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STANDARD BIDDING DOCUMENTS

Supply and Installationof Plant and Equipment

lThe World BankWashington, D.C.

January 1996

iii

Preface

This is a Trial Edition of a new set of bidding documents entitled "Standard BiddingDocuments for the Supply and Installation of Plant and Equipment" that has been prepared forcontracts financed by the International Bank for Reconstruction and Development (IBRD) orthe International Development Association (IDA) (interchangeably known as "The WorldBank" or "the Bank") involving the supply, installation and commissioning of speciallyengineered plant and equipment, such as turbines, generators, boilers, switchyards, pumpingstations, telecommunications, process and treatment plants, and the like for power, water,sewerage, telecommunication and similar projects. Normally, this set of documents should beused when (i) the value of the plant and equipment portion is in excess of fifty percent (50%)of the estimated contract value, or (ii) the nature and complexity of the plant and equipment issuch that the facilities cannot safely be taken over by the Employer without elaborate testing,precommissioning, commissioning and acceptance procedures being followed. Exceptionswould be pipeline and power transrmission line contracts where the nature of the works is suchthat the Bank's Standard Bidding Documents (SBDs) for Works (or Smaller Works) wouldbe more appropriate. If the user has questions regarding which SBD should be used in aparticular case, the appropriate Bank's Regional Procurement Advisor or the ProcurementPolicy and Coordination Unit, Operations Policy Department, should be consulted.

These documents include both a Single Stage (Option A) and an alternative TwoStage (Option B) bidding procedure to be chosen by Borrowers as appropriate to eachcircumstance. The choice of the Two Stage bidding procedure shall be subject to the Bank'sadvance approval on a case-to-case basis, depending on the complexity of the contract and theparticular circumstances surrounding its procurement and implementation. The BiddingProcedures Flowcharts (one for Single Stage bidding and one for Two Stage bidding) showhow the bidding documents are intended to be used both during the bidding process andduring the formulation of the eventual contract documents.

(i) In accordance with the provisions of the World Bank Guidelines:Procurement under IBRD Loans and IDA Credits, January 1995, the use ofSBDs prepared by the Bank is mandatory for all contracts financed by theBank. Borrowers will be required to follow the provisions of these SBDs forproposed contracts for the supply and installation of plant and equipment, oncethe trial period is over and the final edition is published.

(ii) The documents have been prepared as standard documents, which can be usedin their published form without the need for the Borrower to amend or add textto the standard sections of the document. All information and data particularto each individual contract and required by Bidders in order to prepareresponsive bids must be provided by the Employer, prior to issuing the BiddingDocuments, in the "Bid Data Sheet" (Section III), the "Special Conditions ofContract" (Section V), the "Technical Specifications and Drawings" (SectionVI), and the Appendixes to the "Form of Contract Agreement" (Section VII).

iv Preface

Unless specifically agreed with the Bank, the Special Conditions of Contractshall not materially alter the provisions of the General Conditions of Contract.

(iii) The role of "the Engineer," as found, for example, in the Conditions ofContract for Electrical and Mechanical Works produced by the InternationalFederation of Consulting Engineers (FIDIC), is not includ,ed in these BiddingDocuments. In its place, and fulfilling the same duties, there are two newparties named the "Project Manager" and the "Adjudicator."

The Project Manager is appointed by the Employer. Its role is to supervise andmanage the Contract on behalf of the Employer with the intention of achievingthe Employer's objectives for the completed Contract. When appointing theProject Manager, the Employer may either select a reputable firm ofConsulting Engineers experienced in the particular field, or the Employer mayappoint one of its own staff as Project Manager, if the Bank is satisfied that ithas suitable in-house expertise.

The name of the Adjudicator proposed by the Employer is to be given in theBid Data Sheet, and the Bidders have the right to accept or propose analternate in their bids. The documents foresee the nomination of anAdjudicator whose role is to review and decide upon any matters of potentialdispute between the parties where the parties, with or without the help of theProject Manager, have been unable to settle the matter amicably. The costs ofthe Adjudicator are shared equally by both parties. Arbitration is resorted toonly if the parties fail to settle the dispute through the Adjudicator.

(iv) The General Conditions of Contract are based on the Model Form ofInternational Contract for Process Plant Construction published by theEngineering Advancement Association of Japan (ENAA), and the Bankgratefully acknowledges the permission of ENAA to make use of and amendthe Model Form for inclusion in these Standard Bidding Documents. TheseGeneral Conditions meet the Bank's requirements, and they shall be usedwithout amendment unless specifically agreed with the Bank.

The ENAA conditions were drafted primarily with turnkey contracts in mindwhere the Contractor is responsible for each activity required for completion ofthe facilities, e.g., design, manufacture, delivery, installation, testing,commissioning, training, etc. However, these conditions have been adapted bythe Bank for use for single responsibility contracts where some activities, suchas parts of the preliminary design or site preparation works, are done by others.

(v) The time allowed for preparing and submitting bids should not be too short andshould allow adequate time for Bidders to properly study the Invitation, visitthe site and prepare complete and responsive bids.

Preface v

As this is a Trial Edition, any Borrower or Employer using this SBD who is unclear asto the requirements or intentions of the Bank or otherwise finds any ambiguities ordiscrepancies in the Documents is invited to seek clarification from the Bank during the trialperiod. Furthermore, the Bank welcomes any feedback or experiences from the use of theseBidding Documents, from bidders and from others as well.

Any feedback or queries should be addressed to:

Procurement Policy and Coordination UnitOperations Policy Department

The World Bank1818 H Street, N.W.

Washington, D.C. 20433U.S.A.

vii

Table of Contents

OPTION A: SINGLE STAGE BIDDING .................................................... 1

Section I. Invitation for Bids .................................................... 3Notes on the Invitation for Bids .................................................... 3

Section II. Instructions to Bidders ................................................... 7Notes on the Instructions to Bidders .................................................... 7Table of Clauses ................................................... 8

Section III. Bid Data Sheet .................................................. 35Notes on the Bid Data Sheet ................................................... 35

OPTION B: TWO STAGE BIDDING ................................................... 41

Section I. Invitation for Bids .................................................. 43Notes on the Invitation for Bids .................................................. 43

Section II. Instructions to Bidders ................................................... 49Notes on the Instructions to Bidders .................................................. 49Table of Clauses .................................................. 50

Section III. Bid Data Sheet .................................................. 81Notes on the Bid Data Sheet .................................................. 81

Section IV. General Conditions of Contract ................................................... 87Notes on the General Conditions of Contract .................................................. 87Table of Clauses ................................................... 88

Section V. Special Conditions of Contract .................................................. 161Notes on the Special Conditions of Contract .................................................. 161Table of Clauses .................................................. 162

Section VI. Technical Specifications and Drawings ................................................... 169Notes on Preparing the Technical Specifications and Drawings .............................. 169

viii Contents

Section VII. Sample Forms and Procedures ......................................................... 171Notes on the Sample Forms and Procedures ......................................................... 1711. Bid Forms and Price Schedules .......................................................... 1742. Bid Security Form .......................................................... 1883. Form of Contract Agreement .......................................................... 1904. Performance Security Forms .......................................................... 2095. Bank Guarantee FormforAdvance Payment .................................................... 2146. Form of Completion Certificate .......................................................... 2167. Form of Operational Acceptance Certificate ..................................................... 2178. Change Order Procedures .......................................................... 218

Section VIII. Eligibility for the Provision of Goods, Works and Services inBank-Financed Procurement ........................................................ 233

ix

Acronyms

BDS Bid Data SheetCIF Cost, Insurance and FreightCIP Carriage and Insurance Paid to (place)CPM Critical Path MethodECU European Currency UnitEDI Electronic Data InterchangeENAA Engineering Advancement Association of JapanEXW Ex factory, ex works or ex warehouseFCA Free CarrierFIDIC Federation International des Ingenieurs Conseils (International Federation of

Consulting Engineers)FOB Free on BoardGCC General Conditions of ContractIBRD International Bank for Reconstruction and DevelopmentICC International Chamber of CommerceIDA International Development AssociationIFB Invitation for BidsITB Instructions to BiddersSBD Standard Bidding DocumentSCC Special Conditions of ContractTS Technical Specifications and DrawingsUNCITRAL United Nations Commnission on International Trade Law

I

OPTION A: SINGLE STAGE BIDDING

3

Section I. Invitation for Bids

Notes on the Invitation for Bids

The Invitation for Bids (IFB) (see para. 2.8 of the World Bank Guidelines: Procurementunder IBRD Loans and IDA Credits, January 1995) shall be issued as:

(a) an advertisement in at least one newspaper of general circulation in theBorrower's country and in the official gazette, if any

(b) an advertisement in Development Business and/or well-known technicalmagazines (mandatory if specified in the Loan or Credit Agreement)

Advertising iniquiries about the U.N. Development Business publication can be directed asshown below:

Development BusinessUnited Nations, Room DCI-560 Telephone: 1-212-963-1515One United Nations Plaza Facsimile: 1-212-963-1318New York, N.Y. 10017 U.S.A. Telex: 422311 UNUI

Advertisements cani also be arranged through the World Bank, where DevelopmentBusiness maintains a local office at: 1818 H Street, N.W., Washington, D.C. 20433U.S.A., Telephonie: 1-202-458-2397; Facsimile: 1-202-522-3316.

(c) a letter addressed to interested bidders who, following the publication of theGeneral Procurement Notice, have expressed interest in bidding for theinstallation of the plant and equipment for which the invitation is issued

(d) optionally, a circular to consular or diplomatic representatives of countrieswith potential bidders.

The IFB provides information that enables potential bidders to decide whether toparticipate. Apart from the essential items listed in the Standard Bidding Documents(SBDs), the IFB should also indicate any important bid evaluation criteria (for example, theapplication of a margin of preference in bid evaluation) or qualification requirement (forexample, a requirement for a minimum level of experience in manufacturing and installing asimilar type of plant and equipment for which the IFB is issued).

The IFB should be incorporated into the bidding documents. The information contained inthe IFB must conform to the bidding documents and in particular to the relevantinformation in the Bid Data Sheets.

4 Section I. Invitation for Bids

Invitation for Bids

Date of Issuance of IFB:Loan/Credit No.:

IFB No.:

1 . The [name of Borrower] has received' a loan2 from the International Bank forReconstruction and Development3 in various currencies towards the cost of [name ofProject]. It is intended that part of the proceeds of this loan will be applied to eligiblepayments under the contract for [title of Contract].

2. The [name of Employer] now invites sealed bids from eligible Bidders for the supply andinstallation of [brief description of the facilities to be supplied and installed and the services to be

provided].

3. Interested eligible4 Bidders may obtain further information from and inspect thebidding documents at the office of: [name, address and telex/telefax numbers of appropriate

office].5

4. A complete set of bidding documents may be purchased by any interested eligibleBidder on submission of a written application to the above and upon payment of anonrefundable fee of [amount in Borrower's currency or in a convertible currencyl. 6

5. The provisions in the Instructions to Bidders and in the General Conditions ofContract are the provisions of the World Bank Standard Bidding Documents: Supplyand Installation of Plant and Equipment.

6. Bids must be delivered to [name and address of Employer]7 no later than [time] local timeon [month, day, year].

lSubstitute "has applied for" if appropriate.2 Substitute "credit" where appropriate.3 Substitute "International Development Association" where appropriate.4 Change "Interested eligible" to "Prequalified" if a prequalification was carried out.5 The office for inquiry and issuance of bidding documents and that for bid submission may or may not be thesame.6 The fee chargeable should only be nominal, to defray reproduction and mailing costs and to ensure that onlybona fide bidders will request the bidding documents. An amount between US$50 and US$300 or theequivalent is deemed appropriate.7 Substitute the Employer's address for bid submission if different from its address for inquiry and issuance ofbidding documents.

Section 1. Invitation for Bids S

7. All bids must be accompanied by a bid security in an amount of [fixed amount in localcurrency] or the equivalent of Lfixed amount in U.S. dollars] in a freely convertible currencyin one of the following forms:

(a) a bank guarantee or irrevocable letter of credit issued directly by a reputablebank, in the form provided in the bidding documents, or

(b) a cashier's or certified check.

8. Bids will be opened in the presence of the Bidder's representatives who choose toattend at the office of [name, place and address] at [date and local time].

9. In the comparison of evaluated bids, the Employer will grant a margin of preference toplant and equipment manufactured in the Employer's country in accordance with theprocedures outlined in the bidding documents.8

10. [Include a brief description of the basic minimum qualification criteria that Bidders must meet. Thedescription may be less detailed but not more restrictive than the criteria specified in the Bid DataSheet. If Bidders were prequalified, include any update required from the information provided forprequalification.

bThis item should be deleted when the margin of preference does not apply.9 Information to be updated may be specified, such as an updated financial situation, new contractualcommitment or current litigation.

7

Section II. Instructions to Bidders

Notes on the Instructions to Bidders

This section of the bidding documents provides the information necessary for bidders toprepare responsive bids, in accordance with the requirements of the Employer. It alsoprovides information on bid submission, opening and evaluation, and on contract award.

Section II contains provisions that are to be used unchanged. Section III consists ofprovisions that supplement, amend, or specify in detail information or requirementsincluded in Section II and that are specific to each procurement.

Matters governing the performance of the Contractor, payments under the contract, ormatters affecting the risks, rights, and obligations of the parties under the contract are notnormally included in this section, but instead under Section IV, General Conditions ofContract, and/or Section V, Special Conditions of Contract. If duplication of a subject isinevitable in the other sections of the document prepared by the Employer, care must beexercised to avoid contradictions between clauses dealing with the same matter.

These Instructions to Bidders will not be part of the contract.

8 Section H. Instuctions to Biddes

Table of Clauses

A. Introduction ................................... 101. Source of Funds ................................... 102. Eligible Bidders ................................... 103. Eligible Plant, Equipment, and Services ................................... 114. Cost of Bidding .................................... 11

B. The Bidding Documents .................................. 115. Content of Bidding Documents .................................. 1 16. Clarification of Bidding Documents .................................. 127. Amendment of Bidding Documents .................................. 13

C. Preparation of Bids .................................. 138. Language of Bid .................................. 139. Documents Comprising the Bid ................................... 1310. Bid Form and Price Schedules .................................. 1811. Bid Prices .................................. 1812. Bid Currencies .................................. 2113. Bid Security .................................. 2114. Period of Validity of Bid .................................. 2215. Format and Signing of Bid .................................. 23

D. Submission of Bids ................................... 2316. Sealing and Marking of Bids ................................... 2317. Deadline for Submission of Bids ................................... 2418. Late Bids ................................... 2419. Modification and Withdrawal of Bids ................................... 24

E. Bid Opening and Evaluation .................................. 2520. Opening of Bids by Employer .................................. 2521. Clarification of Bids .................................. 2522. Preliminary Examination of Bids .................................. 2623. Conversion to Single Currency .................................. 2724. Technical Evaluation .................................. 2725. Commercial Evaluation .................................. 2826. Domestic Preference .................................. 3127. Contacting the Employer .................................. 31

Section II. Instructions to Bidders 9

F. Award of Contract ......................................................... 3128. Post-qualification ......................................................... 3129. Award Criteria ......................................................... 3230. Employer's Right to Accept Any Bid and to Reject Any or All Bids ................... 3231. Notification of Award ......................................................... 3232. Signing the Contract Agreement ......................................................... 3333. Performance Security ......................................................... 3334. Adjudicator ......................................................... 33

10 Section II. Instructions to Bidders

Instructions to Bidders

A. Introduction

1. Source of 1.1 The Borrower named in the Bid Data Sheet has received/appliedFunds for a loan/credit (hereafter called "loan") from the International

Bank for Reconstruction and Development (IBRD) or theInternational Development Association (IDA) (as identified in theBid Data Sheet and hereafter interchangeably called "the Bank")of the U.S. dollar amount indicated in the Bid Data Sheet. Theloan will be used in various currencies toward the cost of theProject named in the Bid Data Sheet. The Borrower intends toapply a portion of the proceeds of this loan to eligible paymentsunder the contract for which this Invitation for Bids is issued.

1.2 Payment by the Bank will be made only at the request of theBorrower and upon approval by the Bank, in accordance with theterms and conditions of the loan agreement, and will be subject inall respects to the terms and conditions of that agreement. Theloan agreement prohibits a withdrawal from the loan account forthe purpose of any payment to persons or entities, or for anyimport of plant and equipment, if such payment or import, to theknowledge of the Bank, is prohibited by a decision of the UnitedNations Security Council taken under Chapter VII of the Charterof the United Nations. No party other than the Borrower shallderive any rights from the loan agreement or have any claim tothe loan proceeds.

2. Eligible 2.1 This Invitation for Bids, issued by the Employer named in the BidBidders Data Sheet, is open to all suppliers from eligible source countries

as defined in Guidelines: Procurement under IBRD Loans andIDA Credits, January 1995, hereinafter referred to as the IBRDGuidelines for Procurement, except as provided hereinafter.

2.2 Bidders should not be associated, or have been associated in thepast, directly or indirectly, with a firm or any of its affiliates thathas been engaged by the Employer to provide consulting servicesfor the preparation of the design, specifications, and otherdocuments to be used for the procurement of the facilities to bepurchased under this Invitation for Bids.

2.3 Government-owned enterprises in the Employer's country mayonly participate on their own or as members of a joint venture ora consortium if they are legally and financially autonomous,


operate under commercial law, and are not dependent agencies ofthe Borrower or Sub-Borrower.

3. Eligible Plant, 3.1 For the purposes of these bidding documents, the wordEquipment, "facilities" means the plant and equipment to be supplied andand Services installed, together with the services to be carried out by the

contractor under the contract. The words "plant and equipment,""installation services," etc., shall be construed in accordance withthe respective definitions given to them in the General Conditionsof Contract.

3.2 All plant and equipment to be supplied and installed and servicescarried out under the contract shall have their origin in eligiblesource countries, defined in the IBRD Guidelines frProcurement, and all expenditures made under the contract willbe limited to such plant, equipment, and services.

3.3 For purposes of this clause, "origin" means the place where theplant and equipment or component parts thereof are mined,grown, or produced. Plant and equipment are produced when,through manufacturing, processing or substantial and majorassembling of components, a commercially recognized productresults that is substantially different in basic characteristics or inpurpose or utility from its components.

3.4 The origin of the plant, equipment, and services is distinct fromthe nationality of the Bidder.

4. Cost of 4.1 The Bidder shall bear all costs associated with the preparation andBidding submission of its bid, and the Employer will in no case be

responsible or liable for these costs, regardless of the conduct oroutcome of the bidding process.

B. The Bidding Documents

5. Content of 5.1 The facilities required, bidding procedures, contract terms andBidding technical requirements are prescribed in the bidding documents.Documents The bidding documents include the following sections:

Invitation for Bids (IFB)Instructions to Bidders (ITB)Bid Data Sheet (BDS)General Conditions of Contract (GCC)Special Conditions of Contract (SCC)


Technical Specifications and Drawings (TS)Forms and Procedures (FP)

1. Bid Form and Price Schedules2. Bid Security Form3. Form of Contract Agreement4. Performance Security Forms5. Bank Guarantee Form for Advance Payment6. Form of Completion Certificate7. Form of Operational Acceptance Certificate8. Change Order Procedures

Eligibility for the Provision of Goods, Works and Services inBank-Financed Procurement.

5.2 The Bidder is expected to examine all instructions, forms, terms,specifications and other information in the bidding documents.Failure to furnish all information required by the biddingdocuments or submission of a bid not substantially responsive tothe bidding documents in every respect will be at the Bidder's riskand may result in rejection of its bid.

6. Clarification of 6.1 A prospective Bidder requiring any clarification of the biddingBidding documents may notify the Employer in writing or by cableDocuments (hereinafter, the term cable is deemed to include Electronic Data

Interchange (EDI), telex or telefax) at the Employer's mailingaddress indicated in the Bid Data Sheet. Similarly, if a Bidderfeels that any important provision in the documents, such as thoselisted in ITB Sub-Clause 22.5, will be unacceptable, such an issueshould be raised at this stage. The Employer will respond inwriting to any request for clarification or modification of thebidding documents that it receives no later than twenty-eight (28)days prior to the deadline for submission of bids prescribed by theEmployer. Written copies of the Employer's response (includingan explanation of the query but not identification of its source)will be sent to all prospective Bidders that have received thebidding documents.

6.2 The Bidder is advised to visit and examine the site where thefacilities are to be installed and its surroundings and obtain foritself on its own responsibility all information that may benecessary for preparing the bid and entering into a contract forsupply and installation of the facilities. The costs of visiting thesite shall be at the Bidder's own expense.

Section 11. Instructions to Bidders 13

6.3 The Bidder and any of its personnel or agents will be grantedpermission by the Employer to enter upon its premises and landsfor the purpose of such inspection, but only upon the expresscondition that the Bidder, its personnel and agents will releaseand indemnify the Employer and its personnel and agents fromand against all liability in respect thereof and will be responsiblefor death or personal injury, loss of or damage to property andany other loss, damage, costs and expenses incurred as a result ofthe inspection.

7. Amendment of 7.1 At any time prior to the deadline for submission of bids, theBidding Employer may, for any reason, whether at its own initiative, or inDocuments response to a clarification requested by a prospective Bidder,

amend the bidding documents.

7.2 The amendment will be notified in writing or by cable to allprospective Bidders that have received the bidding documentsand will be binding on them. Bidders are required to immediatelyacknowledge receipt of any such amendment, and it will beassumed that the information contained therein will have beentaken into account by the Bidder in its bid.

7.3 In order to afford prospective Bidders reasonable time in which totake the amendment into account in preparing their bid, theEmployer may, at its discretion, extend the deadline for thesubmission of bids.

C. Preparation of Bids

8. Language of 8.1 The bid prepared by the Bidder and all correspondence andBid documents related to the bid exchanged by the Bidder and the

Employer shall be written in the language specified in the BidData Sheet, provided that any printed literature furnished by theBidder may be written in another language, as long as suchliterature is accompanied by a translation of its pertinent passagesin the language specified in the Bid Data Sheet, in which case, forpurposes of interpretation of the bid, the translation shall govern.

9. Documents 9.1 The bid submitted by the Bidder shall comprise the followingComprising documents:the Bid

(a) Bid Form duly completed and signed by the Bidder,together with all Attachments identified in ITB Sub-Clause9.3 below.


(b) Price Schedules duly completed by the Bidder.

9.2 Bidders shall note that, if permitted according to the Bid DataSheet, they are entitled to submit an alternative bid within thescope specified in the Bid Data Sheet. In such cases, Biddersshall submit full details and justifications, etc., in Attachment 7 tothe bid as indicated in ITB Sub-Clause 9.3 (g) below.

9.3 Each Bidder shall submit with its bid the following attachments:

(a) Attachment 1: Bid SecurityA bid security furnished in accordance with ITB Clause 13.

(b) Attachment 2: Power of AttorneyA power of attorney, duly authorized by a Notary Public,indicating that the person(s) signing the bid has theauthority to sign the bid and thus that the bid is bindingupon the Bidder during the full period of its validity inaccordance with ITB Clause 14.

(c) Attachment 3: Bidder's Eligibility and QualificationsIn the absence of prequalification, documentary evidenceestablished in accordance with ITB Clause 2 that the Bidderis eligible to bid and is qualified to perform the contract if itsbid is accepted.

The documentary evidence of the Bidder's eligibility to bidshall establish to the Employer's satisfaction that the Bidder,at the time of submission of its bid, is from an eligiblesource country as defined in ITB Sub-Clause 2.1.

The documentary evidence of the Bidder's qualifications toperform the contract, if its bid is accepted, shall establish tothe Employer's satisfaction that the Bidder has the financial,technical, production, procurement, shipping, installationand other capabilities necessary to perform the contract,and, in particular, meets the experience and other criteriaoutlined in the Bid Data Sheet.

Bids submitted by a joint venture or a consortium of two ormore firms as partners shall comply with the followingrequirements:


(i) The bid shall include all the information required forAttachment 3 as described above for each jointventure or consortium partner.

(ii) The bid shall be signed so as to be legally binding onall partners.

(iii) One of the partners responsible for performing a keycomponent of the contract shall be designated asleader, this authorization shall be evidenced bysubmitting with the bid a power of attorney signed bylegally authorized signatures.

(iv) The leader shall be authorized to incur liabilities andreceive instructions for and on behalf of any and allpartners of the joint venture or consortium, and theentire execution of the contract, including payment,shall be done exclusively with the leader.

(v) All partners of the joint venture or consortium shall beliable jointly and severally for the execution of thecontract in accordance with the contract terms.

(vi) A copy of the agreement entered into by the jointventure or consortium partners shall be submitted withthe bid.

In order for a joint venture or consortium to qualify, each ofits partners or combination of partners must meet theminimum criteria listed for an individual Bidder for thecomponent of the contract they are designated to perform.Failure to comply with this requirement will result inrejection of the joint venture or consortium's bid.

A firm can be a partner in only one joint venture orconsortium; bids submitted by joint ventures or consortiaincluding the same firm as partner will be rejected.

In the case of a Bidder who offers to supply and/or installplant and equipment under the contract that the Bidder didnot manufacture or otherwise produce and/or install, theBidder shall (i) have the financial and other capabilitiesnecessary to perform the contract; (ii) have been dulyauthorized by the manufacturer or producer of the relatedplant and equipment or component to supply and/or install


that item in the Employer's country; and (iii) be responsiblefor ensuring that the manufacturer or producer complieswith the requirements of ITB Sub-Clause 2.1 and meets theminimum criteria listed for an individual bidder for that item.

(d) Attachment 4: Eligibility and Conformity of the FacilitiesDocumentary evidence established in accordance with ITBClause 3 that the facilities offered by the Bidder in its bid orin any alternative bid (if permitted) are eligible and conformto the bidding documents.

The documentary evidence of the eligibility of the facilitiesshall consist of a statement on the country of origin of theplant and equipment offered, which shall be confirmed by acertificate of origin issued at the time of shipment.

The documentary evidence of the conformity of the facilitiesto the bidding documents may be in the form of literature,drawings and data, and shall furnish:

(i) a detailed description of the essential technical andperformance characteristics of the facilities;

(ii) a list giving full particulars, including availablesources, of all spare parts, special tools, etc.,necessary for the proper and continuing functioning ofthe facilities for the period named in the Bid DataSheet, following completion of facilities in accordancewith provisions of contract; and

(iii) a commentary on the Employer's TechnicalSpecifications and adequate evidence demonstratingthe substantial responsiveness of the facilities to thosespecifications. Bidders shall note that standards forworkmanship, materials and equipment designated bythe Employer in the bidding documents are intendedto be descriptive (establishing standards of quality andperformance) only and not restrictive. The Biddermay substitute alternative standards, brand namesand/or catalog numbers in its bid, provided that itdemonstrates to the Employer's satisfaction that thesubstitutions are substantially equivalent or superior tothe standards designated in the TechnicalSpecifications.


(e) Attachment 5: Subcontractors Proposed by the BidderThe Bidder shall include in its bid details of all major itemsof supply or services that it proposes to purchase or sublet,and shall give details of the name and nationality of theproposed Subcontractor, including vendors, for each ofthose items. Bidders are free to list more than oneSubcontractor against each item of the facilities. Quotedrates and prices will be deemed to apply to whicheverSubcontractor is appointed, and no adjustment of the ratesand prices will be permitted

The Bidder shall be responsible for ensuring that anySubcontractor proposed complies with the requirements ofITB Sub-Clause 2. 1, and that any plant, equipment orservices to be provided by the Subcontractor comply withthe requirements of ITB Clause 3 and ITB Sub-Clause 9.3,Attach. 3.

The Employer reserves the right to delete any proposedSubcontractor from the list prior to award of contract, andafter discussion between the Employer and the Contractor,Appendix 5 to the form of Contract Agreement shall becompleted, listing the approved Subcontractors for eachitem.

(f) Attachment 6: DeviationsDeviations, if any, from the terms and conditions orTechnical Specifications shall be listed ONLY inAttachment 6 to the bid. The Bidder shall also provide theadditional price, if any, for withdrawal of the deviations.However, the attention of the Bidders is drawn to theprovisions of ITB Sub-Clause 22.4 regarding the rejectionof bids that are not substantially responsive to therequirements of the bidding documents.

(g) Attachment 7: Alternative Bids(i) When alternatives to the Time Schedule called for in

Appendix 4 to the Contract Agreement are explicitlyinvited, a statement to that effect will be included inthe Bid Data Sheet, as will the method of evaluatingdifferent time schedules.

(ii) Except as provided under subparagraph (iii) below,bidders wishing to offer technical alternatives to therequirements of the bidding documents must first price

Section I. Instructions to Bidders

the Employer's design of the facilities as described inthe bidding documents, and shall further provide allinforrnation necessary for a complete evaluation of thealternatives by the Employer, including drawings,design calculations, technical specifications,breakdown of prices, proposed installationmethodology and other relevant details. Only thetechnical alternatives, if any, of the lowest evaluatedbidder conforming to the basic technical requirementsshall be considered by the Employer.

(iii) When bidders are permitted in the Bid Data Sheet tosubmit alternative technical solutions for specifiedparts of the facilities, such parts shall be described inSection VI, Technical Specifications and Drawings.Technical alternatives that comply with theperformance and technical criteria specified for thefacilities shall be considered by the Employer on theirown merits, pursuant to ITB Sub-Clause 24.2.

10. Bid Form and 10.1 The Bidder shall complete the Bid Form and the appropriate PricePrice Schedules furnished in the bidding documents as indicated thereinSchedules and in the Subsection "Bid Form and Price Schedules" of the

bidding documents, following the requirements of ITB Clauses 11and 12.

11. Bid Prices 11.1 Unless otherwise specified in the Technical Specifications,Bidders shall quote for the entire facilities on a "singleresponsibility" basis such that the total bid price covers all theContractor's obligations mentioned in or to be reasonably inferredfrom the bidding documents in respect of the design,manufacture, including procurement and subcontracting (if any),delivery, construction, installation and completion of the facilities.This includes all requirements under the Contractor'sresponsibilities for testing, precommissioning and commissioningof the facilities and, where so required by the bidding documents,the acquisition of all permits, approvals and licenses, etc.; theoperation, maintenance and training services and such other itemsand services as may be specified in the bidding documents, all inaccordance with the requirements of the General Conditions ofContract.

11.2 Bidders are required to quote the price for the commercial,contractual and technical obligations outlined in the biddingdocuments. If a Bidder wishes to make a deviation, such


deviation shall be listed in Attachment 6 of its bid. The Biddershall also provide the additional price, if any, for withdrawal ofthe deviations.

11.3 Bidders shall give a breakdown of the prices in the manner anddetail called for in the Price Schedules. Where no PriceSchedules are included in the bidding documents, Bidders shallpresent their prices in the following manner:

Separate numbered Schedules shall be used for each of thefollowing elements. The total amount from each Schedule (1 to4) shall be summnarized in a Grand Summary (Schedule 5) givingthe total bid price(s) to be entered in the Bid Form.

Schedule No. 1 Plant and Equipment (including MandatorySpare Parts) Supplied from Abroad

Schedule No. 2 Plant and Equipment (including MandatorySpare Parts) Supplied from within theEmployer's Country

Schedule No. 3 Local TransportationSchedule No. 4 Installation ServicesSchedule No. 5 Grand Summary (Schedules Nos. 1 to 4)Schedule No. 6 Recommended Spare Parts

Bidders shall note that the plant and equipment included inSchedules Nos. I and 2 above exclude materials used for civil,building and other construction works. All such materials shall beincluded and priced under Schedule No. 4, Installation Services.

11.4 In the Schedules, Bidders shall give the required details and abreakdown of their prices as follows:

(a) Plant and equipment to be supplied from abroad (ScheduleNo. 1) shall be quoted on a CIF port-of-entry, CIP borderpoint basis or CIP-named place. In addition, the FOB price(or the FCA price, as the case may be) shall also beindicated.

(b) Plant and equipment manufactured or fabricated within theEmployer's country (Schedule No. 2) shall be quoted on anEXW (ex factory, ex works, ex warehouse or off-the-shelf,as applicable) basis, and shall be inclusive of all costs as wellas duties and taxes paid or payable on components and rawmaterials incorporated or to be incorporated in the facilities.


(c) Local transportation, insurance and other local costsincidental to delivery of the plant and equipment. (ScheduleNo. 3).

(d) Installation Services shall be quoted separately (ScheduleNo. 4) and shall include rates or prices for all labor,contractor's equipment, temporary works, materials,consumables and all matters and things of whatsoevernature, including operations and maintenance services, theprovision of operations and maintenance manuals, training,etc., where identified in the bidding documents, as necessaryfor the proper execution of the Installation Services,including all taxes, duties, levies and charges payable in theEmployer's country as of twenty-eight (28) days prior tothe deadline for submission of bids.

(e) Recommended spare parts shall be quoted separately(Schedule 6) as specified in either subparagraph (a) or (b)above in accordance with the origin of the spare parts.

11.5 The terms EXW, CIF, CIP, etc., shall be governed by the rulesprescribed in the current edition of Incoterms, published by theInternational Chamber of Commerce, 38 Cours Albert lIr, 75008Paris, France.

11.6 The prices shall be in accordance with one of the followingalternatives, as specified in the Bid Data Sheet:

(a) Fixed Price. Prices quoted by the Bidder shall be fixedduring the Bidder's performance of the contract and notsubject to variation on any account. A bid submitted withan adjustable price quotation will be treated asnonresponsive and rejected.

or(b) Adjustable Price. Prices quoted by the Bidder shall be

subject to adjustment during performance of the contract toreflect changes in the cost of labor, material, transportcomponents and contractor's equipment in accordance withthe procedures specified in Appendix 2 to the form ofContract Agreement. A bid submitted with a fixed pricequotation will not be rejected, but the price adjustment willbe treated as zero. The price adjustment provision will notbe taken into consideration in bid evaluation. Bidders arerequired to indicate the source of labor and material indexesin the said Appendix 2.


12. Bid Currencies 12.1 Prices shall be quoted in the following currencies:

(a) Plant and equipment covered under ITB Sub-Clause 11.4(a) to be supplied from abroad shall be quoted entirely in thecurrency of any Bank member country. If the Bidder wishesto be paid in a combination of amounts in differentcurrencies, it may quote its price accordingly, but use nomore than three foreign currencies. For the purpose of thisclause, the European Currency Unit (ECU) is alsoconsidered an eligible currency.

(b) Plant and equipment covered under ITB Sub-Clause 11.4(b) to be supplied from within the Employer's country shallbe quoted in thc urrency of the Employer's country, unlessotherwise specified in the Bid Data Sheet.

(c) Local transportation, insurance and other local costsincidental to delivery of the plant and equipment coveredunder ITB Sub-Clause 11.4 (c) and installation servicescovered under ITB Sub-Clause 11.4 (d) shall be quoted ineither foreign and/or local currency, depending upon thecurrency in which the costs are to be incurred and inaccordance with the provisions of ITB Sub-Clause 11.4 (a)and (b) above.

13. Bid Security 13.1 The bidder shall furnish, as part of its bid, a bid security in theamount stipulated in the Bid Data Sheet in the currency of theEmployer's country, or in the equivalent amount in a freelyconvertible currency.

13.2 The bid security shall, at the Bidder's option, be in the form of acertified check, letter of credit or a bank guarantee from areputable bank selected by the Bidder and located in any eligiblecountry. The format of the bank guarantee shall be in accordancewith the form of bid security included in the bidding documents;other formats may be permitted, subject to the prior approval ofthe Employer. Bid security shall remain valid for a period oftwenty-eight (28) days beyond the original bid validity period, andbeyond any extension subsequently requested under ITB Sub-Clause 14.2.

13.3 Any bid not accompanied by an acceptable bid security shall berejected by the Employer as being nonresponsive, pursuant toITB Clause 22.5. The bid security of a joint venture must be inthe name of all the partners in the joint venture submitting the bid.


13.4 The bid securities of unsuccessful bidders will be returned aspromptly as possible, but not later than twenty-eight (28) daysafter the expiration of the bid validity period.

13.5 The bid security of the successful bidder will be returned whenthe bidder has signed the Contract Agreement, pursuant to ITBClause 32, and has furnished the required performance security,pursuant to ITB Clause 33.

13.6 The bid security may be forfeited

(a) if the Bidder withdraws its bid during the period of bidvalidity specified by the Bidder in the Bid Form

(b) in the case of a successful Bidder, if the Bidder fails withinthe specified time limit

(i) to sign the Contract Agreement, in accordance withITB Clause 32, or

(ii) to furnish the required performance security, inaccordance with ITB Clause 33.

14. Period of 14.1 Bids shall remain valid for the period named in the Bid Data SheetValidity of Bid after the closing date prescribed by the Employer for the receipt

of bids, pursuant to ITB Sub-Clause 17.1. A bid valid for ashorter period shall be rejected by the Employer as beingnonresponsive.

14.2 In exceptional circumstances, the Employer may solicit theBidders' consent to an extension of the bid validity period. Therequest and responses thereto shall be made in writing or bycable. If a Bidder accepts to prolong the period of validity, thebid security shall also be suitably extended. A Bidder may refusethe request without forfeiting its bid security. A Bidder grantingthe request will not be required nor permitted to modify its bid,except as provided in ITB Sub-Clause 14.3.

14.3 In the case of fixed price contracts (not subject to priceadjustment), if the bid validity period is exiended beyond sixty(60) days, the amounts payable in both local and foreigncurrencies to the bidder selected for award shall be increased byapplying the factors specified in the request for extension to boththe local and the foreign currency component of the payments,respectively, for the period of delay beyond sixty (60) days after


the expiry of the initial bid validity up to the time of notificationof award. Bid evaluation will be based on the bid prices withoutconsidering the above correction.

15. Format and 15.1 The Bidder shall prepare an original and the number ofSigning of Bid copies/sets of the bid specified in the Bid Data Sheet, clearly

marking each one as "ORIGINAL BID," "COPY NO. I,""COPY NO. 2," etc., as appropriate. In the event of anydiscrepancy between them, the original shall govern.

15.2 The original and all copies of the bid, each consisting of thedocuments listed in ITB Sub-Clause 9. 1, shall be typed or writtenin indelible ink and shall be signed by the Bidder or a person orpersons duly authorized to bind the Bidder to the contract. Thelatter authorization shall be indicated by written power ofattorney accompanying the bid and submitted as Attachment 2 tothe Bid under ITB Sub-Clause 9.3. All pages of the bid, exceptfor unamended printed literature, shall be initialed by the personor persons signing the bid.

15.3 Any interlineation, erasures or overwriting shall only be valid ifthey are initialed by the signatory (ies) to the bid.

D. Submission of Bids

16. Sealing and 16.1 The Bidder shall seal the original and each copy of the bid inMarking of separate envelopes, duly marking the envelopes as "ORIGINALBids BID" and "COPY NO.[number]" The envelopes shall then be

sealed in an outer envelope.

16.2 The inner and outer envelopes shall

(a) be addressed to the Employer at the address given in theBid Data Sheet, and

(b) bear the contract name indicated in the Bid Data Sheet, theInvitation for Bids title and number indicated in the BidData Sheet, and the statement "DO NOT OPEN BEFORE[date]," to be completed with the time and date specified inthe Bid Data Sheet, pursuant to ITB Sub-Clause 17.1.

16.3 The inner envelopes shall also indicate the name and address ofthe Bidder so that the bid can be returned unopened in case it isdeclared "late."


16.4 If the outer envelope is not sealed and marked as required by ITBSub-Clause 16.2 above, the Employer will assume noresponsibility for the bid's misplacement or premature opening. Ifthe outer envelope discloses the Bidder's identity, the Employerwill not guarantee the anonymity of the bid submission, but thisdisclosure will not constitute grounds for bid rejection.

17. Deadline for 17.1 Bids must be received by the Employer at the address specifiedSubmission of under ITB Sub-Clause 16.2 no later than the time and date statedBids in the Bid Data Sheet.

17.2 The Employer may, at its discretion, extend this deadline forsubmission of bids by amending the bidding documents inaccordance with ITB Sub-Clause 7.3, in which case all rights andobligations of Employer and Bidders will thereafter be subject tothe deadline as extended.

18. Late Bids 18.1 Any bid received by the Employer after the bid submissiondeadline prescribed by the Employer, pursuant to ITB Clause 17,will be rejected and returned unopened to the Bidder.

19. Modification 19.1 The Bidder may modify or withdraw its bid after submission,and provided that written notice of the modification or withdrawal isWithdrawal of received by the Employer prior to the deadline prescribed for bidBids submission.

19.2 The Bidder's modifications shall be prepared, sealed, marked anddispatched as follows:

(a) The Bidders shall provide an original and the number ofcopies specified in the Bid Data Sheet of any modificationsto its bid, clearly identified as such, in two inner envelopesduly marked "BID MODIFICATIONS-ORIGINAL" and"BID MODIFICATIONS-COPIES." The inner envelopesshall be sealed in an outer envelope, which shall be dulymarked "BID MODIFICATIONS."

(b) Other provisions concerning the marking and dispatch of bidmodifications shall be in accordance with ITB Sub-Clauses16.2, 16.3 and 16.4.

19.3 A Bidder wishing to withdraw its bid shall notify the Employer inwriting prior to the deadline prescribed for bid submission. Awithdrawal notice may also be sent by cable, but it must befollowed by a signed confirmation copy, postmarked not later

Section II, Instructions to Bidders 25

than the deadline for submission of bids. The notice ofwithdrawal shall

(a) be addressed to the Employer at the address named in theBid Data Sheet, and

(b) bear the contract name, the IFB number, and the words"BID WITHDRAWAL NOTICE." Bid withdrawal noticesreceived after the bid submission deadline will be ignored,and the submitted bid will be deemed to be a validlysubmitted bid.

19.4 No bid may be withdrawn in the interval between the bidsubmission deadline and the expiration of the bid validity periodspecified in ITB Clause 14. Withdrawal of a bid during thisinterval may result in the Bidder's forfeiture of its bid security,pursuant to ITB Sub-Clause 13.6.

