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Contract Analysis

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Project: Lot 3: 765/220 Mansehra Substation

Sr# GCC No. Condition Number Clause of PCC Important Info. Reference from Remarsk
used GCC, PCC
1 1 Defination 1 GCC6-9

2 2 Contract Documents GCC9

3 3 Interpretation Incoterms:38 Cours Albert 1er, 75008 Paris, France. GCC9-10


Authorized person is PM of Employer, all correspondence in English & in
4 4 Communications written GCC10 Fair, same protocol everywhere

5 5 Law and Language 5 Pakistani Laws for Normal & for Arbitration Independent Country UK, UAE etc. GCC10-11 Fair, same protocol everywhere
English Language PCC3

6 6 Fruad & corruption GCC11

Engineering, Design, Procurement of plant, 5 years Spareparts , construction, GCC12


commissioning, handing over & 1.5 years Warranty, extended warranty (3 PCC3
7 7 Scope of Facilities 7 years)for critical component [i.e power transformers, circuit breakers, Sect.07 p340 Basing of which price is finalized
instrument transformers, protection equipment, Shunt Reactor, Bid clarification
Disconnectors, Surge Arrestors SAS, Protection and Control Equipment] P10

Comencement time is the time from where Project duration to be Counted &
after contract signature & approval of reports. Comencement time will be
thirty days from effective date & completion time is 30 months.
[Effective Date conditions start conditions :
Time for a. contract agreement signed GCC 12
8 8 Commencement and 8 b. performance & advance guarantee submitted. contract forms P9, LC charges are mostly employer's responsibility,
Completion c. advance payment made] P15
Effective date condition not met in 2 months not because of contractor's issue
then EOT & price adjustment claimable
LC opening period is 4 months after Effective date. LC opening charges by
contractor.

Pre-contract: Inspection of site, visual & testing inspection like boring data etc.
Post contract: Design, manufecture, procure, install, subcontract, completion, GCC13-14
warranty, supply of spare parts, acquiring licences, prepare C-ESMP & review
Contractors's frequantly maximum 6 months once, to provide security to employer 's staff& P8,9 Attendum 3
9 9 9 Basing of which price is finalized
Responsibilities it's representative P10
Provision of emloyer's residence 2 house 12 unit bed Barak (40 persons) for
security guards.

10 10 Employer's 10 Accessibilty , land acquire, approvals, inspection, witnessing testing, assist GCC 14-15 Basing of which price is finalized
Responsibilities contract in acquiring licenses PCC6

The contract price only adjustable, if issue arouse not because of contractor's GCC 16
11 11 Contract Price 11 reason. Detailed formula of price adjustment is given in attendum 01 PCC6 Adjustable it's good for us
Maximum three currancies can be used Attendum 04 P18
Project: Lot 3: 765/220 Mansehra Substation
Sr# GCC No. Condition Number Clause of PCC Important Info. Reference from Remarsk
used GCC, PCC

1. Interest (0.05% /month) on delay payment from employer' issue,


2. irrevocable confirmed documentary credit made available to the Contractor
in a bank in the country of the Contractor. [Uniform Customs and Practice for
Documentary Credits 2007 Revision, ICC Publication No. 600.] GCC16
IPC proceture: Payment procedure will be Billed to PM after monthly progress Contract form P9
report, then in 28 days PM will issue IPC to employer, after receiving the contract form P14, Bill to be verified in 28 days from Project manager of employer
12 12 Terms of Payments certicate contractor will submit the invoice. attend 01 P12 but the duration of payment trasfer/cheque is not mentioned
Price adjustmet (60 days before shipment)formula page 16 of cotract form Bid Clarification P7 after approval of IPC & invoice submission?
(rev. formula on page 12 of attendum 01). Base date is 28 days prior to bid
closing date. Date of adjustment is 18th month of effective date or before last
deliver date whichever is earlier. Price adjustment to payable amount only not
on advance already paid.

