general conditions of contract for lump sum turnkey projects

KUWAIT OIL COMPANY (K.S.C.)
(REGISTER OF COMMERCE NO. 21835)
GENERAL CONDITIONS OF CONTRACT FOR
LUMP SUM TURNKEY PROJECTS

TABLE OF CONTENTS
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Page
1.0 DEFINITIONS....................................................................................................... 1
2.0 INTERPRETATION OF THE CONTRACT........................................................... 6
2.1 Interpretation ................................................................................................. 6
2.2 Errors, Omissions or Discrepancies and Conflicts.................................... 7
2.3 Entire Contract .............................................................................................. 7
2.4 Precedence .................................................................................................... 8
2.5 Waiver ............................................................................................................ 8
2.6 Extent of the Contractor’s Obligations........................................................ 8
2.7 Inspection, Witnessing and Approval ......................................................... 8
2.8 Changes and/or Amendments ..................................................................... 8
2.9 Severability .................................................................................................... 9
2.10 Independent Contractor................................................................................ 9
2.11 Survival .......................................................................................................... 9
3.0 CONTRACTOR’S GENERAL RESPONSIBILITIES ............................................ 9
3.3 Verification of Site Information by Contractor.......................................... 10
3.4 Verification of FEED and Other Information ............................................. 11
4.0 COMPANY’S GENERAL RESPONSIBILITIES ................................................. 11
4.1 General......................................................................................................... 11
4.2 Provision of Information and Data............................................................. 11
4.3 Possession of and Access to the Site....................................................... 12
4.4 Assistance to the Contractor ..................................................................... 12
5.0 SUPERINTENDENT’S DUTIES AND RESPONSIBILITIES .............................. 12
5.1 Superintendent............................................................................................ 12
5.2 Superintendent’s Representative .............................................................. 13
6.0 ASSIGNMENT.................................................................................................... 13
7.0 SUBCONTRACTING ......................................................................................... 13
8.0 CONTRACTOR’S REPRESENTATIONS AND WARRANTIES ........................ 14
9.0 TIME FOR COMPLETION AND DELAY LIQUIDATED DAMAGES.................. 17
9.1 Commencement and Completion of the Works........................................ 17
9.2 Delay Liquidated Damages......................................................................... 17
10.0 PROGRAMME, PROGRESS AND SEQUENCE OF WORKS........................... 18
10.1 Programme of Works.................................................................................. 18
10.2 Reporting ..................................................................................................... 20

TABLE OF CONTENTS
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Page
10.3 Rate of Progress ......................................................................................... 21
11.0 CONTRACT PRICE AND PAYMENT ................................................................ 21
11.1 Contract Price.............................................................................................. 21
11.2 Provisional Sums ........................................................................................ 21
11.3 Payment Terms ........................................................................................... 22
12.0 PERFORMANCE BOND.................................................................................... 24
13.0 VARIATIONS ..................................................................................................... 24
13.1 Company Variations ................................................................................... 24
13.2 Contractor Variations ................................................................................. 27
13.3 Variation or Adjustment Order Required by Terms of Contract ............. 28
13.4 Valuation of Variations ............................................................................... 29
13.5 Disputes Regarding Variations .................................................................. 30
14.0 CODES AND STANDARDS............................................................................... 30
15.0 CONFIDENTIALITY ........................................................................................... 31
15.1 Confidentiality ............................................................................................. 31
15.2 Publicity ....................................................................................................... 32
15.3 Photographs ................................................................................................ 32
16.0 ENGINEERING AND DESIGN - GENERAL PROVISIONS ............................... 32
16.1 General......................................................................................................... 32
16.2 Design and Engineering ............................................................................. 33
16.3 Approval/Review of Contractor’s Documentation.................................... 33
17.0 PROCUREMENT AND SUPPLY OF MATERIAL AND EQUIPMENT -
GENERAL PROVISIONS................................................................................... 35
17.1 General Provisions ..................................................................................... 35
17.2 Local Industry Preference .......................................................................... 36
17.3 Use of Company Stocked Surplus Material .............................................. 37
17.4 Inspection and Testing of Materials Before Delivery ............................... 38
18.0 SPARE PART PROCUREMENT - GENERAL PROVISIONS............................ 39
19.0 TRANSPORTATION AND CARRIAGE PRIORITIES ........................................ 40
20.0 KUWAIT CUSTOMS AND IMPORT REGULATIONS........................................ 41
21.0 EXPORT CREDITS - GOODS AND SERVICES................................................ 41
22.0 HEALTH SAFETY AND ENVIRONMENT.......................................................... 42
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TABLE OF CONTENTS
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Page
23.0 COMPLIANCE WITH LAW - LICENSES ........................................................... 50
24.0 CONSTRUCTION - GENERAL PROVISIONS................................................... 51
25.0 CONTRACTOR’S TEMPORARY SITE OFFICES AND WORKS ...................... 53
26.0 ACCESS AND SITE ROADS............................................................................. 54
27.0 SURVEY CONTROL POINTS AND LAYOUTS................................................. 54
28.0 SECURITY ......................................................................................................... 55
29.0 PROPERTY IN CONSTRUCTION TOOLS AND SPECIAL TOOLS.................. 56
30.0 COORDINATION AND COOPERATION AT THE SITE .................................... 56
30.1 Coordination and Cooperation with Others Performing Work................ 56
30.2 Coordination with the Operation of Existing Facilities............................ 57
31.0 UNFORESEEN SITE CONDITIONS .................................................................. 57
32.0 TITLE TO AND USE OF MATERIALS FOUND ................................................. 58
32.1 Title and Right To Use ................................................................................ 58
32.2 Archaeological and Historical Items ......................................................... 58
33.0 CONTRACTOR’S PERSONNEL ....................................................................... 59
33.1 Employment of Personnel .......................................................................... 59
33.2 Accommodation, Welfare Facilities and Transportation ......................... 59
33.3 Project Organisation - Project Office ........................................................ 59
33.4 Project Organisation - Site ......................................................................... 59
33.5 Changes of the Contractor’s Personnel/Organisation............................. 60
33.6 Contractor’s Project Manager’s Responsibility........................................ 60
33.7 Construction Manager’s Responsibility.................................................... 60
33.8 Removal of Employees............................................................................... 60
33.9 Labour Release Certificate......................................................................... 61
34.0 INSPECTION AND TESTING AT SITE.............................................................. 61
35.0 FINAL STAGES OF CONSTRUCTION, PRE-COMMISSIONING,
COMMISSIONING AND TURNOVER................................................................ 62
35.1 Pre-Commissioning .................................................................................... 62
35.2 Application for Construction Completion Certificate............................... 63
35.3 Process of Application for Construction Completion Certificate ........... 64
35.4 Effect of Construction Completion Certificate ......................................... 64
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TABLE OF CONTENTS
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Page
35.5 Commissioning ........................................................................................... 64
35.6 Application for Turnover Certificate.......................................................... 66
35.7 Process of Application for Turnover Certificate....................................... 66
35.8 Effect of Turnover ....................................................................................... 66
36.0 TRAINING OF COMPANY PERSONNEL.......................................................... 67
37.0 PERFORMANCE TESTS AND GUARANTEES ................................................ 67
37.1 General......................................................................................................... 67
37.2 Performance Test Procedures ................................................................... 68
37.3 Commencement of Performance Tests..................................................... 68
37.4 Evaluation of Performance Test Results................................................... 68
37.5 Failure of the Performance Tests .............................................................. 69
37.6 Variances in Feedstock .............................................................................. 70
37.7 Issue of Performance Acceptance Certificate .......................................... 71
38.0 DEFECTS LIABILITY......................................................................................... 71
38.1 Defects Liability Period............................................................................... 71
38.2 Vendor and Subcontractor Warranties...................................................... 72
38.3 Retests ......................................................................................................... 73
38.4 Failure by Contractor.................................................................................. 73
39.0 FINAL ACCEPTANCE ....................................................................................... 73
40.0 TAXES AND DUTIES......................................................................................... 73
41.0 TIME LIMITATION ON CLAIMS BY CONTRACTOR ........................................ 74
42.0 INDEMNITIES AND LIABILITIES ...................................................................... 76
42.1 Care of the Works ....................................................................................... 76
42.2 Indemnities .................................................................................................. 76
42.3 Excepted Risks............................................................................................ 77
42.4 Liens............................................................................................................. 78
42.5 Joint and Several Liability.......................................................................... 78
43.0 INSURANCE ...................................................................................................... 78
43.1 Insurance to be maintained by the Contractor ......................................... 78
43.2 Insurance to Be Maintained by the Company........................................... 80
43.3 Terms of Policies ........................................................................................ 81
43.4 Copies, Notification. ................................................................................... 81
43.5 Subcontractors............................................................................................ 82
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44.0 INTELLECTUAL PROPERTY RIGHTS ............................................................. 82
44.1 Fees, Royalties and Other Charges........................................................... 82
44.2 Intellectual Property Indemnity.................................................................. 82
44.3 Ownership of Intellectual Property Rights................................................ 83
45.0 FORCE MAJEURE ............................................................................................ 84
46.0 SUSPENSION .................................................................................................... 86
47.0 CONSEQUENTIAL DAMAGES ......................................................................... 87
48.0 LIMITATION OF LIABILITY............................................................................... 87
49.0 DECLARATION OF COMMISSIONS................................................................. 88
50.0 KUWAITI AGENT............................................................................................... 88
51.0 TERMINATION AND EVENTS OF DEFAULT................................................... 88
51.1 Termination for Company’s Convenience ................................................ 88
51.2 Events of Default by Contractor ................................................................ 90
51.3 Remedies for Contractor Default ............................................................... 91
52.0 CONTRACTOR’S OBLIGATIONS UPON TERMINATION................................ 92
53.0 NOTICES ........................................................................................................... 93
54.0 GOVERNING LAW ............................................................................................ 93
55.0 DISPUTE RESOLUTION ................................................................................... 93
55.1 Friendly Negotiations and Binding Arbitration......................................... 93
55.2 Continuation of Performance..................................................................... 95
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GENERAL CONDITIONS OF CONTRACT
FOR TURNKEY CONTRACTS
GENERAL CONDITIONS OF CONTRACT
FOR TURNKEY CONTRACTS
1.0 DEFINITIONS
Where used in the Contract the following expressions shall have the
meanings herein assigned to them unless the context otherwise requires:
“Adjustment Order” means an order issued by the Superintendent pursuant
to Clause 13.0 (Variations) adjusting the Contract Price and/or Scheduled
Turnover Date and/or amending any of the Contractor’s obligations under the
Contract.
“Advance Payment” means, where provided for in Appendix A (Contract
Price and Payment), an Advance Payment to be made to the Contractor,
subject to the provision of an advance payment bond in accordance with the
provisions of Clause 11.3.1 (Payment Terms).
“Advance Payment Bond” has the meaning specified in Clause 11.3.1
(Payment Terms).
“Company” means Kuwait Oil Company (K.S.C.), a Company registered in
the State of Kuwait under Register No. 21835, its legal successors and
assignees. Any powers or discretions exercisable under the Contract by the
Company shall, unless the context otherwise requires, be exercisable by the
Chairman and Managing Director of the Company or by his appointed
delegate.
“Construction Completion Certificate” means a certificate issued by the
Superintendent for a Portion or the whole of the Facilities issued in
accordance with the provisions of Clause 35.3 (Process of Application for
Construction Completion Certificate).
“Contract” has the meaning specified in the Contract Agreement.
“Contract Agreement” means the Contract Agreement between the
Company and the Contractor.
“Contract Price” means the price stated in the Contract Agreement, as such
sum may be adjusted from time to time pursuant to an Adjustment Order.
“Contractor” means the person, firm or Company identified as such in the
Contract Agreement and includes its successors and permitted assignees.
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“Contractor’s Existing Data” means any and all items, data, documents
and information of the Contractor in whatever form that were in existence
prior to the date of the Contract Agreement.
“Cost” means all costs reasonably incurred (or to be incurred) by the
Contractor, whether on or off the Site, including the Contractor’s overhead
and similar charges, but not including profit.
“Date for Commencement” means the date of the Contract Agreement.
“Date of Bid” means the date of submission of the Contractor’s bid for the
execution of the Works.
“day” means a calendar day.
“Defect” means any Defect, imperfection, other fault, deficiency or damage
to, in or affecting the Works or any part thereof, including any element of the
design, engineering, procurement, construction or installation of the Works or
any element of workmanship or any element of Materials, design documents,
Contractor’s equipment, tools, supplies or other things the Contractor is
required to provide under this Contract that does not comply in all respects
with the requirements of this Contract.
“Defects Liability Period” means the period stated in Clause 38.1.1
(Defects Liability Period).
“Delay Liquidated Damages” means the amounts for which the Contractor
may be liable to the Company pursuant to Clause 9.2.1 (Delay Liquidated
Damages).
“Excepted Risks” shall have the meaning ascribed to it in Clause 42.3
(Excepted Risks).
“Facilities” means the facilities which the Company desires to reinstate (or
modify), construct, operate, maintain, and/or install, to be achieved by the
execution and completion of the Works by the Contractor all as more
particularly described in the Contract.
“FEED” means the front end engineering design comprising of all technical
documentation and other information provided to the Contractor prior to the
Date of Bid for the purpose of executing the Works, other than information
and data on the Site provided by the Company pursuant to Clause 4.2
(Provision of Data).
“Feedstock” means the feedstock provided by the Company for the testing
and operation of the Facilities, the composition of which is defined in the
Contract and upon which the Performance Guarantees are based.
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“Final Acceptance Certificate” means the certificate issued pursuant to
Clause 39.0 (Final Acceptance).
“Force Majeure” has the meaning ascribed to it in Clause 45.1 (Force
Majeure).
“Good Industry Practice” means (i) internationally accepted professional
practices and standards observed by the construction industries for the
design, construction and operation of Facilities similar in type and scale to the
Facilities, as in effect from time to time, and (ii) practices consistent with the
accomplishment of the Works in a safe, reliable, expedient, economic and
environmentally sound manner.
“Governmental Authority” means any national, regional, or other
governmental entity with jurisdiction over a Party to the Contract.
“Governmental Requirements” means laws, statutes, codes, ordinances,
rules and regulations of any Governmental Authority, and any rulings,
interpretations, orders and standards issued thereunder applicable to any
aspect of the Works or the Facilities, as such laws, statutes, codes,
ordinances, rules and regulations may be amended, modified or
supplemented, as in effect from time to time.
“Intellectual Property Rights” means patents, designs, copyrights, rights in
databases, utility models, semi conductor topography rights, trade marks,
service marks, trade names and business names and including all goodwill
associated with or attached thereto, domain names and rights in information
(including confidential information, trade secrets and know-how) and
registrations of and applications to register any of the aforesaid items and all
rights or forms of protection having an equivalent or similar effect anywhere in
the world, whether enforceable, registered, unregistered or registrable
(including, where applicable, all applications for registration) and the right to
sue for damages for past and current infringement (including passing-off and
unfair competition) in respect of any of the same.
“KOC List of Approved Manufacturers” means the manufacturers listed in
Appendix G (KOC List of Approved Manufacturers).
“KOC List of Approved Contractors for Categories of Works” means the
Contractors listed in Appendix H (KOC List of Approved Contractors for
Categories of Work).
“Liquidated Damages” means Delay Liquidated Damages and Performance
Liquidated Damages.
“Materials” means all items and project materials, including, without
limitation, machinery, plant, materials, equipment their auxiliaries,
consumables, spares and the like for complete construction Works for
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GENERAL CONDITIONS OF CONTRACT
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incorporation into the Facilities, inclusive of commissioning spares, as
specified in the Contract Documents.
“Material Adverse Effect” means an event, circumstance, occurrence or
condition that materially and adversely affects the performance by either
Party of its obligations under the Contract.
“Mechanical Completion” means that in respect of a Portion or the whole of
the Works the conditions set out in Clause 34.6 (Inspection and Testing at
Site) have been achieved and that the Superintendent has issued a
Mechanical Completion Certificate in accordance with Clause 34.7
(Inspection and Testing at Site).
“Mechanical Completion Certificate” means a certificate issued by the
Superintendent for a Portion or the whole of the Facilities in accordance with
Clause 34.7 (Inspection and Testing at Site).
“Minimum Performance Guarantees” means the minimum performance
guarantees for the Facilities stated in Appendix B (Facilities Performance
Guarantees).
“month” means a Gregorian calendar month.
“Particular Conditions” means the Particular Conditions of Contract listed in
the Contract Agreement as a document forming part of the Contract.
“Parties” means the Company and the Contractor.
“Party” means the Company or the Contractor, as the context so requires.
“Performance Acceptance Certificate” means the certificate to be issued
by the Company pursuant to Clause 37.7 (Issue of Performance Acceptance
Certificate).
“Performance Bond” has the meaning specified in Clause 12.1
(Performance Bond).
“Performance Guarantees” means the performance guarantees for the
Facilities stated in Appendix B (Facilities Performance Guarantees).
“Performance Liquidated Damages” has the meaning specified in Clause
37.5.3 (Failure of the Performance Tests).
“Performance Tests” means the tests to be carried out in accordance with
Clause 37.0 (Performance Tests and Guarantees) to verify the achievement
of the Performance Guarantees.
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“Performance Test Procedures” means the test procedures to be submitted
by the Contractor and approved by the Company pursuant to Clause 37.2
(Performance Test Procedures).
“Performance Test Report” has the meaning specified in Clause 37.4.2
(Evaluation of Performance Test Results).
“Portion” means a part, or parts of, the Facilities defined in Appendix F
(Technical Specification) for which a Turnover Certificate is to be issued in
accordance with Clause 35.7 (Process of Application for Turnover Certificate).
“Programme of Works” means the engineering, design, procurement and
construction programme illustrating the major sequencing and requirements
for the Works, to be prepared by the Contractor and approved by the
Superintendent in accordance with Clause 10.1 (Programme of Works).
“Provisional Sum” means a sum (if any) which is specified in the Contract,
for the execution of any part of the Works or for the supply of any Materials or
services including any specified project contingency sum in accordance with
Clause 11.2 (Provisional Sums).
“Scheduled Turnover Date” means the date or dates specified in the
Particular Conditions for Turnover of a Portion or the whole of the Facilities as
may be extended from time to time pursuant to an Adjustment Order.
“Site” means the area where the Works are to be performed and as
described in Appendix F (Technical Specification).
“Stable and Satisfactory Operation” shall have the definition ascribed to it
in Appendix C (Facilities Completion and Acceptance), or if not so defined
therein, the agreed definition in the Contractor’s commissioning procedure
approved by the Company pursuant to Clause 35.2(d) (Application for
Construction Completion Certificate).
“Subcontractor” means any person, firm, partnership, corporation or
combination thereof to whom any part of the Works is subcontracted by the
Contractor in accordance with the terms of the Contract, and for the
avoidance of doubt excludes Vendors.
“Superintendent” means the person named as such in the Particular
Conditions, who may from time to time be replaced by the Company by giving
the Contractor notice in writing of such change.
“Superintendent’s Representative” means the person or persons
appointed from time to time by the Superintendent pursuant to Clause 5.2
(Superintendent’s Representative).
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“Tax Retention Bond” has the meaning ascribed to it in Clause 11.3.7
(Payment Terms).
“Technical Specifications” means the technical specifications referenced in
Appendix E (Scope of Work and Description of Services) and Appendix F
(Technical Specification).
“Temporary Works” means all temporary works of any kind required for the
execution, completion and testing of the Works, and shall include, without
limitation, all staging necessary for the performance of the Works, temporary
buildings, roads and services.
“Turnover” means that with respect to a Portion or the whole of the Facilities
the issuance by the Superintendent of a Turnover Certificate with respect to
such Portion or the whole or the Facilities in accordance with Clause 35.7
(Process of Application for Turnover Certificate).
“Turnover Certificate” means a certificate issued by the Superintendent for
the whole or a Portion of the Facilities in accordance with Clause 35.7
(Process of Application for Turnover Certificate).
“Unusually Inclement Weather” means weather that occurs during the
period in which the Contractor is on Site and performing the Works prior to
Turnover, of a level and severity that occurs on average less frequently than
once in ten years and which has a Material Adverse Effect.
“Variation” means any increase, decrease or changes to the Works pursuant
to the provisions of Clause 13.0 (Variations).
“Vendor” means any manufacturer or supplier approved by the Company for
the supply of materials in accordance with the Contract.
“Works” means all those things to be done or provided by the Contractor in
connection with the design, engineering, procurement, reinstatement,
construction, installation, testing, pre-commissioning, commissioning and
assistance with Performance Testing of the Facilities together with Temporary
Works and all other obligations and responsibilities of the Contractor under
and pursuant to the Contract.
“Work Permit” means any permits required by the Contractor, issued or to
be issued by the Company, to perform the Works or any part of the Works.
2.0 INTERPRETATION OF THE CONTRACT
2.1 Interpretation
2.1.1 All parts of the Contract are intended to be correlative and complementary,
and any Works required by one part and not mentioned in another, shall be
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performed to the same extent and purpose as though required by all. The
misplacement, addition or omission of a word or character shall not change
the intent of any part of the Contract from that set forth by the Contract as a
whole.
2.1.2 Words imparting the singular also include the plural and vice-versa where the
context requires.
2.1.3 Words imparting one gender shall also include the other gender.
2.1.4 Words imparting persons or Parties shall include firms, corporations or
government entities where the context so requires.
2.1.5 The headings and titles to clause references in the Contract are included for
ease of reference only, and shall not form part of the Contract nor affect its
interpretation.
2.1.6 Unless otherwise specified, all references to Clause numbers are restricted to
these General Conditions of Contract.
2.2 Errors, Omissions or Discrepancies and Conflicts
2.2.1 If the Contractor discovers any errors, omissions, or discrepancies in the
Contract, it shall immediately notify in writing the Superintendent, who will
promptly clarify such matters as necessary. Any work affected by such
discoveries which is performed by the Contractor without such notification or
subsequent to discovery and notification but prior to clarification by the
Company, shall be at the Contractor's risk and the Company shall not
entertain any claim arising from such matter.
2.2.2 Where different standards relative to the same matter appear or are referred
to in the Technical Specifications, the most stringent of such standards shall
apply.
2.2.3 Should any Works or Materials be required which are not denoted in the
Contractor’s design, specifications and drawings but which are necessary for
the proper carrying out of the Works in accordance with the Contract, the
Contractor shall nevertheless perform the Works or furnish such Materials as
if so denoted.
2.3 Entire Contract
The Contract is an entire agreement and constitutes a full statement of the
contractual rights and liabilities of the Company and the Contractor and
supersedes any statement, representation, promise, inducement or
understanding of any nature made prior to the Date for Commencement and
not set forth in the Contract. No statements or agreements, oral or written,
made prior to or at the signing hereof shall vary or modify the written terms
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hereof (provided that this Clause 2.3.1 (Entire Contract) shall not have effect
to limit or excuse liability for any fraudulent act).
2.4 Precedence
2.5 Waiver
In the event of ambiguity or conflict between the constituent parts of the
Contract, the order of precedence shall be as stated in Clause 1.0 (The
Contract) of the Contract Agreement.
Except as specifically provided in the Contract, the failure, delay or
forbearance of either Party to insist upon, exercise or enforce any right or
remedy conferred by this Contract shall not be or be deemed to be or be
construed as a waiver of the right or remedy or of any other rights or
remedies nor shall such failure, delay or forbearance operate as a bar to the
exercise or enforcement of the right or remedy at any time or times thereafter.
All waivers of rights or remedies under the Contract shall be in writing and
expressly identified as a waiver.
2.6 Extent of the Contractor’s Obligations
The Contractor’s obligations under the Contract comprise the execution and
completion of the Works and the provision of all Materials, plant, labour,
transport and everything whether of a temporary or permanent nature,
required for its successful execution and completion insofar as the necessity
of providing same is specified in, or is reasonable to be inferred from the
Contract, or is otherwise required for the completion or safe operation of the
Facilities.
2.7 Inspection, Witnessing and Approval
Inspection or non-inspection, witnessing or non-witnessing, approval or nonapproval
by the Company or its representatives, of any matter required to be
done by the Contractor, shall not be construed as acceptance by the
Company nor act as a waiver of the Contractor’s obligation to comply with the
requirements of the Contract nor imply that it is free from Defects.
2.8 Changes and/or Amendments
No changes, amendments or modifications to any of the provisions of the
Contract shall be valid unless stated in writing and signed by an authorised
representative of each Party.
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2.9 Severability
If any provision or condition of the Contract is rendered illegal, invalid or
unenforceable, such illegality, invalidity or unenforceability shall not affect the
legality, validity or enforceability of any other provision or condition of the
Contract.
2.10 Independent Contractor
2.10.1 The Contractor shall be an independent Contractor performing the Contract.
The Contract does not create any agency, partnership, joint venture or other
joint relationship between the Parties hereto.
2.10.2 Subject to the provisions of the Contract, the Contractor shall be solely
responsible for the manner in which the Contract is performed. All
employees, representatives or Subcontractors (of any tier) engaged by the
Contractor in connection with the performance of the Contract shall be under
the complete control of the Contractor and shall not be deemed to be
employees of the Company, and nothing contained in the Contract or in any
Contract placed by the Contractor shall be construed to create any
contractual relationship between any such employees, representatives or
Subcontractors and the Company.
2.11 Survival
To give effect to the Parties’ ongoing obligations under the Contract, any
provisions of the Contract that are required to ensure that the Parties may
fully exercise their rights and perform their obligations under the Contract,
shall survive the termination or expiration of the Contract.
3.0 CONTRACTOR’S GENERAL RESPONSIBILITIES
3.1 The Contractor shall commence the Works on the Date for Commencement,
and perform the Works and all other things to be done by the Contractor in
accordance with the Contract in a diligent and timely manner, having regard
to the Scheduled Turnover Date and in accordance with the Contract such
that the Facilities and each Portion thereof achieve the levels of performance
required by the Contract. The Contractor, except for those obligations that
the Company expressly agrees to perform under the Contract, shall provide
and be responsible for doing everything necessary for the complete execution
of the Works, all as more specifically described in the Contract.
3.2 The Contractor confirms that it has entered into the Contract on the basis of a
proper examination and interpretation of the information and data relating to
the Works (including information and data relating to the Site and any
physical, geological, surface and sub-surface conditions and Feedstock)
provided by the Company prior to the Date of Bid, information and data that
the Contractor could have obtained from a visual inspection of the accessible
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areas of Site and all other information and data readily available to it relating
to the Works. The Contractor acknowledges that any failure to acquaint itself
with all such information and data shall not relieve it of its obligations or
responsibilities under the Contract and neither the Contract Price nor Date for
Completion shall be adjusted in respect of any such failure.
