DOCUMENT NO.

REV

BLA-G-PR-00-601 1A
Contract
SHEET 1 OF 10
No.3510005187

PURCHASING PLAN

BLOCK-A GAS DEVELOPMENT PROJECT

APPROVED FOR CONSTRUCTION

Class 1 X Class 2 Class 3

CONTRACTOR COMPANY
REV DATE PURPOSE
PREP’D CHK’D APP’D APP’D
1A 15-JUL-16 APPROVED FOR CONSTRUCTION S. KUNCORO Y. PURNOMO I. GUNAWAN

1 02-MAY-16 APPROVED FOR CONSTRUCTION S. KUNCORO Y. PURNOMO I. GUNAWAN

0A 28-MAR-16 ISSUED FOR CONSTRACTION S. KUNCORO Y. PURNOMO I. GUNAWAN

0 21-DEC-15 ISSUED FOR CONSTRACTION S. KUNCORO Y. PURNOMO I. GUNAWAN

A 13-NOV-15 ISSUED FOR REVIEW S. KUNCORO Y. PURNOMO I. GUNAWAN

JOB CODE CONTRACTOR ID No:

S-000-1420-001
0-0709-00-0000

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RECORD OF REVISION
The revisions listed below have been incorporated in this copy of the document.
PAGE
REV. NO. SECTION DESCRIPTION OF CHANGES
NO.
A 3 4 Number of Procedure from Block A Project
4.2.1 4 Additional Approved Manufacturer List Approval
5.3.1 7 Technical Bid Evaluation
5.6 9 Year of Operating Years and Wording revised
5.8 9 Requisitions and Purchase Status Report
0 5.3.1 6 Input new paragraphs as CPY’s Commented
5.4 7 Award Order
5.6 9 One (1) & Two (2) Years Operating Spare Parts

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TABLE OF CONTENTS

1. PURPOSE ........................................................................................................................... 4

2. SCOPE ................................................................................................................................. 4

3. REFERENCES .................................................................................................................. 4

4. GENERAL ........................................................................................................................... 4
4.1 Requisitions ............................................................................................................................... 4
4.2 Vendor List ................................................................................................................................. 4
4.2.1 Addition to Vendor List .............................................................................................................. 4

5. PROCEDURE .................................................................................................................... 5
5.1 Requisition Grouping ...................................................................................................... 5
5.2 Inquiry .......................................................................................................................................... 5
5.2.1 Selection of Bidders ................................................................................................................. 5
5.2.2 Inquiry Package ........................................................................................................................ 5
5.2.3 Bid Closing Date ........................................................................................................................ 6
5.2.4 Request for Quotation and Receipt of Quotation .................................................................. 6
5.2.5 Bid Opening and Short Listing ................................................................................................. 6
5.3 Bid Evaluation ........................................................................................................................... 6
5.3.1 Technical Bid Evaluation .......................................................................................................... 7
5.3.2 Commercial Bid Evaluation and Order Authorization .......................................................... 7
5.3.3 Clarification Meeting ................................................................................................................. 7
5.4 Award of Order .......................................................................................................................... 7
5.4.1 Purchase Orders ....................................................................................................................... 8
5.4.2 Acknowledgement .................................................................................................................... 9
5.4.3 Amendment to Purchase Orders ............................................................................................ 9
5.4.4 Notice to Unsuccessful Bidders ............................................................................................... 9
5.5 Kick-off Meeting ......................................................................................................................... 9
5.6 One (1) One (1) & Two (2) years Operating Spare Parts Year Operating Spares ........ 10
5.7 Vendor Specialist ..................................................................................................................... 10
5.8 Reports on Purchasing Processes ........................................................................................ 10
Requisitions and Purchase Status Report ............................................................................ 10
5.10 Job Close-outs ......................................................................................................................... 10
5.11 Organization .......................................................................................................................... 11
5.11.1 Procurement Operation Center .......................................................................................... 11
5.11.2 Worldwide Procurement Satellite Office ........................................................................... 11

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1. PURPOSE
The purpose of issuing this plan is to describe the process of purchasing services of the
Equipment & Materials for Block A Gas Development Project.

