Corporación Dominicana de Empresas Eléctricas

Estatales (CDEEE)

Project for the Rehabilitation of Electricity Distribution Networks

BID IDB Loan No. 2042/OC-DR

Project Implementation Unit (PIU)

COMPONENT No. 1
RESTORATION OF DISRIBUTION NETWORKS

Licitación Pública InternacionalInternational Public Tender

(LPI-01/2010) para elfor the “Suministro e Instalación de Bienes
para la Rehabilitación de Circuitos de Media y Baja Tensión en:
Lote I Zona Santo Domingo, San Cristóbal (EDESUR), Lote II
Zona Santiago (EDENORTE), Lote III Zona Este II
(EDEESTE)Supply and Installation of Goods Required for the
Rehabilitation of Mid and Low Tension Circuit in: Lot I Santo
Domingo Zone, San Cristobal (EDESUR), Lot II Santiago Zone
(EDENORTE), Lot II East II Zone (EDESTE)”

SANTO DOMINGO

April, 2011
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Contract for the Supply and Installation of Goods and Related

Services

For the Rehabilitation of Distribution Networks in Specific areas of

EDEESTE (Lot III)

LPI-01/2010

Between

Corporación Dominicana de Empresas Eléctricas Estatales (CDEEE)

and

Korea Electric Power Corporation, KEPCO

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April 07, 2011

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ÍIndex

I. Contract..................................................................................................................................4
II. The General Conditions of the Contract;............................................................................12
1. Definitions......................................................................................................................12
2. Contract Documents.......................................................................................................13
3. Fraud and Corruption.....................................................................................................13
4. Interpretation..................................................................................................................17
5. Language........................................................................................................................18
6. Joint Venture, Consortium or Association (APCA).......................................................18
7. Elegibility.......................................................................................................................19
8. Notifications...................................................................................................................20
9. Applicable Law..............................................................................................................20
10. Dispute Resolution.........................................................................................................20
11. Scope of the provisions..................................................................................................21
12. Delivery and Documents................................................................................................21
13. Contractor’s Responsibilities.........................................................................................21
14. Contract Price.................................................................................................................21
15. Payment Terms...............................................................................................................21
16. Taxes and Duties............................................................................................................22
17. Compliance Assurance...................................................................................................22
18. Copyright........................................................................................................................22
19. Confidentiality of Information.......................................................................................23
20. Subcontracting................................................................................................................24
21. Specifications and Standards..........................................................................................24
22. Packing and Documents.................................................................................................24
23. Insurance........................................................................................................................25
24. CarriageTransportation..................................................................................................25
25. Inspections and Testing..................................................................................................25
26. Settlement for Damages.................................................................................................26
27. Guarantee of the Goods..................................................................................................27
28. Compensation for Patent Rights.....................................................................................28
29. Limitation of LiabilityLimited Liability........................................................................29
30. Changes in Laws and Regulations.................................................................................29
31. Force Majeure................................................................................................................30
32. Change Order and Amendments to the Contract...........................................................30
33. Extention of Time..........................................................................................................31
34. Completion.....................................................................................................................31
35. Assignment.....................................................................................................................33
III. The Special Conditions of the Contract.............................................................................34
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I. Contract

Contract for the Supply and Installation of Goods

No. 000/2011

The CORPORACION DOMINICANA DE EMPRESAS ELECTRICAS ESTATALES

(CDEEE), Autonomous Public Service Institution, created by virtue of General Electricity
Law No. 125-01, dated July 26 of the year 2001, as amended, with registered office located
at the intersection of Ave. Independencia Avenue, Corner Fray Cipriano de Utrera Street,
Centro de los Héroes de Constanza, Maimón and Estero Hondo, of this city of Santo
Domingo de Guzmán, National District, duly represented by its Secretary of State, Executive
Vice President, LIC. CELSO JOSE MARRANZINI PEREZ, Dominican, of legal age,
married, registered and resident in this city, holder of Electoral and Identity Card No. 001-
0101702-8, who is authorized to sign this contract in accordance with Decree No. 648-02,
dated August 21 of the year 2002; the Decree No. 599-09, of August 16 of 2009, and the
___________Resolution, Law ______ issued by the Governing Council at its meeting on
__________; which hereinafter shall be called “ THE CONTRACTING PARTY and/or
CDEEE”;

and, on the other part KOREA ELECTRIC POWER CORPORATION (KEPCO),

commercial company constituted under the laws of the Republic of Korea, with its head
office at 411, Yeongdongdaero, Gangnam-gu, Seoul 135-791, Korea; duly represented under
Special Power dated _____, by its Vice President, Mr. _____________, Korean, of legal age,
holder of Passport No. _________, and with offices in Santo Domingo, Dominican Republic,
situated at Mario Garcia Alvarado Street, No. 63, Edificio ESD, Ensanche Quisqueya ; who
henceforward in this contract will be called “THE CONTRACTOR” .

THE CONTRACTING PARTY and/or CDEEE and THE CONTRACTOR, hereinafter

in this contract shall be identified individually by their respective names and collectively as
“The Parties”.

INTRODUCTION:

(a) That on March 27, 2009, the Dominican Republic, represented by the Ministry
of Finance and the Inter-American Development Bank (hereinafter referred to
as “the Bank”), signed Loan Agreement No.2042/OC-DR (the “Loan
Agreement” or “the Loan”), for the partial financing of the “Project for the
Rehabilitation of Electricity Distribution Networks” (the “Project”). It was
approved by the National Congress through Resolution No.169-09, issued by
the Executive on May 30, 2009 published in the Official Gazette No. 10522,
of June 4, 2009.
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(b) That pursuant to Clauses 3.02 (a) and 4.07 (b) of the Special Conditions of the
Loan Contract, the Dominican Republic, represented by the Finance Ministry,
signed with the CDEEE the Subsidiary Agreement No. 185/09, dated
December 17, 2009, to enable the latter to implement Components 1, 2 and 3
of the Project, in terms and conditions acceptable to the Bank. It was approved
by the Honorable Board of Administration of the CDEEE by way of the Third
Resolution, Minute No. 197, of December 10, 2009.

