Daily Tenders Basis of Contract -Leads to Business Tender Bulletins in South Africa & Africa for the Civil, Building and Construction Industry

01 August 2010

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3. (1) Available data
    (2) Contractor deemed to have inspected Site
    (3) Contractor to base his tender on Tender Documents
    (4) Contractor to satisfy himself as to the correctness of his tender

4. (1) Documents mutually explanatory
    (2) Additional Cost due to ambiguity
    (3) Copies of Contract Documents

5.       Agreement

6. (1) bsp;
(2) Contractors liability for his own design errors
(3) Work to be to Engineers instructions
(4) Instructions only from Engineer
(5) Compliance with applicable laws

7.       Assignment/cession

8. (1) Subcontracting whole Contract
(2) Subcontracting part of Contract
(3) Engineers consent
(4) Contractors liability unaffected
(5) No consent required

9. (1) Nominated Subcontractors
(2) Provisions of subcontract
(3) Limitation of Contractors obligations to Employer
(4) Prices and rates subject to approval
(5) Proof of payment to Nominated Subcontractor
(6) Contractors failure to pay Nominated Subcontractor
(7) Replacement of Nominated Subcontractor
(8) Cancellation of subcontract
(9) Cession of benefits of Subcontractors obligations
(10) Employers assumption of subcontract

10.       Suretyship

11.       Payment to the Contractor

3.(1) Available data

The Employer shall make available to the Contractor, as part of or by reference in the Tender Documents,
all such data relevant to the Works relating to hydrological and subsurface conditions as have been obtained by
or on behalf of the Employer, but the Contractor shall be responsible for his own interpretation thereof
and deductions therefrom.

(2) Contractor deemed to have inspected Site

The Contractor shall be deemed to have inspected and examined the Site and its surroundings and
information available in connection therewith and to have satisfied himself before submitting his tender
(as far as is practicable) as to

(a) the form and nature of the Site and its surroundings, including subsurface conditions,

(b) the hydrological and climatic conditions,
(c) the extent and nature of work and materials necessary for the execution and completion of the
Works,
(d) the means of access to the Site and the accommodation he may require

and, in general, shall be deemed to have obtained all information (as far as is practicable) as to risks,
contingencies and all other circumstances which may influence or affect his tender.

(3) Contractor to base his tender on Tender Documents

The Contractor shall be deemed to have based his tender on the technical data given in the Tender Documents
and, if in the performance of the Contract any circumstances shall differ from the said technical data,
which difference causes delay or additional Cost, the Contractor shall be entitled to make a claim in
accordance with Clause 51.

(4) Contractor to satisfy himself as to the correctness of his tender

The Contractor shall be deemed to have satisfied himself before tendering as to the correctness and sufficiency
of his tender for the Works and of the rates and prices stated in the priced Schedule of Quantities and
the Schedule of Rates and Prices (if any) or in the Specification, which rates and prices shall (except in so far
as otherwise provided in the Contract) collectively cover full payment for the discharge of all his obligations
under the Contract and all matters and things necessary for the proper completion of the Works.

4.(1) Documents mutually explanatory

The several documents forming the Contract are to be taken as mutually explanatory of one another and
any ambiguity in or discrepancy between them shall be explained and, if necessary, adjusted by the
Engineer who shall thereupon issue to the Contractor a written instruction directing what work, if any,
is to be carried out.

(2) Additional Cost due to ambiguity

If compliance with any such instruction shall involve the Contractor in any delay or additional Cost,
which by reason of any such ambiguity or discrepancy the Contractor did not and had good reason not
to anticipate, he shall be entitled to make a claim in accordance with Clause 51.

(3) Copies of Contract Documents

As soon as practicable after the delivery of the Letter of Acceptance, the Employer or the Engineer shall deliver
to the Contractor a copy of all the documents then constituting the Contract.

5. Agreement

The Contractor shall, when called upon to do so, enter into and execute a formal Agreement
(to be prepared and paid for by the Employer) recording the terms of the Contract.

6.(1) Extent of Contractors obligations

The Contractor shall, save in so far as it is legally or physically impossible,

(a) design (to the extent provided in the Contract), execute and complete the Works and remedy
any defects therein in accordance with the provisions of the Contract, and

(b) provide all superintendence, labour, materials, Constructional Plant, Temporary Works, including
the design thereof, all requisite transport and all other things, whether of a temporary or
permanent nature, required in and for such design, execution and completion of the Works and
for the remedying of any defects, so far as the necessity for providing the same is specified in or
reasonably to be inferred from the Contract.