2. SCOPE
This plan applies to the purchasing activities, such as : preparation of inquiry packages,
evaluation of bids, the negotiation, the awards, issue the purchase orders, summarize of
purchasing status and the arrangement of payments.

3. REFERENCES
(1) BLA-G-PD-00-601, Procurement Execution Plan
(2) BLA-G-IN-00-601, Approved Manufacturer List
(3) BLA-G-PR-00-405, Technical Bid Evaluation (TBE) Procedure
(4) BLA-G-PR-00-607, Specification for Spare Parts and Spare Parts Interchangeability
(5) BLA-G-PR-00-606, Spare Parts Procurement and Handling Procedure.
(6) BLA-G-PR-00-604 Master List Application and Custom Clearance

4. GENERAL
4.1 Requisitions
The technical requirements on Materials are set forth on the requisitions issued by
engineering disciplines.
Requisition as well as the information, all necessary supporting specifications and drawings
(hereinafter called Applicable Documents) are forwarded to Project Procurement Team for
preparation of inquiry.

4.2 Vendor List

The buyer selects bidders, extracting from Approved Manufacturer List (Document No.
BLA-G-IN-00-601), which is a part of the Contract between COMPANY and
CONTRACTOR, and prepares the inquiry for such bidders.

4.2.1 Addition to Vendor List

Vendor List may be updated by CONTRACTOR during the execution of the project.
CONTRACTOR will recommend additional vendors from quality, technical and schedule
aspect who is subject to COMPANY approval.
Additional Approved Manufacturer shall be proposed for COMPANY's approval prior to
execution of Bidding /Request for Quotation (only on Selection stage).

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5. PROCEDURE
5.1 Requisition Grouping

In accordance with the strategy to procure MATERIALS from the most competitive sources,
which provide acceptable quality, and within the schedule constraints required by the
Project, proper requisition grouping is the one of the keys to successful procurement, which
leads to the successful completion of the Project.

Requisitions grouping will be established as a joint effort among engineering, procurement

and construction. All materials will be grouped into requisitions considering similarity of
specification requirements, expected source of materials (possible vendor) etc.

5.2 Inquiry
The buyer conducts inquiries. The process of inquiry is outlined in the following:
(1) Check if all the Applicable Documents listed in the Requisition have been issued
and ready for sending to the vendors via CONTRACTOR’s web system called J-
PLUS. If any document is missing or incorrect, ask the engineering disciplines for
correction.
(2) Prepare commercial documents and include them into the inquiry package
(3) Prepare a Bidders List, extracting from Vendor List
(4) Prepare a “Request for Quotation” (hereinafter called RFQ)
(5) Send Inquiry Package (including RFQ) to the selected bidders

5.2.1 Selection of Bidders

For each requisition, CONTRACTOR selects bidders from Vendor List, and prepares
Bidders List which lists the bidders to whom an inquiry is sent. Vendor list shall follow
Approved Manufacturer List and consider the APDN vendor as requirement. Those who
are considered to be most appropriate candidates at the timing of actual inquiry execution
will be listed in Bidders List. Bidders List is approved within CONTRACTOR’S internal
organization at its own discretion. Project Procurement Manager has the authority of the
final approval of Bidders List.

5.2.2 Inquiry Package

The Inquiry Packages consist of the followings.
1 Request for Quotation
2 Notice of Acknowledgement
3 Secrecy Declaration
4 Quotation Check List
5 General Purchase Conditions
6 General Conditions for Vendor Specialists (if required)
7 Instructions for Export License Requirement
8 Form of Bank Guarantee (Performance Bond)
9 Form of Compliance Question and Declaration
10 Requisition
11 Other applicable documents listed in the Requisition