(c) That under the terms of the Loan Agreement, clause 3.02 (a) and 4.07 (b), the
CDEEE and EDEESTE signed the Inter-Agency Participation Agreement No.
187/09, of December 17, 2009, for the implementation of the sub-projects to
be carried out by the Distributing Company EDEESTE, with a view to
improve the Cash Recovery Index (CRI) and to improve the quality of
electricity supply to the users of the service.

(d) That the Contracting Party, through the Project Implementation Unit for the
Rehabilitation of Electricity Distribution Networks (PIU), called for eligible
bidders to submit sealed offers for the supply and installation of the goods
required for the rehabilitation of medium and low tension networks in specific
areas of EDEESTE.

(e) That the Contracting Party, on August 10, 2010, published the invitation in a
national daily newspaper and in the Contracting Party’s web site, inviting
eligible bidders to submit offers for the provision and installation of the goods
necessary for the rehabilitation of the distribution networks in specific areas of
Electricity Distribution Company Empresa Distribuidora de Electricidad del
Este, EDEESTE, payable with funds provided by the Bank.

(f) That the Contractor declared to the Contracting Party by way of hisits offer
submitted on November 11, 2010, that heit possessed the experience and
technical capacity as well as the financial ability required and that he had the
personnel and equipment necessary for "The Project”, had and agreed to
provide and install the goods on the terms set out in this Contract;

(g) That the Contractor has been awarded the contract for the provision and
installation of certain goods defined in this Contract (Hereinafter referred to as
“The Goods”), as part of the implementation of Component No. 1 of “The
Project”: Rehabilitation of the Distribution Networks by CDEEE; Items s-
i.1.3, of “Pprocurement Plan” of the Project;

(h) That the Contracting Party has received financing from the Bank to cover the
costs of the provision and installation of the goods and that the Contracting
Party intends to apply part of the proceeds of this financing to payments
 7

eligible under this contract provided that (i) the Bank will only make
payments at the request of the Contracting Party and with prior approval of the
Bank, (ii) such payments are subject to, in all respects, to the terms and
conditions of the Loan Agreement and (iii) no one other that the Contracting
Party shall have any rights under the Loan Agreement or any right to seek
financing funds;

(i) That the Contracting Party requested to the Bank its no-objection to the
Evaluation Report corresponding to the acquisition of the Goods, both its
supply and installation, this being accepted by communication CDRC-
251/2011 of February 21, 2011, which consequently allowed continuation
with the process.That the Contracting Party has requested the non objection by
the Bank to the Evaluation Report relating to the acquisition of the Goods,
including provision as well as installation, this being accepted through
communication CDRC-251/2011 dated February 21, 2011,consequently
permitting continuing with the process.

(j) That the Contracting Party, based on the results of the Evaluation Report,
notified the Contractor through communication No. UEP-075-11, dated March
11, 2011, the decision to award him Lot III, corresponding to the rehabilitation
of the medium and low voltage circuits in specific areas of EDEESTE.

(k) The Parties hereby acknowledge and agree the following:

1. That the documents attached to this Agreement shall be considered an integral

and complementary part thereof and all its parts are correlative,
complementary and mutually explanatory so the Contract mustshall be read as
a whole, namely:

a) This The present Contract Form;

b) The Special Conditions of the Contract;

c) The General Conditions of the Contract;

d) The Technical Requirements (including the List of Technical

Requirements and the
Technical Specifications);

e) The Contractor’s Offer and the Price List;

f) The Notice of Award issued by the Contracting Party.

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2. That the mutual rights and obligations of the Contracting Party and the
Contractor are established in the contract, particularly:

a) The Contractor shall provide the provision and installation of the

goods in accordance with the provisions of the Contract and its
attachments, in coordination with the Project Implementation Unit
(PIU) of the Corporación Dominicana de Empresas Eléctricas
Estatales(CDEEE) and with the participation of the Electricity
Distribution Company EDEESTE, as the body supervising the
execution of the works, ensuring quality and efficiency in the
mandated procedures, and

b) The Contracting Party shall make payments to the Contractor in

accordance with the stipulations of the Contract.

3. That this Contract and its respective integral annexes and attachments shall
prevail over any other document. In the event of any discrepancy or
inconsistency between the documents of the Contract, the documents shall
prevail in the order listed above.

THEREFORE, and on the understanding that the above preamble is an integral part of this
contract, “THE PARTIES”, freely and voluntarily,

HAVE AGREED AND COVENANTED THE FOLLOWING:

ARTICLE ONE: THE PARTIES accept the definitions contained in paragraph 1.1 of the
General Provisions of the General Conditions of the Contract. (hereinafter refered to as the
GCC)

ARTICLE TWO: OBJECT OF THE CONTRACT

By this contract, THE CONTRACTOR is obliged to provide and install with all the
property rights and guarantees, the goods offered and accepted as the result of International
Competitive Bidding (LPI-01/2010) for the rehabilitation of the medium and low voltage
circuits in the specific areas in the EDESUR concession, according to the description,
characteristics, quantities and specifications contained in the offer documents and in the
accepted offer. (annexeds to the present Contract).

ARTICLE THREE: CONTRACT PRICE

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The price agreed between THE PARTIES for the provision and installation of the goods and
related services related to the object of this contract is for the sum of_____________
(USD$___________), (hereinafter called the “Contract Price”). This price includes all
supplies and the works and installation, taxes, levies, and charges of any whatever kind as
well as any other expenses arising out of the fulfillmentfulfilment of the obligations
contracted under the present Contract, for whatever concept,

This sum shall be paid by the Contracting Party to the Contractor in the following manner:

a) Advance Payment: Ten percent (10%) of the Contract Price shall be paid within
thirty (30) days following the signing of the Contract, against payment request and
the presentation of a bank guarantee issued by a financial institution of the formal
sector and with representation in the Dominican Republic for an amount equivalent
and valid until the goods have been delivered in the manner set out in the bidding
documents or in such manner as the Contracting Party may find acceptable. The bank
guarantee shall be issued in the same currency as the Advance PaymentAdvance.

