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STANDARD BIDDING DOCUMENT

PROCUREMENT OF CIVIL WORKS

(Small Contracts)

Asian Development Bank


Updated to April 1999
(Reprinted January 2003)
i

Preface

Procurement under projects financed by the Asian Development Bank (hereinafter and
throughout these documents called ADB), is carried out in accordance with policies and
procedures laid down in the Guidelines for Procurement under Asian Development Bank
Loans (hereinafter called the ADB Guidelines for Procurement).

The standard bidding documents in this publication have been prepared for use by
Executing Agencies in the procurement of works for "small" contracts through international
competitive bidding (ICB) or local competitive bidding (LCB). Their use is encouraged as the
procedures and practices they convey have been developed through broad international
experience, and comply with the above guidelines. These standard documents are based on the
standard documents for the procurement of works (smaller contracts) issued by the World Bank.

Care should be taken when using these standard documents to select the appropriate
alternative wording for the specific type of contract or particular features of the procurement. In
particular, users should note the alternative clauses and texts that are required for
"admeasurement" (bill of quantities) and "lump sum" contracts.

The World Bank's permission to use their standard document as one of the bases for this
standard document is herewith acknowledged.

To obtain further information on procurement under ADB assisted projects, contact:

Central Operations Services Office


Project Coordination and Procurement Division
Asian Development Bank
P.O. Box 789
0980, Manila, Philippines

Fax: (632) 636-2475


ii

Contents

Instructions, iii

Notes on the Invitation for Bids, 1

Invitation for Bids (IFB), 2

Section 1. Instruction to Bidders, 3

Table of Contents, 4
A. General, 5
B. Bidding Documents, 8
C. Preparation of Bids, 9
D. Submission of Bids, 17
E. Bid Opening and Evaluation, 18
F. Award of Contract, 24

Section 2. Conditions of Contract, 28

Table of Contents, 29

Section 3. Contract Data, 47

Section 4. Technical Specifications, 51

Section 5. Forms of Bid, Bid Security and List of Eligible Member Countries of the Asian
Development Bank, 53

Appendix to Bid
Sample Form: Bid Security (Bank Guarantee)
List of Eligible Member Countries of the Asian Development Bank

Section 6. Bill of Quantities, 58

Section 7. Sample Form of Agreement, 76

Section 8. Sample Forms of Securities, 78

Annex A: Sample Form: Performance Security Form


Annex B: Sample Form: Bank Guarantee for Advance Payment
Annex C: Sample Form: Domestic Preference

Section 9. Drawings, 82
iii

Instructions
These Standard Bidding Documents are intended as a model for admeasurement (unit
prices or unit rates in a bill of quantities) and lump sum types of contract, which are the most
common in civil works contracting. Lump sum contracts are used in particular for building
construction and other forms of construction where the works are well defined and are unlikely to
change in quantity or specification, and where encountering difficult or unforeseen site conditions
(for example, hidden foundation problems) is unlikely. The main text refers to admeasurement
contracts. Alternative clauses or texts are supplied for use with lump sum contracts (see next
page). Care must be exercised by Executing Agencies in selecting the alternative clauses.

Care should be taken to check the relevance of the provisions of the standard documents
against the requirements of the specific works to be procured. The following directions should be
observed when using the documents:

(a) All the documents listed in the Table of Contents are normally required for the
procurement of works. However, they should be adapted as necessary to the
circumstances of the particular project, or the Borrower.

(b) Specific details, such as the name of the Employer, address for bid submission,
etc., should be furnished in the spaces indicated by italized notes inside
brackets.

(c) The boxed and italicized notes are not part of the text, but rather contain
instructions for the user. They should not be incorporated in the bidding
documents.

(d) Where alternative clauses or text are shown, select those that best suit the
particular works and discard the unused alternative text.

(e) Prequalification of bidders is required for most civil works contracts to ensure that
only technically and financially capable firms will be invited to submit bids. (These
standard bidding documents assume prequalification).

The process of prequalification of bidders is not covered in these standard documents. Refer to
Guide on Prequalification of Civil Works Contractors, available from the Central Projects Services
Office, Asian Development Bank.

Lump Sum Contracts

Lump sum contracts may be used for works that can be defined in their full physical and
qualitative characteristics before bids are called, or where the risks of substantial design
variations are minimal - usually construction of buildings, power transmission towers, and series
of small structures, such as bus shelters or school ablution units.

In lump sum contracts, the concept of priced "activity schedules" has been introduced, to enable
payments to be made as "activities" are completed. Payments can also be made on the basis of
percentage completion of each activity. Examples of activities are:
• in highway repaving contracts: each kilometer completed.
• in a project for constructing many individual housing or classroom units: each of those
units.
• in the construction of a multi-story building: excavation; foundation structures; structural
concrete ( or steel) per floor; cladding, per floor: services (electrical, water, sewers,
drains), each payable as a. percentage completed in relation to the service for the whole
building.
1

Invitation for Bids

Notes on the Invitation for Bids

The Invitation for Bids (see ADB Guidelines for Procurement) should be issued
to all contractors who were determined by the Borrower to be qualified in
accordance with the Borrower's prequalification procedure. This procedure
must be reviewed by ADB if the potential contract is to be eligible for ADB
financing (see ADB Guidelines for Procurement).

Its purpose is to supply information to enable prequalified bidders to decide on


their participation.

The Invitation for Bids should also be incorporated in the bidding documents.
2

Invitation for Bids

Date: [of issue or invitation]__________


Loan No.:__________________________
Contract No.________________________

1. The [name of borrower] has received1 a loan from the Asian


Development Bank (ADB) towards the cost of [name of project]
and it is intended that part of the proceeds of this loan will be applied to eligible payments under
the contract2 for [name of Contract]. Bidding
is open to all bidders from eligible source countries of the Asian Development Bank.

2. The [name of Employer] ("the Employer")


invites sealed bids from prequalified eligible bidders for the construction and completion of
_______________________________________________________________ ("the Works")
[brief description of the Works and statement of the principal quantities involved].

3. Bidders may obtain further information from, and inspect and acquire the bidding documents,
at the office of the Employer, at ___________________________________________________
[mailing address, street address, and cable/telex/facsimile numbers].3

4. A complete set of bidding documents may be purchased by interested eligible bidders on


submission of a written application to the above office, and upon payment of a nonrefundable fee
of ___________________________________________________ [insert amount and currency].4
5. All bids must be accompanied by a security of ______________________________________ 5
or an equivalent amount in a freely convertible currency, and must be delivered to
______________________________________________________ [indicate address and exact
location] at or before [hours] on ___________________________ [date]. Bids will be opened
immediately thereafter in the presence of bidders' representatives who choose to attend.6
1
Substitute "has applied for" if appropriate.

2
Substitute "contracts" where bids are called concurrently for several contracts on a "slice and package" basis; add a new
para. 2; and renumber paras. 2-5:

2. Bidders may bid for one or several contracts, as further defined in the bidding
documents. Bidders wishing to offer discounts in case they are awarded more
than one contract will be allowed to do so, provided those discounts are included
in the Form of Bid or submitted in writing before the deadline for bid submission.
All bids and offers of discounts shall be opened and evaluated simultaneously so
as to determine the bid or combination of bids, including discounts, offering the
lowest evaluated solution for the Employer."
3
The Borrower and the Employer may be the same or different entities. The text of the Invitation for Bids and the texts of
the other documents herein must indicate which agency will act as the Employer.

4
The fee chargeable should only be nominal, to cover reproduction and mailing costs and to ensure that only bona fide
bidders will apply for bidding documents. An amount of between US$5O and US$5OO equivalent is considered
appropriate, depending on the size and complexity of the Works.

5
Insert the amount indicated in Sub-Clause 17.1 of Section 1, Instructions to Bidders, "Bid Security".

6
Coordinate with Clause 25 of Section 1, Instructions to Bidders, "Bid Opening".
3

Section 1: Instructions to Bidders

Notes on the Instructions to Bidders

This section of the bidding documents should provide the information


necessary for bidders to prepare responsive bids, in accordance with the
requirements of the Employer. It should also give information on bid
submission, opening and evaluation, and on the award of contract.

Matters governing the performance of the Contract or payments under the


Contract, or matters affecting the risks, rights, and obligations of the parties
under the Contract are not normally included in this Section, but rather in the
appropriate sections of the Conditions of Contract and/or Contract Data. If
duplication of a subject is inevitable in the different sections of the documents,
care must be exercised to avoid contradiction between clauses dealing with
the same matter.

The Instructions to Bidders will not be part of the Contract and will cease to
have effect once the contract is signed.
4 Instructions to Bidders

Table of Contents

A. General, 5 D. Submission of Bids, 17

1. Scope of Bids, 5 21. Sealing and Marking of Bids, 17


2. Source of Funds, 5 22. Deadline for Submission of Bids, 17
3. Eligible Bidders, 5 23. Late Bids, 17
4. Eligible Materials, Equipment, and 24. Modification and Withdrawal of Bids, 18
Services, 6
5. Qualification of the Bidder, 6 E. Bid Opening and Evaluation, 18
6. One Bid per Bidder, 8
7. Cost of Bidding, 8 25. Bid Opening, 18
8. Site Visit, 8 26. Process to be Confidential, 19
27. Clarification of Bids and Contacting the
B. Bidding Documents, 8 Employer, 19
28. Preliminary Examination of Bids and
9. Content of Bidding Documents, 8 Determination of Responsiveness, 19
10. Clarification of Bidding Documents, 9 29. Correction of Errors, 20
11. Amendments of Bidding Documents, 9 30. Conversion to Single Currency, 20
31. Evaluation and Comparison of Bids, 21
C. Preparation of Bids, 9 32. Preference for Domestic Bidders, 22

12. Language of Bids, 9 F. Award of Contract, 24


13. Documents Comprising the Bid, 10
14. Bid Prices, 10 33. Award, 24
15. Currencies of Bid and Payment, 12 34. Employer’s Right to Accept any Bid and
16. Bid Validity, 13 to Reject any of all Bids, 25
17. Bid Security, 14 35. Notification of Award, 25
18. Alternative Proposals by Bidders, 15 36. Signing of Agreement, 25
19. Pre-Bid Meeting, 16 37. Performance Security, 25
20. Format and Signing of Bid, 16 38. Corrupt or Fraudulent Practices, 26
Instructions to Bidders 5

Section 1. Instructions to Bidders

A. General
1. Scope of Bid 1.1 The ______________________________, [name of Employer]7,
(hereinafter referred to as the Employer), wishes to receive bids
for the construction and completion of
___________________________________________________
___________________________________________________
______________________________________ [insert the name
of the Project and specific Works, and a summary description of
its key elements, so as to clearly identify and distinguish it from
other works], as defined in these bidding documents (hereinafter
referred to as the Works).

7
See definitions of the terms used in these instructions to
Bidders in Sub-Clause 1.1 of the Conditions of the Contract

1.2 The successful bidder will be expected to complete the works


within _______________ [months/weeks]8 from the date of
commencement of the Works.

8
For contracts of less than one year duration, use weeks. The
figure indicated here should be the same as shown in the
Contract Data (Section 3).

2. Source of Funds 2.1 The _____________________________ [name of borrower] has


received9 a loan from Asian Development Bank (hereinafter
referred to as the ADB), towards the cost of
____________________________________ [name of project]
and intends to apply part of the proceeds of this loan to eligible
payments under the contract (hereinafter referred to as the
Contract) for which this Invitation to Bid is issued. Payment by
the ADB will be made only at the request of the [name of
Borrower] and upon approval by the ADB in accordance with the
Loan Agreement, and will be subject in all respects to the terms
and conditions of that Agreement. Except as the ADB may
specifically otherwise agree, no party other than the (name of
Borrower) shall derive any rights from the Loan Agreement or
have any rights to the loan proceeds.

9
Substitute "has applied for" if appropriate.

3. Eligible Bidders 3.1 This Invitation to Bid is open to prequalified bidders meeting all
three of the following requirements:
6 Instructions to Bidders

(a) a bidder (including all members of a joint venture and all


subcontractors of a bidder) shall be from an eligible source
country as listed in Section 5; and

(b) a bidder (including all members of a joint venture and all


subcontractors of a bidder) shall not be affiliated with a firm or
entity (i) which has provided consulting services during the
preparatory stages of the Works or of the project of which the
Works form a part, or (ii) which has been hired (or is proposed to
be hired) as Engineer for the Contract.10

(c) a bidder not be under a declaration of ineligibility for corrupt


and fraudulent practices issued by the ADB in accordance with
Sub-Clause 38.1 (c).

10
Delete the words "or which bas been hired (or is proposed to
be hired) as Engineer for the Contract" if no specific Engineer
is to be hired.

3.2 Bidders shall provide such evidence of their eligibility satisfactory


to the Employer as the Employer shall reasonably request.

4. Eligible 4.1 The materials, equipment, and services to be supplied under the
Materials, Contract shall have their origin in eligible source countries as
Equipment defined in Clause 3.1 (a) above and all expenditures made under
and Services11 the Contract will be limited to such materials, equipment, and
services. At the Employer's request, bidders may be required to
provide evidence of the origin of materials, equipment, and
services.

4.2 For purposes of Clause 4.1 above, "origin" means the place
where the materials and equipment are mined, grown, produced
or manufactured, and from which the services are provided.
Materials and equipment are produced when, through
manufacturing, processing or substantial or major assembling of
components, a commercially recognized product results that is
substantially different in basic characteristics or in purpose or
utility from its components.

11
In accordance with para. 2.21 of the ADB Guidelines for
Procurement, both the bidder and the materials, equipment,
and services offered by the bidder must meet the eligibility
criteria.

5. Qualification 5.1 To be qualified for award of Contract, bidders shall:


of the Bidder
(a) submit a written power of attorney authorizing the
signatory of the bid to commit the bidder; and
Instructions to Bidders 7

(b) update the following information submitted with their


applications for prequalification, and continue to meet
the minimum threshold criteria set out in the
prequalification documents:12
_____________________________________________
_____________________________________________
_____________________________________________
_____________________________________________

_____________________________________________

12
To be applied only if bidding takes place over 6 months after
prequalification. The updating of qualification information
should be limited to a few indicators essential to determine the
bidder's continuing capability to perform the Contract, and in
particular, financial strength, contract work in hand, future
commitments, and current litigation.

5.2 Bids submitted by a joint venture of two or more firms as


partners shall comply with the following requirements:

(a) the bid, and in case of a successful bid, the Form of


Agreement, shall be signed so as to be legally binding
on all partners;

(b) one of the partners shall be authorized to be in charge;


and this authorization shall be evidenced by submitting a
power of attorney signed by legally authorized
signatories of all the partners;

(c) the partner in charge shall be authorized to incur


liabilities and receive instructions for and on behalf of
any or all partners of the joint venture and the entire
execution of the Contract including payment shall be
done exclusive]y with the partner in charge;

(d) all partners of the joint venture shall be joint]y and


severally liable for the execution of the Contract in
accordance with the Contract terms, and a relevant
statement to this effect shall be included in the
authorization mentioned under (b) above as well as in
the Bid Form and the Form of Agreement (in case of a
successful bid); and

(e) a copy of the agreement entered into by the joint venture


partners shall be submitted with the bid.

5.3 Bidders shall also submit proposals of work methods and


schedule, in sufficient detail to demonstrate the adequacy of the
bidders' proposals to meet the technical specifications and the
completion time referred to in Sub-Clause 1.2 above.
8 Instructions to Bidders

6. One Bid per 6.1 Each bidder shall submit on]y one bid either by himself, or as a
Bidder partner in a joint venture. A bidder who submits or participates in
more than one bid (other than alternatives pursuant to Sub-
Clause 18.1) will be disqualified.

7. Cost of Bidding 7.1 The bidder shall bear all costs associated with the preparation
and submission of his bid and the Employer will in no case be
responsible or liable for those costs.

