C311333 - Amal HRSG-1 Project

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C5 Schedule F: Bonus & Penalties

Petroleum Development Oman LLC

Contract Number C311333
Amal Heat Recovery Steam Generator (HRSG)-1 Project

Section C5
Schedule F Bonus & Penalties

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C5 Schedule F: Bonus & Penalties

C5- Sch F - PENALTIES

Amal HRSG
1.0

GENERAL
Notwithstanding the General Conditions for Construction Contracts, Document C3, if the
Contractor exceeds the maximum durations for imposition of penalties with respect to
applicable clauses below, this shall be accepted by the Contractor as sufficient justification for
the Company to consider them as in default.

2.0

MOBILISATION DEFERMENT PENALTY

If the Contractor fails to achieve Milestone No.1 within the durations stated in Schedule E, the
percentage of the Contract Price as stated in the Schedule 'E' will not be released for payment
until certification of the next consecutive Milestone.

3.0

SITE ESTABLISHMENT DEFERMENT PENALTY

If the Contractor fails to achieve Milestone No. 2 Site Establishment within the durations
stated in Schedule E, a penalty as stated below shall become due to the Company:
US$10,000 (in words Ten Thousand US Dollars) per day
for each whole day the milestone is not achieved after the required period subject to a
maximum of:
US$150,000 (in words one Hundred and Fifty Thousand US Dollars)

4.0

SCHEDULE PENALTY FOR COMPLETION OF ISSUE OF PO

If the Contractor fail to achieve Milestone No. 3 Upon completion of issue of purchase
orders for following equipment within the durations stated in Schedule E, a penalty as
stated below shall become due to the Company:
US$10,000 (in words Ten Thousand US Dollars) per day
for each whole day the milestone is not achieved after the required period subject to a
maximum of:
US$100,000 (in words One Hundred Thousand US Dollars)
This penalty can be waived if contractor meet delivery target set in MS.6.

5.0

SCHEDULE PENALTY FOR CIVIL WORK (5A)

If the Contractor fails to achieve Milestone No. 5a Upon completion of following Civil Work:
All foundations for the HRSG Unit and auxiliaries within the durations stated in Schedule E, a
penalty as stated below shall become due to the Company:
US$5,000 (in words Five Thousand US Dollars) per day
for each whole day the milestone is not achieved after the required period subject to a
maximum of:
US$100,000 (in words One Hundred Thousand US Dollars)
This penalty can be waived if contractor meet delivery target set in MS.5b.

6.0

SCHEDULE PENALTY FOR CIVIL WORK (5B)

If the Contractor fails to achieve Milestone No. 5b Upon completion of following Civil Work:
HRSG Control Building ,Blowdown pit, Piperacks supports and piping within the durations
stated in Schedule E, a penalty as stated below shall become due to the Company:
US$5,000 (in words Five Thousand US Dollars) per day

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C5 Schedule F: Bonus & Penalties

for each whole day the milestone is not achieved after the required period subject to a
maximum of:
US$50,000 (in words Fifty Thousand US Dollars)

7.0

SCHEDULE PENALTY FOR RECEIPT OF EQUIPMENT

If the Contractor fail to achieve Milestone No. 6 Upon receipt at Site of following
equipment (including documentation) within the durations stated in Schedule E, a penalty
as stated below shall become due to the Company:
US$ 10,000 (in words Ten Thousand US Dollars) per day
For each whole day Substantial Completion of the Work is not achieved after the required
period subject to a maximum of:
US$ 100,000 (in words One Hundred Thousand US Dollars)

8.0

SCHEDULE PENALTY FOR COMPLETION OF WORK

If the Contractor fail to achieve Milestone No. 9 Upon Mechanical completion and precommissioning of HRSG package including all auxiliaries within the durations stated in
Schedule E, a penalty as stated below shall become due to the Company:
US$ 20,000 (in words Ten Thousand US Dollars) per day
for each whole day Substantial Completion of the Work is not achieved after the required period
subject to a maximum of:
US$ 600,000 (in words Two Hundred Thousand US Dollars) or up to total penalty of
5% of contract value, whichever is higher.

9.0

PROJECT MANAGEMENT NON-COMPLIANCE PENALTY

Compliance with the project management requirements of the General Conditions of the
Contract (Document C-3), Procedures for Contractors (Document C-8) and the particular
conditions as outlined in Document C4 shall be considered a fundamental condition of this
Contract.
If the Contractor fails to comply with the project management requirements, then the Company
shall be entitled, to apply the following penalty. This shall be additional and without prejudice to
any other remedy afforded by the Contract or by law.
If the Company issues the Contractor with Project Management Default Notices, then a penalty
of US $2,500 (Two Thousand Five Hundred US Dollars) for each Default Notice issued
during a month, up to a maximum of US$10, 000 in any one calendar month per occurrence,
shall be assessed.
A Project Management Default Notice shall be defined as a formal complaint issued by the
Company in writing citing non-compliance of specific project management requirements as
outlined in the Scope of Work, Procedures for Contractors and the General Conditions of the
Contract. A complaint note may contain several Project Management Default Notices, each of
which shall be considered a separate Default Notice for the purposes of this penalty clause. A
complaint note shall be preceded with a written warning stating an ultimatum for the Contractor
to rectify the non-compliance.

10.0

COMPLETION OF ALL OUTSTANDING NON-CONFORMANCES

No Milestone shall be certified as complete until all outstanding related HSE, Quality (Audit) and
Contract Non-Conformances have been accepted as being complete by the Company.

11.0

SAFETY DEFAULT PENALTY

The Contractor shall note the requirements of Document C-9 clause 8.0 and the penalties stated
therein.

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12.0

C5 Schedule F: Bonus & Penalties

OMANISATION PENALTY
The Contractor shall note the requirements of Document C-7 and the penalties stated therein.

13.0

PENALTY FOR UN-SCHEDULED SHUT-DOWN

Should the Contractors actions result in the Un-Scheduled shutdown of Amal Steam 132kV
Substation, or other 132 kV substations and/or any feeder and/or incomer from/to these
stations, and provided that such actions did not emanate from instructions or incorrect
information provided by the Company, a penalty of:US$5,500 (in words Five Thousand Five Hundred US Dollars) per Un-Scheduled shutdown
shall become due to the Company.

14.0

SHARING OF KEY PERSONNEL

All Contractors Key Personnel (which are listed in Document C4) are required to be dedicated to
this Contract. In the event that any of the Contractors Key Personnel are working part-time
without the prior written approval of the Company (Such approval shall not unreasonably be
withheld) a penalty of US $500 (in words Five Hundred US Dollars) per position, per day
that Key Personnel are not available, shall become due to the Company.

15.0

NON-AVAILABILITY OF KEY PERSONNEL

All Key Personnel (which are listed in Document C4) are required to be dedicated to this
Contract. In the event that any of the Key Personnel are not available (this includes not
mobilized) or not made available as per the requirements of Document C4 for reasons other
than the Work or instruction by the Company without the prior written approval of the Company
(Such approval shall not unreasonably be withheld), a penalty of US$1,500/= (in words One
Thousand Five Hundred US Dollars) per position, per day that Key Personnel are not
available, shall become due to the Company.
In the event that any of the Key Personnel are replaced or demobilised without the prior written
approval of the Company (Such approval shall not unreasonably be withheld) a penalty of US$
5,000/= (in words Five Thousand US Dollars) for each event, shall become due to the
Company. Both above said penalty shall apply simultaneously depending upon individual case.