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Contract Agreement for The Erection Work for Wood Chip Mill Equipment (Purchase this doc, Text: 08118887270 (Whatsapp))
1. 1 / 17
Contract
For
The Erection Work for Wood Chip Mill Equipment at __________________________
Between
PT. ______________________
Address at
..............................................................................................
..............................................................................................
And
PT. ______________________
Address at
....................................................................................................
(Hereinafter called "Sub-Contractor" or "PT. ____________")
DD/MM/YYYY
2. 2 / 17
Table of Contents
1. Background
2. Definitions
3. The Scope of Contract
4. Work Schedule
5. Contract Price, Terms of Payment and Advance Payment Bond
6. Warranty
7. Change / Modification / Alteration of the Work
8. Progress Report
9. Delay in Delivery / Extension of Time
10. Force Majeure
11. Taxes and Duties
11. Effectiveness of Contract
12. Termination
13. Notices
14. Governing Law and Arbitration
15. Miscellaneous
Annex A : Extent of Scope of Supply and Work, Equipment List
3. 3 / 17
This Contract for the Erection Work for Wood Chip Mill Equipment at .....................................................................
(hereinafter referred to as the “Contract”) is made on ................, ............. of ................... two thousand
and ............... (DD-MM-YYYY), by and between :
1. PT. ______________________, a limited liability company duly established and existing under the laws of
the Republic of Indonesia, having its address at ................................................................ (hereinafter referred
to as the “Contractor”);
2. PT. ______________________, a limited liability company duly established and existing under the laws of
the Republic of Indonesia, having its address at .................................................................................. (hereinafter
referred to as the “Sub-Contractor”).
The Contractor and the Sub-Contractor are collectively herein referred to as the “Parties” and
separately as the “Party”.
1. Background
The Contractor wishes that certain Work (as defined below) be provided and executed by the Sub-
Contractor under the terms and conditions in this Contract, and the Sub-Contractor wishes to
provide and execute the Sub-Contractor's Scope of Supply and Work to the satisfaction of the
Contractor for Contract Price as set forth hereunder.
2. Definitions
Unless otherwise specified in Contract, the following expressions shall have the meanings hereby
assigned to them;
1. "Equipment" means the goods to be supplied and erected by the Sub-Contractor under this
Contract including equipments as stipulated in Equipment List as attached as Annex A of this
Contract.
2. "Contract" means this Contract and the appendixes constituting an integral part of this
Contract.
3. "Work" means and includes all works and services to be provided to this Contract including
the Equipment and/or the Scope of Supply and Work.
4. "Contract Document" means Contract specifications and appendixes as agreed between the
Parties.
5. "Site" means the area where the Equipment is to be located and/or erected.
6. "Advance Payment Bond" to be requested in favor of the Contractor means first class
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international bank's bond(s) and/or other equivalent(s) which is acceptable to the Contractor
for performance and warranty issued by the Sub-Contractor.
7. "Certificate of Mechanical Completion" means the Contractor certifies in writing that the Sub
Contractor's Equipment has been fully erected and proven as satisfactory in all respects of the
Contract Document and specification unless otherwise mutually agreed on.
8. "Client" is PT. ________________, a limited liability company duly established and
existing under the laws of the Republic of Indonesia, having its address
at ..................................................................................................
9. “Scope of Supply and Work” means the scope and supply as stipulated in Annex A of this
Contract.
10. “Government” means the Government of the Republic of Indonesia.
3. The Scope of Contract
The Contractor hereby agree to appoints the Sub-Contractor to provide and execute the Work
under the terms and conditions as stipulated in this Contract and the Sub-Contractor hereby agree
to accept the appointment from the Contractor to provide and execute the Work.
4. Work Schedule
1. The Contractor undertakes to perform Work to achieve Certificate of Mechanical Completion
within five (5) months from the commencement of erection work to be fixed scheduled
on ......................... until Jan ............................ (hereinafter referred to as the “Work Schedule”).
2. Except if the delay is caused by the Force Majeure (as defined below) as stipulated in Article 10
of this Contract, in the event the Certificate of Mechanical Completion cannot be achieved
within the Work Schedule, due to reasons attributable to the Sub-Contractor, the Sub-
Contractor shall pay delay penalties at the rate of zero point three percent (0.3%) per a day of
delay (hereinafter referred to as the “Penalty”). The maximum delay Penalty shall be ten
percent (10%) of the Contract Price. The Contractor shall retain the right to terminate this
Contract in the event that the Work has not been completed and/or the Certificate of
Mechanical Completion has not been achieved until the Penalty has reached its maximum
amount.