8. Site Visit 8.1 The bidder is advised to visit and examine the Site of Works and
its surroundings and obtain for himself on his own responsibility
all information that may be necessary for preparing the bid and
entering into a contract for construction of the Works. The costs
of visiting the Site shall be at the bidder's own expense.

8.2 The bidder and any of his personnel or agents will be granted
permission by the Employer to enter upon his premises and
lands for the purpose of such inspection, but only upon the
express condition that the bidder, his personnel and agents, will
release and indemnify the Employer and his personnel and
agents from and against all liability in respect thereof and will be
responsible for death or personal injury, loss of or damage to
property and any other loss, damage, costs and expenses
incurred as a result of the inspection.

8.3 The Employer may conduct a Site visit concurrently with the Pre-
Bid Meeting referred to in Clause 19.

B. Bidding Documents
9. Content of 9.1 The bidding documents are those stated below, and should be
Bidding read in conjunction with any Addenda issued in accordance with
Documents Clause 11:

Invitation for Bids


Section 1 Instructions to Bidders
2 Conditions of Contract
3 Contract Data
4 Technical Specifications
5 Forms of Bid, Bid Security, and List of Eligible
Member Countries of the Asian Development
Bank
6 Bill of Quantities13
7 Sample Form of Agreement
8 Sample Form of Securities
9 Drawings

13
For lump sum contracts, delete "Bill of Quantities" and
substitute" Activity Schedule".
Instructions to Bidders 9

9.2 The bidder is expected to examine carefully the contents of the


Bidding documents. Failure to comply with the requirements of
bid submission will be at the bidder's own risk. Pursuant to
Clause 28, bids which are not substantially responsive to the
requirements of the bidding documents will be rejected.

10. Clarification 10.1 A prospective bidder requiring any clarification of the bidding
of Bidding documents may notify the Employer in writing or by cable
Documents (hereinafter, the term "cable" is deemed to include telex and
facsimile) at the Employer's address indicated in the Invitation for
Bids14. The Employer will respond to any request for clarification
which he receives earlier than __________________[insert
number]15 days prior to the deadline for submission of bids.
Copies of the Employer's response will be forwarded to all
purchasers of the bidding documents, including a description of
the inquiry.

14
If the Employer wishes that a copy be sent to his consultant,
this requirement should be indicated in the text, and the
consultant's address provided. Late arrival of a copy of a bid at
the consultant's address is not an acceptable cause for
rejection of the bid.

15
Adequate time should be allowed for potential bidders to take
the Employer's response into account in bid preparation.
Occasionally it may be necessary to extend the deadline for
submission of bids (see Sub-Clause 11.3).

11. Amendment 11.1 At any time prior to the deadline for submission of bids, the
of Bidding Employer may, for any reason, whether at his own initiative or in
Documents response to a clarification requested by a prospective bidder,
modify the bidding documents by issuing addenda.

11.2 Any addendum thus issued shall be part of the bidding


documents pursuant to Sub-Clause 9.1, and shall be
communicated in writing or by cable to all purchasers of the
bidding documents. Prospective bidders shall acknowledge
receipt of each addendum by cable to the Employer.

11.3 To afford prospective bidders reasonable time in which to take


an addendum into account in preparing their bids, the Employer
may extend the deadline for submission of bids, in accordance
with Clause 22.

C. Preparation of Bids
12. Language of Bid 12.1 The bid, and all correspondence and documents, related to the
bid, exchanged between the bidder and the Employer shall be
written in the English language. Supporting documents and
printed literature furnished by the bidder may be in another
language provided they are accompanied by an accurate
translation of the relevant passages in the English language, in
10 Instructions to Bidders

which case, for purposes of interpretation of the bid the English


translation shall prevail.

13. Documents 13.1 The bid submitted by the bidder shall comprise the following: Bid
Comprising Form and Appendix to Bid; Bid Security; priced Bill of
the Bid Ouantities16; the information on eligibility and qualification;
alternative offers where invited; and any other materials required
to be completed and submitted by bidders in accordance with
these Instructions to Bidders. The documents listed under
Sections 5, 6, and 7 of Sub-Clause 9.1 shall be filled-in without
exception, subject to extensions thereof in the same format and
to the provisions of Sub-Clause 17.2 regarding the alternative
forms of bid security.

16
For lump sum contracts, substitute "priced Activity Schedule"
for priced "Bill of Quantities".

13.2 Bidders bidding for this Contract together with other contracts to
form a package, will so indicate in the Form of Bid, together with
any discounts offered for the award of more than one contract.17

17
Clause 13.2 should only be included for a project bid in
separate contracts, on a "slice and package" basis.

14. Bid Prices 14.1 Unless stated otherwise in the bidding documents, the Contract
shall be for the whole Works as described in Sub-Clause 1.1,
based on the schedule of unit rates and prices 18 submitted by the
bidder.

18
For lump sum contracts delete "schedule of unit rates and
prices" and insert "priced Activity Schedule."

14.2 The bidder shall fill in rates and prices for all items of the Works
described in the Bill of Quantities.19 Items against which no rate
or price is entered by the bidder will not be paid for by the
Employer when executed and shall be deemed covered by the
other rates and prices described in the Bill of Quantities.19

19
For lump sum contracts, delete "described in the Bill of
Quantities" and insert "described in the drawings and
specifications and listed in the Activity Schedule".
Instructions to Bidders 11

14.3 All duties, taxes and other levies payable by the Contractor
under the Contract, or for any other cause, as of the date 28
days prior to the deadline for submission of bids, shall be
included in the rates and prices20 and the total bid price
submitted by the bidder, and the evaluation and comparison of
bids by the Employer shall be made accordingly, except that any
duties, taxes and other levies payable by contractors on
Constructional Plant, which is being imported for the purposes of
the Works and which will be re-exported upon the completion of
the Works, may be separately identified and will in such case be
excluded in the comparison of bids.

20
For lump sum contracts delete "rates and prices" and
substitute "Lump Sum price."

Alternative A: Fixed Price Contracts21


21
In case of works of short duration (usually less than 12
months), a fixed price contract may he considered, in which
case this "alternative" Sub-Clause 14.4 should he used, and
the Contract Data should indicate that price adjustment will not
apply. The bid validity period should be the shortest possible
and the Employer should not normally request extensions.

14.4 The rates and prices quoted22 by the bidder shall be fixed for the
duration of the Contract and shall not be subject to adjustment
on any account except as provided for in Clause 41 of the
Conditions of Contract.

22
For lump sum contracts delete "rates and prices" and
substitute "Lump Sum price".

Alternative B: for Contracts Subject to Price


Adjustment23
23
For contracts extending beyond, say, 12 months, price
adjustment clauses should be included to provide for changes
in the cost of inputs. In this case, this Alternative Sub-Clause
14.5 should be used, and the Contract Data should include
appropriate entries for price adjustment, as required in Clause
47 of the Conditions of Contract.

14.5 The rates and prices quoted24 by the bidder are subject to
adjustment during the performance of the Contract in
accordance with the provisions of Clause 41 of the Conditions of
Contract. The bidder shall submit with his bid the information
required under the Contract Data and Clause 41 of the
Conditions of Contract.
12 Instructions to Bidders

24
For lump sum contracts delete "rates and prices" and
substitute "Lump Sum price" and “is” for “are”.

15. Currencies of 15.1 The unit rates and the prices25 shall be quoted by the bidder
Bid and entirely in ___________________________________________
Payment [name of the currency of Employer's Country]. A bidder
expecting to incur expenditures in other currencies for inputs to
the Works supplied from outside the Employer's country
(referred to as "the foreign currency requirements") shall indicate
in the Contract Data the proportion of the Bid Price (excluding
any Provisional Sums) needed by him for the payment of such
foreign currency requirements, either (i) entirely in the currency
of the bidder's home country or, at the bidder's option, (ii) entirely
in ________________________________ [specify an
international trading currency]26, always provided that a bidder
expecting to incur expenditures in a currency or currencies other
than those stated in (i) and (ii) above for a portion of the foreign
currency requirements, and wishing to be paid accordingly, shall
indicate the respective portion in his bid.

25
For lump sum contracts delete "unit rates and prices" and
substitute with "lump sum price".

26
The Employer should select and specify a currency widely
used in international trade, such as the U .S. dollar, etc.

15.2 The rates of exchange to be used by the bidder for currency


conversion shall be the selling rates for similar transactions
prevailing on the date 28 days prior to the deadline for
submission of bids published by
____________________________________ (Name of Central
Bank in Employer's Country). If exchange rates are not so
published for certain currencies, the bidder shall state the rates
used and the source. For the purpose of payments, the
exchange rates used in bid preparation shall apply for the
duration of the Contract so that no currency exchange risk is
borne by the bidder.

15.3 Bidders shall indicate their expected foreign currency


requirements in the Contract Data, including but not limited to the
specific requirements for

(a) expatriate staff and labor employed directly on the


Works;

(b) social, insurance, medical and other charges relating to


such expatriate staff and labor, and foreign travel
expenses;

(c) imported materials, both temporary and permanent,


including fuels, oil and lubricants required for the Works;
Instructions to Bidders 13

(d) depreciation and usage of imported Plant and


Contractor's Equipment, including spare parts, required
for the Works;

(e) foreign insurance and freight charges for imported


materials, Plant and Contractor's Equipment, including
spare parts; and

(f) overhead expenses, fees, profit, and financial charges


arising outside ____________________________
[name of Employer's country] in connection with the
Works.

15.4 Bidders may be required by the Employer to clarify their foreign


currency requirements, and to substantiate that the amounts
included in the unit rates and prices and shown in the Contract
Data are reasonable and responsive to Sub-Clause 15.1.

15.5 During the progress of the Works, the foreign currency


requirements of the outstanding balance of the Contract Price
may be adjusted by agreement between the Employer and the
Contractor in order to reflect any changes in foreign currency
requirements for the Contract. Any such adjustment shall be
effected by comparing the percentages quoted in the bid with the
amounts already used in the Works and the Contractor's future
needs for imported items.

16. Bid Validity 16.1 Bids shall remain valid for a period of _______________[specify
number]27 days after the date of bid opening specified in Clause
25.

27
This period should be realistic, allowing sufficient time to
evaluate the bids, bearing in mind the complexity of the Works,
and the time required for obtaining references, clarifications,
clearances and approvals and for notification of the award.
Normally the validity period should not exceed 180 days.

16.2 In exceptional circumstances, prior to expiry of the original bid


validity period, the Employer may request that the bidders extend
the period of validity for a specified additional period. The
request and the responses thereto shall be made in writing or by
cable. A bidder may refuse the request without forfeiting his bid
security. A bidder agreeing to the request will not be required or
permitted to modify his bid, but will be required to extend the
validity of his bid security for the period of the extension, and in
compliance with Clause 17 in all respects.

17. Bid Security 17.1 The bidder shall furnish, as part of his bid, a bid security in the
amount of ___________________________________________
[indicate amount in currency of Employer's country)28 or an
equivalent amount in a freely convertible currency.
14 Instructions to Bidders

28
This amount should be the same as quoted in the Invitation for
Bids. To avoid leakage of bidder's prices originating in the
financial institution issuing the security, a fixed sum should be
specified, in preference to a percentage of the bid price. The
sum should not exceed 2 percent of the estimated cost of the
Works. Alternatively, if the Employer wishes to specify a
percentage of the bid price, it should be indicated as a
"minimum of _____percent", to enable bidders to provide in
excess of the minimum and thus mask their prices.

17.2 The bid security shall, at the bidder's option, be in the form of a
certified check, bank draft, standby letter of credit or guarantee
from a reputable bank. The format of the bank guarantee shall
be in accordance with the sample form of bid security included in
Section 5; other formats may be permitted, subject to the prior
approval of the Employer. Letters of credit and bank guarantees
issued as surety for the bid shall be valid for 28 days beyond the
validity of the bid.

17.3 Any bid not accompanied by an acceptable bid security shall be


rejected by the Employer as nonresponsive.

17.4 The bid securities of unsuccessful bidders will be returned as


promptly as possible, after the expiration of the period of bid
validity.

17.5 The bid security of the successful bidder will be returned when
the bidder has signed the Agreement and furnished the required
performance security.

17.6 The bid security may be forfeited

(a) if the bidder withdraws his bid during the period of bid
validity;

(b) if the bidder does not accept the correction of his bid
price, pursuant to Sub-Clause 29.2; or

(c) in the case of a successful bidder, if he fails within the


specified time limit to

(i) sign the Agreement,

(ii) furnish the required performance security, or

(iii) furnish the required domestic preference


security.

Alternative Proposals by Bidders29


29
The Employer should select one of the following alternatives. In addition, the Employer may
consider, in special cases such as projects where time savings can result in considerable
additional economic benefits, soliciting alternative proposals based on varying times for
completion; these should be coupled with evaluation criteria derived from the additional benefits
Instructions to Bidders 15

accruing to the Employer, and strict supervision discipline, to avoid delaying the Contractor in the
implementation of the Works and thus giving cause for extensions of the Time for Completion. In
this case. Sub-Clauses 1.2 and 31.2 should be amended.

Alternative Proposals by Bidders


Alternative A: Technical alternatives shall be considered on their own merits.

18. Alternative 18.1 Bidders may offer technical alternatives to the requirements of
Proposals by the bidding documents. Such bids shall include all information
Bidders necessary for a complete evaluation of the alternative by the
Employer, including drawings, design calculations, technical
specifications, breakdown of prices, and proposed construction
methods. Technical alternatives which comply with the
performance specifications for the Works shall be considered by
the Employer on their own merits. Each bid submitted must be
accompanied by its own separate bid security.

Alternative Proposals by Bidders


Alternative B: Technical alternatives accepted, but only that of the lowest evaluated
conforming bidder considered.

18. Alternative 18.1 Bidders wishing to offer technical alternatives to the


Proposals by requirements of the bidding documents must first price the
Bidders Employer’s design as described in the bidding documents and
shall further provide all information necessary for a complete
evaluation of the alternative by the Employer, including drawings,
design calculations, technical specifications, breakdown of
prices, and proposed construction methods. Only the technical
alternatives, if any, of the lowest evaluated bidder conforming to
the basic technical requirements shall be considered by the
Employer.

Alternative Proposals by Bidders


Alternative C: To be used when alternative proposals are not permitted.

18. Alternative 18.1 Bidders shall submit offers which comply with the documents,
Proposals by including the basic technical design as indicated in the Drawings
Bidders and Specifications. Alternatives will not be considered. The
attention of bidders is drawn to the provisions of Clause 28
regarding the rejection of bids which are not substantially
responsive to the requirements of the bidding documents.

19. Pre-Bid Meeting 19.1 The bidder or his official representative is invited to attend a pre-
bid meeting which will take place at _______________________
[address of venue] on ___________________ [time and date].30
16 Instructions to Bidders

30
Not later than 28 days before the deadline for bid submission.
It should take place concurrently with the Site visit, if any (see
para. 8.3).

19.2 The purpose of the meeting will be to clarify issues and to


answer questions on any matter that may be raised at that stage.

19.3 The bidder is requested to submit any questions in writing or by


cable, to reach the Employer not later than one week before the
meeting.

19.4 Minutes of the meeting, including the text of the questions raised
and the responses given, will be transmitted without delay to all
purchasers of the bidding documents. Any modification of the
bidding documents listed in Sub-Clause 9.1 which may become
necessary as a result of the pre-bid meeting shall be made by
the Employer exclusively through the issue of an Addendum
pursuant to Clause 11 and not through the minutes of the pre-bid
meeting.

19.5 Nonattendance at the pre-bid meeting will not be a cause for


disqualification of a bidder.

20. Format and 20.1 The bidder shall prepare one original and
Signing of Bid ______________[insert number]31 copies of the Bid documents
comprising the bid as described in Clause 13 of these
Instructions to Bidders, bound with the volume containing the
Form of Bid, and clearly marked "ORIGINAL" and "COPY" as
appropriate. In the event of discrepancy between them, the
original shall prevail.

