& CONDITIONS
FOR EPC CONTRACT (MAJOR)
ABU DHABI GAS LIQUEFACTION CO. LTD.
(ADGAS) / Doc. No...... / Rev ......
CONDITIONS OF CONTRACT
for
ENGINEERING, PROCUREMENT
AND
CONSTRUCTION (MAJOR)
MAC/CC/023 Issue 011 Rev.0 March 2016
TABLE OF CONTENTS
CLAUSE SUBJECT
1 DEFINITIONS
2 SCOPE OF WORK
3 PROJECT SCHEDULE
4 PARTIES’ REPRESENTATIVES
5 CONTRACTOR’S OBLIGATIONS
6 COMPANY’S ASSISTANCE
7 SUBCONTRACTORS
8 LABOUR
9 INSPECTING, TESTING AND ACCEPTANCE
10 DEFICIENT WORK
11 PROCEDURES AND DOCUMENTS
12 AGREEMENT PRICE
13 INVOICING AND PAYMENT
14 TAXES AND DUTIES
15 CLAIMS AND LIENS
16 AUDITS AND ACCOUNTS
17 BANK GUARANTEES
18 INTELLECTUAL PROPERTY
19 CONFIDENTIALITY
20 TITLE
21 WARRANTIES
22 ALLOCATION OF LIABILITIES
23 INSURANCE AND INDEMNITIES
24 VARIATIONS
25 SUSPENSION
26 TERMINATION
27 FORCE MAJEURE
28 AGREEMENT INTERPRETATION
29 INDEPENDENT CONTRACTOR
30 COMPLIANCE WITH LAWS
31 NOTICES AND ADDRESSES
32 SURVIVAL OF PROVISIONS
33 CONFLICT OF INTEREST
34 ASSIGNMENT AND NOVATION
35 CUSTOMS LAW
36 GOVERNING LAW AND DISPUTE RESOLUTION
37 MISCELLANEOUS
Annexure A - ADGAS General Obligations
Annexure B – Guidance Notes for Das Island Contractors
Annexure C – Performance Bond
CLAUSE 1
DEFINITIONS
AFFILIATEmeans, with respect to any PARTY, any other person, partnership or body corporate that directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with such PARTY. For purposes of this definition, "control" means direct or indirect ownership of more than fifty percent (50%) of the outstanding capital stock or other equity interest having ordinary voting power or the ability to appoint a majority of the board of directors or otherwise exercise de facto control.
AGREEMENT means the Signature Agreement executed by the PARTIES, these Clauses and EXHIBITS A, B and C.
AGREEMENT PRICE means the sums set forth and described in EXHIBIT A.7 payable to CONTRACTOR by way of remuneration for the WORK as such remuneration may be adjusted from time to time in accordance with the provisions of the AGREEMENT.
COMMERCIAL PRODUCTION means the actual production in the INSTALLATION of the end products contemplated by the PROJECT in accordance with the criteria described in EXHIBIT A.10.
COMMERCIAL PRODUCTION CERTIFICATE means the certificate issued by ADGAS to CONTRACTOR pursuant to the provisions of EXHIBIT A.10 and EXHIBIT B.38 confirming that COMMERCIAL PRODUCTION has been achieved.
COMMISSIONING means all work, activities and tests following MECHANICAL COMPLETION in accordance with the requirements and check lists stipulated in the EXHIBITS prior to commencement of TEST RUN.
COMPANYABU DHABI GAS LIQUEFACTION CO. LTD. (ADGAS), a company duly organised under the laws of Abu Dhabi and the United Arab Emirates having its postal address as P.O. Box 3500, Abu Dhabi, U.A.E.
COMPANY INDEMNIFIED PARTIES means:
(a)ADGAS and its AFFILIATES to the extent that they are affected by the performance of WORK.
(b)PMC, LICENSORS, ADGAS’s other contractors, engineers, vendors or subcontractors carrying out work in connection with the PROJECT.