E. Bid Opening and Evaluation

20. Opening of 20.1 The Employer will open all bids in the presence of bidders'Bids by representatives who choose to attend the opening at the time, onEmployer the date and at the place specified in the Bid Data Sheet.

Bidders' representatives shall sign a register as proof of theirattendance.

20.2 Bidders' names, bid modifications or withdrawals, bid prices,discounts, the presence of any alternative bid, the presence orabsence of requisite bid security and other such details as theEmployer, at its discretion, may consider appropriate, will beannounced at the opening. No bid will be rejected at bid openingexcept for late bids, which will be returned unopened to thebidder, pursuant to ITB Clause 18.

20.3 Bids (and modifications sent pursuant to ITB Sub-Clause 19.2)that are not opened and read out at bid opening will not beconsidered for further evaluation, regardless of the circumstances.

20.4 The Employer will prepare minutes of the bid opening.

21. Clarification of 21.1 During bid evaluation, the Employer may, at its discretion, ask theBids Bidder for a clarification of its bid. The request for clarification and

the response shall be in writing, and no change in the price orsubstance of the bid shall be sought, offered or permiitted.

26 Section 11. Instructions to Bidders

22. Preliminary 22.1 The Employer will examine the bids to determine whether theyExamination of are complete, whether any computational errors have been made,Bids whether required sureties have been furnished, whether the

documents have been properly signed, and whether the bids aregenerally in order.

22.2 Arithmetical errors will be rectified on the following basis. Ifthere is a discrepancy between the unit price and the total price,which is obtained by multiplying the unit price and quantity, orbetween subtotals and the total price, the unit or subtotal priceshall prevail, and the total price shall be corrected. If there is adiscrepancy between words and figures, the amount in words willprevail. If the Bidder does not accept the correction of errors, itsbid will be rejected.

22.3 The Employer may waive any minor informality, nonconformityor irregularity in a bid that does not constitute a materialdeviation, whether or not identified by the Bidder in Attachment 6to its bid, and that does not prejudice or affect the relativeranking of any Bidder as a result of the technical and commercialevaluation, pursuant to ITB Clauses 24 and 25.

22.4 Prior to the detailed evaluation, the Employer will determinewhether each bid is of acceptable quality, is complete and issubstantially responsive to the bidding documents. For purposesof this determination, a substantially responsive bid is one thatconforms to all the terms, conditions and specifications of thebidding documents without material deviations, objections,conditionalities or reservations. A material deviation, objection,conditionality or reservation is one (i) that affects in anysubstantial way the scope, quality or performance of the contract;(ii) that limits in any substantial way, inconsistent with the biddingdocuments, the Employer's rights or the successful Bidder'sobligations under the contract; or (iii) whose rectification wouldunfairly affect the competitive position of other Bidders who arepresenting substantially responsive bids.

22.5 In particular, bids with deviations from, objections to orreservations about critical provisions-such as those concerningBid Security (ITB Clause 13), GCC Clauses 5 (Governing Law),14 (Taxes and Duties), 27 (Defect Liability), 28 (FunctionalGuarantees), 29 (Patent Indemnity) or 30 (Limitation ofIndemnity), as well as provisions specified in the Bid Data Sheet,if any, that the Bidder is not prepared to withdraw at a statedwithdrawal price, pursuant to ITB Sub-Clause 9.3 (f)-will be


treated as nonresponsive. The Employer's determination of abid's responsiveness is to be based on the contents of the bid itselfwithout recourse to extrinsic evidence.

22.6 If a bid is not substantially responsive, it will be rejected by theEmployer, and may not subsequently be made responsive by theBidder by correction of the nonconformity.

23. Conversion to 23.1 To facilitate evaluation and comparison, the Employer willSingle convert all bid prices expressed in the amounts in variousCurrency currencies in which the bid price is payable to either

(a) the currency of the Employer's country at the sellingexchange rate established for similar transactions by thecentral bank or by a commercial bank in the Employer'scountry, or

(b) a currency widely used in international trade, such as U.S.dollars, at the selling rate of exchange published in theinternational press for the amount payable in foreigncurrency, and at the selling exchange rate established forsimilar transactions by the central bank in the Employer'scountry for the amount payable in the currency of theEmployer's country.

23.2 The currency selected for converting bid prices to a common basefor the purpose of evaluation, along with the source and date ofthe exchange rate, is specified in the Bid Data Sheet.

24. Technical 24.1 The Employer will carry out a detailed evaluation of the bidsEvaluation previously determined to be substantially responsive in order to

determine whether the technical aspects are in accordance withthe requirements set forth in the bidding documents. In order toreach such a determination, the Employer will examine andcompare the technical aspects of the bids on the basis of theinformation supplied by the bidders, taking into account thefollowing factors:

(a) overall completeness and compliance with the TechnicalSpecifications and Drawings; deviations from the TechnicalSpecifications as identified in Attachment 6 to the bid andthose deviations not so identified; suitability of the facilitiesoffered in relation to the environmental and climaticconditions prevailing at the site; and quality, function andoperation of any process control concept included in the


bid. The bid that does not meet minimum acceptablestandards of completeness, consistency and detail will berejected for nonresponsiveness.

(b) achievement of specified performance criteria by thefacilities

(c) type, quantity and long-term availability of mandatory andrecommended spare parts and maintenance services

(d) any other relevant factors, if any, listed in the Bid DataSheet, or that the Employer deems necessary or prudent totake into consideration.

24.2 Where alternative technical solutions have been permitted andoffered in Attachment 7 to the bid, the Employer will make asimilar evaluation of the alternatives, which will be treated in thetechnical and commercial evaluations as if they were base bids.Where alternatives are not permitted, but have in any event beenoffered, they shall be ignored.

25. Commercial 25.1 The comparison shall be of the EXW price of plant andEvaluation equipment offered from within the Employer's country, such

price to include all costs as well as duties and taxes paid orpayable on components and raw material incorporated or to beincorporated in the plant and equipment, with the price of theCIF-named port of destination (or CIP border point or CIP-named place of destination) offered from outside the Employer'scountry, plus the cost of local transportation, all installation andother services required under the contract. The Employer'scomparison will also include the costs resulting from applicationof the evaluation procedures described in ITB Sub-Clause 25.3.

25.2 The Employer's evaluation of a bid will take into account, inaddition to the bid prices indicated in Price Schedules Nos. 1through 5, the following costs and factors that will be added toeach Bidder's bid price in the evaluation using pricing informationavailable to the Employer, in the manner and to the extentindicated in ITB Sub-Clause 25.3 and in the TechnicalSpecifications:

(a) the cost of all quantifiable deviations and omissions from thecontractual and commercial conditions and the TechnicalSpecifications as identified in Attachment 6 to the bid, andother deviations and omissions not so identified


(b) compliance with the time schedule called for in Appendix 4to the form of Contract Agreement and evidenced as neededin a mnilestone schedule provided in the bid

(c) the projected operating and maintenance costs during thelife of the facilities

(d) the functional guarantees of the facilities offered

(e) the extra cost of work, services, facilities etc., required tobe provided by the Employer or third parties.

25.3 Pursuant to ITB Sub-Clause 25.2, the following evaluationmethods will be followed:

(a) Contractual and commercial deviationsThe evaluation shall be based on the evaluated cost offulfilling the contract in compliance with all commercial,contractual and technical obligations under this biddingdocument. In arriving at the evaluated cost, the price forwithdrawal of deviations shown in Attachment 6 of the bidwill be used, if necessary. If such a price is not given, theEmployer will make its own assessment of the cost of sucha deviation for the purpose of ensuring fair comparison ofbids.

(b) Time schedule (program of performance)The plant and equipment covered by this bidding arerequired to be shipped and installed, and the facilities shallhave the precomrnmissioning completed within the periodnamed in the Bid Data Sheet after the effective datespecified in the Contract Agreement. Bidders are requiredto base their prices on the time schedule given inAppendix 4 to the form of Contract Agreement (TimeSchedule) or, where no time schedule is given, on thecompletion date(s) given in the Bid Data Sheet. Nocredit will be given for earlier completion. Where anAlternative Time Schedule is accepted, pursuant to ITBSub-Clause 9.3 (g) (i), and where the completion dateoffered is within the limits specified in the Bid Data Sheet,bids offering a completion date beyond the minimumdesignated period shall be adjusted in the evaluation byadding a factor specified in the Bid Data Sheet to the bidprice. Bids offering a completion date beyond the maximumdesignated period shall be rejected.


(c) Operating and maintenance costs(i) Since the operating and maintenance costs of the

facilities being procured form a major part of the lifecycle cost of the facilities, these costs will beevaluated according to the principles given in the BidData Sheet, including the cost of spare parts for theinitial period of operation stated in the Bid Data Sheetand based on prices furnished by each Bidder in PriceSchedules Nos. 1 and 2, as well as on past experienceof the Employ; or other employers similarly placed.Such costs shall be added to the bid price forevaluation.

(ii) The price of recommended spare parts quoted in PriceSchedule No. 6 shall not be considered for evaluation.

(d) Functional Guarantees of the facilities(i) Bidders shall state the functional guarantees (e.g.

performance, efficiency, consumption) of theproposed facilities in response to the TechnicalSpecifications. Plant and equipment offered shall havea minimum (or a maximum, as the case may be) levelof functional guarantees specified in the TechnicalSpecifications to be considered responsive. Bidsoffering plant and equipment with functionalguarantees less (or more) than the minimum (ormaximum) specified shall be rejected.

(ii) For the purposes of evaluation, the adjustmentspecified in the Bid Data Sheet will be added to thebid price for each drop (or excess) in the responsivefunctional guarantees offered by the Bidder, below (orabove) either a norm of 100 or the value committed inthe responsive bid with the most performing functionalguarantees, as specified in the Bid Data Sheet.

(e) Work, services, facilities etc., to be provided by theEmployerWhere bids include the undertaking of work or theprovision of services or facilities by the Employer in excessof the provisions allowed for in the bidding documents, theEmployer shall assess the costs of such additional work,services and/or facilities during the duration of the contract.Such costs shall be added to the bid price for evaluation.


(f) Specific additional criteriaThe relevant evaluation method, if any, shall be detailed inthe Bid Data Sheet and/or in the Technical Specifications.

25.4 Any adjustments in price that result from the above proceduresshall be added, for purposes of comparative evaluation only, toarrive at an "Evaluated Bid Price." Bid prices quoted by Biddersshall remain unaltered.

26. Domestic 26.1 In the evaluation and comparison of bids, the CIF or CIP price ofPreference plant and equipment to be incorporated in the facilities and

proposed to be supplied from abroad as identified in ITB Sub-Clause 11.4 (a) will be increased by the applicable import tariff(custom duties and other import taxes) for the specific Plant orEquipment in question or by fifteen percent (15%), whichever isless. In the case of more than one import tariff, the appropriatetariff for each item of plant and equipment shall apply. No marginof preference will be allowed for any other component.

27. Contacting the 27.1 Subject to ITB Clause 21, no Bidder shall contact the EmployerEmployer on any matter relating to its bid, from the time of the opening of

bids to the time the contract is awarded.

27.2 Any effort by a Bidder to influence the Employer in theEmployer's bid evaluation, bid comparison or contract awarddecisions may result in rejection of the Bidder's bid.

F. Award of Contract

28. Post- 28.1 In the absence of prequalification, the Employer will determine toqualification its satisfaction whether the Bidder selected as having submitted

the lowest evaluated responsive bid is qualified to satisfactorilyperform the contract.

28.2 The determination will take into account the Bidder's financial,technical and production capabilities, in particular its contract,work in hand, future commitments and current litigation. It willbe based upon an examination of the documentary evidence of theBidder's qualifications submitted by the Bidder in Attachment 3to the bid, as well as such other information as the Employerdeems necessary and appropriate.

28.3 An affirmative determination will be a prerequisite for award ofthe contract to the Bidder. A negative determination will result in

32 Section I. Instructions to Bidders

rejection of the Bidder's bid, in which event the Employer willproceed to the next lowest evaluated bid to make a similardetermination of that Bidder's capabilities to performsatisfactorily.

28.4 The capabilities of the vendors and subcontractors proposed inAttachment 5 to the bid to be used by the lowest evaluatedBidder will also be evaluated for acceptability. Their participationshould be confirrned with a letter of intent between the parties, asneeded. Should a vendor or subcontractor be determined to beunacceptable, the bid will not be rejected, but the Bidder will berequired to substitute an acceptable vendor or subcontractorwithout any change to the bid price.

29. Award Criteria 29.1 Subject to ITB Clause 30, the Employer will award the contractto the successful Bidder whose bid has been determrined to besubstantially responsive and to be the lowest evaluated bid,further provided that the Bidder is determined to be qualified toperform the contract satisfactorily.

29.2 The Employer may request the Bidder to withdraw any of thedeviations listed in Attachment 6 to the winning bid, at the priceshown for the deviation in Attachment 6 to the bid.

30. Employer's 30.1 The Employer reserves the right to accept or reject any bid, andRight to to annul the bidding process and reject all bids at any time prior toAccept Any award of contract, without thereby incurring any liability to theBid and to affected Bidder or bidders or any obligation to inform the affectedReject Any or Bidder or bidders of the grounds for the Employer's action.All Bids

31. Notification of 31.1 Prior to the expiration of the period of bid validity, the EmployerAward will notify the successful Bidder in writing by registered letter or

by cable, to be confirmed in writing by registered letter, that itsbid has been accepted. The notification of award will constitutethe formation of the contract.

31.2 Upon the successful Bidder's furnishing of the performancesecurity pursuant to ITB Clause 33, the Employer will promptlynotify each unsuccessful Bidder and will discharge its bid security,pursuant to ITB Sub-Clause 13.4.


32. Signing the 32.1 At the same time as the Employer notifies the successful BidderContract that its bid has been accepted, the Employer will send the BidderAgreement the Contract Agreement provided in the bidding documents,

incorporating all agreements between the parties.

32.2 Within twenty-eight (28) days of receipt of the ContractAgreement, the successful Bidder shall sign and date the ContractAgreement and return it to the Employer.

33. Performance 33.1 Within twenty-eight (28) days after receipt of the notification ofSecurity award, the successful Bidder shall furnish the performance

security in the amount given in the Bid Data Sheet and in theform provided in the section "Sample Forms and Procedures" ofthe bidding documents or in another form acceptable to theEmployer.

33.2 Failure of the successful Bidder to comply with the requirementsof ITB Clause 32 or Clause 33 shall constitute sufficient groundsfor the annulment of the award and forfeiture of the bid security,in which event the Employer may make the award to the nextlowest evaluated Bidder or call for new bids.

34. Adjudicator 34.1 The Employer proposes that the person named in the Bid DataSheet be appointed as Adjudicator under the contract, at anhourly fee stated in the Bid Data Sheet. A r6sume of the namedperson is attached to the Bid Data Sheet, as well as a descriptionof the expenses that would be considered reimbursable. If aBidder does not accept the Adjudicator proposed by theEmployer, it should so state in its Bid Form and make acounterproposal of an Adjudicator and an hourly fee. If on theday the Contract Agreement is signed, the Employer and theContractor have not agreed on the appointment of theAdjudicator, the Adjudicator shall be appointed, at the request ofeither party, by the Appointing Authority specified in the SpecialConditions of Contract, pursuant to GCC Sub-Clause 6.1.4.

35

Section III. Bid Data Sheet

Notes on the Bid Data Sheet

Section III is intended to assist the Employer in providing the specific information inrelation to corresponding clauses in the Instructions to Bidders included in Section II, andhas to be prepared for each specific procurement.

The Employer should specify in the Bid Data Sheet information and requirements specific tothe circumstances of the Employer, the processing of the procurement, the applicable rulesregarding bid price and currency, and the bid evaluation criteria that will apply to the bids.In preparing Section III, the following aspects should be checked:

(a) Information that specifies and complements provisions of Section II must beincorporated.

(b) Amendments and/or supplements, if any, to provisions of Section II, asnecessitated by the circumstances of the specific procurement, must also beincorporated.

36 Section III. Bid Data Sheet

Bid Data Sheet

The following bid-specific data for the plant and equipment to be procured shall amend and/orsupplement the provisions in the Instructions to Bidders (ITB). Whenever there is a conflict,the provisions herein shall prevail over those in the ITB.

[The notes in italics provide instructions for completing the Bid Data Sheetfor the relevant ITB clauses.]

INTRODUCTIONITB 1.1 Name of the Borrower

ITB 1.1 Loan or credit numberLoan or credit amount[when applicable]

ITB 1.1 Name of Project

ITB 1.1 Name of Contract

ITB 2.1 Name of Employer

ITB 6.1 Address of Employer; telephone, telex and facsimile numbers

ITB 8.1 Language of bid is English

ITB 9.3 (c) & (e) Qualification requirements for bidders, including members of jointventures, subcontractors or vendors[Minimum acceptable levels with regard to Bidder's experience in supplying andinstalling facilities with comparable technical parameters, its manufacturing andinstallation capacity, its financial viability and other factors. If bidders wereprequalified, this Item should include a request to update the informationprovided for prequalification. I

lTB 9.3 (d) (ii) Spares required for operation; number of years following completion:

ITB 9.3 (g) Alternative bids are accepted under Item (i) and/or (iii).orAlternative bids are acceptable under Item (ii).[Delete the inapplicable option. Where alternative bids are accepted, theEmployer should specify the type(s) of alternative accepted in relation to Items(i) and (iii) of ITB 9.3(g).]

Section III. Bid Data Sheet 37

BID PRICE AND CURRENCYITB 11.5 The price shall be fixed

orThe price shall be adjustable[Delete the inapplicable option.]

ITB 12.1 (b) [If the Bidder is permitted to use foreign currencies for pricing and payment forplant, equipment and services from within the Employer's country, state thefollowing:]Sub-Clause 12.1 (b) is not applicable, and Sub-Clause 12.1 (a)applies to all plant, equipment and services.

BID PREPARATION AND SUBMISSIONITB 13.1 Amount of bid security

[This amount should be the same as that quoted in the Invitation for Bids. Toavoid disclosure of bidders' prices originating in thefinancial institution issuingthe security, a fixed sum should be specified, preferably to a percentage of thebid price. The sum should range from the equivalent of one (1) percent of theestimated cost of the facilities, for contracts of over US$100 million, to three (3)percent of the estimated cost, for small contracts. Alternatively, if the Employerwishes to specify a percentage of the bid price, the percentage should beindicated as a "minimum of percent (_%)," to enable bidders toprovide in excess of the minimum and thus conceal their prices.]

ITB 14.1 Bid validity period[The period should be sufficient to permit the completion of evaluation andcomparison of bids, the review of the recommended selection with the Bank (if sorequired), and the obtainment of all necessary approvals and notifications ofaward. Normally, the validity period should be one hundred twenty (120) days.A realistic period should be specified in order to avoid the needfor extensions.]

[Pursuant to ITB Sub-Clause 14.3, the factors to be applied and mentioned inthe request for extension should be as follows:(i) The value of the foreign currency factor should be based on, or becomparable with, the expected prorata annual increases in international prices.(ii) The value of the local currency factor should be based on the projectedinflation in the Employer's countryfor the period in question.]

ITB 15.1 & 19.2 Original and copies

lITB 17.1 Address of bid submissionDeadline for bid submission

lITB 20.1 Location, time and date of bid opening[Should be the same as in ITB 17.1 or immediately afterwards.]


I__________ BID EVALUATIONlITB 23.2 Currency chosen for the purpose of converting to a common

currency[Specify either the local currency or a convertible currency, for example, U.S.dollars.]

Source of exchange rate[If the common currency is other than the local currency, for example, U.S.dollars, indicate the name of an internationally circulated newspaper that listsdaily currency exchange rates -e.g. The Financial Times-that will be used forconverting prices in foreign currencies. For prices in local currency, and if thecommon currency selected above is the local currency, specify either the centralbank or a commercial bank located in the Employer's country.]

Date of exchange rate[Select a date that will not be earlier than four (4) weeks prior to the originaldeadline for the receipt of bids, as specified in ITB Sub-Clause 17.1, and thatwill be no later than the original date of expiration of the bid validity period, asspecified in ITB Sub-Clause 14.1.1

ITB 24.1 (d) Optional: The following additional criteria will be used in theevaluation in the manner stated and to the extent indicated in the BidData Sheet under ITB Sub-Clause 25.3 (f).

ITB 25.3 (b) Time schedule

Time to complete the facilities from the effective date specified inArticle 3 of the Contract Agreement for determining time forcompletion of precommnissioning activities [The completion time specifiedshall be for the entire facilities or for parts or sections of the facilities. I

or lwhere alternative time schedule is accepted, pursuant to ITB Sub-Clause9.3(g)l

Time to complete the facilities from the effective date specified inArticle 3 of the Contract Agreement for determining time forcompletion of precommissioning activities shall be between [date ordays] minimum and [date or days] maximum. The adjustment rate inthe event of completion beyond the minimum period shall be [percent(%)] for each week of delay from that minimum period.[One-fifth of a percent (0.2%) per week is a reasonable figure. Alternatively, therate may be a fixed amount per month, or prorata per week, of delay related tothe loss of benefits to the Employer. The accepted period between the minimumand maximum time for completion should be such that the percentage or amountcorresponding to the maximum period for completion should be less than orequal to the percentage or amount of liquidated damages specified in the SCC inrelation to GCC Sub-Clause 26.2.1


ITB 25.3 (c) Operating and maintenance costs factors for calculation of the lifecycle

(i) number of years for life cycle lit is recommended that the lifecycle period not exceed the usual period before a major overhaul ofthe facilities. ]

(ii) operating costs [e.g., fuel and/or other input, unit cost, annualand total operational requirements]

(iii) maintenance costs, including the cost of spare parts forthe initial period of operation, to be specified by theBidder

(iv) rate, in percent, to be used to discount to present value allannual future costs calculated under (ii) and (iii) above forthe period specified in (i)orReference to the methodology specified in the TechnicalSpecifications or elsewhere in the bidding documents[Delete the inapplicable option.]

ITB 25.3 (d) Functional guarantees(i) Minimum (or maximum) functional guarantees(ii) Adjustment factor used for bid evaluation will be [amount in the

currency of bid evaluation] for each one percent (1%)-or prorate forless than one percent-[drop or excess] of

the norm specified in the Technical Specifications [reference]orthe value committed in the responsive bid with the mostperforming functional guarantees. [Delete the inapplicable option.]

ITB 25.3 (f) Optional: Additional details, as appropriate, on the evaluationmethod or reference to the Technical Specifications

ITB 26 Domestic preference to applyorDomestic preference not applicable [Delete the inapplicable option.]

40 Section HI. Bid Data Sheet

CONTRACT AWARD

rTB 33 Amount of performance security [Performance security amount shallnormally be ten percent (10%) of the contract price.]

ITB 34 Name of the Adjudicator proposed by the Employer [A resume of thenamed person should be attached to the Bid Data Sheet.]

Hourly fee for the Adjudicator

t ~ ~~~~~ ,- -J

41

OPTION B: TWO STAGE BIDDING

43

Section I. Invitation for Bids

Notes on the Invitation for Bids

The Invitation for Bids (IFB) (see para. 2.8 of the World Bank Guidelines: Procurementunder IBRD Loans and IDA Credits, January 1995) shall be issued as

(a) an advertisement in at least one newspaper of general circulation in theBorrower's country and in the official gazette, if any

(b) an advertisement in Development Business and/or well-known technicalmagazines (mandatory if specified in the Loan or Credit Agreement)

Advertising inquiries about the U.N. Development Business publication can be directed asshown below:

Developmenit BusinessUnited Nations, Room DC] -560 Telephone: 1-212-963-1515One United Nations Plaza Facsimile: 1-212-963-1318New York, N.Y. 10017U.S.A Telex: 422311 UNUI

Advertisements can also be arranged through the World Bank, where DevelopmentBusiness maintains a local office at: 1818 H Street, N.W., Washington, D.C. 20433U.S.A.; Telephone: 1-202-458-2397; Facsimile: 1-202-522-3316.

(c) a letter addressed to interested bidders who, following the publication of theGeneral Procurement Notice, have expressed interest in bidding for theinstallation of the plant and equipment for which the invitation is issued

(d) optionally, a circular to consular or diplomatic representatives of countrieswith potential bidders.

The LFB provides information that enables potential bidders to decide whether toparticipate. Apart from the essential items listed in the Standard Bidding Documents(SBDs), the IFB should also indicate any important bid evaluation criteria (for example, theapplication of a margin of preference in bid evaluation) or qualification requirement (forexample, a requirement for a minimum level of experience in manufacturing and installing asimilar type of plant and equipment for which the IFB is issued).

The IFB should be incorporated into the bidding documents. The information contained inthe IFB must conform to the bidding documents and in particular to the relevantinformation in the Bid Data Sheets.


A sample letter of invitation for second stage bids is also included. The letter is sent only tofinms determined by the Employer, following the first stage bid evaluation, to be qualifiedand responsive in order to participate in the second stage bidding process.

Section 1. Invitation for Bids 45

Invitation for Bids (First Stage Bids)

Date of Issuance of IFB:

Loan/Credit No.:

IFB No.:

1. The [name of borrower] has received'0 a loan'' from the International Bank forReconstruction and Development'2 in various currencies towards the cost of [name ofproject]. It is intended that part of the proceeds of this loan will be applied to eligiblepayments under the contract for [title of contractl.

2. The [name of employer] now invites sealed bids from eligible Bidders for the supply andinstallation of [brief description of the facilities to be supplied and installed and the services to beprovided].

3. Interested eligible13 Bidders may obtain further information from and inspect thebidding documents at the office of [name, address and telex/telefax numbers of appropriateoffice]. ' 4

4. A complete set of bidding documents may be purchased by any interested eligibleBidder on submission of a written application to the above and upon payment of anonrefundable fee of [amount in Borrower's currency or in a convertible currency]. 1 5

5. A Two Stage Bidding Procedure will be adopted and will proceed as follows:

(a) The first stage bid will consist of a technical bid only, without any reference toprices, and a list of any deviations to the technical and commercial conditionsset forth in the bidding documents or any alternative technical solutions aBidder wishes to offer, and a justification therefor, always provided that suchdeviations or alternative solutions do not change the basic objectives of theproject. Following evaluation by the Employer of the first stage bids, theEmployer will invite each Bidder who meets the minimum acceptablequalification criteria and who has submitted a technically responsive first stagebid to a clarification meeting, during which the Bidder's bid will be reviewedand all required amendments, additions, deletions and other adjustments will benoted and recorded in a Memorandum. Only those bidders submitting a

10 Substitute "has applied for" if appropriate." Substitute "credit" where appropriate.12 Substitute "International Development Association" where appropriate.3 Change "Interested eligible" to "Prequalified" if a prequalification was carried out.

14 The office for inquiry and issuance of bidding documents and that for bid submission may or may not be thesame.15 The fee chargeable should only be nominal, to defray reproduction and mailing costs and to ensure that onlybona fide bidders will request the bidding documents. An amount between US$50 and US$300 or theequivalent is deemed appropriate.


technically responsive and acceptable first stage bid will be invited to submit asecond stage bid.

(b) The second stage bid will consist of (i) an updated technical bid incorporatingall changes required by the Employer as recorded in the Memorandum to theclarification meeting or as necessary to reflect any amendment to the biddingdocuments issued subsequent to submissi - of the first stage bid, and (ii) thecommercial bid.

6. First stage bids will be opened in the presence of the Bidder's representatives whochoose to attend at the time and date and at the address named in the Bid Data Sheet,following the Instructions to Bidders. Second stage bids will be opened in thepresence of the Bidder's representatives who choose to attend at the time and date andat the address given in the letter of invitation to submit second stage bids.

7. All second stage bids must be accompanied by a bid security in an amount of [fixed

amount in local currency] or the equivalent of [fixed amount in U.S. dollars] in a freelyconvertible currency in one of the following forms:

(a) a bank guarantee or irrevocable letter of credit issued directly by a reputablebank, in the form provided in the bidding documents, or


8. In the comparison of evaluated bids, the Employer will grant a margin of preference toplant and equipment manufactured in the Employer's country in accordance with theprocedures outlined in the bidding documents.'6

9. [Include a brief description of the basic minimum qualification criteria that bidders must meet. Thedescription may be less detailed but not more restrictive than the criteria specified in the Bid DataSheet. ]

16 This item should be deleted when the margin of preference does not apply.

Section 1. Invitation for Bids 47

Sample Letter of Invitation (Second Stage Bids)

(letterhead of the Employer)

Date:Loan/Credit No.:

Contract Name:IFB No.:

To: [name and address of the Bidder]

Dear Ladies and/or Gentlemen,

1. We hereby inform you that you are invited to submit a sealed second stage bid for theexecution and completion of the cited contract for which you submitted a first stagebid on [date of submission offirst stage bid], which was reviewed during the clarificationmeeting(s) held on (date(s)] and has been found technically responsive.

2. Your second stage bid should include an updated technical and commercial bid [oraccepted alternative bid] based on [attached amendment, if any] l and on the modifications,if any, listed in the "Changes Required Pursuant to the First Stage Evaluation" Annexto the Memorandum of the clarification meeting(s) held with you on [date(s)]. l 8

3. Second stage bids shall be submitted [time, date and address for second stage bid submission]

and will be opened in the presence of the Bidder's representatives who choose toattend at (time, date and address for second stage bid opening].19

4. Second stage bids shall remain valid for [number of days]20 after the date of bid openingprescribed above.

5. All second stage bids must be accompanied by a bid security in an amount of [fixedamount in local currency] or the equivalent of [fixed amount in U.S. dollars] in a freelyconvertible currency in one of the following forms:

(a) a bank guarantee or irrevocable letter of credit issued directly by a reputablebank, in the form provided in the bidding documents

17 Amendment shall be common to all bidders invited to submit a second stage bid.18 A copy of the respective Annex may be attached to the letter to the corresponding Bidder.'9 The dates of bid submission and bid opening should be the same, and the time should also be the same orimmediately thereafter.2° The period should be sufficient to permit completion of the second stage bid evaluation, review of therecommended selection by the Bank, obtainment of approvals and notification of award. A realistic period(e.g., sixty [60] days) should be specified in order to avoid the need for extension.



6. In the comparison of evaluated bids, the Employer will grant a margin of preference toplant and equipment manufactured in the Employer's country, in accordance with theprocedures outlined in the bidding documents. 2 '

7. [If bidders were prequalified, include any update requirement from the information provided forprequalification.l 22

8. Please confirm receipt of this letter immediately in writing by cable, fax or telex. Ifyou do not intend to bid, we would appreciate being so notified again in writing atyour earliest opportunity.

Yours truly,

Authorized signature:

Name and title:

Employer:

ENCLOSURE lAmendments, if any, and Memorandum of "Changes Required Pursuant to First StageEvaluation ")

21 This item should be deleted when the margin of preference does not apply.22 Information to be updated may be specified, such as an updated financial situation, new contractualcommitments or current litigation.

49

Section II. Instructions to Bidders

Notes on the Instructions to Bidders

This section of the bidding documents provides the information necessary for bidders toprepare responsive bids, in accordance with the requirements of the Employer. It alsoprovides information on bid submission, opening and evaluation, and on contract award.

Section II contains provisions that are to be used unchanged. Section III consists ofprovisions that supplement, amend, or specify in detail information or requirementsincluded in Section II and that are specific to each procurement.

Matters governing the performance of the Contractor, payments under the contract, ormatters affecting the risks, rights, and obligations of the parties under the contract are notnormally included in this section, but instead under Section IV, General Conditions ofContract, and/or Section V, Special Conditions of Contract. If duplication of a subject isinevitable in the other sections of the document prepared by the Employer, care must beexercised to avoid contradictions between clauses dealing with the same matter.

These Instructions to Bidders will not be part of the contract.


Table of Clauses

A. Introduction .......................................................... 521. Source of Funds .......................................................... 522. Eligible Bidders .......................................................... 523. Eligible Plant, Equipment, and Services .......................................................... 534. Cost of Bidding .......................................................... 53

B. The Bidding Documents .......................................................... 535. Content of Bidding Documents .......................................................... 536. Clarification of Bidding Documents .......................................................... 547. Amendment of Bidding Documents .......................................................... 55

Cl. First Stage Bids: Preparation .......................................................... 558. Language of Bid .......................................................... 559. Documents Comprising the Bid .......................................................... 5510. Bid Form .......................................................... 6011. Format and Signing of Bid .......................................................... 60

C2. First Stage Bids: Submission .......................................................... 6012. Sealing and Marking of First Stage Bids .......................................................... 6013. Deadline for Submission of Bids .......................................................... 61

C3. First Stage Bids: Opening and Evaluation ......................................................... 6114. Opening of First Stage Bids by Employer ......................................................... 6115. Preliminary Examination of First Stage Bids ....................................................... 6116. Technical Evaluation of First Stage Bid ......................................................... 6117. Qualification ......................................................... 62

D. Clarification Meeting ......................................................... 6318. Clarification of First Stage Bids and Review of Bidders' Proposed

Deviations and Alternative Solutions ......................................................... 6319. Invitation to Submit Second Stage Bids ......................................................... 63

El. Second Stage Bids: Preparation ......................................................... 6420. Documents Comprising the Second Stage Bid .................................................... 6421. Bid Form and Price Schedules ......................................................... 6622. Bid Prices ......................................................... 6623. Bid Currencies ......................................................... 6824. Bid Security ......................................................... 6925. Period of Validity of Bid ......................................................... 7026. Format and Signing of Bids ......................................................... 70


E2. Second Stage Bids: Submission ........................................... 7127. Sealing and Marking of Second Stage Bids ........................................................ 7128. Deadline for Submission of Bids ..................................... 7229. Late Bids ..................................... 7230. Modification and Withdrawal of Bids ..................................... 72

E3. Second Stage Bids: Opening and Evaluation .......................................... 7331. Opening of Second Stage Bids by Employer ....................... ................... 7332. Preliminary Examination of Second Stage Bids .................................... ...... 7333. Conversion to Single Currency .......................................... 7534. Technical Evaluation of Second Stage Bid .................. ........................ 7535. Commercial Evaluation of Second Stage Bid ........................... ............... 7536. Domestic Preference .......................................... 7837. Contacting the Employer .......................................... 78

F. Award of Contract .......................................... 7938. Changes in Qualification Status .......................................... 7939. Award Criteria .......................................... 7940. Employer's Right to accept Any Bid and to Reject Any or All Bids .................... 7941. Notification of award .................................................... 7942. Signing of Contract Agreement .................................................... 8043. Performance Security .................................................... 8044. Adjudicator .................................................... 80


Instructions to Bidders

A. Introduction

1. Source of 1.1 The Borrower named in the Bid Data Sheet has received/appliedFunds for/ a loan/credit (hereafter called "loan") from the International

Bank for Reconstruction and Development (IBRD) or theInternational Development Association (IDA) (as identified in theBid Data Sheet and hereafter interchangeably called "the Bank")of the U.S. dollar amount indicated in the Bid Data Sheet. Theloan will be used in various currencies toward the cost of theProject named in the Bid Data Sheet. The Borrower intends toapply a portion of the proceeds of this loan to eligible paymentsunder the contract, named in the Bid Data Sheet, for which thisInvitation for Bids is issued.

1.2 Payment by the Bank will be made only at the request of theBorrower, and upon approval by the Bank, in accordance withthe terms and conditions of the loan agreement, and will besubject in all respects to the terms and conditions of thatagreement. The loan agreement prohibits a withdrawal from theloan account for the purpose of any payment to persons orentities, or for any import of plant and equipment, if suchpayment or import, to the knowledge of the Bank, is prohibitedby a decision of the United Nations Security Council taken underChapter VII of the Charter of the United Nations. No party otherthan the Borrower shall derive any rights from the loan agreementor have any claim to the loan proceeds.

2. Eligible 2.1 This Invitation for Bids, issued by the Employer named in the BidBidders Data Sheet, is open to all contractors from eligible source

countries as defined under the Guidelines: Procurement underIBRD Loans and IDA Credits, January 1995, hereinafter referredto as the IBRD Guidelines for Procurement, except as providedhereinafter.

2.2 Bidders should not be associated, or have been associated in thepast, directly or indirectly, with a firm or any of its affiliates thathas been engaged by the Employer to provide consulting servicesfor the preparation of the design, specifications and otherdocuments to be used for the procurement of the facilities to bepurchased under this Invitation for Bids.


2.3 Government-owned enterprises in the Employer's country mayonly participate on their own or as members of a joint venture ora consortium if they are legally and financially autonomous,operate under commercial law and are not dependent agencies ofthe Borrower or Sub-Borrower.

3. Eligible Plant, 3.1 For the purposes of these bidding documents, the wordEquipment, "facilities" means the plant and equipment to be supplied andand Services installed, together with the services to be carried out by the

Contractor under the contract. The words "plant andequipment," "installation services," etc., shall be construed inaccordance with the respective definitions given to them in theGeneral Conditions of Contract.

3.2 All plant and equipment to be supplied and installed and servicescarried out under the contract shall have their origin in eligiblesource countries, defined in the IBRD Guidelines forProcurement, and all expenditures made under the contract willbe limited to such plant, equipment and services.

3.3 For purposes of this clause, "origin" means the place where theplant and equipment or component parts thereof are mined,grown, or produced. Plant and equipment are produced when,through manufacturing, processing or substantial and majorassembling of components, a commercially recognized productresults that is substantially different in basic characteristics or inpurpose or utility from its components.

3.4 The origin of the plant, equipment and services is distinct fromthe nationality of the Bidder.

4. Cost of 4.1 The Bidder shall bear all costs associated with the preparation andBidding submission of its bid, and the Employer will in no case be

responsible or liable for these costs, regardless of the conduct oroutcome of the bidding process.

B. The Bidding Documents

5. Content of 5.1 The facilities required, bidding procedures, contract terms andBidding technical requirements are prescribed in the bidding documents.Documents The bidding documents include the following sections:

Invitation for Bids (IFB)Instructions to Bidders (ITB)


Bid Data Sheet (BDS)General Conditions of Contract (GCC)Special Conditions of Contract (SCC)Technical Specifications and Drawings (TS)Forms and Procedures (FP)

1. Bid Form and Price Schedules2. Bid Security Form3. Form of Contract Agreement4. Performance Security Forms5. Bank Guarantee Form for Advance Payment6. Form of Completion Certificate7. Form of Operational Acceptance Certificate8. Change Order Procedures

Eligibility for the Provision of Goods, Works and Services inBank-Financed Procurement.

5.2 The Bidder is expected to examine all instructions, forms, terms,specifications and other information in the bidding documents.Failure to furnish all information required by the biddingdocuments or submission of a bid not substantially responsive tothe bidding documents in every respect will be at the Bidder's riskand may result in rejection of its bid.

6. Clarification of 6.1 A prospective Bidder requiring any clarification of the biddingBidding documents may notify the Employer in writing or by cableDocuments (hereinafter, the term cable is deemed to include Electronic Data

Interchange (EDI), telex or telefax) at the Employer's mailingaddress indicated in the Bid Data Sheet. Similarly, if a Bidderfeels that any important provision, such as those listed in ITBSub-Clause 9.3 (d), will be unacceptable, such a clarificationshould be raised at this stage. The Employer will respond inwriting to any request for clarification or modification of thebidding documents that it receives no later than twenty-eight (28)days prior to the deadline for submission of bids prescribed by theEmployer. Written copies of the Employer's response (includingan explanation of the query but not identification of its source)will be sent to all prospective Bidders that have received thebidding documents.

6.2 The Bidder is advised to visit and examine the site where thefacilities are to be installed and its surroundings and obtain foritself on its own responsibility all information that may benecessary for preparing the bid and entering into a contract forsupply and installation of the facilities. The costs of visiting thesite shall be at the Bidder's own expense.


6.3 The Bidder and any of its personnel or agents will be grantedpermission by the Employer to enter upon its premises and landsfor the purpose of such inspection, but only upon the expresscondition that the Bidder, its personnel and agents will releaseand indemnify the Employer and its personnel and agents fromand against all liability in respect thereof, and will be responsiblefor death or personal injury, loss of or damage to property andany other loss, damage, costs and expenses incurred as a result ofthe inspection.

7. Amendment of 7.1 At any time prior to the deadline for submission of bids, theBidding Employer may, for any reason, whether at its own initiative, or inDocuments response to a clarification requested by a prospective Bidder,

amend the bidding documents.

7.2 The amendment will be notified in writing or by cable to allprospective Bidders that have received the bidding documentsand will be binding on them. Bidders are required to immediatelyacknowledge receipt of any such amendment, and it will beassumed that the information contained therein will have beentaken into account by the Bidder in its bid.

7.3 In order to afford prospective Bidders reasonable time to take theamendment into account in preparing their bid, the Employermay, at its discretion, extend the deadline for the submission ofbids.

Cl. First Stage Bids: Preparation

8. Language of 8.1 The bid prepared by the Bidder and all correspondence andBid documents related to the bid exchanged by the Bidder and the

Employer, shall be written in the language specified in the BidData Sheet. Any printed literature furnished by the Bidder maybe written in another language as long as such literature isaccompanied by a translation of its pertinent passages in thelanguage specified in the Bid Data Sheet, in which case, forpurposes of interpretation of the bid, the translation shall govern.

9. Documents 9.1 The first stage bid submitted by the Bidder shall comprise theComprising following documents:the Bid

Bid Form--First Stage, duly completed and signed by the Biddertogether with all Attachments identified in ITB Sub-Clause 9.3below.


First stage bids are technical bids and shall contain no pricesor price schedules or other reference to rates and prices forcompleting the facilities. First stage bids containing suchprice information will be rejected.

9.2 Bidders shall note that they are permitted to propose technicalalternatives or other alternative bids with their first stage bids inaddition to or in lieu of the requirements specified in the biddingdocuments, provided they can document that the proposedalternative bids are to the benefit of the Employer, that they fulfillthe principal objectives of the contract, and that they meet thebasic performance and technical criteria specified in the biddingdocuments.

Any alternative bid proposed by bidders in their first stage bid willbe the subject of discussion during the clarification meeting withthe Bidder, pursuant to ITB Clause 18.