(b) Partial payments against delivery and installation of the goods: Eighty
percent (80%) of the price of the goods delivered and installed, as set out in the
Contract, will be paid against the presentation of the documents specified in
clause 12 of the GCC. These percentages will be split divided by paying the
corresponding percentages each time that partial deliveries and installations are
completed, subject to the satisfactory acceptance by the Contracting Party or hisits
representative, until the 80% is has been completed. These partial and periodic
payments shall be processed according to the requests for approval of payment
drawn up with the participation of the Supervision.
(c) On acceptance of the goods: The Tten per cent (10%) remaining of the Contract
Price, shall be paid within thirty (30)days following receipt and installation of the
goods, as well as the completion of the related services, that are the subject of to
this contract against the presentation of a payment request accompanied by an
acceptance certificate issued by the Supervisor. This payment corresponds to the
stage or final payment, prepared by the Contractor and the Supervisor: with
verification by the Audit Firm. The final settlement corresponds to the complete
Project and not to partial approvals. The final invoice will be agreed and
established by the results of the “As Built” in regard to control of facilities. (This
payment shall constitute the final settlement of the Project, therefore, the final
invoice mustshall be agreed and established by the results of “As-Built” reports
relating relative to the control of the facilitiesinstallations.).

ARTICLE FOUR: TIMELINE FOR THE DELIVERY FOR OF THE GOODS AND
RELATED SERVICES.
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THE CONTRACTOR agrees to deliver the goods and perform the related services under
this contract after signing the Contract, according to the Delivery Plan submitted in the
accepted offer, and which forms an integral part of the Contract.

ARTICLE FIVE: THE CONTRACTOR warrants and declares that:

A) The goods to be supplied under this contract are new, without use, are of the latest or
current modeltechnology, and are free from material defects and in accordance with
current market standards, under conditions of normal use and service, and are in
accordance with the requirements of the bidding documents as specified in the
accepted offer. The validity period of validity of the warranty of the goods shall be as
specified in the accepted offer.

B) The Contractor has and maintains holds in its possession all the specifications,
drawings and relevant documents (including by way of example and without limitation,
the work specifications) necessary to fulfillfulfil its obligations for the supply and
installation, as well the price and periods specified in the Contract and documents that
form an integral part thereof.

C) Holds full ownership rights and powers and authorizations to provide and install the
goods required for the rehabilitation of the medium and low voltage circuits in the
EDESTE concession areas stipulated in this Contract and in accordance with the existing
laws of the Dominican Republic.

D) Supplies and installations are to be carried out in a professional and efficient manner.

E) The Guarantees undertaken in this Contact shall Project protect at all times THE
CONTRACTING PARTY and shall not be considered exclusive are not exclusive of
any other remedies it may have, at law or in equity, to THE CONTRACTOR. The
inspection, approval, acceptance, use or payment by THE CONTRACTOR of the
whole or any part of the Goods and Services will shall in no way affect the warranty
rights.

C) Is obliged to comply with all applicable labor laws and regulations in force relating to
labor relations.

ARTICLE SIX: APPLICABLE LAW.

This Agreement and all its documents shall be interpreted in all respects in accordance with
Common Law of the Dominican Republic.
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ARTICLE SEVEN: RELATIONSHIP BETWEEN THE PARTIES.

THE CONTRACTING PARTY and THE CONTRACTOR are contractually independent

parties. Nothing contained in the Contract and its integral documents shall be deemed to
create a real partnership, joint venture, franchise, employment or agency between the Parties.
Neither Party is authorized or entitled to bind or obligate the other Party beyond that agreed
in this Contract and its integral documents. THE CONTRACTOR acknowledges that
neither it nor of its employees has any labor ties to the CONTRACTING PARTY and that
its relations are limited to the purposes of this present Contract. Therefore, THE
CONTRACTOR declares that this Agreement does not create or establish any labor
subordination to the CONTRACTING PARTY, as stipulated in the Labor Code of The
Dominican Republic.

All personnel that THE CONTRACTOR uses to carry out the works shall be at its own cost
and liability and, in hisits capacity as employer, will be liable for such personnel, maintaining
THE CONTRACTOR as free and harmless. In no event shall THE CONTRACTOR allow
any of hisits employees to act as an employee of THE CONTACTING PARTY and as such,
is obliged to respond to any claims, that as a result of the execution of these works, may be
made by any person who has worked under its management or any third party as a result of
it.

ARTICLE EIGHT: LÍIMITS OF LIABILITY.-

THE CONTRACTOR shall at all times, hold indemnified and hold harmless the
CONTRACTING PARTY and/or EDE_ESTE Dominicana S.A. and their officers, directors
and employees, for any losses, directly or indirectly incurred, actual or potentialpotential due
to as the result of damage, injury or death to persons people or damage to property arising
from any negligent or intentional act or omission by THE CONTRACTOR or its
subsidiaries in the execution of the contracted works. The Contractor shall at hisits own cost,
arrange for all insurance required under Dominican Law, related to the execution of the
contracted works.

THE CONTRACTING PARTY shall not be liable for any damage or loss caused by THE
CONTRACTOR when performing the works. Therefore, THE CONTRACTOR has the
obligation to indemnify and compensate such damages within a reasonable period and at the
first properly supported demandclaim.

THE CONTRACTING PARTY shall not be liable for errors committed by The
CONTRACTOR against third parties for their negligence when carrying out the agreed
work under this Agreement.

ARTICLE NINE: SUBSISTENCE OF RIGHTS AND OBLIGATIONS.

Any provision of the Contract and its supporting documents which by their nature, may be
reasonably expected to be fulfilled, after completion thereof, shall remain in force and shall
be payable after such completion.
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ARTICLE TEN ELECTION OF ADDRESS.

