CLAUSE NUMBER OF CONDITIONS OF CONTRACT

3.1 Obligations of the Contractor

3.2 Assignment and Subletting
3.3 Commencement and Completion
3.4 Defects Liability
3.5 Payment
3.6 Supervisor Instructions
3.7 Increase or Decrease in Cost
3.8 Quantities
3.9 Statuary Obligations, Notices, Fees and Charges
3.10

Contractors Superintendence

3.11

Insurance Against Injury to Persons and Property

3.12

Insurance of the Works

3.13

Determination by the Employer

3.14

Determination by the Contractor

3.15

Articles 1266 and 1267 of the Civil Code

3.16

Surety Bond

3.17

Arbitration

3.18

Bribery

3.19

Patent Rights

3.20

Law of the Contract

3.21

Construction Program

Appendix to the Conditions of Contract

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3.00 CONDITION OF CONTRACT

3.1 OBLIGATIONS OF THE CONTRACTOR
3.1.1

The Contractor shall with due diligence and in a good and workmanlike manner carry out
and complete the Works to the reasonable satisfaction of the Supervisor and The Employer.

3.1.2

The Quality and Quantity of the Work include in the Contract Sum shall be deemed to be
that which is set out in the Specifications and Drawings.

3.2 ASSIGNMENT AND SUBLETTING

3.2.1

The Contractor shall not without the written consent of the Employer, assign this Contract.

3.2.2

The Contract shall not sublet any part of the Works without the written consent of the
Supervisor whose consent shall not unreasonably be withheld.

3.3 COMMENCEMENT AND COMPLETION

3.3.1

The works shall be commenced on the date for Possession stated in the appendix and the
Contractor shall thereupon begin and regularly and diligently proceed with the works and
shall complete the same on or before the Date for Completion stated in the Appendix
subject to the provisions of sub-clause 3.3.2

3.3.2

If it becomes apparent that the Works will not be completed by the Date for Completion (or
any extended date in accordance with the provisions of this sub-clause) for reasons which
are under the control of the Employer then the Contractor shall so notify the Supervisor who
shall extend the time for completion by a reasonable period.

3.3.3

If the Works are not completed by the date for Completion or by any extended date fixed
under sub-clause 3.3.2 then the Contractor shall pay to the Employer liquidated and
ascertained damages at the rate stated in the Appendix for every day or part of a day during
which the Works remain uncompleted.

3.3.4

When in the opinion of the Supervisor the Works have been practically completed, he shall
forthwith issue a certificate to that effect and Practical Completion of the Works shall be
deemed to have taken place on the day named in such certificate.

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3.4 DEFECTS LIABILITY

3.4.1

Any defects, shrinkage or other faults which appear within the period stated in the Appendix
from the date of Practical Completion and which are due to materials or workmanship not in
accordance with the contract shall be made good by the Contractor at no cost to the
Employer unless the Supervisor shall otherwise instruct.

3.4.2

The Supervisor shall, when in his opinion the Contractors obligations under sub-clause
3.4.1 have been discharged, issue a certificate to that effect.

3.5 PAYMENT
3.5.1

Provided the Contractor shall have issued a claim for interim payment at intervals of one
month complete with all supporting documentation and in the format required by the
Supervisor, the Supervisor will issue an interim payment recommendation within 5 (five)
days of receipt of the Contractors claim. The Supervisor shall within 2 (two) days of receipt
of the interim payment recommendation, certify interim payment to the Contractor in respect
of work executed plus 75% of the value of any materials or goods on site for the purposes
of the works, the amount being subject to 5% retention less only the amounts of previous
interim payments and the repayment of the appropriate part of the advance payment (if
any), and the Employer shall pay to the Contractor the amount so certified within the period
stated in the appendix from the date of the certificate.

3.5.2

Provided the Contractor shall have supplied all documentation reasonably necessary for the
computation of the amount to be certified the Supervisor shall within 45 days after the date
of Practical Completion certified under sub-clause 3.3.4 certify payment to the Contractor of
the total amount to be paid to the Contractor under the Contract, the amount certified being
subject to 2 % retention less only the amount of any interim payments made under subclause 3.5.1 and the amount of the advance payment ( if any ) and the Employer shall pay
to the Contractor the amount so certified within the period stated in the Appendix from the
date of the certificate.