Advance security/guarantee 20% in the form of bank guarantee


Performance guarantee 10% within 28 days of contract confirmation/within
GCC16-17
28 days of letter of acceptance, [will be halved on operational day as per GCC PCC6-7 Performance secuity should be adjustable.
but remain same as per PCC], will be null & void in 540 days of completion or
365 days of OAC. attend 01 P2 10% performance money given at the start & then they are
contract form P26, deducting 10% from every IPC & at the end our performance
13 13 Secutities 13 advance security by foreign bank to be enforceable by it's local bank. P28 money & security with employer will be 10+10 =20% leading the
The performane security to be 10% of the component part with extended
security. (Bid clarification employer at a strong position.
P5) ES security can be discussed to be 2% as in clarification it is
3% ES security. (expected) written as 3% expected.
Secuties on Guarantor letterhead or SWIFT identifier code.
The bid security to be returned after submission of performance secutity &
advance guarantee.

All the Taxes & duties to be paid by contractor initially,


The employer will reimburse
1. (all customs & import duties on plant/equipment under schedule 01 )if GCC 17-18
14 14 Taxes & Duties 14 Employer's Weboc used, initial taxes & duties to be paid by contractor then Ok as any veriation in sales tax etc will not impact the cost
PCC7
reimbursed the same by Employer,
2. all domestic taxes on items of Schedule 1 &2
3. all domestic tax in schedule 3 & 4

License/Use of Contractor to grand an exclusive and non trasferable license to employer


15 15 Technical Information upon completion GCC19

16 16 Confidential Both responsibilities GCC19


Information

Enmployer to appoint PM in 14 days of effective date & PM/CM of contractor


to be appointed in 14 days of effective date and should be approved by
17 17 Representatives employer., Employer can change it's PM anytime while notifying the GCC21-23 Same protocol everywhere
contractor, however contractor's representative to be changed with the
approval of employer
Project: Lot 3: 765/220 Mansehra Substation
Sr# GCC No. Condition Number Clause of PCC Important Info. Reference from Remarsk
used GCC, PCC

Organization chart to be submitted in 21 days from effective date & program


in 28 days of effective date, Progress report format to be approved by
18 18 Work Program Employer's PM & monthly progress report is mandatory where planed GCC23-24
activities & actual progress to be shared. frequent updation of program is
required and lag behind to be rectified

The complete/whole plant cann't be subcontracted, a potentional list of


subcontractor to be shared with employer, sub-contractor's list to be shared GCC24-25
19 19 Sub-contracting 19
frequently PCC7-8

From Employer's side PM is approver and should respond in 14 days of


20 20 Design & Engineering submission if not replied then considered as approved after 14 days without GCC25-26
any reply

21 21 Procurement Procurement, insurance, transportation, belonged to Contractor. GCC27-28


PCC8

22 22 Installation 22 All contractor's responsibility , employer itself or via it's representative or both GCC29-39
to verify & supervise all the installation.
FAT to be witnessed by employers representative, 3 & to inform sixty days GCC39-41
23 23 Test & Inspection prior & employers engineer to be replying in 15 days, all the expenses to be PCC9-11
borne by contractor. Section 07-P79

Guarantee test to be passed in 180 days of completion GCC41-42


Completion of the
24 24 Facilities 24 Power for Energization / Backfeeding by Employer PCC11
"Form of completion certificate" Sect. 07 P1007

Commissioning & in 7 days operations & maintenance team to be deployed after written GCC42-44
Operational request of contractor, raw materials, utilities, lubricants, chemicals, catalysts, PCC15
25 25 25
Acceptance facilities, services and other matters required for Commissioning. Sect. 07 P1008
Form of OAC

L D will be on accumulative delay.


1-3 week 0.3% of contract price
3-5 weeks 0.4% of contract price
6-onwards 0.6% of contract price
Completion time Plenty Cap is 10% of contract price Page 46-46 GCC
No bonus for earlier milestone or overall completion. 10% LD on delay & 10% on function, so 10+10 = 20%, at most of
26 26 Guarantee 26 LD functional: Transformer no load losses 12000 USD/kW. & the project, the accumulative plenty cap for both is 12.5%
& Technical guarantee Transformer load losses 7000 USD/kW (+10% limit) (any value of more than Page 12 to 12 PCC
0.5KW equvalent to one)
Reactor losses exceeding guarantee value 12000 USD/kW (+10% limit)
Noise losses exceeding guarantee value 12.000 USD/dB (+3db)
Tech LD cap is 10%