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Request for Quotations and/or other inquiry documents specify the following requirements:
(1) Project Name and Location
(2) Inquiry Number
(3) Scope of Supply and Work
(4) Bid Closing Date
(5) Validity Requirement
(6) Spare Parts Requirement for Construction, Commissioning, and Capital Spare Parts
(where applicable)
(7) Project specific Shipping and Packing Instructions including Marking instructions
(8) Field Supervising Service Requirement (where applicable)
(9) Delivery Terms and Lead Time
(10) Payment Terms
(11) Requirement of Bank Guarantee, if applicable
(12) Special Tool Details (where applicable)
(13) Documentation
(14) Test, Inspection and type of certificate
(15) Local Content Plan

Request for Quotations also specify the documents to be submitted by the bidders such
as:-
(a) Experience List for similar materials
(b) Work Load Status
(c) Sub-Vendor List
(d) Annual Report

5.2.3 Bid Closing Date

Bid closing dates are set considering the complexity of Materials and technical
requirements, and the tightness of the construction schedule. Buyers keep contacting the
bidders to ensure that they submit the bids in time for Bid Closing Date.

5.2.4 Request for Quotation and Receipt of Quotation

Request for Quotation to the bidders and Receipt of Quotation from the bidders are
conducted through the web system called “J-PLUS”. Also, the communication relevant to
the bid evaluation between CONTRACTOR and the bidders is also conducted through J-
PLUS.
During the Inquiry period, communications with the Bidders is encouraged to ensure proper
understanding of all requirements.

5.2.5 Bid Opening and Short Listing

Buyers, after briefly screening the bids, request engineering disciplines, quality control
department for evaluation. Normally, such bids, which conform to the project requirements
and are economical, are short-listed for detailed evaluation

5.3 Bid Evaluation

In this project CTR represent CPY in provision in supply chain management process to
procure equipment and bulk material. In executing the purchasing plan, CTR has to
conduct technical evaluation and commercial evaluation. In preparation of Technical Bid
Evaluation will be assisted by engineering team to include list up major concern of QC,
and schedule constraint.

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To meet overall Project Master schedule requirement of required on site for goods , CPY
confirm its acceptance for bidding type “Direct Selection” with minimum 3 (Three)
selective vendors proposed in TBE.

5.3.1 Technical Bid Evaluation

Technical bid evaluation will be carried out based on BLA-G-PR-00-405, Technical Bid
Evaluation Procedure for Materials. Outline of the technical bid evaluation procedure is as
follows:
All Technical Bid Evaluation shall be reviewed & approved by COMPANY.

CONTRACTOR will issue Technical Bid Evaluation & Reports, including

Deviations/Alternatives and sent it to COMPANY for review and approval.

To meet schedule constraint, TBE for all equipment & Tagged items are categorized as
Class 1 whereas TBE for bulk materials goes to Class 2. Review time of Class 1
document is 15 days and Class 2 is 10 days.

TBE will be prepared by ENGINEERING Team based on all quotation received from
Vendors and all clarification.

Technical quotation from Vendor/Manufacturer will be based on Specification & Data

Sheet with status Approved IFC.
TBE shall be issued to get COMPANY’s approval prior to commercial evaluation.

5.3.2 Commercial Bid Evaluation and Order Authorization

While receiving quotation from bidders, technical and commercial evaluation will do in
parallel.
After completing both technical and commercial evaluation, CTR to follow & incorporate
comment by CPY on first issuance doc IFR/IFA. Buyer conduct negotiation and issues an
Order Authorization for CONTRACTOR’s internal approval on the selected vendor. In
principle, such bidder, whose proposal is technically acceptable and offering the lowest
price, will be selected.

5.3.3 Clarification Meeting

Technical and commercial clarification meetings may be held during technical and
commercial evaluation, not only for critical equipment items but also for other items at the
discretion of the CONTRACTOR. The minutes of these clarification meetings can be
incorporated into the Purchase Orders.

5.4 Award of Order

(1) Critical Items describes as follows :
 Long lead delivery time,
 Short erection duration, compare with fabrication duration,
 Tight Erection and installation sequence,
 Heavy weight and over size equipment (need special crane), and
 Special or complicated equipment need special fabrication.
The Items for CTR to follow and incorporate comment by CPY on issuance of document
IFC with “B” status comment while using Technical Bid Evaluation.
After submission of Technical Bid Evaluation Report for COMPANY’s review and
completion of CONTRACTOR’s internal approval process for Order Authorization,
CONTRACTOR issues a Purchase Order to the selected vendor.