CONTRACTOR------a company duly organised under the laws of ---- having its postal address as P.O. Box
CONTRACTOR INDEMNIFIED PARTIES means CONTRACTOR and its SUBCONTRACTORS to the extent that it concerns the WORK. For the avoidance of doubt, CONTRACTOR’s AFFILIATES involved in the execution of WORK shall be covered by the term SUBCONTRACTORS.
CO-ORDINATION PROCEDURES mean those procedures described in EXHIBIT B.5 to be adopted by ADGAS and CONTRACTOR in relation to the performance of WORK.
EFFECTIVE DATE means the date when the AGREEMENT is deemed to have come into force, which date is specified in the Signature Agreement.
EXHIBITS means EXHIBIT A, EXHIBIT B and EXHIBIT C, which are attached hereto as part of this AGREEMENT.
EXISTING FACILITIES means the existing plant, equipment, installations and other facilities at, near or adjacent to the SITE owned or operated by ADGAS or its AFFILIATES. .
FEED means front end engineering and design prepared by or for ADGAS for the WORK.
FINAL ACCEPTANCE means the stage at which CONTRACTOR has fulfilled all its obligations under this AGREEMENT and the WARRANTY PERIOD has expired.
FINAL ACCEPTANCE CERTIFICATE means the certificate signed by ADGAS and issued to CONTRACTOR to confirm FINAL ACCEPTANCE of the PROJECT.
FORCE MAJEURE means strikes (excluding strikes occurring among the employees of Contractor or its Sub-contractors) or industrial disturbances of a general nature, acts of the public enemy, wars, undeclared wars, acts of governments including the governments of Abu Dhabi or the UAE, blockades, insurrections, riots, epidemics, landslides, earthquakes, lightning, civil disturbances, explosions and any other cause or event which is unpredictable, unsurmountable and similar to the kind enumerated or equivalent forces, not within the control of the party affected thereby and which that party is unable to overcome by exercise of due diligence. Force Majeure shall not include financial distress of either party and late delivery of materials or equipment or late performance of a Sub-contractor unless such late delivery or performance is itself caused by Force Majeure.In the event of any dispute, the party claiming to be affected by Force Majeure shall bear the burden of proving that it is so affected.
GOODS means any and all things, including but not limited to materials and equipment (including spare parts) required for and to be incorporated in the INSTALLATION.
GROSS NEGLIGENCEmeans any act or failure to act which seriously and substantially deviates from a reasonable course of action without justification and which is in reckless disregard of or wanton indifference to, foreseeable harmful consequences.
INSTALLATION means the permanent facilities including the SYSTEM(S),buildings, structures, civil works, amenities and facilities or any of them which are to be designed, procured, are to be designed, procured, constructed, revamped or refurbished, commissioned and tested as part of the PROJECT as described in the EXHIBITS.
INTELLECTUAL PROPERTY means rights, title or interest in patents, trademarks, service marks, trade or business names, design rights (whether the above rights are registered, unregistered or are the subject of pending applications), copyrights (including copyrights in software), database rights, know-how (including trade secrets and confidential information) and any rights, title or interest similar or analogous to any of the above
LICENCE AGREEMENT means any agreement between ADGAS and a LICENSOR as may or may not be novated or assigned to CONTRACTOR in accordance with this AGREEMENT.
LICENSOR means any and all persons, firms, partnerships, companies or a combination thereof directly or indirectly granting ADGAS any right or license to use intellectual property for the design, engineering, construction, operation and/or maintenance of INSTALLATION or SYSTEMS.
LUMP SUM PRICE means that element of the AGREEMENT PRICE which is fixed and firm and payable to CONTRACTOR as full compensation for the successful and timely execution of the WORK.
MECHANICAL COMPLETIONmeans the stage when the construction and pre-commissioning of SYSTEMS and INSTALLATION are successfully completed in full compliance with the AGREEMENT and SPECIFICATIONS and in accordance with procedures and checklists included in EXHIBIT B.38.