3. Without prejudice to any other rights and remedies which the Contractor may has under the
applicable law, any breach to this provision that conducted by the Sub-Contractor shall gives
the Contractor the right to claims, demands, suits, actions, proceeds and/or prosecutes the
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Sub-Contractor for any damages, losses, costs and/or expenses which incurred by the
Contractor, and/or to claim indemnity instead of performance to the Sub-Contractor, as the
result of or in connection with such breach.
5. Contract Price, Terms of Payment and Advance Payment Bond
1. Lump sum and fixed price in this Contract shall be USD .................
(......................................................................... United States Dollars) (hereinafter referred to as
the “Contract Price”). The Contract Price is excluded from Value Added Tax 10% of the
Contract Price.
2. The payments of the Contract Price shall be made against the Sub-Contractor’s invoice with the
following schedule:
a. 30% (USD ................ excluded VAT) as down payment shall be paid within 3 (three)
weeks after the provision of Sub-Contract's invoice as the advance payment.
b. 65% (USD ................ excluded VAT) payment shall be paid on a monthly progress of Work
basis against invoice approved by the Contractor within 3 (three) weeks of the Contractor's
approval date.
c. 5% (USD ............... excluded VAT) payment as retention shall be paid within 2 (two)
months after submitted MDR to the Contractor.
3. The payments of the Contract Price as stipulated in Article 5 paragraph 2 shall be made by the
Contractor to the Sub-Contractor by way of Telegraphic Transfer into the Sub-Contractor’s bank
account as follow:
Bank Name : ...............................................
Branch : ...............................................
Account Number : ...............................................
Account Owner : ...............................................
Account Type : US Dollar
4. All the bank charges incurred from the transfer process of the Contract Price shall be borne by
the Contractor and all the bank charges of incurred from receiving shall be borne by the Sub-
Contractor.
5. At the same time with the signing date of this Contract, the Sub-Contractor shall submit and
provide to the Contractor an Advance Payment Bond, on the favour of the Contractor, in the
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amount of 30% of the Contract Price (included VAT) (hereinafter referred to as the “Advance
Payment Bond”). The period of validity of the Advance Payment Bond shall have the same
period as Work Schedule. The Advance Payment Bond shall be issued by the respectable
financial institution which approved by the Contractor. The Advance Payment Bond shall be
unconditional, unlimited, irrevocable and directly-liable, not unconditional “on first demand”;
the Advance Payment Bond must be subject to substantive laws in the Republic of Indonesia.
The Advance Payment Bond shall be returned when the Certificate of Mechanical Completion
has been achieved by the Sub-Contractor. If until 7 (seven) business days prior to the expiration
date of the Advance Payment Bond period the Certificate of Mechanical Completion still has
not been achieved, then the Sub-Contractor shall extend the validity of the Advance Payment
Bond until and to the date that the Certificate of Mechanical Completion has been achieved. In
the event the Advance Payment Bond period has been expired and the Certificate of
Mechanical Completion has not been achieved by the Sub-Contractor and the Sub-Contractor
failed to extend the validity of the Advance Payment Bond pursuant to this Article 5 paragraph
5, then the Sub-Contractor shall provide to the Contractor a replacement or additional advance
payment bond which has the same amount as the previous Advance Payment Bond and shall
be valid for such period until the achievement of the Certificate of Mechanical Completion, not
later than 7 (seven) Business Days since the expiration date of the Advance Payment Bond.
6. The Parties agree that the Contractor shall be entitled to automatically call and request
liquidation of the Advance Payment Bond in the event the Sub-Contractor breaches and/or fails
to meet its obligations under this Contract.
6. Warranty
1. The Sub-Contractor hereby declare and warrants that all Equipment erected by the Sub-
Contractor under this Contract will be new and state-of-the-art quality, not used, rebuilt or
refurbished material unless approved in writing by the Contractor and free from any defects in
design, workmanship and material when the Equipment is used under normal operation and
proper maintenance conditions. The Sub-Contractor shall repair or replace any parts
determined by faults of the Sub-Contractor during the Warranty Period.