9.3 Attachments to the first stage bid

Each Bidder shall submit with its first stage bid the followingattachments:

(a) Attachment 1: Bidder's Eligibility and QualificationsIn the absence of prequalification, documentary evidenceestablished in accordance with ITB Clause 2 that the Bidderis eligible to bid and is qualified to perform the contract if itsbid is accepted.

The documentary evidence of the Bidder's eligibility to bidshall establish to the Employer's satisfaction that the Bidder,at the time of submission of its bid, is from an eligiblesource country as defined in ITB Sub-Clause 2.1.

The documentary evidence of the Bidder's qualifications toperform the contract, if its bid is accepted, shall establish tothe Employer's satisfaction that the Bidder has the financial,technical, production, procurement, shipping, installation,and other capabilities necessary to perform the contract and,in particular, meets the experience and other criteriaoutlined in the Bid Data Sheet.

Bids submitted by a joint venture or consortium of two ormore firms as partners shall comply with the followingrequirements:


(i) The bid shall include all the information required forAttachment 1 as described above for each jointventure or consortium partner.

(ii) The bid shall be signed so as to be legally binding onall partners.

(iii) One of the partners, responsible for performing a keycomponent of the contract, shall be designated asleader, this authorization shall be evidenced bysubmitting with the bid a power of attorney signed bylegally authorized signatories.

(iv) The leader shall be authorized to incur liabilities andreceive instructions for and on behalf of any and allpartners of the joint venture or consortium, and theentire execution of the contract, including payment,shall be done exclusively with the leader.

(v) All partners of the joint venture or consortium shall beliable jointly and severally for the execution of thecontract in accordance with the contract terms.

(vi) A copy of the agreement entered into by the jointventure or consortium partners shall be submitted withthe bid.

In order for a joint venture or consortium to qualify, each ofits partners or combination of partners must meet theminimum criteria listed for an individual Bidder, inaccordance with ITB Clause 2, for the component of thecontract they are designated to perform. Failure to complywith this requirement will result in rejection of the jointventure or consortium's bid.

A firm can be a partner in only one joint venture orconsortium; bids submitted by joint ventures or consortiumsincluding the same firm as partner will be rejected.

In the case of a Bidder who offers to supply and/or installplant and equipment under the contract that the Bidder didnot manufacture or otherwise produce and/or install, theBidder shall (i) have the financial and other capabilitiesnecessary to perform the contract; (ii) have been dulyauthorized by the manufacturer or producer of the related


plant and equipment or component to supply and/or installthat item in the Employer's country; and (iii) be responsiblefor ensuring that the manufacturer or producer complieswith the requirements of ITB Sub-Clause 2.1 and meets theminimum criteria listed for an individual bidder for that item.

(b) Attachment 2: Eligibility and Conformity of the FacilitiesDocumentary evidence established in accordance with ITBClause 3 that the facilities to be offered by the Bidder in itsbid or in any alternative bid are eligible facilities andconform to the bidding documents.

The documentary evidence of the eligibility of the facilitiesshall consist of a statement on the country of origin of theplant and equipment offered, which shall be confirmed by acertificate of origin issued at the time of shipment.

The documentary evidence of the conformity of the facilitiesto the bidding documents may be in the form of literature,drawings and data, and shall furnish

(i) a detailed description of the essential technical andperformance characteristics of the facilities

(ii) a list giving full particulars, including availablesources, of all spare parts, special tools, etc.,necessary for the proper and continuing functioning ofthe facilities for the period named in the Bid DataSheet, following Completion of the facilities inaccordance with the provisions of the contract

(iii) commentary on the Employer's TechnicalSpecifications and adequate evidence demonstratingthe substantial responsiveness of the facilities to thosespecifications. Bidders shall note that the standardsfor skill, materials and equipment designated by theEmployer in the bidding documents are intended to bedescriptive (establishing standards of quality andperformance) only and not restrictive. The Biddermay substitute alternative standards, brand namesand/or catalog numbers in its bid, provided that itdemonstrates to the Employer's satisfaction that thesubstitutions are substantial, equivalent, or superior tothe standards designated in the TechnicalSpecifications.


(c) Attachment 3: Subcontractors proposed by the BidderWith its bid, the Bidder shall include details of all majoritems of supply or services that it proposes purchasing orsubletting, giving details of the name and nationality of theproposed Subcontractor, including vendors, for each ofthese items. Bidders are free to list more than oneSubcontractor against each item of the facilities.

The Bidder shall be responsible for ensuring that anySubcontractor proposed complies with the requirements ofITB Sub-Clause 2.1 and that any plant, equipment orservices to be provided by the Subcontractor comply withthe requirements of ITB Clause 3 and ITB Sub-Clause 9.3,Attach. 1.

The Employer reserves the right to delete any proposedSubcontractor from the list prior to or during theclarification meeting with the Bidder, pursuant to ITBClause 18. Appendix 5 to the form of Contract Agreementshall be completed, listing the approved subcontractor foreach item.

(d) Attachment 4: DeviationsBidders shall give details of deviations, objections orreservations, other than alternative bids, from therequirements of the bidding documents, that they would likethe Employer to consider during the clarification meetingwith the Bidder, pursuant to ITB Clause 18. In particular,deviations from, objections to or reservations, if any, aboutcritical provisions such as those concerning Bid Security(ITB Clause 24); GCC Clauses 5 (Governing Law), 14(Taxes and Duties), 27 (Defect Liability), 28 (FunctionalGuarantees), 29 (Patent and Indemnity), or 30 (Limitationof Liability), and related prescriptions in the biddingdocuments, shall be explained. The Employer will considerall deviations, pursuant to ITB Clause 16. Those acceptedby the Employer will be incorporated either as anamendment to the bidding documents, or into the "ChangesRequired Pursuant to First Stage Evaluation," pursuantto ITB Clause 19. The deviations that will not be acceptedby the Employer shall be withdrawn by the Bidder in itsSecond Stage bid, failing which, the bid will be rejected,pursuant to ITB Sub-Clause 32.5.


10. Bid Form 10.1 The Bidder shall complete the first stage bid form furnished in thebidding documents in the manner and detail indicated therein andsubmit the same with its first stage bid.

11. Format and 11.1 The Bidder shall prepare an original and the number ofSigning of Bid copies/sets of the bid specified in the Bid Data Sheet, clearly

marking each one as: "FIRST STAGE BID-ORIGINAL,""FIRST STAGE BID-COPY NO. 1," "FIRST STAGE BID-COPY NO. 2," etc., as appropriate. In the event of anydiscrepancy between the original and any copy, the original shallgovern.

11.2 The original and all copies of the bid shall be typed or written inindelible ink and shall be signed by the Bidder or a person orpersons duly authorized to bind the Bidder to the contract. Allpages of the bid, except for unamended printed literature, shall beinitialed by the person or persons signing the bid.

11.3 Any interlineations, erasures or overwriting shall only be valid ifthey are initialed by the person or persons signing the bid.

C2. First Stage Bids: Submission

12. Sealing and 12.1 The Bidders shall seal the original first stage bid and each copy ofMarking of the bid in separate envelopes, each containing the documentsFirst Stage specified in ITB Clause 9, and shall mark the envelopes asBids "FIRST STAGE BID-ORIGINAL" and "FIRST STAGE-

COPIES," all duly marked as required in ITB Sub-Clause 11.1.The envelopes shall be sealed in an outer envelope.

12.2 The inner and outer envelopes shall

(a) be addressed to the Employer, and

(b) bear the contract name, the Invitation for Bids (IFB) titleand number, and the words "FIRST STAGE BID. DONOT OPEN BEFORE _ ," to be completed with thetime and date specified in the Bid Data Sheet, pursuant toITB Sub-Clause 13.1.

12.3 The inner envelopes shall each indicate the name and address ofthe Bidder to enable the bid to be returned unopened in case it isdeclared "late."


12.4 If the outer envelope is not sealed and marked as required by ITBSub-Clauses 12.2 and 12.3, the Employer will assume noresponsibility for the bid's misplacement or premature opening. Ifthe outer envelope discloses the Bidder's identity, the Employerwill not guarantee the anonymity of the bid submission, but thisdisclosure will not constitute grounds for bid rejection.

13. Deadline for 13.1 First Stage bids must be received by the Employer at the addressSubmission of specified and no later than the time and date stated in the BidBids Data Sheet. Late bids will be rejected.

C3. First Stage Bids: Opening and Evaluation

14. Opening of 14.1 The Employer will open the First Stage bids on the date of bidFirst Stage submission and at the time and place indicated in the Bid DataBids by Sheet. Bidder's representatives may attend the opening and shallEmployer sign a register as proof of their attendance.

14.2 The names of all Bidders who submitted First Stage bids will beread out, and other such details as the Employer, at its discretion,may consider appropriate, will be announced at the opening.


15. Preliminary 15.1 The Employer will examine the bids to determine whether theyExamination of are complete, whether the documents have been properly signedFirst Stage and whether the bids are generally in order. Any bids found to beBids nonresponsive for any reason or not meeting the minimum levels

of the performance or other criteria specified in the biddingdocuments will be rejected by the Employer and not included forfurther consideration. The Employer will also carry out apreliminary examination of any alternative bids submitted bybidders.

16. Technical 16.1 The Employer will carry out a detailed evaluation of the bids inEvaluation of order to determine whether the technical aspects are substantiallyFirst Stage Bid responsive to the requirements set forth in the bidding documents.

In order to reach such a determination, the Employer willexamine the information supplied by the Bidders, pursuant to ITBClause 9, and other requirements in the bidding documents,taking into account the following factors:


(a) overall completeness and compliance with the TechnicalSpecifications and Drawings; the technical merits ofalternatives offered and deviations from the TechnicalSpecifications; suitability of the facilities offered in relationto the environmental and climactic conditions prevailing atthe site; quality, function and operation of any processcontrol concept included in the bid

(b) achievement of specified performance criteria by thefacilities

(c) compliance with the time schedule called for in Appendix 4to the form of Contract Agreement and any alternative timeschedules offered by Bidders, as evidenced by a milestoneschedule provided in the bid

(d) type, quantity, and long-term availability of spare parts andmaintenance services

(e) any other relevant technical factors that the Employerdeems necessary or prudent to take into consideration

(f) any deviations to the commercial and contractual provisionsstipulated in the bidding documents.

16.2 The Employer will also review complete technical alternativebids, if any, offered by the Bidder, pursuant to ITB Sub-Clause9.2, to determine whether such alternatives may constitute anacceptable basis for a Second Stage bid to be submitted on itsown merits.

17. Qualification 17.1 In the absence of prequalification, the Employer will ascertain toits satisfaction whether Bidders determined as having submittedresponsive First Stage bids are qualified to satisfactorily performthe contract.

17.2 The determination will take into account the Bidder's financial,technical and production capabilities and past performance. Itwill be based upon an examination of the documentary evidenceof the Bidder's qualifications submitted by the Bidder, pursuantto ITB Sub-Clause 9.3 (a), as well as such other information asthe Employer deems necessary and appropriate.


17.3 An affirmative determination will be a prerequisite for theEmployer to invite the Bidder to a clarification meeting inaccordance with ITB Clause 18. A negative determination willresult in rejection of the Bidder's bid.

D. Clarification Meeting

18. Clarification of 18.1 The Employer may conduct clarification meetings with each orFirst Stage any Bidder to clarify any aspects of its First Stage bid that requireBids and explanation at this stage of the evaluation. During theseReview of meetings, the Employer may bring to the attention of the BidderBidders' any matters, technical or otherwise, where for whatever reason, itProposed requires amendments or changes to be made to the First StageDeviations and bid. All such amendments or changes required by the EmployerAlternative will be listed in an Annex to the Memorandum documenting theSolutions clarification meeting entitled "Changes Required Pursuant to

First Stage Evaluation" and will be formally notified to theBidder as part of the invitation to submit the Second Stage bid.

18.2 The Employer will advise the Bidder of any exceptions ordeviations in the First Stage bid, pursuant to ITB Sub-Clause 9.3(d), that are unacceptable and that are to be withdrawn in theSecond Stage bid, and of such exceptions or deviations that theEmployer finds acceptable. Alternatively, the Employer mayrequire the Bidder to provide in its Second Stage bid theadditional price, if any, for withdrawal of the deviations.

18.3 The Employer will also advise the Bidder whether the proposedalternative bid, if any, is acceptable, and will identify the degree(if any) to which such an alternative bid may be incorporated inthe Bidder's Second Stage bid.

19. Invitation to 19.1 At the end of the First Stage evaluation and after holdingSubmit Second clarification meetings, the Employer willStage Bids

(a) issue an amendment to the bidding documents modifying,inter alia and as needed, the evaluation criteria or othersections of the Instructions to Bidders, the SpecialConditions of Contract, and the Technical Specificationsresulting from the First Stage evaluation and clarificationmeetings, with the objective of improving competitionwithout compromising essential project objectives

64 Section IIL Instructions to Bidders

(b) either

(i) invite a Bidder to submit an updated technical andcommercial Second Stage bid based on themodifications (if any) listed in the "ChangesRequired Pursuant to First Stage Evaluation"Annex to the Memorandum of the clarificationmeetings held with the Bidder, or

(ii) invite a Bidder to submit an updated technical andcommercial Second Stage bid based on an alternativebid proposed by the Bidder in its First Stage bid withthe modifications (if any) listed in the "ChangesRequired Pursuant to First Stage Evaluation"Annex to the Memorandum of the clarificationmeetings held with the Bidder, or

(iii) notify a Bidder that its bid has been rejected on thegrounds of being substantially nonresponsive, or thatthe Bidder does not meet the minimum qualificationrequirements set forth in the bidding documents.

19.2 Bidders are not allowed to form joint venture(s) or consortium(consortia) with other bidders, nor change the partner or structureof the joint venture or consortium if the Bidder in the first stagewas a joint venture or consortium.

19.3 The deadline for submission of Second Stage bids will bespecified in the invitation to submit Second Stage bids.

El. Second Stage Bids: Preparation

20. Documents 20.1 When submitting the Second Stage bid in accordance with ITBComprising Part E2 of these Instructions to Bidders, the documents to bethe Second submitted are the following:Stage Bid

(a) A copy of the Memorandum of clarification meetingsheld with the Bidder;

(b) The commercial bid, consisting of

(i) Bid Form-Second Stage duly completed and signedby Bidder, together with all Attachments identified insubparagraph (d) below


(ii) Price Schedules duly completed by the Bidder

(c) The updated technical bid, consisting of

Updated Technical Specifications and Drawings and anyother technical revisions required for the First Stage bid asrecorded in the Memorandum of the clarification meeting

(d) Attachments to the Second Stage bid:

(i) Attachment 1: Bid SecurityA bid security furnished in accordance with ITBClause 24.

(ii) Attachment 2: Power of AttorneyA power of attorney, duly authorized by a NotaryPublic, indicating that the person(s) signing the bidhave the authority to sign the bid and thus that the bidis binding upon the Bidder during the full period of itsvalidity, in accordance with ITB Clause 25.

(iii) Attachment 3: Bidder's Eligibility and QualificationsAny changes that may have occurred between the timeof submitting the First and Second Stage bids thathave any material effect on the Bidder's eligibility andqualifications to perform the Contract.

(iv) Attachment 4: Eligibility and Conformity of theFacilitiesDocumentary evidence established in accordance withITB Clause 3 that any additional or varied facilities tobe supplied and installed by the Bidder, in accordancewith the requirements of the Memorandum of theclarification meetings, are technically acceptable.

The documentary evidence of the eligibility of theadditional facilities shall consist of a statement on thecountry of origin of the plant and equipment offered,which shall be confirmed by a certificate of originissued at the time of shipment.

The documentary evidence of the conformity of thefacilities to the requirements of the Memorandum ofthe clarification meetings may be in the form ofliterature, drawings and data.


(v) Attachment 5: Subcontractors proposed by theBidderIf the Bidder proposes to engage any Subcontractorsadditional to those named in its First Stage bid, it shallgive details of the name and nationality of theproposed Subcontractor, including vendors, and thepart of the facilities it proposes subletting to them orpurchasing from them. Bidders are free to list morethan one Subcontractor against each item of thefacilities. Quoted rates and prices will be deemed toapply whichever Subcontractor is appointed, and noadjustment of the rates and prices will be permitted.

The Employer reserves the right to delete anyproposed Subcontractor from the list prior to award ofcontract, and after discussion between the Employerand the Contractor, Appendix 5 to the form ofContract Agreement shall be completed listing theapproved Subcontractors for each item of work.

21. Bid Form and 21.1 The Bidder shall complete the Bid Form-Second Stage and thePrice appropriate Price Schedules furnished in the bidding documents inSchedules the manner and detail indicated therein, following the

requirements of ITB Clauses 22 and 23.

22. Bid Prices 22.1 Unless otherwise specified in the Technical Specifications,Bidders shall quote for the entire facilities on a "singleresponsibility" basis such that the total bid price covers all theContractor's obligations mentioned in, or to be reasonablyinferred from, the bidding documents in respect of the design,manufacture, including procurement and subcontracting (if any),delivery, construction, installation and completion of the facilities.This includes all requirements under the Contractor'sresponsibilities for the testing, precommissioning andcommissioning of the facilities, and where so required by thebidding documents, the acquisition of all permits, approvals andlicenses etc., operation, maintenance and training services andsuch other items and services as may be specified in the biddingdocuments, all in accordance with the requirements of theGeneral Conditions of Contract.

22.2 Bidders shall give a breakdown of the prices in the manner anddetail called for in the Price Schedules. Where no PriceSchedules are included in the bidding documents, Bidders shallpresent their prices in the following manner:


Separate numbered Schedules shall be used for each of thefollowing elements. The total amount from each Schedule (I to4) shall be summarized in a Grand Summary (Schedule 5) givingthe total bid price(s) to be entered in the Bid Form.

Schedule No. I Plant & Equipment (including Mandatory SpareParts) Supplied from Abroad

Schedule No. 2 Plant & Equipment (including Mandatory SpareParts) Supplied from within the Employer'sCountry

Schedule No. 3 Local TransportationSchedule No. 4 Installation ServicesSchedule No. 5 Grand Summary (Schedules Nos. 1 to 4)Schedule No. 6 Recommended Spare Parts

Bidders shall note that the plant and equipment included inSchedules Nos. I and 2 above exclude materials used for civil,building and other construction works. All such materials shall beincluded and priced under Schedule No. 4, Installation Services.

22.3 In the Schedules, Bidders shall give the required details and abreakdown of their prices as follows:

(a) Plant and equipment to be supplied from abroad (ScheduleNo. 1) shall be quoted on a CIF port-of-entry, CIP borderpoint basis or CIP-named place. In addition, the FOB price(or the FCA price, as the case may be) shall also beindicated;

(b) Plant and equipment manufactured or fabricated within theEmployer's country (Schedule No. 2) shall be quoted on anEXW (ex factory, ex works, ex warehouse or off-the-shelf,as applicable) basis and shall be inclusive of all costs as wellas duties and taxes paid or payable on components and rawmaterials incorporated or to be incorporated in the facilities;

(c) Local transportation, insurance and other local costsincidental to delivery of the plant and equipment (ScheduleNo. 3);

(d) Installation Services shall be quoted separately (ScheduleNo. 4) and shall include rates and prices for all labor,Contractor's equipment, temporary works, materials,comestibles and all matters and things of whatsoever nature,including operations and maintenance services, the provision


of operations and maintenance manuals, training, etc.,where identified in the bidding documents, as necessary forthe proper execution of the Installation Services;

(e) Recommended spare parts shall be quoted separately(Schedule No. 6) as specified in either subparagraph (a) or(b) above, in accordance with the origin of the spare parts.

22.4 The terms EXW, CIF, CIP, etc., shall be governed by the rulesprescribed in the current edition of Incoterms, published by theInternational Chamber of Commerce, 38 Cours Albert l', 75008Paris, France.

22.5 The prices shall be in accordance with one of the followingalternatives, as specified in the Bid Data Sheet:

(a) Fixed Price. Prices quoted by the Bidder shall be fixedduring the Bidder's performance of the Contract and shallnot be subject to variation on any account. A bid submittedwith an adjustable price quotation will be treated asnonresponsive and rejected.

or(b) Adjustable Price. Prices quoted by the Bidder shall be

subject to adjustment during the performance of theContract to reflect changes in the cost of labor, material,transport and Contractor's equipment components, inaccordance with the procedures specified in Appendix 2 tothe form of Contract Agreement. A bid submitted with afixed price quotation will not be rejected, but the priceadjustment will be treated as zero. The price adjustmentprovision will not be taken into consideration in bidevaluation. Bidders are required to indicate the source oflabor and material indexes in the said Appendix 2.

23. Bid Currencies 23.1 Prices shall be quoted in the following currencies:

(a) Plant and equipment covered under ITB Sub-Clause 22.3(a) to be supplied from abroad shall be quoted entirely inany currency of a Bank member country. If the Bidderwishes to be paid in a combination of amounts in differentcurrencies, it may quote its price accordingly but use nomore than three foreign currencies. For the purpose of thisclause, the European Currency Unit (ECU) is alsoconsidered an eligible currency.


(b) Plant and equipment covered under ITB Sub-Clause 22.3(b) to be supplied from within the Employer's country shallbe quoted in the currency of the Employer's country, unlessotherwise specified in the Bid Data Sheet.

(c) Local transportation, insurance and other local costsincidental to delivery of the plant and equipment coveredunder ITB Sub-Clause 22.3 (c), and installation servicescovered under ITB Sub-Clause 22.3 (d), shall be quoted ineither foreign and/or local currency depending upon thecurrency in which the costs are to be incurred and inaccordance with the provisions of ITB Sub-Clause 11.3 (a)and (b).

24. Bid Security 24.1 The bidder shall furnish, as part of its bid, a bid security in theamount stipulated in the Bid Data Sheet in the currency of theEmployer's country, or in the equivalent amount in a freelyconvertible currency.

24.2 The bid security shall, at the Bidder's option, be in the form of acertified check, a letter of credit or a bank guarantee from areputable bank selected by the Bidder and located in any eligiblecountry. The format of the bank guarantee shall be in accordancewith the form of bid security included in the bidding documents;other formats may be permitted, subject to the prior approval ofthe Employer. Bid security shall remain valid for a period oftwenty-eight (28) days beyond the original bid validity period, andbeyond any extension subsequently requested under ITB Sub-Clause 14.2.

24.3 Any bid not accompanied by an acceptable bid security shall berejected by the Employer as being nonresponsive, pursuant toITB Sub-Clause 32.5. The bid security of a joint venture must bein the name of all the partners in the joint venture submitting thebid.

24.4 The bid securities of unsuccessful bidders will be returned aspromptly as possible, but not later than twenty-eight (28) daysafter the expiration of the bid validity period.

24.5 The bid security of the successful bidder will be returned whenthe bidder has signed the form of Contract Agreement, pursuantto ITB Clause 42, and has furnished the required performancesecurity, pursuant to ITB Clause 43.


24.6 The bid security may be forfeited

(a) if the Bidder withdraws its bid during the period of bidvalidity specified by the Bidder in the Bid Form, or

(b) in the case of a successful Bidder, if the Bidder fails withinthe specified time limit

(i) to sign the Contract Agreement in accordance withITB Clause 42, or

(ii) to furnish performance security in accordance withITB Clause 43.

25. Period of 25.1 Second Stage bids shall remain valid for the period named in theValidity of Bid Letter of Invitation inviting Bidders to submit Second Stage bids

after the closing date for the receipt of Second Stage bidsprescribed by the Employer, pursuant to ITB Sub-Clause 28.1. Abid valid for a shorter period shall be rejected by the Employer asnonresponsive.

25.2 In exceptional circumstances, the Employer may solicit theBidders' consent to an extension of the bid validity period. Therequest and responses thereto shall be made in writing or bycable. If a Bidder accepts to prolong the period of validity, thebid security shall also be extended accordingly. A Bidder mayrefuse the request without forfeiting its bid security. A Biddergranting the request will not be required nor permitted to modifyits bid, except as provided in ITB Sub-Clause 25.3.

25.3 In the case of fixed price contracts (not subject to priceadjustment), if the bid validity period is extended beyond sixty(60) days, the amounts payable in both local and foreigncurrencies to the bidder selected for award shall be increased byapplying the factors specified in the request for extension to boththe local and the foreign currency component of the payments,respectively, for the period of delay beyond sixty (60) days afterthe expiration of the initial bid validity up to the time ofnotification of award. Bid evaluation will be based on the bidprices without considering the above correction.

26. Format and 26.1 The Bidder shall prepare an original and the number ofSigning of Bids copies/sets of the bid specified in the Bid Data Sheet, clearly

marking each one as "SECOND STAGE BID-ORIGINAL,""SECOND STAGE BID-COPY NO. I," "SECOND STAGE


BID-COPY NO. 2," etc. as appropriate. In the event of anydiscrepancy between the original and any copy, the original shallgovern.

26.2 The original and all copies of the bid shall be typed or written inindelible ink and shall be signed by the Bidder or person(s) dulyauthorized to bind the Bidder to the contract. The latterauthorization shall be indicated by written power of attorneyaccompanying the bid and submitted as Attachment 2 to the bidunder ITB Sub-Clause 20.1. All pages of the bid, except forunamended printed literature, shall be initialed by the person orpersons signing the bid.

26.3 Any interlineations, erasures or overwriting shall be valid only ifthey are initialed by the person or persons signing the bid.

E2. Second Stage Bids: Submission

27. Sealing and 27.1 The Bidders shall seal the original and each copy of the bid inMarking of separate envelopes, duly marking the envelopes as "SECONDSecond Stage STAGE BID-ORIGINAL" and "SECOND STAGE BID-Bids COPIES." The envelopes shall be sealed in an outer envelope.

27.2 The inner and outer envelopes shall be sealed and

(a) addressed to the Employer at the address given in the BidData Sheet and

(b) bear the contract name, the Invitation for Bids title andnumber indicated in the invitation for Second Stage Bids,and the statement "DO NOT OPEN BEFORE " (to becompleted with the time and date specified in the invitation,pursuant to ITB Sub-Clause 28.2).

27.3 The inner envelopes shall each indicate the name and address ofthe Bidder so that the bid can be returned unopened in case it isdeclared "late."

27.4 If the outer envelope is not sealed and marked as required by ITBSub-Clause 27.2, the Employer will assume no responsibility forthe bid's misplacement or premature opening. If the outerenvelope discloses the Bidder's identity, the Employer will notguarantee the anonymity of the bid submission, but this disclosurewill not constitute grounds for bid rejection.


28. Deadline for 28.1 Second Stage bids must be received by the Employer at theSubmission of address specified under ITB Sub-Clause 27.2 no later than theBids time and date stated in the invitation to submit a Second Stage

bid.

28.2 The Employer may, at its discretion, extend this deadline forsubmission of bids by amending the bidding documents inaccordance with ITB Clause 7.3, in which case all rights andobligations of the Employer and Bidders will thereafter be subjectto the deadline as extended.

29. Late Bids 29.1 Any bid received by the Employer after the deadline forsubmission of bids prescribed by the Employer, pursuant to ITBClause 27, will be rejected and returned unopened to the Bidder.

30. Modification 30.1 The Bidder may modify or withdraw its Second Stage bid afterand submission, provided that written notice of the modification orWithdrawal of withdrawal is received by the Employer prior to the deadlineBids prescribed for bid submission.

30.2 The Bidder's modifications shall be prepared, sealed, marked anddispatched as follows:

(a) The Bidders shall provide an original and the number ofcopies specified in the Bid Data Sheet of any modificationsto its bid, clearly identified as such, in two envelopes, dulymarked "SECOND STAGE BID MODIFICATIONS-ORIGINAL" and "SECOND STAGE BIDMODIFICATIONS-COPIES." The envelopes shall besealed in an outer envelope, duly marked "SECONDSTAGE BID MODIFICATIONS."

(b) Other provisions concerning the marking and dispatch of bidmodifications shall be in accordance with ITB Sub-Clauses27.2, 27.3 and 27.4.

30.3 A Bidder wishing to withdraw its bid shall notify the Employer inwriting prior to the deadline prescribed for the submission of bids.A withdrawal notice may also be sent by cable, but must befollowed by a signed confirmation copy, postmarked not laterthan the deadline for submission of bids. The notice ofwithdrawal shall:

(a) be addressed to the Employer at the address named in theBid Data Sheet and


(b) bear the contract name, the IFB number, and the words"SECOND STAGE BID WITHDRAWAL NOTICE." BidWithdrawal Notices received after the deadline forsubmission of bids will be ignored, and the submitted bidwill be deemed to be a validly submitted bid.

30.4 No Second Stage bid may be modified or withdrawn in theinterval between the deadline for submission of bids and theexpiration of period of bid validity specified in ITB Clause 25.Withdrawal of a Second Stage bid during this interval may resultin the Bidder's forfeiture of its bid security, pursuant to ITB Sub-Clause 24.6.

E3. Second Stage Bids: Opening and Evaluation

31. Opening of 31.1 The Employer will open the Second Stage bids in the presence ofSecond Stage the Bidder's representatives who choose to attend at the time, onBids by the date and in the opening place specified in the invitation toEmployer submit Second Stage bids. Bidders' representatives shall sign a

register as proof of their attendance.

31.2 Bidders' names, bid prices, discounts, alternative bid prices (ifany), the presence or absence of the requisite bid security, andother such details the Employer, at its discretion, may consider tobe appropriate, will be announced at the opening. No bid will berejected at bid opening except for late bids, which will be returnedunopened to the Bidder, pursuant to ITB Clause 29.

31.3 Bids (and modifications sent pursuant to ITB Sub-Clause 30.2)that are not opened and read out at bid opening will not beconsidered for further evaluation, regardless of the circumstances.


32. Preliminary 32.1 The Employer will examine the Second Stage bids to determineExamination of whether they are complete, whether any computational errorsSecond Stage have been made, whether required sureties have been furnished.Bids whether the documents have been properly signed, and whether

the bids are generally in order. The Employer may, at itsdiscretion, ask the Bidder for a clarification of its bid. Therequest for clarification and the response shall be in writing, andno change in the price or substance of the bid shall be sought,offered or permitted.


32.2 Arithmetic errors will be rectified on the following basis. If thereis a discrepancy between the unit price and the total price that isobtained by multiplying the unit price and quantity, or betweensubtotals and the total price, the unit or subtotal price shall prevailand the total price shall be corrected. If there is a discrepancybetween words and figures, the amount in words will prevail. Ifthe Bidder does not accept the correction of errors, its bid will berejected.

32.3 The Employer may waive any minor informality, nonconformityor irregularity in a bid that does not constitute a materialdeviation, and that does not prejudice or affect the relativeranking of any Bidder as a result of the technical and commercialevaluation, pursuant to ITB Clauses 34 and 35.

32.4 Prior to the detailed evaluation, the Employer will determinewhether each bid is of acceptable quality, is complete, issubstantially responsive to the bidding documents and hasproperly incorporated all the modifications listed in the "ChangesRequired Pursuant to First Stage Evaluation." For purposes ofthis determination, a substantially responsive bid is one thatconforms to all the terms and conditions of the biddingdocuments and the "Changes Required Pursuant to First StageEvaluation" without material deviations, objections,conditionalities or reservations. A material deviation, objection,conditionality or reservation is one (i) that affects in anysubstantial way the scope, quality or performance of the contract;(ii) that limits in any substantial way, inconsistent with the biddingdocuments, the Employer's rights or the successful Bidder'sobligations under the contract; or (iii) whose rectification wouldunfairly affect the competitive position of other Bidders who arepresenting substantially responsive bids.

32.5 In particular, bids with deviations from, objections to orreservations, if any, about critical provisions such as thoseconcerning Bid Security (ITB Clause 24); GCC Clauses 5(Governing Law), 14 (Taxes and Duties), 27 (Defect Liability),28 (Functional Guarantees), 29 (Patent and Indemnity), or 30(Limitation of Liability), and related prescriptions in the biddingdocument, and others, if any, raised at the clarification meetingfor First Stage bids, pursuant to ITB Clause 18, that were notaccepted by the Employer, will be treated as nonresponsive if theBidder has not withdrawn them in its Second Stage bid, at astated withdrawal price, if necessary. In addition, a Second Stagebid containing technical or commercial deviations or alternative


bids not submitted as part of the First Stage bid will be treated asnonresponsive. The Employer's determination of a bid'sresponsiveness is to be based on the contents of the bid itselfwithout recourse to extrinsic evidence.

32.6 If a Second Stage bid is not substantially responsive, it will berejected by the Employer and may not subsequently be maderesponsive by the Bidder by correction of the nonconformity.

33. Conversion to 33.1 To facilitate evaluation and comparison, the Employer willSingle convert all bid prices expressed in the amounts in variousCurrency currencies in which the bid price is payable to either

(a) the currency of the Employer's country at the sellingexchange rate established for similar transactions by thecentral bank or by a commercial bank in the Employer'scountry, or

(b) a currency widely used in international trade, such as U.S.dollars, at the selling exchange rate published in theinternational press for the amount payable in foreigncurrency; and at the selling exchange rate established forsimilar transactions by the central bank in the Employer'scountry for the amount payable in the currency of theEmployer's country.

33.2 The currency selected for converting bid prices to a common basefor the purpose of evaluation, along with the source and date ofthe exchange rate, is specified in the Bid Data Sheet.

34. Technical 34.1 The Employer will carry out a detailed evaluation of the SecondEvaluation of Stage bids to determine whether the technical aspects concerningSecond Stage the modifications to the technically acceptable base or alternativeBid bid detailed in the "Changes Required Pursuant to First Stage

Evaluation," pursuant to ITB Sub-Clause 19.1, have beenproperly addressed and are substantially responsive to therequirements set forth in the bidding documents.

35. Commercial 35.1 The comparison shall be of the EXW price of plant andEvaluation of equipment offered from within the Employer's country, suchSecond Stage price to include all costs as well as duties and taxes paid orBid payable on components and raw material incorporated or to be

incorporated in the plant and equipment, with the price of theCIF-named port of destination (or CIP border point or CIP-named place of destination) offered from outside the Employer's


country, plus the cost of local transportation and all installationand other services required under the contract. The Employer'sevaluation will also include the costs resulting from application ofthe evaluation procedures described in ITB Sub-Clause 35.3.

35.2 The Employer's evaluation of a bid will take into account, inaddition to the bid prices indicated in Schedules Nos. I through 5,the following costs and factors that will be added to eachBidder's bid price in the evaluation, using pricing informationavailable to the Employer, in the manner and to the extentindicated in ITB Sub-Clause 35.3 and in the TechnicalSpecifications:

(a) compliance with the time schedule called for in Appendix 4to the form of Contract Agreement and evidence as neededin a milestone schedule provided in the bid

(b) the projected operating and maintenance costs during thelife of the facilities

(c) the functional guarantees of the facilities offered

(d) the extra cost of work, services, facilities etc. required tobe provided by the Employer or third parties

(e) any other relevant factors listed in the Bid Data Sheet or inthe invitation for the Second Stage bid, or factors that theEmployer deems necessary or prudent to consider.

35.3 Pursuant to ITB Sub-Clause 35.2, the following evaluationmethods will be followed:

(a) Time Schedule (Program of Performance)

The plant and equipment covered by this bidding arerequired to be shipped and installed, and the facilities havethe precomnmissioning completed within the period named inthe Bid Data Sheet after the effective date specified in theContract Agreement. Bidders are required to base theirprices on the Time Schedule given in Appendix 4 to theform of Contract Agreement (Time Schedule) or, whereno Time Schedule is given, on the completion date(s)given in the Bid Data Sheet. No credit will be given toearlier completion. When the option of an Alternative TimeSchedule is provided in the Bid Data Sheet, and the


completion date offered is within the limit specified in theBid Data Sheet, bids offering completion beyond theminimum period snecified shall be adjusted in the evaluationby adding a factor specified in the Bid Data Sheet to the bidprice.

(b) Operating and Maintenance Costs

(i) Since the operating and maintenance costs of thefacilities being procured form a major part of the lifecycle cost of the facilities, these costs will beevaluated according to the principles given in the BidData Sheet, including the cost of spare parts for theinitial period of operation stated in the Bid Data Sheetand based on prices furnished by each Bidder in PriceSchedules Nos. I and 2, as well as on past experienceof the Employer or other employers similarly placed.Such costs shall be added to the bid price forevaluation.

(ii) The price of recommended spare parts quoted in PriceSchedule No. 6 shall not be considered for evaluation.

(c) Functional Guarantees of the Facilities

(i) Bidders shall state the functional guarantees (e.g.,performance, efficiency, consumption) of theproposed facilities in response to the TechnicalSpecifications. Plant and equipment offered shall havea minimum (or maximum, as the case may be) level offunctional guarantees specified in the TechnicalSpecifications to be considered responsive. Bidsoffering plant and equipment with functionalguarantees less (or more) than the minimum (ormaximum) specified shall be rejected.

(ii) For the purposes of evaluation, the adjustmentspecified in the Bid Data Sheet will be added to thebid price for each drop (or excess) in the responsivefunctional guarantees offered by the Bidder, below (orabove) either a norm of 100 or the value committed inthe responsive bid with the most performing functionalguarantees, as specified in the Bid Data Sheet.


(d) Work, Services, Facilities etc., to be Provided by theEmployer

Where bids include the undertaking of work or theprovision of services or facilities by the Employer in excessof the provisions allowed for in the bidding documents, theEmployer shall assess the costs of such additional work,services and/or facilities during the duration of the contract.Such costs shall be added to the bid price for evaluation.

(e) Specific Additional Criteria

The relevant evaluation method shall be detailed in the BidData Sheet and/or in the Technical Specifications. Inaddition, such method will be used where bidders arerequired to provide the price for withdrawal of deviations,pursuant to ITB Sub-Clause 18.2. If such a price is notgiven, the Employer will make its own assessment of thecost of such a deviation for the purpose of ensuring a faircomparison of bids.

35.4 Any adjustments in price that result from the above proceduresshall be added, for the purposes of comparative evaluation only,to arrive at the "Evaluated Bid Price." Bid prices quoted byBidders shall remain unaltered.

36. Domestic 36.1 In the evaluation and comparison of bids, the CIF or CIP price ofPreference plant and equipment to be incorporated in the facilities and

proposed to be supplied from abroad, as identified in ITB Sub-Clause 22.3 (a), will be increased by the applicable import tariff(customs duties and other import taxes) for the specific plant o.equipment in question or fifteen percent (15%), whichever is less.In the case of more than one import tariff, the appropriate tarifffor each item of plant and equipment shall apply. No margin ofpreference will be allowed for any other component.

37. Contacting the 37.1 Subject to ITB Sub-Clause 32.1, no Bidder shall contact theEmployer Employer on any matter relating to its bid, from the time of the

opening of Second Stage bids to the time the contract is awarded.

37.2 Any effort by a Bidder to influence the Employer in theEmployer's bid evaluation, bid comparison or contract awarddecisions may result in rejection of the Bidder's bid.


F. Award of Contract

38. Changes in 38.1 Prior to proceeding with the award of contract, the Employer willQualification determine to its satisfaction that no circumstances, in particularStatus the Bidder's contract work in hand, future commitments and

current litigation, have arisen or intervened during the periodbetween the submission of the First and Second Stage bids thatwould change the Employer's opinion as to whether the Bidderdetermined as having submitted the lowest evaluated andresponsive Second Stage bid is still qualified to satisfactorilyperform the contract.

38.2 An affirmative determination will be a prerequisite for award ofthe contract to the Bidder. A negative determination will result inrejection of the Bidder's bid, in which event the Employer willproceed to the next lowest evaluated bid to make a sirmilardetermination of that Bidder's capabilities to performsatisfactorily.

38.3 The capabilities of the vendors and subcontractors proposed inAttachment 5 to be used by the lowest evaluated Bidder will alsobe evaluated for acceptability. Their participation should beconfirmed with a letter of intent between the parties, as needed.Should a vendor or subcontractor be determined to beunacceptable, the Bidder will not be rejected, but will be requiredto substitute an acceptable vendor or subcontractor without anychange to the bid price.

39. Award Criteria 39.1 Subject to ITB Clause 40, the Employer will award the contractto the successful Bidder whose Second Stage bid has beendetermined to be substantially responsive and to be the lowestevaluated bid, further provided that the Bidder is determined tobe qualified to perform the contract satisfactorily.

40. Employer's 40.1 The Employer reserves the right to accept or reject any First orRight to accept Second Stage bid, and to annul the bidding process and reject allAny Bid and to bids at any time prior to award of contract, without therebyReject Any or incurring any liability to the affected Bidder or Bidders or anyAll Bids obligation to inform the affected Bidder or Bidders of grounds for

the Employer's action.

41. Notification of 41.1 Prior to the expiration of the period of Second Stage bid validity,award the Employer will notify the successful Bidder in writing by

registered letter or by cable, to be confirmed in writing byregistered letter, that its Second Stage bid has been accepted.


The notification of award will constitute the formation of thecontract.

41.2 Upon the successful Bidder's furnishing of the performancesecurity, pursuant to ITB Clause 43, the Employer will promptlynotify each unsuccessful Bidder and will discharge its bid security,pursuant to ITB Sub-Clause 24.4.

42. Signing of 42.1 At the same time as the Employer notifies the successful BidderContract that its Second Stage bid has been accepted, the Employer willAgreement send the Bidder the Contract Agreement provided in the bidding

documents, incorporating all agreements between the parties.

42.2 Within twenty-eight (28) days of receipt of the ContractAgreement, the successful Bidder shall sign and date the ContractAgreement and return it to the Employer.

43. Performance 43.1 Within twenty-eight (28) days of the receipt of the notification ofSecurity award, the successful Bidder shall furnish the performance

security in the amount given in the Bid Data Sheet, and in theform provided in the section "Sample Forms and Procedures" ofthe bidding documents or in another form acceptable to theEmployer.

43.2 Failure of the successful Bidder to comply with the requirementsof ITB Clause 42 or Clause 43 shall constitute sufficient groundsfor the annulment of the award and forfeiture of the bid security,in which event the Employer may make the award to the nextlowest evaluated Bidder or call for new bids.