(2) Contractors liability for his own design errors

Where the Contract expressly provides that part of the Permanent Works shall be designed by the Contractor,
he shall, notwithstanding any approval of the Engineer, be liable for any error or deficiency in any drawing
or document supplied by him for that part of the Works and for any loss or damage arising out of such error
or deficiency.

(3) Work to be to Engineers instructions

The Contractor shall, in carrying out his aforesaid obligations, comply with the Engineers instructions on
any matter relating to the Works.

(4) Instructions only from Engineer

The Contractor shall take instructions only from the Engineer, the Engineers Representative or other
person authorised by the Engineer in terms of Clause 2(5).

(5) Compliance with applicable laws

The Contractor shall, in the performance of the Contract, comply with all applicable laws and shall in particular,
on the request of the Engineer, provide proof that he has complied with all laws relating to

(a) wages and conditions of work, and

(b) safety.

7. Assignment/cession

Neither the Contractor nor the Employer shall, without the written consent of the other, assign the Contract
or any part thereof or any obligation under the Contract or cede any right or benefit thereunder.

8.(1) Subcontracting whole Contract

The Contractor shall not subcontract the whole of the Contract.

(2) Subcontracting part of Contract

Except where otherwise provided by the Contract, the Contractor shall not subcontract any part of
the Contract without the prior written consent of the Engineer, which consent shall not
be unreasonably withheld.

(3) Engineers consent

The Engineers consent in respect of a particular subcontractor may be withdrawn at any time on
reasonable grounds being given in writing to the Contractor by the Engineer, in which event the Contractor
shall forthwith terminate the employment of that subcontractor.

(4) Contractors liability unaffected

Any such consent shall not relieve the Contractor from any liability or obligation under the Contract and
he shall be liable for the acts, defaults and neglects of any subcontractor, his agents or employees as fully as
if they were the acts, defaults or neglects of the Contractor, his agents or employees.

(5) No consent required

The Contractor shall not be required to obtain such consent for

(a) the provision of labour, or

(b) the purchase of materials which are in accordance with the Contract, or

(c) the purchase or hire of Constructional Plant.

9.(1) Nominated Subcontractors

All specialists, merchants, tradesmen and subcontractors who execute any work or supply any goods and
who may have been or are nominated or selected by the Employer or the Engineer, shall be engaged by
the Contractor and shall, in the execution of such work or the supply of such goods, be deemed to
be subcontractors employed by the Contractor and are herein referred to as "Nominated Subcontractors";

Provided that the Contractor shall not be required by the Employer or the Engineer or be deemed to be
under any obligation to employ any Nominated Subcontractor against whom the Contractor shall
make reasonable objection or who shall decline to enter into a subcontract with the Contractor containing
the provisions referred to in Sub-Clause (2).

(2) Provisions of subcontract

The subcontract shall contain the following provisions:

(a) In respect of the work or the goods which are the subject of the subcontract, the Nominated
Subcontractor shall undertake to the Contractor the same obligations and liabilities as are imposed
on the Contractor by the terms of the Contract and shall indemnify the Contractor against
all obligations whatsoever arising out of or in connection therewith, or arising out of or in connection
with any failure to perform such obligations or to discharge such liabilities.

(b) The Nominated Subcontractor shall indemnify the Contractor against liability arising from

(i) failure of the subcontract works to the extent that the design of the works is undertaken
by the Nominated Subcontractor,

(ii) failure of the goods to the extent that the goods are manufactured and/or supplied by
the Nominated Subcontractor,

(iii) any negligence by the Nominated Subcontractor, his agents and employees, and

(iv) any misuse by the Nominated Subcontractor of any Constructional Plant, Temporary
Works or materials provided by the Contractor for the purposes of the Contract.

(3) Limitation of Contractors obligations to Employer

Notwithstanding the provisions of Sub-Clauses (I) and (2), the Contractor shall, if so directed in writing by
the Engineer, enter into a subcontract with a person so declining, on terms and conditions stipulated
or approved by the Employer, in which case the Employer shall be deemed to have given the indemnities
referred to in Sub-Clauses (2)(a) and (b).

(4) Prices and rates subject to approval

The prices or rates set out in the subcontract shall be subject to the Engineers approval and the
subcontract shall contain provisions giving effect to Sub-Clauses (8), (9) and (10). The Contractor shall,
if required to do so, produce evidence to the Engineer that this has been done.