2. The Sub-Contractor shall submit and provide to the Contractor a Warranty Bond in the amount
of 5% (five percent) of Contract Price (hereinafter referred to as the “Warranty Bond”). The
period of validity of the Warranty Bond shall have the same period as Warranty Period. The
Warranty Bond shall be issued by the respectable financial institution which approved by the
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Contractor. The Warranty Bond shall be unconditional, unlimited, irrevocable and directly-liable,
not unconditional “on first demand”, the Warranty Bond must be subject to substantive laws in
the Republic of Indonesia. The Warranty Bond shall be returned at the same time with the
expiration date of Warranty Period. The Parties agree that the Contractor shall be entitled to
automatically call and request liquidation of the Warranty Bond in the event the Sub-Contractor
breaches and/or fails to meet its obligations under this Contract during the Warranty Period.
3. Warranty period shall be 12 (twelve) months from the date of the achievement of Certificate of
Mechanical Completion (“Warranty Period”).
4. The Contractor may correct the defects at the Contractor's own expenses under the Sub-
Contractor's prior consent. In such a case, the Sub-Contractor shall reimburse to the Contractor
for the cost incurred by the rectification of the results.
7. Change / Modification / Alteration of the Work
In case of any requests of changes, modifications or alterations by the Contractor, the Sub-
Contractor shall submit in writing of the additional cost if any and/or the delivery impact.
8. Progress Report
The Sub-Contractor shall furnish the Client with daily, weekly and monthly progress report on the
status of Work and Equipment during the erection. In the meantime, the Contractor shall have the
right to review any internal work progress reports or other documentation of the Sub-Contractor to
assure that actual progress confirm to the said report.
9. Delay in Delivery / Extension of Time
Without prejudice to the provision of Article 4 paragraph 2 herein, the Sub-Contractor shall without
delay notify the Contractor in writing of any events causing delay in delivery and shall include
detailed descriptions of the causes and duration thereof.
10. Force Majeure
1. The Parties hereto shall not be responsible to each other for any failure or delay in
performance of all or part of their respective obligations under this Contract, which directly
owing to cause of circumstances beyond their reasonable control, which causes including but
limited to war, serious fire, strike, labor dispute, flood, typhoon, earthquake, embargo or other
substantially serious events beyond the control of other Party (“Force Majeure”), or as agreed
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upon between the Parties.
2. In the event the Force Majeure occurs, the time for performance under Contract shall be
extended by a period equal to the effect of such cases, and the obligations and rights of the
Parties under this Contract shall be postponed by a period equal to the effect of such cases ,
provided that the Parties shall take all reasonable measures to permit it to resume performance
hereunder within the shortest practicable time, and shall keep the other Party fully informed of
its’ plan to overcome and / or mitigate the Force Majeure circumstances.
3. The prevented Party shall notify the other Party within 7 (seven) days of the occurrence of the
Force Majeure. Failure by the prevented Party to comply with this Article 10 paragraph 3 shall
result in it losing its right to rely upon (or to continue to rely upon) the event of Force Majeure
to which the failure relates and such Party shall conducts its obligations as if the Force Majeure
condition has been passed and/or never occurs.
4. Those obligations of the Parties which are provided for in this Contract and which are not
affected by the event of Force Majeure shall continue unabated; and
5. Should the Force Majeure circumstances and/or the effect of a Force Majeure continue for
more than 30 (thirty) consecutive days, the Parties shall settle the further execution of the Sub-
Contractor through friendly negotiations. If the Contractor believes that such negotiation is
impracticable or that it will not result in a satisfactory resolution, the Contractor shall have the
right to terminate the Contract and settle accordingly.
11. Taxes and Duties
Except as otherwise specifically provided in Contract, the Sub-Contractor shall bear and pay all
taxes, duties, levies and charges assessed on the Sub-Contractor, its sub-contractors or their
employees by all local, state or national government authorities in connection with the Sub-
Contractor's Work.
12. Effectiveness of Contract
This Contract shall become effective on the date of when the following conditions have been
fulfilled:
1. The Down payment as stipulated in Article 5 paragraph 2 point a has been made by the
Contractor to the Sub-Contractor; and
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2. The Advance Payment Bond has been provided and submitted by the Sub-Contractor to the
Contractor.