For all notifications and matters related to this Contract, the Parties select as their addresses,
the following:

THE CONTRACTING PARTY: Ave. Independencia No. 604, Corner Fray Cipriano de
Utrera, Centro de los Héroes de Constanza, Maimón and Estero Hondo. Edificio de la
CDEEE, 3er. Piso.

THE CONTRACTOR:
411, Yeongdongdaero, Gangnam-gu, Seoul 135-791, Korea; and
Calle Mario García Alvarado, No 63, Edificio ESD, Ensanche Quisqueya, Santo
Domingo, República Dominicana.

ARTICLE ELEVEN: For all other legal purposes arising out of this Agreement, the Parties,
agree to be subject to the obligations agreed between the parties according to the agreed
General and Special Conditions of the Contract and the offer made and accepted in the
bidding process. For matters not covered by the Agreement, the Parties are subject to the
common law.

ARTICLE TWELVE: AMENDMENTS TO THE AGREEMENT.

THE PARTIES may amend the terms of the present Agreement, by drawing up a written
amendment signed by both Parties.

ARTICLE THIRTEEN: The term of this Contract for the supply and installation shall be
for up to two (2) years, subject towith compliance subjet toand Force Majeure.

SIGNED AND SEALED in three (3) originals, each of the same tenor and effect, one for
each of the Parties and one for registrationregistry purposes, in the city of Santo Domingo de
Guzmán, Distrito Nacional, Capital of the Dominican Republic, on ___________ (___) day
of the month of April of the year Two Thousand and Eleven (2011).

For and on behalf of the For and on behalf of

Corporación Dominicana de Korea Electric Power
Empresas Eléctricas Estatales Corporation, KEPCO
(CDEEE)

Lic. Celso José Marranzini Pérez Mr. __________

Secretary of State Vice President of KEPCO
Executive Vice President Representative, Authorized Agent
 13

I, _______________________________________, Registration Number. the undersigned

________, Lawyer, Notary Public in the National District, certify and attest that the
signatures which appear at the bottom of this document were made freely and voluntarily in
my presence by LIC. CELSO JOSE MARRANZINI PEREZ and ________, whose
personal details are held on file and, who have stated that they are the same as they are
accustomed to use in both public and private life. In the city of Santo Domingo de Guzmán,
National District, Capital of the Dominican Republic on _____________ (__) day and month
of April of the year Two Thousand and Eleven (2011).

_______________________
PUBLIC NOTARY
NOTARY PUBLIC

II. The General Conditions of the Contract;

1. Definitions 1.1. The following words and expressions have the meanings
hereby assigned to them:
(a) “Bank” means Inter-American Development Bank
(IDB) or any fund managed by the Bank.
(b) “Contract” means the Agreement between The
Contracting Party and The Contractor, together with
the Contract documents referred to therein, including
all annexes and appendices, and all other documents
incorporated here by reference.
(c) Contract Documents” means documents listed in the
Agreement, including any amendments.

(d) “Contract Price” means the price payable to the

Contractor as set out in the Agreement, subject to the
conditions and adjustments or deductions thereto as
appropriate according to the terms of the Contract.
(e) “Day” means calendar day.
(f) “Compliance” means that The Contractor has
completed the delivery of the Related Services in
 14

accordance with the terms and conditions set out in the

Contract.
(g) “GCC” means the General Conditions of the Contract.
(h) “Goods” means all products, raw materials, machinery
and equipment and other materials which the
Contractor mustshall supply to the Contracting Party
under the Contract.
(i) “The Country of the Contracting Party" is the country
specified in the Special Contract Conditions (SCC).
(j) “The Contracting Party” means the entity purchasing
the Goods and Related Services, as indicated in the
SCC:
(k) “Related Services” means incidental services relating
to the provision of goods, such as transportation,
insurance, installation, commissioning, training and
initial maintenance and other similar obligations of the
Contractor under the Contract.
(l) “SCC” means Special Conditions of the Contract.
(m) “Subcontractor” means any natural person, private or
public entity, or any other combination thereof, with
whom the Contractor has subcontracted any part of the
provision of the Goods or performance of any part of
the Services.

(n) “Contractor” means any a natural person, legal or

government entity, or a combination thereof, whose
offer to perform the contract has been accepted by The
Contracting Party and is named as such in the
Contract.
(o) “The Project Site”, where applicable, means the place
named in the SCC.
2. Contract 2.1 Subject to the order of precedence established in the
Documents Agreement, means all documents forming a part of the
Contract (and all components included therein) are
correlative, complementary and mutually explanatory. The
Contract shouldshall be read integrallyin its entirety.
 15

3. Fraud and 3.1 The Bank requires that all borrowers (including grant
Corruption beneficiaries), executing agencies and procurement
agencies, as well as all firms, entities and individuals
bidding for or participating in projects financed by the Bank
including, among others inter alia, applicants, suppliers,
contractors suppliers and dealers (including their respective
officers, employees and agents) observe the highest ethical
standards and report to the Bank all suspected acts of fraud
or corruption of which they have knowledge or information
during the selection process and negotiation or execution of
a contract. Acts of fraud and corruption are forbidden. Fraud
and corruption include acts of: (a) Corrupt practice; (b)
fraudulent practice; (c) coercive practice; and (d) collusion.
The definitions set out below correspond to the most
common types of fraud and corruption, but are not
exhaustive. For this reason, the Bank shall also take action
in the case of similar acts or allegations related to alleged
acts of fraud and corruption, even though they are not
specified in the list below. The Bank will in all cases, follow
the procedure set out in Clause 3.1 (c). For the purposes of
compliance::
(a) The Bank defines, for the purposes of this provision,
the terms listed below:
(i) A corrupt practice is the offering, giving,
receiving or soliciting, directly or indirectly,
anything of value to influence improperly the
actions of another party;
(ii) A fraudulent practice is any act or omission,
including misrepresentation of facts and
circumstances, which deliberately or through
gross negligence, cheat, or attempt to mislead, a
party for financial gain or other reasons or to
avoid an obligation;
(iii) A coercive practice is to harm or cause harm, or
threaten to harm or damage, directly or
indirectly, any party or property to influence
improperly the actions of a party; and
(iv) A collusive practice is an agreement between
two or more parties with the intention to achieve
an improper purpose, including to influencinge
improperly the actions of another party.
(b) If it is found that, in accordance with administrative
 16

