CONDITIONS OF CONTRACT AND

CONTRACT FORMS

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 Table of Clauses
General ..................................................................................................................................... 58
1. Definitions ........................................................................................................................... 58
2. Interpretation ........................................................................................................................ 59
3. Language and Law ................................................................................................................ 60
[Link] Agreement ............................................................................................................... 60
5. Assignment .......................................................................................................................... 60
6. Care and Supply of Documents ............................................................................................... 60
7. Confidential Details............................................................................................................... 61
8. Compliance with Laws .......................................................................................................... 61
9. Joint and Several Liability ...................................................................................................... 61
10. Project Manager's Decisions ................................................................................................. 61
11. Delegation .......................................................................................................................... 62
12. Communications ................................................................................................................. 62
13. Subcontracting .................................................................................................................... 62
14. Other Contractors ................................................................................................................ 62
15 Personnel and Equipment ...................................................................................................... 62
16. Employer’s and Contractor's Risk .......................................................................................... 63
17. Employer’s Risks ................................................................................................................ 63
18. Contractor’s Risks ............................................................................................................... 63
19. Insurance ........................................................................................................................... 63
20. Site Investigation Reports ..................................................................................................... 64
21. Contractor to Construct the Works ......................................................................................... 64
22. The Works to Be Completed within intended Completion Date ................................................. 64
23. Design by contractor and Approval by the Project Manager ...................................................... 64
24. Safety, Security and Protection of the Environment ................................................................. 64
25. Discoveries......................................................................................................................... 65
26. Possession of the Site........................................................................................................... 65
27. Access to the Site ................................................................................................................ 65
[Link], Inspections and Audits........................................................................................ 65
29. Dispute Settlement .............................................................................................................. 66
30. Procedures for Disputes........................................................................................................ 66
B. Staff and Labor .................................................................................................................... 66
31. Forced Labor ...................................................................................................................... 66
32. Child Labor ........................................................................................................................ 66
[Link]-discrimination and Equal Opportunity ............................................................................. 66
B1. Time Control ...................................................................................................................... 66
34. Program ............................................................................................................................. 66
35. Extension of the Intended Completion Date ............................................................................. 67
36. Acceleration ....................................................................................................................... 67
37. Delays Ordered by the Project Manager ................................................................................. 67
38. Management Meetings ......................................................................................................... 67
39. Early Warning..................................................................................................................... 67
C. Quality Control .................................................................................................................... 68
40. Identifying Defects .............................................................................................................. 68

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 41. Tests 68
[Link] of Defects ............................................................................................................ 68
[Link] Defects ............................................................................................................. 68
D. Cost Control ......................................................................................................................... 68
44. Contract Price ..................................................................................................................... 68
45. Changes in the Contract Price ............................................................................................... 68
46. Variations .......................................................................................................................... 69
[Link] Flow Forecasts ............................................................................................................. 69
[Link] Certificates ............................................................................................................. 69
49. Payments ............................................................................................................................ 70
[Link] Events ........................................................................................................... 70
51. Tax 71
52. Currency ............................................................................................................................ 71
53. Price Adjustment ................................................................................................................. 71
54. Retention ............................................................................................................................ 73
55. Liquidated Damages ............................................................................................................ 74
56. Bonus ................................................................................................................................ 74
57. Advance Payment ................................................................................................................ 74
58. Securities ........................................................................................................................... 75
59. Day works .......................................................................................................................... 75
60. Cost of Repairs ................................................................................................................... 75
F. Force Majeure ...................................................................................................................... 75
61. Definition of Force Majeure.................................................................................................. 75
62. Notice of Force Majeure ....................................................................................................... 76
63. Duty to Minimize Delay ....................................................................................................... 76
64. Consequences of Force Majeure ............................................................................................ 76
65. Force Majeure Affecting Subcontractor .................................................................................. 76
[Link] Termination, Payment and Release ............................................................................ 77
67. Release from Performance .................................................................................................... 77
G. Finishing the Contract ......................................................................................................... 77
68. Completion ........................................................................................................................ 77
69. Taking Over ....................................................................................................................... 78
70. Final Account ..................................................................................................................... 78
71. Operating and Maintenance Manuals ..................................................................................... 78
72. Termination ........................................................................................................................ 78
[Link] and Corruption ............................................................................................................ 79
74. Black Listing ...................................................................................................................... 80
75. Payment upon Termination ................................................................................................... 80
76. Property ............................................................................................................................. 81
[Link] from Performance ..................................................................................................... 81
78. Suspension of DP Loan/Credit/Grant ..................................................................................... 81
79. Eligibility ........................................................................................................................... 81
[Link]’s Duties and Authorities ................................................................................ 82
[Link] and Spoil Dumps ..................................................................................................... 82
82. Local Taxation .................................................................................................................... 82
83. Value Added Tax ................................................................................................................ 82
84. Income Taxes on Staff ......................................................................................................... 82
85. Duties, Taxes and Royalties .................................................................................................. 82
86. Member of Government, etc, not Personally Liable ................................................................. 83