540 days from completion or 365 days from operational test whichever occurs
earlier. GCC: P46-48
27 27 Defect Liability 27 Minor infringements 48 hours & major infringements 72 hours. PCC: P12
Major infringement plenty as LD & minor price adjustment
Project: Lot 3: 765/220 Mansehra Substation
Sr# GCC No. Condition Number Clause of PCC Important Info. Reference from Remarsk
used GCC, PCC

Performance test to be passed on 1st, 2nd, 3rd test till passing, if performance
test is not achieved prior to completion of construction period then plenty /LD
be imposed in same fashion.
28 28 Functional Guarantees Passing of funtional test lead to the issuance of operational acceptance GCC:P48-49
certificate issued by PM of employer.

Contractor indemify & hold harmless to employer, staff & office, should notify
29 29 Patent Indemnity to employer in 28 days GCC 49-50
Employer indemnify & hold harmless to contractors & it's staff.
GCC p50
30 30 Limitation of Liability PCC 30 contract multiplier 1.5 times of contract price
PCC P12

i. Ownership of plant & spareparts to be imported to be on employer's


ownership from loading from FOB origion after loading,
ii. Ownership of plant & spareparts to be on employeer at arrival FOB
31 31 Transfer of Ownership
Pakistan,
iii. All the risks to be on contractor till used & accepted O.acceptance.

All contractor's responsibilities until completion,


Employer's responsibility if design provided by employer, fault of employer,
32 32 Care of Facilities employer's representative, causility like weapon attach, nuclear eruption etc. GCC 51-52
If any of the contractor's passage, path or facity to be used by other
contractor of employer then maintenence is their responsibility

Loss of or Damage to if any notice received by employer owing to contractor's act, employer will
33 33 Property; Acci-dent or notify the contractor immediately and contractor to followup the proceeding
Injury to Workers; In- in 28 days, failure of that lead the employer to do the same and money to be
demnification adjusted from contractor's amount

a. all the insurance equipment during transport, employees, staff, labor,


machinery, sub-contractor's persons is contractor's responsibility, the policy
form and name of ensurer to be disclose to employer, b.employer & sub-
contractor co insured.
c. 21 days prior notice before cancellation to be given to employer.
d. contractor fails to take insurance, employer will take insurance on
contractor's cost. GCC 53-55
34 34 Insurance contract form 18
e. employer will asist contractor in policy claim
f. Cargo insurance: from factory to site, cost+10% with 5% deductable. &19
Risk Ensurance: 28 days of effective date to PAC -contract value & 5%
deductable limit.
Third party ensurance $20 million & deductable limit $25K
Note: Insuraer identity & form to be shared with employer

if any forseen condition observed that was not forecasted prior to contract
35 35 Unforeseen conditions 35 signature, any unjustfied information like bore data shared by client, will be GCC 55-56
PCC12
notified to PM immediately, EOT, price adjustment to be claimed.
Project: Lot 3: 765/220 Mansehra Substation
Sr# GCC No. Condition Number Clause of PCC Important Info. Reference from Remarsk
used GCC, PCC

36 36 Change in Laws & any law change impacting cost or execution schedule, after date of 28 days GCC 56
Regulations prior to bid submission date, EOT, Escalation, de escalation to be claimed.

occurance of any force majeure to be notified in 14 days of occurance, 60


37 37 Force Majeure 37 days at once work stopage or 120 days aggregate work stopage owing to force GCC 56-58
majeure may authorize any party to terminate the contract.

any damage to contractor's facilty, personnel, machinery during execution,


any damage caused by war to be compensated by employer. Work stoped 60
38 38 War Risks days at once or 120 days collective may authorize the party to terminate the GCC 58-59
contract.