procedures that any firm, entity or individual bidding

for or participating in a Project financed by the bank
including among others, lenders, suppliers, sellers,
contractors or sub contractors suppliers and dealers,
executing agencies and concessionaires, including
among others, borrowers, lenders, suppliers,
contractors, subcontractors, Suppliers and agents,
executing agencies or Buyers procurement
agenciesorganizations (including their respective
officers, employees and representatives) have
committed an act of fraud or corruption, the Bank
may:
(i) decide not to fund any proposal regarding tendered
contracts or awarded contractsto award a contract
or a contract awarded for the purchase of goods or
contracting of works financed by the Bank:
(ii) suspend the disbursement of the operation if it is
determined at any stage that there is sufficient
evidence to support a finding that an employee,
agent or representative of the Borrower, the
Executing Agency or the Buyer Agency has
committed an act of fraud or corruption;
(iii) Cancel and/or accelerate payment of part of the
loan or grant earmarked for the contract when there
exists evidence that the Borrower or Beneficiary of
the Grant, has not taken adequate corrective
measures within a time that the Bank considers to
be reasonable and in accordance with the
guarantees of due process established in the
Borrower country:
(iv) Issue a reprimand in the form of a formal letter of
censure to the conduct of the firm, entity or
individual:
(v) Declare a person, entity or firm ineligible, either
permanently or for a certain period of time, to be
awarded or to take part in contracts financed by the
Bank except under such conditions as the Bank
deems appropriate;
(vi) Refer the matter to the relevant authorities’
responsible for enforcing the laws: and/or
(vii) Impose other sanctions it deems appropriate under
 17

the circumstances, including the imposition of fines

that represent to the Bank a reimbursement of the
costs related to the investigations and prosecutions.
Such sanctions may be imposed in addition to or in
lieu of other sanctions.
(c) The Bank has established administrative procedures for
cases involving allegations of fraud and corruption
within the procurement process or the execution of a
contract financed by the Bank which are available at the
Bank’s website (www.iadb.org). For such purposes, any
complaint shall be submitted to the Office of the Bank’s
Institutional Integrity (OII) to carry out an investigation.
Complaints may be submitted confidentially or
anonymously.
(d) Payments shall be expressly conditioned to that the
participation of the Contractors in the procurement
process and has beeingn kept in accordance with
applicable Bank policies on fraud and corruption
described in Clause 3.1.
(e) The imposition of any action to be taken by the Bank in
accordance with the provisions referred to in this clause
may be public or private, in accordance with Bank
policies.
3.2 The Bank shall have the right to require demandthat, in
contracts financed by a Bank loan or grant, including the
inclusion of a provision requiring bidders, suppliers,
contractors, subcontractors, suppliers and licensees to
enable the Bank to inspect their accounts and records and
any other document relating to the submission of proposals
and contract performance and to have them audited by
auditors appointed by the Bank. To this end, the Bank shall
have the right to require demand the inclusion of a provision
requiring bidders, suppliers, contractors, subcontractors,
suppliers and dealers: (i) maintain all records and
documents related to projects financed by the Bank for a
period of three (3) years after completion of the work
contemplated in the contract: and (ii) deliver any document
necessary for the investigation of allegations of fraud or
corruption and to make available to the Banks employees or
agents of the bidders, suppliers, contractors, subcontractors
suppliers and dealers who have knowledge of the Project
financed by the Bank to respond to queries from the staff of
the Bank or any investigator, agent, auditor or properly
designated provider for the review of the audit documents.
 18

If the bidder, supplier, contractor, subcontractor, supplier or

licensee breaches the requirement of the Bank, or otherwise
obstructs the matter reviewed by the Bank, the Bank, at its
sole discretion, may take appropriate action against the
bidder, supplier, contractor, subcontractor, supplier or
licensee.
3.3 The Contractor states and warrants:
(i) That it has they have read and understand the ban on
acts of fraud and corruption prepared by the Bank and
agree to abide by the relevant standards;
(ii) That it hasthey have not engaged in any violation of
the policies on fraud and corruption described in this
document;
(iii) That it hasthey have not misrepresented or concealed
any material facts during the procurement processor
the execution of this Contract;
(iv) That none of its directors, officers or shareholders has
been declared ineligible for being awarded contracts
financed by the Bank or has been convicted of a crime
in connection with fraud or corruption;
(v) That none of its directors, officers or shareholders has
been declared ineligible for being awarded contracts
financed by the Bank or has been convicted of a crime
in connection with fraud or corruption;
(vi) Have it has declared all commissions, fees for agents
facilitation payments for services, or agreements to
share income related to the Contract or financed by the
Bank;
(vii) It aAcknowledges that the breach of any of these
guarantees is the basis for the imposition by the Bank,
of any or any set of measures described in Clause 3.1
(b).