31
Usually two, more if essential. Coordinate with Sub-Clause
9.2.

20.2 The original and all copies of the bid shall be typed or written in
indelible ink (in the case of copies, photostats are also
acceptable) and shall be signed by a person or persons duly
authorized to sign on behalf of the bidder, pursuant to Sub-
Clauses 5.1 (a) or 5.2 (c), as the case may be. All pages of the
bid where entries or amendments have been made shall be
initialed by the person or persons signing the bid.

2.0.3 The bid shall contain no alterations, omissions or additions,


except those to comply with instructions issued by the Employer,
or as necessary to correct errors made by the bidder, in which
case such corrections shall be initialed by the person or persons
signing the bid.

20.4 The bidder shall furnish information as described in the Form of


Bid on commissions or gratuities, if any, paid or to be paid
Instructions to Bidders 17

relating to this bid, and to contract execution if the bidder is


awarded the contract.

D. Submission of Bids

21. Sealing and 21.1 The bidder shall seal the original and each copy of the bid in a
Marking of inner and an outer envelope, duly marking the envelopes as
Bids "ORIGINAL" and "COPY".

21.2 The inner and outer envelopes shall

(a) be addressed to the Employer at the following address:


_______________________________ [insert address
of office for bid submission]; and

(b) bear the following identification:

• Bid for _________________ [name of Contract]


• Bid Reference Number: ________ [insert loan
and contract number]
• DO NOT OPEN BEFORE _________________
[time and date for bid opening, per Clause 25]

21.3 In addition to the identification required in Sub-Clause 21.2, the


inner envelope shall indicate the name and address of the bidder
to enable the bid to be returned unopened in case it is declared
"late" pursuant to Clause 23.

21.4 If the outer envelope is not sealed and marked as above, the
Employer will assume no responsibility for the misplacement or
premature opening of the bid.

22. Deadline for 22.1 Bids must be received by the Employer at the address specified
Submission above no later than ___________________________________
of Bids [insert time and should be the same as those given in the
Invitation for Bids].

22.2 The Employer may, at his discretion, extend the deadline for
submission of bids by issuing an addendum in accordance with
Clause 11, in which case all rights and obligations of the
Employer and the bidders previously subject to the original
deadline will thereafter be subject to the deadline as extended.

23. Late Bids 23.1 Any bid received by the Employer after the deadline for
submission of bids prescribed in Clause 22 will be rejected and
returned unopened to the bidder.

24. Modification 24.1 The bidder may modify or withdraw his bid after bid submission,
and Withdrawal provided that written notice of the modification or withdrawal is
of Bids received by the Employer prior to the deadline for submission of
bids.
18 Instructions to Bidders

24.2 The bidder's modification or withdrawal notice shall be prepared,


sealed, marked and delivered in accordance with the provisions
of Clause 21, with the outer and inner envelopes additionally
marked "MODIFICATION" or "WITHDRAWAL", as appropriate. A
withdrawal notice may also be sent by cable but must be
followed by a signed confirmation copy.

24.3 No bid may be modified by the bidder after the deadline for
submission of bids.

24.4 Withdrawal of a bid during the interval between the deadline for
submission of bids and the expiration of the period of bid validity
specified in the Form of Bid may result in the forfeiture of the bid
security pursuant to Clause 17.

E. Bid Opening and Evaluation


25. Bid Opening 25.1 The Employer will open the bids, including modifications made
pursuant to Clause 24, in the presence of bidders'
representatives who choose to
attend, at _________________________[insert time and date)
at the following location: _____________ [insert Address]. The
bidders' representatives who are present shall sign a register
evidencing their attendance.

25.2 Envelopes marked "WlTHDRAWAL" shall be opened and read


out first. Bids for which an acceptable notice of withdrawal has
been submitted pursuant to Clause 24 shall not be opened.

25.3 The bidders' names, the Bid Prices, the total amount of each bid
[and of any alternative bid]32, any discounts, bid modifications
and withdrawals, the presence or absence. of bid security, and
such other details as the Employer may consider appropriate,
will be announced and recorded by the Employer at the opening.
Any bid price, discount or alternative bid price which is not read
out and recorded at bid opening will not be taken into account in
bid evaluation. The record of the meeting must include the
signatures of bidders' representatives and representatives of the
Employer.

32
Delete if alternative bids are not permitted.

25.4 The Employer shall prepare, besides the record of bid opening,
the minutes of the bid opening, including the information
disclosed to those present in accordance with Sub-Clause 25.3.

26. Process to Be 26.1 Information relating to the examination, clarification, evaluation


Confidential and comparison of bids and recommendations for the award of a
contract shall not be disclosed to bidders or any other persons
not officially concerned with such process until the award to the
successful bidder has been announced. Any effort by a bidder to
Instructions to Bidders 19

influence the Employer's processing of bids or award decisions


may result in the rejection of the bidder's bid.

27. Clarification of 27.1 To assist in the examination, evaluation and comparison of bids,
Bids and the Employer may, at his discretion, ask any bidder for
Contacting the clarification of his bid, including breakdowns of unit rates.33 The
Employer request for clarification and the response shall be in writing or by
cable, but no change in the price or substance of the bid shall be
sought, offered or permitted except as required to confirm the
correction of arithmetic errors discovered by the Employer in the
evaluation of the bids in accordance with Clause 29.

27.2 Subject to Sub-Clause 27.1, no bidder shall contact the


Employer on any matter relating to its bid from the time of the bid
opening to the time of the contract is awarded. If the bidder
wishes to bring additional information to the notice of the
Employer, it should do so in writing.

27.3 Any effort by the bidder to influence the Employer in the


Employer's bid evaluation, bid comparison or contract award
decisions may result in the rejection of the bidder's bid.

33
For lump sum contracts, delete "unit rates" and substitute "the
prices in the Activity Schedule".

28. Preliminary 28.1 Prior to the detailed evaluation of bids, the Employer will
Examination determine whether each bid (i) meets the eligibility criteria of the
of Bids and ADB; (ii) has been properly signed; (iii) is accompanied by the
Determination of required securities; (iv) is substantially responsive to the
Responsiveness requirements of the bidding documents; and (v) provides any
clarification and/or substantiation that the Employer may require
pursuant to Sub-Clause 27.1.

28.2 A substantially responsive bid is one which conforms to all the


terms, conditions and specifications of the bidding documents,
without material deviation or reservation. A material deviation or
reservation is one (i) which affects in any substantial way the
scope, quality or performance of the Works; (ii) which limits in
any substantial way, inconsistent with the bidding documents,
the Employer's rights or the bidder's obligations under the
Contract; or (iii) whose rectification would affect unfairly the
competitive position of other bidders presenting substantially
responsive bids.

28.3 If a bid is not substantially responsive, it will be rejected by the


Employer, and may not subsequently be made responsive by
correction or withdrawal of the nonconforming deviation or
reservation.

29. Correction 29.1 Bids determined to be substantially responsive will be checked


of Errors34 by the Employer for any arithmetic errors. Arithmetical errors will
20 Instructions to Bidders

be rectified on the following basis. If there is a discrepancy


between the unit rate and the total cost that is obtained by
multiplying the unit rate and quantity, the unit rate shall prevail
and the total cost will be corrected unless in the opinion of the
Employer there is an obvious misplacement of the decimal point
in the unit rate, in which case the total cost as quoted will govern
and the unit rate corrected. If there is a discrepancy between the
total bid amount and the sum of total costs, the sum of the total
costs shall prevail and the total bid amount will be corrected.

34
For lump sum contracts, delete from ''as follows" to the end,
and substitute: "", as follows: where there is a discrepancy'
between the amounts in figures and in words, the amount will
govern".

29.2 The amount stated in the Form of Bid will be adjusted by the
Employer in accordance with the above procedure for the
correction of errors and, shall be considered as binding upon the
bidder. If the bidder does not accept the corrected amount of bid,
his bid will be rejected, and the bid security may be forfeited in
accordance with Sub-Clause 17.6 (b).

30. Conversion 30.1 The Employer will convert the amounts in various currencies in
to Single which the Bid Price is payable ( excluding Provisional Sums but
Currency including Daywork35 where priced competitively) to the currency
of the Employer's country at the selling exchange rates officially
prescribed for similar transactions as established by__________
___________________________________________________
[name of central bank in Employer's country or other
authoritative source for similar transactions] on

35
Provisional Sums are monetary sums specified by the
Employer in the Bill of quantities, to be used at his discretion
for nominated subcontracts or other specified purposes.
Daywork is work carried out following instructions of the
Employer (Conditions of Contract, Clause 46) and paid for on
the basis of time spent by workmen, and the use of materials
and Contractor's equipment, at the rates quoted in the bid. For
daywork to be priced competitively for bid evaluation purposes,
the Employer must list tentative quantities for individual items
to be costed against daywork (e.g., a specific number of tractor
driver man-days, a specific tonnage of cement, etc.), to be
multiplied by the bidder's quoted rates and included in the total
bid price.

[Option A] 36 the date of opening of bids.

[Option B] 36 the earlier of the dates: (i) the date of the


decision to award the Contract; or (ii) the date of
expiry of the initial period of bid validity specified
in Sub-Clause 16.1.
Instructions to Bidders 21

36
Select only one of the options.

31. Evaluation and 31.1 The Employer will evaluate and compare only the bids
Comparison of determined to be substantially responsive in accordance with
Bids Clause 28.

31.2 In evaluating the bids, the Employer will determine for each bid
the Evaluated Bid Price by adjusting the Bid Price as follows:

(a) making any correction for errors pursuant to Clause 29;

(b) excluding Provisional Sums and the provision, if any, for


Contingencies in the Summary Bill of Quantities,37 but
including Daywork, where priced competitively;38

(c) making an appropriate adjustment for any other


acceptable variations or deviations;39

(d) converting the amount resulting from applying (a) to (c)


above to a single currency in accordance with Clause
30; and

(e) adjusting for any difference in taxation in the Employer's


country in respect of domestic and foreign bidders.

For projects bid in separate contracts, on a "slice and


package" basis, add a new Sub-Clause 31.2 (f):

(f) applying any discounts offered by the bidder for the


award of more than one contract.

37
For lump sum contracts, substitute" Activity Schedule" for
"Summary Bill of Quantities".

38
See also note 23.

39
If varying times for completion are to be used in bid
comparison, the method for evaluating differences offered by
bidders should be specified here, preferably as a set
percentage of the bid price per month of delay beyond a
specified "standard" completion date, related to the loss of
benefits to the Employer.

31.3 The Employer reserves the right to accept or reject any variation,
deviation or alternative offer. Variations, deviations and other
factors which are in excess of the requirements of the bidding
documents or otherwise result in the accrual of unsolicited
benefits to the Employer shall not be taken into account in bid
evaluation.
22 Instructions to Bidders

31.4 The estimated effect of the price adjustment provisions of the


Conditions of Contract, applied over the period of execution of
the Contract, shall not be taken into account in bid evaluation.

31.540 If the bid of the successful bidder is seriously unbalanced41 in


relation to or substantially below the Employer's estimate of the
cost of work to be perforn1ed under the Contract, the Employer
may require the bidder to produce detailed price analyses for any
or all items of the Bill of Quantities, to demonstrate the internal
consistency of those prices with the construction methods and
schedule proposed. After evaluation of the price analyses, the
Employer may require that the amount of the performance
security set forth in Clause 37 be increased at the expense of the
successful bidder to a level sufficient to protect the Employer
against financial loss in the event of default of the successful
bidder under the Contract.

40
For lump sum contracts Clause 31.5 should be deleted.

41
An "unbalanced" or "frontloaded" bid is one in which some
prices are relatively high and others low in relation to the
Engineer’s estimate of the cost of work to be performed. The
imbalance may be due to error or misconception by the bidder,
but more often it is due to the bidder's attempt to increase his
cash flow over the early part of the contract, or to increase
profits by inflating the unit rates of the items which he feels will
be used more than scheduled.

Preference for Domestic Bidders42


42
This Clause may be used only where the domestic preference is expressly permitted by the Loan
Agreement, at the request of the borrower.

32. Preference 32.1 In comparing domestic bids with foreign bids, a margin of
for Domestic preference will be granted to eligible domestic contractors, as
Bidders defined below, in accordance with the following provisions.

(a) For application of domestic preference, all responsive


bids will first be classified into the following two
categories:

(i) Category I: bids offered by domestic contractors


and joint ventures eligible for the preference in
accordance with the criteria set forth in Sub-
Clause 32.2 below; and

(ii) Category II: bids offered by other contractors.

The Employer will review each bid to confirm the


appropriateness of, or to modify as necessary, the
Category to which the bid was assigned by the bidder in
preparing it.
Instructions to Bidders 23

(b) The lowest evaluated bid of each Category will then be


determined by comparing all evaluated bids in each
Category among themselves,

(c) Such lowest evaluated bids will next be compared with


each other and if, as a result of this comparison, a bid
from Category I is found to be the lowest, it will be
selected for the award of Contract,

(d) If, however, as a result of the comparison under (c)


above, the lowest evaluated bid is found to be from
Category II, it will be further compared with the lowest
evaluated bid from Category I. For the purpose of this
further comparison only, an upward adjustment will be
made to the lowest evaluated bid price of Category II by
adding an amount equal to seven and one-half per cent
(71/2%) of the bid price, If, after such comparison, the
Category I bid is determined to be the lowest, it will be
selected for the award of contract; if not, the lowest
evaluated bid from Category II will be selected.

32.2 Domestic contractors and joint ventures between a domestic


contractor(s) and its foreign partner(s) shall meet the following
minimum criteria for eligibility of the Domestic Preference
Scheme:

(a) Domestic contractor(s):

(i) firms are registered in (Name of the Borrowing


Country);

(ii) firms have majority ownership by nationals of


(Name of the Borrowing Country); and

(iii) firms will not subcontract to foreign contractors


more than fifty per cent (50% ) of the total value
of their work.

(b) A joint venture between a domestic contractor(s) and its


foreign partner(s) will be eligible for the preference only
if:

(i) the domestic partner(s) are individually eligible


for the preference according to the criteria stated
above;

(ii) the domestic partner(s) would not qualify for the


Works on technical or financial grounds without
the foreign participation; and

(iii) the domestic partner(s) will, under the


arrangements proposed, carry out at least fifty
per cent (50%) of the Works measured in terms
of value.
24 Instructions to Bidders

32.3 Bidders applying for the preference shall provide all evidence,
including details of ownership, necessary to prove that they are
qualified for the preference according to the criteria set forth in
Sub-Clause 32.2.

32.4 If the Contract is awarded to a bidder who has received the


preference pursuant to the foregoing provisions, such contractor
shall not subcontract to foreign contractors more than fifty per
cent (50%) of the total value of their work.

32.543 Comparison of bids will only be between bids which conform fully
to the specifications, In the event that the alternative bid not
conforming to the specifications, if any, of the bidder whose main
bid which conforms with the specifications is the lowest
evaluated is considered more advantageous than its main bid,
such alternative bid may be considered.

43
Clause 32.5 should be deleted if alternative bids are not
permitted.

32.6 A joint venture which is awarded the Contract as a result of the


application of the above domestic preference provisions, shall
furnish the Employer, together with the Performance Security, a
"Domestic Preference Security" to guarantee that the profit and
loss distribution and work-sharing arrangements with which the
joint venture satisfied the criteria of Sub-Clause 32.2 (b) above
will not be modified throughout the execution of the Contract.
The Domestic Preference Security shall be issued in accordance
with the requirements of Sub-Clause 45.5 of the Conditions of
Contract, for an amount equivalent to the difference between the
joint venture's bid price and the bid price of the lowest foreign
bid.