44. Adjudicator 44.1 The Employer proposes that the person named in the Bid DataSheet be appointed as Adjudicator under the Contract, at anhourly fee stated in the Bid Data Sheet. A resume of the namedperson is attached to the Bid Data Sheet, as well as a descriptionof the expenses that would be considered reimbursable. If aBidder does not accept the Adjudicator proposed by theEmployer, it should so state in its Bid Form and make acounterproposal of an Adjudicator and an hourly fee. If on theday the Contract Agreement is signed, the Employer and theContractor have not agreed on the appointment of theAdjudicator, the Adjudicator shall be appointed at the request ofeither party by the Appointing Authority specified in the SpecialConditions of Contract, pursuant to GCC Sub-Clause 6.1.4.

81

Section III. Bid Data Sheet

Notes on the Bid Data Sheet

Section III is intended to assist the Employer in providing the specific information inrelation to corresponding clauses in the Instructions to Bidders included in Section II, andhas to be prepared for each specific procurement.

The Employer should specify in the Bid Data Sheet information and requirements specific tothe circumstances of the Employer, the processing of the procurement, the applicable rulesregarding bid price and currency, and the bid evaluation criteria that will apply to the bids.In preparing Section III, the following aspects should be checked:

(a) Information that specifies and complements provisions of Section II must beincorporated.

(b) Amendments and/or supplements, if any, to provisions of Section II, asnecessitated by the circumstances of the specific procurement, must also beincorporated.


Bid Data Sheet

The following bid-specific data for the Plant and Equipment to be procured shall amendand/or supplement the provisions in the Instructions to Bidders (ITB). Whenever there is aconflict, the provisions herein shall prevail over those in the ITB.

/The trotes in italics provide instructionisfor completing the Bid Data Sheetfor the relevant ITB Clauses.]

INTRODUCTIONITB 1. 1 Name of the Borrower

ITB 1. I Loan or credit numberLoan or credit amountI when applicable]

ITB 1. I Name of Project

ITB 1. I Name of Contract

ITB 2. 1 Name of Employer

ITB 6.1 Address of Employer; telephone, telex and facsirnile numbers

ITB 8.1 Language of bid is English

ITB 9.3 (a) & (c) Qualification requirements for bidders, including members of jointventures, subcontractors or vendorsIMiniitmuml acceptable levels with regard to Bidder's experience in supplying andinstallinzg facilities withl comparable technical parameters, its manufacturing andinistallationi capacity, its financial validity and other factors. If bidders werepreqqualified, this Item should iniclude a request to update the informationprov ided for prequalification1.]

ITB 9.3 (b) (ii) Spares required for operation; number of years following completion

FIRST STAGE BIDSITB II. 1, 26.1 & Number of copies of the bid and modifications, if any30.2

ITB 13.1 Address of bid subrnissionDeadline for bid submission


ITB 14.1 Location, time and date for first stage bid opening

ITB 16.1 (e) Optional: the following additional criteria will be used in theevaluation in the manner stated and to the extent indicated below orin the Technical Specifications. [Specify details below or indicaterefetemice to Technical Specifications.]

SECOND STAGE BIDS: PRICE AND CURRENCYITB 22.5 The price shall be fixed

orThe price shall be adjustable[Delete the inapplicable option. I

ITB 23.1 (b) [If the Bidder is permitted to useforeign currenciesfor pricing and paymentforplanit, equipment and services from within the Employer's country, state thefollowing:]

Sub-Clause 23.1 (b) is not applicable, and Sub-Clause 23.1 (a)applies to all plant, equipment and services.

SECOND STAGE BIDS: PREPARATION AND SUBMISSIONITB 24.1 Amount of bid security

[Thiis amount should be the samite as that quoted in the Invitation for Bids. Toavoid disclosure of bidders' prices originating in thefinancial institution issuingthe security, a fixed sum should be specified, preferably a percentage of the bidprice. The sum should range front the equivalent of I percent of the estimatedcost of the facilities, for contracts of over US $100 mnillion, to 3 percent of theestimated cost, for small contracts. Alternatively, if the Employer wishes tospecify a percentage of the bid price, the percentage should be indicated as a"minimum of percent (%)" to enable bidders to provide in excess ofthe minim7ium and thus conceal their prices.]

ITB 25.1 Bid validity period of the second stage bid shall be mentioned in theletter of invitation to submit second stage bids[The period should be sufficietit to permit the completion of evaluation andcomparison of bids, the review of the recommended selection with the Bank (if sorequired) anid the obtainme,it of all niecessary approvals and notifications ofaward. Nornally, the validity period should be one hundred twenty (120) days.A realistic period should be specified in order to avoid the need for extensions.]

[Pursuant to ITB Sub-Clause 25.3, the factors to be applied and mentiotned inthe requestfor extension should be asfollows:(i) The value of the foreigtn currenzcy factor should be based on, or becomparable with, expected pro rata annual increases in international prices(ii) The value of the local currency' factor should be based on the projectedinflationi in the Employer's country for the period in question.]


SECOND STAGE BIDS: EVALUATIONITB 33.2 Currency chosen for the purpose of converting to a common

currency[Specify either the local currency or a convertible currency, for example, U.S.dollars. I

Source of exchange rate[If the coimmon currency is other than the local currency, for example, U. S.,lollars. indicate the name of an internationally circulated newspaper that listsdailv c urrenc exchanige rates (e.g., The Financial Times), which will be used incon erting prices in foreign currencies. For prices in local currency, and if theconmnon currencY selected above is the local currency, specify either the centralbank or a c otmimercial bank located in the Employer's country.]

Date of exchange rate[Select a date that will not be earlier than 4 weeks prior to the original deadlinefor the receipt of bids, as specified in ITB Sub-Clause 28.1, and that will be nolater than the original date of expiration of the bid validity period, as specifiedin ITB Sub-Clause 25.1.]

ITB 35.2 (b) Optional: The following additional criteria will be used in theevaluation in the manner stated and to the extent indicated in the BidData Sheet under ITB Sub-Clause 35.3 (e).[Additional criteria may also be included as amendments in the invitation for theSecond Stage bid. I

ITB 35.3 (a) Time ScheduleTime to complete the facilities from the effective date specified inArticle 3 of the Contract Agreement for determining time forcompletion of precommissioning activities[ The comipletion time specified shall be for the entire facilities or for parts or

l sections of thefacilities.]

or loptional/

Time to complete the facilities from the effective date specified inArticle 3 of the Contract Agreement for determining time forcompletion of precommissioning activities shall be between [date ordays] minimum and [date or days] maximum. The adjustment rate inthe event of completion beyond the minimum period shall be 1_lpeercent (-%)] for each week of delay from that minimum period.lOne-fifth of a percent (0.2%) per week is a reasonablefigure. Alternatively, thel-ate may be a fixed amount per month, or pro rata per week, of delay related tothe loss of benefits to the Employer. The accepted period between the minimumand maximumz time for completion should be such that the percentage or amountcorresponding to the maximum period for completion should be less than orequal to the percentage or amount of liquidated damages specified in the SCC inrelation to GCC Sub-Clause 26.2.]

Section 111. Bid Data Sheet 85

ITB 35.3 (b) Operating and maintenance costsFactors for calculation of the life cycle

(i) number of years for life cycle [It is recommended that the lifecycle period not exceed the usual period before a major overhaul ofthe facilities. ]

(ii) operating costs (e.g., fuel and/or other input, unit cost,annual and total operational requirements)

(iii) maintenance costs, including the cost of spare parts forthe initial period of operation, to be specified by theBidder

(iv) rate, in percent, to be used to discount to present value allannual future costs calculated under (i) and (ii) aboveorReference to the methodology specified in the TechnicalSpecifications or elsewhere in the bidding documentsIDelete the inapplicable option.]

ITB 35.3 (c) Functional guaranteesMinimum (or maximum) functional guaranteesAdjustment factor used for bid evaluation will be [amount in thecurrencY of bid evaluation] for each one percent (1%)-or pro rata forless than one percent-[drop or excess] of the norm specified in theTechnical Specifications [reference]

orthe value committed in the responsive bid with the most performingfunctional guarantees. [Delete the inapplicable option.]

ITB 35.3 (e) Optional: Additional details, as appropriate, on the evaluationmethod or reference to the Technical Specifications [Details may alsobe included as amendments in the invitationfor the Second Stage bid.]

ITB 36 Domestic preference to applyorDomestic preference not applicable[Delete the inapplicable option. I


CONTRACT AWARDITB 43 Amount of performance security [Performance security amount shall

normally be ten (IO) percent.]

ITB 44 Name of the Adjudicator proposed by the Employer [A resumi of thenamed person should be attached to the Bid Data Sheet.]

Hourly fee for the Adjudicator

87

Section IV. General Conditions of Contract

Notes on the General Conditions of Contract

The General Conditions of Contract in Section IV, read in conjunction with the SpecialConditions of Contract in Section V and other documents listed therein, should be acomplete document expressing all the rights and obligations of the parties.

The General Conditions of Contract herein shall not be altered. Any changes andcomplementary information that may be needed shall be introduced only through the SpecialConditions of Contract in Section V.

88 Section IV. General Conditions of Contract

Table of Clauses

A. Contract and Interpretation ......................................... 901. Definitions .................................................. 902. Contract Documents ......................................... 933. Interpretation ......................................... 934. Notices ......................................... 965. Governing Law .......................................... 966. Settlement of Disputes ......................................... 96

B. Subject Matter of Contract ......................................... 997. Scope of Facilities ......................................... 998. Time for Commencement and Completion ......................................... 1009. Contractor's Responsibilities .......................................... 10010. Employer's Responsibilities ......................................... 101

C. Payment ......................................... 10211. Contract Price ......................................... 10212. Terms of Payment ......................................... 10313. Securities ......................................... 10314. Taxes and Duties ......................................... 105

D. Intellectual Property ......................................... 10615. Copyright ......................................... 10616. Confidential Information ......................................... 106

E. Work Execution ......................................... 10717. Representatives ......................................... 10718. Work Program ......................................... 10919. Subcontracting .......................................... 11120. Design and Engineering .......................................... 11121. Procurement ......................................... 11422. Installation ......................................... 11623. Test and Inspection ......................................... 12024. Completion of the Facilities ......................................... 12225. Commissioning and Operational Acceptance ......................................... 124

F. Guarantees and Liabilities ........................................ 12726. Completion Time Guarantee ........................................ 12727. Defect Liability ........................................ 12828. Functional Guarantees ........................................ 13029. Patent Indemnity ........................................ 13130. Limitation of Liability ........................................ 132

Section IV. General Conditions of Contract 89

G. Risk Distribution ...................................................... 13331. Transfer of Ownership ...................................................... 13332. Care of Facilities ...................................................... 13433. Loss of or Damage to Property; Accident or Injury to Workers;

Indemnification ...................................................... 13534. lnsurance ...................................................... 13635. Unforeseen Conditions ...................................................... 13936. Change in Laws and Regulations ....................................................... 14037. Force Majeure ...................................................... 14138. War Risks ...................................................... 143

H. Change in Contract Elements ...................................................... 14539. Change in the Facilities ...................................................... 14540. Extension of Time for Completion ............................. ......................... 14841. Suspension ...................................................... 14942. Ternination ...................................................... 15143. Assignment ...................................................... 158


General Conditions of Contract

A. Contract and Interpretation

1. Definitions 1.1 The following words and expressions shall have the meaningshereby assigned to them:

"Contract" means the Contract Agreement entered into betweenthe Employer and the Contractor, together with the ContractDocuments referred to therein; they shall constitute the Contract,and the term "the Contract" shall in all such documents beconstrued accordingly.

"Contract Documents" means the documents listed in Article 1. 1(Contract Documents) of the Form of Contract Agreement(including any amendments thereto).

"GCC" means the General Conditions of Contract hereof.

"SCC" means the Special Conditions of Contract.

"Day" means calendar day of the Gregorian Calendar.

"Month" means calendar month of the Gregorian Calendar.

"Employer" means the person named as such in the SCC andincludes the legal successors or permitted assigns of theEmployer.

"Project Manager" means the person appointed by the Employerin the manner provided in GCC Sub-Clause 17.1 (ProjectManager) hereof and named as such in the SCC to perform theduties delegated by the Employer.

"Contractor" means the person(s) whose bid to perform theContract has been accepted by the Employer and is named assuch in the Contract Agreement, and includes the legal successorsor permitted assigns of the Contractor.

"Contractor's Representative" means any person nominated bythe Contractor and named as such in the SCC and approved bythe Employer in the manner provided in GCC Sub-Clause 17.2(Contractor's Representative and Construction Manager) hereofto perform the duties delegated by the Contractor.


"Subcontractor," including vendors, means any person to whomexecution of any part of the Facilities, including preparation ofany design or supply of any Plant and Equipment, is sub-contracted directly or indirectly by the Contractor, and includesits legal successors or permitted assigns.

"Adjudicator" means the person or persons named as such in theSCC appointed by agreement between the Employer and theContractor to make a decision on or to settle any dispute ordifference between the Employer and the Contractor referred tohim or her by the parties pursuant to GCC Sub-Clause 6.1(Adjudicator) hereof.

"The World Bank" means the International Bank forReconstruction and Development (IBRD) or the InternationalDevelopment Association (IDA).

"Contract Price" means the sum specified in Article 2.1 (ContractPrice) of the Contract Agreement, subject to such additions andadjustments thereto or deductions therefrom, as may be madepursuant to the Contract.

"Facilities" means the Plant and Equipment to be supplied andinstalled, as well as all the Installation Services to be carried outby the Contractor under the Contract.

"Plant and Equipment" means permanent plant, equipment,machinery, apparatus, articles and things of all kinds to beprovided and incorporated in the Facilities by the Contractorunder the Contract (including the spare parts to be supplied bythe Contractor under GCC Sub-Clause 7.3 hereof), but does notinclude Contractor's Equipment.

"Installation Services" means all those services ancillary to thesupply of the Plant and Equipment for the Facilities, to beprovided by the Contractor under the Contract; e.g.,transportation and provision of marine or other similar insurance,inspection, expediting, Site preparation works (including theprovision and use of Contractor's Equipment and the supply of allconstruction materials required), installation, testing,Precommissioning, commissioning, operations, maintenance, theprovision of operations and maintenance manuals, training, etc.


"Contractor's Equipment" means all plant, facilities, equipment,machinery, tools, apparatus, appliances or things of every kindrequired in or for installation, completion and maintenance ofFacilities that are to be provided by the Contractor, but does notinclude Plant and Equipment, or other things intended to form orforming part of the Facilities.

"Country of Origin" means the countries and territories eligibleunder the rules of the World Bank as further elaborated in theSCC.

"Site" means the land and other places upon which the Facilitiesare to be installed, and such other land or places as may bespecified in the Contract as forming part of the Site.

"Effective Date" means the date of fulfillment of all conditionsstated in Article 3 (Effective Date for Determining Time forCompletion) of the Form of Contract Agreement, for the purposeof determining the Time for Completion.

"Time for Completion" means the time within which Completionof the Facilities as a whole (or of a part of the Facilities where aseparate Time for Completion of such part has been prescribed) isto be attained in accordance with the specifications in the SCCand the relevant provisions of the Contract.

"Completion" means that the Facilities (or a specific part thereofwhere specific parts are specified in the SCC) have beencompleted operationally and structurally and put in a tight andclean condition, and that all work in respect of Precommissioningof the Facilities or such specific part thereof has been completed;in other words, that the Facilities or specific part thereof areready for Commnissioning as provided in GCC Clause 24(Completion) hereof.

"Precommissioning" means the testing, checking and otherrequirements specified in the Technical Specifications that are tobe carried out by the Contractor in preparation forCommissioning as provided in GCC Clause 24 (Completion)hereof.

"Commissioning" means operation of the Facilities or any partthereof by the Contractor following Completion, which operationis to be carried out by the Contractor as provided in GCC Sub-Clause 25.1 (Commissioning) hereof, for the purpose of carrying


out Guarantee Test(s).

"Guarantee Test(s)" means the test(s) specified in the TechnicalSpecifications to be carried out to ascertain whether the Facilitiesor a specified part thereof is able to attain the FunctionalGuarantees specified in the Technical Specifications inaccordance with the provisions of GCC Sub-Clause 25.2(Guarantee Test) hereof.

"Operational Acceptance" means the acceptance by the Employerof the Facilities (or any part of the Facilities where the Contractprovides for acceptance of the Facilities in parts), which certifiesthe Contractor's fulfillment of the Contract in respect ofFunctional Guarantees of the Facilities (or the relevant partthereof) in accordance with the provisions of GCC Clause 28(Functional Guarantees) hereof and shall include deemedacceptance in accordance with GCC Clause 25 (Commissioningand Operational Acceptance) hereof.

"Defect Liability Period" means the period of validity of thewarranties given by the Contractor comrencing at Completion ofthe Facilities or a part thereof, during which the Contractor isresponsible for defects with respect to the Facilities (or therelevant part thereof) as provided in GCC Clause 27 (DefectLiability) hereof.

2. Contract 2.1 Subject to Article 1.2 (Order of Precedence) of the ContractDocuments Agreement, all documents forming part of the Contract (and all

parts thereof) are intended to be correlative, complementary andmutually explanatory. The Contract shall be read as a whole.

3. Interpretation 3.1 Language3.1.1 Unless the Contractor is a national of the Employer's

country and the Employer and the Contractor agree to usethe local language, all Contract Documents, allcorrespondence and communications to be given, and allother documentation to be prepared and supplied under theContract shall be written in English, and the Contract shallbe construed and interpreted in accordance with thatlanguage.

3.1.2 If any of the Contract Documents, correspondence orcommunications are prepared in any language other than thegoverning language under GCC Sub-Clause 3.1.1 above,the English translation of such documents, correspondence


or communications shall prevail in matters of interpretation.

3.2 Singular and PluralThe singular shall include the plural and the plural the singular,except where the context otherwise requires.

3.3 HeadingsThe headings and marginal notes in the General Conditions ofContract are included for ease of reference, and shall neitherconstitute a part of the Contract nor affect its interpretation.

3.4 PersonsWords importing persons or parties shall include firms,corporations and government entities.

3.5 IncotermsUnless inconsistent with any provision of the Contract, themeaning of any trade term and the rights and obligations ofparties thereunder shall be as prescribed by Incoterms.

Incoterms means international rules for interpreting trade termspublished by the International Chamber of Commerce (latestedition), 38 Cours Albert ler, 75008 Paris, France.

3.6 Entire AgreementSubject to GCC Sub-Clause 16.4 hereof, the Contract constitutesthe entire agreement between the Employer and Contractor withrespect to the subject matter of Contract and supersedes allcommunications, negotiations and agreements (whether writtenor oral) of parties with respect thereto made prior to the date ofContract.

3.7 AmendmentNo amendment or other variation of the Contract shall beeffective unless it is in writing, is dated, expressly refers to theContract, and is signed by a duly authorized representative ofeach party hereto.

3.8 Independent ContractorThe Contractor shall be an independent contractor performing theContract. The Contract does not create any agency, partnership,joint venture or other joint relationship between the partieshereto.


Subject to the provisions of the Contract, the Contractor shall besolely responsible for the manner in which the Contract isperformed. All employees, representatives or Subcontractorsengaged by the Contractor in connection with the performance ofthe Contract shall be under the complete control of theContractor and shall not be deemed to be employees of theEmployer, and nothing contained in the Contract or in anysubcontract awarded by the Contractor shall be construed tocreate any contractual relationship between any such employees,representatives or Subcontractors and the Employer.

3.9 Joint Venture or ConsortiumIf the Contractor is a joint venture or consortium of two or morepersons, all such firms shall be jointly and severally bound to theEmployer for the fulfillment of the provisions of the Contract andshall designate one of such persons to act as a leader withauthority to bind the joint venture or consortium. Thecomposition or the constitution of the joint venture or consortiumshall not be altered without the prior consent of the Employer.

3.10 Non-Waiver3.10.1 Subject to GCC Sub-Clause 3.10.2 below, no relaxation,

forbearance, delay or indulgence by either party inenforcing any of the terms and conditions of the Contractor the granting of time by either party to the other shallprejudice, affect or restrict the rights of that party underthe Contract, nor shall any waiver by either party of anybreach of Contract operate as waiver of any subsequent orcontinuing breach of Contract.

3.10.2 Any waiver of a party's rights, powers or remedies underthe Contract must be in writing, must be dated and signedby an authorized representative of the party granting suchwaiver, and must specify the right and the extent to whichit is being waived.

3. 11 SeverabilityIf any provision or condition of the Contract is prohibited orrendered invalid or unenforceable, such prohibition, invalidity orunenforceability shall not affect the validity or enforceability ofany other provisions and conditions of the Contract.

3.12 Country of Origin"Origin" means the place where the materials, equipment andother supplies for the Facilities are mined, grown, produced or


manufactured, and from which the services are provided.

4. Notices 4.1 Unless otherwise stated in the Contract, all notices to be givenunder the Contract shall be in writing, and shall be sent bypersonal delivery, airmail post, special courier, cable, telegraph,telex, facsimile or Electronic Data Interchange (EDI) to theaddress of the relevant party set out in the Special Conditions ofContract, with the following provisions.

4.1.1 Any notice sent by cable, telegraph, telex, facsimile or EDIshall be confirmed within two (2) days after dispatch bynotice sent by airmail post or special courier, except asotherwise specified in the Contract.

4.1.2 Any notice sent by airmail post or special courier shall bedeemed (in the absence of evidence of earlier receipt) tohave been delivered ten (10) days after dispatch. In provingthe fact of dispatch, it shall be sufficient to show that theenvelope containing such notice was properly addressed,stamped and conveyed to the postal authorities or courierservice for transmission by airmail or special courier.

4.1.3 Any notice delivered personally or sent by cable, telegraph,telex, facsirmile or EDI shall be deemed to have beendelivered on date of its dispatch.

4.1.4 Either party may change its postal, cable, telex, facsimile orEDI address or addressee for receipt of such notices by ten(10) days' notice to the other party in writing.

4.2 Notices shall be deemed to include any approvals, consents,instructions, orders and certificates to be given under theContract.

5. Governing 5.1 The Contract shall be governed by and interpreted in accordanceLaw with laws of the country specified in the SCC.

6. Settlement of 6.1 AdjudicatorDisputes 6.1.1 If any dispute of any kind whatsoever shall arise between

the Employer and the Contractor in connection with orari;ng out of the Contract, including without prejudice tothe generality of the foregoing, any question regarding itsexistence, validity or termination, or the execution of theFacilities-whether during the progress of the Facilities orafter their completion and whether before or after the


termination, abandonment or breach of the Contract-theparties shall seek to resolve any such dispute or differenceby mutual consultation. If the parties fail to resolve such adispute or difference by mutual consultation, then thedispute shall be referred in writing by either party to theAdjudicator, with a copy to the other party.

6.1.2The Adjudicator shall give its decision in writing to bothparties within twenty-eight (28) days of a dispute beingreferred to it. If the Adjudicator has done so, and no noticeof intention to commence arbitration has been given byeither the Employer or the Contractor within fifty-six (56)days of such reference, the decision shall become final andbinding upon the Employer and the Contractor. Anydecision that has become final and binding shall beimplemented by the parties forthwith.

6.1.3 The Adjudicator shall be paid an hourly fee at the ratespecified in the SCC plus reasonable expenditures incurredin the execution of its duties as Adjudicator, and these costsshall be divided equally between the Employer and theContractor.

6.1.4 Should the Adjudicator resign or die, or should theEmployer and the Contractor agree that the Adjudicator isnot fulfilling its functions in accordance with the provisionsof the Contract, a new Adjudicator shall be jointlyappointed by the Employer and the Contractor. Failingagreement between the two within twenty-eight (28) days,the new Adjudicator shall be appointed at the request ofeither party by the Appointing Authority specified in theSCC.

6.2 Arbitration6.2.1 If either the Employer or the Contractor is dissatisfied with

the Adjudicator's decision, or if the Adjudicator fails to givea decision within twenty-eight (28) days of a dispute beingreferred to it, then either the Employer or the Contractormay, within fifty-six (56) days of such reference, give noticeto the other party, with a copy for information to theAdjudicator, of its intention to commence arbitration, ashereinafter provided, as to the matter in dispute, and noarbitration in respect of this matter may be commencedunless such notice is given.


6.2.2 Any dispute in respect of which a notice of intention tocommence arbitration has been given, in accordance withGCC Sub-Clause 6.2.1, shall be finally settled by arbitration.Arbitration may be commenced prior to or after completionof the Facilities.

6.2.3 Any dispute submitted by a party to arbitration shall beheard by a sole arbitrator, or by an arbitration panelcomposed of three arbitrators, in accordance with theprovisions set forth below.

6.2.4 The Employer and the Contractor shall each appoint onearbitrator, and these two arbitrators shall jointly appoint athird arbitrator, who shall chair the arbitration panel. If thetwo arbitrators do not succeed in appointing a thirdarbitrator within twenty-eight (28) days after the latter ofthe two arbitrators has been appointed, the third arbitratorshall, at the request of either party, be appointed by theAppointing Authority designated in the SCC.

6.2.5 If one party fails to appoint its arbitrator within forty-two(42) days after the other party has named its arbitrator, theparty which has named an arbitrator may request theAppointing Authority to appoint the second arbitrator.

6.2.6 If for any reason an arbitrator is unable to perform itsfunction, a substitute shall be appointed in the same manneras the original arbitrator.

6.2.7 Arbitration proceedings shall be conducted (i) in accordancewith the rules of procedure designated in the SCC, (ii) in theplace designated in the SCC, and (iii) in the language inwhich this Contract has been executed.

6.2.8 The decision of a majority of the arbitrators (or of the thirdarbitrator if there is no such majority) shall be final andbinding and shall be enforceable in any court of competentjurisdiction. The parties thereby waive any objections to orclaims of immunity from such enforcement.

6.3 Notwithstanding any reference to the Adjudicator or arbitrationherein,

(a) the parties shall continue to perform their respectiveobligations under the Contract unless they otherwise agree


(b) the Employer shall pay the Contractor any monies due theContractor.

B. Subject Matter of Contract

7. Scope of 7.1 Unless otherwise expressly limited in the Technical Specifications,Facilities the Contractor's obligations cover the provision of all Plant and

Equipment and the performance of all Installation Servicesrequired for the design, the manufacture (including procurement,quality assurance, construction, installation, associated civilworks, Precommissioning and delivery) of the Plant andEquipment and the installation, completion and commissioning ofthe Facilities in accordance with the plans, procedures,specifications, drawings, codes and any other documents asspecified in the Technical Specifications. Such specificationsinclude, but are not limited to, the provision of supervision andengineering services; the supply of labor, materials, equipment,spare parts (as specified in GCC Sub-Clause 7.3 below) andaccessories; Contractor's Equipment; construction utilities andsupplies; temporary materials, structures and facilities;transportation (including, without limitation, unloading andhauling to, from and at the Site); and storage, except for thosesupplies, works and services that will be provided or performedby the Employer, as set forth in Appendix 6 (Scope of Works andSupply by the Employer) to the Contract Agreement.

7.2 The Contractor shall, unless specifically excluded in the Contract,perform all such work and/or supply all such items and materialsnot specifically mentioned in the Contract but that can bereasonably inferred from the Contract as being required forattaining Completion of the Facilities as if such work and/or itemsand materials were expressly mentioned in the Contract.

7.3 In addition to the supply of Mandatory Spare Parts included inthe Contract, the Contractor agrees to supply spare parts requiredfor the operation and maintenance of the Facilities for the periodspecified in the Special Conditions of Contract. However, theidentity, specifications and quantities of such spare parts and theterms and conditions relating to the supply thereof are to beagreed between the Employer and the Contractor, and the priceof such spare parts shall be that given in Price Schedule No. 6,which shall be added to the Contract Price. The price of suchspare parts shall include the purchase price therefor and othercosts and expenses (including the Contractor's fees) relating to


the supply of spare parts.

8. T1m for 8.1 The Contractor shall commence work on the Facilities within theCommencement period specified in the Special Conditions of Contract andand Completion without prejudice to GCC Sub-Clause 26.2 hereof, the

Contractor shall thereafter proceed with the Facilities inaccordance with the time schedule specified in Appendix 4 (TimeSchedule) to the Contract Agreement.

8.2 The Contractor shall attain Completion of the Facilities (or of apart where a separate time for Completion of such part isspecified in the Contract) within the time stated in the SCC orwithin such extended time to which the Contractor shall beentitled under GCC Clause 40 (Extension of Time forCompletion) hereof.

9. Contractor's 9.1 The Contractor shall design, manufacture (including associatedResponsibilities purchases and/or subcontracting), install and complete the

Facilities with due care and diligence in accordance with theContract.

9.2 The Contractor confirms that it has entered into this Contract onthe basis of a proper examination of the data relating to theFacilities (including any data as to boring tests) provided by theEmployer, and on the basis of information that the Contractorcould have obtained from a visual inspection of the Site (if accessthereto was available) and of other data readily available to itrelating to the Facilities as at the date twenty-eight (28) days priorto bid submission. The Contractor acknowledges that any failureto acquaint itself with all such data and information shall notrelieve its responsibility for properly estimating the difficulty orcost of successfully performing the Facilities.

9.3 The Contractor shall acquire in its name all permits, approvalsand/or licenses from all local, state or national governmentauthorities or public service undertakings in the country wherethe Site is located that are necessary for the performance of theContract, including, without limitation, visas for the Contractor'sand Subcontractor's personnel and entry permits for all importedContractor's Equipment. The Contractor shall acquire all otherpermits, approvals and/or licenses that are not the responsibilityof the Employer under GCC Sub-Clause 10.3 hereof and that arenecessary for the performance of the Contract.


9.4 The Contractor shall comply with a'l laws in force in the countrywhere the Facilities are installed and where the InstallationServices are carried out. The laws will include all national,provincial, municipal or other laws that affect the performance ofthe Contract and bind upon the Contractor. The Contractor shallindemnify and hold harmless the Employer from and against anyand all liabilities, damages, claims, fines, penalties and expenses ofwhatever nature arising or resulting from the violation of suchlaws by the Contractor or its personnel, including theSubcontractors and their personnel, but without prejudice toGCC Sub-Clause 10.1 hereof.

9.5 Any Plant, Material and Services that will be incorporated in orbe required for the Facilities and other supplies shall have theirorigin as specified under GCC Clause 1 (Country of Origin).

10. Employer's 10.1 The Employer shall ensure the accuracy of all information and/orResponsibilities data to be supplied by the Employer as described in Appendix 6

(Scope of Works and Supply by the Employer) to the Contract,except when otherwise expressly stated in the Contract.

10.2 The Employer shall be responsible for acquiring and providinglegal and physical possession of the Site and access thereto, andfor providing possession of and access to all other areasreasonably required for the proper execution of the Contract,including all requisite rights of way, as specified in Appendix 6(Scope of Works and Supply by the Employer) to the ContractAgreement. The Employer shall give full possession of andaccord all rights of access thereto on or before the date(s)specified in Appendix 6.

10.3 The Employer shall acquire and pay for all permits, approvalsand/or licenses from all local, state or national governmentauthorities or public service undertakings in the country wherethe Site is located. Such authorities or undertakings require theEmployer to obtain them in the Employer's name, are necessaryfor the execution of the Contract (they include those required forthe performance by both the Contractor and the Employer of theirrespective obligations under the Contract), and are specified inAppendix 6 (Scope of Works and Supply by the Employer) to theContract Agreement.

10.4 If requested by the Contractor, the Employer shall use its bestendeavors to assist the Contractor in obtaining in a timely andexpeditious manner all permits, approvals and/or licenses


necessary for the execution of the Contract from all local, state ornational government authorities or public service undertakingsthat such authorities or undertakings require the Contractor orSubcontractors or the personnel of the Contractor orSubcontractors, as the case may be, to obtain.

10.5 Unless otherwise specified in the Contract or agreed upon by theEmployer and the Contractor, the Employer shall providesufficient, properly qualified operating and maintenancepersonnel; shall supply and make available all raw materials,utilities, lubricants, chemicals, catalysts, other materials andfacilities; and shall perform all work and services of whatsoevernature, including those required by the Contractor to properlycarry out Precommissioning, Commissioning and GuaranteeTests, all in accordance with the provisions of Appendix 6 (Scopeof Works and Supply by the Employer) to the ContractAgreement at or before the time specified in the programfurnished by the Contractor under GCC Sub-Clause 18.2(Program of Performance) hereof and in the manner thereuponspecified or as otherwise agreed upon by the Employer and theContractor.

10.6 The Employer shall be responsible for the continued operation ofthe Facilities after Completion, in accordance with GCC Sub-Clause 24.8, and shall be responsible for facilitating the GuaranteeTest(s) for the Facilities, in accordance with GCC Sub-Clause25.2.

10.7 All costs and expenses involved in the performance of theobligations under this GCC Clause 10 shall be the responsibilityof the Employer, save those to be incurred by the Contractor withrespect to the performance of Guarantee Tests, in accordancewith GCC Sub-Clause 25.2.

C. Payment

11. Contract Price 11.1 The Contract Price shall be as specified in Article 2 (ContractPrice and Terms of Payment) of the Form of ContractAgreement.

11.2 Unless indicated otherwise in the SCC, the Contract Price shall bea firm lump sum not subject to any alteration, except in the eventof a Change in the Facilities or as otherwise provided in theContract.


11.3 Subject to GCC Sub-Clauses 9.2, 10.1 and 35 (UnforeseenConditions) hereof, the Contractor shall be deemed to havesatisfied itself as to the correctness and sufficiency of the ContractPrice, which shall, except as otherwise provided for in theContract, cover all its obligations under the Contract.

12. Terms of 12.1 The Contract Price shall be paid as specified in Appendix 1Payment (Terms and Procedures of Payment) to the Contract Agreement.

The procedures to be followed in making application for andprocessing payments shall be those outlined in the same Appendix1.

12.2 No payment made by the Employer herein shall be deemed toconstitute acceptance by the Employer of the Facilities or anypart(s) thereof.

12.3 In the event that the Employer fails to make any payment by itsrespective due date or within the period set forth in the Contract,the Employer shall pay to the Contractor interest on the amountof such delayed payment at the rate(s) shown in Appendix I(Terms and Procedures of Payment) to the Contract Agreementfor the period of delay until payment has been made in full,whether before or after judgment or arbitrage award.

12.4 The currency or currencies in which payments are made to theContractor under this Contract shall be specified in Appendix I(Terms and Procedures of Payment) to the Contract Agreement,subject to the general principle that payments will be made in thecurrency or currencies in which the Contract Price has been statedin the Contractor's bid.

13. Securities 13.1 Issuance of SecuritiesThe Contractor shall provide the securities specified below infavor of the Employer at the times, and in the amount, mannerand form specified below.

13.2 Advance Payment Security13.2.1The Contractor shall, within twenty-eight (28) days of the

notification of contract award, provide a security in anamount equal to the advance payment calculated inaccordance with Appendix 1 (Terms and Procedures ofPayment) to the Contract Agreement, and in the samecurrency or currencies, with a validity of up to ninety (90)days beyond the date of Completion of the Facilities inaccordance with GCC Clause 24.


13.2.2The security shall be in the form provided in the biddingdocuments or in another form acceptable to the Employer.The amount of the security shall be reduced in proportionto the value of the Facilities executed by and paid to theContractor from time to time, and shall automaticallybecome null and void when the full amount of the advancepayment has been recovered by the Employer. Thesecurity shall be returned to the Contractor immediatelyafter its expiration.

13.3 Performance Security13.3.1The Contractor shall, within twenty-eight (28) days of the

notification of contract award, provide a security for thedue performance of the Contract in the amount specified inthe SCC.

13.3.2The security shall be denominated in the currency orcurrencies of the Contract, or in a freely convertiblecurrency acceptable to the Employer, and shall be in one ofthe forms of bank guarantees provided in the biddingdocuments, as stipulated by the Employer in the SCC, or inanother form acceptable to the Employer.

13.3.3The security shall automatically become null and void, orshall be reduced pro rata to the Contract Price of a part ofthe Facilities for which a separate time for Completion isprovided, eighteen (18) months after Completion of theFacilities or twelve (12) months after OperationalAcceptance of the Facilities, whichever occurs first;provided, however, that if the Defects Liability Period hasbeen extended on any part of the Facilities pursuant toGCC Sub-Clause 27.8 hereof, the Contractor shall issue anadditional security in an amount proportionate to theContract Price of that part. The security shall be returnedto the Contractor immediately after its expiration,provided, however, that if the Contractor, pursuant toGCC Sub-Clause 27.10, is liable for an extended warrantyobligation, the performance security shall be extended forthe period and up to the amount specified in the SCC.

13.4 Claims under SecurityIf the Employer considers itself entitled to any claim under anysecurity, it shall so notify the Contractor by registered airmailpost, specifying the default of the Contractor upon which it basesits claim, and it shall require the Contractor to remedy the same.


If the Contractor fails to remedy or to take steps to remedy thesame within fourteen (14) days of receipt of such notice, then theEmployer shall be entitled to call the security.

14. Taxes and 14.1 Except as otherwise specifically provided in the Contract, theDuties Contractor shall bear and pay all taxes, duties, levies and charges

assessed on the Contractor, its Subcontractors or their employeesby all municipal, state or national government authorities inconnection with the Facilities in and outside of the country wherethe Site is located.

14.2 Notwithstanding GCC Sub-Clause 14.1 above, the Employer shallbear and promptly pay all customs and import duties as well asother local taxes like, e.g., a value added tax (VAT), imposed onthe Plant and Equipment specified in Price Schedule No. I andthat are to be incorporated into the Facilities by the law of thecountry where the Site is located.

14.3 If any tax exemptions, reductions, allowances or privileges maybe available to the Contractor in the country where the Site islocated, the Employer shall use its best endeavors to enable theContractor to benefit from any such tax savings to the maximumallowable extent.

14.4 For the purpose of the Contract, it is agreed that the ContractPrice specified in Article 2 (Contract Price and Terms ofPayment) of the Form of Contract Agreement is based on thetaxes, duties, levies and charges prevailing at the date twenty-eight (28) days prior to the date of bid submission in the countrywhere the Site is located (hereinafter called "Tax" in this GCCSub-Clause 14.4). If any rates of Tax are increased or decreased,a new Tax is introduced, an existing Tax is abolished, or anychange in interpretation or application of any Tax occurs in thecourse of the performance of Contract, which was or will beassessed on the Contractor, Subcontractors or their employees inconnection with performance of the Contract, an equitableadjustment of the Contract Price shall be made to fully take intoaccount any such change by addition to the Contract Price ordeduction therefrom, as the case may be, in accordance with GCCClause 36 (Change in Laws and Regulations) hereof.


D. Intellectual Property

15. Copyright 15.1 The copyright in all drawings, documents and other materialscontaining data and information furnished to the Employer by theContractor herein shall remain vested in the Contractor or, if theyare furnished to the Employer directly or through the Contractorby any third party, including suppliers of materials, the copyrightin such materials shall remain vested in such third party.

16. Confidential 16.1 The Employer and the Contractor shall keep confidential and shallInformation not, without the written consent of the other party hereto, divulge

to any third party any documents, data or other informationfurnished directly or indirectly by the other party hereto inconnection with the Contract, whether such information has beenfurnished prior to, during or following termination of theContract. Notwithstanding the above, the Contractor may furnishto its Subcontractor(s) such documents, data and otherinformation it receives from the Employer to the extent requiredfor the Subcontractor(s) to perform its work under the Contract,in which event the Contractor shall obtain from suchSubcontractor(s) an undertaking of confidentiality similar to thatimposed on the Contractor under this GCC Clause 16.

16.2 The Employer shall not use such documents, data and otherinformation received from the Contractor for any purpose otherthan the operation and maintenance of the Facilities. Similarly,the Contractor shall not use such documents, data and otherinformation received from the Employer for any purpose otherthan the design, procurement of Plant and Equipment,construction or such other work and services as are required forthe performance of the Contract.

16.3 The obligation of a party under GCC Sub-Clauses 16.1 and 16.2above, however, shall not apply to that information which

(a) now or hereafter enters the public domain through no faultof that party

(b) can be proven to have been possessed by that party at thetime of disclosure and which was not previously obtained,directly or indirectly, from the other party hereto

(c) otherwise lawfully becomes available to that party from athird party that has no obligation of confidentiality.


16.4 The above provisions of this GCC Clause 16 shall not in any waymodify any undertaking of confidentiality given by either of theparties hereto prior to the date of the Contract in respect of theFacilities or any part thereof.

16.5 The provisions of this GCC Clause 16 shall survive termination,for whatever reason, of the Contract.

E. Work Execution

17. Representatives 17.1 Project ManagerIf the Project Manager is not named in the Contract, then withinfourteen (14) days of the Effective Date, the Employer shallappoint and notify the Contractor in writing of the name of theProject Manager. The Employer may from time to time appointsome other person as the Project Manager in place of the personpreviously so appointed, and shall give a notice of the name ofsuch other person to the Contractor without delay. No suchappointment shall be made at such a time or in such a manner asto impede the progress of work on the Facilities. Suchappointment shall only take effect upon receipt of such notice bythe Contractor. The Project Manager shall represent and act forthe Employer at all times during the currency of the Contract. Allnotices, instructions, orders, certificates, approvals and all othercomrnmunications under the Contract shall be given by the ProjectManager, except as herein otherwise provided.

All notices, instructions, information and other communicationsgiven by the Contractor to the Employer under the Contract shallbe given to the Project Manager, except as herein otherwiseprovided.

17.2 Contractor's Representative & Construction Manager17.2.1 If the Contractor's Representative is not named in the

Contract, then within fourteen (14) days of the EffectiveDate, the Contractor shall appoint the Contractor'sRepresentative and shall request the Employer in writing toapprove the person so appointed. If the Employer makesno objection to the appointment within fourteen (14) days,the Contractor's Representative shall be deemed to havebeen approved. If the Employer objects to theappointment within fourteen (14) days giving the reasontherefor, then the Contractor shall appoint a replacementwithin fourteen (14) days of such objection, and the


foregoing provisions of this GCC Sub-Clause 17.2.1 shallapply thereto.

17.2.2The Contractor's Representative shall represent and act forthe Contractor at all times during the currency of theContract and shall give to the Project Manager all theContractor's notices, instructions, information and all othercommunications under the Contract.