4. Interpretation 4.1 If the context so requires, singular means plural and vice
versa.
4.2 Incoterms
(a) The meaning of any trade term and the rights and
obligations of the Parties shall be as described by
Incoterms, unless inconsistent with any provision in
the Contract.
(b) The terms CIP, FCA, CPT and others similar, when
used shall be governed by the provisions in the current
edition of Incoterms specified in the SCC and
 19

published by the International Chamber of Commerce,

Paris, France.
4.3 Entire Agreement
The Agreement constitutes the entire agreement between the
Contracting Party and the Contractor and supersedes all
communications, negotiations and agreements (whether
written or oral) made between the Parties prior to the date of
the signing of the Contract.
4.4 Amendment
No amendment or other variation of the Contract shall be
valid unless it is written, dated, expressly referes to the
present Contract, and is duly signed by an in writing, dated,
expressly refers to this Contract, and signed by a duly
authorized representative of each of the Parties.
4.5 Limitation of Waivers
(a) Subject to GCC sub.clause 4.5 (b) below hereof, no
delay tolerance, delay or approval by either party to
when enforceing any term and condition of the
contract or the granting of time extensionss by one
party to the other, shall prejudicedamage, affect or
limit of the rights of that party under the Contract.
Also, no waiver granted by any party for a breach of
the Contract may serve as a waiver for any later breach
of the Contract.
(b) Any waiver of rights, powers or remedies of any one
of the Parties under the Agreement mustshall be made
in writing, be dated and signed by an authorized
representative of the Party granting such waiver, and
mustshall specify the obligation being dispensed
waived and the scope of the waiver.
4.6 Divisibility
If any provision or condition of the Contract is prohibited or
rendered invalid or unenforceable, such prohibition,
invalidity or unenforceability shall not affect the validity or
enforceability of any other provisions and conditions of the
Contract.
5. Language 5.1 The Contract, as well as all correspondence and documents
relating to the Contract exchanged between the Contracting
Party and the Contractor shall be written in the language
 20

specified in the SCC. Supporting documents and printed

materials that are a part of the Contract may be in another
language provided that they are accompanied by an accurate
translation of the relevant passages in the specified
language, and in that case, the translations will prevail for
purposes of interpretation of the Contract.
5.2 The Contractor shall be responsible for all the costs of
translation into the governing language, as well as all risks
associated with the accuracy of the translation of the
documents provided by the Contractor.
6. Joint Venture, 6.1 If the Contractor is a Joint venture, Consortium or
Consortium or Association (APCA) all the parts of which it is composed
Association mustshall be jointly and severally liable to the Contracting
(APCA) Party for compliance with the terms of the Contract and
shall designate one of the parts them to act as representative
with authority to involve make commitments on behalf of
the APCA. The composition or constitution of the Joint
Venture shall not be altered without the consent of the
Contracting Party.
7. ElegibilityElig 7.1 The Contractor and hisits Subcontractors mustshall shall
ibility belong to the Bank’s member countries. It is considered that
a Contractor or Subcontractor has the nationality of an
eligible country if it complies with the following
requirements:
(a) An Individual has the nationality of a member of the
Bank if heit or she meets one of the following
requirements:
i. Is a citizen of a member country; or
ii. has established residence in a member country
as a “bona fide” resident and is legally
permitted to work in that country.
(b) A firm has the nationality of a member country if it
satisfies two of the following requirements:
i. It is legally constituted or incorporated under
the laws of a member country of the Bank;
and
ii. more than fifty percent (50%) of the capital
of the company is owned by individuals or
firms from member countries of the Bank.

7.2 All members of a joint venture, consortium or association

(APCA) with joint and several liability and all
subcontractors mustshall shall comply with the requirements
 21

specified above.
7.3 All Goods and Related Services to be supplied under the
contract and financed by the Bank mustshall shall originate
in any member country of the Bank. Goods originating in a
Bank member country are those mined, grown, harvested or
produced in a Bank member country. Goods are produced
when through manufacturing, processing or assembling, the
result is a commercially recognized article whose basic
characteristics, function or purpose of use are substantially
different from its parts or components. In the case of goods
that consist of various individual components that need to be
interconnected (which may be executed by a supplier, the
buyer or a third party) in order that the goods may function,
and without regard to the complexity, the Bank considers
that such goods are eligible for funding if the assembly of
individual components was made in a member country.
When the goods are a combination of several individual
items that are normally packed and sold commercially as a
single unit, the goods are considered to have come from the
country where it was packed and shipped to the buyer. For
the purposes of determining the origin of goods identified as
“Made in the European Union” they will be eligible without
the need to identify the specific country of the European
Union. The origin of the materials, parts or components of
the goods or the nationality of the producing company,
assembler, distributor or seller does not determine their
origin.
8. Notifications 8.1 All notices between the Parties under this Contract shall be
in writing and sent to the address indicated in the SCC. The
term “in writing” means communicated in written form with
proof of receipt.
8.2 A notice will be effective on the later of the day of delivery
and or the date of the notification letter, whichever occurs
the latest.
9. Applicable 9.1 The Contract shall be governed by and construed under the
Law. laws of the country of the Contracting Party, unless
otherwise indicated in the SCC.
10. Dispute 10.1 The Contracting Party and the Contractor shall make every
Resolution effort to resolve amicably, through informal, direct
negotiation, any disagreement or dispute arising between
them under or in reference to the Contract.
10.2 If, after twenty-eight (28) days, the Parties have been unable
 22

to resolve the controversy or difference by such mutual

consultation, then the Contracting Party or the Contractor
may inform the other party of its intention to initiate
arbitration proceedings with respect to the matter in dispute
in accordance with the provisions below., Nno person party
may commence arbitration proceedings with regard to that
matter if no such notice has been issued. Any dispute or
difference, whose intention to initiate arbitration in
compliance to the present clause has been notified, it shall
be resolved definitely through arbitrage. regarding that
which has been notified of the intention to initiate
arbitration proceedings in accordance with this clause shall
be finally settled by arbitration. The arbitration process may
begin before or after the delivery of the goods under the
Contract. The arbitration shall be conducted under the rules
of procedure specified in the SCC.
10.3 Notwithstanding any references to arbitration in this
document,
(a) both sides shouldshall shall continue to perform their
respective obligations under the Contract, unless the
Parties agree in some other manner: and
(b) The Contracting Party shall pay any money amount
due to the Contractor.
11. Scope of the 11.1 The Goods and Related Services are to be supplied as
provisions provided in the Schedule of Requirements.
12. Delivery and 12.1 Subject to the provisions of GCC sub clause 32.1, delivery
Documents of the Goods and Related Services shall be in accordance
with the Delivery and Completion Schedule specified in the
Schedule of Requirements. The details of shipping and other
documents to be supplied by the Contractor are specified in
the SCC.
13. Contractor’s 13.1 The Contractor shall provide all the Goods and Related
Responsibilities Services included in the Scope of Supplies in accordance
with Clause 11 of the SCC and the Delivery and Completion
Schedule in accordance with Clause 12 of the SCC.
14. Contract 14.1 The prices charged by the Contractor for the Goods supplied
Price and the Related Services provided under the contract may
not be different from those quoted by the Contactor in the
bid, except for any price adjustments authorized by the
SCC.
15. Payment 15.1 The contract price, including any advance payment, if
 23

Terms applicable, is to be paid as specified in the SCC.