13. Termination
1. This Contract shall be expired or terminated, only because of the following event:
a. Automatically expired if the Work as stipulated under this Contract has been fulfilled in full
by the Sub-Contractor; or
b. Terminated by the Contractor pursuant to the Article 10 paragraph 5 of the Contract, in the
event of Force Majeure has been occurs; or
c. Terminated by the Contractor pursuant to the Article 4 paragraph 2 of the Contract, in the
event the delay of the completion of the Work was occurs and the Penalty has reached its
maximum amount; or
c. Terminated by mutual written agreement of the Parties.
2. In the event of the termination of Contract which conducted in pursuant with the Article 13 of
this Contract:
a. the Contractor shall pays to the Sub-Contractor the amount outstanding for Work that the
Sub-Contractor has accomplished or completed so far under this Contract, (if any)
deducted by the Penalty amount;
b. The Parties shall formally submit in writing record as agreed, to indicate the process, the
reasons and (if any) the settlements for the termination;
c. The Contractor will instruct any other sub-contractor(s) to continue the Work as described
in this Contract.
3. In case of termination of this Contract, the Parties hereby agree to waive the provisions as set
forth in Article 1266 of the Indonesian Civil Code with regard to the requirement of court
pronouncement, decision or decree for the termination of an agreement.
14. Notices
1. Any notice, request, and other correspondence under and in connection with the Contract shall
be sent by courier or registered air mail or by facsimile to the following addresses:
To the Contractor:
PT. ______________________
...............................................
...............................................
To the Sub-Contractor:
PT. ______________________
...............................................,
...............................................
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Telephone: .............................
Facsimile: .............................
E-mail : .............................
Attn.: .............................
Telephone: .............................
Facsimile: .............................
E-mail : .............................
Attn.: .............................
2. Any Party hereto may at any time change its address by notifying the other Party of the
change in writing.
15. Governing Law and Arbitration
1. This Contract shall be governed by and interpreted in accordance with the laws of the Republic
of Indonesia.
2. All disputes, controversies or differences which may arise between the Contractor and the Sub
Contractor out of or in relation to or in connection with this Contract, or for the breach thereof,
shall be finally settled by arbitration in Badan Arbitrase Nasional Indonesia (BANI) in
accordance with the Law No. 30 Year 1999 regarding the Arbitration and Alternative Dispute
Resolution and BANI Rules. The place of arbitration shall be in Jakarta, Indonesia. The
arbitration proceedings shall be conducted in the English language and shall be conducted
before 3 (three) arbitrators which consisting of 1 (one) arbitrator which appointed by the
Contractor, 1 (one) arbitrator which appointed by the Sub-Contractor and 1 (one) of whom
shall be appointed by the said 2 (two) appointed arbitrators. The expense of arbitration shall be
borne in accordance with the determination of the board of arbitration. The award rendered by
the arbitrators shall be final binding upon the Parties to the Contract. For the avoidance of
doubt, neither Party shall be entitled to commence or maintain any action in a court of law
upon any matter in dispute arising from and/or in relation to this Contract and/or the
transactions contemplated herein.
3. The Parties must continue to perform their obligations herein until the arbitrators give their
award.
16. Miscellaneous
1. The Contractor shall provide the technical data, drawings and manuals for operating and
maintaining the Equipment.
2. Confidential Information
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2.1. Unless required otherwise by law and/or court and/or arbitration order and/or decision
and/or any Government authority, the Sub-Contractor shall treat all information as
confidential concerning the Client’s and/or the Contractor’s business and the
performance of the Work (hereinafter referred to as the “Confidential Information”) and
shall not divulge such Confidential Information to any party other than the persons
designated by the Contractor or Contractor representative. In the event the Sub-
Contractor is required to furnish such Confidential Information to court and/or arbitration
and/or any Government authority and/or as required by law, the Contractor shall be
notified of the disclosure of such Confidential Information as soon as possible.
2.2. The Sub-Contractor is obliged to hold confidential information and shall do so until the
termination or expiration of this Contract. The Sub-Contractor shall return to the Client
and/or the Contractor all information made available for the Sub-Contractor to carry out
the Work. All information, data and / or products shall remain the property of the Client
and/or the Contractor.
2.3. The obligation of confidentiality under this Contract is a continuing obligation and shall
remain in force during the term of the Contract and shall remains survive after the
termination and/or the expiration of the Contract and afterwards for a period of 1 (one)
years.