MECHANICAL COMPLETION CERTIFICATE means the certificate signed by ADGAS and issued to CONTRACTOR confirming MECHANICAL COMPLETION.
MILESTONES means those discrete events that constitute a clear demarcation that specific elements of the WORK are complete, including planning, permitting, design, procurement and construction steps, as more fully described in EXHIBIT A.6.
OPERATING DAY means a period of twenty-four (24) continuous hours during which the INSTALLATIONor any part thereof is in operation for any portion of the twenty-four (24) hour period.
PARTY/PARTIES means ADGAS and/or CONTRACTOR.
PROJECT means the ______, as described in EXHIBIT A.1.
PMC means the consulting firm appointed by ADGAS to provide project management services to the WORK and/or the PROJECT.
PROJECT DOCUMENTS means the AGREEMENT and all hard copy and electronic versions of PROJECT documents, which shallinclude, but shall not be limited to, all FEED documents, drawings, P&IDs, PFDs, isometrics, plot plans, general arrangements, SPECIFICATIONS, materials requisitions, data sheets and calculations, indices, manuals, reports, procedures, estimates, accounts, summaries, compilations, agreements including SUBCONTRACTORS agreements, related materials and any other document defined or described in any of the foregoing.
PROVISIONAL ACCEPTANCE means the stage when all WORK including but not limited to MECHANICAL COMPLETION, COMMISSIONING, COMMERCIAL PRODUCTION and TEST RUN has been successfully completed, as set forth in EXHIBIT B.38.
PROVISIONAL ACCEPTANCE CERTIFICATE (PAC) means the certificate signed by ADGAS and issued to CONTRACTOR confirming PROVISIONAL ACCEPTANCE, it being understood that more than one PROVISIONAL ACCEPTANCE CERTIFICATE may be signed and issued in respect of various portions or phases of the WORK completed by CONTRACTOR.
PUNCH LIST means a computerised list of incomplete work, exceptions and /or defects that form a summary of remaining tasks identified by CONTRACTOR and ADGAS to be completed by CONTRACTOR.
READY FOR COMMISSIONING means the stage when all MECHANICAL COMPLETION activities are completed, all SYSTEMS have been inspected and approved, safety facilities including interlock systems activated, safety audit of all SYSTEMS has been performed and all SYSTEMS are ready for inventory with process and utilities media and pressurisation.
REPRESENTATIVE means the person, as notified by one PARTY to the other PARTY, who shall have the authority and duties as set forth in Clause 4 and the EXHIBITS.
SCHEDULE means the timetable for implementation and completion of the WORK as set out in EXHIBIT A.6.
SIGNATURE AGREEMENT means the signature agreement entered into between the PARTIES relating to the WORK.
SITE means all locations in Abu Dhabi where the INSTALLATION is to be permanently constructed, erected, tested, operated and maintained.
SPECIFICATIONS means the specifications, drawings and procedures specified or referenced in the EXHIBITS or reasonably inferred therefrom, and any modifications or additions thereto as may from time to time be approved in writing by ADGAS.
START-UP DATE means the day on which feedstock is introduced into the INSTALLATION or part thereof with the intent to operate the INSTALLATION, or part thereof.
SUBCONTRACTOR(S) includes suppliers and VENDORS and means any and all persons, firms, partnerships, companies or a combination thereof (not being employees of CONTRACTOR) of any tier, to whom any part of the WORK has been subcontracted by CONTRACTOR, or SUBCONTRACTORS (including any contracts novated or assigned by ADGAS to CONTRACTOR) and the successors and assigns of such persons, firms, partnerships, companies or a combination thereof.
SYSTEM(S) means a grouping of equipment and components, including foundations, structures, mechanical, electrical, control systems, piping and associated parts that perform a single service, function and operation as a process, utility system and/or facility, which defines a specific INSTALLATION function.