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Prior to issuance of a Purchase Order, CONTRACTOR may issue a Letter of Intent for
the purchase of the items, for which early order commitment is required.
CONTRACTOR will notify COMPANY of the selected Vendor, and send an un-priced
copy of the Purchase Order to COMPANY.
Basically all PO issuance to include Letter of Intent only could be issued to
Vendor/Manufacturer based on the approval of Technical Bid Evaluation with “B” status
while all deliverables key document already got IFC “A” status. Key deliverables
(Specification, Data Sheet, Requisition) from Company.
(2) Non Critical Items (Others)
 Non long lead items,
 Delivery within construction schedule, and
 Non complicated items equipment.
The Items other than the above (1) CTR to follow and incorporate comment by CPY on
issuance of documents IFC with “B” status result while using Technical Bid Evaluation.
After completion of CONTRACTOR’s internal approval process for Order Authorization,
CONTRACTOR issues a Purchase Order to the selected vendor.
CONTRACTOR will notify COMPANY of the selected Vendor, and send an un-priced
copy of the Purchase Order to COMPANY.
CONTRACTOR has to follow the final design based on Approved For Construction
(AFC) deliverables with vendor.

5.4.1 Purchase Orders

Formal Purchase Orders are prepared using a computerized system referring to the
information such as the requisition, vendor’s quotation, agreed technical and commercial
conditions and the agreed price.
Un-priced copy of the Purchase Orders complete with Terms & Conditions & committed
Inquiry will be distributed to COMPANY in monthly basis.
Purchase Orders specify the following information or requirements, where applicable:
(1) a. Project Name and Location
b. Consignee Name
(2) Purchase Order Number
(3) Requisition Number/ Revision Number
(4) Item, Quantity and Unit of Measure
(5) Description of Material
(6) Equipment/ Tag number
(7) Price
(8) Delivery Time
(9) Delivery Terms
(10) Payment Terms and Bank Guarantee Requirement
(11) Invoicing Instructions
(12) Inspection Requirement
(13) Documentation Requirement
(14) Warranty Conditions

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(15) Other Commercial Terms and Conditions

(16) Technical Requirements
(17) Shipping and Packing Instructions, including Marking Instructions
(18) Requirement of Special Tools
(19) Requirement for Spare Parts Supply and Recommendation including One (1)
Year Operational
(20) Local Content Summary
Consignee Name shall be stated to confirm all goods purchased are own by COMPANY
as per PTK-007 compliance. This has to be applied following Master List pre-requisite for
permanent equipment used.

PT. Medco E&P Malaka

Gedung The Energy, Lt. 28-39, SCBD Lot 11A, Jl. Jendral Sudirman Kav. 52-53,
Senayan, Kebayoran Baru, Jakarta Selatan 12190.

A minimum standard Purchase Order Term & Condition is attached in Exhibit A as per
requirement Exhibit B article.

5.4.2 Acknowledgement
The Purchase Order form (which is particularly called Acceptance of Order) is also
designed to serve as the vendor’s signed acknowledgment of the order and acceptance of
all the terms and conditions therein. All changes noted by the vendor must be considered
for their information on the impact on the purchase price, delivery date and any other terms
and conditions of the order. The settlement shall be made through the issuance of a
supplement or adjusting order or the vendor’s withdrawal of the request of the changes in
writing. After all the disputes over the Purchase Orders have been resolved, the original
Acceptance of Order signed by Vendor will be stored in the designated spaces/files.

5.4.3 Amendment to Purchase Orders

All deviations, changes, revisions, increases, decreases and the like affecting a Purchase
Order are formalized by the amendment on CONTRACTOR’s specified form. All
amendment to Purchase Order are processed in the same manner as for the original
Purchase Order.
The following are examples when Amendment to Purchase Order will be issued :
(1) Change in scope of supply
(2) Increase or decrease in the prices
(3) Changes in delivery terms
(4) Cancellation of orders
(5) Correction of errors or omissions on the original purchase order
(6) Addition or removal of certain terms and conditions

5.4.4 Notice to Unsuccessful Bidders

While the selected vendor receives a Purchase Order from CONTRACTOR, the other
bidders will be notified that the bid is not successful for them.