15.2 The request for payment by the Contractor shall be in
writing to the Contracting Party accompanied by receipts
describing, where appropriate, the Goods delivered and
Related Services performed, and documents submitted in
accordance with Clauses 7.4 and 12 of the SCC and in
compliance with the contract requirements.
15.3 The Contracting Party shall make prompt payments, but in
no case, later than sixty (60) days after the presentation of
the invoice or acceptance by the Contracting Company of
the payment request made by the Contractor.The
Contracting Party shall make prompt payments, but in no
case, later than sixty (60) days alter presentation of the
invoice or payment request by the Contractor, and after its
acceptance by the Contracting Party.
15.4 The currency that will be paid to the Contractor under the
terms of this Contract shall be that which the Contractor had
stated in hisits offer.
15.5 If the Contracting Party fails to make any payment to the
Contractor, on the corresponding dates or within the period
specified in the SCC, the Contracting Party shall pay the
Contractor interest on the amount of the delinquent
payments at the interest rate stated in the SCC for the period
of delay until full payment has been made, whether before
of after any trial or arbitration award.
16. Taxes and 16.1 In the case of Goods manufactured outside the country of
Duties the Contracting Party, the Contractor shall be fully
responsible for all taxes, stamp duties, licence fees, and
other similar charges imposed outside the country of the
Contracting Party.

16.2 In the case of Goods manufactured in the country of the

Contracting Party, the Contractor shall be fully responsible
for all taxes, stamp duties, license fees, and other similar
charges imposed up to delivery of the Goods contracted by
the Contracting Party.

16.3 The Contracting Party will make hisits best endeavours for
the Contractor to benefit from the widest possible scope of
any tax exemptions, grants, or legal privileges that may
apply to the Contractor in the country of the Contracting
Party.
 24

17. Compliance 17.1 If so stipulated in the SCC, the Contractor, within a period
Assurance of twenty-eight (28) days of notification of the award of the
Contract, shall furnish provide the Contract Performance
Guarantee for the amount specified in the SCC.

17.2 The proceeds of the Performance Bond shall be made

payable to the Contracting Party as compensation for any
loss that might result from t breach of contract by the
Contractor.he failure of the Contractors obligations under
the Contract.

17.3 As stated in the SCC, the Performance Bond, if required,

shall be denominated in the same currency as the Contract
or in a freely convertible currency, acceptable to the
Contracting Party and presented in one of the formats
stipulated by the Contracting Party in the SCC, or in any
other format acceptable to the Contracting Party.

17.4 Unless otherwise specified in the SCC, the Compliance

Guarantee shall be released by the Contracting Party and
returned to the Contractor not later than twenty-eight (28)
days from the date of completion of the Contractor’s
obligations under the Contract, including any guarantee
regarding the Goods.

18. Copyright 18.1 The copyright of all the drawings, documents and other
materials containing data and information provided to the
Contracting Party by the Contractor shall remain as the
property of the Contractor. If this information was provided
directly to the Contracting Party or through the Contractor
by third parties, including suppliers of materials, the
copyright of these materials will remain as the property of
such third parties.
19. Confidentialit 19.1 The Contracting Party and the Contractor shall keep
y of Information confidentiality and never at any time release to third parties,
without the written consent of the other Party, any
documents or data or other information which may be
directly or indirectly supplied to the other Party in
connection with the Contract, before, during or after the
execution of the Contract. Notwithstanding the foregoing,
the Contractor may furnish hisits subcontractors such
documents, data and information received from the
Contacting Party to enable them to carry out their tasks
under the Contract. In this case, the Contractor shall obtain
 25

from the Subcontractors, a confidentiality agreement similar

to that required of the Contactor under Clause 19 of the
GCC.
19.2 The Contracting Party shall not use such documents, data or
other information received from the Contractor for any use
not related to the Contract. The Likewise, the Contracting
PartyContractor shall not use such documents, data or other
information received from the Contractor for any use not
related to the Contract.

19.3 The obligation of the Parties in accordance with Sub-clauses

9.1 and 19.2 of the GCC referred to above, shall not apply to
information that:
(a) The Contracting Party and the Contractor need to share
with the Bank or other institutions involved in the
financing of the Contract;
(b) which now presently or in the futureor later enters the
public domain through no fault of the Parties;
(c) Can be shown proven that it was in the possession of
that Party at the time that it was released divulged and
was not obtained previously, either directly or indirectly
from the other Party :or
(d) That becomes lawfully available, having been made
available by a third party who has no obligation of
confidentiality.
19.4 The foregoing conditions of this Clause 19 of the GCC
Clause19 shall not affect in any way any obligation of
confidentiality given by either Party before the date of the
Contract with regard to the Supplies or any part of them.
19.5 The provisions of Clause 19 of the GCC shall remain valid
after fulfilment or termination of the contract for whatever
reason.
20. Subcontractin 20.1 The Contractor shall notify the Contracting Party, in
g writing, of all subcontracts awarded under the Contract if
not already specified in the tender. Such notifications, in the
original offer or later, shall not exempt the Contractor from
hisits obligations, duties and undertakings or responsibilities
undertaken by virtue of this Contract.
 26