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87. Approval of Use of Explosives .............................................................................................. 83
89. Permission for Blasting ........................................................................................................ 83
[Link] of Explosives........................................................................................................... 83
91. Traffic Diversion ................................................................................................................. 83

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Section VII: General Conditions of Contract

SHIVRAJ MUNICIPALITY
Office of municipal executive

34/SM/NCB/RD/082/83

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 General Conditions of Contract
This Section provides the General Conditions of Contract that will apply to the Contract for which the
Biding document is issued.
General
1. Definitions 1.1 Boldface type is used to identify defined terms.
(a) The Accepted Contract Amount means the amount accepted in the Letter of
Acceptance for the execution and completion of the Works and the remedying of
any defects.
(b) The Activity Schedule is a schedule of the activities comprising the construction,
installation, testing, and commissioning of the Works in a lump sum contract. It
includes a lump sum price for each activity, which is used for valuations and for
assessing the effects of Variations and Compensation Events.
(c) Bill of Quantities means the priced and completed Bill of Quantities forming part of
the Bid.
(d) Compensation Events are those defined in GCC 50 hereunder.
(e) The Completion Date is the date of completion of the Works as certified by the
Project Manager, in accordance with GCC 68.1.
(f) The Contract is the Contract between the Employer and the Contractor to execute,
complete, and maintain the Works. It consists of the documents listed in GCC 2.3 below.
(g)The Contractor is the party whose Bid to carry out the Works has been accepted
by the Employer.
(h)The Contractor’s Bid is the completed bidding document submitted by the
Contractor to the Employer.
(i)The Contract Price is the Accepted Contract Amount stated in the Letter of
Acceptance and thereafter as adjusted in accordance with the Contract.
(j) Days are calendar days; months are calendar-months.
(k) Dayworks are varied work inputs subject to payment on a time basis for the
Contractor’s employees and Equipment, in addition to payments for associated
Materials and Plant.
(l) A Defect is any part of the Works not completed in accordance with the Contract.
(m) The Defects Liability Certificate is the certificate issued by Project Manager upon
correction of defects by the Contractor.
(n) The Defects Liability Period is the period calculated from the Completion Date
where the Contractor remains responsible for remedying defects.
(o) Drawings include calculations and other information provided or approved by the
Project Manager for the execution of the Contract.
(p) The Employer is the party who employs the Contractor to carry out the Works, as
specified in the SCC.
(q) Equipment is the Contractor’s machinery and vehicles brought temporarily to the
Site to construct the Works.
(r) Force Majeure means an exceptional event or circumstance: which is beyond a Party's
control; which such Party could not reasonably have provided against before entering into