F. Award of Contract
33. Award44 33.1 Subject to Clause 34, the Employer will award the Contract to
the bidder whose bid has been determined to be substantially
responsive to the bidding documents and who has offered the
Lowest Evaluated Bid Price, provided that such bidder has been
determined to be (i) eligible in accordance with the provisions of
Sub-Clause 3.1; and (ii) qualified in accordance with the
provisions of Clause 5.

44
For projects bid in separate contracts, on a "slice and
package" basis, after "Lowest Evaluated Bid Price" add the
following words: "for this Contract, when evaluated in
conjunction with the other contracts to be awarded
concurrently for this project and taking into account any
Instructions to Bidders 25

discounts offered by bidders for the award of more than one


contract,".

34. Employer's 34.1 Notwithstanding Clause 33, the Employer reserves the right to
Right to accept or reject any bid, and to annul the bidding process and
Accept any reject all bids, at any time prior to award of Contract, without
Bid and to thereby incurring any liability to the affected bidder or bidders or
Reject any any obligation to inform the affected bidder or bidders of the
or all Bids grounds for the Employer's action.

35. Notification 35.1 Prior to expiration of the period of bid validity prescribed by the
of Award Employer, the Employer will notify the successful bidder by cable
confirmed by registered letter that his bid has been accepted.
This letter (hereinafter and in the Conditions of Contract called
the "Letter of Acceptance") shall name the sum which the
Employer will pay the Contractor in consideration of the
execution, completion and maintenance of the Works by the
Contractor as prescribed by the Contract (hereinafter and in the
Conditions of Contract called "the Contract Price").

35.2 The notification of award will constitute the formation of the


Contract.

35.3 Upon the furnishing by the successful bidder of a performance


security (and domestic preference security where required), the
Employer will promptly notify the other bidders that their bids
have been unsuccessful.

36. Signing of 36.1 At the same time that he notifies the successful bidder that his
Agreement bid has been accepted, the Employer will send the bidder the
Form of Agreement provided in the bidding documents,
incorporating all agreements between the parties.

36.2 Within ____________________________ [insert number)45 days


of receipt of the Form of Agreement, the successful bidder shall
sign the Form and return it to the Employer.

45
Normally 14-28 days are sufficient.

37. Performance 37.1 Within________________________________ [insert number]46


Security days of receipt of the notification of award from the Employer,
the successful bidder shall furnish to the Employer a
performance security in an amount of _________________
[insert figure]47 percent of the Contract Price in accordance with
the Conditions of Contract. The form of performance security
provided in Section 8 of the bidding documents may be used or
some other form acceptable to the Employer.

46
Same period as allowed under Sub-Clause 36.2.
26 Instructions to Bidders

47
An amount of 10 percent of the Contract Price is commonly
specified for bank guarantees.

37.2 Failure of the successful bidder to comply with the requirements


of Clauses 36 or 37 shall constitute sufficient grounds for the
annulment of the award and forfeiture of the bid security.

37.3 The above provisions shall also apply to the furnishing of a


domestic preference security, where required, and in the terms
specified in, Sub-Clause 32.6.

38. Corrupt or 38.1 The ADB requires that Borrowers (including beneficiaries of ADB
Fraudulent loans), as well as bidders/suppliers/contractors under ADB-
Practices financed contracts, observe the highest standard of ethics during
the procurement and execution of such contracts. In pursuance
of this policy, the ADB:

(a) defines, for the purposes of this provision, the terms set
forth below as follows:

(i) "corrupt practice" means behavior on the part of


officials in the public or private sectors by which
they improperly and unlawfully enrich
themselves and/or those close to them, or
induce others to do so, by misusing the position
in which they are placed, and it includes the
offering, giving, receiving, or soliciting of
anything of value to influence the action of any
such official in the procurement process or in
contract execution; and

(ii) "fraudulent practice" means a misrepresentation


of facts in order to influence a procurement
process or the execution of a contract to the
detriment of the Borrower, and includes collusive
practice among bidders (prior to or after bid
submission) designed to establish bid prices at
artificial non-competitive levels and to deprive
the Borrower of the benefits of free and open
competition;

(b) will reject a proposal for award if it determines that the


bidder recommended for award has engaged in corrupt
or fraudulent practices in competing for the contract in
question;

(c) will declare a firm ineligible, either indefinitely or for a


stated period of time, to be awarded an ADB-financed
contract if it at any time determines that the firm has
engaged in corrupt or fraudulent practices in competing
for, or in executing, and ADB-financed contract.
Instructions to Bidders 27

38.2 Furthermore, bidders shall be aware of the provision stated in


Sub-Clause 52.2 and Sub-Clause 55.1 of the Conditions of
Contract.
Contract Data 76

Section 2: Conditions of Contract

Notes on Conditions of Contract

The Conditions of Contract, read in conjunction with the Contract Data and
other documents listed therein should be a complete document expressing
fairly the rights and obligations of both parties.

The model form of Conditions of Contract which follows has been developed
on the basis of considerable international experience in the drafting and
management of contracts, bearing in mind a trend in the construction industry
towards simpler, more straightforward language.

The model form can be used directly for smaller admeasurement contracts
and, with the modifications noted in the footnotes, it can be adapted for lump
sum contracts.

The model form is not a "standard form", nor is its use mandatory for ADB
borrowers. Any other national standard or international conditions of contract
acceptable to ADB may be used for international competitive biddings.

The use of standard conditions of contract for all building and civil works
throughout a country win ensure comprehensiveness of coverage, general
acceptability of its provisions, savings in cost and time in bid preparation and
review, and the development of a solid background of legal case histories.
Conditions of Contract 29

Table of Contents

A. General, 29 C. Quality Control, 36

1. Definitions, 30 28. Identifying Defects, 36


2. Interpretation, 31 29. Tests, 37
3. Language and Law, 32 30. Correction of Defects, 37
4. Notice, 32 31. Uncorrected Defects, 37
5. Delegation, 32
6. Communications, 32 D. Cost Control, 37
7. Subcontracting, 32 (Alternative A: Admeasurement Contracts)
8. Other Contractors, 32 32. Bill of Quantities, 37
9. Personnel, 32 33. Changes in the Quantities, 37
10. Contractor’s Risks, 33 (Alternative B: Lump Sum Contracts)
11. Employer’s Risks, 33 32. Activity Schedule, 38
12. Insurance, 33 33. Changes in the Activity Schedule, 38
13. Indemnities, 34 (Alternative A: Admeasurement Contracts)
14. Contractor to Construct the Works, 34 34. Variations, 38
15. The Works to Be Completed by the (Alternative B: Lump Sum Contracts)
Intended Completion Date, 34 34. Variations, 39
16. Approval of the Contractor’s
Temporary Works, 34 35. Cash Flow Forecasts, 39
17. Safety, 34 36. Payment Certificates, 40
18. Discoveries, 34 37. Payments, 40
19. Possession of the Site, 34 38. Compensation Events, 40
20. Access to the Site, 35 39. Tax, 41
21. Disputes, 35 40. Currencies, 42
41. Price Adjustments, 42
B. Time Control, 35 42. Retention, 42
43. Liquidated Damages, 43
22. Program, 35 44. Advance Payment, 43
23. Extension of the Intended Completion 45. Securities, 43
Date, 35 46. Dayworks, 44
24. Acceleration, 35 47. Cost of Repairs, 44
25. Suspension of Work, 36
26. Management Meetings, 36 E. Completion of the Contract, 44
27. Early Warning, 36
48. Completion, 44
49. Taking Over, 45
50. Final Account, 45
51. Operating and Maintenance Manuals,
45
52. Termination, 45
53. Payment upon Termination, 46
54. Property, 46
55. Inspections & Audit by the ADB, 46
Contract Data 76

Section 2. Conditions of Contract

A. General

1. Definitions 1.1 Terms which are defined in the Contract Data are not also
defined in the Conditions of Contract but keep their defined
meanings. Capital initials are used to identify defined terms.

Acceptance is the date when the Contract came into


existence upon receipt by the Contractor of the Letter of
Acceptance issued by the Employer.

The Activity Schedule48 is a schedule of the activities


comprising the construction, installation, testing, and
commissioning of the Works. It includes a lump sum
price for each activity which is used for valuations and
for assessing the effects of Variations and
Compensation Events.

"The ADB is the Asian Development Bank".

48
Use this definition for lump sum contracts. Delete for
admeasurement (bill of quantities) contracts.

Compensation Events are those defined in Clause 38


hereunder.

The Completion Date is the date when the Employer


notifies the Contractor that the Works can be used by
the Employer.

The Contract is the contract between the Employer and


the Contractor.

The Contract Data defines the documents and other


information which comprise the Contract.

The Contractor is a person or corporate body whose bid


to carry out the Works has been accepted by the
Employer.

The Contractor's Bid is the completed bidding


document submitted by the Contractor to the Employer.

The Contract Price is the price stated in the Letter of


Acceptance and thereafter as adjusted in accordance
with the provisions of the Contract.

Days are calendar days; months are calendar months.

A Defect is any part of the Works not completed in


accordance with the Contract.
Conditions of Contract 31

Defect Notice Period is the period stated in the


Contract Data within which the Employer may notify the
Contractor of a Defect pursuant to Clause 30.

The Employer is the party who will employ the


Contractor to carry out the Works.

Equipment is the Contractor's machinery and vehicles


brought temporarily to the Site to construct the Works.

The Initial Contract Price is the Contract Price at the


date of the Employer's written acceptance of the Bid.

The Intended Completion Date is the date on which it


is intended that the Contractor shall complete the Works.
The Intended Completion Date is specified in the
Contract Data. The Intended Completion Date may be
revised only by the Employer by issuing an extension of
time.

Plant is any integral part of the Works which is to have a


mechanical, electrical, electronic or chemical function.

The Site is the area defined as such in the Contract


Data.

Site Investigation Reports are those which were


included in the Bid documents and are factual and
interpretative reports about the ground and groundwater
conditions at the Site.

The Start Date is given in the Contract Data. It is the


date when the Contractor can commence work on the
Contract. It does not necessarily coincide with any of the
Site Possession Dates.

A Subcontractor is a person or corporate body who has


a contract with the Contractor to carry out a part of the
work in the Contract.

Temporary Works are works designed, constructed,


installed, and removed by the Contractor which are
needed for construction or installation of the Works.

A Variation is an instruction given by the Employer


which varies the Works.

The Works are what the Contract requires the


Contractor to construct, install, and hand over to the
Employer.

2. Interpretation 2.1 In interpreting these Conditions of Contract, singular also means


plural, male also means female, and vice versa. Headings and
cross-references between clauses have no significance. Words
Contract Data 76

have their normal meaning under the language of the Contract


unless specifically defined.

2.2 If sectional completion is specified in the Contract Data,


references in the Conditions of Contract to the Works, the
Completion Date, and the Intended Completion Date apply to
any Section of the Works (other than references to the
Completion Date and Intended Completion date for the whole of
the Works).

3. Language 3.1 The language of the Contract is English and the law governing
and Law the Contract is stated in the Contract Data.

4. Notice 4.1 Any notification under this Contract shall be served on the party
concerned when received by telex or registered letter at the
addresses listed in the Contract Data.

5. Delegation 5.1 The Engineer, named in the Contract Data, or any other
competent person appointed by the Employer and notified to the
Contractor, to act in replacement of the. Engineer, is designated
by the Employer to represent the Employer in all dealings with
the Contractor concerning the work, including administering the
Contract, certifying payments due to the Contractor, issuing and
valuing Variations to the Contract, awarding extensions of time,
and valuing the Compensation Events.

5.2 The Contract shall designate in writing to the Employer a


representative, to be its representative in all dealings with the
Employer concerning the Work.

6. Communications 6.1 Communications between parties which are referred to in the


conditions are effective only when in writing.

7. Subcontracting 7.1 If the Contractor causes any part of the Work to be performed by
a Subcontractor, the provisions of this Contract shall apply to
such Subcontractor or his employees as if he or it were
employees of the Contractor and the Contractor shall be liable
for the work of the Subcontractor. No subcontract shall be made
without the prior written approval of the Employer of both the
Subcontractor and the subcontract.

8. Other Contractors 8.1 The Contractor is to cooperate and share the Site with other
contractors, public authorities, utilities and the Employer.

9. Personnel 9.1 The Contractor shall employ the key personnel named in the
Schedule of Key Personnel to carry out the functions stated in
the Schedule or such other personnel approved by the
Employer. The Employer will approve proposed replacement key
personnel only if their qualifications, abilities, and relevant
experience are equal or better than those of the personnel listed
in the Schedule of Key Personnel.

9.2 If the Employer asks the Contractor to remove any of its or its
Subcontractor's personnel and states his reasons the Contractor
is to ensure that such personnel leaves the Site and has no
further connection with the Works.
Conditions of Contract 33

10. Contractor's 10.1 Except as provided in Clauses 11 and 13, the Contractor shall be
Risks responsible for all risks of loss of or damage to physical property
and of personal injury and death which arise during and in
consequence of its performance of the Contract.

11. Employer's 11.1 The Employer shall be responsible for expected risks which are
Risks (a) insofar as they directly affect the execution of the Works in
the Employer's country, the risks of war, hostilities, invasion, act
of foreign enemies, rebellion, revolution, insurrection or military
or usurped power, civil war, riot, commotion or disorder (unless
restricted to the Contractor's employees), and contamination
from any nuclear fuel or nuclear waste or radioactive toxic
explosive, or (b) a cause due solely to the design of the Works,
other than the Contractor's design.

12. Insurance 12.1 Without limiting the Contractor's liability pursuant to Clauses 10
and 13, the following insurance cover is to be provided and
maintained by the Contractor in the joint names of the Employer
and the Contractor for the period from the Start Date to the end
of the Defects Notice Period or of the last Defects Correction
Period whichever is the later:49

(a) third party liability in an amount not less than specified in


the Contract Data, for anyone claim or series of claims
arising out of anyone accident or event;

(b) adequate workmen's compensation and/or employer's


liability insurance which complies with applicable
legislation;

(c) adequate automobile public liability and property


damage insurance; and

(d) cover against damage to the Works and materials during


construction.50

49
May need to be expanded if other specified insurance cover is
required, e.g. if watercraft or helicopters are being used.

50
The requirement for such cover must be determined in view of
the type of work being carried out - "double-insurance" cover
should be avoided, i.e. Employer may wish to provide this
cover.

12.2 Policies or certificates of insurance are to be produced by the


Contractor to the Employer for approval before the Start Date
given in the Contract Data and subsequently as the Employer
may require.

12.3 The Employer shall be given 30 days advance notification in the


event of cancellation or change in any part or all of said
insurance policies.
Contract Data 76

13. Indemnities 13.1 Each party shall be liable for and indemnity the other Party
against losses, expenses and claims for loss or damage to
physical property, personal injury, and death caused by his own
acts or omissions.

13.2 Notwithstanding Clause 13.1 above, the Contractor shall be


solely responsible for and shall indemnify and hold harmless the
Employer from and against all claims, liabilities and costs of
action in respect of injury to or death of any person in the
employment of the Contractor or any of its Subcontractors.

13.3 The Contractor shall indemnify and hold the Employer harmless
against all third-party claims of infringement of industrial design
or intellectual property rights arising from the use or provision of
the Works, including any Plant, Construction Documents or
Materials, or any part thereof.

14. Contractor to 14.1 The Contractor is to construct and install the Works in
Construct accordance with the Specification and Drawings:51
the Works

51
For Lump sum contracts, add "and Activity Schedule".

15. The Works to 15.1 The Contractor shall begin the Works on the Start Date and shall
Be Completed perform and complete the Works in accordance with the program
by the Intended submitted by him, as updated with the approval of the Employer,
Completion Date by the Intended Completion Date.

16. Approval of the 16.1 The Contractor shall submit drawings and specifications showing
Contractor's his proposed Temporary Works to the Employer, who shall
Temporary Works approve them if they comply with the Contract Data.