3.3 Verification of Site Information by Contractor
3.3.1 The Contractor shall within one hundred twenty (120) days of the Date for
Commencement or within one hundred twenty (120) days after receipt of
further data pursuant to Clause 4.2.2 (Provision of Information and Data), or
within such other period(s) as the Company and the Contractor may from time
to time agree, use its best endeavours to verify and satisfy itself to the extent
reasonably possible the accuracy and sufficiency of all information and data
relating to the Site furnished to the Contractor by the Company pursuant to
Clause 4.2 (Provision of Information and Data).
3.3.2 If within the periods stated in Clause 3.3.1 (Verification of Site Information by
Contractor) and pursuant to its obligations therein, the Contractor identifies
any clarification, material discrepancy, deficiency, error or conflict in any
information and data furnished to the Contractor by the Company pursuant to
Clause 4.2 (Provision of Information and Data), then it shall immediately notify
the Company in accordance with Clause 41.1 (Time Limitation on Claims by
Contractor), giving the following details in support of such notification:
(a)
(b)
(c)
a detailed technical explanation of the notified clarification, discrepancy,
deficiency, error or conflict;
full technical details of the Contractor’s proposals to overcome such
discrepancy, deficiency, error or conflict; and
its proposal for any adjustment to the Contract Price and/or effect on the
Scheduled Turnover Date resulting from the Contractor’s alternative
proposals.
3.3.3 The Company, on receipt of such notification and supporting details thereof,
shall review the information provided by the Contractor, and, if required, may
request further documents and information from the Contractor and enter into
discussions with the Contractor regarding any notified clarification,
discrepancy, deficiency, error or conflict together with the Contractor’s
alternative proposals. If the Company is satisfied that such a discrepancy,
deficiency, error, or conflict exists and is also satisfied with the Contractor’s
alternative proposals, any resultant changes to the Facilities or the Works, as
applicable, shall be treated as a Variation for which an Adjustment Order shall
be issued in accordance with Clause 13.3 (Variation or Adjustment Order
Required by Terms of Contract).
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3.3.4 Without prejudice to Clause 31.0 (Unforeseen Site Conditions) or to any
submissions made by the Contractor pursuant to Clause 3.3.2 (Verification of
Site Information by Contractor), the Contractor shall be deemed, upon the
expiry of the periods stated in Clause 3.3.1 (Verification of Site Information by
Contractor) to have verified pursuant to its obligations therein, the accuracy of
all information provided by the Company relating to the Site pursuant to
Clause 4.2 (Provision of Information and Data), and shall not be entitled
thereafter to a Variation pursuant to Clause 3.3.3 (Verification of Site
Information by Contractor) or to any Adjustment Order pursuant to Clause
13.3 (Variation or Adjustment Order Required by Terms of Contract) or any
adjustment to the Scheduled Turnover Date or to the Contract Price or any
additional Cost in respect of any discrepancy, deficiency, error or conflict in
such information.
3.4 Verification of FEED and Other Information
3.4.1 The Contractor shall be deemed to have verified, accepted and to have
assumed sole and absolute responsibility for the technical accuracy of the
FEED and the Contractor shall not be entitled to any adjustment to the
Scheduled Turnover Date or any adjustment to the Contract Price or any
additional payment whatsoever for any Defect therein, based upon a claim
that the FEED contains technical inaccuracies.
4.0 COMPANY’S GENERAL RESPONSIBILITIES
4.1 General
The Company shall perform all of its obligations under the terms of the
Contract in such time and manner as to facilitate the orderly and timely
execution of the Works by the Contractor.
4.2 Provision of Information and Data
4.2.1 The Company has made available to the Contractor prior to the Date of Bid
certain relevant information and data relating to the Site which the Contractor
is required to verify pursuant to Clause 3.3.1 (Verification of Site Information
by Contractor), including any information and data relating to the physical,
geological, surface and sub-surface conditions together with any Feedstock
data to the extent such data is applicable to the Facilities or the Works.
4.2.2 If the Contractor requires any further information and data relating to the Site
to enable the design execution and completion of the Works it shall within
thirty (30) days of the Date for Commencement make a written request to the
Company to provide such information and data. If such information and data
is available and in the Company’s possession, the Company shall promptly
provide such information and data and the Contractor shall likewise verify any
further information and data so provided in accordance with its obligations
under Clause 3.3.1 (Verification of Site Information by Contractor), however if
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such information and data is not available, the Company shall advise the
Contractor, who shall then make its own arrangements to carry out such
investigations as are reasonably necessary or to otherwise obtain such
information and data.
4.3 Possession of and Access to the Site
The Company shall provide the Contractor reasonable access to and
possession of the Site or such parts of the Site as may be specifically
provided for in the Contract. It is acknowledged that such access and
possession may not be exclusive to the Contractor.
4.4 Assistance to the Contractor
Without limiting the Contractor’s responsibilities under Appendix D (Project
Administration and Coordination Procedure), if requested by the Contractor,
the Company shall reasonably assist the Contractor in obtaining all permits
and/or approvals reasonably necessary for the Contractor’s performance of
its obligations under the Contract.
5.0 SUPERINTENDENT’S DUTIES AND RESPONSIBILITIES
5.1 Superintendent
5.1.1 The Superintendent shall be the Company’s representative with respect to the
performance of the Works and the administration of the Contract.
5.1.2 The Superintendent may at any time review and inspect the Works or any
part thereof. The Superintendent shall have access at all reasonable times to
the premises where any part of the Works are being carried out (including the
premises of Subcontractors) and may review and inspect the Contractor’s and
the Subcontractor’s engineering and design calculations and other data
(including computer and scheduling programmes) and Materials. The
Superintendent may reject any drawings, specifications, Materials or
workmanship that do not comply with the requirements of the Contract.
5.1.3 The Superintendent is authorised to make decisions on behalf of the
Company on all interpretations of the specifications and any drawings and
documents furnished by the Company to the Contractor.
5.1.4 All approvals by the Superintendent shall be in writing, by letter or by
facsimile and wherever the words “approved”, “authorised”, “approval”, or
“authorisations” are used it shall mean in writing, by letter or facsimile issued
by the Superintendent.
5.1.5 Any review, comments, agreement or approval by the Superintendent related
to the Works shall not relieve the Contractor from its obligation to fulfil all the
requirements of the Contract.
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5.2 Superintendent’s Representative
The Superintendent may from time to time delegate to any person or persons
the powers and authorities vested in the Superintendent and shall notify the
Contractor of any such appointment. The Superintendent’s Representative
shall be such person, or persons, as notified in writing to the Contractor by
the Superintendent from time to time. Any instructions by the
Superintendent’s Representative shall bind the Contractor, provided:
(a)
(b)
the decision of Superintendent’s Representative to approve any part of the
Works shall not constitute confirmation that such Works comply with the
Contract;
the Contractor, if it is dissatisfied with any decision of the Superintendent’s
Representative, may refer the matter in writing to the Superintendent, who
shall confirm, vary or reverse such decision, within fourteen (14) days of
receipt of such written referral; and
(c) in no event shall the Superintendent’s authority and powers under Clause 6.0
(Assignment), Clause 7.0 (Subcontracting), Clause 13.0 (Variations), Clause
41.0 (Time Limitations and Claims by Contractor), Clause 46.0 (Suspension),
Clause 51.0 (Termination and Events of Default) or Clause 55.0 (Dispute
Resolution) be delegated to the Superintendent’s Representative.
6.0 ASSIGNMENT
6.1 Neither Party hereto shall assign the Contract or any part thereof without the
other Party’s prior approval in writing, except that Company may assign the
Contract at any time without agreement of the Contractor to any entity wholly
or substantially owned or controlled by the State of Kuwait, provided that the
Company shall remain jointly and severally liable to the Contractor pursuant
to the terms of the Contract, as in effect, on the date of such assignment.
6.2 A permitted assignee of the Contract shall not be entitled to any rights or
benefits of the Contract until such assignee has undertaken in writing to each
Party to be bound by the terms and conditions of the Contract.
7.0 SUBCONTRACTING
7.1 Without prejudice to Clause 16.1.3 (Engineering and Design - General
Provisions), the Contractor shall not subcontract the whole of the Works nor
the engineering, design or the procurement services thereof. The Contractor
shall not subcontract any other part of the Works without the prior written
approval of the Superintendent, whose approval shall not be unreasonably
withheld or delayed.
7.2 The Contractor shall be responsible for the acts and omissions of its
Subcontractors of any tier,Vendors, consultants, and of any persons either
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directly or indirectly employed by them as if those acts and omissions were its
own or those of persons directly employed by the Contractor.
7.3 The Contractor shall ensure that all subcontracts shall incorporate all
applicable engineering, technical data and requirements together with the
relevant terms and conditions provided for in the Contract insofar as they
apply to such subcontract, in order that, insofar as possible, all
Subcontractors are bound by such terms and conditions. Notwithstanding the
provisions hereof, it is expressly agreed and understood that such
subcontracting shall not create any contractual relationship between any
Subcontractor and the Company or create any obligation on the part of the
Company to any Subcontractor of any tier.
7.4 The Contractor shall further ensure that all subcontracts shall contain
assignment rights in favour of the Company, as necessary to make the
assignments required by Clause 52.1.3 (Contactor’s Obligations Upon
Termination), immediately exercisable by the Company upon a default by the
Contractor or in the event of termination of the Contract, in whole or in part,
hereof by the Company.
7.5 The Contractor, without prejudice to the generality of Clause 23.0
(Compliance with Law - Licenses), shall comply with Ministerial Order No.
44/1985 issued by the Ministry of Finance and Economy concerning
notification by Contractors about their Subcontractors.
7.6 The Contractor shall select all Subcontractors from the KOC List of Approved
Contractors/Vendors for Categories of Works, unless the Superintendent
otherwise authorises in writing.
8.0 CONTRACTOR’S REPRESENTATIONS AND WARRANTIES
8.1 The Contractor represents, warrants and covenants to the Company that:
8.1.1 the Contractor possesses the specialised requisite knowledge, expertise,
skills and experience necessary to enable it to fulfil the requirements of the
Contract in all respects and to perform the Works efficiently and effectively in
a timely and professional manner, utilising sound project management
procedures in accordance with Good Industry Practice;
8.1.2 the Contractor is not aware of any facts, conditions or events which could
reasonably be expected to have a Material Adverse Effect on the ability of
Contractor to perform and complete the Works in accordance with the
Technical Specifications, the Scheduled Turnover Date and all the other
requirements of the Contract;
8.1.3 each member of the Contractor’s personnel is and shall be sufficiently
qualified, skilled, experienced and competent to perform the Works safely,
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reliably and to the high standards reasonably to be expected from personnel
of an experienced Contractor;
8.1.4 the Contractor shall exercise the degree of professional skill, care and
judgment in the performance of the Works as would be reasonable to expect
from a contracting organisation possessing the specialised knowledge and
expertise of an experienced Contractor carrying out a project of a similar size,
scope, nature and complexity as the Works and the Facilities;
8.1.5 the Contractor shall perform the Works in accordance with Good Industry
Practices and shall comply with all Governmental Requirements applicable to
the same and in accordance with the requirements of the Contract;
8.1.6 the Contractor shall apply itself with due diligence to the provision of the
Works promptly and expeditiously in accordance with the Contract, and shall
furnish all resources and personnel required for the purpose;
8.1.7 all items of construction plant, equipment and tools utilised by Contractor for
the provision of the Works shall be maintained at all times in a safe and good
working condition and fit for their respective intended purposes;
8.1.8 all Materials and products furnished by the Contractor and its Vendors and
Subcontractors and/or utilised for the Works shall be free from all Defects,
comply with Good Industry Practice as well as with all applicable
Governmental Requirements and meet the specifications relating to them and
all quality standards and other requirements of the Contract;
8.1.9 the Contractor shall perform its design, engineering and construction
obligations in accordance with sound engineering, design, procurement and
construction principles and Good Industry Practice and in accordance with all
applicable Governmental Requirements, so that its design, engineering and
construction will be such as to permit the Works and all components thereof
to meet the requirements of the Contract;
8.1.10 the Contractor is familiar with (a) the nature of the Works; (b) the location of
the Site and the requirements for access thereto; (c) the type and magnitude
of engineering, procurement and construction services and labour required;
(d) the availability of skilled and unskilled labour; (e) the general character of
construction tools, Facilities and Materials required preliminary to and during
the execution of the Works; (f) the requirements for bringing personnel,
Materials, supplies and construction tools into and out of the Site; (g) the
availability of Materials, utilities and other required Facilities at the Site; and
(h) the general and local conditions at the Site (save to the extent expressly
provided otherwise in the Contract), the risks, contingencies and other
circumstances that may affect the Works and all other matters relating to the
Works which an experienced Contractor carrying out a project of a similar
size, scope, nature and complexity to the Works should know;
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8.1.11 the Contractor is duly organised, validly existing, in good standing under the
laws of the state of its organisation, has all necessary power and authority to
conduct its business as presently conducted, to perform its obligations under
the Contract. It shall be duly qualified or licensed to do business in each
jurisdiction where such qualification or licence is required;
8.1.12 each of the execution, delivery and performance by the Contractor of the
Contract has been duly authorised by all necessary Company action on the
part of the Contractor;
8.1.13 the Contractor has duly executed and delivered the Contract and the Contract
constitutes a valid and binding obligation of the Contractor enforceable
against it in accordance with its terms, except as such enforceability is limited
by applicable bankruptcy, insolvency, reorganisation, moratorium or other
laws affecting creditors’ rights generally and as its enforceability is subject to
general principles of equity, regardless of whether considered in a proceeding
in equity or at law;
8.1.14 neither the execution, delivery nor performance by the Contractor of the
Contract, nor the consummation by the Contractor of any of the transactions
contemplated thereby, requires the consent or approval of, the giving of
notice to, the registration with, the recording or filing of any document with, or
the taking of any other action in respect of, any Governmental Authority,
except (a) such as have been duly obtained, given, registered, recorded, filed
or taken and are in full force and effect or are not yet required and (b) filings,
permits and recordings expressly required pursuant to the Contract.
Contractor has no reason to believe that any such consents or approvals shall
not be readily obtainable or issued in the ordinary course of business upon
due application therefore;
8.1.15 there are no pending or, to the knowledge of the Contractor, threatened
actions, investigations or proceedings affecting the Contractor or any affiliate
or subsidiary of the Contractor before any Governmental Authority, other than
those that in the aggregate, if adversely determined, would have no Material
Adverse Effect on the ability of the Contractor to perform its obligations under
the Contract;
8.1.16 the Contractor is financially solvent, able to pay its debts as they mature, and
possessed of sufficient working capital to complete its obligations under the
Contract;
8.1.17 the Contractor is able to furnish or cause to be furnished the Materials, labour
and design services required to perform its obligations under the Contract;
8.1.18 no information, report or notice provided by (or statement made by) the
Contractor in connection with the preparation and submission of its bid for the
Works or in the negotiation and finalization of the Contract contains any
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untrue statement, or omits to state any material fact or is otherwise
misleading; and
8.1.19 the Contractor shall at all times maintain its existence and its good standing
under the laws of its state of formation and shall have all necessary power
and authority to carry on its business as presently conducted and to perform
its obligations under the Contract.
9.0 TIME FOR COMPLETION AND DELAY LIQUIDATED DAMAGES
9.1 Commencement and Completion of the Works
9.1.1 The Contractor shall commence the Works upon the Date for
Commencement and shall thereafter proceed with the Works with due
diligence and dispatch to achieve the Turnover of each Portion or the whole
of the Facilities by each Scheduled Turnover Date.
9.1.2 The Contractor shall be entitled, subject to Clause 41.0 (Time Limitation on
Claims by Contractor), to an adjustment to the Scheduled Turnover Date if
and to the extent that it is delayed (i) by any event or circumstance expressly
giving an entitlement to such an adjustment by virtue of any provision of this
Contract; or (ii) any delay, impediment or prevention caused by or attributable
to the Company, its employees, hired personnel or the Company’s other
Contractors on the Site. If the Contractor considers himself to be entitled to
any extension of time he shall give notice in accordance with Clause 41.0
(Time Limitation on Claims by Contractor).
9.2 Delay Liquidated Damages
9.2.1 If the Facilities or any Portion are not completed by the Scheduled Turnover
Date in respect thereof, the Contractor shall pay to the Company as
Liquidated Damages for each day Turnover is delayed beyond the relevant
Scheduled Turnover Date the amount of the Delay Liquidated Damages
specified in the Particular Conditions. Subject to the provisions of Clauses
9.2.3 (Delay Liquidated Damages) and 51.0 (Termination and Events of
Default), the payment of Delay Liquidated Damages for such failure shall be
in full satisfaction of the Contractor’s liability for damages for failure to achieve
Turnover of the Facilities or relevant Portion by the relevant Scheduled
Turnover Date.
9.2.2 The Parties hereby acknowledge and agree that it is critical to the economic
success of the Facilities that Turnover of each Portion or the Facilities as a
whole, occur by no later than the relevant Scheduled Turnover Date. The
actual damages and losses that may result if Turnover of the Facilities and
each Portion does not occur by such date are difficult or impossible to
determine with certainty. For this reason, the Parties agree that the Delay
Liquidated Damages are a reasonable and fair estimate of the damages and
losses that the Company would suffer and are not a penalty. It is understood
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and agreed that such Delay Liquidated Damages are limited and restricted to
failure of the Facilities or relevant Portion (as the case may be) to achieve
Turnover by the Scheduled Turnover Date and do not apply to any other
failure or breach by the Contractor in complying with any of its obligations
hereunder.
9.2.3 The maximum amount of Delay Liquidated Damages payable by the
Contractor shall not exceed the percentage of the Contract Price specified as
the maximum amount of Delay Liquidated Damages in the Particular
Conditions. In the event that the Contractor’s liability for Delay Liquidated
Damages exceeds such maximum amount stated in the Particular Conditions,
then the Company may terminate the Contract or part thereof pursuant to
Clause 51.2 (Events of Default by Contractor) hereof.
9.2.4 The Company may, without prejudice to any other method of recovery and
without the need for judicial proceedings, deduct the amount of Delay
Liquidated Damages payable hereunder from any moneys due or which may
become due to the Contractor and may call on the Advance Payment Bond
and/or Performance Bond for the purpose of discharging the Contractor’s
liability for Delay Liquidated Damages (subject to Clause 11.3.9 (Payment
Term)). No prior notice shall be required for the application of Delay
Liquidated Damages, and they shall become due and payable immediately
and on a daily basis by the mere event of delay in achieving Turnover of the
Facilities or relevant Portion by the Scheduled Turnover Date. The payment
or deduction of such damages shall not relieve the Contractor from its
obligation to complete the Works or from any other of its obligations and
liabilities under the Contract.
9.2.5 Nothing in this Clause 9.0 (Time for Completion and Delay Liquidated
Damages) shall operate to limit or restrict any other rights or remedies
available to the Company under the Contract, except as specifically provided
in Clauses 9.2.1 and 9.2.3 (Delay Liquidated Damages).
10.0 PROGRAMME, PROGRESS AND SEQUENCE OF WORKS
10.1 Programme of Works
10.1.1 In accordance with Appendix D (Project Administration and Coordination
Procedure), the Contractor shall prepare and submit within the periods stated
therein, the programmes and schedules described under “Programme
Descriptions.” Such programmes and schedules, which shall comprise the
Programme of Works, shall include the 90-Day Look Ahead Programme, the
Critical Documents Schedule, the Detailed Critical Path Method (CPM)
Programme for Engineering, Procurement and Subcontracts, the Detailed
CPM Programme for Construction/Installation and the Overall Detailed
Contract CPM Programme.
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10.1.2 The Contractor shall ensure that the Programme of Works provides for the
following constraints:
(a)
(b)
(c)
to carry out pre-commissioning in the presence of the Company’s
representatives;
that tie-ins to the existing Facilities, and pre-commissioning of the Facilities
are performed in a sequential manner in accordance with the sequence and
procedures referred to in Appendix D (Project Administration and
Coordination Procedure) and the period of shutdowns are kept to a minimum;
the actual programme for any tie-ins that require shutdowns shall be agreed
with the Superintendent and shall be reconfirmed by the Contractor in writing
a minimum of thirty (30) days before the commencement date of any tie-in. In
the event of consecutive shutdowns, a minimum interval of fourteen (14) days
is to be maintained between the completion of one shutdown and the start of
another shutdown, subject always to the Company’s operational
requirements;
(d) that except to the extent otherwise required by Ministerial Order 157/2005
(Working Hours During June, July and August) and provided that all
construction activities shall be performed during the hours permitted by such
Order, all construction activities shall be performed during a six day working
week and a ten hour working day commencing at 0700 hours, Friday being a
non-working day and with no Works to be performed on public holidays in
Kuwait, all in accordance with Kuwait Labour Law.
(e)
(f)
that the Contractor and its Subcontractors shall not work outside normal
working hours as described in sub-clause (d), or at night, without prior written
approval of the Superintendent, except in the case of work which cannot be
stopped and must be completed such as finishing a pour of concrete or tie-in
work. Work outside normal working hours or days shall be at no additional
Cost to the Company. The working hours during total Facilities, equipment
and/or line shutdowns shall be twenty-four (24) hours per day. All Costs for
such additional working hours shall be deemed included in the Contract Price;
and
that no Works are carried out at the Site without having obtained the
necessary permits from the Superintendent in accordance with the
requirements of the Contract.
10.1.3 The Superintendent, within twenty-one (21) days of receipt of any of the work
programmes prepared in accordance with Clause 10.1.1 (Programme of
Works), shall notify the Contractor in writing of his comments together with
any modifications considered necessary and the Contractor shall amend the
programmes and promptly submit the amended work programmes to the
Superintendent.
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10.1.4 If the Contractor does not agree with the Superintendent’s comments, it shall
modify the programmes to conform with the Superintendent’s comments and
forward to the Superintendent copies of the modified programmes together
with a reasonably detailed justification for its disagreement with the
Superintendent’s comments and proceed with the Works.
10.1.5 The modified programmes approved by the Superintendent, as a result of
changes made under the provisions of Clause 10.1.3 or 10.1.4 (Programme
of Works), shall constitute the Programme of Works which shall form the
basis for the performance of the Works. All progress reporting, programme
forecasting and scheduling in accordance with the requirements stated in
Appendix D (Project Administration and Coordination Procedure) shall be
carried out by reference to the Programme of Works.
10.1.6 The Contractor shall ensure that all major activity dates and constraints
imposed by the Programme of Works shall be incorporated into any
subcontracts which may be entered into for the execution of any parts of the
Works.
10.1.7 The Company may at any time require the Contractor to alter any agreed
sequence for the construction, tie-in Works and/or pre-commissioning,
commissioning or testing of the Works or any part thereof as the
Superintendent may consider to be desirable for the proper and timely
execution of the Works. In such an event, the Contractor shall, on receipt of
the Superintendent’s written directive, implement such changes and proceed
diligently to mitigate their effect on the overall progress of the Works. Within
the periods stated in Clause 41.1 (Time Limitation on Claims by Contractor),
the Contractor shall notify the Company in writing of the measures taken and
to be taken by the Contractor as a consequence thereof and the overall effect
on its performance of the Works. If the Contractor suffers (or will suffer)
delay and/or incurs (or will incur) additional Cost as a result of complying with
the Company’s requirements under this Clause 10.1.7 (Programme of
Works), it shall be entitled to an adjustment to the Scheduled Turnover Dates
and/or an adjustment to the Contract Price pursuant to an Adjustment Order
under Clause 13.3 (Variation or Adjustment Order Required by Terms of
Contract).
10.2 Reporting
10.2.1 In accordance with and at the intervals specified in Appendix D (Project
Administration and Coordination Procedure), the Contractor shall submit to
the Company the monthly programme updates and each of the Progress
Reports specified in Appendix D (Project Administration and Coordination
Procedure).
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10.3 Rate of Progress
If at any time the Contractor’s actual progress falls behind the Programme of
Works or it becomes apparent that it will so fall behind, the Contractor shall
prepare and submit to the Superintendent a revised programme, taking into
account the prevailing circumstances, and shall notify the Superintendent of
the steps being taken by it to expedite progress so as to attain completion of
the Facilities or each Portion on or before the relevant Scheduled Turnover
Date.
11.0 CONTRACT PRICE AND PAYMENT
11.1 Contract Price
11.1.1 The Contractor shall be deemed to have made proper allowance in the
Contract Price for all of its obligations under the Contract and all matters for
which the Contractor is responsible and which are necessary for the proper
execution of the Works. The Contract Price is also deemed to include all
risks and Costs arising out of the Contractor’s obligations under the Contract,
and the Contractor is deemed to have satisfied itself as to the correctness
and sufficiency of the Contract Price.
11.1.2 The Contract Price shall be the total amount payable by the Company to the
Contractor for the execution of the Works. For the avoidance of doubt, it is
agreed and understood that any payments made for operational spare parts
provided in accordance with Clause 18.0 (Spare Part Procurement - General
Provisions) do not form part of the Contract Price.
11.1.3 The Contract Price shall not be increased or decreased except pursuant to an
Adjustment Order issued in accordance with Clause 13.0 (Variations).
11.2 Provisional Sums
11.2.1 Each Provisional Sum shall only be expended, in whole or in part, or not at
all, in accordance with the Company’s instructions, and the Contract Price
shall be adjusted accordingly by way of Adjustment Order under Clause 13.1
(Company Variations), Clause 13.2 (Contractor Variations) or Clause 13.3
(Variation or Adjustment Order Required by Terms of Contract). The total sum
paid to the Contractor in respect of any Provisional Sum shall include only
such amounts for the work, supplies or services to which the Provisional Sum
relates as the Company shall have instructed.
11.2.2 Any adjustment to the Contract Price resulting from the Company’s instruction
pursuant to Clause 11.2.1 (Provisional Sums) shall be calculated in
accordance with the provisions of Clause 13.4 (Valuation of Variations). The
Contractor shall as necessary in support of the expenditure of any Provisional
Sum so instructed, provide such breakdown of prices, quantities, invoices,
vouchers, accounts or receipts reasonably required by the Company.
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11.3 Payment Terms
11.3.1 Where Appendix A (Contract Price and Payment) so provides, an Advance
Payment equal to the amount stated in Appendix A (Contract Price and
Payment) shall be paid within thirty (30) days after delivery to the Company of
an unconditional and irrevocable bank guarantee in favour of the Company,
issued by a bank licensed to operate in Kuwait and approved by the
Company, for the full amount of the Advance Payment (the “Advance
Payment Bond”). The Advance Payment Bond shall be valid until the date of
issue of the last Performance Acceptance Certificate and shall guarantee all
obligations of the Contractor under the Contract. The Advance Payment
Bond shall be in substantially the form of the specimen Advance Payment
Bond attached to Appendix A (Contract Price and Payment) and shall provide
for proportional reductions every three months by the amount deducted by the
Company from the Contractor’s three prior monthly invoices in respect of
such Advance Payment. Promptly upon Contractor’s written request therefor,
the Company shall deliver to such bank that issued the Advance Payment
Bond, a certification of the amount deducted from the Contractor’s monthly
invoice in respect of an Advance Payment and authorise such the bank to
reduce the face amount of such Advance Payment Bond.
