GENERAL CONDITIONS OF CONTRACT

PROCUREMENT OF WORKS
1. Definitions

1.1
The contract is the contract between the procuring entity and the contractor to
execute, to complete and maintain the works. The name of the contract is
defined in the contract data.

The bid form is the form that the Bidder shall fill and submit with the Bid to
The Procuring Entity.
The contract price is the price stated in the Letter of Acceptance sent by the
procuring entity to the contractor, which the completion of the contract form
will be based on.
The completion date is the date of completion of the works as certified by the
procuring entity.
The bill of quantities means the priced bill of quantities forming part of the bid.
The compensations events are those defined in the clause 19.1 thereunder.
The contractor is a person or a company whose bid to carry out the works has
been accepted by the procuring entity.
Days are calendar days; months are calendar months.
A defect is any part of the works not completed in accordance with the contract.
The defect liability period is the period named in the contract data and
calculated form the completion date.
Drawings include calculations and other information provided or approved by
the procuring entity for the execution of the contract.
The employer is a central or local body to whom funds are allocated to perform
the contract.
The procuring entity, as defined in the contract data, is the part who employs
the contractor to carry out the works.
The name of the person authorised to act as a representative of the procuring
entity, is included in the contract data.
The project manager is a competent person appointed by the procuring entity
and notified to the contractor, who is responsible for supervising and execution
of the works and administering the contract.
The engineer is the person, representative of the contractor and approved by the
procuring entity, responsible for the execution and the completion of the works.
Equipment is the contractor’s machinery brought temporarily to the site to
construct the works.
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 Procuring Entity by issuing an extension of time or an acceleration
order.
Materials are all supplies, including consumable, used by the Contractor for
incorporation in the Works.
Specifications means the Specifications of the Works included in the Contract
and any modification or addition made or approved by the Procuring Entity and
the Investor.
The Start Date is included in the Contract Data. It is the date when the
Contractor shall commence execution of the Works. If it is not possible for the
Contractor to commence the Works, the date of receiving of the advance
payment will be considered as the Start Date.
Temporary Works are works designed, constructed, installed and removed by
the Contractor that are needed for construction or installation of the Works.
The Works are what the Contractor has to perform in conformity with the
Contract.
1.2 This shall be a “Unit Price Contract based on Priced Bill of Quantities”, as
specified in the Contract Data.

2. Language

2.1 The language of the Contract is stated in the Contract Data.

3. Communications.

3.1 Communications between parties shall be effective only in writing. A

notice shall be effective when it is delivered.

4. Personnel.

4.1 The Contractor shall employ the key personnel as prescribed in the offer,
to carry out the functions stated in the Schedule approved by the Project
Manager. The Project Manager will approve any proposed replacement of the
 key personnel only if their relevant qualifications and abilities are
substantially equal to or better than those of the personnel listed in the
Schedule.
4.2 If the Project Manager asks to the Contractor to remove a person who is a
member of the Contractor’s staff or work force, stating the reasons, the
Contractor shall ensure that the person leaves the site within 72 hours and has
no further connections with the works in the Contract.

5. Contractor’s Risks.

5.1 From the Starting Date until the Defects Correction Certificate has been
issued, the risks of personal injury, death and loss of or damage to property
(including without limitation, the Works, Materials and Equipment) are
Contractor’s risks.

6. Insurance.

6.1 The Contractor shall provide all insurance in conformity with the
Albanian laws, which are due to the Contractor’s risks according to the point
5 of this GCC, covering the period from the Start Date to the end of Defects
Liability Period for the following events:

(a) damages to the Works;

(b) loss and/ordamages to Materials and Equipment;
(c) personal injury or death.

7. Contractor to Construct the Works.

7.1 The Contractor shall construct the Works in accordance with

Specifications and Drawings.

8. Program.

8.1 Within the time stated in the Contract Data, the Contractor shall submit to
the Project Manager for approval a Program showing the general methods and a
time schedule according to the proposed period for all the activities in the
Works. The Contractor shall implement the Program according to this schedule.
9. The works to be completed by the Intended Completion Date.

9.1 The Contractor shall carry out the Works in accordance with the Program
submitted by the him and complete them by the Intended Completion Date.

10. Safety.

10.1 The Contractor shall be responsible for the safety of all activities on the
Site.

11. Correction of Defects.

11.1 The Project Manager shall give notice to the Contractor of any defect
before the end of Defect Liability Period. The Defect Liability Period shall be
extended for as long as Defects remain to be corrected.

11.2 Every time notice of a Defect is given, the Contractor shall correct the
notified Defect within the length of time specified by the Project Manager’s
notice.

13. Uncorrected Defects.

13.1 If the Contractor has not corrected a Defect within the time specified in
the Project Manager’s notice, the Project Manager will assess the cost of
Defect’s correction and the Contractor will pay this amount or the Procuring
Entity shall withhold this amount from statements of the estimated value of the
works to be performed.