(5) Proof of payment to Nominated Subcontractor

Before issuing, under Clause 52, a payment certificate which includes any payment in respect of work done
or goods supplied by any Nominated Subcontractor, the Engineer shall be entitled to demand from the
Contractor reasonable proof that

(a) all amounts (less retention) payable to the Nominated Subcontractor which have been included in
previous payment certificates in respect of the work or goods of such Nominated Subcontractor
have been paid or discharged by the Contractor, or

(b) he has reasonable cause for withholding or refusing to make such payment and that he has
so informed such Nominated Subcontractor in writing.

(6) Contractors failure to pay Nominated Subcontractor

If in respect of any payment certificate, the Contractor has failed to comply with the provisions of
Sub-Clause (5), the Employer shall be entitled to pay such Nominated Subcontractordirect upon the
certificate of the Engineer the amount which the Contractor has failed to pay to such Nominated Subcontractor;

Provided that any such payments shall be taken into account by the Engineer who shall, in issuing any
further certificate in favour of the Contractor, deduct from the amount thereof the amount so paid direct to
the Nominated Subcontractor.

(7) Replacement of Nominated Sub contractor

If any intended Nominated Subcontractor shall refuse to enter into the subcontract or, if for any reason
the Contractor shall not be obliged to enter into such subcontract and shall elect not to do so,
then the provisions of Sub-Clauses (8)(b) and (c) shall apply mutatis mutandis.

(8) Cancellation of subcontract

(a) If the Nominated Subcontractor shall be in default in any of the respects referred to in Clause 58
(l), such default will entitle the Contractor to cancel the subcontract and the Contractor shall,
upon the written instruction of the Engineer, do so.

(b) Upon such cancellation, the Employer or the Engineer shall nominate another subcontractor
in accordance with the provisions of Sub-Clauses (2), (3) and (4) and the Contractor shall,
subject to the provisions of those Sub-Clauses, engage such subcontractor as a Nominated
Subcontractor to carry out and complete the subcontract works in terms of this Clause.

(c) Any difference between the original subcontract sum (adjusted in terms of these General Conditions)
and the total cost of carrying out and completing the subcontract works shall be for the
Employers account.

(9) Cession of benefits of Subcontractors obligations

In the event of a Nominated Subcontractor having undertaken to the Contractor in respect of work executed
or goods or materials supplied by such Nominated Subcontractor any continuing obligation extending beyond
the date of completion of the Works or the end of the Defects Liability Period, as the case may be,
the Contractor shall at any time after such date cede to the Employer, at the Employers request and cost,
the benefit of such obligation for the unexpired duration thereof, whereupon the Employer shall have no
further claim against the Contractor in respect of the said continuing obligation.

(10) Employers assumption of subcontract

If the Contract shall have been cancelled in terms of Clause 58, the Employer shall have the right,
by written notice given to any Nominated Subcontractor not later than 28 days after the said cancellation,
to convert the subcontract concerned to a direct contract between theEmployer and the Subcontractor;

Provided that

(a) the terms of the said direct contract shall mutatis mutandis be those of the subcontract concerned,
and

(b) the Employer shall have the said right, notwithstanding any breach of the subcontract by the
Contractor, subject to his forthwith paying to the Subcontractor all amounts then owing to the
Subcontractor by the Contractor and perform any obligation which the Contractor has failed
to perform.

10. Suretyship

The Contractor shall deliver to the Employer within such time as may be stated in the Appendix a guarantee
of an Insurance Company or Bank to be jointly and severally bound with the Contractor, in terms of a Deed
of Suretyship, in a sum equal to the amount stated in the Appendix, for the due performance of the Contract.
The said Company or Bank, and the terms of the said Deed if different from the Pro Forma annexed hereto,
shall be subject to approval by the Employer.

The Engineer shall be empowered to withhold all payment certificates untie the Contractor has complied with
his obligations in terms of this Clause.

Expenditure incurred in obtaining such guarantee and the Deed to be entered into shall be borne by
the Contractor unless the Contract otherwise provides.

The liability under such Suretyship shall terminate upon the issue of a Certificate or Certificates of Completion
in respect of the whole of the Permanent Works, unless otherwise provided in the Contract, and the Deed
of Suretyship shall be returned to the Surety within 14 days after such issue.

11. Payment to the Contractor

As consideration for the construction, completion and defects correction of the Works, the Employer shall pay
to the Contractor the Contract Price in terms of the provisions ofthe Contract.

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