11.3.2 The Advance Payment shall be repaid by deducting from sums payable under
each monthly invoice a proportion of the relevant payment equivalent to the
Advance Payment expressed as a proportion of the original Contract Price
(excluding Provisional Sums), until the amount of the Advance Payment has
been fully repaid. Thirty (30) days after the issuance of the last Performance
Acceptance Certificate, the remaining Portion of the Advance Payment not
yet repaid (if any) shall immediately become due and payable by the
Contractor to the Company.
11.3.3 Invoices shall be submitted by the Contractor in accordance with the
procedures described in Appendix A (Contract Price and Payment). The
Contractor shall not submit an invoice that is materially nonconforming,
incomplete, inaccurate or lacks the detail, specificity or supporting
documentation required by Appendix A (Contract Price and Payment). It is
understood and agreed by the Contractor that any invoice which is not in
compliance with this Clause 11.3.3 (Payment Terms) and Appendix A
(Contract Price and Payment) shall not constitute a valid and proper invoice
and the Contractor shall be required to resubmit said invoice in valid and
proper form before the Company incurs any obligation to make payment on
account thereof.
11.3.4 The Company, subject to the provisions of Clauses 33.9 (Labour Release
Certificate) and 40.3 (Taxes and Duties) and Appendix A (Contract Price and
Payment), shall make payments in Kuwaiti Dinars against valid and proper
invoices submitted by the Contractor at the end of each month to the
Company’s Accounts Payable Team. Following registration by the Company,
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valid and proper invoices will be forwarded to the Superintendent for approval
and certification.
11.3.5 The Company will make payment of the certified undisputed amount of such
invoice to the Contractor’s bank account with a bank licensed to operate in
Kuwait designated in writing by the Contractor within thirty (30) days of receipt
of such valid and proper invoices by the Company.
11.3.6 A tax retention of five percent (5%) shall be withheld from all payments (other
than the final payment) made to the Contractor and such retention shall be
released to the Contractor in part or whole (as the case may be) following
submission by the Contractor of a valid certificate from the Income Tax
Control Office of Kuwait to the effect that the Contractor has discharged its
tax liability in relation to the Works or part thereof.
11.3.7 The Contractor may elect at its option to effect the release of the balance of
the total retention held under Clause 11.3.6 (Payment Terms) subject to the
provision of a Tax Retention Bond. The Tax Retention Bond shall be in the
form of an unconditional and irrevocable bank guarantee in favour of the
Company in the amount of the retention otherwise held in accordance with
Clause 11.3.6 (Payment Terms), shall be in substantially the form provided in
Appendix A (Contract Price and Payment), issued by a bank licensed to
operate in Kuwait and approved by the Company, and be valid until the date
of issue of the Final Acceptance Certificate.
11.3.8 In the event that a Tax Retention Bond is delivered to the Company, the
stated amount of such tax retention shall be released and paid to the
Contractor in the monthly payment following the issue of such Tax Retention
Bond.
11.3.9 Any amounts due to the Company under the Contract, including but not
limited to Liquidated Damages and overpayments, shall be recoverable as a
debt without notice or judicial proceedings at the Company’s option by
deductions from any monies due or becoming due to the Contractor under the
Contract or any other Contract between the Company and the Contractor or
by drawing on the Advance Payment Bond and/or the Performance Bond.
The Company agrees not to issue a draw notice under any such bonds prior
to the expiration of five (5) days after the Company provides written notice to
the Contractor of its intention to draw on such bonds, which notice shall
indicate the reason for calling the relevant bond(s).
11.3.10 The Company may withhold payment of any part of or the whole of the
Contract Price otherwise due under the Contract, in respect of any breach of
Contract on the part of the Contractor, provided always that the amount so
withheld is commensurate with the value of the breach in question.
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12.0 PERFORMANCE BOND
12.1 The Contractor shall furnish, as security for Contractor’s payment and
performance of its obligations hereunder, an unconditional and irrevocable
bank guarantee in favour of the Company, issued by a bank licensed to
operate in Kuwait and approved by the Company, in the amount specified in
the Particular Conditions (the “Performance Bond”). The Performance Bond
shall be delivered to the Company, prior to and not later than the Date for
Commencement but may condition its effectiveness upon the occurrence of
the Date for Commencement and shall be in substantially the form provided
inInstructions to Bidders. The Contractor shall, at the Company’s direction,
increase or decrease the value of the Performance Bond resulting from any
Adjustment Order.
12.2 The amount of the Performance Bond shall reduce upon the issue of each
Performance Acceptance Certificate by an amount equal to 50% of the
amount of the Contract Price allocated to the Portion or the whole of the
Facilities to which such Performance Acceptance Certificate relates. Upon
issue of the last Final Acceptance Certificate, the Company agrees to
promptly deliver to the Contractor the Performance Bond. However, the value
of the Performance Bond shall not be reduced and the Performance Bond
shall not be delivered to the Contractor if a call on the Performance Bond is in
progress at the relevant time.
12.3 If it appears that the effective date of the Final Acceptance Certificate will
occur more than one year after the effective date of the last Performance
Acceptance Certificate, then upon the written request of the Contractor, the
Company shall provide written notice to the bank issuing the Performance
Bond to permit the value of the Performance Bond to be reduced after said
one-year period to a sum reasonably equivalent in value to the total value of
any then outstanding Works subject to Contractor’s obligations under the
Contract.
13.0 VARIATIONS
13.1 Company Variations
13.1.1 The Company may require Variations, and the Contractor shall execute and
be bound by such Variations in accordance with this Clause 13.0 (Variations).
The Superintendent may at any time propose in writing, changes to any
aspect of the Works or Company’s requirements thereto, including without
limitation any changes in the design or drawings of any part of the Facilities,
or the specification of Materials therefore or the construction thereof, or the
addition or omission of any work in connection therewith, or
additional/modified Materials.
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13.1.2 As soon as possible, but no later than seven (7) days after receipt of the
Superintendent’s notice delivered pursuant to Clause 13.1.1 (Company
Variations), or within such other time as may be acceptable to the Company,
the Contractor shall submit to the Superintendent in writing the following:
(a)
(b)
(c)
(d)
(e)
a brief description of the proposed Variation incorporating the changes
proposed pursuant to Clause 13.1.1 (Company Variations);
any objection the Contractor has based on technical grounds to the
implementation of such proposed Variation;
an estimate of the Cost of engineering and design work to be incurred by the
Contractor in the preparation of such proposed Variation;
an estimate of the Cost of such proposed Variation; and
an estimate of the likely effect, if any, on the Scheduled Turnover Date and
any material impact on any major activity dates and constraints imposed by
the Programme of Works.
13.1.3 The Superintendent, after receipt of the particulars submitted by the
Contractor pursuant to Clause 13.1.2 (Company Variations), shall instruct the
Contractor to either proceed with the submission of the further particulars
required by Clause 13.1.4 (Company Variations) or to abandon such
proposed Variation.
13.1.4 Within twenty-one (21) days after receipt from the Superintendent of an
instruction to proceed pursuant to Clause 13.1.3 (Company Variations), or
such longer period as may be agreed by the Superintendent, the Contractor
shall submit the following in writing to the Superintendent, together with the
appropriate justification thereof:
(a)
(b)
(c)
(d)
(e)
a detailed description of the proposed Variation;
its proposal for an adjustment to the Contract Price calculated in accordance
with Clause 13.4.1 (Valuation of Variations) hereof;
its proposal for adjustment to the Scheduled Turnover Date and any material
impact on any major activity dates and constraints imposed by the
Programme of Works;
its proposal as to necessary adjustments to any of the Contractor’s others
obligations under the Contract (if any); and
if appropriate, any alternative proposals to meet the Company’s stated
objectives in respect of the proposed Variation.
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13.1.5 Following receipt of the Contractor’s proposal pursuant to Clause 13.1.4
(Company Variations), the Superintendent shall advise the Contractor
whether the Company wishes to implement the Variation and as necessary,
may request further documents and information from the Contractor and enter
into discussions with the Contractor regarding the Contractor’s proposal with
a view to the Parties reaching the earliest practicable agreement on any
adjustment to the Contract Price, adjustment to the Scheduled Turnover Date
and other effects of the Variation.
13.1.6 If the Company wishes the Contractor to implement the proposed Variation
the Superintendent shall, where the value of the Variation together with the
value of previous Adjustment Orders issued (if any) does not exceed the
aggregate value of Provisional Sums included in the Contract, issue an
Adjustment Order within twenty-one (21) days of any agreement pursuant to
Clause 13.1.5 (Company Variations). In all other cases the Company shall
issue an Adjustment Order as soon as practicable after any agreement
pursuant to Clause 13.1.5 (Company Variations). Any Adjustment Order shall
adjust, as applicable the Contract Price, the Scheduled Turnover Date and
any other obligations of the Contractor under the Contract and shall
incorporate the Contractor’s proposal submitted under Clause 13.1.4
(Company Variations), as may be modified by negotiations between the
Parties pursuant to Clause 13.1.5 (Company Variations).
13.1.7 If the Company decides not to implement the Variation after receipt of the
Contractor’s proposals pursuant to Clause 13.1.4 (Company Variations), the
Contractor shall be entitled to reimbursement for any reasonable Cost
incurred by it in performing any engineering and design work to determine the
Cost of the proposed Variation pursuant to Clause 13.1.4 (Company
Variations), and the Superintendent shall issue an Adjustment Order to adjust
the Contract Price in respect of such abortive engineering and design Cost,
provided always such Cost shall not exceed the estimate of such Costs given
pursuant to Clause 13.1.2 (Company Variations)(c). If, however, the
Company decides to implement the Variation in accordance with Clause
13.1.6 (Company Variations), the Cost of such engineering and design work
shall be deemed to be included in the aggregate Costs included in the
Adjustment Order.
13.1.8 Notwithstanding the provisions of this Clause 13.1 (Company Variations), the
Superintendent may waive any or all of the procedures set out in Clauses
13.1.2 to 13.1.7 (Company Variations) and issue an instruction directing the
Contractor to proceed with the implementation of the Variation, pending
agreement of Cost and effects on the Scheduled Turnover, following which
the Superintendent shall issue an Adjustment Order.
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13.2 Contractor Variations
13.2.1 The Contractor may at any time during the performance of the Contract
propose a Variation for consideration by the Company, which may, in its sole
judgement, reject or approve such proposed Variation. The Contractor shall
not be entitled to any extension of the Scheduled Turnover Date or
adjustment to the Contract Price or any additional Cost in respect of any
Variation required as a consequence or otherwise attributable to any default
on the part of the Contractor.
13.2.2 If the Contractor wishes to propose a Variation to the Company for
consideration, the Contractor shall submit the following to the Superintendent,
together with the appropriate justification thereof:
(a)
(b)
(c)
(d)
a detailed description of the proposed Variation;
the technical and economic justification for the proposed Variation,
specifically identifying any resultant benefits to the Company;
an estimate of the Cost of the proposed Variation; and
an estimate of the likely effect, if any, on the Scheduled Turnover Date and
any material impact on any major activity dates and constraints imposed by
the Programme of Works.
13.2.3 The Superintendent shall, within seven (7) days of receipt of the particulars
submitted by the Contractor pursuant to Clause 13.2.2 (Contractor
Variations), either reject the Contractor’s proposed Variation or instruct the
Contractor to proceed with the submission of the following particulars within
twenty one(21) days of such instruction:
(a)
(b)
(c)
(d)
(e)
a detailed description of the proposed Variation;
the technical and economic justification for the proposed Variation,
specifically identifying any resultant benefits to the Company;
its proposal for adjustment to the Contract Price calculated in accordance with
Clause 13.4.1 (Valuation of Variations) hereof;
its proposal for adjustment to the Scheduled Turnover Date and any material
impact on any major activity dates and constraints imposed by the
Programme of Works; and
its proposal; as to necessary amendments to the Contractor’s other
obligations under the Contract (if any).
13.2.4 Following receipt of the particulars submitted pursuant to Clause 13.2.3
(Contractor Variations), the Superintendent may either reject the Contractor’s
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proposed Variation or, if the Company wishes to implement the proposed
Variation, the Superintendent may as necessary, request further documents
and information from the Contractor and enter into discussions with the
Contractor regarding the Contractor’s proposal with a view to the Parties
reaching the earliest practicable agreement on any adjustment to the Contract
Price, adjustment to the Scheduled Turnover Date and other effects of the
Variation.
13.2.5 If the Company wishes the Contractor to implement the proposed Variation
the Superintendent shall, where the value of the Variation together with the
value of previous Adjustment Orders issued (if any) does not exceed the
aggregate value of Provisional Sums included in the Contract, issue an
Adjustment Order within twenty-one (21) days of any agreement pursuant to
Clause 13.2.4 (Contractor Variations). In all other cases the Company shall
issue an Adjustment Order as soon as practicable after agreement of
Variation pursuant to Clause 13.2.4 (Contractor Variations). Any Adjustment
Order shall adjust, as applicable, the Contract Price, Scheduled Turnover
Date and any other obligations of the Contractor under the Contract and shall
incorporate the Contractor’s proposal submitted under Clause 13.2.3
(Contractor Variations), as may be modified by negotiations between the
Parties pursuant to Clause 13.2.4 (Contractor Variations).
13.3 Variation or Adjustment Order Required by Terms of Contract
13.3.1 Where the Contract expressly provides for a Variation or Adjustment Order to
be issued pursuant to any provision of the Contract other than Clauses 13.1
(Company Variations) and 13.2 (Contractor Variations), the Contractor shall in
accordance with the provisions of Clause 41.0 (Time Limitations and Claims
by Contractor), submit a claim therefor including the following details to the
Superintendent together with the appropriate justification thereof:
(a)
(b)
(c)
(d)
(e)
a detailed description of the relevant circumstances;
the particular Clause in the Contract that entitles the Contractor to require a
Variation or Adjustment Order;
its proposal for adjustment to the Contract Price calculated in accordance with
Clause 13.4.1 (Valuation of Variations) hereof;
its proposal for adjustment to the Scheduled Turnover Date and any material
impact on any major activity dates and constraints imposed by the
Programme of Works; and
the effect on any of the Contractor’s other obligations under the Contract (if
any).
13.3.2 On receipt of a claim pursuant to Clause 13.3.1 (Variation or Adjustment
Order Required by Terms of Contract), the Superintendent may, as
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applicable, request further documents and information from the Contractor
and enter into discussions with the Contractor on the details so provided with
a view to the Parties reaching the earliest practicable agreement on any
adjustment to the Contract Price, adjustment to the Scheduled Turnover Date
and other effects of the Variation.
13.3.3 The Superintendent shall, where the value of the Variation together with the
value of previous Adjustment Orders issued (if any) does not exceed the
aggregate value of Provisional Sums included in the Contract, shall issue an
Adjustment Order within twenty-one (21) days of agreement with the
Contractor pursuant to Clause 13.3.2 (Variation or Adjustment Order
Required by Terms of Contract). In all other cases the Company shall issue
such an Adjustment Order as soon as practicable after agreement of
Variation pursuant to Clause 13.3.2 (Variation or Adjustment Order Required
by Terms of Contract). Any Adjustment Order shall adjust as applicable, the
Contract Price, Scheduled Turnover Date and any other obligations of the
Contractor under the Contract in accordance with the terms of such
agreement.
13.4 Valuation of Variations
13.4.1 Any adjustment to the Contract Price resulting from a Variation or Adjustment
Order shall be calculated by applying the rates and prices specified in the
Contract insofar as they are applicable. If the Contract does not contain any
rates or prices applicable to a proposed Variation or Adjustment Order, then
suitable fair and equitable rates or prices, having regard to the local or
international market, shall be agreed as may be appropriate in the
circumstances. The valuation of Variations pursuant to Clause 13.1
(Company Variations) and Clause 13.2 (Contractor Variations) and
Adjustment Orders in respect of Provisional Sums pursuant to Clause 11.2
(Provisional Sums) may include provision for the Contractor’s overhead and
profit. All other valuations for Variations and Adjustment Orders shall not
compensate the Contractor for profit. The resultant adjustment to the
Contract Price shall be effected by the issue of an Adjustment Order.
13.4.2 Subject to Clause 13.1.8 (Company Variations) and Clause 13.5 (Disputes
Regarding Variations), the Contractor shall not proceed to implement any
Variation, prior to the receipt from the Superintendent of an Adjustment Order
for the proposed Variation, and such Adjustment Order shall not be given
before the Company approves the Contractor’s proposals for the change in
the Contract Price or as a minimum, where the value of such a Variation
cannot be immediately determined, the basis for computing the Cost thereof,
together with the effect on the relevant Scheduled Turnover Date.
13.4.3 Any adjustment to the Scheduled Turnover Date resulting from the Variation
shall be calculated in accordance with Clause 41.0 (Time Limitation on
Claims by Contractor).
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13.5 Disputes Regarding Variations
13.5.1 In the event that the Superintendent and the Contractor are unable to agree
whether the Contractor is entitled to a Variation or Adjustment Order under
the Contract or are unable to reach agreement on an adjustment to the
Contract Price, the Scheduled Turnover Date or other effect resulting from a
Variation in accordance with the provisions of Clauses 13.1.5 (Company
Variations), 13.2.4 (Contractor Variations) or 13.3.2 (Variation or Adjustment
Order Required by Terms of Contract), the Superintendent may nevertheless
direct the Contractor to proceed with the work in question, subject to the
following:
(a)
(b)
(c)
the Parties shall use good faith endeavours to reach the earliest possible
agreement on the effects of the Variation;
if an agreement cannot be reached between the Superintendent and the
Contractor, the matter shall be referred by either Party to the dispute
resolution procedure contained in Clause 55.0 (Dispute Resolution); and
pending agreement between the Parties or resolution of the dispute pursuant
to Clause 55.0 (Dispute Resolution), the Company shall pay the Contractor in
connection with such work and award any undisputed extensions to the
Scheduled Turnover Date in a manner reasonably determined by
Superintendent. In the event that the resolution of any such dispute results in
an over or under payment, the over payment shall be refunded by the
receiving Party or the under payment shall be immediately made by the
appropriate Party.
13.5.2 The Contractor shall not be entitled to additional Costs or to an extension of
the Scheduled Turnover Date in respect of Works already commenced or
executed which have not been carried out in accordance with this Clause
13.0 (Variations).
14.0 CODES AND STANDARDS
14.1 The codes and standards specified in Appendix F (Technical Specification)
shall be applicable to the Works. In the event of any conflict between
different applicable codes and standards, then the more stringent
requirements as defined by the Company shall apply.
14.2 In the event of a dispute with respect to interpretation or applicability of any
code or standard, the Superintendent and Contractor shall attempt to resolve
the interpretation or applicability of such code or standard. If the
Superintendent and Contractor are unable to resolve such dispute, then such
dispute shall be resolved pursuant to Clause 55.0 (Dispute Resolution).
14.3 In the event any codes or standards are changed or come into effect
subsequent to the Date of Bid, the Contractor shall subject to the Company’s
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confirmation that it wishes the changed or newly introduced code or standard
to apply to the Works, ensure that the Works comply with the new code or
standard and such change shall be treated as a Variation pursuant to Clause
13.3 (Variation or Adjustment Order Required by Terms of Contract).
15.0 CONFIDENTIALITY
15.1 Confidentiality
15.1.1 The Contractor, its Subcontractors and Vendors shall hold in confidence and
not divulge to third Parties or use in any way other than for the purposes of
the Contract, except with the prior written approval of the Company, any
information disclosed, directly or indirectly, to the Contractor by the Company
or by any licensor of the Company, in regard to the Works, or any processes,
process data or correlations, or any drawings or designs showing the
equipment, devices and machinery in which and by which the processing
shall be performed or carried out, or in relation to the Company or Company’s
business, which are provided by the Company or any licensor of the
Company, or are prepared for the Company by the Contractor (collectively
“Confidential Information”). The Contractor shall disclose Confidential
Information only to those of its Personnel and its Subcontractors who
reasonably require such Confidential Information in connection with
Contractor’s activities as contemplated by this Agreement. In maintaining the
confidentiality of Confidential Information, Contractor shall exercise no less
than the degree of care that it exercises with its own confidential information,
and in no event less than a reasonable degree of care. Contractor shall
ensure that each of its personnel holds in confidence and makes no use of
the Confidential Information for any purpose other than those permitted under
this Agreement. The obligation to hold information in confidence shall not
apply to:
(a)
(b)
(c)
(d)
information that at the time of disclosure is in, or thereafter becomes part of
the public domain through an authorised source other than the Contractor and
not as a result of the fault of the Contractor;
information that the Contractor can prove by written records was in the
possession of the Contractor prior to the disclosure by the Company and was
not obtained, directly or indirectly from the Company or any licensor of the
Company;
information that the Contractor can establish was disclosed to it by a third
Party, legally in possession of such information, free of restrictions on
disclosure and such information was not obtained, directly or indirectly, from
the Company or any licensor of the Company; or
information that is required to be disclosed by Governmental Requirements.
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15.1.2 Disclosures that are specific (e.g. as to equipment, products or operating
conditions), shall not be deemed to be in the public domain or in the prior
possession of the Contractor merely because they, or individual features
thereof, are embraced by general disclosures in the public domain or are in
the possession of the Contractor, unless the combination itself and its
principle of operation are in the public domain or in the possession of the
Contractor.
15.1.3 The Contractor may disclose to its Subcontractors and Vendors such part of
Confidential Information as is necessary for the prosecution of the Works,
provided that the Contractor shall have imposed upon, and shall take all steps
necessary to enforce against such Subcontractors and Vendors substantially
the same secrecy conditions required of the Contractor under Clause 15.1
(Confidentiality) and Contractor shall be liable for any disclosure by its
Subcontractors or Vendors or their personnel which violates or would violate
the terms of Clause 15.1.1 (Confidentiality) had Contractor made such
disclosure.
15.2 Publicity
The Contractor shall not make any announcement or release any information,
or make speeches concerning the Contract or the Works or any Company
installation or any part thereof unless approved by the Company in
accordance with Appendix D (Project Administration and Coordination
Procedure). The coordination of all requests for prior sanction and written
approvals are the responsibility of the Contractor.
15.3 Photographs
The Contractor shall ensure that its personnel or the personnel of its
Subcontractors do not, without the prior written consent of the
Superintendent, carry or use in the Company’s areas cameras, video
cameras, mobile phones (including hand free headphones) as well as
watches that contain camera and photographic features or any other
equipment, which can aid in making an image or video of a Company area.
16.0 ENGINEERING AND DESIGN - GENERAL PROVISIONS
16.1 General
16.1.1 The Contractor shall carry out all design and engineering work in its offices
unless otherwise agreed in writing by the Superintendent.
16.1.2 All design and the engineering work shall be carried out in compliance with
the provisions of the Contract, or where not so expressly specified, in
accordance with Good Industry Practice.
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16.1.3 Notwithstanding Clause 7.1 (Subcontracting) or any other provision of the
Contract, the Contractor shall be entitled to subcontract the preparation of
engineering, environmental, geological and architectural studies to any one or
more of the pre-approved consultants identified at the Form of Tender, but
shall not be entitled to subcontract any element of its design work thereto.
16.2 Design and Engineering
16.2.1 The Contractor, to ensure compliance with the design requirements stated in
greater detail in Appendix E (Scope of Work and Description of Services) and
Appendix F (Technical Specification), shall be responsible for the design and
detailed engineering of the Facilities. The Contractor’s design and
engineering work shall take into account all the Company’s provided
information and data to be verified by the Contractor in accordance with
Clauses 3.3 (Verification of Site Information by Contractor) and 3.4
(Verification of FEED and Other Information).
16.2.2 Without prejudice to its obligations under this Clause 16.2 (Design and
Engineering), the Contractor, before finalising its design shall propose
appropriate modifications and/or additions which it considers may achieve a
better integrated or optimised design. If the Contractor wishes to make such
modifications and/or additions to the design detailed in the Technical
Specifications, it shall promptly notify the Company of these in accordance
with the provisions of Clause 13.2 (Contractor Variations), and the Company
shall in accordance with these provisions either accept or reject such
proposed modifications and/or additions.
16.2.3 The Contractor shall be responsible for any discrepancies, errors or
omissions in the specifications, drawings and other technical documents that
it has prepared, whether or not such specifications, drawings and other
documents have been approved by the Company, the Superintendent or the
Superintendent’s Representative.
16.3 Approval/Review of Contractor’s Documentation
16.3.1 The Company may review both the nature and the progress of the
Contractor’s design and engineering work as it proceeds to the extent
deemed necessary by the Company. The Company in carrying out such
reviews, shall cooperate, to the extent possible, with the Contractor so as not
to increase unreasonably the Contractor’s engineering Costs or delay the
Works.
16.3.2 The Contractor, notwithstanding any review in accordance with Clause 16.3.1
(Approval/Review of Contractor’s Documentation) by the Company, shall
prepare and submit to the Superintendent for review all design documentation
including related drawings for the Facilities and Temporary Works. The
Superintendent shall notify the Contractor of his approval or disapproval
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together with details of any modifications considered necessary within twentyone
(21) days of receipt of such design documentation.
16.3.3 The Contractor shall resolve the Superintendent’s comments in accordance
with Appendix D (Project Administration and Coordination Procedure).
Documentation revised by the Contractor shall be resubmitted to the
Superintendent for further review and approval/disapproval who shall respond
within fourteen (14) days of receipt thereof subject to Contractor’s compliance
with Superintendent’s comments under Clause 16.3.2 (Approval/Review of
Contractor’s Documentation). In the event, however, that the Contractor fails
to comply with such comments or has introduced additional changes to the
documents previously reviewed, then the Contractor shall be responsible for
any resultant schedule delays and Company’s review period shall revert to
twenty-one (21) days in accordance with Clause 16.3.2 (Approval/Review of
Contractor’s Documentation).
16.3.4 The Superintendent shall not disapprove any document submitted in
accordance with Clause 16.3.2 (Approval/Review of Contractor’s
Documentation) or Clause 16.3.3 (Approval/Review of Contractor’s
Documentation) except on the grounds that it does not comply with any of the
express provisions of the Contract, or that is contrary to Good Industry
Practice. In the event the Superintendent does disapprove the
documentation on such grounds, it shall clearly state its reasons for such
disapproval.
16.3.5 Designs approved pursuant to this Clause 16.3 (Approval/Review of
Contractor’s Documentation) shall form the basis for the execution of the
Works and shall not thereafter be modified in any way without the express
written consent of the Superintendent. The Contractor shall not commence
construction work unless the drawings are approved by the Superintendent as
“Approved for Construction.”
16.3.6 The Contractor, prior to entering into binding commitments with Vendors,
shall submit its procurement related specifications and designs (including any
appropriate drawings) to the Superintendent for review. The Superintendent
shall notify the Contractor of his comments within twenty-one (21) days of
receipt thereof. The Contractor shall resolve the Superintendent’s comments
in a manner equivalent to that stated in Clause 16.3.3 (Approval/Review of
Contractor’s Documentation).