14. Bill of Quantities.

14.1 The Bill of Quantities shall contain items for the construction,
installation, testing to be done by the Contractor.

14.2 The Bill of Quantities is used to calculate the Contract Price. The
Contract Price is fixed. If the Project Manager will accept any variation, the
payment for the relevant additional amount will be made using the fund for
contingencies included in the items of Bill of Quantities.The Contractor is paid
for the quantity of the work done at the rate in the Bill of Quantities for each
item.

15. Changes in Quantities.

15.1 Ordered changes. Each change in the quantity of the works, ordered by
the Procuring Entity, which will increase the Contract Price, shall be subject to a
written Minute (Order) signed by the Procuring Entity. Such kind of orders will
be prepared based on Procuring Entity’s technical proposal and relevant
calculations made by the Contractor based on unit rates of the Bill of Quantities
for each item.

15.2 Changes in Quantities. If the final quantity of the work done differs
from the quantity in the Bill of Quantities and the estimated value does not
exceed the Provisional Sum included in the Bill of Quantities, the Procuring
Entity shall adjust the rates to allow for the change.

16. Payment Certificates.

16.1 The Contractor shall submit to the Project Manager monthly statements
of the estimated value of the work executed less the cumulative amount certified
previously, the relevant amount of the advance payment, the retention for
defects corrections, as specified in Contract Data.

16.2 The Project Manager shall check the works executed by the Contractor
and shall certify the amount to be paid to the Contractor within 20 days from the
date of payment certificate submission. The value of the work executed shall be
determined by the Project Manager and shall comprise the value of the
quantities of the items in the Bill of Quantities.

15.3 The value of work executed shall include the valuation of Variations and
Compensation Events.

16. Payments.

16.1 The Procuring Entity shall pay the Contractor the amounts certified by
the Project Manager within 8 days of the date of each certificate. If the
Employer makes a late payment, this will be considered a compensation event.

16.2 Items if the Works for which no rate or price has been entered in the
submitted offer, will not be paid for by the Procuring Entity and shall be
deemed covered by other rates and prices in the Contract.

17. Compensation Events.

17.1 The following shall be Compensation Events:

(a) The Procuring Entity does not give access to the Site possession in the
date stated in the Contract Data.

(b) The Project Manager orders a delay or does not issue Drawings,
Specifications or instructions required for execution of the Works on time.

(c) The Project Manager instructs the Contractor to uncover or to carry out
additional tests upon work, which is then found to have Defects.

(d) Public authorities, Procuring Entity or the Investor cause delays and
additional costs for the Contractor.

(e) The delayed advance payment or late payment of certificates.

(f) The Procuring Entity unreasonably delays issuing of Certificate of

Completion.

17.2 The above mentioned events will be compensated as follows:

(a) Regarding to the events prescribed in points 17.1 (a), (b), (c), (d) the
Procuring Entity will postpone the Completion Date foreseen in the Contract
Data.
Also for the events prescribed in points 17.1 (c) and (d) the Procuring
Entity will accept the additional costs.

(b) Regarding to the delays mentioned in points 17.1 (e) and (f) the Procuring
Entity shall pay to the Contractor the interest on the late payment for day of
delay, as stated in the Contract Data.

18. Tax

18.1 The Contractor is obliged to pay all tax duties in accordance with the
Albanian laws.

18.2 The Contractor shall include in the Contract Price all taxes and duties
governing 28 days before the bid opening date. No other additional payment
shall be done by the Procuring Entity.

19. Liquidated damages.

19.1 The Contractor shall pay liquidated damages to the Procuring Entity at
the rate per day stated in the Contract Data for each day that the Completion
Date is later than the Intended Completion Date. The total amount of liquidated
damages shall not exceed the amount defined in the Contract Data. The
Procuring Entity may deduct liquidated damages from payment due to the
Contractor.

20. Advance Payment.

20.1 The Procuring Entity shall make an advance payment to the Contractor of
the amount stated in the Contract Data after transferring on Site by the
Contractor of machineries and equipment necessary for works’ commencement.

20.2 The Contractor is to use the advance payment only to pay for materials
and mobilisation expenses required specifically for execution of the Contract.

20.3 The advance payment shall be repaid monthly by deducting proportionate

amounts form the Certificate of Payment submitted by the Contractor.

21. Security.

21.1 The Procuring Entity shall deduct from each payment due to the
Contractor an amount calculated at the rate stated in the Contract Data as a
guarantee for the quality of the works completed. These amounts will be paid to
the Contractor after the Defeats Liability Period is expired.

22. Cost of Repairs.

22.1 Loss or damage of the Works and Materials to be incorporated in the

Works between the Start Date and the Completion Date shall be remedied by
the Contractor at the Contractor’s costs if the loss or damage arises from the
Contractor’s acts or omissions.

22.2 The works not satisfactorily completed shall be remedied by the

Contractor during the Defects Liability Period, at the Contractor’s costs.