Change order possible, the contractor to made, if worth more than 15%
inform the employer before preparation, if change order made by contractor GCC60-63
by itself no compensation to make the change order expenses, if empoyer PCC14
39 39 Change in the Facilities 39
asked to do then the cost of making the change order to be compensated. Sec.07 P1009
change order issue not resolved in 60 days to be forward to DB
Change order procedure & format

Extension of Time for GCC63-64


40 40 Completion (EOT) War, force majure, first Eot leading to price escalation

upon aggregate suspension of 90 days, contractor notify the PM, who has to
reply in 28 days, invoices, payment documents to be passed in 14 days, failure
41 41 Suspension to do so as of employer's reason lead to interest (0.05% per month) on GCC 64-65
payment.
Contractor's resources to be at site during suspension

Employer can terminate the contract at any stage, the part work executed to
be paid, the demobilization to be paid, contractor to terminate the sub-
contract after receiving the termination letter from employer.
If contract terminated owing to contractor's reason (Banking, ownership
42 42 Termination issues, breach of contract), the employer to notify the contractor, which has GCC 65-70
to respond in 28 days failure to do so lead to termination.
contractor can also terminate the contract in special conditions like
sabstantial contract breach by employer, failure to pay timely etc., after
written notice to PM

43 43 Assignment No party can assign anything without prior written consent of other party GCC 70

Contractor has to fulfill all the responsibilities like permits, license etc,
44 44 Export Restrictions however if import to employer's country failed as of employer, employer's GCC71
country reason then it will be employer's responsibility.
Project: Lot 3: 765/220 Mansehra Substation
Sr# GCC No. Condition Number Clause of PCC Important Info. Reference from Remarsk
used GCC, PCC

EOT & Price escalation to be filed in 28 days of occurance, detailed claim to be


45 45 Contractor's claim filed in 42 days to PM, in 42 days PM to approve or disapprove the claim, the GCC72-73
claim money to be paid with interim payments,

To be appointed in 21 days of effective date, three member from contractor &


another from employer and third will be their chairman to be appointed the
two member, if not agreed then PEC chairman.DB to decide in 84 days of
46 46 Dispute & Arbitration 46 filing. The decision of DB can be filed in Arbitration (London, United Kingdom, GCC 72-75
PCC 14
or Dubai, United Arab Emirates.)
The payment to BD would be paid by contractor initially then 50% of the same
will be reimbursed from employer.

Treasury Management Division of National Bank of Pakistan


47 Parity ratio (https://www.nbp.com.pk/RATESHEET/index.aspx) Bid data sheet P42

48 GC for Dispute Board Agreement


49 1 Defination
50 2 General Provisions
51 3 Warranties

52 4 General Obligations of
the Member
General Obligations of
53 5 the Employer and
Contractor
54 6 Payment
55 7 Termination

56 8 Default of the member

57 9 Dispute

58 Appendix A: Dispute
Boad Guidelines

Appendix B Fruad &


59 Corruption

Appendix C: Metrics
60 for Progress Reports-
Environmental & Social
(ES)
Project: Lot 3: 765/220 Mansehra Substation
Sr# GCC No. Condition Number Clause of PCC Important Info. Reference from Remarsk
used GCC, PCC

• Detail Time Schedule


• Critical Path Analysis
• Detail programme chart
• Work Break Down Structure
Schedule submission • Financial plan and program
61 • List of documents which will be submitted for approval P30 Sec. 07
with 28 days of LOA
• List of Design documents which will be submitted for approval
• Plan and Program fo manucturing
• Plan and program of Factory Trainings
• Plan and program of Factory Acceptance Tests

• List of deliverables, plan of supply and delivery


• Plan and program of preparation works
62 Submission after • Plan and program of installation works P30 Sec. 07
project realization • Plan and program of testing and commissioning

(ESMS) in compliance with ISO 14001 and World Bank Guidelines


Section 7 P49
63 ESMS Weekly TBT & weekly HSE meeting 52, 53
Project meeting quarterly or as per schedule of PM if early.
107
Call for meeting with prior request for meeting.
64 QAP to be submitted in 30 days of effective date Sect07 P85

65 Sub-contractor/ ISO 9001, 9002 or 9003 to be selected in accordance with the guidelines given
supplier identification in ISO 9000-1 and in ISO 9000-3

66 Reports Monthly progress report in 4 copies at every month from 2nd month of Sect. 07P100
effective date, within 7 days of cut off day.

