] [Occupation] [Address]

))))))))))


# Select the appropriate form or forms and repeat for each Guarantor. 1. The italic parts are not part of the execution clause. They are for guidance or information only. 2 Select the correct expression for use. If none is applicable, insert an appropriate expression. 3 For use where the Guarantor executes by an attorney.

ETWB TCW No. 50/2002 Appendix D Page D

Common Seal

L.S.

4 of 4

Appendix E

Articles of Agreement for use with an Unincorporated Joint Venture


CONTRACT NO. / /

TITLE ARTICLES OF AGREEMENT made and entered into this day of between the Government of the Hong Kong Special Administrative Region (hereinafter referred to as "the Employer") and of and of (a) trading as [name of the unincorporated joint venture] at (hereinafter referred to collectively as "the Contractor"). WHEREAS (A) the Employer is desirous of having the Works executed in accordance with the

General Conditions of Contract and the Special Conditions of Contract, the Tender and the acceptance thereof by the Employer, the Bills of Quantities or Schedule of Rates, the Drawings and the Specification.

(B) the Contractor has agreed to execute the Works subject to the terms and conditions

hereinafter contained : NOW IT IS HEREBY AGREED AS FOLLOWS : 1. In these Articles of Agreement, words and expressions shall have the same meanings as are respectively assigned to them in the General Conditions of Contract and the Special Conditions of Contract (if any) referred to in the tender submitted by the Contractor for Contract No. [ ] and accepted by the Employer. 2. For the consideration hereinafter contained, the Contractor shall execute the Works to the satisfaction of the Architect/Engineer* in accordance with the General Conditions of Contract and the Special Conditions of Contract, the Tender and the acceptance thereof by the Employer, the Bills of Quantities or Schedule of Rates, the Drawings and the Specification.

ETWB TCW No. 50/2002 Appendix E Page E1 of 4

Appendix E

3. The Contractor shall execute the Works within the period stipulated in the Contract or within such further time as may be determined by the Architect/Engineer* in accordance with the provisions of the Contract. 4. The Employer shall pay to the Contractor the Final Contract Sum at the times the manner specified in the Contract.

L. .S

5. and (a) each agrees to be jointly and severally bound terms of the Contract. IN WITNESS WHEREOF these Articles of Agreement have been executed as a deed parties hereto on the date first above written

SIGNED, SEALED and DELIVERED by )the Employer by )[insert name and appointment of officer] )in the presence of: ) ) ) )........................................................................ )[Name] )[Occupation] )[Address] )

[Signature of the officer]**

(b) #SIGNED, SEALED and DELIVERED )

by [name of participant] being a participant )of the [name of the unincorporated joint venture] ) in the presence of: ) ) )........................................................................ )[Name] )[Occupation] )[Address] )

[Signature of the participant]**

(c) #SIGNED, SEALED and DELIVERED by )

L.S

L

ETWB TCW No. 50/2002 Appendix E Page E2L

and in

by the

by the

of 4

.

L.S.

L.S.

.S.

.S.

Appendix E

[name of a participant] being a participant of the [name of the unincorporated joint venture] )by [ ], ) his/her/its* attorney under power of attorney ) dated [ ] ) in the presence of: ) ) ......................................................................... ) [Name] ) [Occupation] ) [Address] )

[Signature of the attorney]**

(d) #SEALED with the COMMON SEAL of )

[name of participant] ) being a particpiant of the [name of the unincorporated joint venture] ) and SIGNED by ) [ ] its [diretor(s) or director and )secretary or person(s) authorized to ) sign the contract by its board of directors] ) in the presence of: ) ) .......................................................................... ) [Name] ) [Occupation] ) [Address] )

[Signature(s) of the directors etc]**

CommonSeal

Notes: (for preparation of but not inclusion in the engrossment of these Articles of

Agreement) (a) This may be appropriately expanded if there are more than two (2) joint venture

participants. (b) For use where an individual joint venture participant is a sole proprietor or is a

partnership itself. (c) For use where an individual joint venture participant, whether a firm or an

incorporated company, executes through an attorney. (d) For use where an individual joint venture participant which is an incorporated

company executes under its common seal. # Select the appropriate form or forms and REPEAT FOR EACH PARTICIPANT of

the unincorporated joint venture.


Appendix E


** The italic parts are not part of the execution clause. They are for guidance or information

only. * Delete as appropriate.

ETWB TC(W) No. 50/2002 Contractor Joint Ventures · 2017-01-25 · previous memo ref (019JP-01-4)...

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