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 the Contract; which, having arisen, such Party could not reasonably have avoided or
overcome; and, which is not substantially attributable to the other Party.
(s) The Initial Contract Price is the Contract Price listed in the Employer’s Letter of
Acceptance.
(t) In writing or written means hand written, type written, printed or electronically
made, and resulting in permanent record.
(u) 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 SCC. The Intended Completion Date may be revised only by the Project Manager
by issuing an extension of time or an acceleration order.
(v) Letter of Acceptance means the formal acceptance by the Employer of the Bid and
denotes the formation of the contract at the date of acceptance.
(w) Materials are all supplies, including consumables, used by the Contractor for
incorporation in the Works.
(x) Party means the Employer or the Contractor, as the context requires.
(y) SCC means Special Conditions of Contract
(aa) Plant is any integral part of the Works that shall have a mechanical, electrical,
chemical, or biological function.
(bb) The Project Manager is the person named in the SCC (or any other competent
person appointed by the Employer and notified to the Contractor, to act in replacement of
the Project Manager) who is responsible for supervising the execution of the Works and
administering the Contract.
(cc) Retention Money means the aggregate of all monies retained by the Employer
pursuant to GCC 54.1.
(dd) Schedules means the document(s) entitled schedules, completed by the Contractor
and submitted with the Letter of Bids, as included in the Contract. Such document may
include the Bill of Quantities, data, lists, and schedules of rates and/or prices.
(ee) The Site is the area defined as such in the SCC.
(ff) Site Investigation Reports are those that were included in the bidding documents
and are factual and interpretative reports about the surface and subsurface conditions at the
Site.
(gg) Specification means the Specification of the Works included in the Contract and
any modification or addition made or approved by the Project Manager.
(hh) The Start Date is given in the SCC. It is the latest date when the Contractor shall
commence execution of the Works. It does not necessarily coincide with any of the Site
Possession Dates.
(ii) 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, which includes work on the Site.
(jj) Temporary Works are works designed, constructed, installed, and removed by
the Contractor that are needed for construction or installation of the Works.
(kk) A Variation is an instruction given by the Project Manager which varies the Works
(ll) The Works are what the Contract requires the Contractor to construct, install, and turn
over to the Employer, as defined in the SCC.
2. Interpretation
2.1 In interpreting these GCC, singular also means plural, male also means female or neuter,
and the other way around. Headings have no significance. Words have their normal
meaning under the language of the Contract unless specifically defined. The Project

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 Manager shall provide instructions clarifying queries about these GCC.

2.2 If sectional completion is specified in the SCC, references in the GCC 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).

2.3 The documents forming the Contract shall be interpreted in the following order of priority:
(a) Contract Agreement,
(b) Letter of Acceptance,
(c) Letter of Bid,
(d) Special Conditions of Contract,
(e) General Conditions of Contract,
(f) Specifications,
(g) Drawings,
(h) Bill of Quantities (or Schedules of Prices for lump sum contracts), and
(i) Any other document listed in the SCC as forming part of the Contract.
3. Language and Law
3.1 The language of the Contract and the law governing the Contract are stated in the SCC.

3.2 Throughout the execution of the Contract, the Contractor shall comply with the import of
goods and services prohibitions in the Employer’s country when
(a) by an act of compliance with a decision of the United Nations Security Council
taken under Chapter VII of the Charter of the United Nations, the Employer’s Country
prohibits any import of goods from, or any payments to, a particular country, person, or
entity. Where the Employer’s country prohibits payments to a particular firm or for
particular goods by such an act of compliance, that firm may be excluded.
[Link] Agreement
4.1 The Parties shall enter into a Contract Agreement within 15 days after the Contractor
receives the Letter of Acceptance, unless the Special Conditions establish otherwise.
The Contract Agreement shall be based upon the attached Contract forms in Section IX.

4.2 Without altering the basic nature or scope of work, the contract may be amended upon
mutual written consent as per prevailing Public Procurement Law.
5. Assignment
5.1 Neither Party shall assign the whole or any part of the Contract or any benefit or
interest in or under the Contract. However, either Party
(a) may assign the whole or any part with the prior agreement of the other Party,
at the sole discretion of such other Party; and
(b) may, as security in favor of a bank or financial institution, assign its right to
any moneys due, or to become due, under the Contract.
6. Care and Supply of
6.1 The Specification and Drawings shall be in the custody and care of the Employer.

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Documents Unless otherwise stated in the Contract, one copy of the Contract and of each
subsequent Drawing shall be supplied to the Contractor, who may make or request
further copies at the cost of the Contractor.

6.2 Each of the Contractor’s Documents shall be in the custody and care of the Contractor,
unless and until taken over by the Employer. Unless otherwise stated in the Contract,
the Contractor shall supply to the Engineer six copies of each of the Contractor’s
Documents.

6.3 The Contractor shall keep, on the Site, a copy of the Contract, publications named in the
Specification, the Contractor’s Documents (if any), the Drawings and Variations and other
communications given under the Contract. The Employer’s Personnel shall have the right
of access to all these documents at all reasonable times.