All notices, instructions, information and all othercommunications given by the Employer or the ProjectManager to the Contractor under the Contract shall begiven to the Contractor's Representative or, in its absence,its deputy, except as herein otherwise provided.

The Contractor shall not revoke the appointment of theContractor's Representative without the Employer's priorwritten consent, which shall not be unreasonably withheld.If the Employer consents thereto, the Contractor shallappoint some other person as the Contractor'sRepresentative, pursuant to the procedure set out in GCCSub-Clause 17.2.1.

17.2.3The Contractor's Representative may, subject to theapproval of the Employer (which shall not be unreasonablywithheld), at any time delegate to any person any of thepowers, functions and authorities vested in him or her.Any such delegation may be revoked at any time. Anysuch delegation or revocation shall be subject to a priornotice signed by the Contractor's Representative, and shallspecify the powers, functions and authorities therebydelegated or revoked. No such delegation or revocationshall take effect unless and until a copy thereof has beendelivered to the Employer and the Project Manager.

Any act or exercise by any person of powers, functions andauthorities so delegated to him or her in accordance withthis GCC Sub-Clause 17.2.3 shall be deemed to be an actor exercise by the Contractor's Representative.

17.2.41From the commencement of installation of the Facilities atthe Site until Completion, the Contractor's Representativeshall appoint a suitable person as the construction manager(hereinafter referred to as "the Construction Manager").The Construction Manager shall supervise all work done at


the Site by the Contractor and shall be present at the Sitethroughout normal working hours except when on leave,sick or absent for reasons connected with the properperformance of the Contract. Whenever the ConstructionManager is absent from the Site, a suitable person shall beappointed to act as his or her deputy.

17.2.5The Employer may by notice to the Contractor object toany representative or person employed by the Contractor inthe execution of the Contract who, in the reasonableopinion of the Employer, may behave inappropriately, maybe incompetent or negligent, or may commit a seriousbreach of the Site regulations provided under GCC Sub-Clause 22.3. The Employer shall provide evidence of thesame, whereupon the Contractor shall remove such personfrom the Facilities.

17.2.61f any representative or person employed by the Contractoris removed in accordance with GCC Sub-Clause 17.2.5,the Contractor shall, where required, promptly appoint areplacement.

18. Work Program 18.1 Contractor's OrganizationThe Contractor shall supply to the Employer and the ProjectManager a chart showing the proposed organization to beestablished by the Contractor for carrying out work on theFacilities. The chart shall include the identities of the keypersonnel together with the curricula vitae of such key personnelto be employed within twenty-one (21) days of the EffectiveDate. The Contractor shall promptly inform the Employer andthe Project Manager in writing of any revision or alteration ofsuch an organization chart.

18.2 Program of PerformanceWithin twenty-eight (28) days after the date of signing theContract Agreement, the Contractor shall prepare and submit tothe Project Manager a detailed program of performance of theContract, made in the form specified in the SCC and showing thesequence in which it proposes to design, manufacture, transport,assemble, install and precommission the Facilities, as well as thedate by which the Contractor reasonably requires that theEmployer shall have fulfilled its obligations under the Contract soas to enable the Contractor to execute the Contract in accordancewith the program and to achieve Completion, Commissioning andAcceptance of the Facilities in accordance with the Contract. The


program so submitted by the Contractor shall accord with theTime Schedule included in Appendix 4 (Time Schedule) to theContract Agreement and any other dates and periods specified inthe Contract. The Contractor shall update and revise the programas and when appropriate or when required by the ProjectManager, but without modification in the Times for Completiongiven in the SCC and any extension granted in accordance withGCC Clause 40, and shall submit all such revisions to the ProjectManager.

18.3 Progress ReportThe Contractor shall monitor progress of all the activitiesspecified in the program referred to in GCC Sub-Clause 18.2(Program of Performance) above, and supply a progress report tothe Project Manager every month.

The progress report shall be in a form acceptable to the ProjectManager and shall indicate: (a) percentage completion achievedcompared with the planned percentage completion for eachactivity; and (b) where any activity is behind the program, givingcomments and likely consequences and stating the correctiveaction being taken.

18.4 Progress of PerformanceIf at any time the Contractor's actual progress falls behind theprogram referred to in GCC Sub-Clause 18.2 (Program ofPerformance), or it becomes apparent that it will so fall behind,the Contractor shall, at the request of the Employer or the ProjectManager, prepare and submit to the Project Manager a revisedprogram, taking into account the prevailing circumstances, andshall notify the Project Manager of the steps being taken toexpedite progress so as to attain Completion of the Facilitieswithin the Time for Completion under GCC Sub-Clause 8.2(Time for Commencement and Completion), any extensionthereof entitled under GCC Sub-Clause 40.1 (Extension of Timefor Completion), or any extended period as may otherwise beagreed upon between the Employer and the Contractor.

18.5 Work ProceduresThe Contract shall be executed in accordance with the ContractDocuments and the procedures given in the section on SampleForms and Procedures of the Contract Documents.


The Contractor may execute the Contract in accordance with itsown standard project execution plans and procedures to theextent that they do not conflict with the provisions contained inthe Contract.

19. Subcontracting 19.1 Appendix 5 (List of Approved Subcontractors) to the ContractAgreement specifies major items of supply or services and a list ofapproved Subcontractors against each item, including vendors.Insofar as no Subcontractors are listed against any such item, theContractor shall prepare a list of Subcontractors for such item forinclusion in such list. The Contractor may from time to timepropose any addition to or deletion from any such list. TheContractor shall submit any such list or any modification theretoto the Employer for its approval in sufficient time so as not toimpede the progress of work on the Facilities. Such approval bythe Employer for any of the Subcontractors shall not relieve theContractor from any of its obligations, duties or responsibilitiesunder the Contract.

19.2 The Contractor shall select and employ its Subcontractors forsuch major items from those listed in the lists referred to in GCCSub-Clause 19.1.

19.3 For items or parts of the Facilities not specified in Appendix 5(List of Approved Subcontractors) to the Contract Agreement,the Contractor may employ such Subcontractors as it may select,at its discretion.

20. Design and 20.1 Specifications and DrawingsEngineering 20.1.1 The Contractor shall execute the basic and detailed design

and the engineering work in compliance with the provisionsof the Contract, or where not so specified, in accordancewith good engineering practice.

The Contractor shall be responsible for any discrepancies,errors or omissions in the specifications, drawings andother technical documents that it has prepared, whethersuch specifications, drawings and other documents havebeen approved by the Project Manager or not, providedthat such discrepancies, errors or omissions are notbecause of inaccurate information furnished in writing tothe Contractor by or on behalf of the Employer.


20.1.2The Contractor shall be entitled to disclaim responsibilityfor any design, data, drawing, specification or otherdocument, or any modification thereof provided ordesignated by or on behalf of the Employer, by giving anotice of such disclaimer to the Project Manager.

20.2 Codes and StandardsWherever references are made in the Contract to codes andstandards in accordance with which the Contract shall beexecuted, the edition or the revised version of such codes andstandards current at the date twenty-eight (28) days prior to dateof bid submnission shall apply unless otherwise specified. DuringContract execution, any changes in such codes and standards shallbe applied after approval by the Employer and shall be treated inaccordance with GCC Clause 39 (Changes Originating fromContractor).

20.3 Approval/Review of Technical Documents by Project Manager20.3. 1 The Contractor shall prepare (or cause its Subcontractors

to prepare) and furnish to the Project Manager thedocuments listed in Appendix 7 (Scope of Works andSupply by the Employer) to the Contract Agreement for itsapproval or review as specified and as in accordance withthe requirements of GCC Sub-Clause 18.2 (Program ofPerformance).

Any part of the Facilities covered by or related to thedocuments to be approved by the Project Manager shall beexecuted only after the Project Manager's approvalthereof.

GCC Sub-Clauses 20.3.2 through 20.3.7 shall apply tothose documents requiring the Project Manager's approval,but not to those furnished to the Project Manager for itsreview only.

20.3.2Within fourteen (14) days after receipt by the ProjectManager of any document requiring the Project Manager'sapproval in accordance with GCC Sub-Clause 20.3.1, theProject Manager shall either return one copy thereof to theContractor with its approval endorsed thereon or shallnotify the Contractor in writing of its disapproval thereofand the reasons therefor and the modifications that theProject Manager proposes.


If the Project Manager fails to take such action within thesaid fourteen (14) days, then the said document shall bedeemed to have been approved by the Project Manager.

20.3.3The Project Manager shall not disapprove any document,except on the grounds that the document does not complywith some specified provision of the Contract or that it iscontrary to good engineering practice.

20.3.4 If the Project Manager disapproves the document, theContractor shall modify the document and resubmit it forthe Project Manager's approval in accordance with GCCSub-Clause 20.3.2. If the Project Manager approves thedocument subject to modification(s), the Contractor shallmake the required modification(s), whereupon thedocument shall be deemed to have been approved.

20.3.5 If any dispute or difference occurs between the Employerand the Contractor in connection with or arising out of thedisapproval by the Project Manager of any documentand/or any modification(s) thereto that cannot be settledbetween the parties within a reasonable period, then suchdispute or difference may be referred to an Adjudicator fordetermination in accordance with GCC Sub-Clause 6.1(Adjudicator) hereof. If such dispute or difference isreferred to an Adjudicator, the Project Manager shall giveinstructions as to whether and if so, how, performance ofthe Contract is to proceed. The Contractor shall proceedwith the Contract in accordance with the ProjectManager's instructions, provided that if the Adjudicatorupholds the Contractor's view on the dispute and if theEmployer has not given notice under GCC Sub-Clause6.1.2 hereof, then the Contractor shall be reimbursed bythe Employer for any additional costs incurred by reason ofsuch instructions and shall be relieved of such responsibilityor liability in connection with the dispute and the executionof the instructions as the Adjudicator shall decide, and theTime for Completion shall be extended accordingly.

20.3.6The Project Manager's approval, with or withoutmodification of the document furnished by the Contractor,shall not relieve the Contractor of any responsibility orliability imposed upon it by any provisions of the Contractexcept to the extent that any subsequent failure resultsfrom modifications required by the Project Manager.


20.3.7The Contractor shall not depart from any approveddocument unless the Contractor has first submitted to theProject Manager an amended document and obtained theProject Manager's approval thereof, pursuant to theprovisions of this GCC Sub-Clause 20.3.

If the Project Manager requests any change in any alreadyapproved document and/or in any document based thereon,the provisions of GCC Clause 39 (Change in the Facilities)shall apply to such request.

21. Procurement 21.1 Plant and EquipmentSubject to GCC Sub-Clause 14.2, the Contractor shallmanufacture or procure and transport all the Plant and Equipmentin an expeditious and orderly manner to the Site.

21.2 Employer-Supplied Plant, Equipment, and MaterialsIf Appendix 6 (Scope of Works and Supply by the Employer) tothe Contract Agreement provides that the Employer shall furnishany specific items of machinery, equipment or materials to theContractor, the following provisions shall apply:

21.2.1 The Employer shall, at its own risk and expense, transporteach item to the place on or near the Site as agreed uponby the parties and make such item available to theContractor at the time specified in the program furnishedby the Contractor, pursuant to GCC Sub-Clause 18.2(Program of Performance), unless otherwise mutuallyagreed.

21.2.2Upon receipt of such item, the Contractor shall inspect thesame visually and notify the Project Manager of anydetected shortage, defect or default. The Employer shallimmediately remedy any shortage, defect or default, or theContractor shall, if practicable and possible, at the requestof the Employer, remedy such shortage, defect or default atthe Employer's cost and expense. After inspection, suchitem shall fall under the care, custody and control of theContractor. The provision of this GCC Sub-Clause 21.2.2shall apply to any item supplied to remedy any suchshortage or default or to substitute for any defective item,or shall apply to defective items that have been repaired.


21.2.3The foregoing responsibilities of the Contractor and itsobligations of care, custody and control shall not relievethe Employer of liability for any undetected shortage,defect or default, nor place the Contractor under anyliability for any such shortage, defect or default whetherunder GCC Clause 27 (Defect Liability) or under any otherprovision of Contract.

21.3 Transportation21.3.1 The Contractor shall at its own risk and expense transport

all the Plant and Equipment and the Contractor'sEquipment to the Site by the mode of transport that theContractor judges most suitable under all thecircumstances.

21.3.2Unless otherwise provided in the Contract, the Contractorshall be entitled to select any safe mode of transportoperated by any person to carry the Plant and Equipmentand the Contractor's Equipment.

21.3.3Upon dispatch of each shipment of the Plant andEquipment and the Contractor's Equipment, theContractor shall notify the Employer by telex, cable,facsimile or Electronic Data Interchange (EDI) of thedescription of the Plant and Equipment and of theContractor's Equipment, the point and means of dispatch,and the estimated time and point of arrival in the countrywhere the Site is located, if applicable, and at the Site. TheContractor shall furnish the Employer with relevantshipping documents to be agreed upon between the parties.

21.3.4The Contractor shall be responsible for obtaining, ifnecessary, approvals from the authorities for transportationof the Plant and Equipment and the Contractor'sEquipment to the Site. The Employer shall use its bestendeavors in a timely and expeditious manner to assist theContractor in obtaining such approvals, if requested by theContractor. The Contractor shall indemnify and holdharmless the Employer from and against any claim fordamage to roads, bridges or any other traffic facilities thatmay be caused by the transport of the Plant and Equipmentand the Contractor's Equipment to the Site.


21.4 Customs ClearanceThe Contractor shall, at its own expense, handle all importedPlant and Equipment and Contractor's Equipment at the point(s)of import and shall handle any formalities for customs clearance,subject to the Employer's obligations under GCC Sub-Clause14.2, provided that if applicable laws or regulations require anyapplication or act to be made by or in the name of the Employer,the Employer shall take all necessary steps to comply with suchlaws or regulations. In the event of delays in customs clearancethat are not the fault of the Contractor, the Contractor shall beentitled to an extension in the Time for Completion, pursuant toGCC Clause 40.

22. Installation 22.1 Setting Out/Supervision/Labor22.1. 1 Bench Mark: The Contractor shall be responsible for the

true and proper setting-out of the Facilities in relation tobench marks, reference marks and lines provided to it inwriting by or on behalf of the Employer.

If, at any time during the progress of installation of theFacilities, any error shall appear in the position, level oralignment of the Facilities, the Contractor shall forthwithnotify the Project Manager of such error and, at its ownexpense, immediately rectify such error to the reasonablesatisfaction of the Project Manager. If such error is basedon incorrect data provided in writing by or on behalf of theEmployer, the expense of rectifying the same shall be borneby the Employer.

22.1.2Contractor's Supervision: The Contractor shall give orprovide all necessary superintendence during theinstallation of the Facilities, and the Construction Manageror its deputy shall be constantly on the Site to provide full-time superintendence of the installation. The Contractorshall provide and employ only technical personnel who areskilled and experienced in their respective callings andsupervisory staff who are competent to adequatelysupervise the work at hand.

22.1.3 Labor:(a) The Contractor shall provide and employ on the Site

in the installation of the Facilities such skilled, semi-skilled and unskilled labor as is necessary for theproper and timely execution of the Contract. TheContractor is encouraged to use local labor that has


the necessary skills.

(b) Unless otherwise provided in the Contract, theContractor shall be responsible for the recruitment,transportation, accommodation and catering of alllabor, local or expatriate, required for the execution ofthe Contract and for all payments in connectiontherewith.

(c) The Contractor shall be responsible for obtaining allnecessary permit(s) and/or visa(s) from theappropriate authorities for the entry of all labor andpersonnel to be employed on the Site into the countrywhere the Site is located.

(d) The Contractor shall at its own expense provide themeans of repatriation to all of its and itsSubcontractor's personnel employed on the Contractat the Site to their various home countries. It shallalso provide suitable temporary maintenance of allsuch persons from the cessation of their employmenton the Contract to the date programmed for theirdeparture. In the event that the Contractor defaults inproviding such means of transportation and temporarymaintenance, the Employer may provide the same tosuch personnel and recover the cost of doing so fromthe Contractor.

(e) The Contractor shall at all times during the progressof the Contract use its best endeavors to prevent anyunlawful, riotous or disorderly conduct or behavior byor amongst its employees and the labor of itsSubcontractors.

(f) The Contractor shall, in all dealings with its labor andthe labor of its Subcontractors currently employed onor connected with the Contract, pay due regard to allrecognized festivals, official holidays, religious orother customs and all local laws and regulationspertaining to the employment of labor.

22.2 Contractor's Equipment22.2.1 All Contractor's Equipment brought by the Contractor

onto the Site shall be deemed to be intended to be usedexclusively for the execution of the Contract. The


Contractor shall not remove the same from the Sitewithout the Project Manager's consent that suchContractor's Equipment is no longer required for theexecution of the Contract.

22.2.2Unless otherwise specified in the Contract, uponcompletion of the Facilities, the Contractor shall removefrom the Site all Equipment brought by the Contractoronto the Site and any surplus materials remaining thereon.

22.2.3 The Employer will, if requested, use its best endeavors toassist the Contractor in obtaining any local, state ornational government permission required by the Contractorfor the export of the Contractor's Equipment imported bythe Contractor for use in the execution of the Contract thatis no longer required for the execution of the Contract.

22.3 Site Regulations and SafetyThe Employer and the Contractor shall establish Site regulationssetting out the rules to be observed in the execution of theContract at the Site and shall comply therewith. The Contractorshall prepare and submit to the Employer, with a copy to theProject Manager, proposed Site regulations for the Employer'sapproval, which approval shall not be unreasonably withheld.

Such Site regulations shall include, but shall not be limited to,rules in respect of security, safety of the Facilities, gate control,sanitation, medical care, and fire prevention.

22.4 Opportunities for Other Contractors22.4.1 The Contractor shall, upon written request from the

Employer or the Project Manager, give all reasonableopportunities for canrying out the work to any othercontractors employed by the Employer on or near the Site.

22.4.2 If the Contractor, upon written request from the Employeror the Project Manager, makes available to othercontractors any roads or ways the maintenance for whichthe Contractor is responsible, permits the use by such othercontractors of the Contractor's Equipment, or provides anyother service of whatsoever nature for such othercontractors, the Employer shall fully compensate theContractor for any loss or damage caused or occasioned bysuch other contractors in respect of any such use orservice, and shall pay to the Contractor reasonable


remuneration for the use of such equipment or theprovision of such services.

22.4.3 The Contractor shall also so arrange to perform its work asto minimize, to the extent possible, interference with thework of other contractors. The Project Manager shalldetermine the resolution of any difference or conflict thatmay arise between the Contractor and other contractorsand the workers of the Employer in regard to their work.

22.4.4The Contractor shall notify the Project Manager promptlyof any defects in the other contractors' work that come toits notice, and that could affect the Contractor's work.The Project Manager shall determine the correctivemeasures, if any, required to rectify the situation afterinspection of the Facilities. Decisions made by the ProjectManager shall be binding on the Contractor.

22.5 Emergency WorkIf, by reason of an emergency arising in connection with andduring the execution of the Contract, any protective or remedialwork is necessary as a matter of urgency to prevent damage tothe Facilities, the Contractor shall immediately carry out suchwork.

If the Contractor is unable or unwilling to do such workimmediately, the Employer may do or cause such work to bedone as the Employer may determine is necessary in order toprevent damage to the Facilities. In such event the Employershall, as soon as practicable after the occurrence of any suchemergency, notify the Contractor in writing of such emergency,the work done and the reasons therefor. If the work done orcaused to be done by the Employer is work that the Contractorwas liable to do at its own expense under the Contract, thereasonable costs incurred by the Employer in connectiontherewith shall be paid by the Contractor to the Employer.Otherwise, the cost of such remedial work shall be borne by theEmployer.

22.6 Site Clearance22.6.1 Site Clearance in Course of Performance: In the course of

carrying out the Contract, the Contractor shall keep theSite reasonably free from all unnecessary obstruction, storeor remove any surplus materials, clear away any wreckage,rubbish or temporary works from the Site, and remove any


Contractor's Equipment no longer required for executionof the Contract.

22.6.2Clearance of Site after Completion: After Completion ofall parts of the Facilities, the Contractor shall clear awayand remove all wreckage, rubbish and debris of any kindfrom the Site, and shall leave the Site and Facilities cleanand safe.

22.7 Watching and LightingThe Contractor shall provide and maintain at its own expense alllighting, fencing, and watching when and where necessary for theproper execution and the protection of the Facilities, or for thesafety of the owners and occupiers of adjacent property and forthe safety of the public.

22.8 Work at Night and on Holidays22.8.1 Unless otherwise provided in the Contract, no work shall

be carried out during the night and on public holidays ofthe country where the Site is located without prior writtenconsent of the Employer, except where work is necessaryor required to ensure safety of the Facilities or for theprotection of life, or to prevent loss or damage to property,when the Contractor shall immediately advise the ProjectManager, provided that provisions of this GCC Sub-Clause22.8.1 shall not apply to any work which is customarilycarried out by rotary or double-shifts.

22.8.2Notwithstanding GCC Sub-Clauses 22.8.1 or 22.1.3, if andwhen the Contractor considers it necessary to carry outwork at night or on public holidays so as to meet the Timefor Completion and requests the Employer's consentthereto, the Employer shall not unreasonably withhold suchconsent.

23. Test and 23.1 The Contractor shall at its own expense carry out at the place ofInspection manufacture and/or on the Site all such tests and/or inspections of

the Plant and Equipment and any part of the Facilities as arespecified in the Contract.

23.2 The Employer and the Project Manager or their designatedrepresentatives shall be entitled to attend the aforesaid test and/orinspection, provided that the Employer shall bear all costs andexpenses incurred in connection with such attendance including,but not limited to, all traveling and board and lodging expenses.


23.3 Whenever the Contractor is ready to carry out any such testand/or inspection, the Contractor shall give a reasonable advancenotice of such test and/or inspection and of the place and timethereof to the Project Manager. The Contractor shall obtain fromany relevant third party or manufacturer any necessary permissionor consent to enable the Employer and the Project Manager (ortheir designated representatives) to attend the test and/orinspection.

23.4 The Contractor shall provide the Project Manager with a certifiedreport of the results of any such test and/or inspection.

If the Employer or Project Manager (or their designatedrepresentatives) fails to attend the test and/or inspection, or if it isagreed between the parties that such persons shall not do so, thenthe Contractor may proceed with the test and/or inspection in theabsence of such persons, and may provide the Project Managerwith a certified report of the results thereof.

23.5 The Project Manager may require the Contractor to carry out anytest and/or inspection not required by the Contract, provided thatthe Contractor's reasonable costs and expenses incurred in thecarrying out of such test and/or inspection shall be added to theContract Price. Further, if such test and/or inspection imnpedesthe progress of work on the Facilities and/or the Contractor'sperformance of its other obligations under the Contract, dueallowance will be made in respect of the Time for Completion andthe other obligations so affected.

23.6 If any Plant and Equipment or any part of the Facilities fails topass any test and/or inspection, the Contractor shall either rectifyor replace such Plant and Equipment or part of the Facilities andshall repeat the test and/or inspection upon giving a notice underGCC Sub-Clause 23.3.

23.7 If any dispute or difference of opinion shall arise between theparties in connection with or arising out of the test and/orinspection of the Plant and Equipment or part of the Facilities thatcannot be settled between the parties within a reasonable periodof time, it may be referred to an Adjudicator for determination inaccordance with GCC Sub-Clause 6.1 (Reference toAdjudicator).


23.8 The Contractor shall afford the Employer and the ProjectManager, at the Employer's expense, access at any reasonabletime to any place where the Plant and Equipment are beingmanufactured or the Facilities are being installed, in order toinspect the progress and the manner of manufacture orinstallation, provided that the Project Manager shall give theContractor a reasonable prior notice.

23.9 The Contractor agrees that neither the execution of a test and/orinspection of Plant and Equipment or any part of the Facilities,nor the attendance by the Employer or the Project Manager, northe issue of any test certificate pursuant to GCC Sub-Clause 23.4,shall release the Contractor from any other responsibilities underthe Contract.

23.10 No part of the Facilities or foundations shall be covered up on theSite without the Contractor carrying out any test and/orinspection required under the Contract. The Contractor shall givea reasonable notice to the Project Manager whenever any suchpart of the Facilities or foundations are ready or about to be readyfor test and/or inspection; such test and/or inspection and noticethereof shall be subject to the requirements of the Contract.

23.11 The Contractor shall uncover any part of the Facilities orfoundations, or shall make openings in or through the same as theProject Manager may from time to time require at the Site, andshall reinstate and make good such part or parts.

If any part of the Facilities or foundations have been covered upat the Site after compliance with the requirement of GCC Sub-Clause 23.10 and are found to be executed in accordance with theContract, the expenses of uncovering, making openings in orthrough, reinstating, and making good the same shall be borne bythe Employer, and the Time for Completion shall be reasonablyadjusted to the extent that the Contractor has thereby beendelayed or impeded in the performance of any of its obligationsunder the Contract.

24. Completion of 24.1 As soon as the Facilities or any part thereof has, in the opinion ofthe Facilities the Contractor, been completed operationally and structurally and

put in a tight and clean condition as specified in the TechnicalSpecifications, excluding minor items not materially affecting theoperation or safety of the Facilities, the Contractor shall so notifythe Employer in writing.


24.2 Within seven (7) days after receipt of the notice from theContractor under GCC Sub-Clause 24.1, the Employer shallsupply the operating and maintenance personnel specified inAppendix 6 (Scope of Works and Supply by the Employer) to theContract Agreement for Precommissioning of the Facilities or anypart thereof.

Pursuant to Appendix 6 (Scope of Works and Supply by theEmployer) to the Contract Agreement, the Employer shall alsoprovide, within the said seven (7) day period, the raw materials,utilities, lubricants, chemicals, catalysts, facilities, services andother matters required for Precommissioning of the Facilities orany part thereof.

24.3 As soon as reasonably practicable after the operating andmaintenance personnel have been supplied by the Employer andthe raw materials, utilities, lubricants, chemicals, catalysts,facilities, services and other matters have been provided by theEmployer in accordance with GCC Sub-Clause 24.2, theContractor shall commence Precommissioning of the Facilities orthe relevant part thereof in preparation for Commissioning.

24.4 As soon as all works in respect of Preconmmissioning arecompleted and, in the opinion of the Contractor, the Facilities orany part thereof is ready for Commissioning, the Contractor shallso notify the Project Manager in writing.

24.5 The Project Manager shall, within fourteen (14) days after receiptof the Contractor's notice under GCC Sub-Clause 24.4, eitherissue a Completion Certificate in the form specified in the Formsand Procedures section in the bidding documents, stating that theFacilities or that part thereof have reached Completion as at thedate of the Contractor's notice under GCC Sub-Clause 24.4, ornotify the Contractor in writing of any defects and/or deficiencies.

If the Project Manager notifies the Contractor of any defectsand/or deficiencies, the Contractor shall then correct such defectsand/or deficiencies, and shall repeat the procedure described inGCC Sub-Clause 24.4.

If the Project Manager is satisfied that the Facilities or that partthereof have reached Completion, the Project Manager shall,within seven (7) days after receipt of the Contractor's repeatednotice, issue a Completion Certificate stating that the Facilities orthat part thereof have reached Completion as at the date of the


Contractor's repeated notice.

If the Project Manager is not so satisfied, then it shall notify theContractor in writing of any defects and/or deficiencies withinseven (7) days after receipt of the Contractor's repeated notice,and the above procedure shall be repeated.

24.6 If the Project Manager fails to issue the Completion Certificateand fails to inform the Contractor of any defects and/ordeficiencies within fourteen (14) days after receipt of theContractor's notice under GCC Sub-Clause 24.4 or within seven(7) days after receipt of the Contractor's repeated notice underGCC Sub-Clause 24.5, or if the Employer makes use of theFacilities or part thereof, then the Facilities or that part thereofshall be deemed to have reached Completion as of the date of theContractor's notice or repeated notice, or as of the Employer'suse of the Facilities, as the case may be.

24.7 As soon as possible after Completion, the Contractor shallcomplete all outstanding minor items so that the Facilities arefrilly in accordance with the requirements of the Contract, failingwhich the Employer will undertake such completion and deductthe costs thereof from any monies owing to the Contractor.

24.8 Upon Completion, the Employer shall be responsible for the careand custody of the Facilities or the relevant part thereof, togetherwith the risk of loss or damage thereto, and shall thereafter takeover the Facilities or the relevant part thereof.

25. Commissioning 25.1 Commissioningand 25.1.1 Commissioning of the Facilities or any part thereof shall beOperational commenced by the Contractor immediately after issue ofAcceptance the Completion Certificate by the Project Manager,

pursuant to GCC Sub-Clause 24.5, or immediately afterissue of the deemed Completion, under GCC Sub-Clause24.6.

The Employer shall supply the operating and maintenancepersonnel and all raw materials, utilities, lubricants,chemicals, catalysts, facilities, services and other mattersrequired for Commissioning.

25.1.2In accordance with the requirements of the Contract, theContractor's advisory personnel shall attendCommissioning and advise and assist the Employer.


25.2 Guarantee Test25.2.1 The Guarantee Test (and repeats thereof) shall be

conducted by the Contractor during Commissioning of theFacilities or the relevant part thereof to ascertain whetherthe Facilities or the relevant part can attain the FunctionalGuarantees specified in the Technical Specifications. TheContractor's and Project Manager's advisory personnelshall attend the Guarantee Test, and shall advise and assistthe Employer. The Employer shall promptly provide theContractor with such information as the Contractor mayreasonably require in relation to the conduct and results ofthe Guarantee Test (and any repeats thereof).

25.2.21f for reasons not attributable to the Contractor, theGuarantee Test of the Facilities or the relevant part thereofcannot be successfully completed within the period fromthe date of Completion specified in the SCC or any otherperiod agreed upon by the Employer and the Contractor,the Contractor shall be deemed to have fulfilled itsobligations with respect to the Functional Guarantees, andGCC Sub-Clauses 28.2 and 28.3 shall not apply.

25.3 Operational Acceptance25.3.1 Subject to GCC Sub-Clause 25.4 (Partial Acceptance)

below, Operational Acceptance shall occur in respect ofthe Facilities or any part thereof when

(a) the Guarantee Test has been successfully completedand the Functional Guarantees are met; or

(b) the Guarantee Test has not been successfullycompleted or has not been carried out for reasons notattributable to the Contractor within the period fromthe date of Completion specified in the SCC or anyother agreed upon period as specified in GCC Sub-Clause 25.2.2 above; or

(c) the Contractor has paid the liquidated damagesspecified in GCC Sub-Clause 28.3 hereof; and

(d) any minor items mentioned in GCC Sub-Clause 24.7hereof relevant to the Facilities or that part thereofhave been completed.


25.3.2At any time after any of the events set out in GCC Sub-Clause 25.3.1 have occurred, the Contractor may give anotice to the Project Manager requesting the issue of anOperational Acceptance Certificate in the form provided inthe Bidding Documents or in another form acceptable tothe Employer in respect of the Facilities or the part thereofspecified in such notice as at the date of such notice.

25.3.3The Project Manager shall, after consultation with theEmployer, and within seven (7) days after receipt of theContractor's notice, issue an Operational AcceptanceCertificate.

25.3.41f within seven (7) days after receipt of the Contractor'snotice, the Project Manager fails to issue the OperationalAcceptance Certificate or fails to inform the Contractor inwriting of the justifiable reasons why the Project Managerhas not issued the Operational Acceptance Certificate, theFacilities or the relevant part thereof shall be deemed tohave been accepted as at the date of the Contractor's saidnotice.

25.4 Partial Acceptance25.4.1 If the Contract specifies that Completion and

Commissioning shall be carried out in respect of parts ofthe Facilities, the provisions relating to Completion andCommissioning including the Guarantee Test shall apply toeach such part of the Facilities individually, and theOperational Acceptance Certificate shall be issuedaccordingly for each such part of the Facilities.

25.4.21f a part of the Facilities comprises facilities such asbuildings, for which no Commissioning or Guarantee Testis required, then the Project Manager shall issue theOperational Acceptance Certificate for such facility when itattains Completion, provided that the Contractor shallthereafter complete any outstanding minor items that arelisted in the Operational Acceptance Certificate.


F. Guarantees and Liabilities

26. Completion 26.1 The Contractor guarantees that it shall attain Completion of theTime Facilities (or a part for which a separate time for completion isGuarantee specified in the SCC) within the Time for Completion specified in

the SCC pursuant to GCC Sub-Clause 8.2, or within suchextended time to which the Contractor shall be entitled underGCC Clause 40 (Extension of Time for Completion) hereof.

26.2 If the Contractor fails to attain Completion of the Facilities or anypart thereof within the Time for Completion or any extensionthereof under GCC Clause 40 (Extension of Time forCompletion), the Contractor shall pay to the Employer liquidateddamages in the amount specified in the SCC as a percentage rateof the Contract Price, or the relevant part thereof. The aggregateamount of such liquidated damages shall in no event exceed theamount specified as "Maximum" in the SCC. Once the"Maximum" is reached, the Employer may consider terminationof the Contract, pursuant to GCC Sub-Clause 42.2.2.

Such payment shall completely satisfy the Contractor's obligationto attain Completion of the Facilities or the relevant part thereofwithin the Time for Completion or any extension thereof underGCC Clause 40 (Extension of Time for Completion). TheContractor shall have no further liability whatsoever to theEmployer in respect thereof.

However, the payment of liquidated damages shall not in any wayrelieve the Contractor from any of its obligations to complete theFacilities or from any other obligations and liabilities of theContractor under the Contract.

Save for liquidated damages payable under this GCC Sub-Clause26.2, the failure by the Contractor to attain any milestone or otheract, matter or thing by any date specified in Appendix 4 (TimeSchedule) to the Contract Agreement and/or other program ofwork prepared pursuant to GCC Clause 18 (Program ofPerformance) shall not render the Contractor liable for any loss ordamage thereby suffered by the Employer.

26.3 If the Contractor attains Completion of the Facilities or any partthereof before the Time for Completion or any extension thereofunder GCC Clause 40 (Extension of Time for Completion), theEmployer shall pay to the Contractor a bonus in the amountspecified in the SCC. The aggregate amount of such bonus shall


in no event exceed the amount specified as "Maximum" in thesCC.

27. Defect 27.1 The Contractor warrants that the Facilities or any part thereofLiability shall be free from defects in the design, engineering, materials and

workmanship of the Plant and Equipment supplied and of thework executed.

27.2 The Defect Liability Period shall be eighteen (18) months fromthe date of Completion of the Facilities (or any part thereof) ortwelve (12) months from the date of Operational Acceptance ofthe Facilities (or any part thereof), whichever first occurs, unlessspecified otherwise in the SCC.

If during the Defect Liability Period any defect should be found inthe design, engineering, materials and workmanship of the Plantand Equipment supplied or of the work executed by theContractor, the Contractor shall promptly, in consultation andagreement with the Employer regarding appropriate remedying ofthe defects, and at its cost, repair, replace or otherwise makegood (as the Contractor shall, at its discretion, determine) suchdefect as well as any damage to the Facilities caused by suchdefect. The Contractor shall not be responsible for the repair,replacement or making good of any defect or of any damage tothe Facilities arising out of or resulting from any of the followingcauses:

(a) improper operation or maintenance of the Facilities by theEmployer

(b) operation of the Facilities outside specifications provided inthe Contract

(c) normal wear and tear.

27.3 The Contractor's obligations under this GCC Clause 27 shall notapply to

(a) any materials that are supplied by the Employer under GCCSub-Clause 21.2 (Employer-Supplied Plant, Equipment andMaterials), are normally consumed in operation, or have anormal life shorter than the Defect Liability Period statedherein


(b) any designs, specifications or other data designed, suppliedor specified by or on behalf of the Employer or any mattersfor which the Contractor has disclaimed responsibilityherein

(c) any other materials supplied or any other work executed byor on behalf of the Employer, except for the work executedby the Employer under GCC Sub-Clause 27.7.

27.4 The Employer shall give the Contractor a notice stating the natureof any such defect together with all available evidence thereof,promptly following the discovery thereof. The Employer shallafford all reasonable opportunity for the Contractor to inspect anysuch defect.

27.5 The Employer shall afford the Contractor all necessary access tothe Facilities and the Site to enable the Contractor to perform itsobligations under this GCC Clause 27.

The Contractor may, with the consent of the Employer, removefrom the Site any Plant and Equipment or any part of theFacilities that are defective if the nature of the defect, and/or anydamage to the Facilities caused by the defect, is such that repairscannot be expeditiously carried out at the Site.

27.6 If the repair, replacement or making good is of such a characterthat it may affect the efficiency of the Facilities or any partthereof, the Employer may give to the Contractor a noticerequiring that tests of the defective part of the Facilities shall bemade by the Contractor immediately upon completion of suchremedial work, whereupon the Contractor shall carry out suchtests.

If such part fails the tests, the Contractor shall carry out furtherrepair, replacement or making good (as the case may be) untilthat part of the Facilities passes such tests. The tests shall beagreed upon by the Employer and the Contractor.

27.7 If the Contractor fails to commence the work necessary toremedy such defect or any damage to the Facilities caused bysuch defect within a reasonable time (which shall in no event beconsidered to be less than fifteen (15) days), the Employer may,following notice to the Contractor, proceed to do such work, andthe reasonable costs incurred by the Employer in connectiontherewith shall be paid to the Employer by the Contractor or may


be deducted by the Employer from any monies due the Contractoror claimed under the Performance Security.

27.8 If the Facilities or any part thereof cannot be used by reason ofsuch defect and/or making good of such defect, the DefectLiability Period of the Facilities or such part, as the case may be,shall be extended by a period equal to the period during which theFacilities or such part cannot be used by the Employer because ofany of the aforesaid reasons.

27.9 Except as provided in GCC Clauses 27 and 33 (Loss of orDamage to Property/Accident or Injury toWorkers/Indemnification), the Contractor shall be under noliability whatsoever and howsoever arising, and whether under theContract or at law, in respect of defects in the Facilities or anypart thereof, the Plant and Equipment, design or engineering orwork executed that appear after Completion of the Facilities orany part thereof, except where such defects are the result of thegross negligence, fraud, criminal or willful action of theContractor.

27.10 In addition, the Contractor shall also provide an extendedwarranty for any such component of the Facilities and during theperiod of time as may be specified in the SCC. Such obligationshall be in addition to the defect liability specified under GCCSub-Clause 27.02.

28. Functional 28.1 The Contractor guarantees that during the Guarantee Test, theGuarantees Facilities and all parts thereof shall attain the Functional

Guarantees specified in Appendix 8 (Functional Guarantees) tothe Contract Agreement, subject to and upon the conditionstherein specified.

28.2 If, for reasons attributable to the Contractor, the minimum levelof the Functional Guarantees specified in Appendix 8 (FunctionalGuarantees) to the Contract Agreement are not met either inwhole or in part, the Contractor shall at its cost and expensemake such changes, modifications and/or additions to the Plant orany part thereof as may be necessary to meet at least theminimum level of such Guarantees. The Contractor shall notifythe Employer upon completion of the necessary changes,modifications and/or additions, and shall request the Employer torepeat the Guarantee Test until the minimum level of theGuarantees has been met. If the Contractor eventually fails tomeet the minimum level of Functional Guarantees, the Employer


may consider termination of the Contract, pursuant to GCC Sub-Clause 42.2.2.

28.3 If, for reasons attributable to the Contractor, the FunctionalGuarantees specified in Appendix 8 (Functional Guarantees) tothe Contract Agreement are not attained either in whole or inpart, but the minimum level of the Functional Guaranteesspecified in Appendix 8 (Functional Guarantees) to the ContractAgreement is met, the Contractor shall, at the Employer's option,either

(a) make such changes, modifications and/or additions to theFacilities or any part thereof that are necessary to attain theFunctional Guarantees at its cost and expense, and shallrequest the Employer to repeat the Guarantee Test or

(b) pay liquidated damages to the Employer in respect of thefailure to meet the Functional Guarantees in accordancewith the provisions in Appendix 8 (Functional Guarantees)to the Contract Agreement.

28.4 The payment of liquidated damages under GCC Sub-Clause 28.3,up to the limitation of liability specified in the SCC, shallcompletely satisfy the Contractor's guarantees under GCC Sub-Clause 28.3, and the Contractor shall have no further liabilitywhatsoever to the Employer in respect thereof. Upon thepayment of such liquidated damages by the Contractor, theProject Manager shall issue the Operational AcceptanceCertificate for the Facilities or any part thereof in respect ofwhich the liquidated damages have been so paid.

29. Patent 29.1 The Contractor shall, subject to the Employer's compliance withIndemnity GCC Sub-Clause 29.2, indemnify and hold harmless the Employer

and its employees and officers from and against any and all suits,actions or administrative proceedings, claims, demands, losses,damages, costs, and expenses of whatsoever nature, includingattorney's fees and expenses, which the Employer may suffer as aresult of any infringement or alleged infringement of any patent,utility model, registered design, trademark, copyright or otherintellectual property right registered or otherwise existing at thedate of the Contract by reason of: (a) the installation of theFacilities by the Contractor or the use of the Facilities in thecountry where the Site is located; and (b) the sale of the productsproduced by the Facilities in any country.


Such indemnity shall not cover any use of the Facilities or anypart thereof other than for the purpose indicated by or to bereasonably inferred from the Contract, any infringement resultingfrom the use of the Facilities or any part thereof, or any productsproduced thereby in association or combination with any otherequipment, plant or materials not supplied by the Contractor,pursuant to the Contract Agreement.

29.2 If any proceedings are brought or any claim is made against theEmployer arising out of the matters referred to in GCC Sub-Clause 29.1, the Employer shall promptly give the Contractor anotice thereof, and the Contractor may at its own expense and inthe Employer's name conduct such proceedings or claim and anynegotiations for the settlement of any such proceedings or claim.

If the Contractor fails to notify the Employer within twenty-eight(28) days after receipt of such notice that it intends to conductany such proceedings or claim, then the Employer shall be free toconduct the same on its own behalf. Unless the Contractor has sofailed to notify the Employer within the twenty-eight (28) dayperiod, the Employer shall make no admission that may beprejudicial to the defense of any such proceedings or claim.