16.2 The Contractor is responsible for design of Temporary Works.

16.3 The Employer's approval does not alter the Contractor's


responsibility for his design of the Temporary Works.

17. Safety 17.1 The Contractor is responsible for the safety of all its activities on
the Site.

18. Discoveries 18.1 Anything of historical or other interest or of significant value


unexpectedly discovered on the Site is the property of the
Employer. The Contractor shall notify the Employer of such
discoveries and carry out the Employer's instructions for dealing
with them.

19. Possession 19.1 The Employer shall give possession of all parts of the Site to the
of the Site Contractor. If possession of a part is not given by the date stated
in the Contract Data the Employer is deemed to have delayed
the start of the relevant activities and this shall be considered a
Compensation Event.
Conditions of Contract 35

20. Access to 20.1 The Contractor shall allow the Engineer and any person
the Site authorized by the Employer access to the Site and to any place
where work in connection with the Contract is being carried out
or is intended to be carried out.

21. Disputes 21.1 All disputes arising in connection with the present Contract, and
which cannot be amicably settled between the parties, shall be
finally settled under the Rules of Conciliation and Arbitration of
the International Chamber of Commerce by one or more
arbitrators appointed in accordance with said Rules. The
Arbitration shall take place as shown in the Contract Data.

B. Time Control
22. Program 22.1 Within the time stated in the Contract Data the Contractor shall
submit to the Employer for its approval a program showing the
general methods, arrangements, order, and timing for all the
activities in the Works.

22.2 An update of the program is a program showing the actual


progress achieved on each activity and the effect of the progress
achieved on the timing of the remaining work, including any
changes to the sequence of the activities as well as the effects of
Variations and Compensation Events.

22.3 The Contractor shall submit to the Employer, for his approval, an
updated program at intervals no longer than the period stated in
the Contract Data. If the Contractor does not submit an updated
program within this period, the Employer may withhold the
amount stated in the Contract Data from the next payment
certificate and continue to withhold this amount until the next
payment after the date on which the overdue program has been
submitted.

22.4 The Employer's approval of the program or an updated program


does not alter the Contractor's obligations under the Contract.

23. Extension of 23.1 The Employer and the Contractor may agree to extend the
the Intended Intended Completion Date if a Compensation Event occurs or a
Completion Date Variation is issued which makes it impossible for Completion to
be achieved by the Intended Completion Date without the
Contractor taking steps to accelerate the remaining work and
which would cause the Contractor to incur additional cost.

24. Acceleration 24.1 In the event the Employer wishes the Contractor to finish before
the Intended Completion Date, the Employer shall obtain priced
proposals for achieving the necessary acceleration from the
Contractor. If the Employer accepts these proposals, the
Intended Completion Date is adjusted accordingly and shall be
confirmed by both the Employer and the Contractor.
Contract Data 76

24.2 If the Contractor's priced proposals for an acceleration are


accepted by the Employer, they shall be incorporated in the
Contract Price and treated as a Variation.

25. Suspension 25.1 The Employer may at any time by written notice to the Contractor
of Work suspend further performance of the Works, whereupon the
Contractor shall suspend further performance of the Works to the
extent specified and shall properly ensure and protect all Works
in progress. Such suspension shall not exceed more than
twenty-eight (28) consecutive days each or aggregate more than
ninety (90) days. The Employer may at any time give notice of
resumption of the suspended Works, in whole or in part,
whereupon the Contractor shall resume its performance of that
portion of the Works.

26. Management 26.1 Either the Employer or the Contractor may require the other to
Meetings attend a management meeting. The business of a management
meeting is to review the plans for remaining work and to deal
with matters raised in accordance with the early warning
procedure, pursuant to Clause 27 below.

26.2 The Contractor shall record the business of management


meetings and shall provide copies of the records to those
attending the meeting and to the Employer. The responsibility of
the parties for actions to be taken is to be decided by the
Employer, either at the management meeting, or after the
management meeting and stated in writing to all who attended
the meeting.

27. Early Warning 27.1 The Contractor shall warn the Employer at the earliest
opportunity of specific likely future events or circumstances
which may adversely affect the quality of the Works, increase the
Contract Price or delay the Intended Completion Date. The
Employer may require the Contractor to provide an estimate of
the expected effect of the future event or circumstance on the
Contract Price and Intended Completion Date. The estimate
shall be provided by the Contractor as soon as reasonably
possible.

27.2 The Contractor shall cooperate with the Employer in making and
considering proposals for how the effect of such an event or
circumstance can be avoided or reduced by anyone involved in
the Works and in carrying out any resulting instruction of the
Employer.

C. Quality Control
28. Identifying 28.1 The Employer shall check the Contractor's work and notify the
Defects Contractor of any Defects which are found. Such checking does
not affect the Contractor's responsibilities. The Employer may
instruct the Contractor to search for a Defect and to uncover and
test any part of the Works which the Employer considers may
have a Defect.
Conditions of Contract 37

29. Tests 29.1 If the Employer instructs the Contractor to carry out a test not
specified in the Specification to check whether any part of the
Works has a Defect and the test shows that it does, the
Contractor shall pay for the test and any samples. If there is no
Defect the test is a Compensation Event.

30. Correction 30.1 The Employer shall give notice to the Contractor of any Defects
of Defects before the end of the Defects Notice Period, which begins at
Completion.

30.2 Every time notice of a Defect is given, a Defects Correction


Period for the notified Defect begins. The Contractor shall correct
the notified Defect within the Defects Correction Period at no
cost to the Employer. The length of the Defects Correction
Period is stated in the Contract Data.

30.3 The Contractor shall correct Defects which he notices himself


before the end of the Defects Notice Period.

30.4 The Employer shall certify that all Defects have been corrected.
If the Employer considers that correction of a Defect is not
essential he can request the Contractor to submit a quotation for
the corresponding reduction in the Contract Price. If the
Employer accepts the quotation, the corresponding change in
the Contract Data is a Variation.

31. Uncorrected 31.1 The Employer may arrange for a third party to correct a Defect if
Defects the Contractor has not corrected it within the Defects Correction
Period.

31.2 The Employer shall give the Contractor at least 14 days notice of
his intention to use a third party to correct a Defect. If the
Contractor does not correct the Defect himself within this period,
the Employer may have the Defect corrected by the third party.
The cost of the correction will be deducted from the Contract
Price.

D. Cost Control

Alternative A: Cost Control Clauses for Admeasurement


[Bill of Quantities] Contracts.

32. Bill of 32.1 The Bill of Quantities shall contain items for the construction,
Quantities installation, testing, and commissioning work to be done by the
Contractor.

32.2 The Bill of Quantities shall be used to calculate the Contract


Price. The Contractor is paid for the quantity of the work done at
the rate in the Bill of Quantities for each item.

33. Changes in 33.1 If the final quantity of the work done differs or is expected to
the Quantities differ from the quantity in the Bill of Quantities for the particular
Contract Data 76

item in more than 15 per cent, the parties shall agree upon an
adjustment of the rate to allow for the change in accordance with
the provisions for Variations.

33.2 If requested by the Employer, the Contractor shall provide the


Employer with a detailed cost breakdown of any rate in the Bill of
Quantities.

Alternative B: Cost Control Clauses for Lump-Sum Contracts.

32. Activity 32.1 The Contractor shall produce an updated Activity Schedule
Schedule within 14 days of being instructed by the Employers. The
activities on the activity schedule are to be coordinated with the
activities on the program for performing the Works.

32.2 The Contractor shall show delivery materials to the Site


separately on the Activity schedule if payment for materials on
Site is to be made separately.

33. Changes in 33.1 The Activity Schedule shall be amended by the Contractor to
the Activity accommodate changes of the program for performing the Works
Schedule or method of working made at his own discretion. Prices in the
Activity Schedule are not altered when the Contractor makes
such changes to the Activity Schedule.

Alternative A: Variation Clauses for Admeasurement


[Bill of Quantities] Contracts.

34. Variations 34.1 All Variations are to be included in updated programs produced
by the Contractor, and shall be reflected in the Intended
Completion Date.

34.2 The Contractor is to forecast the cost effect of a proposed


Variation on the Contract Price and provide the Employer with a
quotation for carrying out the Variation when requested to do so
by the Employer. The Employer shall assess the quotation,
which shall be given within seven days of the request or within
any longer period stated by the Employer and before the
Variation is ordered by him.

34.3 If the work in the Variation corresponds with an item description


in the Bill of Quantities and if, in the opinion of the Employer, the
volume of work does not cause the cost per unit of quantity to
change, the rate in the Bill of Quantities is used to calculate the
value of the Variation. If the cost per unit of quantity changes, or
if the nature of the work in the Variation does not correspond
with items in the Bill of Quantities, the quotation by the
Contractor is to be in the form of new rates for the relevant items
of work.
Conditions of Contract 39

34.4 Where the urgency of varying the work would prevent a


quotation being given and considered without delaying the work,
no quotation is given and the Variation is treated as a
Compensation Event.

34.5 The Contractor is not entitled to additional payment for costs


which could have been avoided by giving early warning.

Alternative B: Variation Clauses for Lump-Sum Contracts.

34. Variations 34.1 The Employer may notify the Contractor to alter, amend, omit,
add to or otherwise vary the Works. The Contractor shall submit
to the Employer an estimate for the proposed Variation within
fourteen (14) days of receipt of notice of a Variation and the said
estimate shall comprise the following:

(i) An estimate of the impact (if any) of the Variation on the


Intended Completion Date;

(ii) A schedule for execution of the Variation showing


resources to be employed and affects in the Activity
Schedule;

(iii) A detailed costing covering the total amount of the


Variation in terms of all relevant manpower and
equipment; and

(iv) A proposed schedule of payment.

34.2 Authorization of Variation: The Contractor shall not perform a


Variation until the Employer has authorized the Variation in
writing on the basis of an estimate provided by the Contractor as
described in Clause 34.1 above.

Variations mutually agreed upon as a Variation shall constitute a


part of the Works and the terms and conditions of this Contract
shall apply to the said Variation.

During the course of the Works, the Employer may advise the
Contractor of minor changes in the Works. The Contractor shall
comply with such changes only if the Contractor deems that such
changes will not affect Contract Price or time for performance of
the Works. Any costs incurred by the Contractor to perform
changes in the Work not previously approved in writing by the
Employer shall be for the Contractor's account, and the
Contractor waives any and all rights to claim from the Employer
such costs/or additional time to perform the Works.

35. Cash Flow 35.1 When the program52 is updated the Contractor is to provide the
Forecasts Employer with an updated cash flow forecast. The cash flow
forecast is to include different currencies as defined in the
Contract, converted as necessary using the Contract exchange
rates.
Contract Data 76

52
In lump-sum contracts, add "... or Activity Schedule..."

36. Payment 36.1 The Contractor shall submit to the Employer monthly statements
Certificates of the estimated value of the work completed less the cumulative
amount certified previously.

36.2 The Employer shall check the Contractor's monthly statement


within 14 days and certify the amount to be paid to the
Contractor.

36.3 The value of work completed is determined by the Employer.

36.453 The value of work completed comprises the value of the


quantities of the items in the Bill of Quantities completed.

53
In lump-sum contracts, substitute this paragraph with:

"The value of work completed comprises the value of


completed activities in the Activity Schedule".

36.5 The value of work completed includes the valuation of Variations,


advance payments, Compensation Events and deductions for
retention.

36.6 The Employer may exclude any item certified in a previous


certificate or reduce the proportion of any item previously
certified in any certificate in the light of later information.

37. Payments 37.1 The Employer is to pay the Contractor the amounts certified
within 28 days of the date of each certificate. If the Employer
makes a late payment, the Contractor is to be paid interest on
the late payment in the next payment. Interest is calculated from
the date by which the payment should have been made at the
rate of interest for commercial borrowing for each of the
currencies in which payments are made.

38. Compensation 38.1 The following are Compensation Events unless they are caused
Events by the Contractor:

(a) The Employer does not give access to a part of the Site
by the Site Possession Date stated in the Contract Data.

(b) The Employer modifies the Schedule of other


Contractors in a way which affects the work of the
Contractor under the Contract.

(c) The Employer does not issue drawings, specifications or


instructions required for execution of the Works on time.
Conditions of Contract 41

(d) The Employer instructs the Contractor to uncover or to


carry out additional tests upon work which is then found
to have no Defects.

(e) Ground conditions are substantially more adverse than


could reasonably have assumed before Acceptance
from the information issued to bidders (including the Site
Investigation Reports), from information available
publicly and from a visual inspection of the Site.

(f) Force majeure, including but not limited to war, riots, civil
insurrection, strikes, fires, floods and earthquakes.

(g) The Employer gives an instruction for dealing with an


unforeseen condition, a Defect caused by the Employer,
or additional work required for safety or other reasons.

(h) Other contractors, public authorities, utilities or the


Employer do not work to the dates and other constraints
stated in the Contract, and the non-compliance by such
parties results in a delay to the Contractor.

(i) Delayed payment of the advance payment.

(j) Other Compensation Events listed in the Contract Data.

38.2 If a Compensation Event causes additional cost or would prevent


the Works being completed before the Intended Completion
Date, the Contract Price shall be increased and/or the Intended
Completion Date shall be extended.

38.3 As soon as information demonstrating the effect of each


Compensation Event upon the Contractor's forecast cost has
been provided by the Contractor, it shall be assessed by the
Employer and the Contract Price shall be adjusted accordingly. If
the Contractor's forecast is unreasonable, the Employer shall
make his own forecast and initially adjust the Contract Price on
that basis. In case agreement on Contract Price adjustment or
extension of the Intended Completion Date cannot be reached,
the Contractor shall complete the Work on the basis of
Employer's estimate and the dispute be settled by arbitration.

38.4 The Contractor is not entitled to compensation to the extent that


the Employer’s interests are adversely affected by the Contractor
not having given early warning or not having cooperated with the
Engineer.

39. Tax 39.1 The Employer is to adjust the Contract Price if taxes and duties
are changed between the date 28 days before the deadline for
submission of bids for the Contract and the date of the last
Completion certificate. The adjustment is to be the change in the
amount of tax payable by the Contractor, provided such changes
are not already reflected in the Contract Price.
Contract Data 76

40. Currencies 40.1 Where payments are made in currencies other than the currency
of the Employer's country, the exchange rates used for
calculating the amounts to be paid are to be the exchange rates
on the date stated in the Schedule of Contract Exchange Rates.

41. Price54 41.1 Prices are adjusted for fluctuations in the cost of inputs, only if
Adjustment this is provided for in the Contract Data. The amounts certified in
each payment certificate are adjusted by applying the respective
price adjustment factor to the payment amounts due in each
currency:

Imc
Pc = Ac + Bc ------
Ioc

where

Pc is the adjustment factor for the portion of the Contract


Price payable in currency "c";

Ac and Bc55 are coefficients specified in the Contract


Data, representing the nonadjustable and adjustable
portions, respectively, of the Contract Price payable in
currency "c"; and

Imc and Ioc are the index at the end of the month being
invoiced and the bid index, respectively, for inputs
payable in currency "c".

54
If the contract period is more than 12 months, price adjustment
provisions must be included.
55
The sum of the two coefficients should be 1 (one) in the
formula for each currency. Normally both coefficients will be
the same in the formulae for all currencies, since coefficient A,
for the non-adjustable portion of the payments, is usually an
estimated figure to take account of initial costs and the
inaccuracy of the indices used for adjustment.

41.2 If the value of the index is changed after it has been used in a
calculation, the calculation is corrected and an adjustment made
in the next payment certificate. The index value is deemed to
take account of all changes in cost due to fluctuations in costs.

42. Retention 42.1 The Employer will retain from each payment due to the
Contractor the proportion stated in the Contract Data until
Completion of the whole of the Works.