5.5 Kick-off Meeting

Kick-off meetings are held after order placement for critical Materials in order to confirm
engineering requirements and also to ensure that the required documents will be submitted
in the required time frame and with sufficient details.

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5.6 One (1) One (1) & Two (2) years Operating Spare Parts Year Operating Spares
All Vendor shall submit proposal of One (1) & two (2) year Operation Spare-parts
under different breakdown price in the same Inquiry of main item. CONTRACTOR shall
submit the quotation for One (1) & Two (2) years Operation Spare parts for COMPANY
review & approval.

Price validity of quotation for Spare Parts is 12 months from awarded of PO issuance.

If requested by COMPANY, CONTRACTOR will procure One (1) & Two (2) Years
operating spare parts in accordance with BLA-G-PR-00-606, Spare Parts Procurement and
Handling Procedure, and covering by another contract.

5.7 Vendor Specialist

Quality, availability, pricing, and terms & conditions of Vendor Specialists will be evaluated
by CONTRACTOR at same time when CONTRACTOR conducts bid evaluation for main
Materials. The rates and terms & conditions will be quoted in bidder’s proposal, along with
details of typical/expected site duration.
Each requisition specifies the requirement of field services (pre-commissioning,
commissioning, Start Up). Vendor Service Agreement shall be entered with the selected
vendor for the Materials which requires field service as specified in its Requisition.

5.8 Reports on Purchasing Processes

CONTRACTOR prepares the following reports on purchasing processes.

Requisitions and Purchase Status Report

The status of the purchasing activities; such as requisition issuance, inquiry issuance,
quotation receipt, bid evaluation, order commitment, and the essential information on
purchasing; such as the name of the selected vendor, contractual, delivery date,
Construction Required Date (CRD), Engineering Required Date (ERD) are summarized in
Requisition and Purchase Status Report (Point of Procurement Report –POP Report).
Buyers prepare this report and ensure that all status are updated periodically for each
inquiry and issued in accordance with the project requirements.
CONTRACTOR shall submit Requisition & Purchase Status Report regularly on weekly
basis.

5.9 Payment
Invoice for Payment to VENDOR will be received by Procurement. A detailed review and
payment procedure will be in accordance with CONTRACTOR’s standard procedure.

The Buyers will make sure the correctness on those invoices in accordance with
Purchase Orders and forward them to:
 Expediter to confirm achievement of Milestone/Progress
 Shipping Coordinator to completeness of delivery
in accordance with payment terms as specified and agreed in the Purchase Orders.

After the endorsement / confirmation by Expediter / Shipping Coordinator, buyer will initiate
payment application and Project Procurement Manger will approve it.
Approved payment application will be forwarded to Accounting Section for payment.

5.10 Job Close-outs

When a supplier has fulfilled all its contractual obligations and (possible) liquidated
damages and back charges and claims have been settled, the Purchase Order will be
closed.

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5.11 Organization

5.11.1 Procurement Operation Center

Overall Procurement activities will be managed by Procurement Team located at Jakarta
Operation Center (JOC) led by Project Procurement Manager (PPM) and executes local
and overseas procurement and shipping coordination.

5.11.2 Worldwide Procurement Satellite Office

In addition to procurement organization this Project as stated above, JOC will utilize
procurement services given by CONTRACTOR’s worldwide procurement satellite offices
listed below.
(a) JGC Yokohama for Japan Vendors
(b) JGC USA Inc in Houston, USA for North and South American vendors
(c) JGC Italy in Dalmine, Italy for European vendors
(d) JGC Shanghai for Asian Vendor
These four procurement satellite offices are permanent offices which provide expediting, inspection
and logistics services in their territory after purchase order commitments if required.

Instead of back up services, all Purchase Orders issued will only issue under the consortium JGC-
Encona Engineering.

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