The Employer shall, at the Contractor's request, afford allavailable assistance to the Contractor in conducting suchproceedings or claim, and shall be reimbursed by the Contractorfor all reasonable expenses incurred in so doing.

29.3 The Employer shall indemnify and hold harmless the Contractorand its employees, officers and Subcontractors from and againstany and all suits, actions or administrative proceedings, claims,demands, losses, damages, costs, and expenses of whatsoevernature, including attorney's fees and expenses, which theContractor may suffer as a result of any infringement or allegedinfringement of any patent, utility model, registered design,trademark, copyright or other intellectual property rightregistered or otherwise existing at the date of the Contract arisingout of or in connection with any design, data, drawing,specification, or other documents or materials provided ordesigned by or on behalf of the Employer.

30. Limitation of 30.1 Except in cases of criminal negligence or willful misconduct,Liability

(a) the Contractor shall not be liable to the Employer, whetherin contract, tort, or otherwise, for any indirect or


consequential loss or damage, loss of use, loss ofproduction, or loss of profits or interest costs, provided thatthis exclusion shall not apply to any obligation of theContractor to pay liquidated damages to the Employer and

(b) the aggregate liability of the Contractor to the Employer,whether under the Contract, in tort or otherwise, shall notexceed the total Contract Price, provided that this limitationshall not apply to the cost of repairing or replacing defectiveequipment, or to any obligation of the Contractor toindemnify the Employer with respect to patent infringement.

G. Risk Distribution

31. Transfer of 31.1 Ownership of the Plant and Equipment (including spare parts) toOwnership be imported into the country where the Site is located shall be

transferred to the Employer upon loading on to the mode oftransport to be used to convey the Plant and Equipment from thecountry of origin to that country.

31.2 Ownership of the Plant and Equipment (including spare parts)procured in the country where the Site is located shall betransferred to the Employer when the Plant and Equipment arebrought on to the Site.

31.3 Ownership of the Contractor's Equipment used by the Contractorand its Subcontractors in connection with the Contract shallremain with the Contractor or its Subcontractors.

31.4 Ownership of any Plant and Equipment in excess of therequirements for the Facilities shall revert to the Contractor uponCompletion of the Facilities or at such earlier time when theEmployer and the Contractor agree that the Plant and Equipmentin question are no longer required for the Facilities.

31.5 Notwithstanding the transfer of ownership of the Plant andEquipment, the responsibility for care and custody thereoftogether with the risk of loss or damage thereto shall remain withthe Contractor pursuant to GCC Clause 32 (Care of Facilities)hereof until Completion of the Facilities or the part thereof inwhich such Plant and Equipment are incorporated.


32. Care of 32.1 The Contractor shall be responsible for the care and custody ofFacilities the Facilities or any part thereof until the date of Completion of

the Facilities pursuant to GCC Clause 24 (Completion of theFacilities) or, where the Contract provides for Completion of theFacilities in parts, until the date of Completion of the relevantpart, and shall make good at its own cost any loss or damage thatmay occur to the Facilities or the relevant part thereof from anycause whatsoever during such period. The Contractor shall alsobe responsible for any loss or damage to the Facilities caused bythe Contractor or its Subcontractors in the course of any workcarried out, pursuant to GCC Clause 27 (Defect Liability).Notwithstanding the foregoing, the Contractor shall not be liablefor any loss or damage to the Facilities or that part thereof causedby reason of any of the matters specified or referred to inparagraphs (a), (b) and (c) of GCC Sub-Clauses 32.2 and 38.1.

32.2 If any loss or damage occurs to the Facilities or any part thereofor to the Contractor's temporary facilities by reason of

(a) (insofar as they relate to the country where the Site islocated) nuclear reaction, nuclear radiation, radioactivecontamination, pressure wave caused by aircraft or otheraerial objects, or any other occurrences that an experiencedcontractor could not reasonably foresee, or if reasonablyforeseeable could not reasonably make provision for orinsure against, insofar as such risks are not normallyinsurable on the insurance market and are mentioned in thegeneral exclusions of the policy of insurance, including WarRisks and Political Risks, taken out under GCC Clause 34(Insurance) hereof

(b) any use or occupation by the Employer or any third party(other than a Subcontractor) authorized by the Employer ofany part of the Facilities

(c) any use of or reliance upon any design, data or specificationprovided or designated by or on behalf of the Employer, orany such matter for which the Contractor has disclaimedresponsibility herein,

the Employer shall pay to the Contractor all sums payable inrespect of the Facilities executed, notwithstanding that the samebe lost, destroyed or damaged, and will pay to the Contractor thereplacement value of all temporary facilities and all parts thereoflost, destroyed or damaged. If the Employer requests the


Contractor in writing to make good any loss or damage to theFacilities thereby occasioned, the Contractor shall make good thesame at the cost of the Employer in accordance with GCC Clause39 (Change in the Facilities). If the Employer does not requestthe Contractor in writing to make good any loss or damage to theFacilities thereby occasioned, the Employer shall either request achange in accordance with GCC Clause 39 (Change in theFacilities), excluding the performance of that part of the Facilitiesthereby lost, destroyed or damaged, or, where the loss or damageaffects a substantial part of the Facilities, the Employer shallterminate the Contract pursuant to GCC Sub-Clause 42.1(Termination for Employer's Convenience) hereof, except thatthe Contractor shall have no entitlement to profit under paragraph(e) of GCC Sub-Clause 42.1.3 in respect of any unexecutedFacilities as at the date of termination.

32.3 The Contractor shall be liable for any loss of or damage to anyContractor's Equipment, or any other property of the Contractorused or intended to be used for purposes of the Facilities, except(i) as mentioned in GCC Sub-Clause 32.2 (with respect to theContractor's temporary facilities), and (ii) where such loss ordamage arises by reason of any of the matters specified in GCCSub-Clauses 32.2(b) and (c) and 38.1.

32.4 With respect to any loss or damage caused to the Facilities or anypart thereof or to the Contractor's Equipment by reason of any ofthe matters specified in GCC Sub-Clause 38.1, the provisions ofGCC Sub-Clause 38.3 shall apply.

33. Loss of or 33.1 Subject to GCC Sub-Clause 33.3, the Contractor shall indemnifyDamage to and hold harmless the Employer and its employees and officersProperty; from and against any and all suits, actions or administrativeAccident or proceedings, claims, demands, losses, damages, costs, andInjury to expenses of whatsoever nature, including attorney's fees andWorkers; expenses, in respect of the death or injury of any person or loss ofIndemnification or damage to any property (other than the Facilities whether

accepted or not), arising in connection with the supply andinstallation of the Facilities and by reason of the negligence of theContractor or its Subcontractors, or their employees, officers oragents, except any injury, death or property damage caused by thenegligence of the Employer, its contractors, employees, officersor agents.


33.2 If any proceedings are brought or any claim is made against theEmployer that might subject the Contractor to liability underGCC Sub-Clause 33.1, the Employer shall promptly give theContractor a notice thereof and the Contractor may at its ownexpense and in the Employer's name conduct such proceedings orclaim and any negotiations for the settlement of any suchproceedings or claim.

If the Contractor fails to notify the Employer within twenty-eight(28) days after receipt of such notice that it intends to conductany such proceedings or claim, then the Employer shall be free toconduct the same on its own behalf. Unless the Contractor has sofailed to notify the Employer within the twenty-eight (28) dayperiod, the Employer shall make no admission that may beprejudicial to the defense of any such proceedings or claim.

The Employer shall, at the Contractor's request, afford allavailable assistance to the Contractor in conducting suchproceedings or claim, and shall be reimbursed by the Contractorfor all reasonable expenses incurred in so doing.

33.3 The Employer shall indemnify and hold harmless the Contractorand its employees, officers and Subcontractors from any liabilityfor loss of or damage to property of the Employer, other than theFacilities not yet taken over, that is caused by fire, explosion orany other perils, in excess of the amount recoverable frominsurances procured under GCC Clause 34 (Insurances), providedthat such fire, explosion or other perils were not caused by anyact or failure of the Contractor.

33.4 The party entitled to the benefit of an indemnity under this GCCClause 33 shall take all reasonable measures to mitigate any lossor damage which has occurred. If the party fails to take suchmeasures, the other party's liabilities shall be correspondinglyreduced.

34. Insurance 34.1 To the extent specified in Appendix 3 (Insurance Requirements)to the Contract Agreement, the Contractor shall at its expensetake out and maintain in effect, or cause to be taken out andmaintained in effect, during the performance of the Contract, theinsurances set forth below in the sums and with the deductiblesand other conditions specified in the said Appendix. The identityof the insurers and the form of the policies shall be subject to theapproval of the Employer, who should not unreasonably withholdsuch approval.


(a) Cargo Insurance During TransportCovering loss or damage occurring while in transit from theContractor's or Subcontractor's works or stores untilarrival at the Site, to the Plant and Equipment (includingspare parts therefor) and to the Contractor's Equipment.

(b) Installation All Risks InsuranceCovering physical loss or damage to the Facilities at theSite, occurring prior to Completion of the Facilities, with anextended maintenance coverage for the Contractor's liabilityin respect of any loss or damage occurring during theDefect Liability Period while the Contractor is on the Sitefor the purpose of performing its obligations during theDefect Liability Period.

(c) Third Party Liability InsuranceCovering bodily injury or death suffered by third parties(including the Employer's personnel) and loss of or damageto property occurring in connection with the supply andinstallation of the Facilities.

(d) Automobile Liability InsuranceCovering use of all vehicles used by the Contractor or itsSubcontractors (whether or not owned by them) inconnection with the execution of the Contract.

(e) Workers' CompensationIn accordance with the statutory requirements applicable inany country where the Contract or any part thereof isexecuted.

(f) Employer's LiabilityIn accordance with the statutory requirements applicable inany country where the Contract or any part thereof isexecuted.

(g) Other InsurancesSuch other insurances as may be specifically agreed upon bythe parties hereto as listed in the said Appendix 3.

34.2 The Employer shall be named as co-insured under all insurancepolicies taken out by the Contractor pursuant to GCC Sub-Clause34. 1, except for the Third Party Liability, Workers'Compensation and Employer's Liability Insurances, and theContractor's Subcontractors shall be named as co-insureds under


all insurance policies taken out by the Contractor pursuant toGCC Sub-Clause 34.1 except for the Cargo Insurance DuringTransport, Workers' Compensation and Employer's LiabilityInsurances. All insurer's rights of subrogation against such co-insureds for losses or claims arising out of the performance of theContract shall be waived under such policies.

34.3 The Contractor shall, in accordance with the provisions ofAppendix 3 (Insurance Requirements) to the ContractAgreement, deliver to the Employer certificates of insurance (orcopies of the insurance policies) as evidence that the requiredpolicies are in full force and effect. The certificates shall providethat no less than twenty-one (21) days' notice shall be given tothe Employer by insurers prior to cancellation or materialmodification of a policy.

34.4 The Contractor shall ensure that, where applicable, itsSubcontractor(s) shall take out and maintain in effect adequateinsurance policies for their personnel and vehicles and for workexecuted by them under the Contract, unless such Subcontractorsare covered by the policies taken out by the Contractor.

34.5 The Employer shall at its expense take out and maintain in effectduring the performance of the Contract those insurances specifiedin Appendix 3 (Insurance Requirements) to the ContractAgreement, in the sums and with the deductibles and otherconditions specified in the said Appendix. The Contractor andthe Contractor's Subcontractors shall be named as co-insuredsunder all such policies. All insurers' rights of subrogation againstsuch co-insureds for losses or claims arising out of theperformance of the Contract shall be waived under such policies.The Employer shall deliver to the Contractor satisfactoryevidence that the required insurances are in full force and effect.The policies shall provide that not less than twenty-one (21) days'notice shall be given to the Contractor by all insurers prior to anycancellation or material modification of the policies. If sorequested by the Contractor, the Employer shall provide copies ofthe policies taken out by the Employer under this GCC Sub-Clause 34.5.

34.6 If the Contractor fails to take out and/or maintain in effect theinsurances referred to in GCC Sub-Clause 34.1, the Employermay take out and maintain in effect any such insurances and mayfrom time to time deduct from any amount due the Contractorunder the Contract any premium that the Employer shall have


paid to the insurer, or may otherwise recover such amount as adebt due from the Contractor. If the Employer fails to take outand/or maintain in effect the insurances referred to in GCC 34.5,the Contractor may take out and maintain in effect any suchinsurances and may from time to time deduct from any amountdue the Employer under the Contract any premium that theContractor shall have paid to the insurer, or may otherwiserecover such amount as a debt due from the Employer. If theContractor fails to or is unable to take out and maintain in effectany such insurances, the Contractor shall nevertheless have noliability or responsibility towards the Employer, and theContractor shall have full recourse against the Employer for anyand all liabilities of the Employer herein.

34.7 Unless otherwise provided in the Contract, the Contractor shallprepare and conduct all and any claims made under the policieseffected by it pursuant to this GCC Clause 34, and all moniespayable by any insurers shall be paid to the Contractor. TheEmployer shall give to the Contractor all such reasonableassistance as may be required by the Contractor. With respect toinsurance claims in which the Employer's interest is involved, theContractor shall not give any release or make any compromisewith the insurer without the prior written consent of theEmployer. With respect to insurance claims in which theContractor's interest is involved, the Employer shall not give anyrelease or make any compromise with the insurer without theprior written consent of the Contractor.

35. Unforeseen 35.1 If, during the execution of the Contract, the Contractor shallConditions encounter on the Site any physical conditions (other than climatic

conditions) or artificial obstructions that could not have beenreasonably foreseen prior to the date of the Contract Agreementby an experienced contractor on the basis of reasonableexamination of the data relating to the Facilities (including anydata as to boring tests) provided by the Employer, and on thebasis of information that it could have obtained from a visualinspection of the Site (if access thereto was available) or otherdata readily available to it relating to the Facilities, and if theContractor determines that it will in consequence of suchconditions or obstructions incur additional cost and expense orrequire additional time to perform its obligations under theContract that would not have been required if such physicalconditions or artificial obstructions had not been encountered, theContractor shall promptly, and before performing additional workor using additional Plant and Equipment or Contractor's


Equipment, notify the Project Manager in writing of

(a) the physical conditions or artificial obstructions on the Sitethat could not have been reasonably foreseen

(b) the additional work and/or Plant and Equipment and/orContractor's Equipment required, including the steps whichthe Contractor will or proposes to take to overcome suchconditions or obstructions

(c) the extent of the anticipated delay

(d) the additional cost and expense that the Contractor is likelyto incur.

On receiving any notice from the Contractor under this GCC Sub-Clause 35.1, the Project Manager shall promptly consult with theEmployer and Contractor and decide upon the actions to be takento overcome the physical conditions or artificial obstructionsencountered. Following such consultations, the Project Managershall instruct the Contractor, with a copy to the Employer, of theactions to be taken.

35.2 Any reasonable additional cost and expense incurred by theContractor in following the instructions from the Project Managerto overcome such physical conditions or artificial obstructionsreferred to in GCC Sub-Clause 35.1 shall be paid by theEmployer to the Contractor as an addition to the Contract Price.

35.3 If the Contractor is delayed or impeded in the performance of theContract because of any such physical conditions or artificialobstructions referred to in GCC Sub-Clause 35.1, the Time forCompletion shall be extended in accordance with GCC Clause 40(Extension of Time for Completion).

36. Change in Laws 36.1 If, after the date twenty-eight (28) days prior to the date of Bidand Regulations submission, in the country where the Site is located, any law,

regulation, ordinance, order or by-law having the force of law isenacted, promulgated, abrogated or changed (which shall bedeemed to include any change in interpretation or application bythe competent authorities) that subsequently affects the costs andexpenses of the Contractor and/or the Time for Completion, theContract Price shall be correspondingly increased or decreased,and/or the Time for Completion shall be reasonably adjusted tothe extent that the Contractor has thereby been affected in the


performance of any of its obligations under the Contract.Notwithstanding the foregoing, such additional or reduced costsshall not be separately paid or credited if the same has alreadybeen accounted for in the price adjustment provisions whereapplicable, in accordance with the SCC.

37. Force Majeure 37.1 "Force Majeure" shall mean any event beyond the reasonablecontrol of the Employer or of the Contractor, as the case may be,and which is unavoidable notwithstanding the reasonable care ofthe party affected, and shall include, without limitation, thefollowing:

(a) war, hostilities or warlike operations (whether a state of warbe declared or not), invasion, act of foreign enemy and civilwar

(b) rebellion, revolution, insurrection, mutiny, usurpation ofcivil or military government, conspiracy, riot, civilcommotion and terrorist acts

(c) confiscation, nationalization, mobilization, commandeeringor requisition by or under the order of any government orde jure or de facto authority or ruler or any other act orfailure to act of any local state or national governmentauthority

(d) strike, sabotage, lockout, embargo, import restriction, portcongestion, lack of usual means of public transportation andcommunication, industrial dispute, shipwreck, shortage orrestriction of power supply, epidemics, quarantine andplague

(e) earthquake, landslide, volcanic activity, fire, flood orinundation, tidal wave, typhoon or cyclone, hurricane,storm, lightning, or other inclement weather condition,nuclear and pressure waves or other natural or physicaldisaster

(f) shortage of labor, materials or utilities where caused bycircumstances that are themselves Force Majeure.

37.2 If either party is prevented, hindered or delayed from or inperforming any of its obligations under the Contract by an eventof Force Majeure, then it shall notify the other in writing of theoccurrence of such event and the circumstances thereof within


fourteen (14) days after the occurrence of such event.

37.3 The party who has given such notice shall be excused from theperformance or punctual performance of its obligations under theContract for so long as the relevant event of Force Majeurecontinues and to the extent that such party's performance isprevented, hindered or delayed. The Time for Completion shallbe extended in accordance with GCC Clause 40 (Extension ofTime for Completion).

37.4 The party or parties affected by the event of Force Majeure shalluse reasonable efforts to mitigate the effect thereof upon its ortheir performance of the Contract and to fulfill its or theirobligations under the Contract, but without prejudice to eitherparty's right to terminate the Contract under GCC Sub-Clauses37.6 and 38.5.

37.5 No delay or nonperformance by either party hereto caused by theoccurrence of any event of Force Majeure shall

(a) constitute a default or breach of the Contract

(b) (subject to GCC Sub-Clauses 32.2, 38.3 and 38.4) give riseto any claim for damages or additional cost or expenseoccasioned thereby

if and to the extent that such delay or nonperformance is causedby the occurrence of an event of Force Majeure.

37.6 If the performance of the Contract is substantially prevented,hindered or delayed for a single period of more than sixty (60)days or an aggregate period of more than one hundred and twenty(120) days on account of one or more events of Force Majeureduring the currency of the Contract, the parties will attempt todevelop a mutually satisfactory solution, failing which either partymay terminate the Contract by giving a notice to the other, butwithout prejudice to either party's right to terminate the Contractunder GCC Sub-Clause 38.5.

37.7 In the event of termination pursuant to GCC Sub-Clause 37.6, therights and obligations of the Employer and the Contractor shall beas specified in GCC Sub-Clauses 42.1.2 and 42.1.3, except thatthe Contractor shall have no entitlement to profit under paragraph(e) of GCC Sub-Clause 42.1.3 in respect of any unexecutedFacilities as at the date of termination.


37.8 Notwithstanding GCC Sub-Clause 37.5, Force Majeure shall notapply to any obligation of the Employer to make payments to theContractor herein.

38. War Risks 38.1 "War Risks" shall mean any event specified in paragraphs (a) and(b) of GCC Sub-Clause 37.1 and any explosion or impact of anymine, bomb, shell, grenade or other projectile, missile, munitionsor explosive of war, occurring or existing in or near thecountry(or countries) where the Site is located.

38.2 Notwithstanding anything contained in the Contract, theContractor shall have no liability whatsoever for or with respectto

(a) destruction of or damage to Facilities, Plant & Equipment,or any part thereof

(b) destruction of or damage to property of the Employer orany third party

(c) injury or loss of life

if such destruction, damage, injury or loss of life is caused by anyWar Risks, and the Employer shall indemnify and hold theContractor harmless from and against any and all claims,liabilities, actions, lawsuits, damages, costs, charges or expensesarising in consequence of or in connection with the same.

38.3 If the Facilities or any Plant and Equipment or Contractor'sEquipment or any other property of the Contractor used orintended to be used for the purposes of the Facilities shall sustaindestruction or damage by reason of any War Risks, the Employershall pay the Contractor for

(a) any part of the Facilities or the Plant and Equipment sodestroyed or damaged (to the extent not already paid for bythe Employer)

(b) replacing or making good any Contractor's Equipment orother property of the Contractor so destroyed or damaged

so far as may be required by the Employer, and as may benecessary for completion of the Facilities,


(c) replacing or making good any such destruction or damageto the Facilities or the Plant and Equipment or any partthereof.

If the Employer does not require the Contractor to replace ormake good any such destruction or damage to the Facilities, theEmployer shall either request a change in accordance with GCCClause 39 (Change in the Facilities), excluding the performance ofthat part of the Facilities thereby destroyed or damaged or, wherethe loss, destruction or damage affects a substantial part of theFacilities, shall terminate the Contract, pursuant to GCC Sub-Clause 42.1 (Termination for Employer's Convenience).

38.4 Notwithstanding anything contained in the Contract, theEmployer shall pay the Contractor for any increased costs orincidentals to the execution of the Contract that are in any wayattributable to, consequent on, resulting from, or in any wayconnected with any War Risks, provided that the Contractor shallas soon as practicable notify the Employer in writing of any suchincreased cost.

38.5 If during the performance of the Contract any War Risks shalloccur that financially or otherwise materially affect the executionof the Contract by the Contractor, the Contractor shall use itsreasonable efforts to execute the Contract with due and properconsideration given to the safety of its and its Subcontractors'personnel engaged in the work on the Facilities, provided,however, that if the execution of the work on the Facilitiesbecomes impossible or is substantially prevented for a singleperiod of more than sixty (60) days or an aggregate period ofmore than one hundred and twenty (120) days on account of anyWar Risks, the parties will attempt to develop a mutuallysatisfactory solution, failing which either party may terminate theContract by giving a notice to the other.

38.6 In the event of termination pursuant to GCC Sub-Clauses 38.3 or38.5, the rights and obligations of the Employer and theContractor shall be specified in GCC Sub-Clauses 42.1.2 and42.1.3, except that the Contractor shall have no entitlement toprofit under paragraph (e) of GCC Sub-Clause 42.1.3 in respectof any unexecuted Facilities as of the date of termination.


H. Change in Contract Elements

39. Change in the 39.1 Introducing a ChangeFacilities

39.1.1 Subject to GCC Sub-Clauses 39.2.5 and 39.2.7, theEmployer shall have the right to propose, and subsequentlyrequire, that the Project Manager order the Contractorfrom time to time during the performance of the Contractto make any change, modification, addition or deletion to,in or from the Facilities (hereinafter called "Change"),provided that such Change falls within the general scope ofthe Facilities and does not constitute unrelated work andthat it is technically practicable, taking into account boththe state of advancement of the Facilities and the technicalcompatibility of the Change envisaged with the nature ofthe Facilities as specified in the Contract.

39.1 .2The Contractor may from time to time during itsperformance of the Contract propose to the Employer(with a copy to the Project Manager) any Change that theContractor considers necessary or desirable to improve thequality, efficiency or safety of the Facilities. The Employermay at its discretion approve or reject any Changeproposed by the Contractor, provided that the Employershall approve any Change proposed by the Contractor toensure the safety of the Facilities.

39.1.3Notwithstanding GCC Sub-Clauses 39.1.1 and 39.1.2, nochange made necessary because of any default of theContractor in the performance of its obligations under theContract shall be deemed to be a Change, and such changeshall not result in any adjustment of the Contract Price orthe Time for Completion.

39.1 .4 The procedure on how to proceed with and executeChanges is specified in GCC Sub-Clauses 39.2 and 39.3,and further details and sample forms are provided in theSample Forms and Procedures section in the biddingdocuments.

39.2 Changes Originating from Employer

39.2.1 If the Employer proposes a Change pursuant to GCC Sub-Clause 39.1.1, it shall send to the Contractor a "Requestfor Change Proposal," requiring the Contractor to prepare


and furnish to the Project Manager as soon as reasonablypracticable a "Change Proposal," which shall include thefollowing:

(a) brief description of the Change(b) effect on the Time for Completion(c) estimated cost of the Change(d) effect on Functional Guarantees (if any)(e) effect on any other provisions of the Contract.

39.2.2 Prior to preparing and submitting the "Change Proposal,"the Contractor shall submit to the Project Manager an"Estimate for Change Proposal," which shall be an estimateof the cost of preparing and submitting the ChangeProposal.

Upon receipt of the Contractor's Estimate for ChangeProposal, the Employer shall do one of the following:

(a) accept the Contractor's estimate with instructions tothe Contractor to proceed with the preparation of theChange Proposal

(b) advise the Contractor of any part of its Estimate forChange Proposal that is unacceptable and request theContractor to review its estimate

(c) advise the Contractor that the Employer does notintend to proceed with the Change.

39.2.3 Upon receipt of the Employer's instruction to proceedunder GCC Sub-Clause 39.2.2 (a), the Contractor shall,with proper expedition, proceed with the preparation of theChange Proposal, in accordance with GCC Sub-Clause39.2.1.

39.2.4The pricing of any Change shall, as far as practicable, becalculated in accordance with the rates and prices includedin the Contract. If such rates and prices are inequitable,the parties thereto shall agree on specific rates for thevaluation of the Change.

39.2.5 If before or during the preparation of the Change Proposalit becomes apparent that the aggregate effect ofcompliance therewith and with all other Change Orders


that have already become binding upon the Contractorunder this GCC Clause 39 would be to increase ordecrease the Contract Price as originally set forth in Article2 (Contract Price) of the Contract Agreement by more thanfifteen (15) percent, the Contractor may give a writtennotice of objection thereto prior to furnishing the ChangeProposal as aforesaid. If the Employer accepts theContractor's objection, the Employer shall withdraw theproposed Change and shall notify the Contractor in writingthereof.

The Contractor's failure to so object shall neither affect itsright to object to any subsequent requested Changes orChange Orders herein, nor affect its right to take intoaccount, when making such subsequent objection, thepercentage increase or decrease in the Contract Price thatany Change not objected to by the Contractor represents.

39.2.6Upon receipt of the Change Proposal, the Employer andthe Contractor shall mutually agree upon all matters thereincontained. Within fourteen (14) days after such agreement,the Employer shall, if it intends to proceed with theChange, issue the Contractor with a Change Order.

If the Employer is unable to reach a decision withinfourteen (14) days, it shall notify the Contractor withdetails of when the Contractor can expect a decision.

If the Employer decides not to proceed with the Changefor whatever reason, it shall, within the said period offourteen (14) days, notify the Contractor accordingly.Under such circumstances, the Contractor shall be entitledto reimbursement of all costs reasonably incurred by it inthe preparation of the Change Proposal, provided thatthese do not exceed the amount given by the Contractor inits Estimate for Change Proposal submitted in accordancewith GCC Sub-Clause 39.2.2.

39.2.7 If the Employer and the Contractor cannot reachagreement on the price for the Change, an equitableadjustment to the Time for Completion, or any othermatters identified in the Change Proposal, the Employermay nevertheless instruct the Contractor to proceed withthe Change by issue of a "Pending Agreement ChangeOrder."

148 Section lV. General Conditions of Contract

Upon receipt of a Pending Agreement Change Order, theContractor shall immediately proceed with effecting theChanges covered by such Order. The parties shallthereafter attempt to reach agreement on the outstandingissues under the Change Proposal.

If the parties cannot reach agreement within sixty (60) daysfrom the date of issue of the Pending Agreement ChangeOrder, then the matter may be referred to the Adjudicatorin accordance with the provisions of GCC Sub-Clause 6.2(Arbitration).

39.3 Changes Originating from Contractor

39.3.1 If the Contractor proposes a Change pursuant to GCCSub-Clause 39.1.2, the Contractor shall submit to theProject Manager a written "Application for ChangeProposal," giving reasons for the proposed Change andincluding the information specified in GCC Sub-Clause39.2.1.

Upon receipt of the Application for Change Proposal, theparties shall follow the procedures outlined in GCC Sub-Clauses 39.2.6 and 39.2.7. However, should the Employerchoose not to proceed, the Contractor shall not be entitledto recover the costs of preparing the Application forChange Proposal.

40. Extension of 40.1 The Time(s) for Completion specified in the SCC shall beTime for extended if the Contractor is delayed or impeded in theCompletion performance of any of its obligations under the Contract by

reason of any of the following:

(a) any Change in the Facilities as provided in GCC Clause 39(Change in the Facilities)

(b) any occurrence of Force Majeure as provided in GCCClause 37 (Force Majeure), unforeseen conditions asprovided in GCC Clause 35 (Unforeseen Conditions), orother occurrence of any of the matters specified or referredto in paragraphs (a), (b) and (c) of GCC Sub-Clause 32.2

(c) any suspension order given by the Employer under GCCClause 41 (Suspension) hereof or reduction in the rate ofprogress pursuant to GCC Sub-Clause 41.2 or


(d) any changes in laws and regulations as provided in GCCClause 36 (Change in Laws and Regulations) or

(e) any default or breach of the Contract by the Employer,specifically including failure to supply the items listed inAppendix 6 (Scope of Works and Supply by the Employer)to the Contract Agreement, or any activity, act or omissionof any other contractors employed by the Employer or

(f) any other matter specifically mentioned in the Contract;

by such period as shall be fair and reasonable in all thecircumstances and as shall fairly reflect the delay or impedimentsustained by the Contractor.

40.2 Except where otherwise specifically provided in the Contract, theContractor shall submit to the Project Manager a notice of a claimfor an extension of the Time for Completion, together withparticulars of the event or circumstance justifying such extensionas soon as reasonably practicable after the commencement ofsuch event or circumstance. As soon as reasonably practicableafter receipt of such notice and supporting particulars of theclaim, the Employer and the Contractor shall agree upon theperiod of such extension. In the event that the Contractor doesnot accept the Employer's estimate of a fair and reasonable timeextension, the Contractor shall be entitled to refer the matter toan Adjudicator, pursuant to GCC Sub-Clause 6.2 (Arbitration).

40.3 The Contractor shall at all times use its reasonable efforts tominimize any delay in the performance of its obligations under theContract.

41. Suspension 41.1 The Employer may request the Project Manager, by notice to theContractor, to order the Contractor to suspend performance ofany or all of its obligations under the Contract. Such notice shallspecify the obligation of which performance is to be suspended,the effective date of the suspension and the reasons therefor. TheContractor shall thereupon suspend performance of suchobligation (except those obligations necessary for the care orpreservation of the Facilities) until ordered in writing to resumesuch performance by the Project Manager.

If, by virtue of a suspension order given by the Project Manager,other than by reason of the Contractor's default or breach of theContract, the Contractor's performance of any of its obligations is


suspended for an aggregate period of more than ninety (90) days,then at any time thereafter and provided that at that time suchperformance is still suspended, the Contractor may give a noticeto the Project Manager requiring that the Employer shall, withintwenty-eight (28) days of receipt of the notice, order theresumption of such performance or request and subsequentlyorder a change in accordance with GCC Clause 39 (Change in theFacilities), excluding the performance of the suspendedobligations from the Contract.

If the Employer fails to do so within such period, the Contractormay, by a further notice to the Project Manager, elect to treat thesuspension, where it affects a part only of the Facilities, as adeletion of such part in accordance with GCC Clause 39 (Changein the Facilities) or, where it affects the whole of the Facilities, astermination of the Contract under GCC Sub-Clause 42.1(Termination for Employer's Convenience).

41.2 If

(a) the Employer has failed to pay the Contractor any sum dueunder the Contract within the specified period, has failed toapprove any invoice or supporting documents without justcause pursuant to Appendix 1 (Terms and Procedures ofPayment) to the Contract Agreement, or commits asubstantial breach of the Contract, the Contractor may givea notice to the Employer that requires payment of such sum,with interest thereon as stipulated in GCC Sub-Clause 12.3,requires approval of such invoice or supporting documents,or specifies the breach and requires the Employer to remedythe same, as the case may be. If the Employer fails to paysuch sum together with such interest, fails to approve suchinvoice or supporting documents or give its reasons forwithholding such approval, or fails to remedy the breach ortake steps to remedy the breach within fourteen (14) daysafter receipt of the Contractor's notice or

(b) the Contractor is unable to carry out any of its obligationsunder the Contract for any reason attributable to theEmployer, including but not limited to the Employer'sfailure to provide possession of or access to the Site orother areas in accordance with GCC Sub-Clause 10.2, orfailure to obtain any governmental permit necessary for theexecution and/or completion of the Facilities;


then the Contractor may by fourteen (14) days' notice to theEmployer suspend performance of all or any of its obligationsunder the Contract, or reduce the rate of progress.

41.3 If the Contractor's performance of its obligations is suspended orthe rate of progress is reduced pursuant to this GCC Clause 41,then the Time for Completion shall be extended in accordancewith GCC Sub-Clause 40.1, and any and all additional costs orexpenses incurred by the Contractor as a result of suchsuspension or reduction shall be paid by the Employer to theContractor in addition to the Contract Price, except in the case ofsuspension order or reduction in the rate of progress by reason ofthe Contractor's default or breach of the Contract.

41.4 During the period of suspension, the Contractor shall not removefrom the Site any Plant and Equipment, any part of the Facilitiesor any Contractor's Equipment, without the prior written consentof the Employer.

42. Termination 42.1 Termination for Employer's Convenience

42.1.1 The Employer may at any time terminate the Contract forany reason by giving the Contractor a notice of terminationthat refers to this GCC Sub-Clause 42.1.

42.1.2 Upon receipt of the notice of termination under GCC Sub-Clause 42.1. 1, the Contractor shall either immediately orupon the date specified in the notice of termination

(a) cease all further work, except for such work as theEmployer may specify in the notice of termination forthe sole purpose of protecting that part of theFacilities already executed, or any work required toleave the Site in a clean and safe condition

(b) terminate all subcontracts, except those to beassigned to the Employer pursuant to paragraph(d)(ii) below

(c) remove all Contractor's Equipment from the Site,repatriate the Contractor's and its Subcontractors'personnel from the Site, remove from the Site anywreckage, rubbish and debris of any kind, and leavethe whole of the Site in a clean and safe condition


(d) In addition, the Contractor, subject to the paymentspecified in GCC Sub-Clause 42.1.3, shall

(i) deliver to the Employer the parts of theFacilities executed by the Contractor up to thedate of termination

(ii) to the extent legally possible, assign to theEmployer all right, title and benefit of theContractor to the Facilities and to the Plant andEquipment as at the date of termination, and, asmay be required by the Employer, in anysubcontracts concluded between the Contractorand its Subcontractors

(iii) deliver to the Employer all non-proprietarydrawings, specifications and other documentsprepared by the Contractor or itsSubcontractors as at the date of termination inconnection with the Facilities.

42.1.3In the event of termination of the Contract under GCCSub-Clause 42.1.1, the Employer shall pay to theContractor the following amounts:

(a) the Contract Price, properly attributable to the partsof the Facilities executed by the Contractor as of thedate of termination

(b) the costs reasonably incurred by the Contractor in theremoval of the Contractor's Equipment from the Siteand in the repatriation of the Contractor's and itsSubcontractors' personnel

(c) any amounts to be paid by the Contractor to itsSubcontractors in connection with the termination ofany subcontracts, including any cancellation charges

(d) costs incurred by the Contractor in protecting theFacilities and leaving the Site in a clean and safecondition pursuant to paragraph (a) of GCC Sub-Clause 42.1.2

(f) the cost of satisfying all other obligations,commitments and claims that the Contractor may in


good faith have undertaken with third parties inconnection with the Contract and that are notcovered by paragraphs (a) through (d) above.

42.2 Termination for Contractor's Default

42.2.1 The Employer, without prejudice to any other rights orremedies it may possess, may terminate the Contractforthwith in the following circumstances by giving a noticeof termination and its reasons therefor to the Contractor,referring to this GCC Sub-Clause 42.2:

(a) if the Contractor becomes bankrupt or insolvent, hasa receiving order issued against it, compounds withits creditors, or, if the Contractor is a corporation, aresolution is passed or order is made for its windingup (other than a voluntary liquidation for thepurposes of amalgamation or reconstruction), areceiver is appointed over any part of its undertakingor assets, or if the Contractor takes or suffers anyother analogous action in consequence of debt

(b) if the Contractor assigns or transfers the Contract orany right or interest therein in violation of theprovision of GCC Clause 43 (Assignment).

42.2.2If the Contractor

(a) has abandoned or repudiated the Contract

(b) has without valid reason failed to commence work onthe Facilities promptly or has suspended (other thanpursuant to GCC Sub-Clause 41.2) the progress ofContract performance for more than twenty-eight(28) days after receiving a written instruction fromthe Employer to proceed

(c) persistently fails to execute the Contract inaccordance with the Contract or persistently neglectsto carry out its obligations under the Contractwithout just cause

(d) refuses or is unable to provide sufficient materials,services or labor to execute and complete theFacilities in the manner specified in the programfurnished under GCC Clause 18 (Program of


Performance) at rates of progress that givereasonable assurance to the Employer that theContractor can attain Completion of the Facilities bythe Time for Completion as extended

then the Employer may, without prejudice to any otherrights it may possess under the Contract, give a notice tothe Contractor stating the nature of the default andrequiring the Contractor to remedy the same. If theContractor fails to remedy or to take steps to remedy thesame within fourteen (14) days of its receipt of such notice,then the Employer may terminate the Contract forthwith bygiving a notice of termination to the Contractor that refersto this GCC Sub-Clause 42.2.

42.2.3 Upon receipt of the notice of termination under GCC Sub-Clauses 42.2.1 or 42.2.2, the Contractor shall, eitherimmediately or upon such date as is specified in the noticeof termination,

(a) cease all further work, except for such work as theEmployer may specify in the notice of termination forthe sole purpose of protecting that part of theFacilities already executed, or any work required toleave the Site in a clean and safe condition

(b) terminate all subcontracts, except those to beassigned to the Employer pursuant to paragraph (d)below

(c) deliver to the Employer the parts of the Facilitiesexecuted by the Contractor up to the date oftermination

(d) to the extent legally possible, assign to the Employerall right, title and benefit of the Contractor to theWorks and to the Plant and Equipment as at the dateof termination, and, as may be required by theEmployer, in any subcontracts concluded between theContractor and its Subcontractors

(e) deliver to the Employer all drawings, specificationsand other documents prepared by the Contractor orits Subcontractors as at the date of termination inconnection with the Facilities.


42.2.4The Employer may enter upon the Site, expel theContractor, and complete the Facilities itself or byemploying any third party. The Employer may, to theexclusion of any right of the Contractor over the same,take over and use with the payment of a fair rental rate tothe Contractor, with all the maintenance costs to theaccount of the Employer and with an indemnification bythe Employer for all liability including damage or injury topersons arising out of the Employer's use of suchequipment, any Contractor's Equipment owned by theContractor and on the Site in connection with the Facilitiesfor such reasonable period as the Employer considersexpedient for the supply and installation of the Facilities.

Upon completion of the Facilities or at such earlier date asthe Employer thinks appropriate, the Employer shall givenotice to the Contractor that such Contractor's Equipmentwill be returned to the Contractor at or near the Site andshall return such Contractor's Equipment to the Contractorin accordance with such notice. The Contractor shallthereafter without delay and at its cost remove or arrangeremoval of the same from the Site.

42.2.5 Subject to GCC Sub-Clause 42.2.6, the Contractor shall beentitled to be paid the Contract Price attributable to theFacilities executed as at the date of termination, the valueof any unused or partially used Plant and Equipment on theSite, and the costs, if any, incurred in protecting theFacilities and in leaving the Site in a clean and safecondition pursuant to paragraph (a) of GCC Sub-Clause42.2.3. Any sums due the Employer from the Contractoraccruing prior to the date of termination shall be deductedfrom the amount to be paid to the Contractor under thisContract.

42.2.61f the Employer completes the Facilities, the cost ofcompleting the Facilities by the Employer shall bedetermined.

If the sum that the Contractor is entitled to be paid,pursuant to GCC Sub-Clause 42.2.5, plus the reasonablecosts incurred by the Employer in completing the Facilities,exceeds the Contract Price, the Contractor shall be liablefor such excess.


If such excess is greater than the sums due the Contractorunder GCC Sub-Clause 42.2.5, the Contractor shall paythe balance to the Employer, and if such excess is less thanthe sums due the Contractor under GCC Sub-Clause42.2.5, the Employer shall pay the balance to theContractor.

The Employer and the Contractor shall agree, in writing,on the computation described above and the manner inwhich any sums shall be paid.

42.3 Termination by Contractor

42.3.1If

(a) the Employer has failed to pay the Contractor anysum due under the Contract within the specifiedperiod, has failed to approve any invoice orsupporting documents without just cause pursuant toAppendix 1 (Terms and Procedures of Payment) ofthe Contract Agreement, or commits a substantialbreach of the Contract, the Contractor may give anotice to the Employer that requires payment of suchsum, with interest thereon as stipulated in GCC Sub-Clause 12.3, requires approval of such invoice orsupporting documents, or specifies the breach andrequires the Employer to remedy the same, as thecase may be. If the Employer fails to pay such sumtogether with such interest, fails to approve suchinvoice or supporting documents or give its reasonsfor withholding such approval, fails to remedy thebreach or take steps to remedy the breach withinfourteen (14) days after receipt of the Contractor'snotice, or

(b) the Contractor is unable to carry out any of itsobligations under the Contract for any reasonattributable to the Employer, including but not limitedto the Employer's failure to provide possession of oraccess to the Site or other areas or failure to obtainany governmental permit necessary for the executionand/or completion of the Facilities,

then the Contractor may give a notice to the Employerthereof, and if the Employer has failed to pay the

Section IV, General Conditions of Contract 157

outstanding sum, to approve the invoice or supportingdocuments, to give its reasons for withholding suchapproval, or to remedy the breach within twenty-eight (28)days of such notice, or if the Contractor is still unable tocarry out any of its obligations under the Contract for anyreason attributable to the Employer within twenty-eight(28) days of the said notice, the Contractor may by afurther notice to the Employer referring to this GCC Sub-Clause 42.3.1, forthwith terminate the Contract.