6.4 If a Party becomes aware of an error or defect in a document which was prepared for use
in executing the Works, the Party shall promptly give notice to the other Party of such
error or defect.
7. Confidential
7.1 The Contractor’s and the Employer’s Personnel shall disclose all such confidential and
Details other information as may be reasonably required in order to verify the Contractor’s
compliance with the Contract and allow its proper implementation.

7.2 Each of them shall treat the details of the Contract as private and confidential, except to
the extent necessary to carry out their respective obligations under the Contract or to
comply with applicable Laws. Each of them shall not publish or disclose any particulars
of the Works prepared by the other Party without the previous agreement of the other
Party. However, the Contractor shall be permitted to disclose any publicly available
information, or information otherwise required to establish his qualifications to compete
for other projects.

7.3 Notwithstanding the above, the Contractor may furnish to its Subcontractor(s) such
documents, data and other information it receives from the Employer to the extent
required for the Subcontractor(s) to perform its work under the Contract, in which event
the Contractor shall obtain from such Subcontractor(s) an undertaking of confidentiality
similar to that imposed on the Contractor under this Clause.
8. Compliance with
8.1 The Contractor shall, in performing the Contract, comply with applicable Laws of
Laws Nepal.
9. Joint and Several
9.1 If the Contractor is a joint venture of two or more entities , all such entities shall be
Liability jointly and severally liable to the Employer for the fulfillment of the provisions of the
Contract, and shall designate one of such persons to act as a leader with authority to
bind the joint venture. The contractor shall not handover the responsibility of the
contract to any one member or some members of Joint Venture or any other
parties, not involved in the contract. The composition or the constitution of the joint
venture shall not be altered without the prior consent of the Employer.
10. Project Manager's
10.1 Except where otherwise specifically stated, the Project Manager shall decide contractual
Decisions matters between the Employer and the Contractor in the role representing the Employer.

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11. Delegation
11.1 The Project Manager may delegate any of his duties and responsibilities to other people
after notifying the Contractor, and may cancel any delegation after notifying the
Contractor.
12. Communications 12.1 Communications between parties that are referred to in the Conditions shall be effective
only when in writing. Wherever these Conditions provide for the giving or issuing of
approvals, certificates, consents, determinations, notices and requests, these
communications shall be:
(a) in writing and delivered by hand (against receipt), sent by mail or courier, or transmitted
using any of the agreed systems of electronic transmission as stated in the SCC; and
(b) delivered, sent or transmitted to the address for the recipient’s communications as stated
in the Contract. However:
(i) if the recipient gives notice of another address, communications shall thereafter be
delivered accordingly; and
(ii) if the recipient has not stated otherwise when requesting an approval or consent, it
may be sent to the address from which the request was issued.
Approvals, certificates, consents and determinations shall not be unreasonably withheld or
delayed.

12.2 A Notice shall be effective when delivered or on the Notice’s effective date, whichever is
later.
13. Subcontracting
13.1 A list of approved Subcontractors including its value/works is included as Article 2 (k) of
contract Agreement. Approval by the Employer for any of the Subcontractors shall not
relieve the Contractor from any of its obligations, duties, or responsibilities under the
contract.
14. Other Contractors
14.1 The Contractor shall cooperate and share the Site with other contractors, public
authorities, utilities, and the Employer between the dates given in the Schedule of Other
Contractors, as referred to in the SCC. The Contractor shall also provide facilities
and services for them as described in the Schedule. The Employer may modify the
Schedule of Other Contractors, and shall notify the Contractor of any such modification
15 Personnel and
15.1 The Contractor shall employ the key personnel and use the equipment identified in its
Equipment
Bid to carry out the Works, or other personnel and equipment approved by the Project
Manager. The Project Manager shall approve any proposed replacement of key personnel
and equipment only if their relevant qualifications or characteristics are substantially
equal to or better than those proposed in the Bid.

15.2 If the Project Manager asks 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 seven days and has no further connection with the work in
the Contract.

15.3 If the Employer, Project Manager, or Contractor determines, that any employee of the
Contractor be determined to have engaged in corrupt, fraudulent, collusive, coercive, or
other prohibited practices during the execution of the Works, then that employee shall

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