16.3.7 The Contractor’s compliance with the review procedures described in this
Clause 16.3 (Approval/Review of Contractor’s Documentation) shall at all
times also be in accordance with the provisions of Appendix D (Project
Administration and Coordination Procedures) save that in the event of a
conflict between provisions of this Clause 16.3 (Approval/Review of
Contractor’s Documentation) and those contained in Appendix D (Project
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Administration and Coordination Procedure), the provisions of this Clause
16.3 (Approval/Review of Contractor’s Documentation) shall prevail.
16.3.8 Compliance by the Contractor with the review procedures described in this
Clause 16.3 (Approval/Review of Contractor’s Documentation) shall, unless
expressly provided therein to the contrary, be at no additional Cost to the
Company and the Contractor shall be deemed to have made due allowance
in its engineering and procurement schedule for reasonable time expended
on such procedures. The Contractor understands and accepts that no review
comment by the Company will be construed as an instruction to perform extra
work or as taking the place in any way of an Adjustment Order as provided for
in Clause 13.0 (Variations).
16.3.9 The Contractor, at no additional Cost to the Company, shall, subject to
Clause 16.3 (Approval/Review of Contractor’s Documentation), promptly
remedy any deficiencies, omissions, contradictions or ambiguities in
drawings, specifications, manuals or other documents furnished by it which
the Company brings to the Contractor’s attention.
17.0 PROCUREMENT AND SUPPLY OF MATERIAL AND EQUIPMENT -
GENERAL PROVISIONS
17.1 General Provisions
17.1.1 With the sole exception of those items specifically required to be supplied by
the Company pursuant to the terms of the Contract, the Contractor shall be
responsible for the procurement, supply, inspection, testing and delivery to
the Site of all Materials for incorporation into the Facilities, including all
special tools, jigs and templates necessary for installation and maintenance,
as provided in Clause 29.0 (Property in Construction Tools - Special Tools).
Title to all Materials shall pass to Company with full title, at whichever is the
earlier of the following events:
(a)
(b)
(c)
the title to such Materials being transferred to the Contractor;
the delivery of such Materials to Site; or
payment for such Materials being made by the Company to the Contractor.
Notwithstanding this Clause 17.1.1 (Procurement and Supply of Material and
Equipment - General Provisions), risk of all Materials shall remain with
Contractor until Turnover of the Facilities or the Portion in which such
Materials are comprised in accordance with Clause 42.1 (Care of the Works) .
17.1.2 The Contractor shall, as appropriate, receive and store at the Site all
Materials in a manner satisfactory to the Superintendent pending the
incorporation of such Materials into the Facilities and Contractor shall be fully
responsible for all Costs arising in connection with such storage.
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17.1.3 All Materials for incorporation into the Facilities shall be procured by the
Contractor in accordance with the relevant requirements set forth in Appendix
D (Project Administration and Coordination Procedure) and all purchase
orders for such items shall be placed by the Contractor in its own name, and
the Contractor shall be responsible for the payment of all Costs arising in
connection with said purchase orders.
17.1.4 Lists of all special tools, jigs and templates, referred to in Clause 17.1.1
(Procurement and Supply of Material and Equipment - General Provisions),
required for installation and maintenance shall be submitted by the Contractor
to the Superintendent for his review and approval prior to the ordering of the
related equipment. The Contractor shall make available to the Company
complete sets of such equipment for any Portion or the whole of the Facilities
at least fourteen (14) days prior to request for issue of the relevant Turnover
Certificate.
17.1.5 The Contractor, unless the Superintendent otherwise authorizes in writing,
shall procure and ensure that its Sub-Contractors procure all Materials and
equipment for incorporation into the Facilities only from Vendors supplying
Materials and equipment manufactured by firms listed in the KOC List of
Approved Manufacturers. The Contractor shall however ensure that all
proposed Vendors are legally entitled to do business with the State of Kuwait.
17.1.6 The Contractor when selecting a Vendor shall evaluate the Vendor’s
proposals for the supply of Materials for incorporation into the Facilities,
having regard to (i) the technical capabilities of the Vendor, (ii) the Cost of
operation, flexibility and ease of operation, Cost and ease of maintenance
and the Cost of and need for spare parts for the relevant Materials, as well as
purchase price thereof; and provided that the evaluation of such proposals
shall always be in accordance with the Contract and Good Industry Practice.
17.1.7 The Contractor shall ensure that all lubricating oils necessary for servicing its
vehicles and machinery that are provided under this Contract shall wherever
possible be of Kuwait National Petroleum Company’s products (“Kuwait Oil”).
The Company shall be entitled to carry out audit of Contractor’s records
and/or vehicles and machinery to ensure Contractor’s compliance with this
obligation.
17.2 Local Industry Preference
17.2.1 In performance of the Contractor’s obligations under the Contract, the
Contractor shall give price preference of up to ten percent (10%) to locally
manufactured Materials. The Contractor shall utilise Appendix I (Ministry of
Commerce & Industry - Kuwait Industrial Guide) or utilise or any other such
publication pertaining to details of Kuwaiti manufacturers and industries to
determine the availability of Kuwaiti manufactured Materials.
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17.2.2 When obtaining Materials for product categories listed in Appendix G (KOC
List of Approved Manufacturers) and if Kuwaiti manufacturers are also listed
for such product category, the Contractor must obtain quotations and give the
price preference stated in Clause 17.2.1 (Local Industry Preference) to the
Kuwaiti manufacturers, provided that the local product meets schedule
delivery requirements and is technically acceptable.
17.2.3 If Kuwaiti manufacturers are not listed in Appendix G (KOC List of Approved
Manufacturers), the Contractor shall utilise Appendix I (Ministry of Commerce
& Industry - Kuwait Industrial Guide) for Kuwaiti manufacturers producing
such products. If such Kuwaiti manufacturers are identified in Appendix I
(Ministry of Commerce & Industry - Kuwait Industrial Guide) the Contractor
shall obtain quotations from the Kuwaiti manufacturers, evaluate them
technically and give them the price preference stated in Clause 17.2.1 (Local
Industry Preference) above. If a quotation is acceptable on the foregoing
basis, the Contractor must obtain such product from the Kuwaiti
manufacturer.
17.2.4 If no Kuwaiti manufacturer for a product category exists in Appendix I
(Ministry of Commerce & Industry - Kuwait Industrial Guide), the Contractor
shall utilise the approved manufacturers for the product category of Appendix
G (KOC List of Approved Manufacturers).
17.2.5 If the Contractor intends to utilise an imported product in preference to an
available local product, the Contractor shall obtain the Company’s approval
for such a deviation supported with complete justification prior to placing a
purchase order. The Contractor shall not incorporate any imported Material
into the Works when an equivalent local material are both technically and
commercially acceptable.
17.2.6 The Contractor shall ensure that the obligation to give preference to locally
manufactured Materials of up to (but no more than) ten percent (10%) is
included in all subcontracts.
17.3 Use of Company Stocked Surplus Material
17.3.1 The Contractor, prior to ordering any Materials required for incorporation in
the Works, shall review the list of Company stocked surplus Materials
attached as Appendix J (List of Company’s Stocked Surplus Materials), and if
any of the Materials required for the Works are listed therein, then it shall
inspect the same at the Company stores to satisfy itself as to the quality of
such Materials and their compliance with requirements of the Contract. If the
Contractor is satisfied with the quality of such Materials and their compliance
with the requirements of the Contract, then it shall issue to the Superintendent
a schedule of the required Materials, who shall within fourteen (14) days of
receipt thereof furnish the Contractor with the prices of the required Materials.
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17.3.2 Subject to the Contractor being satisfied as to the quality of such Materials,
their compliance with the requirements of the Contract, and the price of the
Company stocked Materials being lower than the Cost of equivalent Materials
from other approved sources, the Contractor shall procure the Materials from
the Company at the rates quoted, unless it can provide the Superintendent
justifiable reasons for not utilising such Materials.
17.3.3 Any Company stocked Materials to be utilised in the Works shall be reserved
by the Contractor in writing, and the Materials so reserved shall be drawn
against requisitions as soon as possible, the format of which shall be provided
by the Company, and shall be endorsed by Company or its representative.
Collection and transportation of the Materials drawn from the Company’s
stock of surplus Materials shall be the Contractors responsibility; however, the
Company shall provide at all reasonable times all available Company-owned
cranage to facilitate loading and offloading all Materials being collected from
the Company stores by the Contractor.
17.3.4 The Contractor shall be entirely responsible for the quality and specifications
of the Materials and their suitability for incorporation in the Works once the
Materials are received by the Contractor from the Company.
17.3.5 The Contractor shall pay for the Materials so supplied at the agreed rates and
the Company shall deduct from payments to the Contractor the Cost of all
Materials supplied as aforesaid. The Contractor’s invoice for each month
shall show appropriate deductions in respect of the Materials supplied from
the Company’s stock of surplus Materials during that particular month.
17.4 Inspection and Testing of Materials Before Delivery
17.4.1 The following requirements of Clauses 17.4.2 to 17.4.4 (Inspection and
Testing of Materials Before Delivery), as more detailed in Appendix D (Project
Administration and Coordination Procedure), shall apply in respect of
inspection and testing of Materials before delivery.
17.4.2 The Contractor shall be responsible for all inspection and testing required by
Governmental Requirements, the Contract, appropriate codes, standards and
Good Industry Practice with respect to all Materials and spare parts for
incorporation in the Facilities. No Materials or spare parts shall be delivered
until all applicable tests and inspections have been successfully completed
revealing no Defects therein with the exception of minor Defects which, in the
reasonable opinion of both the Contractor and the Company, may be
remedied at the Site without detracting from the end quality of the item
concerned and without hindrance to the progress of the Works and at no
additional cost to Company. The Contractor shall give the Superintendent
timely written notification of all such Defects prior to shipment together with
proposals for their subsequent rectification and testing.
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17.4.3 The Contractor, as early as possible in the procurement phase, shall submit
to the Superintendent a detailed schedule of the inspections and tests
planned for each item of Materials and spare parts. The Contractor shall
advise the Superintendent in writing of any off-Site inspection or testing at
least fourteen (14) days in advance (or twenty-one (21) days if the off-Site
inspection will occur outside of Kuwait). If no representative of the Company
appears at the time and place so notified, the inspection or test may be
carried out as planned and the Contractor shall promptly furnish the Company
with the results of such inspection or test carried out in its absence.
17.4.4 The Company or its nominated representatives may at all reasonable times,
alone or with the Contractor, inspect, cause the inspection of, or witness the
testing of any spare parts or Materials at their place of production or
fabrication.
18.0 SPARE PART PROCUREMENT - GENERAL PROVISIONS
18.1 The Contractor shall provide at no extra Cost to the Company, all spare parts
necessary for pre-commissioning and commissioning of the Facilities and
each Portion.
18.2 For all items of equipment for which operational spare parts are normally
required, the Contractor shall, within four (4) months of the date of the order
placed by the Contractor for the relevant item of equipment, submit to the
Superintendent the Contractor’s and Vendor/manufacturer’s recommended
spare parts list to provide for one (1) year operation under design conditions.
The Contractor shall provide all such data in a timely manner to ensure that it
will be possible for the Company to procure all or any of such spare parts and
have them available in the Company’s stores prior to the issue of the
Turnover Certificate for the Facilities or relevant Portion. The Contractor
shall, in addition to the delivery period, make allowances of one hundred
twenty (120) days for the Company to process the placement of the relevant
purchase orders and thirty (30) days for the Company to receive, check and
take such spare parts into its stores’ stock and any periods of time in excess
of these stated period for such operations shall be the Company’s
responsibility.
18.3 The Contractor shall ensure that the spare parts list is in the form of an
itemized list, priced on a Free on Board (“F.O.B.”) basis and presented in the
format as given in Appendix D (Project Administration and Coordination
Procedure). The spare parts shall be classified by type such as general,
special, capital or insurance. The Contractor shall procure (so far as
reasonably possible) that the F.O.B. prices quoted by the Vendor shall be firm
and fixed for ordering of such parts by the Company at any time up to one (1)
year after the date of the Contractor’s or the Company’s confirmation of the
purchase order for the corresponding original item of equipment. When
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obtaining its quotation for spare parts the Contractor shall procure for the
Company the right to purchase in its own name all or any of the listed spare
parts direct from the Vendor, on a Cost, Insurance, Freight (“C.I.F.”) Kuwaiti
port basis, utilising the same F.O.B. price basis defined above.
18.4 Reference in this Clause 18.0 (Spare Part Procurement - General Provisions)
to “Free on Board” (F.O.B.) and “Carriage Insurance and Freight” (C.I.F.) shall
have the meanings ascribed to them in the edition current at the date of the
Contract Agreement of “Incoterms” published by the International Chamber of
Commerce.
18.5 For each item of equipment, the Contractor shall also supply a
comprehensive list of spares and subsystems, complete with relevant
drawings and the Vendor’s comprehensive spare parts manual for that
equipment, to enable the Company to ascertain or verify its spare parts
requirements.
18.6 The Company shall have the option to ask the Contractor to procure the
spare parts within the one (1) year period referred to in Clause 18.3 (Spare
Part Procurement - General Provisions) which shall be supplied at the prices
stated in the spare parts list including overhead and similar charges but
excluding profit and the Company shall be given the benefit of any
manufacturers or suppliers discount thereon received by the Contractor. If
the Company requires the Contractor to procure the operational spare parts,
then this shall be treated as a Variation pursuant to Clause 13.3 (Variation or
Adjustment Order Required by Terms of Contract).
18.7 All spare parts shall be properly packed and protected, marked, tagged as
appropriate, and accompanied by such documentation as the Company shall
specify for ease of post-delivery administration including, but not by way of
limitation, a detailed packing list for each consignment.
18.8 The Contractor shall submit to the Company a statement from the Vendor of
each major item of equipment to be incorporated into the Facilities that they
will use best endeavours to notify the Company of any cessation of
production of such equipment within a period of five (5) years from the date of
the appropriate purchase order, thereby enabling the Company to purchase
spare parts for such equipment as may be required at that time. Said
notification shall take place one year before the actual cessation of availability
of spare parts.
19.0 TRANSPORTATION AND CARRIAGE PRIORITIES
19.1 The Contractor shall use Kuwait Airways Corporation (“KAC”) in the event air
travel of the Contractor’s employees, agents and representatives, or air
freight of goods, is required or becomes necessary for the performance of the
Contractor’s obligations under the Contract. Where flights of KAC are not
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available or fully booked, the Contractor may use the respective national
airline of the country of such employees, agents or representatives or the
country exporting the goods or shall cause carriage arrangements to be
undertaken and documented by KAC.
19.2 The Contractor shall cause the sea carriage of any Materials or equipment
required for the Works to be undertaken by the Kuwait Oil Tanker Company
or by the United Arab Shipping Company, provided that the freight rates
offered by these companies are competitive, but in no way higher than ten
percent (10%) of those offered by other shipping companies for the carriage
of similar goods to Kuwait. The Contractor shall, within sufficient time,
provide the aforementioned shipping companies with the delivery dates for
the Materials needed to be shipped. If the ships of either Company are not
available at the exporting port or if carriage by said companies may result in a
delay to the progress of the Works or if the freight rates offered by these
companies exceed those offered by others for the carriage of similar goods to
Kuwait by more than ten percent (10%), the Contractor may use another
carrier.
20.0 KUWAIT CUSTOMS AND IMPORT REGULATIONS
20.1 The Contractor confirms it is aware that the Kuwaiti import and customs rules
and regulations are applicable to the shipment and import of goods or any
part thereof into Kuwait.
20.2 The Contractor, to the extent that Materials are purchased or provided by the
Contractor, shall be responsible for all necessary documentation required for
customs clearance of Materials, construction equipment, spare parts and the
other items required for the execution of the Works.
20.3 The Contractor shall be responsible for and shall bear all Costs of customs
and import duties, port handling charges, import licenses and other official
authorisations and all other custom formalities necessary for the importation
of Materials and for the transportation and delivery of Materials purchased or
provided by the Contractor to and from the Site.
21.0 EXPORT CREDITS - GOODS AND SERVICES
21.1 The State of Kuwait acting through Kuwait Investment Authority (“KIA”) and
other financial institutions may finance goods and services covered by the
Contract through buyer credit Facilities supported by Export Credit Agencies
(“ECAs”).
21.2 Any financing shall be in the form of buyer credits whose terms and
conditions shall be negotiated separately by KIA and other financial
institutions with ECAs. The Contract terms may be amended by agreement
between the Company and Contractor (such agreement of the Contractor not
to be unreasonably withheld) to include provisions necessary to meet the
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requirements of the ECAs. There shall be no supplier financing. All financing
is explicitly excluded from the Contract, which is to be priced on a cash
payment basis.
22.0 HEALTH SAFETY AND ENVIRONMENT
22.1 The Company places prime importance on Health, Safety and Environment
(“HSE”) issues and requires that the Contractor shall adhere and actively
pursue the highest standards of HSE performance.
22.2 The Contractor without prejudice to the generality of Clause 23.0 (Compliance
with Law - Licenses), shall be deemed to have acquainted itself and shall
comply in so far as applicable with the terms, standards and specification
stated in Resolution No. 210 for 2001 issued by the Environment Public
Authority containing the Executive Terms of Reference for Law No. 21/1995
amended by Law No. 16/1996.
22.3 The Contractor shall take full responsibility for the adequacy, stability and
safety of all its operations and methods necessary for the performance of the
Works and shall ensure that the Works are carried out in accordance with the
requirements of HSE stipulated in Kuwait law, Governmental Requirements,
guidelines of statutory bodies and safe working practices as required by the
Company. The Contractor shall strictly comply with the Company’s latest
version of Fire and Safety Regulations and Health, Safety & Environmental
Management System (“HSEMS”) Guidelines for Contractors existing on the
date prior to the Date of Bid comprising an attachment to Appendix E (Scope
of Work and Description of Services).
22.3.1 In the event that, subsequent to the Date of Bid, any new Company Fire and
Safety Regulations and Health, Safety & Environmental Management System
(“HSEMS”) Guidelines for Contractors come into effect, the Contractor shall
comply with such new regulations. If the Contractor suffers (or will suffer)
delay and/or incurs (or will incur) additional Cost as a result of complying with
such regulations, it shall be entitled to an adjustment to the Scheduled
Turnover Date and/or adjustment to the Contract Price pursuant to an
Adjustment Order under Clause 13.3 (Variation or Adjustment Order Required
by Terms of Contract).
22.4 The Contractor shall submit a preliminary HSE plan with its tender based on
Company’s Fire and Safety Regulations and HSEMS Guidelines for
Contractors and other requirements stipulated in the tender document. The
preliminary HSE plan shall be produced in line with the requirements of KOC
procedure GE.KOC.048-Procedure to the Preparation of Project HSE Plan.
This should cover all phases of the works, as far as can be reasonably
achieved considering the status of the project. It should be noted that the
contractor’s HSE Plan must be specific to the project and not generic in
nature.
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22.5 The Contractor, within thirty (30) working days from the Date for
Commencement, unless otherwise specified in the Contract, shall submit for
the Superintendent’s approval its detailed HSE plan based upon the
preliminary HSE plan. The Company shall within thirty (30) working days
approve or direct the Contractor to make amendments to ensure that the HSE
plan is in accordance with the requirements of the Contract.
22.6 The Contractor shall ensure that all its personnel and Subcontractor’s
personnel are fully familiar and shall comply with Company’s Fire & Safety
Regulations, HSEMS Guidelines for Contractors and Contractor’s approved
HSE Plan, with provisions of any local regulations made there-under and
such other regulations as the Company may issue from time to time. The
Contractor, prior to date of commencement, shall attend an orientation
meeting with the Superintendent and representative(s) of the Company’s
Asset HSE team. The Contractor shall ensure that all its personnel and
Subcontractor’s personnel are given HSE awareness training which enables
them to carry out the Works safely.
22.6.1 The Contractor shall submit the content of the HSE induction and job
orientation course, as well as, an HSE training programme for its personnel
for the duration of the Contract for approval to the Superintendent within thirty
(30) days from the Date for Commencement. The Contractor, on the
Company’s instructions, shall provide documented evidence of all HSE
training and instructions given to personnel under its control, together with
practical demonstrations of such training.
22.6.2 The Company may remove from the Site any employee of the Contractor or
its Sub-contractor(s) in the event they contravene the Company’s HSE policy
and procedures, including Fire and Safety Regulations.
22.6.3 The Contractor shall provide to the Superintendent, within thirty (30) days
from the Date for Commencement a plan showing the frequency of HSE
meetings and shall invite the Superintendent and representative(s) of the
Company’s Asset HSE team to attend such meetings. The copies of minutes
of such HSE meetings shall be provided to the Company.
22.7 The Contractor shall ensure that the work is carried out with a valid Work
Permit and Excavation Notification and Permit. The Contractor shall obtain
Work Permit and Excavation Notification and Permit prior to commencing the
Works in a timely manner so as to ensure uninterrupted progress of the
Works. The Work Permit and Excavation Notification and Permit
requirements and the type of the Work Permit shall be as specified in the
Company’s Permit to Work Procedure.
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22.8 The Contractor shall provide all necessary safety equipment for the Works
and all other similar requirements including; watchmen, fire extinguishers,
adequate and appropriate lighting during hours of darkness and safe lighting
in confined places where natural light is obscured, adequate protection for the
public and other persons including road signs, warning lights, notices,
barricades and other protection to permit work to be carried out efficiently,
satisfactorily, and safely; and to permit thorough inspection of the Works.
22.8.1 The Contractor shall ensure that all construction tools and equipments, and,
Temporary Works and other items including, but not limited to, scaffolding,
forms, sheds, buildings and trailers, whether purchased, rented or otherwise
provided by the Contractors or its Subcontractors are maintained in a safe,
sound and good condition and are capable of performing the functions for
which they are intended and where they are not, the Contractor shall do all
that is necessary to put them in such satisfactory condition.
22.8.2 The Contractor shall ensure that all lifting tackles, lifting appliances, mobile
work platforms and hoists under its control possess a valid Company
approved classification society current certification, prior to their use on Site,
and provide the copies of the test certificates and records to the
Superintendent for examination. The Cost of obtaining such certification shall
be deemed included in the Contract Price.
22.9 The Contractor shall provide its personnel and its Subcontractor’s personnel
with personal protective clothing and equipment, such as hard hats, gloves,
safety shoes, safety glasses, breathing apparatus, personal hydrogen
sulphide (“H 2 S”) gas detectors and any other appropriate safety wear which
may be required in connection with the safe performance of the Works, and
which shall be maintained by the Contractor in good condition. The Contractor
shall ensure that all its personnel’s protective equipment complies with the
relevant international standard specification and are presented to the
Superintendent for approval prior to their use.
22.10 The Superintendent or the Superintendent’s Representative may test at any
time any item of the Contractor’s Constructional Plant. The Contractor shall
remove and replace at no extra Cost to the Company any item of
constructional plant which in the Opinion of the Superintendent or the
Superintendent’s Representative, is unsafe.
22.11 The Contractor shall ensure that all Works are carried out with due diligence
to the preservation of air, water, soil and animal and plant life. Procedures
adopted in this respect shall be in compliance with applicable Company’s
HSEMS Guidelines for Contractors, environmental guidelines and regulations
and with all regulatory requirements of the State of Kuwait. In the absence of
specific national, regional or international standards or guidelines, Good
Industry Practice shall be adopted.
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22.12 The Company shall not permit disposal of untreated sewage, oil spills,
chemicals and the like to ground. The method of sewage disposal shall be
subject to the Company approval. The Contractor shall collect untreated
sewage in appropriate containers and remove it from the Site and transport it
to State approved disposal Facilities.
22.13 The Company may inspect the Site from time to time to ascertain the
Contractor’s safety preparedness and ensure compliance with the Company’s
Fire and Safety Regulations as well as with the Contractor’s approved HSE
plan, and that the Works are being performed in accordance with safe
working practices.
22.14 The Superintendent or the Superintendent’s Representative may order the
cessation of any work, which in his sole opinion, he reasonably considers is
not being carried out in accordance with safe working practices. Work so
suspended shall not be resumed until the Contractor has satisfied the
Superintendent or the Superintendent’s Representative to the adequacy of
the safety precautions employed. The Contractor shall not be entitled to
cease work for safety or for any reasonable requirement to take adequate
safety measure having regard to the circumstances of the Works.
22.15 The Contractor shall inform the Company immediately of any incident on
Company’s premises or any other work related incident causing death, injury
to personnel or damage to any property including near misses, followed by an
accident/incident report within twenty-four (24) hours. The Contractor shall
hold a thorough incident investigation immediately after any, incident,
determine the cause, and take preventive measures to avoid re-occurrence.
The Contractor shall submit such report to the Superintendent. The
Contractor if directed by the Company shall demonstrate mock-up of the
accident and the corrective action taken to prevent such reoccurrence in the
Company’s HSE forum and safety meetings.
22.16 In case of any emergency, the Contractor shall immediately mobilize all
resources to combat the emergency and coordinate with the Company and
Company’s other Contractors.
22.17 The Contractor shall take all necessary measures to protect the Works,
Facilities and the Company’s existing Facilities against accidents and
occupational hazards.
22.18 Unexploded Ordnance Disposal
22.18.1 The Contractor acknowledges and is placed on notice that unexploded
ordnance disposal within the confines of the Site, together with the
designated access roads, designated areas for the Contractor’s office, lay-
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down areas and other temporary Facilities has been performed on behalf of
the Company by professional ordnance disposal Contractors using visual
and/or mechanical means. The Contractor shall obtain an explosive
ordinance clearance certificate for the Site from the Superintendent.
22.18.2 The Contractor further acknowledges and is placed on notice that due to sand
coverage and possible re-introduction of explosive ordnance due to winds
and subsequent movement of sand, undetected explosive ordnance my be
within the Site and other designated areas and/or be reintroduced into such
areas, and that there are potential dangers concerning the discovery of and
making safe, such newly discovered items of explosive ordnance.
22.18.3 Whilst the Company has taken reasonable precautionary measures to ensure
that the Site and surrounding areas are free from unexploded ordnance, the
Contractor shall exercise extreme care during the performance of the Works,
and at all times be vigilant, exhorting its personnel to take extreme care as to
the dangers of explosive ordnance.
22.18.4 The Contractor shall include as part of its personnel orientation programme
for the Works, unexploded ordnance recognition, precautions and action upon
discovery programme, such programme shall be:
a) mandatory for all personnel, including its Subcontractor’s personnel;
b) conducted prior to the performance of the Works and to the employment of
any person upon the Works; and
c) conducted in the native language(s) of the personnel participating in the
orientation programme and subsequently to be employed on the Works
22.18.5 The Contractor shall include the unexploded ordnance recognition,
precautions and action upon discovery programme, together with all other
procedures and the like pertaining to explosive ordnance within its safety plan
for the Works.
22.18.6 In the event that the Contractor discovers unexploded ordnance, the
Contractor shall immediately implement the necessary safety procedures to
secure the area and shall immediately notify the Superintendent, who shall
effect the disposal of the unexploded ordnance.