42.3.2The Contractor may terminate the Contract forthwith bygiving a notice to the Employer to that effect, referring tothis GCC Sub-Clause 42.3.2, if the Employer becomesbankrupt or insolvent, has a receiving order issued againstit, compounds with its creditors, or, being a corporation, ifa resolution is passed or order is made for its winding up(other than a voluntary liquidation for the purposes ofamalgamation or reconstruction), a receiver is appointedover any part of its undertaking or assets, or if theEmployer takes or suffers any other analogous action inconsequence of debt.

42.3.3 If the Contract is terminated under GCC Sub-Clauses42.3.1 or 42.3.2, then the Contractor shall immediately

(a) cease all further work, except for such work as maybe necessary for the purpose of protecting that partof the Facilities already executed, or any workrequired to leave the Site in a clean and safecondition

(b) terminate all subcontracts, except those to beassigned to the Employer pursuant to paragraph(d)(ii)

(c) remove all Contractor's Equipment from the Site andrepatriate the Contractor's and its Subcontractor'spersonnel from the Site

(d) In addition, the Contractor, subject to the paymentspecified in GCC Sub-Clause 42.3.4, shall

(i) deliver to the Employer the parts of theFacilities executed by the Contractor up to thedate of termination


(ii) to the extent legally possible, assign to theEmployer all right, title and benefit of theContractor to the Facilities and to the Plant andEquipment as of the date of termination, and, asmay be required by the Employer, in anysubcontracts concluded between the Contractorand its Subcontractors

(iii) deliver to the Employer all drawings,specifications and other documents prepared bythe Contractor or its Subcontractors as of thedate of termination in connection with theFacilities.

42.3.41f the Contract is terminated under GCC Sub-Clauses42.3.1 or 42.3.2, the Employer shall pay to the Contractorall payments specified in GCC Sub-Clause 42.1.3, andreasonable compensation for all loss or damage sustainedby the Contractor arising out of, in connection with or inconsequence of such termination.

42.3.5Ternination by the Contractor pursuant to this GCC Sub-Clause 42.3 is without prejudice to any other rights orremedies of the Contractor that may be exercised in lieu ofor in addition to rights conferred by GCC Sub-Clause 42.3.

42.4 In this GCC Clause 42, the expression "Facilities executed" shallinclude all work executed, Installation Services provided, and allPlant and Equipment acquired (or subject to a legally bindingobligation to purchase) by the Contractor and used or intended tobe used for the purpose of the Facilities, up to and including thedate of termination.

42.5 In this GCC Clause 42, in calculating any monies due from theEmployer to the Contractor, account shall be taken of any sumpreviously paid by the Employer to the Contractor under theContract, including any advance payment paid pursuant to Appendix3 (Terms and Procedures of Payment) to the Contract Agreement.

43. Assignment 43.1 Neither the Employer nor the Contractor shall, without theexpress prior written consent of the other (which consent shallnot be unreasonably withheld), assign to any third party theContract or any part thereof, or any right, benefit, obligation orinterest therein or thereunder, except that the Contractor shall beentitled to assign either absolutely or by way of charge any


monies due and payable to it or that may become due and payableto it under the Contract.

161

Section V. Special Conditions of Contract

Notes on the Special Conditions of Contract

Similar to the clauses in the Bid Data Sheet in Section III, the clauses in this Section V areintended to help the Employer to provide contract-specific infornation in relation tocorresponding clauses in the General Conditions of Contract.

The provisions of Section V complement the General Conditions of Contract included inSection IV, specifying contractual requirements linked to the special circumstances of theEmployer, the Employer's country, the sector, and the facilities installed. In preparingSection V, the following aspects should be checked:

(a) Information that complements provisions of Section IV must beincorporated.

(b) Amendments and/or supplements to provisions of Section IV, as necessitatedby the circumstances of the specific contract, must also be incorporated.

162 Section V. Snecial Conditions of Contract

Table of Clauses

1. Definitions (GCC Clause 1) ........................................................ 1632. Notices (GCC Clause 4) ........................................................ 1643. Governing Law (GCC Clause 5) ........................................................ 1644. Settlement of Disputes (GCC Clause 6) ........................................................ 1645. Scope of Facilities [Spare Parts] (GCC Clause 7) ................................................ 1646. Time for Commencement and Completion (GCC Clause 8) ................................ 1657. Contract Price (GCC Clause I 1) ........................................................ 1658. Securities (GCC Clause 13) ....................................................... 1659. Work Program (GCC Clause 18) ....................................................... 16610. Commissioning and Operational Acceptance (GCC Clause 25) ......................... 16611. Completion Time Guarantee (GCC Clause 26) ................................................. 16612. Defect Liability (GCC Clause 27) ....................................................... 16613. Completion-Guarantee Test-Acceptance (GCC Clause 24.3 and 25.2) ......... 167

Section V. Special Conditions of Contract 163

Special Conditions of Contract

The following Special Conditions of Contract (SCC) shall supplement the General Conditionsof Contract (GCC). Whenever there is a conflict, the provisions herein shall prevail overthose in the GCC. The corresponding clause number of the GCC is indicated in parentheses.

[Instructions for completing the Special Conditions of Contract are provided, as needed, inthe notes in italics mentioned for the relevant Special Conditions. Where sample provisionsare furnished, they are only illustrative of the provisions that the Employer should draftspecifically for each procurement. Several provisions and related information shall be eithercompleted or modified in accordance with the information provided by the Bidder whose bidhas been accepted by the Employer or agreed between that Bidder and the Employer.]

1. Definitions (GCC Clause 1)

The Employer is: [Name, address, and telephone, cable and facsimile numbers]

The Project Manager is: [Name, address, and telephone, cable andfacsimile numbers]

The Contractor is: [Name, address, and telephone, cable andfacsimile numbers]

The Contractor's Representative is: [Name, address, and telephone, cable and facsimilenumbers]

The Adjudicator is: [Name, address, and telephone, cable andfacsimile numbers)

Country of Origin: all countries and territories as indicated in the section of the biddingdocuments, Eligibility for the Provision of Goods, Works and Services in Bank-FinancedProcurement.

Time for Completion:

Sample Provision

Time for Completion for all Facilities: [The time shall be specified in days, weeks or months, asappropriate, and shall be written in words and figures.], or

Time for Completion for parts of the Facilities:

Description Time for Completion

[Each part of the Facilities subject to a specific Time for Completion shall be listed and brieflydescribed with its respective Time for Completion specified in days, weeks or months, as appropriate,in words and figures.]

164 Section V. Special Conditions of Contract

2. Notices (GCC Clause 4)

GCC 4.1-Employer's address for notice purposes:

Contractor's address for notice purposes: [address, telephone, cable andfacsimilenumbers]

3. Governing Law (GCC Clause 5)

Sample Provision

GCC 5.1-The Contract shall be interpreted in accordance with the laws of theEmployer's country.

4. Settlement of Disputes (GCC Clause 6)

GCC 6.1.3-Adjudicator's hourly fee: [The fee shall be specified in a convertible currency.)

GCC 6.1 .4-Appointing Authority for Adjudicator: [The Appointing Authority should be animpartial international technical organization recognized in the sector.I

GCC 6.2.4-Appointing Authority for the third Arbitrator: (The Appointing Authorityshould be an impartial international technical organization recognized in the sector.]

GCC 6.2.7(i)-Rules of procedure for arbitration proceedings: [International commercialarbitration may have practical advantages over other dispute settlement methods. The World Bankshould not be named as arbitrator, nor should it be asked to name an arbitrator. The Employer maywish to consider the Rules of Conciliation and Arbitration of the International Chamber of Commerce[ICC], the United Nations Commission on International Trade Law f UNCITRALI Arbitration Rules of1976, or the UNCITRAL Conciliation Rules of 1980. Another acceptable approach would be toprovide (a) for international conciliation or arbitration [under ICC, UNCITRAL, or other rules] in thecase of a dispute with a foreign contractor; and (b) for adjudication/arbitration in accordance with thelaw of the Employer's country in the case of a dispute with a contractor who is a national in theEmployer's country. Employers are strongly advised to consult their lawyers for the purpose ofdrafting an amending provision.]

GCC 6.2.7 (ii)-The place of arbitration shall be:

5. Scope of Facilities [Spare Parts] (GCC Clause 7)

GCC 7.3-The Contractor agrees to supply spare parts for a period of years: [Areasonable number of years should be specified in words and figures.]

Sample Clause

GCC 7.4-The Contractor shall carry sufficient inventories to ensure an ex-stock supplyof consumable spares for the plant and equipment. Other spare parts and components


shall be supplied as promptly as possible, but at the most within six (6) months ofplacing the order and opening the letter of credit. In addition, in the event oftermination of the production of spare parts, advance notification will be made to theEmployer of the pending termination, with sufficient time to permit the Employer toprocure the needed requirement. Following such termination, the Contractor will permitto the extent possible and at no cost to the Employer the blueprints, drawings andspecifications of the spare parts, if requested.

6. Time for Commencement and Completion (GCC Clause 8)

Sample Clause

GCC 8.1-The Contractor shall commence work on the Facilities from the EffectiveDate for determining Time for Completion as specified in the Contract Agreement.

GCC 8.2-The Completion of the Facilities shall be attained within [weeks ormonths in words and figures].

[Parts and timesfor respective Completions shall be specified where applicable.]

7. Contract Price (GCC Clause 11)

Sample Provision

GCC 11.2-The Contract Price shall be adjusted in accordance with the provisions ofAppendix 2 (Price Adjustment) to the Contract Agreement [to be inserted only if ContractPrice is subject to adjustment].

8. Securities (GCC Clause 13)

GCC 13.3.1-The amount of performance security, as a percentage of the ContractPrice, shall be: [The amouit should not exceed ten percent (10%) in any case]

(The following provision should be used when the Facilities have warranty obligationsbeyond the Defect Liability Period, pursuant to the provisions in the SCC under GCCClause 12.)

GCC 13.3.2-The Performance Security shall be in the form of the [insert eitherConditional Guarantee or Unconditional Guaranteel attached hereto in the section on SampleForms and Procedures.

GCC 13.3.3-The performance security shall be reduced to ten percent (10%) of thevalue of the component cover by the extended warranty to cover the Contractor'sextended warranty in accordance with the provision in the SCC, pursuant to GCC Sub-Clause 27.10. [to be inserted only when an extended warranty is requestedI


9. Work Program (GCC Clause 18)

GCC 18.2-The form of the program of performance of the Contract shall be: [Programof performance shall usually be in the form of the critical path method (CPM), the PERT network, orother internationally used programs]

10. Commissioning and Operational Acceptance (GCC Clause 25)

GCC 25.2.2-The Guarantee Test of the Facilities shall be successfully completedwithin [days or weeks, written in words and figures] from the date of Completion[Parts and separate times for the respective Guarantee Tests shall be specified where applicable].

11. Completion Time Guarantee (GCC Clause 26)

GCC 26.2-Applicable rate for liquidated damages:

Maximum deduction for liquidated damages: [The percentage shall be at least equivalent tothe percentage specified itn the Bid Data Sheet, with reference to either ITB Sub-Clause 25.3 (d), inSingle Stage Bidding, or ITB Sub-Clause 35.3 (c), in Two Stage Bidding. The applicable rate shall notexceed one-half percent (0.5%) per week, and the maximum shall not exceed ten percent (10%) of theContract Price. I

Sample Clause

The above rate and maximum apply to the price of the part of the Facilities, as quoted inthe Price Schedule, for that part for which the Contractor fails to achieve Completionwithin the particular Time for Completion. [The above provision may be used where separateTimes for Completioni have been prescribed for parts of the Facilities]

GCC 26.3-Applicable (amount or rate) for the bonus for early Completion:

Maximum bonus: [ Where bonus is applicable, insert appropriate amount or rate as a percentage ofthe Contract Price, or part thereof in words and figures, per week of early Completion of the Facilitiesor part thereof, in accordance with the Time for Completion specified in the SCC, with a correspondingreference in GCC 1. The amount of the bonus and the minimum should be related to the benefit theEmployer will gain in operating the Facilities, or part thereof, earlier than anticipated.]

(For a contract without a bonus, the following provision should be used.)

GCC 26.3-No bonus will be given for earlier Completion of the Facilities or partthereof.

12. Defect Liability (GCC Clause 27)

[The Employer should not extend the Defect Liability Period beyond the period prescribed in GCCSub-Clause 27.2, except where it is commercial practice for that type of Facilities, and in which casethe relevant period shall be specified in the SCC under GCC Sub-Clause 27.10.]


GCC 27.10-The critical components cover under the extended warranty are [thecomponents should either be mentioned herein or a reference should be made to the related paragraphin the Technical Specifications], and the period shall be Inumber of years, which shall not exceed

five (5) years] (to be inserted only when an extended warranty is requested).

13. Completion-Guarantee Test-Acceptance (GCC Clause 24.3 and 25.2)

Sample Provision

13.1 In the event that the Contractor is unable to proceed with the Precommissioning ofthe Facilities pursuant to Sub-Clause 24.3, or with the Guarantee Test pursuant toSub-Clause 25.2, for reasons attributable to the Employer either on account ofnonavailability of other facilities under the responsibilities of other contractor(s), orfor reasons beyond the Employer's control, the provisions leading to "deemed"completion of activities such as Completion, pursuant to GCC Sub-Clause 24.6,and Operational Acceptance, pursuant to GCC Sub-Clause 25.3.4, andContractor's obligations regarding Defect Liability Period, pursuant to GCC Sub-Clause 27.2, Functional Guarantee, pursuant to GCC Clause 28, and Care ofFacilities, pursuant to GCC Clause 32, and GCC Clause 41.1, Suspension, shallnot apply. In this case, the following provisions shall apply.

13.2 When the Contractor is notified by the Project Manager that he will be unable toproceed with the activities and obligations pursuant to above Sub-Clause 13.1, theContractor shall be entitled to the following:

(a) the Time of Completion shall be extended for the period of suspensionwithout imposition of liquidated damages pursuant to GCC Sub-Clause 26.2;

(b) payments due to the Contractor in accordance with the provision specified inAppendix 1 (Terms and Procedures of Payment) to the Contract Agreement,which would not have been payable in normal circumstances due tononcompletion of the subject activities, shall be released to the Contractoragainst submission of a security in the form of a bank guarantee of equivalentamount acceptable to the Employer, and which shall become null and voidwhen the Contractor will have complied with its obligations regarding thosepayments, subject to the provision of Sub-Clause 13.3 below;

(c) the expenses towards the above security and extension of other securitiesunder the contract, of which validity need to be extended, shall be reimbursedto the Contractor by the Employer;

(d) the additional charges towards the care of the Facilities pursuant to GCCSub-Clause 32.1 shall be reimbursed to the Contractor by the Employer forthe period between the notification mentioned above and the notification


mentioned in Sub-Clause 13.4 below. The provision of GCC Sub-Clause33.2 shall apply to the Facilities during the same period.

13.3 In the event that the period of suspension under above Sub-Clause 13.1 actuallyexceeds one hundred eighty (180) days, the Employer and Contractor shallmutually agree to any additional compensation payable to the Contractor.

13.4 When the Contractor is notified by the Project Manager that the plant is ready forPrecommissioning, the Contractor shall proceed without delay in performing allthe specified activities and obligations under the contract.

[The above SCC Clause 13 may be used when performance of Precommissioning activities and/orFunctional Guarantees will be tied to the completion of other facilities which and are not under theresponsibilities of the Contractor (e.g., completion of transmission lines to connect to the grid a powerplant constructed under the contract).]

169

Section VI. Technical Specifications and Drawings

Notes on Preparing the Technical Specifications and Drawings

The text of the Technical Specifications shall be inserted into the bidding documents bythe Employer, as applicable to each Contract.

Reference to brand names, catalogue numbers or other details that limit any materials oritems to a specific manufacturer should be avoided as far as possible. Where unavoidable,such item description should always be followed by the words "or substantially equivalent."

Where standard specifications or codes of practice are referred to, a statement shouldfollow that other national or international standards that ensure substantial equivalence willalso be acceptable. Unless specifically indicated to the contrary, the latest available editionof any named standards and codes will be deemed to apply.

Technical Specifications shall normally be fully descriptive and give the full requirements inrespect of, but not limited to, the following:

(a) Standards of materials and workmanship required(b) Details of all factory tests required (type and number)(c) Details of all work required to achieve completion(d) Details of all precomrnissioning and commissioning activities to be performed

by the Contractor(e) Details of all functional guarantees required and liquidated damages to be

applied in the event that such guarantees are not met

It is recommended that essential technical and performance characteristics andrequirements, including maximum or minimum acceptable values, as appropriate, besummarized in a specific section, to be completed by the Bidder and attached as anAttachment to the Bid Form.

Attention is also drawn to the Appendixes to the Form of Contract Agreement in thebidding documents. There shall be consistency in the requirements specified in bothsections.

Where the bidders are to provide part or all of the technical specifications, technicalschedules, or other technical information, the nature and extent of the requireddetails and the manner in which they are to be presented by the bidders in their bidsshall be clearly identified.

170 Section VI. Technical Specifications and Drawings

It is essential that, attached to the Technical Specifications, there shall be a List ofDrawings showing all drawings supplied by the Employer and issued with and forming partof the bidding documents.

171

Section VII. Sample Forms and Procedures

Notes on the Sample Forms and Procedures

The Bidder shall complete and submit with its bid the Bid Form and Price Schedules, inaccordance with the requirements included in the bidding documents. There are twodifferent Bid Forms included herein, depending on whether Option A-Single StageBidding, or Option B-Two Stage Bidding, is to be used. The latter consists of a Bid Formfor the First Stage Bid and a Bid Form for the Second Stage Bid. These forms shall beincluded unamended for the Bidder to complete, sign and submit with the Bid.

The price breakdown given in the sample Price Schedules is the breakdown required forapplication of the domestic preference. Employers are free to choose whether they fill inthe Item/Description details prior to issuing the bidding documents (desirable when theFacilities and Installation Services to be executed can be easily identified and defined), orwhether bidders are required to fill in Item/Description details (may be more suitable whendetails are not easily identifiable).

The Bidder shall provide the Bid Security, either in the form included hereafter or inanother form acceptable to the Employer, pursuant to the provisions in the Instructions toBidders.

The Form of Contract Agreement shall be used unamended, except for the need tocomplete Article 1. 1 (Contract Documents) and Article 3 (Effective Date), as appropriate.The form shall also include the Appendices listed, as required, which should be completedaccording to the instructions for their completion provided at the beginning of eachAppendix. If required, the Price Schedule deemed to form part of the Contract should bemodified according to any corrections or modifications to the accepted bid resulting fromprice corrections, pursuant to the provisions of the Instructions to Bidders.

The Performance Security and Bank Guarantee for Advance Payment forms should notbe completed by the bidders at the time of their bid preparation. The Employer shall includein the bidding documents the type of performance security form (unconditional orconditional) that it has selected, pursuant to GCC Sub-Clause 13.2.2. Only the successfulBidder will be required to provide performance security and a bank guarantee for advancepayment, according to one of the forms indicated herein or in another form acceptable tothe Employer and pursuant to the provisions of the General and Special Conditions ofContract, respectively.

172 Section Vll. Sample Forms and Procedumes

Recommended Sample Forms for Completion and Operational Acceptance are includedherein, together with Change Order Procedures and Forms that complement theprovisions in Part VIII of the General Conditions of Contract. Unless the Employer hasgood reason to require different procedures for those recommended, or to require differentwording in the certificates, the procedures and forms shall be included unamended. If theEmployer wishes to amend the recommended procedures and/or certificates, it may proposealternatives for the approval of the Bank before incorporation in the bidding documents.

Section VII. Sample Forms and Procedures 173

Table of Sample Forms and Procedures

1. Bid Forms and Price Schedules ................................. 1742. Bid Security Form ................................. 1883. Form of Contract Agreement ................................. 1904. Performance Security Forms ................................. 2095. Bank Guarantee Form for Advance Payment ................................. 2146. Form of Completion Certificate ................................. 2167. Form of Operational Acceptance Certificate ................................. 2178. Change Order Procedures ................................. 218

174 Section VII. Sample Forms and Procedures

1. Bid Forms and Price Schedules

1.1 Bid Form-Single Stage Bidding

Date:

Loan/Credit N°:IFB N°:

[Name of Contract]

To: [Name and address of Employer]

Ladies and/or Gentlemen,

Having examined the bidding documents, including Addenda Nos. [insert numbers], the receiptof which is hereby acknowledged, we, the undersigned, offer to design, manufacture, test,deliver, install, precommission and commission the Facilities under the above-named Contractin full conformity with the said bidding documents for the sum of: [amount offoreign currency in

words], [amount in figures], and (amount of local currency in words], (amount in figures] or such othersums as may be determined in accordance with the terms and conditions of the Contract. Theabove amounts are in accordance with the Price Schedules attached herewith and are madepart of this bid.

We undertake, if our bid is accepted, to commence the Facilities and to achieve Completionwithin the respective times stated in the bidding documents.

If our bid is accepted, we undertake to provide an advance payment security and aperformance security in the form, in the amounts, and within the times specified in the biddingdocuments.

We accept the appointment of [name proposed in Bid Data Sheet] as the Adjudicator.

or

We do not accept the appointment of [name proposed in Bid Data Sheet] as the Adjudicator, andwe propose instead that (name] be appointed as Adjudicator, whose resume and hourly feesare attached.

We agree to abide by this bid, which consists of this letter and Attachments 1 through [date]

hereto, for a period of [number] days from the date fixed for submission of bids as stipulated inthe bidding documents, and it shall remain binding upon us and may be accepted by you at anytime before the expiration of that period.


Until a formal contract is prepared and executed between us, this bid, together with yourwritten acceptance thereof and your notification of award, shall constitute a binding contractbetween us.

We understand that you are not bound to accept the lowest or any bid you may receive.

Dated this day of , 19

Isignaturel

In the capacity of[position]

Duly authorized to sign this bid for and on behalf of[name of bidder]

Attachments: [in accordance with ITB Sub-Clause 9.3, plus any additional attachment either specified bythe Employer in the Bid Data Sheet or included by the Bidder. In this regard, the Employer may include inthe bidding document, as an Attachment to the Bid Form, a list of "Bidding Data," including the mostimportant data to be provided by the Bidder (e.g., Time for Completion, Functional Guarantees, etc.)J.


1.2 Bid Form-Two Stage Bidding, First Stage Bid

Date:Loan/Credit NO:

IFB N°:

[Name of Contract]



Having examined the bidding documents, including Addenda Nos. (insert numbers), thereceipt of which is hereby acknowledged, we, the undersigned, offer to design, manufacture,test, deliver, install and precommission the Facilities under the above-named Contract in fullconformity with the said bidding documents.

We further undertake, if invited to do so by you, and at our own cost, to attend a clarificationmeeting at a place of your choice, for the purpose of reviewing our First Stage Bid and dulynoting all amendments and additions thereto, and noting omissions therefrom that you mayrequire.

We further undertake, upon receiving your written invitation, to proceed with the preparationof our Second Stage Bid, updating our First Stage Bid in accordance with the requirementsfrom the Memorandum of the clarification meeting, and completing our commercial bid forperforming the Facilities in accordance with our updated technical bid.

We accept the appointment of (name proposed in Bid Data Sheet] as the Adjudicator.

or

We do not accept the appointment of [name proposed in Bid Data Sheet) as the Adjudicator, andwe propose instead that [name] be appointed as Adjudicator, whose hourly fees and resumeare attached.

We agree to abide by this First Stage Bid, which consists of this letter and Attachments 1through [date] hereto, for a period of [numberl days from the date fixed for submission of bidsas stipulated in the bidding documents, and together with the above written undertakings, itshall remain binding on us, provided that we are invited to attend a clarification meeting withyou before the expiration of that period.

Section VIU. Sample Forms and Procedures 177

Dated this day of , 19

[signature]


Duly authorized to sign this bid for and on behalf of_[name of bidder]

Attachments: [in accordance with ITB Sub-Clause 9.3, plus any additional attachment either specified bythe Employer in the Bid Data Sheet or included by the Bidder. In this regard, the Employer may include inthe bidding document, as an Attachment to the Bid Form, a list of "Bidding Data," including the mostimportant data to be provided by the Bidder (e.g., Timefor Completion, Functional Guarantees, etc.)].


1.3 Bid Form-Two Stage Bidding, Second Stage Bid

Date:

Loan/Credit N°: ___

IFB N°:

[Name of Contractl

To: [Name and addre.vs of Enployer]


Having examined the bidding documents, including Addenda Nos. [insert numbers], and your

requirements incorporated in the Memorandum of the clarification meeting held between us

on [datel, we, the undersigned, offer to design, manufacture, test, deliver, install,

precommission and commission the Facilities under the above-named Contract in full

conformity with the said bidding documents and the said Memorandum for the sum of:

[amount of foreign currency in words], [amount in figures], and [amount of local currency in words],

[amzount in figures] or other such sums as may be determined in accordance with the terms and

conditions of the Contract. The above amounts are in accordance with the Price Schedules

herewith and are made part of this bid.

We undertake, if our bid is accepted, to commence the Facilities, and to achieve Completion

within the respective times stated in the bidding documents.

If our bid is accepted, we undertake to provide an advance payment security and a

performance security in the form, in the amounts, and within the times specified in the bidding

documents.

We confirm our agreement with the appointment of [niame proposed in Bid Data Sheet or dut-ing the

clarification meeting of the First Stage bid] as the Adjudicator.

We agree to abide by this bid, which consists of this letter and Attachments I through [date]

hereto, for a period of [numberl days from the date fixed for submission of the Second Stage

bids as stipulated in the letter of invitation to submit a Second Stage Bid, and it shall remain

binding on us and may be accepted by you at any time before the expiration of that period.

Until a formal contract is prepared and executed between us, this bid, together with your

written acceptance thereof and your notification of award, shall constitute a binding contract

between us.

We understand that you are not bound to accept the lowest or any bid you may receive.


Dated this day of ,19 -

[signature]


Duly authorized to sign this bid for and on behalf of _(name of bidder]

Attachments: [In accordance with ITB Sub-Clause 20.1, plus any additional attachment either specified bythe Employer in the Bid Data Sheet or included by the Bidder. In this regard, the Employer may include inthe bidding document, as an Attachment to the Bid Form, a list of "Bidding Data," including the mostimportant data to be provided by the Bidder (e.g., Timefor Completion, Functional Guarantees, etc.)].


1.4 Price Schedules

In order to receive consistent and responsive bids, it is recommended that Employers include aPREAMBLE to the Price Schedules indicating exactly what is required of bidders whencompleting and pricing their bids.

The following Preamble is given as an example only. Employers are responsible for ensuringthat the Preamble included in the bidding documents is complete and appropriate for thecontract in question.

PREAMBLE

General

1. The Price Schedules are divided into separate Schedules as follows:

Schedule No. 1 Plant and Equipment (including Mandatory Spare Parts) Supplied fromAbroad

Schedule No. 2 Plant and Equipment (including Mandatory Spare Parts) Supplied fromwithin the Employer's Country

Schedule No. 3 Local TransportationSchedule No. 4 Installation ServicesSchedule No. 5 Grand SummarySchedule No. 6 Recommended Spare Parts

Add any other Schedules as appropriate

2. The Schedules do not generally give a full description of the plant and equipment to besupplied and the services to be performed under each item. Bidders shall be deemed tohave read the Technical Specifications and other sections of the bidding documents andreviewed the Drawings to ascertain the full scope of the requirements included in eachitem prior to filling in the rates and prices. The entered rates and prices shall be deemedto include for the full scope as aforesaid, including overheads and profit.

3. If bidders are unclear or uncertain as to the scope of any item, they shall seekclarification in accordance with the Instructions to Bidders in the bidding documentsprior to submitting their bid.

Pricing

4. Prices shall be filled in indelible ink, and any alterations necessary due to errors etc.,shall be initialed by the Bidder.


As specified in the Bid and Contract Data Sheets, prices shall be fixed and firm for theduration of the Contract, or prices shall be subject to adjustment in accordance withAppendix 2 (Price Adjustment) to the Contract Agreement.

5. Bid prices shall be quoted in the manner indicated and in the currencies specified in theInstructions to Bidders in the bidding documents.

For each item, bidders shall complete each appropriate column in the respectiveSchedules, giving the price breakdown as indicated in the Schedules.

Prices given in the Schedules against each item shall be for the scope covered by thatitem as detailed in the Technical Specifications, Drawings or elsewhere in the biddingdocuments.

6. Where there are errors between the total of the amounts given under the column for theprice breakdown and the amount given under the Total Price, the former shall prevailand the latter will be corrected accordingly.

Where there are errors between the total of the amounts of Schedules 1 to 4 and theamount given in Schedule 5 (Grand Summary), the former shall prevail and the latterwill be corrected accordingly.

Where there are discrepancies between amounts stated in figures and amounts stated inwords, the amounts stated in words shall prevail.

7. Payments will be made to the Contractor in the currency or currencies indicated undereach respective item.

8. Items left blank will be deemed to have been included in other items. The TOTAL foreach Schedule and the TOTAL of the Grand Summary shall be deemed to be the totalprice for executing the facilities and sections thereof in complete accordance with theContract, whether or not each individual item has been priced.

9. When requested by the Employer for the purposes of making payments or partpayments, valuing variations or evaluating claims, or for such other purposes as theEmployer may reasonably require, the Contractor shall provide the Employer with abreakdown of any composite or lump sum items included in the Schedules.


Schedules of Rates and Prices

Schedule 1. Plant, equipment, and mandatory spare parts supplied from abroad

Item Description Code' Qty. Unit Price2 Total Price2

FOB or FCA CIF or CIP...___ ....... ... .................(1) (2) (3) (lx 3)

... . . ...... . . .. . . . . .. .. . . . . .. . . . . .. . . . . . . . . . .. . ... . . .. . . . .. . . . . . . ... ........ ...... . ......... .. .. ... ..1... ...... ............................. .... ......................

.. . ........... . . . .. . . . .. . . . . . ....... .................---.---------------- ----------- .......-' ---- ................. ................................. ................................. ..... .... .... ..... .... ....

........ ....... .... .... .... .... .... .... .... ... .... .... .... .... .... .... .... . .. .... .,.. .... . . ... .-.-..-. ... .... .... .... .... .... .-.. .... ... .... .... .... .... .-.. .... .... .... .... .... ...

.. .. . ......... ....................................... . . . . .- . . . .. .. . . . . .. .............. . ....... ... ... ..................... ...... . . ................................ ..... ....... ................ .

........ .. . ... ... . .... ... ... . .. . .... ... .. .. .. ..... .. . .. .... . .. .. ...... . ... .. . ... ... ...., ., . .. .. .. , . , .... ... ... . ... ... -...... . .. .... ... .... .. . .... .. . ...-.. . .... ... ..... ... .. ... .

.. . .. . . ..... ................................... ................ . . . . . I . . . . . ......... . .. . ... . . .. . . . ............... ...... . . .. . ............................. . ..... ....................... .

....... ...........I. . . . . . ...................... . . ... . . ............... ......... . . .. .. . .. . . . . .......... ..... .... .---. .... .................. . .. . . . . .. . . . .. ... . . . .. .

TO TAL (to Schedule 5. Grand Summary) ______

Code Country...... ..... ................ ...... ..... ......... N am e of B idder . . . .. . .. . . .. . .. . . .. . .. . .

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

....... ............................... t.o..d............................. Se .. .

'Bidders shall enter a code representing the country of origin of all imponted plant and equipment.2 Specify currency.


Schedule 2. Plant, equipment, and mandatory spare parts supplied from within theemployer's country

Item Description Qty. EXW Unit Price' EXW Total Price'(1) (2) (lx2)

.. . . . .. . . . . .. . . . . .. .. . . . . .. . . . . .. .. . . .. . . . . . . .. . . . ................ .. .. ..,,.. . .. . . . . . . . . .. . . . . . ................... ................. ............................

.................. ... .................................................................. ..................... ,,............ ...... ........ .............................................. .............. ........ ........................

................. ..... ... ... ... ... ... ... ... .. .......,.,.................. .. .. .. ............................ .. . . . .. . . . .............. . . . . . . . .. . . . . . . . ....................... ........ ... ... .

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

. ................ ......... ......... ...... ,,,...... .,........ . . . . . . . . . .. . . . . . . . . . .. . . . . . . I . . . ..,............... ..................... ........................ ... . . . . . ................................

.................. .... .,,,,.. ...,,,,,,...,,... ...,. .................. ........ . ............... . . . . .. . . . . .. .... . .. . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

... ,. . .. .,. ........................................... . . . . . . . ......................... .. .. .. ,. . . ..... ... ... ... ... .................. ........... .... -.....,.,., ............................. . . . . . . ..

1 .,........... ...... , .., ... .. .. . .. .. . .. .. .. . .. .. . .. .. .. . .. .. . ................... . . .. . . . ......... ..... .. .. .. .. .. .. . . . . . . .. . . . . . . .. .. .. . .. ,. . . . . . .. . . . . . . .. . . . . . .

I,... ,, ,,, . , ,S............ .. ... . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . ......... .. ......... .. ,,. .. . ....... . . . . . .................. . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . .

| ~~~~~~~~TOTAL ( to Schedule 5. Grand Summary)_________

Name of Bidderc; __________

Signature of Bidder ____________

Specify currency in accordance with specifications in Bid Data Sheet under ITB Sub-Clause 12.1 (b) in Single Stage Bid, or ITB Sub-Clause 23.1 (b) in Two Stage Bid.


Schedule 3. Local transportation

Item Description Qty. UnitP rice' Total Price'Local Inland Foreign Currency

Transportation Portion(1) (2) (optional) (I x 2)

... ........I.. .............................................. .... ''''. '' ........

-~~~~OA (t cedl . Grn Sumary

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

...... ................................................ .. .. ... .----------- ...... ..------- .....- ............ ..-- ..'---''-..-''..-'-'-'--'-----1---'''--'''---''''''''''-'--'-.-'-''''----'''

Name of Biddrer _ _ _ _ _ _ _ _ _ _ _ _

Signature of Bidderc _ _ _ _ __ _ _ _ _ _ _

'Specify currency in accordance with specifications in Bid Data Sheet under ITB Sub-Clause 12.1 (c) in Single Stage Bid, or ITB Sub-Clause 23.1 (c) in Two Stage Bid.


Schedule 4. Installation services

Item Description Qty. Unit Price' Total Price'Foreign Local Foreign Local

Currency CurrencyPortion Portion

_ (1) (2) (3) (I x 2) (I x 3)

......... ...... ............. ...................... ..,........... ......................... ......................... ................... . .... .........................

............. ........................................................ ....... ..... ....................... ............... ............... .........'-'- ......''''''''......

............. ........................................... ................ . ........... ....................I...... ....................... .. ... ............................. ..........................

................. . ..........................................I.................................. ................. ........................ ....... ................. .................... ........................................ ..I.......................................................... .............. ... .............. ... .................. .. ..... ........................ ..... ............................. ..... ........................... .. .......

................. .............................................I............... .............. ... ............... .................. .. ......... ........................... ............................. .... t.... ...................

................. . ............................................................................ ............... ... ............... .. ............ .......I.......... .... ....... ................. .... ........ .......... .... ...............

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

TOTAL (to Schedule 5. Grand Summary) _____

Name of Bidder; ___________

Signature of Bidder ___ _________

'Specify currency in accordance with specifications in Bid Data Sheet under ITB Sub-Clause 12.1 (c) in Single Stage Bid, or ITB Sub-Clause 23.1 (c) in Two Stage Bid.


Schedule 5. Grand summary

Item Description Total Price'Foreign Local

.................. ...........................................................................................................................................T ................................... Total Schedule 1. Plant, equipment, and mandatory spare parts

.u~~p~p.ied from wihib heemlye'scunr.................. .. ....................................................................................................................................... .. ..................................... ...I....... ..................... .................

Total Schedule 2. Pla ant equipmen and mandatory stare parts

.................. ....supid fowthrhemly... s-........................................ o .. un ...................., .......,,,................................... .................. .................

.................. ................................................................................................................................ .......................... ......... ................................... q1-

Total Schedule 4. Insaltrall oration adohrsrie.................. .... oa ceue4Isaito n te evcs......................................................... ................................... .................................... .................................... .. .......................................................................................................................................... ........................ ........... .... ..............................................

TOTAL (to Bid Form)

Name of Bidder

Signature of Bidder

Specify cunrency in accordance with specifications in Bid Data Sheet under ITB Sub-Clause 12.1 in Single Stage Bid, or ITB Sub-Clause23.1 in Two Stage Bid.


Schedule 6. Recommended spare parts

Item Description Qty. Unit Price TCIF foreign EXW local

(1) (2) (3) (I x 2 or 3)

.. . . .. . .. .. .............................................................. ............ ,.................... .... . . . ..... ............................ ..... ................................. ...... ................... .

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

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

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

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

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

.................. ................................................................................................ .. . . . .. . . .................. f..... ................................... .

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

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

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

F .. .. ........ .............................................................. .......................... ......... . . .. ............... ................. ........... ..................... ............ ..

.~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

TOTAL ___ __

Name of Bidder ______ ______

Signature of Bidder ____________


2. Bid Security Form

Date:Loan/Credit N°:

IFB N°:

[Name of Contract]


WHEREAS [name of Bidder] (hereinafter called "the Bidder") has submitted its Bid dated [dateof bid] for the performance of the above-named Contract (hereinafter called "the Bid")

KNOW ALL PERSONS by these present that WE [name of bank] of [address of bank](hereinafter called "the Bank"), are bound unto lname of Employer] (hereinafter called "theEmployer") in the sum of: lamount], for which payment well and truly to be made to the saidEmployer, the Bank binds itself, its successors and assigns by these presents.

Sealed with the Common Seal of the said Bank this day of 19

THE CONDITIONS of this obligation are the following:

1. If the Bidder withdraws its Bid during the period of bid validity specified by the Bidderin the Bid Form, or

2. If the Bidder, having been notified of the acceptance of its Bid by the Employer duringthe period of bid validity

a) fails or refuses to sign the Contract Agreement when required or

b) fails or refuses to issue the performance security in accordance with the biddingdocuments,

WE undertake to pay to the Employer up to the above amount upon receipt of its first writtendemand, without the Employer having to substantiate its demand, provided that in its demandthe Employer will note that the amount claimed by it is due it, owing to the occurrence of oneor both of the two above-named CONDITIONS, and specifying the occurred condition orconditions.

This guarantee will remain in full force up to and including [date 30 days after the period of bidvalidity], and any demand in respect thereof must reach the Bank not later than the above date.


For and on behalf of the Bank

[Signature]

in the capacity of

Common Seal of the Bank


3. Form of Contract Agreement

THIS CONTRACT AGREEMENT is made the day of , 19-

BETWEEN(1) /Name of Employer], a corporation incorporated under the laws of [coutntrv of Employerl andhaving its principal place of business at [address of EmploYerl (hereinafter called "theEmployer"), and (2) [name of Contractor], a corporation incorporated under the laws of [country

of Contractor] and having its principal place of business at laddress of Contractor] (hereinaftercalled "the Contractor")

WHEREAS the Employer desires to engage the Contractor to design, manufacture, test,deliver, install, complete and commission certain Facilities, viz. [list of facilities] ("theFacilities") and the Contractor have agreed to such engagement upon and subject to the termsand conditions hereinafter appearing.

NOW IT IS HEREBY AGREED as follows:

Article 1. 1.1 Contract Documents (Reference GCC Clause 2)Contract The following documents shall constitute the Contract betweenDocuments the Employer and the Contractor, and each shall be read and

construed as an integral part of the Contract:

(a) This Contract Agreement and the Appendixes hereto(b) Special Conditions of Contract(c) General Conditions of Contract(d) Technical Specifications and Drawings(e) Bid and Price Schedules submitted by the Contractor(f) Procedures (as listed)(g) Any other documents shall be added here

1.2 Order of Precedence (Reference GCC Clause 2)In the event of any ambiguity or conflict between the ContractDocuments listed above, the order of precedence shall be theorder in which the Contract Documents are listed in Article 1.1(Contract Documents) above.

1.3 Definitions (Reference GCC Clause 1)Capitalized words and phrases used herein shall have the samemeanings as are ascribed to them in the General Conditions ofContract.


Article 2. 2.1 Contract Price (Reference GCC Clause 11)Contract Price The Employer hereby agrees to pay to the Contractor theand Terms of Contract Price in consideration of the performance by thePayment Contractor of its obligations hereunder. The Contract Price shall

be the aggregate of: [amount offoreign currency in words], [amount infigures], and [amount of local currency in words], [amount in figures], orsuch other sums as may be determined in accordance with theterms and conditions of the Contract.

2.2 Terms of Payment (Reference GCC Clause 12)The terms and procedures of payment according to which theEmployer will reimburse the Contractor are given in Appendix 1(Terms and Procedures of Payment) hereto.

Article 3. 3.1 Effective Date (Reference GCC Clause 1)Effective Date The Time of Completion of the Facilities shall be determined fromfor the date when all of the following conditions have been fulfilled:DeterminingTime for (a) This Contract Agreement has been duly executed for and onCompletion behalf of the Employer and the Contractor;

(b) The Contractor has submitted to the Employer theperformance security and the advance payment guarantee;

(c) The Employer has paid the Contractor the advance payment

(d) Any other conditions shall be added here (e.g.,opening/confirmation of letter of credit).

Each party shall use its best efforts to fulfill the above conditionsfor which it is responsible as soon as practicable.

3.2 If the conditions listed under 3.1 are not fulfilled within two (2)months from the date of this Contract Agreement because ofreasons not attributable to the Contractor, the parties shall discussand agree on an equitable adjustment to the Contract Price andthe Time for Completion and/or other relevant conditions of theContract .

Article 4. The Appendixes listed in the attached List of Appendixes shall beAppendixes deemed to form an integral part of this Contract Agreement.