3.5.3

Provided the Contractor shall have supplied all documentation reasonably necessary for the
computation of the amount to be certified the Supervisor shall within 3 days after the date
certified under sub-clause 3.4.2 issue a final certificate certifying the amount remaining due
to the Contractor or due to the Employer as the case may be and such sum shall as from
the expiry of the period stated in the Appendix from the date of the final certificate be a debt
payable as the case may be the Employer to the Contractor or by the Contractor to the
Employer.

3.5.4

On execution of the Contract the percentage of the Contract Sum stated in the Appendix as
advance payment (if any) shall be paid against the unconditional Letter of Guarantee of a
bank licensed to undertake foreign exchange (Bank Devisa) to be jointly and severally
bound with the Contractor to the Employer. The said bank and the terms of the said
guarantee shall be to the approval of the Employer and the cost of obtaining and
maintaining the guarantee shall be borne by the Contractor.

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3.6 SUPERVISORS INSTRUCTIONS

3.6.1

The Supervisor may issue written instructions, which the Contractor shall forthwith, carry
out. If instructions are given orally the Supervisor shall forthwith confirm them in writing.

3.6.2

The Supervisor may, without invalidating the Contract, order in writing.

3.6.2.1 The alteration or modification of the design or quality or quantity of the Works or
3.6.2.2 the addition, omission or substitution of any work,
3.6.2.3 the addition, alteration or mission of any obligations or restrictions imposed by the
Employer, or
3.6.2.4 the expenditure of any provisional sums
3.6.3

The amount to be added to or deducted from the contract sum in respect of instructions
may be agreed between the Employer and the Contractor complying with any such
instruction but if not so agreed there shall be added to or deducted from the Contract Sum
an amount determined in accordance with the following rules :

3.6.3.1 additions or omissions shall be valued in accordance with the relevant prices in the Bills of
Quantities for work of a similar nature set out the Contract;
3.6.3.2 A fair valuation where there is no work of a similar nature set out in the Contract.
3.7 INCREASE OR DECREASE IN COSTS
There will be no variation in the Contract Sum as a result of any change in the cost of
materials, consumable stores, fuel, power, water, communications, freight or insurance
rates, import duties or taxes, wage rates or allowances in respect of labor, etc., or for rises
or falls in the exchange rates of currencies.
3.8 QUANTITIES
This is a Lump Sum Contract the tendered must measure his own quantities and satisfy
him that any descriptions provided accurately reflect the work shown on the Drawings and
Specification.

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3.9 STATUTORY OBLIGATIONS, NOTICES, FEES AND CHARGES

3.9.1

The Contractor shall comply with, and give all notices required by and any Law or Decree of
the Central Government, or any regulation or by law of any local or other duly constituted
authority which has any jurisdiction with regard to the works.

3.9.2

The Employer will obtain the following permits SIPPT (Land Title), Block Plan, TPAK
(Advisory Board on Architecture), TPKB1 (Advisory Board on Building Structure
Foundations), TPKB2 (Advisory Board on Building Installation), IMB (Building Permit) and
Occupation Permit.

3.9.3

The Contractor will pay all other fees and charges necessary for the completion and hand
over of the works.

3.10

CONTRACTORS SUPERINTENDENCE

3.10.1 The Contractor shall give or provide all necessary superintendence during the execution of
the works as long thereafter as the Supervisor may consider necessary for the fulfilling of
the Contractors obligations under the Contract.
3.10.2 The Contractors superintendent shall be approved by the Supervisor, which approval may
at any time be withdrawn, and shall be constantly on the Works and shall give his whole
time to the superintendence of the Works.
3.11

INSURANCE AGAINST INJURY TO PERSONS AND PROPERTY

3.11.1 The Contractor shall be liable for, and shall indemnify the Employer against, any expense,
liability, loss, claim or proceedings whatsoever arising under any law, decree or regulation in
respect of personal injury to or the death or any person whosoever arising out of or in the
course of or caused by the carrying out of the Works, except to the extent due to any act or
neglect of the Employer or of any person for whom the Employer is responsible.
3.11.2 The Contractor shall be liable for, and shall indemnify the Employer against, any expense,
liability, loss, claim or proceedings in respect of any injury or damage whatsoever to any
property real or personal in so far as such injury or damage arises out of or in the course of
or by reason of the carrying out of the Works, and provided always that the same is due to
any negligence omission or default of the Contractor, his servants or agents.