22.3 The Contractor shall not be responsible for repairing of damages caused
by a force major during the execution of the Works.

23. Taking Over.

23.1 After the Completion Date the Contractor shall supply to the Project
Manager with a detailed account of the total amount for the works executed.
The Project Manager shall certify that this account is correct and complete and
submit it to the Procuring Entity within 30 days of receiving the Contractor’s
account. The Procuring Entity shall check the Contractor’s work and notify the
Contractor by a written note for any defects that are found asking the repair of
the defect within 15 days of issuing this note. After the correction of the defect,
if any, and the relevant corrections have been made in the final account, the
Procuring Entity shall issue the Taking Over Certificate, discharging also the
Contractor’s performance security.

24. Termination.

24.1 The Employer, the Procuring Entity or the Contractor may terminate the
Contract if the other party causes a fundamental breach of the Contract.

24.2 Fundamental breaches of the Contract shall include, but shall not be
limited to, the following:

(a) the Contractor stops the work for 15 days when no stoppage of works is
shown on the current program and the stoppage has not been authorised by the
Project Manger;

(b) the Project Manager instructs the Contractor to stop the process of the
work and this instruction is not withdrawn within 15 days or the Contractor
does not agree to pay for the relevant cost of this stoppage;

(c) the Procuring Entity is made bankrupt or goes into liquidation other than
for a reconstruction or amalgamation;

(d) the Project Manager gives notice that failure to correct a particular defect
is a fundamental breach of Contract and the Contractor fails to correct it within
30 days;

(e) the Contractor has delayed the completion of Works by the number of
days for which the maximum amount for liquidated damages can be paid, as
defined in Contract Data.

24.3 When either party to the Contract gives notice of a breach of Contract to
the Employer for a cause other than those listed under sub-clause 24.2, the
Employer shall decide whether the breach is fundamental or not.

24.4 Notwithstanding the above, the Procuring Entity may terminate the
Contract for convenience and shall send to the Contractor a written notice
within 30 days form the Contract termination.
24.5 If the Contract is terminated, the Contractor shall stop the work
immediately, make the Site safe and secure, and leave the Site within 15 days
from receiving of the notice.

25. Payment Upon Termination.

25.1 If the Contract is terminated because of a fundamental breach of Contract

by the Contractor, the Project Manager shall issue a payment 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 to apply to
the value of the work not completed, as indicated in the Contract Data.
Additional Liquidated Damages shall not apply.

25.2 If the Contract is terminated for the Procuring Entity’s convenience or

because of a fundamental breach of Contract by the Procuring Entity, the
Project Manager shall issue a certificate for the value of the work done,
Materials ordered, the reasonable cost of protecting and securing the Works and
less payments received up to the date of the certificate.

26. Property

26.1 All Works executed shall be deemed to be the property of the Procuring
Entity if the Contract is terminated because of the Contractor’s default.

27. Release from Performance.

27.1 If the Contract is frustrated by the outbreak of war or by any other event
entirely outside the control of either the Procuring Entity or the Contractor, the
Procuring Entity shall certify that the Contract has been frustrated. The
Contractor shall make Site safe and stop the work as quickly as possible after
receiving this certificate and shall be paid for all work carried out before
receiving it and for any work carried out afterwards to which a commitment was
made.

28. Resolution of Disputes.

28.1 The Procuring Entity and the Contractor shall make every effort to
resolve amicably by direct informal negotiation any disagreement and dispute
arising between them under or in connection with the Contract. If after thirty
(30) days from the commencement of such informal negotiations, the Procuring
Entity and the contractor have been unable to resolve amicably a Contract
dispute, either party may require that the dispute be referred for resolution to
three independent qualified contractors, one chosen by the Procuring Entity and
one chosen by the Contractor and the third chosen by an appropriate
professional body. The three should arrive at a solution satisfactory to the
Procuring Entity and the Contractor. In case of further disagreement, either
party can take the matter to arbitration in accordance with the Law governing
the Contract. The place of arbitration will take place will be stated in the
Contract Data.

29. Costs Changes.

29.1 In case of any change in the governing legislation after the fixed date 28
days before the bid opening date, that might cause to the Contractor additional
costs, these costs will be defined by the Project Manager and the contract price
will be adjusted. The Contractor shall be notified by the Project Manager for the
above mentioned changes.

30. Contract Validity.

30.1 This Contract along with each or all annexes to the contract will be
considered as valid documentation only after their approval by the Employer.
Note. In case of Lump Sum contracts (as specified in the Contract Data):

- Clause 1.2 will be replaced as follows:

This is a Lump Sum Contract based on Priced Activity Schedule, as

specified in the Contract Data.

- Clause 13.2 will be replaced as follows:

The Bill of Quantities is 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.

- Clause 14.2 will be deleted.

- Clause 16.2 will be replaced as follows:

Items for which no rate and price is entered the Bidder, shall be deemed
covered by the other rates and prices in the Activity Schedule.