TEST RUN means the performance demonstration when the INSTALLATIONwill be operated continuously for the period and in accordance with the procedures and activities specified in EXHIBIT A.10 to prove that the INSTALLATIONand the SYSTEMS operate according to the design parameters and meet the performance guarantees stipulated under this AGREEMENT.
TEMPORARY WORKS means all temporary facilities, buildings and contents thereof of every kind required for or concerning the execution or maintenance of the WORK, but excluding CONTRACTOR’S construction plant and equipment.
THIRD PARTY means any and all persons, firms, partnerships, companies, bodies, entities or a combination thereof, other than ADGAS or CONTRACTOR.
U.A.E. means the United Arab Emirates.
VARIATION(S) means any and all changes in or relative to the WORK in accordance with Clause 24 hereof.
VENDOR(S) means any and all persons, firms, partnerships, companies, bodies, entities or a combination thereof including sub-vendors and suppliers, who are providing GOODS (including any of the foregoing whose purchase orders are novated or assigned by ADGAS to CONTRACTOR) and the successors and assigns of such persons, firms, partnerships, companies, bodies, entities or a combination thereof.
WARRANTY PERIOD means the eighteen (18) month period (as such period may be extended in accordance with Clauses 21.9 and 21.10) commencing on the date or effective date of issuing the last PROVISIONAL ACCEPTANCE CERTIFICATE, but without affecting or diminishing CONTRACTOR’s warranty obligations under this AGREEMENT which have arisen on the date or effective date of the first PROVISIONAL ACCEPTANCE CERTIFICATE, if any.
WILFUL MISCONDUCTmeans any act or failure to act with an intentional disregard of foreseeable harmful consequences.
WORK means and includes INSTALLATION together with all work and services to be performed and GOODS, services and other things to be provided by CONTRACTOR or SUBCONTRACTORS to satisfy all of CONTRACTOR’s obligations under the AGREEMENT.
END OF CLAUSE
CLAUSE 2
SCOPE OF WORK
2.1GENERAL
CONTRACTOR agrees to provide and perform and complete the WORK according to the requirements and the terms and conditions of the AGREEMENT and in compliance with the sequence of dates set forth in the MILESTONES and SCHEDULE described in EXHIBIT A.6.
2.2The WORK which CONTRACTOR is required to perform is more particularly described in these Clauses and EXHIBITS and includes, but not limited to:
- PROJECT design services
- PROJECT engineering services
- Procurement services and supply of all GOODS for the PROJECT
- Provision of all TEMPORARY WORKS
- Construction planning and construction management services
- THIRD PARTY approvals and coordination
- Construction of the INSTALLATIONS, including site preparation and the installation of all facilities together with all pre-commissioning services and provision of construction plant and equipment.
- COMMISSIONING and start-up planning and management
- COMMISSIONING and TEST RUN
- Training of ADGAS’s personnel
- Procurement and delivery of two-year spare parts as specified in the AGREEMENT
- Ancillary design and construction for the PROJECT
- WORK required to attain the FINAL ACCEPTANCE CERTIFICATE.
2.3ADGAS shall have the right at any time and at its own discretion to increase or decrease the Scope of Work. In such cases, the AGREEMENT PRICE and the SCHEDULE will be adjusted in accordance with the provisions of this AGREEMENT as set forth in Clause 24
END OF CLAUSE
CLAUSE 3
PROJECT SCHEDULE
3.1COMMENCEMENT OF THE WORK
CONTRACTOR shall immediately commence the WORK upon the EFFECTIVE DATE of this AGREEMENT.
3.2SCHEDULE AND MILESTONES
The SCHEDULE and MILESTONES for the CONTRACTOR’s performance of the WORK are set forth in EXHIBIT A.6. The MILESTONES and SCHEDULE shall be subject to adjustments only pursuant to the provisions of this AGREEMENT.