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3.11.3 Without prejudices to the liability of the Contractor to indemnify the Employer under clause
3.11.1 and 3.11.2 of these Conditions, the Employer shall maintain such insurance as are
necessary to cover the liability of the Contractor or, as the case may be, of any subcontractor, or of any Nominated Sub-Contractor, in respect of personal injury or death
arising out of or in the course of or caused by the carrying out of the Works not due to any
act or neglect of the Employer or of any person for whom the Employer is responsible and
in respect of injury or damage to property real or personal arising out of or in the course of
or by reason of the carrying out of the Works, including works carried out by such subcontractor his servants or agents, or by such Nominated Sub-Contractor his servants or
agents or such Nominated Sub-Contractor, his servants or agent.
3.11.4 The insurance in respect of claims for personal injury to, or the death of any person under a
contract of service with the Contractor or any sub-contractor or any nominated SubContractor, as the case may be and arising out of and in the course of such, persons
employment, shall be placed with the Asuransi Tenaga Kerja (ASTEK). Provided that, in
respect of any persons employed by any Nominated Sub-Contractor, the Contractors
obligation to insure as aforesaid shall be satisfied if the Nominated Sub-Contractor shall
have insured in a like manner.
3.11.5 As and when he reasonably required so to do by the Contractor, the Employer shall
produce for inspection the policy for the insurance required by sub-clause 3.11.3 of this
Condition and the receipt for the premium paid
3.11.6 Should the Employer make default in insuring or in continuing to insure as required by subclause 3.11.3 of this Condition the Contractor may himself insure against any risk with
respect to which the default shall have occurred and the cost of the premium shall be added
to the Contract Sum.
3.12

INSURANCE OF THE WORKS

3.12.1 All work executed and all unfixed materials and goods, delivered to placed on or adjacent to
the work and intended therefor (except temporary buildings, plant, tools and equipment
owned or hired by the Contractor or any sub-contractor or Nominated Sub-Contractor) shall
be at the sole risk of the Employer as regards loss or damage by fire, lighting, explosion,
storm, tempest, flood, bursting or overflowing of water tanks, apparatus or pipes,
earthquake, aircraft and other aerial devices or articles dropped therefrom, riot and civil
commotion.

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3.12.2 The Employer shall maintain in the joint names of the Employer and the Contractor a proper
policy of insurance against that risk, and such policy and the receipt for the premium paid
shall upon request be produced for inspection by the Contractor. If the Employer shall at
any time fail upon request to produced any receipt showing such a policy as aforesaid to be
effective then the Contractor may in the name and on behalf of the Employer insure all work
executed and all unfixed materials and goods as aforesaid against loss or damage
occasioned by the said contingencies and shall upon production of receipt for any premium
paid by him be entitled to have its amount added to the Contract Sum. If any loss or
damage affecting the Works or any part thereof or any contingencies, then upon discovering
the said loss or damage the Contractor shall forthwith give notice in writing both to the
Supervisor and the Employer of the extent, nature and location thereof and
3.12.2.1The occurrence of such loss or damage shall be disregarded in computing any amounts
payable to the Contractor under or by virtue of this Contract.
3.12.2.2The Contractor with due diligence shall restore works damaged, replace or repair any
unfixed materials or goods which have been destroyed or injured, remove and dispose of
any debris and proceed with the carrying out and completion of the Works. The replacement
and repair of unfixed materials and goods and the removal and disposal of debris shall be
deemed to be a variation required by the Supervisor.
3.13

DETERMINATION BY THE EMPLOYER

3.13.1 Without prejudice to any other rights or remedies which the Employer may possess, the
Employer may but not unreasonably or vexatiously by notice by registered post or recorded
delivery to the Contractor forthwith determine the employment of the Contractor under this
Contract if the Contractor shall make default in any one or more of the following respects ;
3.13.2 if without reasonable cause he wholly suspends the carrying out of the Works before
completion thereof; or
3.13.3 if he fails to proceed regularly and diligently with the Works; or
3.13.4 if he refused or persistently neglects to comply with a written notice from the Supervisor
requiring him to remove defective work or improper materials or goods and by such refusal
or neglect the Works are materially affected; or
3.13.5 If the Contractor becomes bankrupt or makes any composition or arrangement with his
creditors or has a winding up order made or a resolution for voluntary winding up passed or
a Receiver of Manager of his business is appointed or possession is taken by or on behalf
of any creditor.