22.18.7 Should the Contractor require, for the purpose of the performance and
completion of the Works, or otherwise be required by the Superintendent, to
utilize areas not ascertained by the Company as being cleared of unexploded
ordnance, the Contractor shall immediately notify the Superintendent that
clearance of the concerned area is necessary. If the Superintendent
considers that clearance of such area might require excessive time which
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might adversely affect the work progress, the Contractor shall be required to
propose alternative(s) to avoid such possible delay.
22.18.8 Under no circumstances whatsoever shall the Contractor utilize any area of
the Site, designated access roads, designated areas for the Contractor’s
offices, lay-down areas and other temporary Facilities that have not been
declared cleared of unexploded ordnance.
22.18.9 Where the Contractor suffers (or will suffer) delay or incurs (or will incur)
additional Cost due to the discovery of unexploded ordnance, it shall be
entitled to claim an adjustment to the scheduled Turnover dates and/or an
adjustment to the Contract price pursuant to an Adjustment Order under
Clause 13.3 (Variation or Adjustment Order Required by Terms of Contract).
22.19 Other HSE Requirements
22.19.1 The Contractor shall adhere to the Company’s driving procedures and
specified speed limits in Company’s operating areas and within Ahmadi. In
the event that any of the Contractor’s personnel do not follow the speed limits,
the Company may direct the Contractor to replace such personnel at no
additional Cost to the Company.
22.19.2 The Contractor shall ensure that buses, cars, trucks, vans and other vehicles
shall:
(a)
(b)
(c)
Not be older than five (5) years at any time during the performance of the
Works.
Be regularly serviced and maintained in accordance with the manufacturer’s
recommendations.
Be subject to inspection by the Company as per agreed schedule.
22.19.3 The Contractor shall full comply with the Company’s Fire and Safety
Regulations and HSEMS Guidelines for Contractors with respect to all
vehicles.
22.19.4 The Contractor shall ensure that all its drivers comply with the State
regulations and State Traffic Department rules.
22.19.5 The Contractor’s HSE performance shall be measured with regard to their
compliance with the requirements stipulated in the Company’s Fire and
Safety Regulations and HSEMS Guidelines for Contractors.
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22.19.6 The Contractor shall not use portable electronic devices in the Company
operational areas unless such devices are certified to be intrinsically safe by
an approved certifying agency and Company’s approval is obtained. Such
devices include mobile phones, laptops, palmtops, organizers, pocket PCs,
radios, audio equipment and the like.
22.19.7 The Contractor acknowledges that photography is prohibited in Company’s
operational areas. The Contractor shall not use mobile phones, watches, and
similar equipment and tools that have photographic features within
Company’s operational areas. However, cameras and video equipment may
be utilized provided that the Contractor submits reasonable justification, the
devices are certified to be intrinsically safe by an approved certifying agency
and Company’s approval is obtained.
22.19.8 The Contractor shall conduct monthly Advanced Safety Audit (“ASA”) using
the Company guidelines and forms as directed by the Superintendent.
22.20 Occupational Health and Hygiene
22.20.1 The Contractor shall provide qualified personnel with medical equipments and
consumables necessary to manage, operate and maintain a first aid facility,
which shall be available at all times when employees are at work, as required
by the Company and local Government requirements. A vehicle (ambulance)
shall be available at all times when employees are at work to transport sick
and injured persons to the hospital.
22.20.2 The Contractor shall provide medical examination for its employees at the
periods specified in accordance with the Contract and/or any laws, rules and
regulations of the state of Kuwait. The Contractor shall ensure that employees
who are exposed to significant health hazards are provided with appropriate
medical surveillance by a qualified occupational health physician. This will
include but not limited to work involving radiation, high noise levels and toxic
or carcinogenic substances. The Contractor’s HSE plan shall clearly state the
specific jobs and hazardous tasks that will require health surveillance. All
medical examination for employees shall be carried out in accordance with
rules, regulations or decrees issued by the Ministry of Social Affairs and
Labor or the Department of Occupational Diseases in the Ministry of Public
Health.
22.20.3 The Contractor shall develop a written HSE Audit and inspection
plan/schedule not more than thirty (30) days after commencing the Works at
Site, ensuring carrying out regular HSE inspections/audits at no longer than a
seven (7) day interval to cover its work Sites, industrial areas, camps and
messing Facilities. Copies of the Audit/inspection reports shall be submitted
to the Superintendent no more than five (5) working days after the
Audit/inspection.
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22.20.4 The contractor shall ensure that all necessary arrangements have been made
to identify any hazardous exposures to health of its employees and that
precautionary measures have been taken to protect personnel. Potential
health impacts that should be considered will include exposure to hazardous
materials, chemicals and other substances which may be toxic by inhalation,
ingestion or by skin/eye contact. This must take into account any toxic
substances contained in consumable materials involved in the construction
phase (e.g. coatings, lubricants, welding materials, adhesives, sealants,
thermal insulation) and any process related dust, gases and vapours.
22.20.5 Potential impacts relating to exposure to hazardous physical agents: including
noise, vibration, thermal environment and radiation (ionisng and non-ionising)
must also be taken into account and appropriate control measures
implemented.
22.20.6 Contractor shall provide suitable levels of ventilation in enclosed areas, in
order to dilute or reduce to a minimum any obnoxious odours or harmful dust
or fumes generated by the work processes.
22.20.7 The Contractor must make adequate provision for satisfactory health and
welfare facilities at the workplace, all as detailed in the Kuwait Labor Laws. In
particular, the Contractor must provide protective and welfare facilities as
described as follows: All on-site welfare facilities provided for eating, washing
and toilet facilities must be constructed in a manner that allows them to be
kept in a clean and sanitary condition. Contractor shall implement a system of
cleaning to ensure that these are maintained in a continuous state of
cleanliness. All welfare facilities should be properly ventilated and lit. Washing
facilities should have running hot and cold or warm water, soap and clean
towels or other means of cleaning or drying. There shall be sufficient number
of toilets and other welfare facilities for all the Contractor’s workers and they
should be placed in locations where the workers can easily use them at the
worksite. As a general guide, one toilet per 25 workers should be provided.
22.20.8 Where food and drink is provided for the workers, the Contractor must ensure
that this is of a suitable quality to ensure the good health of the workers in
accordance with Kuwait Municipality food hygiene rules and regulations. All
food handlers shall be certified in accordance with the Kuwait law.
22.20.9 An adequate supply of wholesome drinking water, with an upward drinking jet
or suitable cups, must be provided. Chilled water dispensers should be
provided at temporary work areas. Bottled water may still be provided as a
secondary source of drinking water. Water should be supplied cooled, to
encourage body cooling in hot working conditions.
22.20.10 Suitable sheltered areas must be provided at work areas to enable personnel
to gain refuge from the sun and heat.
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22.20.11 Adequate, suitable and secure space should be provided to store workers’
own clothing and special protective clothing and equipment. Changing
facilities should also be provided for workers who change into special work
clothing. The facilities should be readily accessible from workrooms and
washing and eating facilities.
22.21 HSE Dossier
22.21.1 The Contractor shall, at all times during the performance of the Works,
establish and maintain an HSE dossier detailing the reasoning and
justification for all HSE-related decisions taken during the execution of the
Works. The HSE dossier shall be kept up-to-date and delivered to the
Company by the Contractor prior to applying for a Turnover Certificate.
22.21.2 The HSE dossier shall include information such as safety Audits, reviews
such as HAZOP, PHSER, EIA, SIL, fire fighting equipment reports, etc.
23.0 COMPLIANCE WITH LAW - LICENSES
23.1 The Contractor shall be subject to and comply with all Governmental
Requirements that are applicable to the Works, and shall indemnify and keep
the Company indemnified against all penalties and liabilities of every kind
resulting from breach thereof or non-compliance therewith.
23.2 The Contractor shall have no entitlement to additional Costs or extensions of
time arising from changes to any Governmental Requirements, except for any
such changes that may be implemented by the State of Kuwait after the Date
of Bid, in which case the Contractor shall be entitled, subject to Clause 23.3
(Compliance with Law - Licenses), to any reasonable additional Costs
unavoidably incurred (or to be incurred) by the Contractor and/or an
extension of time to the Scheduled Turnover Date pursuant to an Adjustment
Order issued in accordance with Clause 13.3 (Variation or Adjustment Order
Required by Terms of Contract).
23.3 If the Contractor suffers (or will suffer) delay or incurs (or will incur) additional
Cost as a result of changes to any Governmental Requirements that occur
after the Scheduled Turnover Date, the Contractor shall not be entitled to any
extension of time or adjustment to the Contract Price pursuant to an
Adjustment Order under Clause 13.3 (Variation or Adjustment Order Required
by Terms of Contract) or otherwise.
23.4 The Contractor shall obtain all licenses and shall do all other things necessary
in any country or any political subdivision thereof wherein any part of the
Works is performed to enable itself and its Subcontractors to perform their
obligations under the Contract, or relevant subcontract, and shall obtain all
temporary permits and authorisations required for prosecution of the Works.
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23.5 The Contractor shall be deemed to have acquainted itself with the
requirements pertaining to the recruitment of local and foreign labour and
shall be deemed to be aware of the time it takes to provide the manpower
necessary for it to discharge its obligations under the Contract. No claim by
the Contractor requesting an extension of time shall be valid if such claim is
based upon the Contractor’s failure to provide in a timely manner the
manpower required for the performance of the Works due to shortage or
absence of manpower.
23.6 The Contractor shall be deemed to have acquainted itself and shall comply in
so far as applicable with the terms, standards and specifications stated in
Resolution No. 210 of 2001 issued by the Public Environmental Authority
containing Executive Terms and Reference for Law No. 21 of 1995 amended
by Law No. 16 of 1996 concerning the establishment of the Public
Environmental Authority.
23.7 The Contractor shall promptly notify the Company in writing where any of the
Contractor’s owners, partners or local agents (as applicable) become a
member of the Central Tenders Committee or an employee of the Kuwait Oil
Company during the period from the Date for Commencement until the date
of Turnover of the Facilities as a whole.
24.0 CONSTRUCTION - GENERAL PROVISIONS
24.1 The Contractor shall construct the Facilities on the Site in accordance with the
Contract and all applicable drawings and specifications and shall furnish all
necessary supervision, labour, construction tools and plant, construction
supplies, erection equipment, temporary offices, storage Facilities, portable
fire fighting equipment, accommodation and messing and all other
requirements necessary for the construction thereof. The Contractor shall
likewise furnish all utilities and Facilities required for the execution of the
Works.
24.2 The Contractor shall ensure that employees of the Contractor and of its
consultants, if any, and Subcontractors and all others required by the
Contractor to enter the Company’s property or the Site comply at all times
with applicable regulations and requirements of both the Company and all
Governmental Requirements.
24.3 The Contractor shall at all times comply with the provisions of Appendix D
(Project Administration and Coordination Procedure) and Appendix E (Scope
of Work and Description of Services) but without prejudice to the order of
precedence stated in the Contract Agreement.
24.4 The Contractor shall at all times keep the Company’s property and adjoining
areas clear of construction Materials and rubbish caused by the Works and,
prior to the putting into operation of any Portion or the whole of the Facilities,
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shall remove all remaining Materials from and about the premises of the
Portion or the whole of the Facilities and shall leave such areas safe, clean
and ready for use to the satisfaction of the Superintendent, except for any
Materials required for the completion of that Portion or the whole of the
Facilities in accordance with the provisions of Clause 34.6 (Inspection and
Testing at Site) or the remedying of Defects in accordance with Clause 38.0
(Defects Liability), which may remain tidily stored in the area.
24.5 The Contractor shall deliver all solid, dangerous and inactive wastes removed
from the Site to the designated area in Shuaiba Industrial Area for disposal in
compliance with the Kuwait Municipal Council’s Order ref: MB/F25/257/12/98
dated 22 June 1998, unless an alternative method for disposal is approved by
the Superintendent. The Contractor shall arrange for the disposal, in a
manner approved by the Superintendent, of all redundant Materials and spoil
arising from the Works and the removal from the Site of all temporary
structures of whatever nature. All Costs of removing and disposing of
material, including the Cost of obtaining permits, shall be deemed to be
included in the Contract Price.
24.6 The Contractor shall safeguard all buried or above ground pipelines, cables or
other services and shall be responsible for familiarising itself with respect to
their locations as shown on the drawings and shall, during the performance of
the Works, exercise the degree of care which could reasonably be expected
of an experienced Contractor to prevent any damage to these or to any other
such pipelines, cables or other services that may exist but are not shown on
the drawings. If any such pipelines, cables or other services are damaged
during the course of construction, the Contractor shall be responsible for their
expeditious repair to the satisfaction of the Superintendent at the Contractor’s
own Cost, except where in the opinion of the Superintendent the Contractor
has exercised such a reasonable degree of care as aforesaid during the
performance of the Works and the damage is to buried pipelines, cables and
other services not shown on the drawings supplied by the Company, in which
event the Contractor shall be entitled to an adjustment to the Contract Price
for the Cost of such repair pursuant to an Adjustment Order under Clause
13.3 (Variation or Adjustment Order Required by Terms of Contract).
Wherever determined in the Contract for the safe operation of the Works, the
Contractor shall supply and install approved protective barriers between
existing installations and the Works.
24.7 The Contractor shall take all reasonable precautions and/or to prevent
damage or disturbance to roads, bridges or underground services en route to
and/or within the Site, together with all other existing installations, and the
Contractor shall be responsible at the Contractor’s Cost for the expeditious
repair and putting back into the same order and condition of any damage or
disturbance occasioned to these installations except where the Contractor
can demonstrate that reasonable precautions were employed, in which case
the Contractor shall be entitled to an adjustment to the Contract Price for the
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Cost of such repairs pursuant an Adjustment Order under Clause 13.3
(Variation or Adjustment Order Required by Terms of Contract). The
Contractor shall advise the Superintendent at least seven (7) days in advance
of the movement of heavy loads and shall be responsible for ascertaining
details of weight and size restrictions, in particular height clearances, on the
proposed routes.
24.8 The Contractor shall make due allowance for any specific operational
requirements of the Company in relation to any existing Facilities as may be
stated in the Contract or otherwise instructed by the Company. If the
Contractor suffers (or will suffer) delay and/or incurs (or will incur) additional
Cost as a result of complying with any such requirements that are not set out
in the Contract, it shall be entitled to an adjustment to the Scheduled
Turnover Dates and/or an adjustment to the Contract Price pursuant to and
Adjustment Order under Clause 13.3 (Variation or Adjustment Order Required
by Terms of Contract). However, the Contractor shall not be entitled to any
extension of time or adjustment to the Contract Price or any additional Cost
as a result of complying with any such requirements that are set out in the
Contract.
25.0 CONTRACTOR’S TEMPORARY SITE OFFICES AND WORKS
25.1 The Company shall make available areas of suitable size for the Contractor’s
temporary use on Site throughout the period of the Contract. The Contractor
shall fence such areas and upon issue of the final Performance Acceptance
Certificate promptly remove fencing and leave the area clean and tidy. The
Contractor shall obtainthe necessary permits and approvals for this area from
concerned State Authorities, if needed. The Company shall assist the
Contractor in obtaining such permits/approvals wherever possible.
25.2 The Contractor shall provide within the fenced area the following:
(a)
(b)
(c)
(d)
air-conditioned offices completely furnished with all Facilities and services for
use by Company personnel as more detailed in Appendix E (Scope of Work
and Description of Services);
adequate offices required by the Contractor for the performance of the Works;
all necessary utilities and drainage systems; and
adequate storage Facilities.
25.3 The Contractor’s temporary offices, Facilities and Works shall be properly
designed and constructed to carry such loads as will be imposed upon them.
25.4 Not less than thirty (30) days prior to commencing erection of any part of the
Temporary Works the Contractor shall submit details of such Temporary
Works together with the relevant location, and plot plan drawings and
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calculations to the Superintendent for review and approval in accordance with
Clause 16.3 (Approval/Review of Contractor’s Documentation). The
Contractor shall at all times be wholly responsible for the efficiency, security
and maintenance of said Temporary Works.
25.5 The Contractor shall provide and erect a temporary signboard at each work
location (“Signboard”), which shall show information in Arabic and English in
accordance with Appendix D (Project Administration and Coordination
Procedure). The Contractor shall maintain the Signboard in good condition
during the execution of the Works and until the issue of the appropriate
Turnover Certificate. Upon completion of the Works, the Contractor shall
promptly remove the Signboard.
25.6 The Contractor shall arrange and provide for its and its Subcontractors
workforce all necessary transport, messing and accommodation.
25.7 The living and messing accommodation for the Contractors's workforce and
that of any Subcontractor it employs shall not be located within the
Contractor's allocated work area provided in this Clause 25.0 (Contractor’s
Temporary Site Offices and Works).
26.0 ACCESS AND SITE ROADS
26.1 The Contractor, at no additional expense to the Company, shall construct and
maintain temporary access and haul roads, as may be necessary, for the
proper performance of the Contract. The Contractor shall submit to the
Superintendent a layout of all proposed roads prior to road construction. The
layout shall show road widths, direction of traffic, curves, grades and related
information in sufficient detail for review and approval by the Company.
Roads constructed on the Company’s land or rights-of-way shall be subject to
the Company’s approval.
26.2 Maintenance and restoration of access roads provided by the Company shall
be the responsibility of the Contractor upon the Contractor’s mobilisation to
the Site.
27.0 SURVEY CONTROL POINTS AND LAYOUTS
27.1 The survey control points, as shown on the drawings, shall be established by
the Company.
27.2 The Contractor shall complete the layout of the Works, establish any
additional survey control markers required by the Contractor (subject to the
approval of the Superintendent) and be responsible for the detailed survey of
the existing conditions for all measurements necessary for the proper
performance of the Works in accordance with the locations, lines, and grades
specified or shown on the drawings, subject to such modifications as the
Superintendent may require as the Works progress. If at any time during the
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progress of the Works any error appears or arises in the position, levels,
dimensions or alignment of any part of the Works, the Contractor at no
additional Cost to the Company, shall rectify such error to the satisfaction of
the Superintendent.
27.3 The Contractor shall frequently check all survey control points established by
the Company and, if the Contractor or any of its Subcontractors or any of their
representatives or employees move or destroy or render inaccurate any
Company established survey control point, the Contractor shall promptly
notify the Company and such survey control point shall be replaced by the
Company at the Contractor’s expense.
27.4 Any survey work that the Contractor may require to carry out for the
performance of the Works shall be deemed included in the Contract Price.
28.0 SECURITY
28.1 Security - General Requirements
28.1.1 Without prejudice to the provisions of Clause 8.0 (Contractor’s
Representations and Warranties), the Contractor understands and accepts
that the Site is located in the oil fields area of the State of Kuwait and
consequently subject to access control regulations imposed by the State
authorities in addition to those of the Company referred in the Contract. The
Contractor shall be fully responsible for ascertaining and complying with all
such regulations in force, as they may be amended from time to time, and the
Company shall, without any further obligations, provide documentary
assistance to the Contractor to the extent required by such regulations. The
Contractor shall not be entitled to claim any extension of time to the
Scheduled Turnover Date or adjustment to the Contract Price or other
payments as a result of any events or circumstances arising from the
Contractor’s compliance with such regulations as existing at the Date of Bid.
28.1.2 In the event that, subsequent to the Date of Bid, any new security regulations
come into effect, the Contractor shall comply with such new regulations. If
the Contractor suffers (or will suffer) delay and/or incurs (or will incur)
additional Cost as a result of complying with such regulations, it shall be
entitled to an adjustment to the Scheduled Turnover Date and/or adjustment
to the Contract Price pursuant to an Adjustment Order under Clause 13.3
(Variation or Adjustment Order Required by Terms of Contract).
28.2 Security - Construction Activities
The Contractor, during the performance of the Works until Turnover of the
whole of or a Portion of the Facilities, shall be responsible for the internal
security and protection of the Works, including the storage of the Materials.
The Contractor shall provide a guard service and an associated security
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system, the detailed specification for which shall be submitted by the
Contractor to the Superintendent for approval.
29.0 PROPERTY IN CONSTRUCTION TOOLS AND SPECIAL TOOLS
29.1 The Contractor’s and its Subcontractors’ construction tools and erection
equipment brought to the Site shall remain their property except that legal title
to any special tools, jigs or templates for use with, or peculiar to, a specific
item of equipment to be incorporated into the Facilities shall become the
property of the Company when they are brought onto or delivered to the Site
and shall remain the property of the Company after completion of
construction.
29.2 Legal title to Intellectual Property Rights under software licenses and other
licenses or arrangements entered into by the Contractor specifically for the
purpose of executing the Works shall become the property of the Company
when legal title thereto vests in the Contractor.
29.3 The Contractor shall maintain at the Site an inventory of all such special tools,
jigs, templates, licenses and other things and supply copies thereof to the
Company if so requested. Any such listed items which are missing or not in
an acceptable and usable condition shall be replaced by the Contractor at its
own Cost prior to issuance of the appropriate Turnover Certificate. Upon
request by the Company, Contractor will execute and deliver documentation
requested by the Company to evidence such transfer of title.
30.0 COORDINATION AND COOPERATION AT THE SITE
30.1 Coordination and Cooperation with Others Performing Work
30.1.1 The Contractor, when directed to do so by the Superintendent, shall
coordinate and liaise with other Contractors employed by the Company and
with the Company in reviewing their respective programmes and shall provide
all programme information relating to the Contractor’s activities to such other
Contractors as the Superintendent may from time to time direct.
30.1.2 The Contractor, in accordance with such requirements as the Company may
notify from time to time, shall provide all reasonable access to other
Contractors employed by the Company on or around the Site, for introduction
and storage of their Materials and equipment and performance of their
activities. If the Contractor suffers (or will suffer) delay and/or incurs (or will
incur) additional Cost as a result of complying with any such requirements
that are not set out in the Contract, it shall be entitled to an adjustment to the
Scheduled Turnover Dates and/or an adjustment to the Contract Price
pursuant to an Adjustment Order under Clause 13.3 (Variation or Adjustment
Order Required by Terms of Contract). Furthermore the Contractor shall
coordinate its design, engineering and construction operations with those of
other Contractors employed by the Company as required by the Contract and
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as may from time to time be directed by the Company. In the event that such
coordination necessitates any changes to the Works, then such change shall
(subject to Clause 41.0 (Time Limitation on Claims by Contractor)) be treated
as a Variation pursuant to Clause 13.3 (Variation or Adjustment Order
Required by Terms of Contract).
30.1.3 If part of the Works depends, for proper execution or results, on design or
engineering information provided by, or construction or operations carried out
by other Contractors engaged by the Company, the Contractor shall, prior to
proceeding with that part of the Works, promptly notify the Company of further
information required and any apparent discrepancies or Defects it discovers
in such other information or in construction that would render it unsuitable or
not conform to the requirements of the Contract.
30.2 Coordination with the Operation of Existing Facilities
The Contractor shall coordinate all his construction activities with the
Company to ensure that all existing Facilities of the Company may continue to
be operated safely and, as far as possible, without interruption while the
Works are in progress. Where the Works require the shutdown of any
operating Facilities of the Company, or others, the Contractor shall give such
notices as are required to be given in accordance with the requirements of
Appendix D (Project Administration and Coordination Procedures) and such
shutdown shall be kept to the practical minimum. The Contractor shall be
responsible for making all appropriate and timely arrangements necessary to
ensure that work on the Company’s existing Facilities and, as may be
required hereunder, those of others, shall be performed safely and without
unnecessary delays and the Contractor shall not claim additional Cost for
having to reschedule the Works as required by this Clause 30.2 (Coordination
with the Operation of Existing Facilities).
31.0 UNFORESEEN SITE CONDITIONS
Subject to Contractor fulfilling its obligations under Clause 3.3 (Verification of
Site Information by Contractor), if during the execution of the Contract, the
Contractor encounters on the Site any physical conditions relating to the Site
(other than climatic conditions) that could not have been reasonably foreseen
at the Date of Bid by an experienced Contractor on the basis of its
examination and inspection of data and the Site in accordance with Clause
3.2 (Contractor’s General Responsibilities) and Clause 3.3 (Verification of Site
Information by Contractor), and if the Contractor determines that it will as a
consequence of such physical conditions (other than Unusually Inclement
Weather) incur additional Cost or be delayed as a direct result of such
unforeseen conditions relating to the Site such that, the Contractor will not be
able to achieve Turnover of the Facilities or any Portion on or before the
relevant Scheduled Turnover Date, the Contractor shall promptly, and before
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performing any additional work or modified work notify the Superintendent in
writing of:
(a)
(b)
(c)
(d)
the physical conditions on the Site that could not have been reasonably
foreseen and the date such physical conditions were encountered;
the resultant additional or modified work including the steps which the
Contractor proposes to take to overcome such physical conditions;
any additional Cost that the Contractor is likely to incur calculated in
accordance with Clause 13.4.1 (Valuation of Variations); and
the effect of such event on the Scheduled Turnover Date and any material
impact on any major activity dates and constraints imposed by the
Programme of Works; or
The Contractor shall be entitled to as applicable, an adjustment to the
Scheduled Turnover Dates and/or an adjustment to the Contract Price in
respect of such matters pursuant to an Adjustment Order under Clause 13.3
(Variation or Adjustment Order Required by Terms of Contract).
32.0 TITLE TO AND USE OF MATERIALS FOUND
32.1 Title and Right To Use
Unless otherwise provided in the Contract, the title to and all interest in and
right to use all water, soil, stone, gravel, sand, minerals, timber and all other
Materials developed or obtained in the excavation or other operations by the
Contractor or any of its representatives or employees or any of its
Subcontractors of any tier or any of their representatives or employees, and
the right to use or dispose of the same, are hereby expressly reserved in the
Company, and neither the Contractor nor any of its representatives or
employees nor its Subcontractors of any tier nor any of their representatives
or employees shall have any right, title or interest in or to any part thereof and
neither shall they, nor any of them, assert or make any claim thereto. The
Contractor will, as determined by the Company, be permitted to use in its
Works any such Materials, which meet the requirements of the Contract.
32.2 Archaeological and Historical Items
In the event that any items with archaeological or historical value are
discovered by the Contractor or any of its representatives or employees or
any of its Subcontractors of any tier or any of their representatives or
employees, the Contractor shall immediately notify the Company and, if such
discoveries are reasonably likely to impact the Works, await the Company’s
decision before proceeding with the affected parts of the Works. Neither the
Contractor nor any of its representatives or employees nor any of its
Subcontractors of any tier nor any of their representatives or employees shall
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have any property rights in such items. Where the Contractor suffers (or will
suffer) delay to the critical path activities due to the compliance by Contractor
with this Clause 32.2 (Archaeological and Historical Items) and/or incurs (or
will incur) additional Cost, then the Contractor shall be entitled to an
adjustment to the Scheduled Turnover Date and an adjustment to the
Contract Price pursuant to an Adjustment Order under Clause 13.3 (Variation
or Adjustment Order Required by Terms of Contract).