42.2 On Completion of the whole of the Works half the total amount
retained is repaid to the Contractor and half when the Defects
Notice Period has passed and the Employer has certified that all
Defects notified to the Contractor before the end of this period
have been corrected.
Conditions of Contract 43

43. Liquidated 43.1 The Contractor shall pay liquidated damages to the Employer at
Damages the rate per day stated in the Contract Data for each day that the
Completion Date is later than the Intended Completion Date. The
Employer may deduct liquidated damages from payments due to
the Contractor. Payment of liquidated damages does not affect
the Contractor's liabilities.

43.2 If the Intended Completion Date is extended after liquidated


damages have been paid, the Employer shall correct any
overpayment of liquidated damages by the Contractor by
adjusting the next payment certificate.

43.3 Notwithstanding the above, the amount of liquidated damage


paid by the Contractor to the Employer shall not exceed 10 per
cent of the Contract Price.

44. Advance 44.1 The Employer shall make advance payment to the Contractor of
Payment the amounts stated in the Contract Data by the dates stated in
the Contract Data, against provision by the Contractor of an
unconditional bank guarantee in a form and by a bank
acceptable to the Employer in amounts and currencies equal to
the advance payment. The guarantee shall remain effective until
the advance payment has been repaid, but the amount of the
guarantee shall be progressively reduced by the amounts repaid
by the Contractor.

44.2 The Contractor is to use the advance payment only to pay for
Equipment, other capital goods, and installation expenses
required specifically for carrying out the Works. The Contractor
shall demonstrate that advance payment has been used in this
way by supplying copies of invoices or other documents to the
Employer.

44.3 The advance payment is repaid by deducting the amounts stated


in the Contract Data from payments otherwise due to the
Contractor, following the schedule of completed percentages of
the Works stated in the Contract Data. No account is taken of the
advance payment or its repayment in assessing valuations of
work done, Variations, price adjustments, Compensation Events
or Liquidated Damages.

45. Securities 45.1 A performance security shall be provided to the Employer in


accordance with the Instructions to Bidders and shall be issued
in a form acceptable to the Employer, and denominated in the
types and proportions of the currencies in which the Contract
Price is payable.

45.2 If there is no reason to call the performance security, the


performance security shall be returned to the Contractor within
21 days of the last Defects Correction Period.

45.3 The Employer shall notify the Contractor of any claim made
against the institution issuing the performance security.

45.4 The Employer may claim against the surety if any of the following
occurs for 14 days or more:
Contract Data 76

(a) the Contractor is in breach of the Contract and the


Employer has notified him that he is; and

(b) the Contractor has not paid an amount due to the


Employer.

45.5 If the Contractor consists of a joint venture which is awarded the


Contract through the application of domestic preference, the
Contractor, (i) throughout the execution of the Contract, shall not
modify the worksharing characteristics of the joint venture with
which it satisfied the criteria of eligibility for being awarded the
Contract in application of the domestic preference; and (ii)
concurrently with the above performance security, the Contractor
shall provide a "domestic preference security" to guarantee that
such characteristics of the joint venture will not be modified. The
domestic preference security shall be in the form of an "on
demand" bank guarantee or stand-by letter of credit acceptable
to the Employer for an amount in a convertible currency,
equivalent to the difference between the Contractor's bid price
and the bid price of the lowest foreign bid. The domestic
preference security shall be issued either by a bank located in
the country of the Employer or directly by a foreign bank
acceptable to the Employer. The domestic preference security
shall remain valid until Completion of the Works pursuant to
Clause 48.

46. Dayworks56 46.1 The Dayworks rates in the Contractor's Bid are to be used for
small additional amounts of work and only when the Employer
has given written instructions in advance for additional work to
be paid for in that way.

56
Delete for lump sum contracts.

46.2 All work to be paid for as Dayworks is to be recorded by the


Contractor on forms approved by the Employer. Each completed
form is to be verified and signed by the Engineer within two days
of the work being done.

46.3 The Contractor will be paid for Dayworks only when he has
obtained signed Dayworks forms.

47. Cost of Repairs 47.1 Loss or damage to the Works or materials to be incorporated in
the Works between the Start Date and the end of the Defects
Correction periods is to be mended by the Contractor at the
Contractor's cost if the loss or damage arises from the
Contractor's acts or omissions.

E. Completion of the Contract


48. Completion 48.1 The Employer shall issue a certificate certifying Completion of
the Works to the Contractor and the Employer when he decides
that the Works are completed.
Conditions of Contract 45

49. Taking Over 49.1 The Employer takes over the Site and the Works within seven (7)
days of the issuance of the certificate of Completion.

50. Final Account 50.1 The Contractor shall supply to the Employer a detailed account
of the total amount which he considers is payable to him under
the Contract before the end of the Defects Notice Period. The
Employer is to certify any final payment which is due to the
Contractor within 56 days of receiving the Contractor’s account
provided it is correct and complete. If it is not, the Employer shall
issue a schedule which states the scope of the corrections or
additions which are necessary.

51. Operating and 51.1 If operating and maintenance manuals are required the
Maintenance Contractor shall supply them by the date stated in the Contract
Manuals Data.

51.2 If the Contractor does not supply the manuals referred to above
by the date stated in the Contract Data, the Employer may
withhold the amount stated in the Contract Data from payments
due to the Contractor.

52. Termination 52.1 The Employer or the Contractor may terminate the Contract if the
other party causes a breach of the Contract.

52.2 Breaches of Contract include but are not limited to

(a) the Contractor stops work when no stoppage of work is


shown on the current program and the stoppage has not
been authorized by the Employer;

(b) the Employer instructs the Contractor to suspend the


Works and the instruction is not withdrawn within 28
days;

(c) the Employer or the Contractor is made bankrupt or


goes into liquidation other than for a reconstruction or
amalgamation;

(d) a payment certified by the Employer is not paid to the


Contractor within 84 days of the date of the certificate;

(e) the Employer gives Notice that failure to correct a


particular Defect is a breach of Contract and the
Contractor fails to correct such Defect within a
reasonable period of time determined by the Employer;

(f) the Contractor does not maintain a security which is


required, pursuant to the Contract;

(g) the Contractor has delayed the completion of the Works


by the number of days for which the maximum amount of
liquidated damages can be paid, as defined in the
Contract Data; and
Contract Data 76

(h) if the Contractor, in the judgment of the Employer has


engaged in corrupt or fraudulent practices in competing
for or in executing the Contract.

52.3 Notwithstanding the above, the Employer may terminate the


Contract at his convenience.

52.4 If the Contract is terminated the Contractor is to stop work


immediately, make the Site safe and secure and leave the Site
as soon as reasonably possible.

53. Payment upon 53.1 If the Contract is terminated because of a breach of Contract by
Termination the Contractor, the Employer shall issue a certificate for the
value of the work done and materials ordered less advance
payments received up to the date of the issue of the certificate
and less the percentage of the value of the Works not completed
indicated in the Contract Data. Liquidated Damages do not apply
and the Employer has a right to damages in respect of any delay
incurred arising from the breach. If the total amount due to the
Employer exceeds any payment due to the Contractor the
difference shall be a debt payable to the Employer.

53.2 If the Contract is terminated at the Employer's convenience or


because of a breach of Contract by the Employer, the Employer
shall issue a certificate for the value of the Work done, materials
ordered, the reasonable cost of removal of equipment,
repatriation of the Contractor's personnel employed solely on the
Works, and the Contractor's costs of protecting and securing the
Works and less advance payments received up to the date of the
certificate.

54. Property 54.1 All materials on the Site, Plant, Equipment, Temporary Works
and Works are deemed to be the property of the Employer and
are at the Employer's disposal if the Contract is terminated due
to breach of Contract by the Contractor.

55. Inspections 55.1 The Contractor shall permit the ADB to inspect the Contractor's
& Audit by accounts and records relating to the performance of the Contract
the ADB and to have them audited by auditors appointed by the ADB, if
so required by the ADB.
Contract Data 49

Section 3. Contract Data

Items marked “N/A” do not apply in this Contract.

The following documents are also part of the Contract: Clause Reference

• The Bid and Letter of Acceptance [1]

• The Conditions of Contract [1]

• The Technical Specifications

• The Drawings

• The Program [22]

• The Priced Bill of Quantities57 [32]

• The Schedule of Operating and Maintenance Manuals [51]

• The Schedule of Other Contractors [8]

• The Schedule of Key Personnel [9]

• The Schedule of Contract Exchange Rates [40]

The Employer is [1][4]

Name: _______________________________
Address: _______________________________

57
For lump sum contracts, substitute “Schedule of Activities” for “Bill of Quantities”.

The Engineer is: [4][5]


Name: _______________________________
Address: _______________________________

The Contractor is: [1][4]


Name: _______________________________
Address: _______________________________

The Start Date is _______________________________ [15]

The Intended Completion Date for the whole of the


Works is58 ____________________________________ [15][23]

The Contractor is to submit the program for the Works


within ______ days of being notified of the acceptance of his bid. [22]

The Site Possession Date is59 ____________________ [19]


Contract Data 76

The Site is located at ___________________________ [1]


and is defined in drawings nos. ___________________
_____________________________________________

The Defects Notice Period is ________ days. [30]

The Defects Correction Period is _______ days. [30][31]

The minimum insurance cover for Third Part Liability Insurance


injury, and death is ______________________________ [amount] [12]

58
If different dates will be specified for completion of the Works by sections
(“sectional completion”) these dates should be listed here.
59
If the Site is to be made available by sections, the different dates should be listed
here.

The following events are also Compensation Events: [38]

1. ______________________________________
2. ______________________________________
3. ______________________________________
4. ______________________________________

The period between program updates is ________ days. [22]

The amount to be withheld for the late submission of an updated


program is _______________________________________ [22]

The law which applies to the Contract is the law


of ___________________________________________ [country] [3]

Place where arbitration will take place: _________________ [21]

The currency of the Contract is the ____________________ [35][40]


but payments will be made in the percentages, rates of exchange,
and currencies stated:

Currency Percentage Payable Rate of Exchange: Inputs of which


in Currency One Foreign Equals Foreign Currency
(local) is Required

The date of the exchange rate is ______________________ [40]

The formula(e) for adjustment of prices60 is (are) [41]

For currency (c):


______ per cent nonadjustable element (coefficient Ac)
______ per cent adjustable element (coefficient Bc)
Contract Data 49

Imc and Ioc are indices published by ______________


(authority at origin of inputs)

[insert other formulas as required for payments in other currencies]

The proportion of payments retained is __________________ [42]

The liquidated damages for the whole of the Works are


____________________________ [amount] per day61 [43]

60
Price adjustment provisions must be included where the contract period is beyond
12 months.
61
If Sectional Completion and Damages per Section have been agreed, the latter
should be specified here.

The amounts and currencies of the advance payment are62 [44]

Amount Currency

The advance payment will be made on ___________________ [date] [44]

The advance payment will be repaid as follows:

Percentage Amounts
Completed Currency (c) Currency (x), etc.

etc.

62
Advance payment should be proportionate to the likely requirements of the
Contract for starting construction. They usually amount between 10 and 20 per
cent of the Contract Price.

The amounts and currencies of the advance payment guarantee are [44]

Amount Currency
Contract Data 76

The amounts and currencies of the performance guarantee are [45]

Amount Currency

The amounts and currencies of the domestic preference guarantee are [45]

Amount Currency

The date by which operating and maintenance manuals are


required is _________________________________________ [51]

The amount to be withheld for failing to produce operating


and maintenance manuals by the date required is
__________________________________________________ [51]

The percentage of the value of the work not completed


representing the Employer’s additional cost for completing
the Works is ______ per cent. [53]

Qualifications and experience of key personnel proposed for


administration and execution of the Contract. Attach biographical data.
(The schedule should only be completed where the key personnel are
different from those proposed during prequalification). [9]

Position Name Years of Experience Years of Experience


(general) in proposed position
Project Manager
51 Technical Specifications

Section 4. Technical Specifications

These Notes for Preparing Specifications are intended only as information for the
Employer or the person drafting the bidding documents. They should not be
included in the final documents.

Notes for 1. A set of precise and clear technical specifications is a


Preparing prerequisite for bidders to respond realistically and competitively
Specifications to the requirements of the Employer without qualifying or
conditioning their bids. In the context of international competitive
bidding, the specifications must be drafted to permit the widest
possible competition and, at the same time, present a clear
statement of the required standards of workmanship, materials
and performance of the goods and services to be procured. Only
if this is done will the objectives of economy, efficiency and
equality in procurement be realized, responsiveness of bids be
ensured, and the subsequent task of bid evaluation facilitated.
The specifications should require that all goods and materials to
be incorporated in the Works are new, unused, of the most
recent or current models and incorporate all recent
improvements in design and materials unless provided otherwise
in the Contract.

2. Samples of specifications from previous similar projects in the


same country are useful in this respect. Most technical
specifications are normally written specially by the Employer or
Engineer to suit the Contract Works in hand. There is no
standard set of Technical Specifications for universal application
in all sectors in all countries, but there are established principles
and practices which are reflected in these documents.

3. There are considerable advantages in standardizing General


Technical Specifications for repetitive Works in recognized public
sectors such as highways, ports, railways, urban housing,
irrigation, water supply, etc., in the same country or region where
similar conditions prevail. The General Technical Specifications
should cover all classes of workmanship, materials and
equipment commonly involved in construction, although not
necessarily to be used in a particular works contract. Deletions
or addenda should then adapt the General Specifications to the
particular Works.

4. Care must be taken in drafting technical specifications to ensure


they are not restrictive. In the specification of standards for
goods, materials and workmanship, recognized international
standards should be used as much as possible. Where other
particular standards are used, whether national standards of the
Borrower's country or other standards, the specifications should
state that goods, materials or other standards, the specifications
should state that goods, materials and workmanship meeting
other authoritative standards, and which ensure equal or higher
quality than the standards mentioned, will also be acceptable.
Contract Data 76

The following Clause may be inserted in the Technical


Specifications:

Sample Clause

Equivalency of Standards and Codes

Wherever reference is made in the Contract to specific standards


and codes to be met by the goods and materials to be furnished,
and work performed or tested, the provisions of, the latest
current edition or revision of the relevant standards and codes in
effect shall apply, unless otherwise expressly stated in the
Contract. Where such standards and codes are national, or
relate to a particular country or region, other authoritative
standards which ensure an equal or higher quality than the
standards and codes specified will be accepted subject to the
Employers prior review and written approval. Differences
between the standards specified and the proposed alternative
standards must be fully described in writing by the Contractor
and submitted to the Employers at least 28 days prior to the date
when the Contractor desires the Employer's approval. In the
event the Employer's determines that such proposed deviations
do not ensure equal or higher quality, the Contractor shall
comply with the standards specified in the documents.
53 Forms of Bid, Bid Security and List of Eligible Member Countries of the ADB

Section 5. Forms of Bid, Bid Security and


List of Eligible Member Countries of
the Asian Development Bank
Note: All details marked * shall be inserted before issue of Bid documents.

Form of Bid
Name of Contract:* ______________________________________________________

To:* __________________________________________________________________
______________________________________________________________________

Gentlemen and/or Ladies:

1. Having examined the Conditions of Contract, Specification, Drawings, and Bill of


Quantities63 and Addenda Nos. ____________________ for the execution of the above-
named Works we, the undersigned, offer to execute and complete such Works and
remedy any defects therein in conformity with the Conditions of Contract, Specification,
Drawings, Bill of Quantities and Addenda for the sum(s) of

63
For lump sum contracts, substitute “Activity Schedule” for “Bill of Quantities”.

_______________________________________________________________________

_______________________________________________________________________

_______________________________________________________________________

as specified in the Contract Data or such other sums as may be ascertained in


accordance with the said Conditions.

2. We acknowledge that the Contract Data forms part of our Bid.

3. We undertake, if our Bid is accepted, to commence the Works on the Start Date stated in
the Contract Data, and to complete the whole of the Works comprised in the Contract
within the date stated in the Contract Data.