Reference in the Contract to any Appendix shall mean the Appendixesattached hereto, and the Contract shall be read and construedaccordingly.


IN WITNESS WHEREOF the Employer and the Contractor have caused this Agreement tobe duly executed by their duly authorized representatives the day and year first above written.

Signed by for and on behalf of the Employer

[Signature]

[Title]

in the presence of

Signed by for and on behalf of the Contractor

[Signature]

[Title]

in the presence of


CONTRACT AGREEMENT

dated the. day of ,_19-

BETWEEN

["the Employer"]

and

["the Contractor"

APPENDIXES

Appendix 1 Terms and Procedures of PaymentAppendix 2 Price AdjustmentAppendix 3 Insurance RequirementsAppendix 4 Time ScheduleAppendix 5 List of Approved SubcontractorsAppendix 6 Scope of Works and Supply by the EmployerAppendix 7 List of Documents for Approval or ReviewAppendix 8 Functional Guarantees


Appendix 1. Terms and Procedures of Payment

The following Terms and Procedures of Payment are given as a guideline suitable for Supplyand Installation Contracts. In the event that the Employer wishes to introduce different termsof payment to the following, it shall first obtain the written approval of the Bank for the termsit intends to use. If additional Price Schedules are introduced, suitable terms of payment inrespect of such additional schedules must be added.

In accordance with the provisions of GCC Clause 12 (Terms of Payment), the Employer shallpay the Contractor in the following manner and at the following times, on the basis of thePrice Breakdown given in the section on Price Schedules. Payments will be made in thecurrencies quoted by the Bidder unless otherwise agreed between the parties. Applicationsfor payment in respect of part deliveries may be made by the Contractor as work proceeds.

TERMS OF PAYMENT

Schedule No. 1. Plant and Equipment Supplied from Abroad

In respect of plant and equipment supplied from abroad, the following payments shall bemade:

Ten percent (10%) of the total CIF or CIP amount as an advance payment againstreceipt of invoice and an irrevocable advance payment security for the equivalentamount made out in favor of the Employer. The advance payment security may bereduced in proportion to the value of the plant and equipment shipped FOB or deliveredto the site, as evidenced by shipping and delivery documents.

Eighty percent (80%) of the total or pro rata FOB or FCA amount upon Incoterm"FOB" or "FCA," within forty-five (45) days after receipt of invoice and shippingdocuments. In the event that shipping is delayed upon the written instruction of theEmployer for more than twenty-eight (28) days beyond the date shown in the Programof Performance provided in accordance with GCC Sub-Clause 18.2, the Contractor maymake application for this part of the payment against warehouse receipts, providedalways that the plant and equipment are ready for shipment on the date shown in the saidProgram.

Eighty percent (80%) of the total or pro rata CIF or CIP amount upon Incoterm "CIF or"CIP," upon delivery to Site within forty-five (45) days after receipt of invoice, lesseighty percent (80%) of the FOB amount already paid or authorized for payment.

Five percent (5%) of the total or pro rata CIF or CIP amount upon issue of theCompletion Certificate, within forty-five (45) days after receipt of invoice.


Five percent (5%) of the total or pro rata CLF or CIP amount upon issue of theOperational Acceptance Certificate, within forty-five (45) days after receipt of invoice.

Schedule No. 2. Plant and Equipment Supplied from within the Employer's Country

In respect of plant and equipment supplied from within the Employer's country, thefollowing payments shall be made:

Ten percent (10%) of the total EXW amount as an advance payment against receipt ofinvoice, and an irrevocable advance payment security for the equivalent amount madeout in favor of the Employer. The advance payment security may be reduced inproportion to the value of the plant and equipment delivered to the site, as evidenced byshipping and delivery documents.

Eighty percent (80%) of the total or pro rata EXW amount upon Incoterm "Ex-Works,"upon delivery to the site within forty-five (45) days after receipt of invoice.

Five percent (5%) of the total or pro rata EXW amount upon issue of the CompletionCertificate, within forty-five (45) days after receipt of invoice.

Five percent (5%) of the total or pro rata EXW amount upon issue of the OperationalAcceptance Certificate, within forty-five (45) days after receipt of invoice.

Schedule No. 3. Local Transportation

In respect of local transportation for both the foreign currency (where applicable) andthe local currency portions, the following payments shall be made:

Ten percent (10%) of the total local transportation amount as an advance paymentagainst receipt of invoice, and an irrevocable advance payment security for theequivalent amount made out in favor of the Employer. The advance payment securitymay be reduced in proportion to the value of the Plant and Equipment delivered to thesite, as evidenced by shipping and delivery documents.

Ninety percent (90%) of the total or pro rata local transportation amount upon deliveryto the site within forty-five (45) days after receipt of invoice.

Schedule No. 4. Installation Services

In respect of installation services for both the foreign and local currency portions, thefollowing payments shall be made:

Ten percent (10%) of the total installation services amount as an advance paymentagainst receipt of invoice, and an irrevocable advance payment security for theequivalent amount made out in favor of the Employer. The advance payment security


may be reduced in proportion to the value of work performed by the Contractor asevidenced by the invoices for installation services.

Eighty percent (80%) of the measured value of work performed by the Contractor, asidentified in the said Program of Performance, during the preceding month, as evidencedby the Employer's authorization of the Contractor's application, will be made monthlywithin forty-five (45) days after receipt of invoice.

Five percent (5%) of the total or pro rata value of installation services performed by theContractor as evidenced by the Employer's authorization of the Contractor's monthlyapplications, upon issue of the Completion Certificate, within forty-five (45) days afterreceipt of invoice.

Five percent (5%) of the total or pro rata value of installation services performed by theContractor as evidenced by the Employer's authorization of the Contractor's monthlyapplications, upon issue of the Operational Acceptance Certificate, within forty-five (45)days after receipt of invoice.

In the event that the Employer fails to make any payment on its respective due date, theEmployer shall pay to the Contractor interest on the amount of such delayed payment atthe rate of [insert a figure that may be different for the foreign and local currency portions and a

figure that reflects the cost of money in the respective currencies] percent per month for period ofdelay until payment has been made in full.

PAYMENT PROCEDURES

The procedures to be followed in applying for certification and making payments shall be asfollows:

Appropriate procedures, normally through letters of credit, are to be inserted (includingforms and certificates annexed as appropriate) by the Employer in the bidding documents.


Appendix 2. Price Adjustment

Where the Contract Period (excluding the Defects Liability Period) exceeds eighteen (18)months, it is normal procedure that prices payable to the Contractor shall be subject toadjustment during the performance of the Contract to reflect changes occurring in the costof labor and material components. In such cases the bidding documents shall include in thisAppendix 2 a formula of the following general type, pursuant to GCC Sub-Clause 11.2.

Where Contracts are of a shorter duration than twelve (12) months or in cases where thereis to be no Price Adjustment, the following provision shall not be included. Instead, it shallbe indicated under this Appendix 2 that the prices are to remain firm and fixed for theduration of the Contract.

Sample Price Adjustment Formula

Prices payable to the Contractor, in accordance with the Contract, shall be subject toadjustment during performance of the Contract to reflect changes in the cost of labor andmaterial components, in accordance with the following formula:

Li MlPi = Pox(a+b-+c-)-Po

Lo Mo

in which:

Pi = adjustment amount payable to the Contractor

PO = Contract price (base price)

a = fixed element representing profit and overhead in Contract price (a = %)

b = estimated percent of labor component in Contract price (b = %)

c = estimated percent of plant & equipment component in Contract price (c = _%)

Lo, LI = labor indexes applicable to the appropriate industry in the country of originon the base date and the date for adjustment, respectively

MO, Ml= material indexes for the major raw materials in the country of origin on thebase date and the date for adjustment, respectively


The sum of the three coefficients a, b and c shall be one (1) in every application of theformula.

Conditions applicable to Price Adjustment

The Bidder shall indicate the source of labor and materials indexes and the base date indexesin its bid.

Item Source of Indexes Used Base Date Indexes

The base date shall be the date thirty (30) days prior to the Bid closing date.

The date of adjustment shall be the mid-point of the period of manufacture or installation ofcomponent or Plant.

The following conditions shall apply:

(a) Price adjustment will be applied only if the resulting increase or decrease is more thantwo percent (2%) of the Contract price.

(b) No price increase will be allowed beyond the original delivery date unless covered by anextension of time awarded by the Employer under the terms of the Contract. No priceincrease will be allowed for periods of delay for which the Contractor is responsible.The Employer will, however, be entitled to any price decrease occurring during suchperiods of delay.

(c) The total adjustment (plus or minus) shall be subject to a ceiling amount of % of theContract price.

(d) If the currency in which the Contract price, PO, is expressed is different from thecurrency of the country of origin of the labor and/or materials indexes, a correctionfactor will be applied to avoid incorrect adjustments of the Contract price. Thecorrection factor shall correspond to the ratio of exchange rates between the twocurrencies on the base date and the date for adjustment as defined above.

(e) No price adjustment shall be payable on the portion of the Contract price paid to theContractor as an advance payment.

Note: For complex Plant supply and installation involving several sources of supply and/ora substantial amount of installation works, a family of formulas may be necessary, withprovision for the usage of Contractor's equipment in the works formula.


Appendix 3. Insurance Requirements

Details to be completed by the Employer prior to issuing the bidding documents. In theevent that the Employer provides any insurances under the Contract, appropriate detailsmust also be given.

Insurances to be taken out by the Contractor

In accordance with the provisions of GCC Clause 34, the Contractor shall at its expense takeout and maintain in effect, or cause to be taken out and maintained in effect, during theperformance of the Contract, the insurances set forth below in the sums and with thedeductibles and other conditions specified. The identity of the insurers and the form of thepolicies shall be subject to the approval of the Employer, such approval not to beunreasonably withheld.

(a) Cargo InsuranceCovering loss or damage occurring, while in transit from the supplier's ormanufacturer's works or stores until arrival at the site, to the facilities (including spareparts therefor) and to the construction equipment to be provided by the Contractor or itsSubcontractors.

Amount Deductible limits Parties insured From To

(b) Installation All Risks InsuranceCovering physical loss or damage to the facilities at the site, occurring prior tocompletion of the facilities, with an extended maintenance coverage for the Contractor'sliability in respect of any loss or damage occurring during the defect liability periodwhile the Contractor is on the site for the purpose of performing its obligations duringthe defect liability period.


(c) Third Party Liability InsuranceCovering bodily injury or death suffered by third parties (including the Employer'spersonnel) and loss of or damage to property (including the Employer's property andany parts of the facilities that have been accepted by the Employer) occurring inconnection with the supply and installation of the facilities.



(d) Automobile Liability InsuranceCovering use of all vehicles used by the Contractor or its Subcontractors (whether ornot owned by them) in connection with the supply and installation of the facilities.Comprehensive insurance in accordance with statutory requirements.

(e) Workers' CompensationIn accordance with the statutory requirements applicable in any country where thefacilities or any part thereof is executed.

(f) Employer's LiabilityIn accordance with the statutory requirements applicable in any country where thefacilities or any part thereof is executed.

(g) Other InsurancesThe Contractor is also required to take out and maintain at its own cost the followinginsurances:

Details:


The Employer shall be named as co-insured under all insurance policies taken out by theContractor pursuant to GCC Sub-Clause 34.1, except for the Third Party Liability, Workers'Compensation and Employer's Liability Insurances, and the Contractor's Subcontractors shallbe named as co-insureds under all insurance policies taken out by the Contractor pursuant toGCC Sub-Clause 34.1, except for the Cargo, Workers' Compensation and Employer'sLiability Insurances. All insurer's rights of subrogation against such co-insureds for losses orclaims arising out of the performance of the Contract shall be waived under such policies.


Insurances to be taken out by the Employer

If the Employer is proposing to take out any or all of the above insurances itself, or anyother insurances in respect of the Facilities, either in its own name or in the joint names ofitself and the Contractor, it shall give details below prior to issuing the bidding documents.Under the terms of the Contract, the Contractor and the Contractor's Subcontractors shallbe namned as co-insureds under all such policies.

The Employer shall at its expense take out and maintain in effect during the performance ofthe Contract the following insurances.

Details:



Appendix 4. Time Schedule

The Employer should normally provide a Time Schedule to be followed by the Contractorduring the performance of the Contract. This schedule should be provided with the biddingdocuments under this Appendix 4. All completion times indicated must be in accordancewith the information regarding Time(s) for Completion given in the Bid Data Sheet.

Except under exceptional circumstances, the Time Schedule should indicate periods of time(e.g., weeks or months) and not specify calendar dates. All periods should be shown fromthe Effective Date of the Contract.

Should it become necessary to amend the Time Schedule to reflect any agreements madewith the selected Bidder prior to award of Contract, the amended Time Schedule shallreplace the original Time Schedule prior to signature of the Contract Agreement.

If the bidding documents contain no Time Schedule, the Bidder shall be required to submitwith its bid a detailed program, normally in the form of a bar chart, showing how and theorder in which it intends to perform the Contract and showing the key events requiringaction or decision by the Employer. In preparing this Program, the Bidder shall adhere tothe Time(s) for Completion given in the Bid Data Sheet or give its reasons for not adheringthereto. The Time Schedule submitted by the selected Bidder and amended as necessaryprior to award of Contract shall be included as Appendix 4 to the Contract Agreementbefore the Contract is signed.

If bidders, pursuant to the provisions of the Instructions to Bidders, are to be permitted tooffer an Alternative Bid based on a different Time Schedule, details of this and any resultingreduction in Price from their conforming bid based on the Time Schedule included in thebidding documents shall be submitted as an Attachment to their bid.


Appendix 5. List of Approved Subcontractors

Prior to award of Contract, the following details shall be completed, indicating thoseSubcontractors proposed by the Bidder in the corresponding Attachment to its bid that areapproved by the Employer for engagement by the Contractor during the performance of theContract.

The following Subcontractors are approved for carrying out the item of the facilities indicated.Where more than one Subcontractor is listed, the Contractor is free to choose between them,but it must notify the Employer of its choice in good time prior to appointing any selectedSubcontractor. In accordance with GCC Sub-Clause 19.1, the Contractor is free to submitproposals for Subcontractors for additional items from time to time. No Subcontracts shall beplaced with any such Subcontractors for additional items until the Subcontractors have beenapproved in writing by the Employer and their names have been added to this list of ApprovedSubcontractors.

Item of Facilities Approved Subcontractors Nationality


Appendix 6. Scope of Works and Supply by the Employer

Prior to issuing the bidding documents, the Employer shall indicate in this Appendix 6details of all personnel and facilities it will provide for use by the Contractor and indicate,where applicable, the charges that it will make in respect of their use.

The Employer shall also identify any part(s) of the facilities it intends to carry out itself (orby other contractors), and any plant, equipment, or materials that it proposes to purchaseitself and supply to the Contractor for incorporation in the facilities, indicating whereapplicable, the charges that it will make in respect thereof.

The following personnel, facilities, works and supplies will be provided/supplied by theEmployer, and the provisions of GCC Clauses 10, 21 and 24 shall apply as appropriate.

All personnel, facilities, works and supplies will be provided by the Employer in good time soas not to delay the performance of the Contractor, in accordance with the approved TimeSchedule and Program of Performance pursuant to GCC Sub-Clause 18.2.

Unless otherwise indicated, all personnel, facilities, works and supplies will be provided freeof charge to the Contractor.

Personnel Charge to Contractor (if any)

Facilities Charge to Contractor (if any)

Works Charge to Contractor (if any)

Supplies Charge to Contractor (if any)


Appendix 7. List of Documents for Approval or Review

Pursuant to GCC Sub-Clause 20.3.1, the Contractor shall prepare, or cause its Subcontractorto prepare, and present to the Project Manager in accordance with the requirements of GCCSub-Clause 18.2 (Program of Performance), the following documents for

A. Approval

1.

2.

3.

B. Review

1.

2.

3.


Appendix 8. Functional Guarantees

I1. General

This Appendix sets out

(a) the functional guarantees referred to in GCC Clause 28 (Functional Guarantees)

(b) the preconditions to the validity of the functional guarantees, either in productionand/or consumption, set forth below

(c) the minimum level of the functional guarantees

(d) the formula for calculation of liquidated damages for failure to attain the functionalguarantees.

2. Preconditions

The Contractor gives the functional guarantees (specified herein) for the facilities,subject to the following preconditions being fully satisfied:

[List any conditions for the carrying out of the Guarantee Test referred to in GCC Sub-Clause 25.2.1

3. Functional Guarantees

Subject to compliance with the foregoing preconditions, the Contractor guarantees asfollows:

3.1 Production Capacity

[List here the production capacity that the Contractor is to guarantee, making sure to use, asfunctional guarantees, the figures offered by the Contractor in its bid.]

and/or

3.2 Raw Materials and Utilities Consumption

[List here the guaranteed items of consumption per unit of production le.g., kg, tons, kcal, kWh,etc.] that the Contractor is to guarantee, making sure to use, as functional guarantees, thefigures offered by the Contractor in its bid.)]

4. Failure in Guarantees and Liquidated Damages

4.1 Failure to Attain Guaranteed Production Capacity


If the production capacity of the facilities attained in the guarantee test, pursuantto GCC Sub-Clause 25.2, is less than the guaranteed figure specified in para. 3.1above, but the actual production capacity attained in the guarantee test is not lessthan the minimum level specified in para. 4.3 below, and the Contractor elects topay liquidated damages to the Employer in lieu of making changes, modificationsand/or additions to the facilities, pursuant to GCC Sub-Clause 28.3, then theContractor shall pay liquidated damages at the rate of lamount in the contractcurrency] for every complete one percent (1%) of the deficiency in the productioncapacity of the facilities, or at a proportionately reduced rate for any deficiency, orpart thereof, of less than a complete one percent (1%).

4.2 Raw Materials and Utilities Consumption in Excess of Guaranteed Level

[To be specified in the appropriate wording for the type of facilities if there are consumptionguarantees.]

If the actual measured figure of specified raw materials and utilities consumed perunit (or their average total cost of consumption) exceeds the guaranteed figurespecified in para. 3.2 above (or their specified average total cost of consumption),but the actual consumption attained in the guarantee test, pursuant to GCC Sub-Clause 25.2, is not more than the maximum level specified in para. 4.3 below, andthe Contractor elects to pay liquidated damages to the Employer in lieu of makingchanges, modifications and/or additions to the facilities pursuant to GCC Sub-Clause 28.3, then the Contractor shall pay liquidated damages at the rate of [amount

in the contract currency] for every complete one percent (1%) of the excessconsumption of the facilities, or part thereof, of less than a complete one percent(1%).

[The rate of liquidated damages specified in paras. 4.1 and 4.2 above shall be at least equivalentto the rate specified in the Bid Data Sheet under ITB Sub-Clause 25.3 (d), in single stagebidding, or ITB Sub-Clause 35.3 (c), in tvo stage bidding, for the comparison of functionalguarantees provided by the Bidders.]

4.3 Minimum Levels

Notwithstanding the provisions of this paragraph, if as a result of the guaranteetest(s), the following minimum levels of performance guarantees (and consumptionguarantees) are not attained by the Contractor, the Contractor shall at its own costmake good any deficiencies until the facilities reach any of such minirnumperformance levels, pursuant to GCC Sub-Clause 28.2:

(a) production capacity of the facilities attained in the guarantee test: ninety-fivepercent (95%) of the guaranteed production capacity

and/or


(b) average total cost of consumption of all the raw materials and utilities of thefacilities: one hundred and five percent (105%) of the guaranteed figures.

4.4 Limitation of Liability

Subject to para. 4.3 above, the Contractor's aggregate liability to pay liquidateddamages for failure to attain the functional guarantees shall not exceedpercent ( _ %) of the Contract price Ithe percentage specified shall not exceed ten

percent (10%)].


4. Performance Security Forms

4.1 Bank Guarantee-Unconditional


IFB N°:

(Name of Contract]



We refer to the Contract Agreement ("the Contract") signed on (datel between you and [name

of Contractor] ("the Contractor") concerning design, execution and completion of lBriefdescription of the Facilities].

By this letter we, the undersigned, [name of Bank], a Bank (or company) organized under thelaws of [country of Bank] and having its registered/principal office at [address of Bank], do herebyjointly and severally with the Contractor irrevocably guarantee payment owed to you by theContractor, pursuant to the Contract, up to the sum of [amountl, equivalent to [number] percent(_%) [amount should not exceed ten percent (10%) in any case] of the Contract Price until the dateof the Operational Acceptance Certificate and thereafter up to a sum of [amount], equivalent to[number] percent (-%) [amount should not exceed two and one half percent (2.5%) in any case] of theContract Price, until twelve (12) months after the date of Operational Acceptance, or eighteen(18) months after Completion of the Facilities, whichever occurs first.

Where it is agreed between you and the Contractor that the Facilities are to be accepted inparts, and thus where there are separate Completion and Operational Acceptance Certificatesfor each part, this Letter of Guarantee shall be apportioned to the value of each such part andshall reduce or expire as provided above on or following Completion or OperationalAcceptance of each part.

We undertake to make payment under this Letter of Guarantee upon receipt by us of your firstwritten demand signed by your duly authorized officer declaring the Contractor to be indefault under the Contract and without cavil or argument any sum or sums within the above-named limits, without your need to prove or show grounds or reasons for your demand andwithout the right of the Contractor to dispute or question such demand.

Our liability under this Letter of Guarantee shall be to pay to you whichever is the lesser of thesum so requested or the amount then guaranteed hereunder in respect of any demand dulymade hereunder prior to expiry of this Letter of Guarantee, without being entitled to inquirewhether or not this payment is lawfully demanded.


This Letter of Guarantee shall be valid from the date of issue until the earlier of twelve (12)months after the date of Operational Acceptance or eighteen (18) months after the date ofCompletion of the Facilities or, where the Facilities are to be accepted in parts, twelve (12)months after the date of Operational Acceptance or eighteen (18) months after the date ofCompletion of the last part or [datel, whichever comes first.

Except for the documents herein specified, no other documents or other action shall berequired, notwithstanding any applicable law or regulation.

If the Defect Liability Period is extended with respect to any part of the Facilities inaccordance with the Contract, you shall notify us, and the validity of this Letter of Guaranteeshall be extended with respect to the percentage of the Contract Price stipulated in thenotification until expiry of such extended Defect Liability Period.

Our liability under this Letter of Guarantee shall become null and void immediately upon itsexpiry, whether it is returned or not, and no claim may be made hereunder after such expiry orafter the aggregate of the sums paid by us to you shall equal the sums guaranteed hereunder,whichever is the earlier.

All notices to be given hereunder shall be given by registered (airmail) post to the addressee atthe address herein set out or as otherwise advised by and between the parties hereto.

We hereby agree that any part of the Contract may be amended, renewed, extended, modified,compromised, released or discharged by mutual agreement between you and the Contractor,and this security may be exchanged or surrendered without in any way impairing or affectingour liabilities hereunder without notice to us and without the necessity for any additionalendorsement, consent or guarantee by us, provided, however, that the sum guaranteed shallnot be increased or decreased.

No action, event or condition which by any applicable law should operate to discharge usfrom liability hereunder shall have any effect and we hereby waive any right we may have toapply such law, so that in all respects our liability hereunder shall be irrevocable and, except asstated herein, unconditional in all respects.

Yours truly,Name of the Bank

Authorized Signature


4.2 Bank Guarantee-Conditional


IFB N°:

[Name of Contract]

To: [Name anid address of Emplover]


We refer to the Contract Agreement ("the Contract") signed on [date] between you and [nanmeof Contractor] ("the Contractor") concerning design, execution and completion of [Briefdescriptioni of the Facilities].

By this letter we, the undersigned, [name of Bank], a Bank (or company) organized under thelaws of [country of Banzk] and having its registered/principal office at [address of Bank], do herebyjointly and severally with the Contractor irrevocably guarantee payment owed to you by theContractor, pursuant to the Contract, up to the sum of [amount!, equivalent to [number] percent(_%) [amount shall tlot exceed ten percent (10%) in any case] of the Contract Price until the date ofthe Operational Acceptance Certificate and thereafter up to a sum of [amouit], equivalent tof,,umber] percent (_%) [amount shall not exceed two and one half percent (2.5%) in any case] of the

Contract Price, until twelve (12) months after the date of Operational Acceptance, or eighteen(18) months after Completion of the Facilities, whichever comes first.

Where it is agreed between you and the Contractor that the Facilities are to be accepted inparts, and thus where there are separate Completion and Operational Acceptance Certificatesfor each part, this Letter of Guarantee shall be apportioned to the value of each such part andshall reduce or expire as provided above on or following Completion or OperationalAcceptance of each part.

We shall only undertake to make payment under this Letter of Guarantee upon our receipt ofa written demand signed by your duly authorized officer for a specified sum, where suchdemand sets out the reasons for your claim under this Letter of Guarantee and is accompaniedby

(a) a copy of the written notice sent by you to the Contractor before making the claimunder this Guarantee, specifying the Contractor's breach of contract andrequesting the Contractor to remedy it

(b) a letter signed by your duly authorized officer certifying that the Contractor hasfailed to remedy the default within the period allowed for remedial action


(c) a copy of your written notice to the Contractor stating your intent to claim underthis Letter of Guarantee because of the Contractor's failure to remedy the defaultin accordance with the request referred to in para. (i) above.

Our liability under this Letter of Guarantee shall be to pay to you whichever is the lesser of thesum so requested or the amount then guaranteed hereunder in respect of any demand dulymade hereunder prior to expiry of this Letter of Guarantee, without being entitled to inquirewhether or not this payment is lawfully demanded.

This Letter of Guarantee shall be valid from the date of issue until the earlier of twelve (12)months after the date of Operational Acceptance or eighteen (18) months after the date ofCompletion of the Facilities or, where the Facilities are to be accepted in parts, twelve (12)months after the date of Operational Acceptance or eighteen (18) months after the date ofCompletion of the last part or idate], whichever comes first.

Except for the documents herein specified, no other documents or other action shall berequired, notwithstanding any applicable law or regulation.

If the Defect Liability Period is extended with respect to any part of the Facilities inaccordance with the Contract, you shall notify us, and the validity of this Letter of Guaranteeshall be extended with respect to the percentage of the Contract Price stipulated in thenotification until expiry of such extended Defect Liability Period.

Our liability under this Letter of Guarantee shall become null and void immediately upon itsexpiry, whether it is returned or not, and no claim may be made hereunder after such expiry orafter the aggregate of the sums paid by us to you shall equal the sums guaranteed hereunder,whichever is the earlier.

All notices to be given hereunder shall be given by registered (airmail) post to the addressee atthe address herein set out or as otherwise advised by and between the parties hereto.

We hereby agree that any part of the Contract may be amended, renewed, extended, modified,compromised, released or discharged by mutual agreement between you and the Contractor,and this security may be exchanged or surrendered without in any way impairing or affectingour liabilities hereunder without notice to us and without the necessity for any additionalendorsement, consent or guarantee by us, provided, however, that the sum guaranteed shallnot be increased or decreased.

No action, event or condition which by any applicable law should operate to discharge usfrom liability hereunder shall have any effect and we hereby waive any right we may have toapply such law, so that in all respects our liability hereunder shall be irrevocable and, except asstated herein, unconditional in all respects.

Section VII. Sample Formns and Procedures 213

Yours truly,Namne of the Bank



5. Bank Guarantee Form for Advance Payment


IFB N°:

[Name of Contract]



We refer to the Contract Agreement ("the Contract") signed on [date] between you and [name

of Contractor] ("the Contractor") concerning design, execution and completion of [Brief

descriptiotn of the Facilities].

Whereas, in accordance with the terms of the said Contract, the Employer has agreed to payor cause to be paid to the Contractor an Advance Payment in the amount of [number] percent(_%) of the total Contract Price due to the Contractor, namely a payment of: [Amount of

foreign currency in word.i1, [Anmounit in figures], and [Amount of local currency in wordsl, [Amount in

figures].

By this letter we, the undersigned, [tiame of Bank], a Bank (or company) organized under thelaws of [country of Bankl and having its registered/principal office at (address of Bank], do hereby

jointly and severally with the Contractor irrevocably guarantee repayment of the said amountsupon the first demand of the Employer without cavil or argument in the event that theContractor fails to commence or fulfill its obligations under the terms of the said Contract,and in the event of such failure, refuses to repay all or part (as the case may be) of the saidadvance payment to the Employer.

Provided always that the Bank's obligation shall be limited to an amount equal to theoutstanding balance of the advance payment, taking into account such amounts that have beenrepaid by the Contractor from time to time in accordance with the terms of payment of thesaid Contract as evidenced by appropriate shipping documents or payment certificates.

This Guarantee shall remain in full force from the date upon which the said advance paymentis received by the Contractor until the date upon which the Contractor has fully repaid theamount so advanced to the Employer in accordance with the terms of the Contract. At thetime at which the outstanding amount is nil, this Guarantee shall become null and void,whether the original is returned to us or not.

Any claims to be made under this Guarantee must be received by the Bank during its period ofvalidity.


Yours truly,

Name of the Bank


216 Section VII. Sample Fonms and Procedures

6. Form of Completion Certificate

Date:

Loan/Credit NO:

LFB N°:

[Name of Contract]

To: [Name and address of Contractor]


Pursuant to GCC Clause 24 (Completion of the Facilities) of the General Conditions of theContract entered into between yourselves and the Employer dated Idatel, relating to the [briefdescription of thefacilities], we hereby notify you that the following part(s) of the Facilities was(were) complete on the date specified below, and that, in accordance with the terms of theContract, the Employer hereby takes over the said part(s) of the Facilities, together with theresponsibility for care and custody and the risk of loss thereof on the date mentioned below.

1. Description of the Facilities or part thereof: Idescription)

2. Date of Completion: (date]

However, you are required to complete the outstanding items listed in the attachment heretoas soon as practicable.

This letter does not relieve you of your obligation to complete the execution of the Facilitiesin accordance with the Contract nor of your obligations during the Defects Liability Period.

Very truly yours,

Title(Project Manager)


7. Form of Operational Acceptance Certificate

Date:

Loan/Credit N°:

IFB N°:

[Name of Contract]

To: IName and address of Conitractor]


Pursuant to GCC Sub-Clause 25.3 (Operational Acceptance) of the General Conditions of theContract entered into between yourselves and the Employer dated (date], relating to the [briefdescription of thefacilities], we hereby notify you that the Functional Guarantees of the followingpart(s) of the Facilities were satisfactorily attained on the date specified below.

1. Description of the Facilities or part thereof: [description]

2. Date of Operational Acceptance: [datel

This letter does not relieve you of your obligation to complete the execution of the Facilitiesin accordance with the Contract nor of your obligations during the Defects Liability Period.

Very truly yours,

Title(Project Manager)


8. Change Order Procedures

Date:

Loan/Credit N":

IFB N°:

CONTENTS

1. General2. Change Order Log3. References for Changes

ANNEXES

Annex I Request for Change ProposalAnnex 2 Estimate for Change ProposalAnnex 3 Acceptance of EstimateAnnex 4 Change ProposalAnnex 5 Change OrderAnnex 6 Pending Agreement Change OrderAnnex 7 Application for Change Proposal


Change Order Procedure

1. General

This section provides samples of procedures and forms for implementing changes in theFacilities during the performance of the Contract in accordance with GCC Clause 39(Change in the Facilities) of the General Conditions of Contract.

2. Change Order Log

The Contractor shall keep an up-to-date Change Order Log to show the current statusof Requests for Change and Changes authorized or pending, as Annex 8. Entries of theChanges in the Change Order Log shall be made to ensure that the log is up-to-date.The Contractor shall attach a copy of the current Change Order Log in the monthlyprogress report to be submitted to the Employer.

3. References for Changes

(1) Request for Change as referred to in GCC Clause 39 shall be serially numberedCR-X-nnn.

(2) Estimate for Change Proposal as referred to in GCC Clause 39 shall be seriallynumbered CN-X-nnn.

(3) Acceptance of Estimate as referred to in GCC Clause 39 shall be serially numberedCA-X-nnn.

(4) Change Proposal as referred to in GCC Clause 39 shall be serially numbered CP-X-nnn.

(5) Change Order as referred to in GCC Clause 39 shall be serially numbered CO-X-nnn.

Note: (a) Requests for Change issued from the Employer's Home Office and the siterepresentatives of the Employer shall have the following respectivereferences:

Home Office CR-H-nnnSite CR-S-nnn

(b) The above number "nnn" is the same for Request for Change, Estimate forChange Proposal, Acceptance of Estimate, Change Proposal and ChangeOrder.


Annex 1. Request for Change Proposal

(Employer's Letterhead)

To: [Contractor's Name and Address] Date:

Attention: [Name and Title]

Contract Name: [Contract name]

Contract Number: iContract number]

Dear Ladies and/or Gentlemen:

With reference to the captioned Contract, you are requested to prepare and submit a ChangeProposal for the Change noted below in accordance with the following instructions within[number] days of the date of this letter. [or on or before (date)]

1. Title of Change: [Title]

2. Change Request No./Rev.: [Number]

3. Originator of Change: Employer: [Name]

Contractor (by Application for Change Proposal No.[Number]2 3 ):

4. Brief Description of Change: [description)

5. Facilities and/or Item No. of equipment related to the requested Change: (description]

6. Reference drawings and/or technical documents for the request of Change:

Drawing No./Document No. Description

7. Detailed conditions or special requirements on the requested Change: [description)

8. General Terms and Conditions:

(a) Please submrit your estimate to us showing what effect the requested Change willhave on the Contract Price.

23 Refer to Annex 7.

Section VIL Sarnple Forms and Procedures 221

(b) Your estimate shall include your claim for the additional time, if any, forcompletion of the requested Change.

(c) If you have any opinion negative to the adoption of the requested Change inconnection with the conformability to the other provisions of the Contract or thesafety of the Plant or Facilities, please inform us of your opinion in your proposalof revised provisions.

(d) Any increase or decrease in the work of the Contractor relating to the services ofits personnel shall be calculated.

(e) You shall not proceed with the execution of the work for the requested Changeuntil we have accepted and confirmed the amount and nature in writing.

(Employer's Name)

(Signature)

(Name of signatory)

(Title of signatory)

222 Section VII. Sample Fonns and Procedures

Annex 2. Estimate for Change Proposal

(Contractor's Letterhead)

To: [Employer's Name and Address] Date:


Contract Name: [Contract namelContract Number: [Contract number]


With reference to your Request for Change Proposal, we are pleased to notify you of theapproximate cost of preparing the below-referenced Change Proposal in accordance withGCC Sub-Clause 39.2.1 of the General Conditions of Contract. We acknowledge that youragreement to the cost of preparing the Change Proposal, in accordance with GCC Sub-Clause39.2.2, is required before estimating the cost for change work.


2. Change Request No./Rev.: [Number]

3. Brief Description of Change: [description]

4. Scheduled Impact of Change: [description]

5. Cost for Preparation of Change Proposal: [Cost]24

(a) Engineering (Amount)

(i) Engineer hrs x rate/hr =

(ii) Draftsperson hrs x rate/hr =

Sub-total hrs

Total Engineering Cost

(b) Other Cost

Total Cost (a) + (b)

24 Costs shall be in the currencies of the Contract.


(Contractor's Name)

(Signature)

(Name of signatory)



Annex 3. Acceptance of Estimate




Contract Name: [Contract name]Contract Number: IContract number]


We hereby accept your Estimate for Change Proposal and agree that you should proceed withthe preparation of the Change Proposal.


2. Change Request No./Rev.: [Request Number/Revision]

3. Estimate for Change Proposal No./Rev.: lProposal Number/Revision]

4. Acceptance of Estimate No./Rev.: [Estimate Number/Revision]

5. Brief Description of Change: [Description]

6. Other Terms and Conditions: In the event that we decide not to order the Changeaccepted, you shall be entitled to compensation for the cost of preparation of ChangeProposal described in your Estimate for Change Proposal mentioned in para. 3 above inaccordance with GCC Clause 39 of the General Conditions of Contract.

(Employer's Name)

(Signature)

(Name and Title of signatory)


Annex 4. Change Proposal




Contract Name: [Contract ,lame]

Contract Number: [Contract nwumber]


In response to your Request for Change Proposal No. [number], we hereby submit ourproposal as follows:

I . Title of Change: [name]

2. Change Proposal No./Rev.: (proposal number/revision]

3. Originator of Change: Employer [namel

Contractor [name]


5. Reasons for Change: [reason]

6. Facilities and/or Item No. of Equipment related to the requested Change: [facilities]

7. Reference drawings and/or technical documents for the requested Change:

Drawing/Document No. Description

8. Estimate of increase/decrease to the Contract Price resulting from Change Proposal:25

(Amount)

(a) Direct material

(b) Major construction equipment

25 Costs shall be in the currencies of the Contract.


(c) Direct field labor (Total _ hrs)

(d) Subcontracts

(e) Indirect material and labor

(f) Site supervision

(g) Head office technical staff salaries

Process engineer hrs @ rate/hr

Project engineer hrs @ rate/hr

Equipment engineer hrs @ rate/hr

Procurement hrs @ rate/hrDraftsperson hrs @ rate/hr

Total hrs

(h) Extraordinary costs (computer, travel, etc.)

(i) Fee for general administration, o% of Items

(j) Taxes and customs duties

Total lump sum cost of Change Proposal[sum of Items (1) to (10)]

Cost to prepare Estimate for Change Proposal[amount payable if Change is not accepted]

9. Additional time for Completion required due to Change Proposal

10. Effect on the Functional Guarantees

11. Effect on the other terms and conditions of the Contract

12. Validity of this Proposal: within [number] days after receipt of this Proposal by theEmployer

13. Other terms and conditions of this Change Proposal:

(a) You are requested to notify us of your acceptance, comments or rejection of thisdetailed Change Proposal within Inumberl days from your receipt of this Proposal.

(b) The amount of any increase and/or decrease shall be taken into account in theadjustment of the Contract Price.

Section VII. Sample Forns and Procedures 227

(c) Contractor's cost for preparation of this Change Proposal:26

(Note) This cost shall be reimbursed by the Employer in case of Employer'swithdrawal or rejection of this Change Proposal without default of the Contractorin accordance with GCC Clause 39 of the General Conditions of Contract.

(Contractor's Name)

(Signature)

(Name of signatory)


26 Specify where necessary.


Annex 5. Change Order




Contract Name: [Contract namttelContract Number: iContract niumberl


We approve the Change Order for the work specified in the Change Proposal (No. [number]),

and agree to adjust the Contract Price, Time for Completion and/or other conditions of theContract in accordance with GCC Clause 39 of the General Conditions of Contract.

1. Title of Change: Iname/

2. Change Request No./Rev.: [Request number/revisionl

3. Change Order No./Rev.: [Order number/revision]

4. Originator of Change: Employer: [name]

Contractor: [namel

5. Authorized Price:

Ref. No.: [number] Date: [date]

Foreign currency portion [amount] plus Local currency portion [amount]

6. Adjustment of Time for Completion

None Increase [numberl days Decrease [number] days

7. Other effects, if any

Authorized by: Date:

(Employer)

Accepted by: Date:

(Contractor)


Annex 6. Pending Agreement Change Order



Attention: [Name and Titlel

Contract Name: [Contract name]

Contract Number: [Contract number]


We instruct you to carry out the work in the Change Order detailed below in accordance withGCC Clause 39 of the General Conditions of Contract.

1. Title of Change: [name]

2. Employer's Request for Change Proposal No./Rev.: [number/revision] dated: [date]

3. Contractor's Change Proposal No./Rev.: lnumber/revision] dated: [date]


5. Facilities and/or Item No. of equipment related to the requested Change: [facilities]

6. Reference Drawings and/or technical documents for the requested Change:

Drawing/Document No. Description

7. Adjustment of Time for Completion:

8. Other change in the Contract terms:

9. Other terms and conditions:


(Employer's Name)

(Signature)

(Name of signatory)



Annex 7. Application for Change Proposal




Contract Name: [Contract nlame]

Contract Number: [Contract number]


We hereby propose that the below-mentioned work be treated as a Change in the Facilities.

1. Title of Change: Iname]

2. Application for Change Proposal No./Rev.: inuumber/revision] dated: [date]


4. Reasons for Change:

5. Order of Magnitude Estimation (in the currencies of the Contract):

6. Scheduled Impact of Change:

7. Effect on Functional Guarantees, if any:

8. Appendix:

(Contractor's Name)

(Signature)

(Name of signatory)


233

Section VIII. Eligibility for the Provision of Goods, Worksand Services in Bank-Financed Procurement

234 Section Vill. Eligibility for the Provision of Goods, Works___ __ __ __ _ _ __ _-_and Services in Bank-Financed Procurement

Public Inforniation Center

Eligibility for the Provision of Goods, Works and Services in Bank-FinancedProcurement

As of December- 1995

For the information of borrowers and bidders, and with reference to paragraph 1.6,footnote 9, of the Guilelines: Procurement uniider IBRD Loancs atnd IDA Credits, datedJanuary 1995, set forth below is a list of countries from which bidders, goods and services arenot eligible to participate in procuiement finaniced by the World Bank or IDA.27

* Andorra* Cuba* Democratic People's Republic of Korea (North Korea)- Liechtenstein- AMonaco- Nauru

* ,San Marino* Tuvalu

In addition, bidders, goods and services from other countries or telTitories may bedeclared ineligible by a provision in the bidding documents if the borrower's country hasexcluded them by a law, an official regulation, or an act of compliance meeting therequirements of paragraph 1.8 (a) of the Guidelines: Procurement under IBRD Loans andIDA Credits.

The Loan/Credit Agreement also prohibits a withdrawal from the Loan/CreditAccount for the purpose of any payment to persons or entities, or for any import of goods, ifsuch payment or import, to the knowledge of the Bank, is prohibited by a decision of theUnited Nations Security Council taken under Chapter VII of the Charter of the UnitedNations. At the present time, this prohibition applies to

* Iraq* Libya

27 Any questions regarding this list should be addressed to the Senior Manager, Procurement Policy andCoordination Unit, Operations Policy Department, the World Bank.

Distributors of World Bank Publications0

nces and credt terms vary Tom country to Country Consult your 'xal d,stnburor oetore placing an orTer

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