33.0 CONTRACTOR’S PERSONNEL
33.1 Employment of Personnel
The Contractor shall not employ any person who has resigned or been
discharged from the employment of the Company, any Ministry of the
Government of Kuwait, or any Company or corporation under the ownership
or control of the State of Kuwait, without a written release from such employer
or the approval in writing of the Company or until a period of not less than
twenty-six (26) weeks has elapsed since the person’s last working day in the
employment of the above entities.
33.2 Accommodation, Welfare Facilities and Transportation
33.2.1 The Contractor shall arrange and provide for its and its Subcontractors’
workforce all necessary transport, messing and accommodation; the resultant
Costs of which shall be deemed included in the Contract Price.
33.2.2 The living and messing accommodation for the Contractor’s workforce and
that of any Subcontractor it employs shall not be located within the
Contractor’s allocated work areas provided pursuant to Clause 25.0
(Contractor’s Temporary Offices and Works).
33.3 Project Organisation - Project Office
The Contractor, within a period of fourteen (14) days after the Date for
Commencement, shall submit to the Superintendent for approval the
Contractor’s project office organisation chart and job descriptions providing
details of lines of authority and responsibility, names, titles and functions of all
supervisory and other key personnel that the Contractor has assigned to its
home office project organisation, and the relationships of this project
organisation to the Contractor’s existing project office organisation and the
Contractor’s Site project organisation.
33.4 Project Organisation - Site
No later than thirty (30) days prior to assigning construction personnel to the
Site, the Contractor shall submit to the Superintendent for approval, an
organisation chart showing its proposed Site project organisation (including its
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design support team in Kuwait), and job descriptions lines of authority and
responsibility, names, titles and functions of all supervisory and other key
personnel that the Contractor proposes to assign to its project organisation at
the Site and the total number of non-manual labour employees, together with
resumes, including length of service with the Contractor, for each of the
Contractor’s non-manual labour personnel.
33.5 Changes to the Contractor’s Personnel/Organisation
The Contractor shall not make any changes in the organisation charts
referred to in Clauses 33.3 (Project Organisation - Project Office) and 33.4
(Project Organisation - Site) without the Superintendent’s prior written
agreement, provided that the Superintendent’s agreement shall not be
required if the relevant personnel leave the employment of the Contractor or
relevant Subcontractor voluntarily or it is necessary to remove them for
disciplinary reasons. The Contractor’s key project personnel, identified in the
Contract, shall be assigned to the Works and shall not be re-assigned without
the Superintendent’s prior written consent (which shall not unreasonably be
withheld), or without an adequate replacement being provided.
33.6 Contractor’s Project Manager’s Responsibilities
The Contractor shall designate a project manager (“Project Manager”) to be in
charge of all phases of the Project and shall represent and act with full
authority for the Contractor at all times during the progress of the Works. The
Project Manager shall have overall day-to-day responsibility for the Works,
including those performed in the Contractor’s project office and at the Site.
All communications from the Company delivered to the Project Manager shall
be as binding as if given to the Contractor.
33.7 Contractor’s Construction Manager’s Responsibilities
The Contractor’s construction manager (“Construction Manager”) shall be
resident at the Site during the construction of the Works. He shall represent
and act with full authority for the Contractor at the Site in the absence of the
Project Manager in relation to construction matters, but without restricting the
Company’s right to deal with the Project Manager directly. All
communications from the Company delivered to the Construction Manager
shall be as binding as if given to the Contractor including communications
addressed to the Project Manager.
33.8 Removal of Employees
The Contractor shall immediately remove from the Site any person whom it is
directed, to remove by the Company. The Company may also require the
Contractor to replace personnel assigned to non-Site Works and to require
replacement of same with personnel satisfactory to the Company.
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33.9 Labour Release Certificate
Notwithstanding any provision to the contrary in the Contract, pending either
(a) the submission by the Contractor of a certificate from the Ministry of Social
Affairs and Labour to the effect that the Contractor has satisfied the
requirement of the said Ministry in respect of its workforce on completion of
the Contract, or (b) evidence reasonably satisfactory to the Company that
Contractor has provided bonding for all employees as required by Kuwaiti
law, the Company shall retain the final payment due to the Contractor under
the Contract.
34.0 INSPECTION AND TESTING AT SITE
34.1 The Contractor shall be responsible for all inspection and testing required by
law, appropriate codes and Good Industry Practices of the component parts
of the Facilities at the Site all as more detailed in Appendix D (Project
Administration and Coordination Procedure). In addition, the Contractor shall
provide at the Site whatever inspection and testing the Contract requires to
discover any deviations from the Contract or any Defects in Materials spare
parts or workmanship. All such inspection and testing shall take place in time
to avoid delays to the Turnover of the Facilities and each Portion.
34.2 The Superintendent shall have the right at all reasonable times to inspect,
cause the inspection of, or witness the testing of, any part of the Works at
Site.
34.3 The Contractor shall give the Superintendent not less than seven (7) days
written notice of any inspection or testing of any part of the Works at the Site
where such inspection or tests are to be witnessed by the Company.
34.4 The Contractor, where the Company fails to exercise its right of inspection
after notification by the Contractor in accordance with Clause 34.3 (Inspection
and Testing at Site), may proceed with such inspection or testing so that
subsequent closing or covering will not be delayed. However, the Contractor
shall then promptly furnish the results of such inspection or test to the
Superintendent.
34.5 Neither the conduct of any test by the Contractor nor the inspection or
witnessing of any such test on the part of the Company shall constitute or be
deemed to constitute acceptance of any part of the Works nor relieve the
Contractor of any responsibility under the Contract, including responsibility to
ensure that each part of the Works complies with the requirements of the
Contract and is free from Defects and capable of performing its intended
function.
34.6 The condition for Mechanical Completion of any Portion or the whole of the
Facilities shall be when:
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a) the relevant Portion or the whole of the Facilities have been installed in
accordance with the final specifications and drawings;
b) the construction stage activities listed in Attachment 1 to Appendix C
(Facilities Completion and Acceptance) have been completed to the
satisfaction of the Company (except, if the Contractor so wishes, for minor
Works such as painting, insulation and grading, which will not hinder precommissioning
or commissioning or affect the safety thereof); and
c) tests for mechanical fitness have been carried in accordance with the
Technical Specifications, which tests shall include but not limited to all
generally accepted hydrostatic, pneumatic and other field tests and such
other tests (if any) as set down in the Contractor’s approved equipment
specifications. The Contractor in the event of failure of any such test wholly or
in part, shall promptly notify the Superintendent and perform such work as
may be necessary to correct the deficiencies and shall repeat such test until
all requirements of the test are met. The Contractor’s designated
representative and the Superintendent shall certify in writing the successful
completion of each test undertaken.
34.7 The Superintendent shall issue a Mechanical Completion Certificate for the
relevant Portion or the whole of the Facilities when the conditions of
Mechanical Completion set out in Clause 34.6 (Inspection and Testing at Site)
have been achieved
35.0 FINAL STAGES OF CONSTRUCTION, PRE-COMMISSIONING,
COMMISSIONING AND TURNOVER.
35.1 Pre-Commissioning
35.1.1 The Contractor shall prepare and submit for approval by the Superintendent
prior to commencement of any pre-commissioning activities, precommissioning
procedures showing those pre-commissioning activities that
the Contractor deems necessary to enable the various Portions or the whole
of the Facilities to be placed in operation as specified in Appendix C (Facilities
Completion and Acceptance). These procedures shall incorporate the
requirements of all Governmental Requirements, including such work as is
required to meet safety standards.
35.1.2 The Contractor, to enable any Portion or the whole of the Facilities to be
placed in operation at the earliest practicable date, shall to the extent
possible, but subject to the approval by the Superintendent of the precommissioning
procedures, complete the pre-commissioning of the items
required for the safe commissioning and operation of any Portion of the
Facilities prior to the completion of the whole thereof.
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35.2 Application for Construction Completion Certificate
The Contractor shall apply in writing to the Superintendent for a Construction
Completion Certificate for a Portion or for the whole Facilities as appropriate
when the Contractor has complied in respect of that Portion or the whole
Facilities with the following requirements:
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
ensured that the Works comprising the Portion or the whole of the Facilities
have achieved Mechanical Completion (pursuant to Clause 34.6 (Inspection
and Testing at Site)) and all relevant pre-commissioning operations referred
to in the approved pre-commissioning procedure prepared in accordance with
Clause 35.1.1 (Pre-Commissioning) have been completed pursuant to the
requirements of the Contract;
ensured that no deficiency or Defect remains which would hinder the safe
commissioning and operation of that Portion or the whole of the Facilities;
delivered in a format satisfactory to the Superintendent all appropriate
operating and maintenance manuals appropriate to that Portion or the whole
of the Facilities;
submitted, and obtained the Company’s approval of a detailed commissioning
procedure and schedule in accordance with Appendix C (Facilities
Completion and Acceptance) for the whole Facilities including, where not
already defined in Appendix C (Facilities Completion and Acceptance), the
basis of determining Stable and Satisfactory Operation of the Facilities;
delivered all tools, jigs and templates applicable to that Portion or the whole of
the Facilities which are required in accordance with Clauses 17.1.4
(Procurement and Supply of Material and Equipment - General Provisions)
and 29.0 (Property in Construction Tools - Special Tools);
completed the training of the Company’s personnel for the respective Portion
or the whole of the Facilities in accordance with Clause 36.0 (Training of
Company Personnel);
made available at the Site commissioning spares and consumables
applicable to that Portion or the whole of the Facilities in accordance with
Clause 18.1 (Spare Part Procurement - General Provisions) and ensured that
in accordance with the provisions of Clause 18.2 (Spare Part Procurement -
General Provisions) adequate time has been made available for the Company
to procure and have available in the Company stores those operational spare
parts that are appropriate to that Portion or the whole of the Facilities;
delivered to the Company the “as built” manuals, operating and maintenance
manuals, documents and records at the times specified in the Appendix D
(Project Administration and Coordination Procedure) appropriate to that
Portion or the whole of the Facilities; and
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(i)
submitted to the Company a statement from each Vendor of equipment as
required by Clause 18.8 (Spare Part Procurement - General Provisions).
35.3 Process of Application for Construction Completion Certificate
The Superintendent, within ten (10) days after receipt of an application for a
Construction Completion Certificate, shall respond either by advising the
Contractor why such application is not acceptable or issuing a Construction
Completion Certificate for the relevant Portion or the whole of the Facilities in
accordance with the following:
(a)
(b)
the certificate shall note any exceptions which shall not hinder the
commissioning of the Portion or the whole of the Facilities or impede the
operational and safety requirements of the Company; and
the effective date of the Construction Completion Certificate shall be the date
of receipt by the Superintendent of an application for the issue of such
certificate; however, in case of refusal by the Superintendent to accept the
application, the effective date of the Construction Completion Certificate shall
be the date of the application for the Construction Completion Certificate that
is finally accepted by the Superintendent.
35.4 Effect of Construction Completion Certificate
35.4.1 The issue of a Construction Completion Certificate shall not be construed as
the Company’s concurrence that the Portion or the whole Facilities fully
conform to all the requirements of the Contract.
35.4.2 The Contractor, after issuance of a Construction Completion Certificate by the
Company, shall attend to and satisfy the exceptions noted on the
Construction Completion Certificate and thereafter commence commissioning
and start-up of that Portion or the whole of the Facilities as required by
Clause 35.5.1 (Commissioning).
35.5 Commissioning
35.5.1 The Contractor, as soon as the Construction Completion Certificate has been
issued by the Superintendent in respect of any Portion of or the whole of the
Facilities and the exceptions noted on it have been satisfied to the
Superintendent’s satisfaction, shall commence commissioning of such Portion
or the whole of the Facilities in accordance with the Contractor’s approved
commissioning procedure and Appendix C (Facilities Completion and
Acceptance).
35.5.2 The Contractor shall provide an adequate number of electrical, instrument
and mechanical specialists and a representative of each Vendor of specialist
equipment identified in Appendix B (Facilities Performance Guarantees) on a
24-hour-a-day basis, from commencement of the commissioning activities
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and until Stable and Satisfactory Operation of the Portion or the whole of the
Facilities, have been achieved and approved by the Superintendent.
35.5.3 An adequate number of skilled technicians and general labourers shall be
provided by the Contractor to support each of the aforementioned discipline
specialists to carry-out the commissioning in accordance with the approved
commissioning procedure and schedule. The Contractor shall continue to
provide an operation and maintenance team to perform routine maintenance
of the commissioned Portion or the whole of the Facilities up to the issuance
of the Turnover Certificate in respect thereof.
35.5.4 The Contractor’s specialists mentioned in Clause 35.5.2 (Commissioning),
subject to the approval of the Superintendent, may be assigned concurrently
to more than one Portion at the times and for the periods stated therein. The
Vendor’s representatives shall be available during normal working hours and
shall be on-call during hours outside normal working hours.
35.5.5 Commissioning shall include operational tests as required by the approved
commissioning procedure and schedule, to demonstrate to the Company by
the Contractor that any Portion or the whole of the Facilities can be operated
safely under all available operating conditions in accordance with the Contract
and achieve Stable and Satisfactory Operation. As soon as a Portion or the
whole of the Facilities have been commissioned, the Contractor shall submit a
commissioning report to the Company for approval. The Company shall
approve the commissioning report or provide its comments within twenty-one
(21) days from receipt of said report.
35.5.6 The Contractor, where it incurs commissioning delays which are attributable
to the Company, shall give notice along with all pertinent substantiation, to the
Company and, subject to the provisions of Clause 13.3 (Variation or
Adjustment Order Required by Terms of Contract), shall be entitled to:
(a)
(b)
an adjustment to the Scheduled Turnover Date, and/or
an adjustment to the Contract Price,
pursuant to an Adjustment Order pursuant to Clause 13.3 (Variation or
Adjustment Order Required by Terms of Contract).
35.5.7 The Company, where any Portion or the whole of the Facilities does not
satisfy the commissioning tests stated in Clause 35.5.5 (Commissioning),
shall, subject to Clause 35.5.8 (Commissioning), order further repetition of
commissioning, to allow the Contractor to remedy any Defects that prevent
compliance with such test.
35.5.8 The Company, where the Contractor fails diligently to commence and carry
out the commissioning of any Portion or the whole of the Facilities promptly
after issuance of a Construction Completion Certificate in respect thereof,
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may by written notice direct the Contractor to complete all commissioning
work within a specific number of days, as reasonably determined by the
Company. The Contractor shall complete the commissioning work in the
period specified in the notice. If the Contractor fails to complete
commissioning within the period so specified, the Company may complete the
commissioning or complete commissioning with the assistance of a third
Party, at the Cost and expense of the Contractor.
35.6 Application for Turnover Certificate
The Contractor shall apply in writing to the Superintendent for a Turnover
Certificate for any particular Portion or the whole of the Facilities as
appropriate after:
(a)
(b)
(c)
a Construction Completion Certificate has been issued by the Company in
accordance with Clause 35.3 (Process of Application for Construction
Completion Certificate);
the Company has approved the commissioning report prepared by the
Contractor in accordance with Clause 35.5.5 (Commissioning); and
Stable and Satisfactory Operation has been achieved.
35.7 Process of Application for Turnover Certificate
The Superintendent, within ten (10) days after receipt of an application for a
Turnover Certificate for a Portion or the whole of the Facilities, shall respond
either by (i) notifying the Contractor in writing as to why such application is not
acceptable or (ii) issuing a Turnover Certificate for the relevant Portion or the
whole of the Facilities. The Turnover Certificate shall note any exceptions,
which will not hinder the Performance Acceptance Test of that Portion or the
whole Facilities or impede the operational and safety requirements of the
Company. The effective date of the Turnover Certificate shall be the date on
which it is issued by the Superintendent.
35.8 Effect of Turnover
35.8.1 The issue of a Turnover Certificate for a Portion or the whole of the Facilities
shall not be construed as the Company’s concurrence that the relevant
Portion or the whole of the Facilities fully conforms to all requirements of the
Contract.
35.8.2 The Company, after Turnover of a Portion or the Facilities as a whole, shall
be responsible for the operation of and the carrying out of routine
maintenance of that Portion or the whole of the Facilities without prejudice to
the requirements for the Contractor to comply with its obligations under the
provisions of Clause 38.0 (Defects Liability). Any commissioning and/or
maintenance work in respect of any Portion or the whole of the Facilities
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performed by the Company prior to the issue of the Turnover Certificate shall
not be construed as a waiver of the Contractor’s liability under the Contract,
and the Contractor shall remain liable for all commissioning and maintenance
and other obligations it is required by the Contract to perform.
36.0 TRAINING OF COMPANY PERSONNEL
36.1 The Contractor shall in conjunction with its Subcontractors, prepare, develop
and carry out a specialist training programme to impart all necessary skills
and knowledge to the Company’s operational and maintenance personnel
such as to enable them to competently and safely operate and maintain the
Facilities. Such training programme shall be submitted to the Superintendent
for review and approval no less than one hundred eighty (180) days prior to
the anticipated date of Turnover of the first Portion or whole of the Facilities
and shall satisfy as a minimum those requirements as stated in Clause 9.0
(Training of Company Personnel) of Appendix E (Scope of Work and
Description of Services).
36.2 The training shall be carried out in Kuwait as specified in Appendix E (Scope
of Work and Description of Services) in accordance with the approved training
programme and shall be completed prior to, and as a condition precedent to,
the issue of the Construction Completion Certificate of the relevant Portion or
the whole of the Facilities.
37.0 PERFORMANCE TESTS AND GUARANTEES
37.1 General
37.1.1 The Contractor shall ensure that the Facilities and each Portion comply with
and achieve the Performance Guarantees stated in Appendix B (Facilities
Performance Guarantees), which shall be demonstrated by means of
Performance Tests carried out in accordance with the provisions of this
Clause 37.0 (Performance Tests and Guarantees) and Appendix B (Facilities
Performance Guarantees).
37.1.2 The Contractor shall assist the Company in conducting Performance Tests on
all Portions or the whole of the Facilities, and shall also provide support from
all critical equipment Vendors. The list of such Vendors shall be agreed and
finalised in consultation between the Company and the Contractor and
included in the agreed commissioning procedure and schedule. The
Contractor shall arrange for and ensure the presence of the critical equipment
Vendors during the Performance Tests.
37.1.3 All Performance Tests shall be carried out under normal Kuwait operating
conditions (as defined in Appendix B (Facilities Performance Guarantees))
and conducted within the period stated in Appendix B (Facilities Performance
Guarantees) unless the Contractor and the Superintendent agree on a shorter
period. The specific methods to be used and the conditions under which the
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Performance Tests shall be performed shall be determined by prior
agreement between the Contractor and the Superintendent in accordance
with the Performance Test Procedures.
37.2 Performance Test Procedures
The Contractor shall, no less than one hundred eighty (180) days prior to the
anticipated Turnover date for the a Portion or whole of the Facilities submit to
the Company for its review and approval, the draft Performance Test
Procedures, which shall include detailed proposals for all tests necessary to
demonstrate the compliance of the Facilities with the Performance
Guarantees, together with proposed layouts for log sheets to record all
significant performance parameters (e.g. flow rates, temperatures, pressures
and the like). The draft Performance Test Procedures shall be prepared in
such a manner that the data to be recorded during testing may be used to
evaluate the performance of the major individual items of equipment as well
as that of the Facilities or relevant Portion thereof. The Company shall notify
the Contractor of its comments together with details of any modifications
considered necessary within a reasonable time. The Contractor shall revise
the draft Performance Test Procedures accordingly and resubmit them to the
Company for its further review. The final approved document shall be
available no later than ninety (90) days prior to the anticipated Turnover date
of the relevant Portion or the whole of the Facilities.
37.3 Commencement of Performance Tests
The Contractor and the Superintendent shall agree on a date and time for the
Performance Test for each Portion or the whole of the Facilities to be carried
out. The Parties shall use their best efforts to ensure that all Performance
Testing is started and concluded during days to be agreed with the Company.
The date for commencement of Performance Tests shall be as soon as
practicable after Turnover in respect of each Portion or the whole of the
Facilities.
37.4 Evaluation of Performance Test Results
37.4.1 The Company, for the purpose of the Performance Tests, shall provide all
requisite operating and engineering personnel together with laboratory and
other services as may be required to operate the Portions of the Facilities
under test and to obtain the necessary data in accordance with the approved
Performance Test Procedures, all as detailed in the Technical Specifications
and in Appendix B (Facilities Performance Guarantees).
37.4.2 The Contractor shall collect and evaluate all test data and within twenty-one
(21) days of the conclusion of Performance Tests and receipt of all testing
results, shall submit to the Company a written report (a “Performance Test
Report”) detailing and demonstrating whether and to what extent the relevant
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Portion or the whole of the Facilities satisfies the Performance Guarantees.
The Company shall approve or reject the Performance Test Report within
twenty one (21) days of receipt of it by the Company.
37.5 Failure of the Performance Tests
37.5.1 If any of the Performance Guarantees have not been achieved, the
Contractor shall promptly provide, at no additional Cost to the Company and
at Contractor’s own expense, any necessary additions, alterations,
adjustments, repairs and replacements together with any associated
engineering services, necessary Materials and labour required to ensure that
the relevant Portion or the whole of the Facilities meet the Performance
Guarantees. Any such additions, alterations, adjustments, repairs and
replacement, shall be subject to the written approval of the Superintendent.
37.5.2 After completion of any required additions, alterations, adjustments, repairs or
replacements, and after the rectified Portion of the Facilities has again run
satisfactorily and continuously for not less than five (5) days, the Company
shall commence as soon as possible, another Performance Test for the
period specified in Appendix B (Facilities Performance Guarantees), unless
the Superintendent has agreed to a shorter period, conducted in the same
manner and on the same conditions as the original Performance Tests to
determine whether the Performance Guarantees have been met.
37.5.3 If following the expiry of ninety (90) days from the date of the failure of the first
Performance Test for a Portion or the whole of the Facilities, the Contractor is
still unable to achieve the Performance Guarantees in respect thereof, then
the following shall apply:
(a)
(b)
(i)
If the Contractor has failed to achieve the Performance Guarantees either in
whole or in part, but has satisfied the Minimum Performance Guarantees
stated in Appendix B (Facilities Performance Guarantees), then the
Contractor shall pay to the Company performance Liquidated Damages at the
rates stated therein in respect of any shortfall between the Performance
Guarantee and the level of performance attained in the last Performance Test
(the “Performance Liquidated Damages”). In such event, payment of
Performance Liquidated Damages shall be in full satisfaction of the
Contractor’s obligation to achieve Performance Guarantees for that Portion or
the whole of the Facilities and upon payment of such Performance Liquidated
Damages, the Superintendent shall thereupon issue a Performance
Acceptance Certificate for that Portion or the whole of the Facilities.
If the Contractor fails to achieve the Minimum Performance Guarantees then
the Company may, at its option, either:
require the Contractor carry out remedial Works in accordance with Clause
37.5.1 (Failure of the Performance Tests) and repeat the Performance Tests
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until such time as the Minimum Performance Guarantees are met, in which
case the provisions of Clauses 37.5.2 and 37.5.3 (Failure of the Performance
Tests) shall also apply; or
(ii)
(iii)
(c)
accept the Portion or whole of the Facilities and issue a Performance
Acceptance Certificate, subject to a reasonable reduction in the Contract
Price, which reduction shall include the Contractor’s liability for Performance
Liquidated Damages as may be calculated in accordance with Appendix B
(Facilities PerformanceGuarantees).
terminate the Contract in accordance with Clause 51.2 (Events of Default by
Contractor) hereof.
The maximum aggregate amount of Performance Liquidated Damages
payable by the Contractor for failure to achieve the Performance Guarantees
shall not exceed the percentage of the Contract Price specified as the
maximum aggregate amount of Performance Liquidated Damages in Clause
6.0 (Liquidated Damages for Shortfall in Performance) of the Particular
Conditions.
37.6 Variances in Feedstock
Subject to the Contractor’s obligations to verify Feedstock data provided by
the Company pursuant to Clause 3.3.1 (Verification of Site Information by
Contractor), if in the Contractor’s opinion the Feedstock prevents the
satisfaction of any of the Performance Guarantees due to any variance in
such Feedstock at the date of the Performance Tests (allowing for seasonal
adjustment thereof), with either the Feedstock data included in the Contract or
revised Feedstock data accepted from the Company pursuant to Clause 3.3.3
(Site Information), the Contractor shall forthwith notify the Superintendent in
writing giving details of such variance together with reasonable justification
that such variance is the cause of any failure to satisfy the Performance
Guarantees. If the Superintendent agrees with the Contractor’s reasonable
justification, the Contractor shall at the Company’s sole option either:
a) be entitled to an adjustment to the Performance Guarantees, reflecting the
effect on the performance of the Facilities of the varied Feedstock, which
adjustment shall be instructed pursuant to an Adjustment Order under Clause
13.1 (Company Variations) and shall be calculated by the Superintendent
using established and technically sound methods of calculation; or
b) the Company may pursuant to Clause 13.1 (Company Variations), instruct the
Contractor to carry out such modifications to the Works as will enable that
Portion or the whole of the Facilities to pass the Performance Guarantees
based on varied Feedstock identified by the Contractor in this Clause 37.6
(Variances in Feedstock).
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37.7 Issue of Performance Acceptance Certificate
37.7.1 As soon as the Performance Tests for a Portion or the whole of the Facilities
satisfactorily establish that, subject to Clauses 37.5.3(a) (Failure of the
Performance Tests), 37.6 (Variances in Feedstock) and 37.7.2 (Issue of
Performance Acceptance Certificate), all Performance Guarantees have been
achieved and the relevant Portion or whole of the Facilities are functioning
satisfactorily in accordance with the performance criteria described in the
Contract including the Performance Test Procedures, the Superintendent
shall issue to the Contractor a Performance Acceptance Certificate for such
Portion or the whole of the Facilities, the effective date of which shall be the
date of approval by the Company of the Performance Test Report in
accordance with Clause 37.4.2 (Evaluation of Performance Test Results).
37.7.2 If, through no contractual default, the Contractor’s Performance Testing has
not been commenced by the Company on a particular Portion or the whole of
the Facilities within three (3) months of the issue of the relevant Turnover
Certificate, the Company shall accept that Portion or the whole of the
Facilities and the Performance Guarantees shall be deemed to have been
achieved and the Superintendent shall issue a Performance Acceptance
Certificate to that effect.
38.0 DEFECTS LIABILITY
38.1 Defects Liability Period
38.1.1 The Defects Liability Period for a Portion of or the whole of the Facilities, shall
be a period of twelve (12) months from the effective date of the Performance
Acceptance Certificate (as determined pursuant to Clause 37.7.1 (Issue of
Performance Acceptance Certificate) for such Portion or the whole of the
Facilities, as such period may be extended pursuant to Clause 38.1.3
(Defects Liability Period).