4. We agree to abide by this Bid for the period of* ____ days from the date fixed for
receiving the same, and it shall remain binding upon us and may be accepted at any time
before the expiration of that period.

5. Unless and until a formal Agreement is prepared and executed, this Bid, together with
your written acceptance thereof, shall constitute a binding contract between us.

6. We understand that you are not bound to accept the lowest or any bid you may receive.

7. Commissions or gratuities, if any, paid or to be paid by us to agents relating to this Bid,


and to contract execution if we are awarded the contract, are listed below:
Contract Data 76

Name and Amount and Purpose of


Address of Agent Currency Commission
Or Gratuity

____________________ _________________ _________________________

____________________ _________________ _________________________

____________________ _________________ _________________________


(if none, state “none”).”

Dated this _______ day of ______________________ 20____.

Signature ______________________________________ in the capacity of ________________


duly authorized to sign bids for and on behalf of ______________________________________
_____________________________________________________________________________.

[in block capitals or typed]

Address
_____________________________________________________________________________
_____________________________________________________________________________

Witness
_____________________________________________________________________________
_____________________________________________________________________________

Address
_____________________________________________________________________________
_____________________________________________________________________________

Occupation
_____________________________________________________________________________
_____________________________________________________________________________
55 Forms of Bid, Bid Security and List of Eligible Member Countries of the ADB

SAMPLE

FORM OF BID SECURITY (BANK GUARANTEE)

WHEREAS, _______________________________ [Name of Bidder] (hereinafter called "the


Bidder") has submitted his bid dated _____________ [Date] for the construction of
____________________ [Name of Contract] (hereinafter called "the Bid").

KNOW ALL MEN by these presents that We ___________________________ [Name of Bank] of


__________________________________________ [Name of Country] having our registered
office at ___________________________ (hereinafter called "the Bank") are bound unto
_______________________[Name of Employer] (hereinafter called "the Employer") in the sum of
__________________________ 64 for which payment well and truly to be made to the said
Employer the Bank binds himself, his successors and assigns by these presents.

SEALED with the Common Seal of the said Bank this ____ day of _________________ 20____.

THE CONDITIONS of this obligation are:

(1) If the bidder withdraws his Bid during the period of bid validity specified in the
Form of Bid;

or

(2) If the Bidder having been notified of the acceptance of his Bid by the Employer
during the period of bid validity:

(a) fails or refuses to execute the Form of Agreement in accordance with the
Instructions to Bidders, if required; or

(b) fails or refuses to furnish the Performance Security, in accordance with


the Instructions to Bidders,

we undertake to pay to the Employer up to the above amount upon receipt of his first written
demand, without the Employer having to substantiate his demand, provided that in his demand
the Employer win note that the amount claimed by him is due to him owing to the occurrence of
one or both of the two conditions, specifying the occurred condition or conditions.

64
The bidder should insert the amount of the guarantee in words and figures denominated in the
currency of the employer's country or an equivalent amount in a freely convertible currency.
This figure should be the same as shown in Clause 17.1 of the Instructions to Bidder.

This Guarantee will remain in force up to and including the date _______ 65 days after the
deadline for submission of bids as such deadline is stated in the Instructions to Bidders or as it
may be extended by the Employer, notice of which extension(s) to the Bank is hereby waived.
Any demand in respect of this Guarantee should reach the Bank not later than the above date.
Contract Data 76

DATE ________________________ SIGNATURE OF THE BANK ________________________

WITNESS ____________________ SEAL __________________________________________

________________________________________
(Signature, Name, and Address)

65
Usually 28 days after the end of the validity period of the Bid. Date should be inserted by the
Employer before the bidding documents are issued.
57 Forms of Bid, Bid Security and List of Eligible Member Countries of the ADB

LIST OF ELIGIBLE MEMBERS OF THE


ASIAN DEVELOPMENT BANK
(As of 23 July 2002)

Afghanistan Mongolia
Australia Myanmar
Austria Nauru
Azerbaijan Nepal
Bangladesh Netherlands, The
Belgium New Zealand
Bhutan Norway
Cambodia Pakistan
Canada Papua New Guinea
China, People’s Republic of Philippines
Cook Islands Portugal
Denmark Samoa
East Timor, Democratic Republic of Singapore
Fiji Islands Solomon Islands
Finland Spain
France Sri Lanka
Germany Sweden
Hong Kong, China Switzerland
India Taipei,China
Indonesia Tajikistan
Italy Thailand
Japan Tonga
Kazakhstan Turkey
Kiribati Turkmenistan
Korea, Republic of Tuvalu
Kyrgyz Republic United Kingdom
Lao People’s Democratic Republic Unites States
Malaysia Uzbekistan
Maldives Vanuatu
Marshall Islands, Republic of the Viet Nam, Socialist Republic of
Micronesia, Federated States of

For the latest list, please see http://www.adb.org/About/members.asp


Contract Data 76

Section 6. Bill of Quantities66

These notes for Preparing a Bill of Quantities are intended only as information
for the Employer or the person drafting the bidding documents. They should not
be included in the final documents.

Objectives 1. The objectives of the Bill of Quantities are

(a) to provide sufficient information on the quantities of


Works to be performed to enable bids to be prepared
efficiently and accurately; and

(b) when a Contract has been entered into, to provide a


priced Bill of Quantities for use in the periodic valuation
of Works executed.

2. In order to attain these objectives, Works should be itemized in


the Bill of Quantities in sufficient detail to distinguish between the
different classes of Works, or between Works of the same nature
carried out in different locations or in other circumstances which
may give rise to different considerations of cost. Consistent with
these requirements, the layout and content of the Bill of
Quantities should be as simple and brief as possible.

Content 3. The Bill of Quantities should be divided generally into the


following sections:

(a) Preamble;
(b) Work Items (grouped into parts);
(c) Daywork Schedule; and
(d) Summary.

Preamble 4. The Preamble should indicate the inclusiveness of the unit


prices, and should state the methods of measurement which
have been adopted in the preparation of the Bill of Quantities
and which are to be used for the measurement of any part of the
Works.

66
Replace with “Schedule of Activities” for Lump Sum Contracts, throughout this
Section.

Rock 5. Where excavating, boring or driving is included in the Works, a


comprehensive definition of rock, if not given in the Technical
Specification, should be given in the Preamble and this definition
should be used for the purposes of measurement and payment.

Work Items 6. The items in the Bill of Quantities should be grouped into
sections to distinguish between those parts of the Works which
by nature, location, access, timing or any other special
characteristics may give rise to different methods of construction,
or phasing of the Works or consideration of cost. General items
59 Bill of Quantities

common to all parts of the Works may be grouped as a separate


section in the Bill of Quantities. When price adjustment formulas
are used, they should relate to appropriate sections in the bill of
Quantities.

Quantities 7. Quantities should be computed net from the Drawings, unless


directed otherwise in the Contract, and no allowance should be
made for bulking, shrinkage or waste. Quantities should be
rounded up or down where appropriate.

Units of 8. The following units of measurement and abbreviations are


Measurements recommended for use.

Unit Abbreviation Unit Abbreviation


Millimeter mm Kilogram kg

Meter m Metric Ton t


2
Square Millimeter mm or sq.mm Lump sum sum

Square Meter m2 or sq.m Number nr.

Hectare ha Hour hr

Cubic Meter m3 or cu.m Week wk


Month mon

Ground and 9. The commencing surface should be identified in the description


Excavation Levels of each item for work involving excavating, boring or driving for
which the commencing surface is not also the original surface.
The excavated surface should be identified in the description of
each item for work involving excavation for which the excavated
surface is not also the final surface. The depths of work should
be measured for the commencing surface to the excavated
surface as defined.

Daywork Schedule 10. A Daywork Schedule should be included only if there is a


probability of unforeseen work outside the items included in the
Bill of Quantities. To facilitate checking by the Employer of the
realism of rates quoted by the bidders, the Daywork Schedule
should normally be comprised of a list of the various classes of
labor, materials and constructional plant for which basic daywork
rates or prices are to be inserted by the bidder, together with a
statement of the conditions under which the Contractor will be
paid for work executed on a daywork basis.

Provisional 11. Provision for quantity contingencies in any particular item or


Quantities and class of work with a high expectation of a quantity overrun
Sums should be made by entering specific "Provisional Quantities" or
"Provisional Items" in the Bill of Quantities, and not by increasing
the quantities for that item or class of work beyond those of the
work normally expected to be required. To the extent not
covered above, a general provision for physical contingencies
(quantity overruns) should be made by including a "Provisional
Sum" in the Summary of the Bill of Quantities. Similarly a
contingency allowance for possible price increases should be
provided as a "Provisional Sum" in the Summary of the Bill of
Quantities.
Contract Data 76

Summary 12. The summary should contain a tabulation of the separate parts
of the Bill of Quantities carried forward, with provisional sums for
Daywork, for physical (quantity) contingencies and for price
contingencies (upward price adjustment) where applicable.
61 Bill of Quantities

SAMPLE

SECTION 6

BILL OF QUANTITIES

A. Preamble

1. The Bill of Quantities shall be read in conjunction with the Instructions to Bidders,
Conditions of Contract, Technical Specifications, and Drawings.

2. The quantities given in the Bill of Quantities are estimated and provisional, and are given
to provide a common basis for bidding. The basis of payment will be the actual quantities
of work ordered and carried out, as measured by the Contractor and verified by the
Engineer and valued at the rates and prices tendered in the priced Bill of Quantities,
where applicable, and otherwise t such rates and prices as the Engineer may fix within
the terms of the Contract.

3. The rates and prices tendered in the priced Bill of Quantities shall, except insofar as it .s
otherwise provided under the Contract, include all constructional plant, labor, supervision,
materials, erection, maintenance, insurance, profit, taxes and duties, together with all
general risks, liabilities and obligations set out or implied in the Contract.

4. The rates and prices shall be quoted entirely in (Name of Currency of Employer's
Country), while the foreign currency requirements, included in said rates and prices, shall
be indicated in Section 3, Contract Data, see Instructions to Bidders, Clause 15.

5. A rate or price shall be entered against each item in the Bill of Quantities, whether
quantities are stated or not. The cost of Items against which the Contractor has failed to
enter a rate or price shall be deemed to be covered by other rates and prices entered in
the Bill of Quantities.

6. The whole cost of complying with the provisions of the Contract shall be included in the
items provided in the priced Bill of Quantities, and where no Items are provided the cost
shall be deemed to be distributed among the rates and prices entered for the related
Items of Work.

7. General directions and descriptions of work and materials are not necessarily repeated or
summarized in the bill of Quantities. References to the relevant sections of the contract
documentation shall be made before entering rates or prices against each item in the Bill
of Quantities.

8. The method of measurement of completed work for payment shall be in accordance with
(Insert the Name of a standard reference guide, or full details of the methods to be use).67

67
The method of measurement should be spelled out precisely in the Preamble to the Bill of
Quantities; for example, description of the allowances (if any) for timbering in excavation,
etc. Many national standard reference guides have been prepared on the subject and one
such guide is the "Standard Method of Measurement" of the UK Institution of Civil
Engineers, 1976.
Contract Data 76

9. Errors will be corrected by the Employer for any arithmetic errors pursuant to Clause 29
of the Instructions to Bidders.

10. Rock is defined as all materials which. in the opinion of the Engineer, require blasting, or
the use of metal wedges and sledgehammers. or the use of compressed air drilling for its
removal, and which cannot be extracted by ripping with a tractor of at least 150 kW with a
single rear mounted heavy duty ripper.
63 Bill of Quantities

SAMPLE

BILL OF QUANTITIES

B. Work Items

1. The Bill of Quantities contains the following part Bills and Schedules:

Bill No. 1 - General Items;


Bill No. 2 - Earthworks;
Bill No. 3 - Culverts and Bridges;
Bill No. 4, 5, 6 etc. as required;
Daywork Schedule; and
Summary Bill of Quantities.

2. Bidders shall price the Bill of Quantities in local currency only, and shall indicate in
Section 3, Contract Data, the percentage expected for payment in foreign currency or
currencies.
Contract Data 76

SAMPLE

BILL OF QUANTITIES

BILL NO. 1: GENERAL ITEMS

Item
No. Description Unit Quantity Rate Amount

101 Performance Bond sum --- ---


Guarantee

102 Insurance of the Works sum --- ---

103 Insurance of sum --- ---


Constructional Plant

104 Third Party Insurance sum --- ---

105 -etc.-

111 Provide and equip nr 2


Engineer’s offices

112 Maintain Engineer’s mon 24


offices for 24 months,
including services

113 -etc.-

121 Provide diversion road sum --- ---

122 Provide for traffic control mon 24


and maintenance of
diversion road

123 -etc.-

131 Provide for cleaning up sum --- ---


the Site on completion

TOTAL FOR BILL NO. 1


(Carried forward to Summary) ___________________
65 Bill of Quantities

SAMPLE

BILL OF QUANTITIES

BILL NO. 2: EARTHWORKS

Item
No. Description Unit Quantity Rate Amount

201 Excavate topsoil to m3 95,000


maximum depth of 250 mm
and stockpile for reuse,
maximum haul distance
1 km

202 Excavate topsoil to m3 15,000


maximum depth of
250-500 mm, and
dispose

203 -etc.-

206 Excavate fill materials m3 258,000


from cuttings or approved
borrow pits, haul up to 1km,
deposit, shape and compact
to fill

207 Excavate rock in cuttings m3 25,000


and dispose, any depth

208 -etc.-

TOTAL FOR BILL NO. 2


(Carried forward to Summary) ___________________
Contract Data 76

SAMPLE

BILL OF QUANTITIES

BILL NO. 3: CULVERTS AND BRIDGES

Item
No. Description Unit Quantity Rate Amount

301 Excavate in all material m3 18,500


other than rock from
ground level to underside
of foundations, maximum
depth of 5 m, and dispose

302 As Item 301, depth of m3 2,500


5 m to 7.5 m

303 As Item 301, depth of m3 1,500


7.5 m to 10 m

304 -etc.-

311 Concrete class B in m3 18,500


abutments and piers

312 -etc.-

321 Mild Steel reinforcement t 370


in abutments and piers
up to 20 mm diameter

322 -etc.-

TOTAL FOR BILL NO. 3


(Carried forward to Summary) ___________________
67 Bill of Quantities

SAMPLE

BILL OF QUANTITIES

C. Daywork Schedule68

68
(i) A "Daywork Schedule" is commonly found in Contracts where the likely incidence of
unforeseen work cannot be covered by definitive descriptions and approximate quantities
in the Bill of Quantities. The preferred alternative is to value the additional work in
accordance with Clause 46 of the Conditions of Contract. A Daywork Schedule normally
has the disadvantage of not being competitive among bidders, who may therefore add the
rates assigned to some or all the items. If a Daywork Schedule is to be included at all in
the bidding documents, it is preferable to include nominal quantities against the items
most likely to be used, and to carry the sum of the extended amounts forward into the Bid
Summary in order to make the basic Schedule of Daywork Rates competitive.

(ii} The total amount assigned to such competitive daywork is normally 3-5 per cent of the
estimated base Contract Price, and is regarded as a Provisional Sum to be expended
under direction and at the discretion of the Employer. The unit rate quoted should be
invariable whatever quantities of work are ordered.

General

1. Reference should be made to Clause 46 of the Conditions of Contract. Work shall not be
executed on a daywork basis except by written instructions of the Employer. Bidders shall
enter basic rates for daywork items in the Schedules. These rates shall apply to any
quantity of daywork ordered by the Employer. Nominal quantities have been indicated
against each item of daywork, and the extended total for daywork shall be carried forward
as a Provisional Sum to the Summary Total bid Amount. Unless otherwise adjusted,
payments for daywork shall be subject to price adjustment in accordance with the
provisions in the Conditions of Contract.