Employer facility to be Site Offices with complete facility,


67 supplied by contractor Transport for Employer’s Personnel on tracker vehicle

Section 10,
Payments contract forms
Offshore-Schedule I
i 20% Carriage & insurance paied

1. Invoice
2. Packing list
3. Bill of Lading
4. Insurance certificate to the named place of destination
ii 70% material arrival & 45 days of documents submission 5. Customs declaration issued by the customs authorities of the
Em-ployer's country
6. Certificate of origin
7. Test report

iii 5% 45 days of invoice after completion certificate


iv 5% 45 days of OAC

local Supply- Schedule II Section 10,


contract forms
Project: Lot 3: 765/220 Mansehra Substation
Sr# GCC No. Condition Number Clause of PCC Important Info. Reference from Remarsk
used GCC, PCC
i 20% upon submission of invoice & adjustable guarantee
ii 70% after delivery & 45 days of invoice submission
iii 5% 45 days of completion certificate & completion certificate
iv 5% 45 days of OAC & completion certificate

Design service - Schedule III Section 10,


contract forms
i 20% invoice submission & irrecoverable guarantee
ii 80% upon acceptance of design by PM & 45 days of invoice submission
Section 10,
Installation services - Schedule IV contract forms

i 20% against irrecoverable / adjustable advance guarantee & invoice submission

ii 70% measured value, 45 days of receipt of invoice


iii 5% 45 days of invoice submission & completion
iv 5% 45 days of invoice submission & OAC
1412.8 1518.76

1912.8 1898.45

2198.45

2748.0625
Document list
Sr# Description Issue Date No. of pages Remarks
1 Request for Bid 3 after prequalification

Bidding procedure, condition of bid, bidding


2 Request for Bid 34 procedure, Bid validity, Bid format & signing,
bid evaluation, comparision & award

3 Bid Data Sheet 13 Content of bidding document, bidding


procedure, Bid opening, contract award
Technical & economic evaluation, Technical LD,
Evaluation and Qualification
4 18 price adjustment for evaluation, Qualification,
Criteria
sub-contractor

Letter of Bid, technical & financial part,


schedule rate, price & price adjustment,
technical proposal i.e. project organization,
5 Bidding forms 54 method statement, schedule, violation,
proposed subcontractors, ESHS performance
declaration, current contract commitment,
financial situation, average turnover, Bid
security format, undertaking

6 Eligible country 2
7 Fruad & corruption 3
Detail discription of technical & technical
8 Employer's requirents 1028
requirement
Geral contract condition, dispute board, work
Condition of contract &
9 contract form, 88 domain & payment of DB, metrics of progress
report
Particular condition of
10 15 Additional information to GCC
contract

Notification of contract award, ownership


disclosure, LOA, Contract agreement, price,
payment, effective date & it's condition, terms
11 Contract forms 30 & procedure of payment, price adjustment,
Bank Guarantee format, ESHS demand
guarantee format, advance payment security
format,
Schedule 1 -Offshore import,
Schedule 2 - local purchase
Schedul 3 - Design Services
12 Price Schedule Schedule 4 - Construction & installation
Schedule 5 - Grand Summary
Schedule 6 - Spare parts

13 General Layout overview 1 Layout


14 Addendum 2 3 Revision in the bid submission date
15 Addendum 4 8 Clarifications
Amended clauses & revised ES guarantee
16 Addendum 1 29
format,
Addendum 3 & response to
17 44 date revised, amended clauses, clarifications
pre-bid clarifications
18 Prebid clarification 01 51
Maximum, minimum levels with contour
19 Contour plan 1
provided
20 Pre-bid clarification 51 Clarifications & amendment
Deecon, a basic resport & info about bore log
21 Basic soil investigation 35
etc.
22 WAPDA specifications 1268 Technical part
Schedule 5 Grand Summary
Item o. Description USD CNY
1 Schedule 1 (supply from abroad) 36339957.80 330445216.55
2 Schedule 2 (local supply) 0.00 0.00
3 Schedule 3 (Design) 0.00 0.00
4 Schedule 4 (Installation) 0.00 0.00
Sub-Total 36339957.80 330445216.55
Provisional Sum (Unadjusted sum) 0.00 0.00
Total 36339957.80 330445216.55
Tax & duties not included in bid evaluation 0.00 0.00
Grand Total 36339957.80 330445216.55

11221919554
PKR
0.00
268549481.20
488152518.74
4212330124.46
4969032124.40
3426660000.00
8395692124.40
0.00
8395692124.40

19617611678.44
82995353.3800313
119,335,311

278325508
0.428761675627774

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