38.1.2 If, at any time during the performance of the Works or within the Defects
Liability Period, the Company notifies the Contractor or the Contractor
otherwise becomes aware of any Defect (including any damage caused by
any other part of the Works by such Defect), then the Contractor, at no
additional Cost to the Company, shall promptly rectify such failure by carrying
out any necessary design, engineering, procurement, construction and/or
other modification or rectification work to comply with the requirements of the
Contract and shall carry out any further re-tests necessary to verify
compliance with the Contract.
38.1.3 If any Defect is repaired or replaced pursuant to the provisions of Clause
38.1.2 Defects Liability Period), then a further period of twelve (12) months
shall apply to the affected part of the Facilities from the date on which such
repairs or replacements were completed. Notwithstanding the above, in no
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event shall the Defects Liability Period in respect of the Facilities or any part
thereof exceed twenty-four (24) months.
38.1.4 If and to the extent that any Defect notified is directly attributable to faulty
operation or maintenance of the Facilities by the Company or to conditions of
use more severe than those specified in the Contract (or if more stringent
than those required to meet the Performance Guarantees), the remedial work
shall be carried out at the Company’s Cost, in which case the Contractor shall
be entitled to an Adjustment Order pursuant to Clause 13.3 (Variation or
Adjustment Order Required by Terms of Contract).
38.1.5 If and to the extent that any Defect notified arises from failure in service due
to normal wear and tear based upon the time in service at the time of such
failure, the remedial Works shall be carried out at the Company’s Cost
(provided that the Contractor can demonstrate that such failure is not
attributable in whole or in part to inadequate detailed design or specifications
prepared by the Contractor in accordance with Good Industry Practice and
the applicable codes and standards provided for in Clause 14.0 (Codes and
Standards)), in which case the Contractor shall be entitled to an Adjustment
Order pursuant to Clause 13.0 (Variations).
38.1.6 The Company shall provide the Contractor all necessary access to the
Facilities and the Site to enable the Contractor to perform its obligations
under this Clause 38.0 (Defects Liability).
38.1.7 The Contractor may, with the consent of the Superintendent, remove from the
Site any Materials or part of the Facilities that are defective if the nature of the
Defect, and/or any damage to the Facilities caused by the Defect, is such that
repairs cannot be expeditiously carried out at the Site.
38.1.8 The Contractor shall, in the performance of its obligations under this Clause
38.0 (Defects Liability), use all reasonable endeavours to avoid any
unnecessary interference with or disruption to the operation of the Facilities or
other operations on the Site.
38.2 Vendor and Subcontractor Warranties
38.2.1 The Contractor, without prejudice to its obligations under Clause 38.1
(Defects Liability Period), shall obtain, to the extent possible, for the benefit of
the Contractor and the Company, warranties or guarantees of Subcontractors
for as long a period as possible with respect to the Materials or work
manufactured or furnished by them for repair, replacement or re-work by them
at their own Cost and expense, and the Contractor shall use its best efforts to
enforce such warranties or guarantees on its own behalf or, if so directed by
the Company, on behalf of the Company.
38.2.2 No such direction by the Company shall act as a waiver of or release from the
Contractor’s obligations under Clause 38.1 (Defects Liability Period).
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38.3 Retests
The Contractor, at no additional Cost to the Company, shall perform such
tests as may be required to verify that any parts of the Works affected by
work done pursuant to this Clause 38.0 (Defects Liability) comply in all
respects with the Contract.
38.4 Failure by Contractor
If the Contractor, after due notification by the Company, fails to comply with
its obligations under this Clause 38.0 (Defects Liability), the Company may at
the Contractor’s expense, perform, or cause to be performed, such
obligations.
39.0 FINAL ACCEPTANCE
The Company, when, in respect of a Portion or the whole of the Facilities (i)
all obligations of the Contractor under the Contract have been satisfactorily
performed, (ii) the Performance Acceptance Certificate has been issued, and
(iii) all Defects notified by the Company have been remedied in accordance
with Clause 38.2 (Vendor and Subcontractor Warranties) (for which notice
has been properly given by the Superintendent within the Defects Liability
Period stated in Clause 38.1.1 (Defects Liability Period)), shall issue a Final
Acceptance Certificate for the respective Portion or the whole of the Facilities,
as the case may be. The effective date of such certificate shall be the date of
issue thereof. The issue of the Final Acceptance Certificate shall not release
the Contractor from those obligations under the Contract, that continue to
apply.
40.0 TAXES AND DUTIES
40.1 The following shall be paid by the Contractor when due and payable, whether
under the laws of Kuwait or any other country, all of which are deemed to be
included in the Contract Price:
(a)
(b)
all taxes imposed wherever and by whomsoever they may be imposed by
reason of the Works undertaken by the Contractor including, but not limited
to, all sales, excise, value added, storage, consumption and use taxes,
licence, permit and registration fees and income, profit, franchise, corporate
and personal property taxes. This obligation shall not include any licenses or
permits required of and obtained by the Company in Kuwait.
all employment taxes and contributions imposed by law, or trade union
Contracts or regulations, with respect to or measured by the amount (wages,
salaries or other) paid to employees of the Contractor related to the Works,
including, but not limited to, taxes and contributions for various legally
required compensation insurances, funds and the like.
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(c)
fees and Costs relating to all import/export licenses and import/export taxes
and duties (including customs duties) on services, equipment, Materials and
supplies and construction tools and equipment imported or exported by the
Contractor.
40.2 The Contractor shall defend, indemnify and hold the Company harmless from
any liability resulting from the failure of or delay by the Contractor in making
any payment required to be made by the Contractor in accordance with
Clause 40.1 (Taxes and Duties) or by any failure of the Contractor to comply
with the reporting, return or other procedural requirements with respect to any
such payment.
40.3 The Company shall withhold the release of amounts retained pursuant to
Clause 11.3.6 (Payment Terms) or the Tax Retention Bond notwithstanding
any provision of the Contract to the contrary, pending the submission by the
Contractor of a valid certificate from the Income Tax Control Office of Kuwait
to the effect that the Contractor has discharged its tax liability in relation to the
Works or part thereof.
41.0 TIME LIMITATION ON CLAIMS BY CONTRACTOR
41.1 If events or circumstances arise which the Contractor considers would entitle
it to make a claim under the Contract for an extension of time to the
Scheduled Turnover Date, or an adjustment to the Contract Price, or any
additional payment by virtue of any provision of the Contract (with the
exception Clauses 13.1 (Company Variations) and 13.2 (Contractor
Variations)) or otherwise in connection with the Contract, then the Contractor
shall:
(a)
(i)
(ii)
(iii)
(b)
within seven (7) days of becoming aware of such event or circumstance, give
written notice to the Company that it intends to make a claim, which notice
shall include the following details:
brief particulars of the events or circumstances giving rise to the claim;
the specific Clause under the Contract on which such claim is based; and
the measures Contractor has taken or proposes to take to avoid or mitigate
the effects of any delay.
within thirty (30) days of becoming aware of such event or circumstance, or
where such events of circumstances are still ongoing, as soon as practicable
thereafter, submit to the Superintendent in writing the details required
pursuant to Clause 13.3.1 (Variation or Adjustment Order Required by Terms
of Contract).
41.2 With regard to any claim for delay or an extension of time, the Contractor
shall, in the details provided to the Superintendent pursuant to Clause 13.3.1
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and 13.3.2 (Variation or Adjustment Order Required by Terms of Contract),
demonstrate by reference to the current Programme of Works (as updated in
accordance with Clause 10.0 (Programme, Progress and Sequence of
Works)) and the critical path contained therein the effect on the Contractor’s
regular progress and on any Scheduled Turnover Dates together with the
measures taken by the Contractor to avoid or mitigate such delay.
41.3 Any claim for an adjustment to the Contract Price or additional Cost or any
other sum shall be substantiated by reference to a detailed breakdown of the
amounts claimed and where such amounts are as a result of any delay, then
the Contractor shall demonstrate the loss so caused and that it has been
incurred as a direct result of such delay.
41.4 The Contractor, except where expressly permitted under the Contract, shall
not be entitled to an extension of the Scheduled Turnover Date.
41.5 Where there is a concurrent delay by both the Company and the Contractor,
the predominant cause of delay shall be regarded as the cause of delay to the
progress of the Works. If the Parties cannot agree as to the existence of a
concurrent delay or the predominant cause of such delay, the dispute shall be
resolved in accordance with Clause 55.0 (Dispute Resolution).
41.6 It is a condition precedent to the Contractor’s entitlement to an extension of
time and/or an adjustment to the Contract Price and/or any additional Cost or
any other sum, as the case may be, that it complies with all the following
conditions:
(a) the Contractor has complied with the time notice provision of Clause 41.1
(Time Limitation on Claims by Contractor);
(b)
(c)
(d)
the Contractor demonstrates, by reference to the current Programme of
Works (as updated in accordance with Clause 10.0 (Programme, Progress
and Sequence of Works)) that the delay event is on the critical path or will
impact the critical path and that such delay event will prevent the Contractor
from achieving Turnover of the Facilities or any Portion by the relevant
Scheduled Turnover Date;
the Contractor has made reasonable attempts to avoid or mitigate the delay
(giving specific details of such attempts); and
the amount claimed, is the direct Cost and loss the Contractor has suffered as
a result of the relevant event or circumstance.
The Company shall be discharged from all liability in connection with any
event or circumstance where the Contractor has failed to comply with these
conditions in relation to a claim in respect of such event or circumstance.
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42.0 INDEMNITIES AND LIABILITIES
42.1 Care of the Works
The Contractor shall be responsible for the care, custody and control of the
Works from the Date for Commencement until the date of Turnover of a
Portion or the whole of the Facilities (at which point responsibility of the care
of the Works comprised in that Portion or the whole of the Facilities shall pass
to the Company) and shall make good any loss or damage that may occur to
the Works from any cause whatsoever during that period. The Contractor
shall also be responsible for any loss or damage to the Works caused by the
Contractor in the course of any Works carried out pursuant to Clause 38.0
(Defects Liability) hereof. Notwithstanding the foregoing, the Contractor shall
not be liable for any loss or damage to the Works or any part thereof by
reason of the Excepted Risks specified in Clause 42.3 (Excepted Risks)
hereof.
42.2 Indemnities
42.2.1 The Contractor shall be liable for and shall indemnify and hold the Company
harmless against all claims, demands and actions made or brought against
the Company in respect of injury to, illness, disease or death of any of the
employees or hired personnel of the Contractor or its Subcontractors or loss
or damage to the property of the Contractor, its Subcontractors or its or their
employees and hired personnel and all compensation, damages, Costs,
expenses, losses and liability whatsoever in connection therewith..
42.2.2 The Company shall be liable for and shall indemnify and hold the Contractor
harmless against all claims, demands and actions made or brought against
the Contractor in respect of injury to, illness, disease or death of any of the
Company’s employees or hired personnel of the Company or its other
Contractors or Subcontractors or loss or damage to the property of the
Company (other than the Facilities), or its other Contractors and
Subcontractors or its or their employees and hired personnel and all
compensation, damages, Costs, expenses, losses and liability whatsoever in
connection therewith.
42.2.3 The Contractor shall be liable for and shall indemnify and hold the Company
harmless against all claims, demands, and actions made or brought against
the Company in respect of injury to, illness, disease, or death to any third
Party or loss or damage to third Party property resulting from the negligence
or breach of the Contract by the Contractor and all compensation, damages,
Costs, expenses, losses and liability whatsoever in connection therewith.
42.2.4 The Company shall be liable for and shall indemnify and hold the Contractor
harmless against all claims, demands, and actions made or brought against
the Contractor in respect of injury to, illness, disease, or death to any third
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Party or loss or damage to third Party property resulting from the negligence
or breach of the Contract by the Company and all compensation, damages,
Costs, expenses, losses and liability whatsoever in connection therewith.
42.2.5 The Contractor shall be liable for and shall indemnify and hold the Company
harmless against all claims, demands, and actions made or brought against
the Company in respect of pollution emanating from the property of the
Contractor arising from or relating to the execution of the Works and all
compensation, damages, Costs, expenses, losses and liability whatsoever in
connection therewith.
42.2.6 The Company shall be held liable for and shall indemnify and hold the
Contractor harmless against all claims, demands, and actions made or
brought against the Contractor in respect of pollution emanating from a
wellhead, reservoir or from the property of the Company arising from or
relating to the execution of the Works and all compensation, damages, Costs,
expenses, losses and liability whatsoever in connection therewith; provided,
that such pollution is not a direct result of any act, default or negligence of the
Contractor.
42.3 Excepted Risks
If loss or damage occurs to the Works or any part thereof by reason of: (a)
war (whether war be declared or not), hostilities, invasion, act of foreign
enemies; (b) rebellion, terrorism, revolution, insurrection, military or usurped
power, or civil war within Kuwait; (c) riot, commotion or disorder within Kuwait
by persons other than the Contractor’s personnel and other employees of the
Contractor and Subcontractors; (d) munitions of war, explosive Materials,
ionising radiation or contamination by radio activity, within Kuwait, except as
may be attributable to the Contractor’s use of such munitions, explosives,
radiation or radioactivity; or (e) pressure waves caused by aircraft or other
aerial devices travelling at sonic or supersonic speeds ( together the
“Excepted Risks”), then the Company shall pay to the Contractor all sums
payable in respect of the Works executed, notwithstanding that the same be
lost, destroyed or damaged, and will pay to the Contractor the replacement
value of all Temporary Works and all parts thereof lost, destroyed or
damaged to the extent such Temporary Works are necessary to be reinstated
for Contractor to complete the Works. If the Company requests the
Contractor in writing to make good any loss or damage to the Works thereby
occasioned, the Contractor shall make good the same at the Cost of the
Company in accordance with Clause 13.1 (Company Variations). If the
Company does not request the Contractor in writing to make good any loss or
damage to the Facilities thereby occasioned, the Contractor may request a
Variation in accordance with Clause 13.3 (Variation or Adjustment Order
Required by Terms of Contract) hereof, excluding the performance of that
part of the Works thereby lost, destroyed or damaged, or, where the loss or
damage affects a substantial part of the Works, the Company shall terminate
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42.4 Liens
the Contract pursuant to Clause 51.1 (Termination for Company’s
Convenience) hereof.
The Contractor shall take full responsibility for the payment of Subcontractors
under all subcontracts and for the management of all claims for payment
thereunder, including payments to all Subcontractors of any tier, and shall
take all proper precautions to prevent the imposition of any lien or charge
against any property of the Company and to indemnify and defend the
Company against any and all claims, demands, actions, suits, proceedings
and judgments which may be brought or secured against the Company by
reason of the Contractor’s failure to make payments under any subcontract.
42.5 Joint and Several Liability
42.5.1 If the Contractor constitutes a joint venture, consortium or other
unincorporated grouping of two or more members:
(a) these members shall be deemed to be jointly and severally liable to the
Company for the performance of the Contractor’s obligations under the
Contract;
(b)
(c)
(d)
(e)
these members shall appoint and authorise a lead member (named) with
authority to bind the Joint Venture, and to act on its behalf in all matters in
connection with or arising out of the Contract;
payments made by the Company to the account nominated by the Project
Manager shall satisfy the Company’s payment obligations in respect of such
payment to all members of Contractor. All members of the Contractor hereby
waive all right or claim that might otherwise arise to call for any additional
payment by reason of such manner of payment or any division of future
payments;
these members confirm to the Company that the Project Manager has the
authority set out in Clause 33.6 (Contractor’s Project Manager’s
Responsibility) and shall furnish the Company with copies of the powers of
attorney or such other instrument, granting such authority;
the Contractor shall not alter its composition or legal status without the prior
consent of the Company
43.0 INSURANCE
43.1 Insurance to be maintained by the Contractor
The Contractor and its Subcontractors, at their expense, shall from the Date
for Commencement effect and maintain until the date of the last Final
Acceptance Certificate the insurance coverage stated in Clauses 43.1.1,
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43.1.2 and 43.1.4 (Insurance to be Maintained by the Contractor) with an
Insurance Company licensed to operate in Kuwait subject to Company
approval with limits not less than those stated in the Particular Conditions.
43.1.1 Workmen’s Compensation and Employer’s Liability Insurance covering all
statutory, civil or common law liabilities arising out of job related injury to,
illness, disease or death of the Contractor’s and/or its Subcontractors’
employees (including passive war injury or death caused by mines, bombs or
other weapons of war remaining from hostilities) in accordance with any
applicable statutes and referencing the Contract number. The employer’s per
occurrence liability limit shall be the amount specified in the Particular
Conditions.
43.1.2 Automotive Third-Party Liability Insurance covering all the Contractor- or
Subcontractor-owned motor vehicles that are licensed for road use whilst in or
outside the State of Kuwait. In respect of automobiles operated in the State
of Kuwait, the Contractor and its Subcontractors shall ensure that the
insurance provided shall be in accordance with all the legal requirements of
the State of Kuwait.
43.1.3 In cases where the Contractor or Subcontractor uses non-owned or hired
motor vehicles, it shall be the responsibility of the Contractor to ensure that
insurance fulfilling the abovementioned requirements are in effect.
43.1.4 Construction Plant and Equipment Insurance covering:
(a)
(b)
during the transit to Kuwait, on an all risks basis, all construction plant and
equipment and temporary buildings owned by the Contractor and/or its
Subcontractors or for which the Contractor and/or its Subcontractors are
responsible, until off-loaded on arrival at the Works Site;
on arrival in Kuwait, on an all risks basis, including passive war risk cover, all
construction, plant, equipment and Temporary Works owned by the
Contractor and/or its Subcontractors or for which the Contractor and/or its
Subcontractors are responsible that are brought onto the Site in connection
with the performance and execution of the Works. The minimum value of
such insurance shall be for the Cost of replacement to the same condition
immediately prior to loss or damage. Such insurance will commence from offloading
on arrival at the Site.
43.1.5 The Contractor shall furnish the Company, for itself and for its
Subcontractors, a certificate of insurance for each policy of insurance
described in Clauses 43.1.1, 43.1.2 and 43.1.4 (Insurance to be Maintained
by the Contractor) above. All such policies shall include an insurer’s waiver of
any right of subrogation against the Company and/or its officers, employees,
representatives, agents, Contractors and Subcontractors, or the successors
of any of them.
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43.1.6 The Contractor shall pay all premiums on insurances specified in this Clause
43.1 (Insurance to Be Maintained by the Contractor) and shall be liable and
responsible for the amount of any deductibles.
43.2 Insurance to Be Maintained by the Company
Subject to Clause 43.2.5 (Insurance to be Maintained by the Company),
commencing from the Date for Commencement until the date of the last Final
Acceptance Certificate, the Company shall maintain insurance coverage
stated in Clauses 43.2.1, 43.2.2 and 43.2.3 (Insurance to be Maintained by
the Company). Details with respect to risk covered limits and deductibles
shall be as specified in the Particular Conditions.
43.2.1 All Risks Marine Cargo Insurance covering ocean, marine, air or land transit
and temporary storage outside the project Site of all goods and Materials to
be incorporated into the Works. Loss valuation shall be Cost Insurance and
Freight (CIF) plus ten percent (10%) basis.
43.2.2 Construction All Risk Insurance covering physical loss or damage (including
passive war damage caused by mines, bombs or other weapons of war
remaining from hostilities) for the full Contract Price, including any Adjustment
Orders at the Site or otherwise within the Gulf area where the Works are to be
performed and goods or Materials to be incorporated into the Works delivered
to the Works Site, in terms specified in the Particular Conditions.
43.2.3 Comprehensive General Liability Insurance in respect of any claim, demand
or action made or brought against the Company or the Contractor or any of
their respective Contractors or Subcontractors (the “insured”) for each
occurrence or injury to, illness, disease or death of any third Party or loss of
or damage to any property of any third Party and all compensation, damages,
Costs, expenses, losses and liability whatsoever in connection therewith
resulting directly or indirectly from any act, default or negligence in connection
with any of the Works.
43.2.4 The insurances specified in Clauses 43.2.1, 43.2.2 and 43.2.3 (Insurance to
Be Maintained by the Company) shall include the Company, the Contractor
and its Subcontractors (of any tier) as joint insureds and shall include an
insurer’s waiver of any right to subrogation against the Company, the
Contractor or its Subcontractors and/or their respective officers, employees,
representatives, agents, Contractors, Subcontractors or the successors of
any of them. Details with respect to risk coverage limits, deductibles and
period of insurance shall be as specified in the Particular Conditions.
43.2.5 The Company shall use its best endeavours to maintain the insurances
specified in Clauses 43.2.1, 43.2.2 and 43.2.3 (Insurance to be Maintained by
the Company) on the terms stated in the Contract, provided that these
insurances remain available on such terms from reputable insurers at
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reasonable commercial rates and prices. The Company shall, however notify
the Contractor of any proposed changes to the terms of these insurances,
and shall discuss and agree with the Contractor the best way to cover such
risks.
43.2.6 Deductibles under the insurance to be maintained by the Company shall be
for the Contractor and/or its Subcontractors account to the extent that the
event(s) giving rise to the claim under the policy result from any act,
negligence or default by the Contractor.
43.3 Terms of Policies
43.3.1 The Contractor shall and procure that its Subcontractors shall: (a) make
themselves conversant with the terms and conditions of the insurance
effected and maintained by the Company as aforesaid; (b) comply in all
respects and at all times with the terms and conditions of the said insurances,
including furnishing all information reasonably required by the insurers; (c)
notify insurers of all claims in accordance with and within the periods required
by the said insurances and follow the Company established insurance
procedures for the administration of Insurance to Be Maintained by the
Company; and (d) not do or permit or omit anything to be done which would in
any way invalidate any of the said insurances to be procured by the Company
or the Contractor or reduce the effectiveness of the cover thereunder.
43.3.2 Insofar as there is any duplication of coverage between the insurance
effected and maintained by the Company under Clauses 43.2.1, 43.2.2 and
43.2.3 (Insurance to Be Maintained by the Company) and the Contractor’s or
Subcontractor’s own policies of insurance, then the insurance effected and
maintained by the Company under Clauses 43.2.1, 43.2.2 and 43.2.3
(Insurance to be Maintained by the Company) shall be treated as primary
cover.
43.4 Copies, Notification.
In respect of the insurances to be effected and maintained pursuant to this
Clause 43.0 (Insurance):
43.4.1 The Company and the Contractor shall submit to the other a copy of the
policy certificates and evidence of payment of premiums for inspection. Such
documents shall be made available for inspection at the Company’s offices in
Kuwait.
43.4.2 The Contractor shall give not less than thirty (30) days written notice to the
Company of any proposal to cancel, vary, amend or permit to lapse any
insurances that are to be maintained by the Contractor under the Contract
(including Subcontractor’s insurances) and shall not, without the consent of
the Company, cancel, vary, amend or permit the same to lapse if such act or
omission would affect adversely the interest of the Company.
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43.4.3 If the Contractor and, as the case may be, any of its Subcontractors are
unable to effect any of the insurances required under Clause 43.1 (Insurance
to Be Maintained by the Contractor) or if any such insurance is cancelled, or
lapses, the Contractor shall immediately notify the Company. In addition, the
Contractor and as the case may be, any of its Subcontractors shall provide
the Company with detailed information of quotations obtained and terms of
coverage sought for any insurance which the Contractor or its Subcontractor
is unable to effect and shall cooperate fully with the Company’s efforts to
assist the Contractor in obtaining such coverage.
43.5 Subcontractors
In cases where Clause 43.0 (Insurance) imposes or purports to impose
obligations directly upon Subcontractors, the Contractor shall procure
performance by such Subcontractors.
44.0 INTELLECTUAL PROPERTY RIGHTS
44.1 Fees, Royalties and Other Charges
Except in respect of the licenses directly obtained by the Company or as
otherwise specifically provided in the Contract, the Contractor shall be
responsible for the payment of all fees, royalties and other charges, if any,
that may be payable under the terms of any license, process or permission in
connection with the design, manufacture, supply and operation of any of the
Facilities whether such licenses relate to Intellectual Property Rights or
otherwise. Such fees, royalties and other charges are deemed to be included
in the Contract Price.
44.2 Intellectual Property Indemnity
44.2.1 The Contractor shall defend, indemnify and hold harmless the Company from
and against any and all liability, Costs, damages, demands, causes of action,
Costs and expenses (including legal fees and expenses) arising out of any
actual or threatened claim, suit or action brought against the Company
alleging that any process furnished by the Contractor or Subcontractor or the
execution of the Works by the Contractor or a Subcontractor infringes any
Intellectual Property Rights of a third Party.
44.2.2 To the extent that the Contractor is required to indemnify the Company under
Clause 44.2.1 (Intellectual Property Indemnity), the Contractor shall have the
right at its sole Cost to take control of and to settle such claim, suit or action,
subject to:
(a)
the Contractor providing an undertaking reasonably satisfactory to the
Company to the effect that it will indemnify the Company in respect of the
course of such claim, suit or action; and
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(b)
acknowledging its liability under Clause 44.2.1 (Intellectual Property
Indemnity) to indemnify in respect of the relevant claim, suit or action.
The Contractor shall provide to the Company the undertakings of Clause
44.2.2(a) and (b) within two (2) weeks of a demand for indemnity from
Company. Notwithstanding the foregoing, in no event shall the Contractor be
entitled to agree to any non-monetary settlement on the Company’s behalf
without Company’s prior written consent.
44.2.3 The Company shall be entitled to receive full and prompt information as to the
progress of any claim, suit or action in respect of which the Contractor has
assumed control of claims under Clause 44.2.2 (Intellectual Property
Indemnity) and to retain its own counsel in relation to the same (at its own
Cost). In the event that any claim, suit or action in respect of which the
Contractor has taken control of involves a claim for a non-monetary remedy,
the Company shall be entitled, if it feels so necessary, to take back control of
such claim.
44.2.4 The Contractor may, in order to avoid such claims or actions, substitute at its
expense by non-infringing Materials or processes, or modify at its expense
such infringing design, Materials and processes so they become noninfringing,
provided that such substituted and modified design, Materials and
processes shall meet all the requirements of and be subject to all the
provisions of the Contract and are approved by the Company in advance.
44.3 Ownership of Intellectual Property Rights
44.3.1 As between the Company and the Contractor, the Contractor shall retain
ownership of all Intellectual Property Rights in Contractor’s Existing Data.
The Contractor hereby grants to the Company an irrevocable, perpetual, fully
transferable, non-exclusive, royalty-free licence to use all Intellectual
Property Rights in Contractor’s Existing Data, in connection with the
provision, use, and operation and maintenance of the Facilities and the use or
sale or importation worldwide of products produced thereby and otherwise as
necessary for the Contractor’s performance of this Contract or Company’s
exploitation of the Facilities.
44.3.2 Except to the extent that it is expressly prohibited under agreements with
Subcontractors:
a) The Intellectual Property Rights in all Works other than the Contractor’s
Existing Materials, which are produced either by or on behalf of the
Contractor or the Company in connection with the Contract, shall be the
exclusive property of the Company and the Contractor agrees that it shall at
its sole Cost do and procure to be done all actions and things necessary to
vest absolute ownership of such Intellectual Property Rights in the Company.