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3.14

DETERMINATION BY THE CONTRACTOR

Without prejudice to any other rights or remedies which the Contractor may possess, the
Contractor may but not unreasonably or vexatiously by notice by registered post or
recorded delivery to the Employer forthwith determine the employment of the Contractor
under this Contract if the Employer shall make default in any one or more of the following
respect;

3.14.1 If the Employer fails to make any interim payment due under the provision of clause 3.5
within 28 days of such payment being due; or
3.14.2 If the Employer becomes bankrupt or makes any composition or arrangement with his
creditors or has a winding up order made or resolution for voluntary winding up passed or
Receiver or Manager of his business is appointed or possession is taken by or on behalf of
any creditor.
3.15

ARTICLES 1266 AND 1267 OF THE CIVIL CODE

The Employer and the Contractor hereby irrevocably renounce all benefit of Articles 1266
and 1267 of the Civil Code to the end that the Employer or Contractor shall have the right to
terminate the contract by written notice.

3.16

SURETY BOND

3.16.1 The Contractor shall obtain the guarantee of a bank licensed to undertake foreign exchange
(Bank Devisa) to be jointly and severally bound with the Contractor to the Employer in a
sum as stated in the Appendix for the due performance of the Contract under the terms of a
bond. The said bank and the terms of the said bond shall be to the approval of the
Employer and the cost of obtaining the bond shall be borne by the Contractor.
3.16.2 Provided always, that when the Certificate of Practical Completion in accordance with subclause 3.3.4 shall have been issued, the said bank shall be released from the bond.
3.17

ARBITRATION

3.17.1 If any dispute or difference concerning this contract shall arise between the Employer or the
Supervisor on his behalf and the Contractor such dispute or difference shall be and is
hereby referred to the arbitration of a person to be agreed between the parties or, failing
agreement within 14 days after either party has given to the other a written request to occur
in the appointment of an arbitrator, a person to be appointed on the request of either party
by the Chairman of the Court of appeal in Denpasar.
3.17.2 The rules under which any arbitration proceedings are held shall be the rules of Badan
Arbitrasi Nasional Indonesia (BANI ).

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3.17.3 The Employer and the Contractor hereby irrevocably waive their rights of appeal under
Article 641 of the Code of Civil Procedure and agree that the award of the arbitrator shall be
final and binding.
3.17.4 The arbitration proceedings shall be held in Denpasar.
3.18

BRIBERY
The Employer shall be entitled to determine the employment of the Contractor under this or
any other contract if the Contractor shall have offered or given or agreed to give to any
person any gift or consideration of any kind as an inducement or reward for doing or
forbearing to do or for having done or forborne to do any action in relation to the obtaining
or execution of this or any other contract with the Employer or for showing or forbearing to
show favor or disfavor to any person in relation to this or any other contract with the
Employer, or if the like act shall have been done by any person employed by the Contractor
or acting on his behalf ( whether with or without the knowledge of the Contractor ).

3.19

PATENT RIGHTS
The Contractor shall save harmless and indemnify the Employer from and against all claims
and proceedings for or on account of infringement of any patent right, design, trademark or
name or other protected rights in respect of the Works, except where such infringement
results from compliance with the design or specification provided by the Employer.

3.20

LAW OF THE CONTRACT

The Law of the Contract shall be the law of the Republic of Indonesia.

3.21

CONSTRUCTION PROGRAMME

3.21.1 The Contractor in coordination with Supervisor shall provide and keep on site a copy of the
current master program.
3.21.2 The Contractor shall provide to the Supervisor all reasonable information required for the
master program of the works to e regularly updated in respect to the progress of the works
of this contract.
3.21.3 The Contractor shall within fourteen days of contract award submit to the Supervisor a
comprehensive and competently prepared construction program showing dates for
commencement and completion of each trade in each major section of the works and
showing Practical Completion by the due date and including all critical activities, critical
dates and program float times.

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3.21.4 The program shall be updated at not less than weekly intervals in the light of the progress of
the works.
3.21.5 Immediately delays or extensions of time are evident, the Contractor shall be required to reprogram the contract works forthwith to extend fully over new contract period.

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Appendix to the Conditions of Contract

Clause
Date for Possession

3.3

to be advised

Date for Completion

3.3

to be advised

Liquidated and Ascertained Damage

3.3

Rp. 0.1% of the Contract

Sum per day or part day

Defect Liability Period

3.4

Three calendar months

Time between claim for interim

Payment and issue of interim
Payment recommendation and

3.5

. . . days

Time between issue of interim

Payment recommendation and
Issue of payment certificate.

3.5

. . . days

Period for Honoring Certificates

3.5

. . . days

Amount of Advance Payment

3.5

. . .%

Amount of Insurance Cover

Against injury to Person and Property

3.11

By Contractor

Insurance of the Work

3.12

By Contractor

Amount of Surety Bond

3.16

5%

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