Daywork Labor

2. In calculating payments due to the Contractor for the execution of dayworks, the hours for
labor will be reckoned from the time of arrival of the labor at the job site to execute the
particular item of daywork to the time of departure from the job site, but excluding meal
breaks and rest periods. Only the time of classes of labor directly doing work ordered by
the Employer and are competent to perform such work will be measured. The time of
gangers (charge hands) actually doing work with the gangs will also be measured but not
the time of foremen or other supervisory personnel.

3. The Contractor shall be entitled to payment in respect of the total time that labor is
employed on daywork, calculated at the basis rates entered by him in the "SCHEDULE
OF DAYWORK RATES: 1. LABOUR" The rates for labor shall be deemed to cover all
costs to the Contractor including (but not limited to) the amount of wages paid to such
labor, transportation time, overtime, subsistence allowances, and any sums paid to or on
behalf of such labor for social benefits in accordance with (Country of Borrower) law, as
well as Contractor's profit, overheads, superintendence, liabilities and insurance and
allowance to labor, timekeeping and clerical and office work, the use of consumable
stores, water, lighting and power; the use and repair of stagings, scaffolding, workshops
Contract Data 76

and stores, portable power tools, manual plant and tools; supervision by the Contractor's
staff, foremen and other supervisory personnel; and charges incidental to the foregoing:
The rates shall be stated in the local currency, but payments will be made in the following
currency proportions:69

(i) foreign: (_____) per cent (to be stated by bidder); and

(ii) local: (_______) per cent (to be stated by bidder).

69
The bidder shall state the percentage in a common foreign currency equivalent required
for payment, and the exchange rates and official sources used.
69 Bill of Quantities

SAMPLE

SCHEDULE OF DAYWORK RATES

1: LABOUR

Item Nominal
No. Description Unit Quantity Rate Amount

D100 Ganger hr 500

D101 Laborer hr 5,000

D102 Bricklayer hr 500

D103 Mason hr 500

D104 Carpenter hr 500

D105 Steelwork Erector hr 500

D106 -etc.-

D113 Driver for vehicle up to 10 t hr 1,000

D114 Operator for excavator, hr 500


dragline shovel or crane

D115 Operator for tractor, (tracked) hr 500


with dozer blade or ripper

D116 -etc.-

TOTAL FOR DAYWORK: LABOUR


(Carried forward) ___________________
Contract Data 76

Daywork Materials

4. The Contractor shall be entitled to payment in respect of materials used for daywork
(except for materials for which the cost is included in the percentage addition to labor
costs as detailed heretofore), at the rates entered by him in the "SCHEDULE OF
DAYWORK RATES: 2 MATERIALS" and shall be deemed to include overhead charges
and profit as follows;

(a) the rates for materials shall be calculated on the basis of the invoiced price,
freight, insurance, handling expenses, damage, losses, etc., and shall provide for
delivery to store for stockpiling at the Site. The rates shall be stated in local
currency but payment will be made in the following currency proportions:

(i) foreign: (___) per cent (to be stated by the bidder) and

(ii) local: (___) per cent (to be stated by the bidder).

(b) the cost of hauling materials for use on work ordered to be carried out as
daywork from the store or stockpile on the Site to the place where it is to be used
will be paid in accordance with the terms for Labor and Constructional Plant in
this Schedule.
71 Bill of Quantities

SAMPLE

SCHEDULE OF DAYWORK RATES

2: MATERIALS

Item Nominal
No. Description Unit Quantity Rate Amount

D201 Cement, ordinary Portland t 200


or equivalent in bags

D202 Mild Steel reinforcing bar t 100


up to 20 mm diameter to
BS 4449 or equivalent

D203 Fine aggregate form t 1,000


concrete as specified
in Clause (__________)

D204 -etc.-

D222 Gelignite (Nobel Special t 10


Gelatine 60%, or equivalent)
including caps, fuse wire
and requisite accessories

TOTAL FOR DAYWORK: MATERIALS


(Carried forward) ___________________

Daywork Construction Plant

5. The Contractor shall be entitled to payments in respect of Constructional Plant already on


Site and employed on daywork at the basic rental rates entered by him in the
"SCHEDULE OF DAYWORK RATES: 3. CONSTRUCTIONAL PLANT". The said rates
shall be deemed to include due and complete allowance for depreciation, interest,
indemnity and insurance, repairs, maintenance, supplies, fuel, lubricants, and other
consumable, and all overhead profit and administrative costs related to the use of such
equipment. The cost of drivers, operators and assistants win be paid for separately as
described under the section on Daywork Labor.
Contract Data 76

6. In calculating the payment due to the Contractor for Constructional Plant employed on
daywork, only the actual number of working hours will be eligible for payment, except that
where applicable and agreed with the Employer, the travelling time from the part of the
Site where the Construction Plant was located when ordered by the Employer to be
employed on daywork and the time for return journey thereto shall be included for
payment.

7. The basic rental rates for Constructional Plant employed on daywork shall be, stated in
local currency but payments to the Contractor will be made in currency proportions as
follows:

(i) foreign: (_______) per cent (to be stated by the bidder) and

(ii) local: (_________) per cent (to be stated by the bidder).


73 Bill of Quantities

SAMPLE

SCHEDULE OF DAYWORK RATES

3: CONSTRUCTIONAL PLANT

Item Nominal Basic Extended


No. Description Quantity Hourly Amount
(Hours) Rental
Rate

D301 Excavator, face shovel


or dragline:

.1 Up to and including 1 m3 500

.2 Over 1 m3 to 2 m3 400

.3 Over 2 m3 100

D302 Tractor (tracked) including


bull or angled dozer:

.1 Up to and including 150 kW 500

.2 Over 150 – 200 kW 400

.3 Over 200 – 250 kW 200

D303 Tractor with ripper:

.1 Up to and including 200 kW 400

.2 Over 200 – 250 kW 200

D304 -etc.-

TOTAL FOR DAYWORK: CONSTRUCTION PLANT


(Carried forward) ___________________
Contract Data 76

SAMPLE

DAYWORK SUMMARY

Amount in
(_______)70 % Foreign

1. Total for Daywork: Labour ________ _________

2. Total for Daywork: Materials ________ _________

3. Total for Daywork: Constructional Plant ________ _________

TOTAL FOR DAYWORK ________ _________

(Provisional Sum)
(Carried forward to Bid Summary)

70
The Employer should insert local currency unit.
75 Bill of Quantities

SAMPLE

SUMMARY BILL OF QUANTITIES

Amount71

Bill No. 1: General Items _________

Bill No. 2: Earthworks _________

Bill No. 3: Culverts and Bridges _________

Bill No. 4: -etc.- _________

SUBTOTAL OF BILLS _________

Provisional sum of Daywork _________

TOTAL OF BILLS AND DAYWORK72

Add ___ % of SUBTOTAL OF BILLS _________


as Provisional Sum73 for Contingencies

BID PRICE _________


(Carried forward to Form of Bid)

71
The Employer should insert the local currency unit.

72
This item needs to be included only when the Daywork Schedule is made competitive by
the introduction of nominal quantities of work to be extended at the rates quoted.
Otherwise it should be included in the Provisional Sum for Contingencies.

73
To the extent that quantity contingencies are not wholly covered by the provisional items
included in the bin of Quantities it is advisable to insert a predetermined percentage to
provide for unforeseen physical quantities of work (usually 5-15 per cent of base cost, that
is of the Subtotal of Bills) and (if included in the Contract) for price escalation adjustments
(commonly 6-12 per cent cost, that is of the Subtotal of Bills) and (if included in the
Contract) for price escalation adjustments (commonly 6 - 12 per cent per annum on
estimated annual payments). The resulting total Bid Price is then a more realistic
estimated final Contract value for the purposes of budgetary approval. . As an alternative
to the percentage addition for contingencies, a fixed amount can be predetermined by the
Employer, based on the estimated Contract amount, and inserted as a common figure in
the" Amount" column.
Contract Data 76

Section 7. Sample Form of Agreement

SAMPLE FORM

Bidders should not complete the Form of Agreement at this time. Only the
successful bidder will be required to complete the Form.

Agreement

This Agreement made this ____ day of _________________20_____ between


_______________________________________ of __________________________________
(hereinafter called “the employer”) of the one part and _________________________________
of _____________________________________ (hereinafter called “the Contractor”) of the other
part.

Whereas the Employer is desirous that certain works should be executed by the
Contractor, viz. _____________________________________ and has accepted a Bid by the
Contractor for the execution and completion of such Works and the remedying of any defects
therein.

Now this Agreement witnesseth as follows:

1. In this Agreement words and expressions shall have the same meanings as are
respectively assigned to them in the Conditions of Contract hereinafter referred to.

2. The attached Contract Data and the documents listed in the Contract Data shall be
deemed to form and be read and construed as part of this Agreement.

3. In consideration of the payments to be made by the Employer to the Contractor as


hereinafter mentioned, the Contractor hereby covenants with the Employer to execute and
complete the Works and remedy any defects therein in conformity in all respects with the
provisions of the Contract.

4. The Employer hereby covenants to pay the Contractor in consideration of the execution
and completion of the Works and the remedying of defects therein, the Contract Price or such
other sum as may become payable under the provisions of the Contract at the times and in the
manner prescribed by the Contract.
77 Conditions of Contract

In witness whereof the parties hereto have caused this Agreement to be executed the
day and year first before written.

The Common Seal of ___________________________________________________


was hereto affixed in the presence of:

or

Signed, Sealed, and Delivered by the said _____________________________ in the presence


of:

Binding Signature of Employer ______________________________________

Binding Signature of Contractor _____________________________________


Contract Data 76

Section 8. Sample Forms of Securities

Samples of acceptable forms of guarantee are annexed. Bidders should not complete the forms
at this time. Only the successful bidder will be required to provide guarantee(s) in accordance
with the samples, or in a similar forms acceptable to the Employer.

Annex A: Performance Bank Guarantee

Annex B:76 Bank Guarantee for Advance Payment

Annex C:77 Domestic Preference Guarantee

76
The Employer should omit Annex B if no Advance Payment is to be provided.

77
The Employer should omit Annex C if the domestic preference is not used.
79 Sample Forms of Securities

Annex A: SAMPLE FORM

PERFORMANCE BANK GUARANTEE

To: ____________________________________________________ [name of Employer]


____________________________________________________ [address of Employer]

WHEREAS ___________________________ [name and address of Contractor] (hereinafter


called "the Contractor") has undertaken, in pursuance of Contract No. ____________________
dated __________________ to execute ________________________________ [name of Contract
and brief description of Works] (hereinafter called "the Contract");

AND WHEREAS it has been stipulated by you in the said Contract that the Contractor
shall furnish you with a Bank Guarantee by a recognized bank for the sum specified therein as
security for compliance with his obligations in accordance with the Contract;

AND WHEREAS we have agreed to give the Contractor such a Bank Guarantee;

NOW THEREFORE we hereby affirm that we are the Guarantor and responsible to you,
on behalf of the Contractor, up to a total of ________________________________ [amount of
Guarantee]78 _______________________________________________ [in words], such sum being
payable in the types and proportions of currencies in which the Contract Price is payable, and we
undertake to pay you, upon your first written demand and without cavil or argument, any sum or
sums within the limits __________________________________________of [amount of Guarantee]
as aforesaid without your needing to prove or to show grounds or reasons for your demand for
the sum specified therein.

78
An amount is to be inserted by the Guarantor, representing the percentage of the
Contract Price specified in the Contract, and denominated either in the currency(ies) of
the Contract or in a freely convertible currency acceptable to the Employer.

We hereby waive the necessity of your demanding the said debt from the Contractor
before presenting us with the demand.

We further agree that no change or addition to or other modification of the terms of the
Contract or of the Works to be performed thereunder or of any of the Contract documents which
may be made between you and the Contractor shall in any way release us from any liability under
this guarantee, and we hereby waive notice of any such change, addition or modification.

This guarantee shall be valid until the date of issue of the Defects Correction Certificate.

SIGNATURE AND SEAL OF THE GUARANTOR _______________________________


NAME OF BANK _______________________________
ADDRESS _______________________________
DATE _______________________________
Contract Data 76

Annex B: SAMPLE FORM

BANK GUARANTEE FOR ADVANCE PAYMENT

To: _____________________________________ [name of Employer]


_____________________________________ [address of Employer]
_____________________________________ [name of Contract]

Gentlemen:

In accordance with the provisions of the Conditions of Contract, Clause 44 ("Advance


Payment") of the above-mentioned Contract, ______________________________________
[name and Address of Contractor] (hereinafter called "the Contractor") shall deposit with
______________________ [name of Employer] a bank guarantee to guarantee his proper and
faithful performance under the said Clause of the Contract in an amount of _________________
[amount of Guarantee] _______________________________________________ [in words].

We, the _________________________________ [bank or financial institution], as instructed


by the Contractor, agree unconditionally and irrevocably to guarantee as primary obligator and
not as Surety merely, the payment to _______________________________________________
[name of Employer] on his first demand without whatsoever right of objection on our part and without
his first claim to the Contractor, in the amount not exceeding ________________________
[amount of Guarantee]79_____________________________________________________________
[in words].

79
An amount is to be inserted by the bank or financial institution representing the amount of
the Advance Payment, and denominated either in the currency(ies) of the Advance
Payment as specified in the Contract, or in a freely convertible currency acceptable to the
Employer.

We further agree that no change or addition to or other modification of the terms of the
Contract or of Works to be performed thereunder or of any of the Contract documents which may
be made between ____________________________________________________ [name of
Employer] and the Contractor, shall in any way release us from any liability under this guarantee,
and we hereby waive notice of any such change, addition or modification.

This guarantee shall remain valid and in full effect from the date of the advance payment
under the Contract until _____________________________________________ [name of Employer]
receives full repayment of the same amount from the Contractor.

SIGNATURE AND SEAL OF THE GUARANTOR : ______________________________________


Name of Bank/Financial Institution: ______________________________________
Address: ______________________________________
Date: ______________________________________
81 Sample Forms of Securities

Annex C: SAMPLE FORM

DOMESTIC PREFERENCE GUARANTEE

To: ____________________________________________________ [name of Employer]


____________________________________________________ [address of Employer]

WHEREAS a joint venture among: __________________________________________


_______________________________________________________________ [name and address of
all joint venture partners] (hereinafter called "the Contractor"), has undertaken in pursuance to
Contract No. _______ dated ________________ to execute ____________________ [name of
Contract and brief Description of Works], (hereinafter called "the Contract");

AND WHEREAS it has been stipulated by you in the said Contract that the Contractor
shall furnish you' with a Bank Guarantee by a recognized bank for the sum specified therein as
security for compliance with his obligation stated in Clause 45 of the Conditions of Contract;

AND WHEREAS we have agreed to give the Contractor such a Bank Guarantee;

NOW THEREFORE we hereby affirm that we are the Guarantor and responsible to you,
on behalf of the Contractor, up to a total of __________________________________________
[amount of Guarantee]80, we undertake to pay you, upon your first written demand and without your
having to substantiate such demand any sum within the limit of
_________________________________ [amount of Guarantee]80.

We hereby waive the necessity of demanding the said debt from the Contractor before
presenting us with the demand.

We further agree that no change or addition to or other modification of the terms of the
Contract or of the Works to be performed thereunder or of any of the Contract documents which
may be made between you and the Contractor shall in any way release us from liability under this
guarantee, and we hereby waive notice of any such change, addition or modification.

This guarantee is valid until the date of the Defects Correction Certificate.

SIGNATURE AND SEAL OF THE GUARANTOR _______________________________


NAME OF BANK _______________________________
ADDRESS _______________________________
DATE _______________________________

80
Amount to be inserted by the Guarantor in accordance with Clause 45 of the Conditions of
Contract.
Contract Data 76

Section 9. Drawings

Insert here a list of Contract Drawings.