The Contractor acknowledges that it shall have no rights to use such
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Intellectual Property Rights other than for the purposes of carrying out the
Works in connection with this Contract.
b) The Contractor further acknowledges that the Intellectual Property Rights in
all documents comprising the Contract and all documentation of which the
Company is the author and which is issued to the Contractor, vests in the
Company, and except where reasonably necessary for Contract
administration, shall not be reproduced, transmitted or stored in any form by
any means without the Company’s prior written permission.
c) The Contractor undertakes to obtain, on an irrevocable basis, all licenses and
other permissions necessary for the use, without commercially unreasonable
restriction or condition, of any Intellectual Property Rights in connection with
the provision, use, and operation and maintenance by the Company of the
Facilities and the use or sale or importation worldwide of products produced
thereby and otherwise as necessary for the Contractor’s performance of this
Contract or Company’s exploitation of the Facilities (collectively, the “Third
Party IP Rights”). The Contractor shall undertake this obligation prior to the
commencement of any activities pursuant to this Contract that would
otherwise amount to an infringement of any Third Party IP Rights. All
royalties, license fees and other sums payable to any third Party in respect of
any of the Third Party IP Rights shall be paid by the Contractor and shall be
deemed included in the Contract Price.
45.0 FORCE MAJEURE
45.1 Force Majeure means events or circumstances occurring after the Date of Bid
that are unforeseen and beyond the reasonable control of the Party claiming
Force Majeure and that cannot be circumvented by such Party by legal
means. Such events and circumstances include but are not limited to acts of
God, acts of Governmental Authority, fires, floods, earthquakes, Unusually
Inclement Weather, explosions, riots, war (whether war be declared or not),
rebellion and sabotage, strikes and lockouts (other than those solely confined
to the Contractor and/or Subcontractors or their employees) but excluding
lack or shortage of labour, Materials or shipping (unless caused by Force
Majeure events and circumstances). For the avoidance of doubt, it is agreed
that inclement weather (other than Unusually Inclement Weather) is excluded
from the definition of Force Majeure.
45.2 No delay in or failure of performance by either Party under the Contract shall
constitute default hereunder or give rise to any claim for damages or
compensation if and to the extent caused by Force Majeure, provided that:
(a)
the Party claiming Force Majeure shall have notified the other Party in writing
within seven (7) days after the event or circumstance begins to affect
performance of the Works of the nature of the event or circumstance and its
anticipated duration and effect on performance of the Works;
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(b)
(c)
as soon as practicable thereafter the claimant Party shall have provided the
other Party with such independent evidence thereof as the claimant Party is,
by the exercise of its best efforts, able to obtain to substantiate adequately
the claim to the other Party; and
that as soon as practicable after the event or circumstance ceases to affect
performance, the claimant Party shall recommence the affected Works and
shall notify the other Party in writing setting forth the effect of the event or
circumstance on its performance of the Contract.
45.3 The Party affected by Force Majeure shall be responsible for taking all
reasonable measures to mitigate the effects of Force Majeure to achieve
Turnover of each Portion or the whole of the Facilities on or before the
Scheduled Turnover Date.
45.4 The Company shall grant an extension of the relevant Scheduled Turnover
Date by a period of time equitable with the impact of the event or
circumstance of Force Majeure, by the issue of an Adjustment Order in
accordance with Clause 13.3 (Variation or Adjustment Order Required by
Terms of Contract) to reflect any delays sustained to the Works as a result of
such event of Force Majeure having regard to the Contractor’s endeavours to
mitigate the effects of the Force Majeure.
45.5 The acceptance by one Party of the other Party’s claim of Force Majeure shall
not be considered as a waiver of any of the Parties obligations under the
Contract except to the extent specifically provided for in this Clause 45.0
(Force Majeure).
45.6 If an event of Force Majeure, duly notified in accordance with Clause 45.2
(Force Majeure), prevents performance of the whole Works, or substantially
the whole of the Works, for a continuous uninterrupted period of ninety (90)
days, the Contractor may, on giving written notice to the Company, terminate
the Contract, and such termination shall be treated as a termination by the
Company in accordance with Clause 51.1 (Termination for Company’s
Convenience) hereof.
45.7 The Contractor shall not be entitled to any adjustment to the Contract Price or
any additional Cost it may incur as a result of Force Majeure nor shall it claim
any such adjustment or additional Cost.
45.8 In the event that the Parties are unable in good faith to agree whether a Force
Majeure event has occurred, the Parties shall submit the dispute to resolution
pursuant to Clause 55.0 (Dispute Resolution); provided that the burden of
proof shall be upon the Party claiming a Force Majeure event to prove that a
Force Majeure event has occurred by establishing that the criteria set out in
Clause 45.1 (Force Majeure) have been met.
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46.0 SUSPENSION
46.1 The Company may at any time suspend the Works or any part of the Works
for any reason whatsoever by giving a written order to the Contractor
specifying the part of the Works to be suspended and the effective date of
suspension if different from the date of such written order.
46.2 The Contractor shall cease all work on the suspended part of the Works on
the effective date of suspension and thereafter shall do only such work on the
suspended part as may be necessary to preserve and protect the Facilities,
Materials, supplies and construction tools and equipment, wherever located.
The Contractor shall continue to execute the remainder of the Works.
46.3 Upon receipt of such notice of suspension, the Contractor shall, except to the
extent required otherwise in that notice, place no further purchase orders,
subcontracts or other agreements except as may be necessary for completion
of such part of the Works as is not suspended and shall promptly make every
effort to procure suspension on the best terms possible of all purchase
orders, subcontracts or other agreements to the extent they relate to the
Works suspended. The Contractor shall use its best efforts to mitigate the
Costs, in general, of such suspension.
46.4 Where the Company suspends all or any part of the Works, it shall pay to the
Contractor the amount of any verifiable additional Costs reasonably incurred
by the Contractor as a result of and in connection with any such suspension
and subsequent resumption of that part of the Works, together with an
extension to the Scheduled Turnover Date, provided however that the
suspension is not due to any of the following: (a) Force Majeure; (b) breach of
any Governmental Requirements; or (c) the Contractor’s breach of or default
under the terms of the Contract. The Contract Price and Scheduled Turnover
Date shall be adjusted by an Adjustment Order pursuant to Clause 13.3
(Variation or Adjustment Order Required by Terms of Contract).
46.5 The Company shall not be liable for any other damages of whatever nature or
loss of anticipated profits on account of suspension of any part of the Works
and, except as provided in Clauses 46.4 and 46.8 (Suspension), the
Contractor’s sole remedy is compensation as provided under the terms of this
Clause 46.0 (Suspension).
46.6 The Superintendent may at any time authorise resumption of all or any part of
the suspended part of the Works by giving written notice to the Contractor
specifying the part of the Works to be resumed. The Contractor shall resume
such Works forthwith.
46.7 Notwithstanding Clause 41.0 (Time Limitation on Claims by Contractor), any
claim by the Contractor for an extension of time and/or for payment under this
Clause 46.0 (Suspension) made under Clause 13.3 (Variation or Adjustment
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Order Required by Terms of Contract) and shall be made in writing within
thirty (30) days after receipt of notice (or such other period acceptable to the
Company) to resume Works, and the Contractor shall submit to the
Superintendent for approval suggested revisions to the Programme of Works.
In the event of suspension lasting more than thirty (30) days, the Contractor
may submit interim claims at 30 day intervals after the commencement of
suspension and a final claim within thirty (30) days after receipt of notice to
resume Works. Failure by the Contractor to submit such a claim within the
said period will be deemed a waiver of its entitlement to an extension of time
and/or payment and will render any subsequent claim null and void.
46.8 If the Company suspends the whole of the Works pursuant to this Clause
46.0 (Suspension) and the Works remain suspended for a continuous and
uninterrupted period of ninety (90) days, the Contractor may, on giving written
notice to the Company, terminate the Contract, and such termination shall be
treated as termination by the Company in accordance with Clause 51.1
(Termination for Company’s Convenience). The provisions of this Clause
46.8 (Suspension) shall not apply where the Contractor is the cause for
suspension of the Works.
47.0 CONSEQUENTIAL DAMAGES
Neither the Contractor nor the Company shall in any event be liable to the
other in Contract, tort or otherwise for consequential damages resulting from
or arising out of the Contract, including, without limitation, loss of use, loss of
revenue, loss of anticipated profits, loss of production, business interruption
(including downtime and delay to the Company’s operation), or for any other
form of consequential or indirect loss or for damage to, or destruction of,
mineral reservoirs suffered or incurred by the other Party; provided always
that this exclusion shall not apply to any obligation of the Contractor under the
Contract to pay Liquidated Damages.
48.0 LIMITATION OF LIABILITY
48.1 The maximum liability of the Contractor to the Company in Contract, tort or
otherwise, for all matters in connection with the Contract shall be the amount
defined in Clause 7.0 (Limitation of Liability) of the Particular Conditions.
Notwithstanding the foregoing, liabilities of Contractor with respect to the
following amounts shall not be subject to the limitation of liability provided for
in this Clause 48.1 (Limitation of Liability): (i) Costs recovered by the
Contractor from insurance; and (ii) liabilities arising under Clauses 23.0
(Compliance with Law - Licenses), 40.0 (Taxes and Duties) and 44.0
(Intellectual Property Rights).
48.2 Notwithstanding the provisions of Clause 48.1 (Limitation of Liability), where
Clauses 37.5.3(b)(ii) or 37.5.3(b)(iii) (Failure of the Performance Tests) apply
in respect of a failure to achieve Minimum Performance Guarantees and/or
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events of default by the Contractor under Clause 51.2 (Events of Default by
Contractor), then the maximum liabilities of Contractor, including liabilities
arising under Clauses 37.5.3(b)(ii), 37.5.3(b)(iii) (Failure of the Performance
Tests) and/or Clause 52.0 (Contractor’s Obligations upon Termination) shall
be the amount defined in Clause 7.0 (Limitation of Liability) of the Particular
Conditions in respect of this Clause 48.2 (Limitation of Liability) in lieu of the
amount specified in respect of Clause 48.1 (Limitation of Liability).
48.3 Nothing in this Clause 48.0 (Limitation of Liability) shall limit the Contractor’s
liability for death or personal injury.
49.0 DECLARATION OF COMMISSIONS
The Contractor shall comply with Law No. 25/1996 relating to declaration of
commissions in connection with State Contracts, and, where such law is
applicable or becomes applicable to the Contract, the Contractor shall serve
notice on the Superintendent within the time limit specified by such law a
declaration in the format set out in the relevant attachment to the Form of
Tender.
50.0 KUWAITI AGENT
50.1 The Contractor (if not formed or organised under the laws of Kuwait) shall
appoint a Kuwaiti agent in Kuwait in respect of the Contract, and shall provide
the following details of its Kuwaiti agent so appointed as and when directed
by the Company: (a) name; (b) address in Kuwait; (c) address of main place
of business or office in Kuwait (if different from (b)); and (d) letter from such
agent on such agent’s letterhead confirming and accepting such appointment.
50.2 The Contractor shall be deemed to have allowed in the Contract Price any
amount payable to the Kuwait agent towards agency fees or otherwise, and
any such amount shall not be payable by the Company for any reason
including the termination of the Contract under the provisions of Clause 51.0
(Termination and Events of Default).
51.0 TERMINATION AND EVENTS OF DEFAULT
51.1 Termination for Company’s Convenience
51.1.1 The Company may, at any time, terminate any part of the Works or all
remaining Works without giving any reason therefore, by giving written notice
to the Contractor specifying the part of the Works to be terminated and the
effective date of termination if different from the date of said written notice.
51.1.2 Upon receipt of such notice the Contractor shall cease all work on the
terminated part of the Works on the effective date of termination and
thereafter shall do only such work on the terminated part as may be
necessary to preserve and protect the Facilities, Materials, supplies and
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construction tools and equipment, wherever situated. The Contractor shall
continue to execute any part of the Works not so terminated. The Company
may elect to have the terminated Portion of the Works performed by itself or
by another Contractor. In order to permit the Company to employ other
Contractors or use the Site itself, the Contractor agrees, upon the Company’s
demand, to promptly deliver to the Company the Site or any part of the Site
relating to such Works, even if the Contractor disputes the legitimacy of the
notice of termination.
51.1.3 If any part of the Works is terminated, the Contractor shall not be entitled to
payment for any Costs related to said part of the Works incurred after the
effective date of termination except for Costs related to work performed by the
Contractor pursuant to Clause 51.1.2 (Termination for Company’s
Convenience). In addition to such Costs, the Company shall pay to the
Contractor an amount equal to the Costs and expenses incurred by the
Contractor, or to which it is committed (provided that the Contractor has acted
reasonably to mitigate such Costs and expenses) as a result of such
termination (including the Cost of Materials delivered to the Contractor or of
which the Contractor is liable to accept delivery, the Cost of removal of
Temporary Works and Contractor’s tools and equipment from the Site and
return to the Contractor’s Works in his country, and the Cost of repatriation of
the Contractor’s staff and labour employed wholly in connection with the
Works at the date of termination), together with so much of the Contract Price
that is fairly attributable to the part of the Works terminated as had been
earned by the Contractor at the date of termination less all sums on account
thereof already paid by the Company. The Company shall not be liable for
any damages of whatever nature or loss of anticipated profits and the
Contractor’s sole remedy in connection with such termination is to receive
payment as specifically provided in this Clause 51.1.3 (Termination for
Company’s Convenience).
51.1.4 If the Company terminates any part of the Works under this Clause 51.0
(Termination and Events of Default), then with respect to such part of the
Works, the Contractor shall, to the extent required by the Company, execute
and deliver to the Company all existing documents required by the Company
and, so far as legally possible, take all steps necessary to fully vest in the
Company the rights and benefits of the Contractor under all existing
agreements relating to the Works, including agreements with Subcontractors.
51.1.5 For any part of the Works terminated, the applicable provisions of the
Contract shall continue in full force and effect as to all Works performed prior
to the effective date of termination. For the remainder of the Works, the
Contract shall remain in full force and effect.
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51.2 Events of Default by Contractor
The Contractor shall be in default of its obligations under the Contract should
any one or more of the following events or conditions arise or exist and
continue beyond the applicable cure period (if any) provided under this
Clause 51.2 (Events of Default by Contractor):
51.2.1 the Contractor (or its parent Company) becomes insolvent, bankrupt or has a
receiver appointed or has a receiving order made against it or files any sort of
petition for court protection from creditors, or has filed a bankruptcy petition,
or makes arrangement with or assignment in favour of its creditors, or agrees
to carry out the Contract under a committee of inspection of its creditors or, if
Contractor is a Company or a corporation, has gone into liquidation (other
than a voluntary liquidation for purposes of amalgamation or reconstruction);
51.2.2 the Contractor without cause fails to commence the Works on the Date for
Commencement and fails to commence within thirty (30) days after receiving
notice in writing by the Company;
51.2.3 the Contractor abandons the Works;
51.2.4 the Contractor is in breach of any of its material obligations under the
Contract and (i) has not diligently started to remedy such breach within ten
(10) days of the Company’s written notice giving details of the breach or (ii)
has not remedied such breach within either thirty (30) days of such notice or
at the Company’s sole discretion, within an agreed period;
51.2.5 the Contractor fails to proceed with the Works with reasonable diligence;
51.2.6 the Contractor’s liability for Delay Liquidated Damages exceeds the maximum
amount stated in the Particular Conditions and the Company decides to
terminate pursuant to Clause 9.2.3 (Delay Liquidated Damages);
51.2.7 the Contractor fails to meet the Minimum Performance Guarantees and the
Company decides to terminate pursuant to Clause 37.5.3(b)(iii) (Failure of the
Performance Tests);
51.2.8 the Performance Bond, Advance Payment Bond, and/or Tax Retention Bond
fails to be in full force and effect to the extent required under the Contract and
the Contractor fails to replace the relevant bond with a new performance and
payment bond or guarantee acceptable to the Company within ten (10) days
after delivery of written notice by the Company;
51.2.9 except as provided for in Clause 6.0 (Assignment), the Contractor assigns or
transfers the Contract or any of its rights or interests herein;
51.2.10 any material representation or warranty made by Contractor shall prove to
have been materially incorrect or misleading as of the date such
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representation or warranty was made and such incorrect representation or
warranty could reasonably be expected to result in a Material Adverse Effect;
or
51.2.11 the Contractor fails to pay Liquidated Damages or any other amount when due
in accordance with the provisions of the Contract and such default continues
for thirty (30) days after delivery of written notice by the Company and the
Company has not otherwise offset such payments due in accordance with the
terms of the Contract.
51.3 Remedies for Contractor Default
In the event that Contractor is in default pursuant to Clause 51.2 (Events of
Default by Contractor) or where the terms of this Contract give the Company
express rights of termination pursuant to this Clause 51.3 (Remedies for
Contractor Default), the Company shall have the following rights and
remedies, in addition to those rights and remedies that may be available to
the Company pursuant to other provisions of the Contract or, subject to the
limitations set forth herein, at law or in equity:
51.3.1 the Company may without the need for a judicial action (a) terminate any part
of the Works or all remaining Works, by giving written notice to the Contractor
specifying the part of the Works to be terminated and the effective date of
termination, if different from said written notice and (b) following seven (7)
days’ notice thereof in writing to the Contractor or immediately following a
default under Clause 51.2.1 (Events of Default by Contractor), enter the Site
to expel the Contractor and take over the Works or any part of the Works and
all Materials and supplies furnished or ordered by the Contractor therefore
and complete the Works, or the part taken over, or cause the same to be
completed. In any such case, the Company may also retain and use in the
performance of the Works all tools, Materials and supplies and other things
employed, or which were to have been employed, by the Contractor in the
Works, which at the time are located at the Site.
51.3.2 the Company may retain, and apply toward any amounts owed by Contractor
hereunder, any amounts held by Company as retainage.
51.4 Provisions Surviving Termination
51.4.1 Except as expressly stated herein, any expiry or termination of the Works or
part of the Works shall be without prejudice to rights and obligations accrued
as at such time.
51.4.2 The Parties’ obligations under Clause 15.0 (Confidentiality) shall survive for a
period of fifteen (15) years after termination of this Contract or the
Contractor’s employment hereunder.
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52.0 CONTRACTOR’S OBLIGATIONS UPON TERMINATION
52.1 Upon receipt of any written notice of termination under Clause 51.3
(Remedies for Contractor Default) of any part of the Works affected by any
such termination, the Contractor shall, at it’s own expense:
52.1.1 assist the Superintendent in making an inventory of all things employed on or
to be incorporated into the Facilities wheresoever situated;
52.1.2 cease all further work in connection with the Works other than such work as is
necessary for the purposes of preserving and protecting those parts of the
Facilities already executed, or any work required to leave the Site in a clean
and safe condition;
52.1.3 to the extent legally possible, assign to the Company all subcontracts,
purchase orders and agreements entered into in connection with the Works
and all Intellectual Property Rights, technology licenses and other rights
relating to the Works and necessary for the construction, ownership and
operation of the Facilities, as designated by the Company;
52.1.4 remove from the Site and take possession of all items listed in said inventory
that are designated in writing by the Superintendent as not required by the
Company in completing the Facilities;
52.1.5 hand over to the Company the uncompleted Facilities and Works, all
Materials intended therefor, all designs, drawings, plans, schedules and
specifications, and all construction plant, equipment and tools, for the
Company’s use in completing the Facilities by whatever reasonable method
the Company may deem expedient; and
52.1.6 make available to the Company the names and category of employment of all
people employed on the Site, other than the Contractor’s permanent staff, to
enable the Company to employ such personnel as the Company may require
to complete the Facilities.
52.2 The Contractor shall be liable to the Company for and hereby agrees to pay
the Company all Costs and losses the Company incurs of whatever nature as
a result of termination under Clause 51.3 (Events of Default by Contractor), all
extra Costs of completing the Works, whether by the Company or a third
Party and any other sums due from the Contractor to the Company to
complete the Works. If such Costs exceed the amount of monies due to the
Contractor, the Contractor shall pay the difference between the two amounts
to the Company. Where the Contractor fails to compensate the Company for
the losses incurred, the Company shall be entitled to recover such monies, by
drawing down on the Performance Bond, Advance Payment Bond and/or
recover its losses through other means available to it. In the event of a handover
to the Company of the uncompleted Facilities, Works and Materials
pursuant to Clause 52.1.5 (Contractor’s Obligations upon Termination), the
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Company will determine and identify the major construction equipment
handed over and shall pay the Contractor for the actual direct Costs of such
equipment, it being understood that the indirect Costs, such as overhead, will
not be payable. Otherwise no other amounts shall be payable by the
Company to the Contractor pursuant to Clause 52.1.5 (Contractor’s
Obligations upon Termination).
53.0 NOTICES
All notices required by the Contract and other communications required or
permitted to be given hereunder (a) shall be in writing in English; (b) shall be
delivered in person, by express courier, or by facsimile transmission; (c) shall
be deemed delivered when actually received by the recipient Party; and (d)
shall be delivered to the recipient Party at its address set forth in Clause 9.0
(Notices) of the Particular Conditions, or such other address as such Party
shall have designated to the other Party on ten (10) days prior notice.
54.0 GOVERNING LAW AND LANGUAGE
The Contract shall be governed by and take effect in accordance with the
laws of the State of Kuwait. The wording of the Contract shall be construed in
accordance with the normal usage of the English language as related to
Works of this nature and all communications in connection with the Contract
shall be in the English language.
55.0 DISPUTE RESOLUTION
55.1 Friendly Negotiations and Binding Arbitration
Any dispute between the Parties arising out of or in connection with the
Contract shall be resolved as follows:
55.1.1 The Company and the Contractor shall each appoint a qualified senior
employee or representative to a standing two (2) member board (the
“Disputes Review Board”) within thirty (30) days of the Date for
Commencement. The Parties shall keep the members of the Disputes
Review Board reasonably informed from time to time of the progress of the
Works and shall provide to each member of the Disputes Review Board such
information about the Works and such access to the Site as such member
may reasonably request.
55.1.2 If the representatives of the Parties are unable to resolve a dispute within
forty-five (45) days after notice of the existence of the dispute from one Party
to the other (the “Dispute Notice”), either Party may, by a second notice to the
other Party, submit the dispute for review to the Disputes Review Board. The
Disputes Review Board shall immediately consider any dispute referred to it
and shall make a recommendation within twenty (20) days of the date of such
second notice. If the Disputes Review Board has not resolved the dispute to
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the satisfaction of both Parties within thirty (30) days of such second notice,
then either Party may, by a third notice to the other Party, submit the dispute
to the most senior executive officers of the Contractor and of the Company
(collectively, “CEOs”). A meeting date and place shall be established by
mutual agreement of the CEOs. However, if the Parties are unable to agree,
the meeting shall take place at Company’s offices in Ahmadi, Kuwait within
twenty-one (21) days after the date of such third notice. The CEOs and their
representatives as necessary shall meet in person and shall in good faith
attempt to resolve the dispute.
55.1.3 If the dispute remains unresolved following such meeting of CEO’s pursuant
to Clause 55.1.2 (Friendly Negotiations and Binding Arbitration), the Parties
shall within ten (10) days take the necessary steps to commence mediation
under the then-current London Court of International Arbitration (“LCIA”)
procedures. The Parties will within ten (10) days of the receiving of a
Request for Mediation agree upon a mediator. If the Parties cannot agree,
one will be selected by the LCIA pursuant to the procedures then in effect.
55.1.4 If the dispute remains unresolved following such mediation, either Party may
commence arbitration as set out below. Nothing herein shall prevent a Party
from commencing arbitration at any time (i) when the delay required for
performance hereunder might materially and adversely affect such Party’s
interest; (ii) when the other Party fails to fulfill its obligations under this Clause
55.1 (Friendly Negotiations and Binding Arbitration); or (iii) if the dispute
remains unresolved after one hundred twenty (120) days of the issuance of
the Dispute Notice.
55.1.5 The arbitration shall be held in London and, subject to the provisions of
Clauses 55.1.6, 55.1.7, and 55.1.8 (Friendly Negotiations and Binding
Arbitration), shall be conducted in accordance with the arbitration rules of the
LCIA as in effect on the date hereof.
55.1.6 The arbitral tribunal shall consist of three (3) arbitrators. Each Party shall
appoint one arbitrator. The claimant in any such arbitration shall give notice
of its Party-appointed nominee within twenty (20) days of filing its notice of
arbitration. The two Party-appointed arbitrators shall appoint the third
arbitrator who shall serve as the chairman of the arbitral tribunal. If a Party
fails to appoint its arbitrator within a period of twenty (20) days after receiving
notice of the opposing Party’s selection of its Party-appointed arbitrator, or if
the two arbitrators appointed cannot agree on the third arbitrator within a
period of fifteen (15) days after appointment of the second arbitrator, then
such arbitrator shall be appointed by the LCIA.
55.1.7 In the event that the LCIA is required or requested, whether under the said
LCIA arbitration rules or otherwise, to appoint an arbitrator, it shall appoint
only a person who has knowledge and experience in technical matters and
with experience in international commercial agreements and, in particular, the
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implementation and interpretation of Contracts relating to the design,
construction, operation and maintenance of petroleum production Facilities.
55.1.8 No arbitrator appointed under this Clause 55.0 (Dispute Resolution) shall be a
present or former employee or agent of, or consultant or counsel to, of either
Party or any Affiliate thereof or any applicable Governmental Authority.
55.1.9 The arbitration shall be conducted in English. All documents or evidence
presented at such arbitration in a language other than in English shall be
accompanied by a certified English translation thereof.
55.1.10 The arbitrators shall decide the dispute in accordance with applicable law of
the Contract by majority of the arbitral tribunal and shall state in writing the
reasons for its decision. Any monetary award of the arbitral tribunal shall be
denominated and payable in Kuwaiti Dinars and in immediately available
funds. The decision of the arbitrators shall be binding.
55.1.11 Prior to any attempt to enforce a final award of the arbitral tribunal, the
prevailing Party shall make formal presentment for satisfaction of the final
award to the Party against which the final award is to be charged. The
presentment for satisfaction shall be delivered to the non-prevailing Party
pursuant to the notice provisions of Clause 53.0 (Notices). The presentment
of the final award for satisfaction is an express condition precedent for
satisfaction of the same. In no event shall a prevailing Party initiate any
proceedings to enforce the final award without first making presentment of the
award for satisfaction as described herein. If the final award remains
unsatisfied for a period of six months from the date of presentment the
prevailing Party may then attempt to enforce the final award.
55.1.12 The Costs of such arbitration, including the fees for the Parties’ legal counsel
and technical experts shall be determined by and allocated between the
Parties by the arbitral tribunal in its award.
55.2 Continuation of Performance
Unless otherwise agreed in writing, the Company and the Contractor shall
continue to perform their respective obligations hereunder during any
proceeding by the Parties.
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