2.4. Without prejudice to any other rights and remedies which the Contractor may has under
the applicable law, any breach to this provision that conducted by the Sub-Contractor
shall gives the Contractor the right to claims, demands, suits, actions, proceeds and/or
prosecutes the Sub-Contractor for any damages, losses, costs and/or expenses which
incurred by the Contractor as the result of or in connection with such breach.
3. Any and all attachments, appendixes, addendum, and/or amendment to the Contract shall be
regarded as an integral and inseparable part of this Contract.
4. Matters that have not been regulated or insufficiently provided in this Contract, will be
discussed in good faith by the Parties and will be set out in a written document that will be
signed by the Parties.
5. The Sub-Contractor shall not assign the Contract with any third party for the performance of all
or any portion of Work without the Contractor's prior written approval. However, such approval
shall not be revised or modified except in a writing signed by the Parties.
12. 12 / 17
6. Subcontractor
The Sub-Contractor shall not sublet any of the Work as described in this Contract without the full
written approval from the Contractor, provided however:
6.1. The Sub-Contractor shall be responsible for all of its subcontractors (if any) with regards
to insurance, and any other responsibility; and
6.2 The subcontractor(s), in all matters but not be limited to its actions and behavior under
the guidance of the Sub-Contractor, shall be responsible to the Contractor immediately;
and
6.3. The Contractor shall hold the Sub-Contractor fully responsible of all the matters
regarding the subcontractors that are engaged by the Sub-Contractor in carrying out the
Work; and
6.4. The Contractor shall not be responsible for any costs, expenses, effort or anything with
regards to everything that relate to the issue of subcontractors of the Sub-Contractor;
and
6.5. The Contractor shall notify letters of dissatisfaction with regards to the subcontractor’s
actions and/or behavior in the Site when the Contractor considers that the subcontractor
is not in compliance to the Contractor and/or the Government regulation and/or rules
applicable in this Contract.
7. This Contract constitutes the entire agreement between the Parties with respect to the subject
matter hereof and cancels and supersedes any prior understandings and agreement between
the Parties with respect thereto.
8. In the event that any provision or part of a provision in this Contract shall for any reason be
determined by any court or arbitral tribunal to be illegal, invalid or unenforceable, then
Contract shall not be affected and/or the remaining provisions and other parts of the provision
shall not be affected, impaired or invalidated and shall remain in full force and effect and shall
continue to be binding upon the Parties. The Parties shall, in any such event, agree on new
provision(s) that would replace such provision(s).
IN WITNESS WHEREOF, the undersigned have caused this Contract to be executed by their respective
representatives as of the date first above written.
13. 13 / 17
The Contractor The Sub-Contractor
PT. ______________________ PT. ______________________
__________________________ _____________________________
Vice President Director Vice President Director
14. 14 / 17
ANNEX A
Scope of Supply & Work
NO
.
DESCRIPTION
SUPPLIED BY
REMARKS
‘ X ‘ ‘ Y ‘
A Scope of Supply
1 Special tools and jigs for site assembling
2 Blind flanges together with bolts, nuts and proper gaskets for hydrostatic
test3 Painting material for equipment proper & platform & stairway for touch-
up4 Heavy equipment for erection
5 Vehicle for construction
6 Temporary housing, Site office & warehouse
7 Power for construction from diesel generator
8 Welding consumables
9 Welding rod
10 Consumables for erection
11 Jigs and tools for construction
12 equipment for construction
13 Corrosion inhibitor for hydrostatic test (if required)
B Scope of Work
14 Necessary documentations including liP, etc. ( ITP )
15 Material procurement for temporary jig and others
16 Provision for documents
17 Site construction
18 Supervising for construction at site
19 WPS with PQR and production test (if necessary)
20 Inspection at site, water drainage and drying work
21 External preparation, painting and coating
22 Surface preparation and painting as per painting
23 specification prime coat
24 Surface preparation and painting as per painting
25 spec. intermediate & finishing paint for Top coat
26 Inland transportation (from port to site) & Unloading
27 Temporary work of utility for construction and test
28 Dimensional check and acceptance of foundation
29 including minor adjustment work
30 Hydrostatic test at site and water drainage as per specification
31 Insurance and taxes for workers
32 Safety control
33 Unit & running Test
34 Custody of equipment supplied by KHI
C Out of Scope
35 Civil and foundation
36 Insulation material & work
37 Cabling and wiring materials for permanent
38 Blind flanges with bolts, nuts and gaskets for test
39 Hydro-test water