3.3COMPLETION OF THE WORK
The WORK shall be considered complete upon issuance by ADGAS of the FINAL ACCEPTANCE CERTIFICATE.
The issuance of the FINAL ACCEPTANCE CERTIFICATE shall relieve CONTRACTOR of its obligations under this AGREEMENT except those that survive expiry or termination of this AGREEMENT and/or are otherwise provided for in this AGREEMENT.
3.4COMPLETION OF WORK
CONTRACTOR guarantees that it will achieve the MILESTONES by the dates set against each of them.
3.5LIQUIDATED DAMAGES FOR LATE COMPLETION
3.5.1In the event that CONTRACTOR fails to achieve any of the MILESTONES set out in EXHIBIT A.9 by the dates set against each of them, CONTRACTOR shall pay to ADGAS by way of liquidated damages and not as a penalty, the amounts set out in EXHIBIT A.9 for delay in achieving the MILESTONE.Liquidated damages (also referred to as liquidated and ascertained damages) are damages whose amount the parties designate during the formation of a contract for the injured party to collect as compensation upon a specific breach (e.g., late performance)
3.5.2CONTRACTOR’s liability to ADGAS pursuant to Clause 3.5.1 above in respect of each failure to achieve a MILESTONE by its associated date shall not exceed the amount of delay liquidated damages specified for each MILESTONE set out in EXHIBIT A.9, and CONTRACTOR’s total liability to ADGAS under this Clause 3.5 shall not exceed the aggregate amount of liquidated damages set out in EXHIBIT A.9.
3.5.3ADGAS may, without prejudice to any other method of recovery, deduct the amount of liquidated damages payable under Clause 3.5.1 from any monies due or which may become due from ADGAS to CONTRACTOR.The payment or deduction of such damages shall not relieve CONTRACTOR from its obligation to complete the WORK or from any of its other obligations and associated liabilities under the AGREEMENT.
3.5.4Without prejudice to Clause 3.5.3, CONTRACTOR shall pay any liquidated damages payable hereunder within thirty (30) days of receipt of ADGAS’s written request demanding such payment.
3.5.5It is understood and agreed by the PARTIES that the amounts of liquidated damages payable hereunder are a genuine pre-estimate of the loss that ADGAS will sustain as a result of CONTRACTOR’s failure to achieve the MILESTONES by the relevant MILESTONE dates.These amounts are agreed upon and fixed because of the difficulty of ascertaining the exact amount of loss that ADGAS suffers in such circumstances and shall be applicable regardless of the actual loss that ADGAS may be deemed to sustain.
3.5.6If CONTRACTOR’s obligation to pay liquidated damages hereunder is determined to be unenforceable (by any tribunal, arbitrator, court or other judicial authority on the basis that such obligation does not constitute a reasonable pre-estimate of loss), CONTRACTOR shall, subject to the liability caps referred to in Clauses 3.5.2 and 22.6, nevertheless be liable to pay unliquidated damages in respect of the losses from the breach of this AGREEMENT to which losses such liquidated damages would otherwise relate.
END OF CLAUSE
CLAUSE 4
PARTIES' REPRESENTATIVES
4.1PARTIES’ REPRESENTATIVES
4.1.1ADGAS and CONTRACTOR shall each nominate a REPRESENTATIVE for the purpose of this AGREEMENT within five (5) days of the EFFECTIVE DATE. The REPRESENTATIVES shall have the duties, rights and obligations outlined as follows:
4.1.1.1All information, instructions and decisions by a PARTY shall be issued by the REPRESENTATIVE of that PARTY. All information, instructions and decisions from the REPRESENTATIVE of a PARTY shall bind that PARTY.
4.1.1.2The REPRESENTATIVE of a PARTY may delegate in writing any of its responsibilities to a nominated deputy or deputies. The terms of such delegation shall be subject to prior written notification to the other PARTY. Information, instructions and decisions from such a nominated deputy shall be deemed to have been issued by the REPRESENTATIVE of the PARTY.