20.2 All subcontracts shall comply with the provisions of Clauses

3 and 7 of the GCC.
21. Specifications 21.1 Technical Specifications and Drawings
and Standards
(a) The Goods and Related Services provided under this
contract shall conform to the specifications and
standards set out in Section VI, Schedule of
Requirements and, when there is no reference to an
applicable standard, the standard that is equal to or
higher than the official standard shall apply, whose
application is appropriate in the country of origin of
the Goods.
(b) The Contractor shall have the right to refuse
responsibility for any design, data or drawing,
specification or other document, or any amendment
provided or designed by or on behalf of the
Contracting Party, by notifying the Contracting Party
of such rejection.
(c) When the Contract makes reference to codes and
standards under which it is executed, the edition or
revised version of the codes and standards will be
specified in the Schedule of Requirements. Any
changes in such codes or standards during the
execution of the Contract shall be applied only with
the prior approval of the Contracting Party and such
change will be governed in accordance with Clause 32
of the GCC.
22. Packing and 22.1 The Contractor shall package the goods as required to
Documents prevent damage or deterioration during transit to their final
destination indicated in the Contract. The packing shall be
sufficient to withstand, without limit, rough and careless
handling, exposure to extreme temperatures, salt and
rainwater, and storage in open spaces. The size and weight
of the packages shouldshall be considered, as well as where
appropriate, the remoteness of the final destination of the
goods and the absence of heavy facilities equipment for the
handling of goods at all points where the goods are to be
transhipped.
22.2 The packing, marking and documentation to be placed inside
and outside the packages mustshall comply strictly with the
special requirements stated in the Contract, and any other
requirements, if any, specified in the SCC and any other
 27

instructions ordered by the Contracting Party.

23. Insurance 23.1 Unless otherwise stipulated in the SCC, the Goods provided
under this Contract mustshall be fully insured in a freely
convertible currency from an eligible country, against loss
or damage or incidental damage which may occur during
manufacture, acquisition, transport, storage and delivery, in
accordance with the relevant Incoterms or as required
according to the SCC.
24. Carriage 24.1 Unless otherwise specified in the SCC, responsibility for
arranging transportation of the Goods is governed by the
Incoterms specified.

25. Inspections 25.1 The Contractor shall perform all the tests and/or inspections
and Testing of the Goods and Related Services as provided in the SCC,
at hisits expense and without cost to the Contracting Party.
25.2 The inspections and tests may be conducted on the premises
of the Contractor or hisits subcontractors, in the place of
delivery and/or the final destination of the Goods or
elsewhere in the country of the Contracting Party
established in the SCC. In accordance with Sub clause 25.3
of the GCC, when such inspections or tests are carried out
on the premises of the Contractor or hisits subcontractor, all
reasonable facilities and assistance shall be provided,
including access to drawings and production data without
charge to the Contracting Party.
25.3 The Contracting Party or hisits designated representative
shall be entitled to attend all tests and/or inspections referred
to in Sub clause 25.2 of the GCC, as long heit bears all costs
and expenses incurred in hisits participation, including
travel, lodging and meals.
25.4 When the Contractor is ready to perform such tests and
inspections, heit shall promptly notify the Contracting Party
indicating the time and place. The Contractor shall obtain
from a third party, if any, or from the makermanufacturer,
whatever permission or consent is necessary to allow the
Contracting Party or hisits designated representative to
attend the tests and inspections, when the Contractor is
readyavailable.
25.5 The Contracting Party may require the Contractor to
perform some tests and/or inspections that are not required
in the Contract, but deemed necessary to verify that the
 28

characteristics and performance of the goods comply with

the codes of the technical specifications and standards
established in the Contract. Reasonable additional costs
incurred by the Contractor for such tests and inspections
shall be added to the Contract Price. Further, if such tests
and/or inspections impede the progress of construction
and/or performance of other obligations of the Contractor
under the Contract, appropriate adjustment shouldshall shall
be made to the Delivery Dates and Compliance and other
affected obligations.

25.6 The Contractor shall submit to the Contracting Party a

report of the results of such tests and/or inspections.
25.7 The Contracting Party may reject any Goods or their parts
that do not pass the tests or inspections or not conforming to
the specifications. The Contractor may either rectify or
replace such rejected Goods or parts or make the necessary
modifications to meet the specification, at no cost to the
Contracting Party. HeIt mustshall also repeat the test or
inspection, at no cost to the Contracting Party, after
notifying the Contracting Party under Sub-Clause 25.4 of
the GCC.
25.8 The Contractor agrees that neither the testing nor
inspections of the Goods or their parts, nor the presence of
the Contracting Party or hisits representative, nor the
issuance of reports in accordance with Sub-Clause 25.6 of
the GCC, shall exempt him from the guarantees or other
obligations under the Contract.
26. Settlement for 26.1 Except as provided in Clause 31 of the GCC, shouldshall
Damages the Contractor fail to comply with the delivery of all or part
of the Goods by the date(s) set or the provision of the
Related Services within the period specified in the Contract,
without prejudice damage to other resources of the
Contacting Party under the Contract, heit may deduct from
the Contract Price as settlement for damages, a sum
equivalent to the percentage of the delivery price of the
delayed goods or the unprovided services as set out in the
SCC for each week or part thereof of delay up to the
maximum percentage specified in the SCC. Upon reaching
the maximum, the Contracting Party may terminate the
Contract in accordance with Clause 34 of the GCC.
27. Guarantee of 27.1 The Contractor warrants that all the goods provided under
 29

the Goods the Contract are new, unused, of recent or current model
technology and incorporate all recent improvements in
design and materials, unless the Contract stipulates
otherwise.

27.2 In accordance with Sub-Clause 21.1(b) of the GCC, the

Contractor warrants that all goods supplied shall be free
from defects resulting from acts and omissions that they
may have been subject to, or arising from design, materials
or manufacture, under normal use under the prevailing
conditions in the country of final destination.
27.3 Unless otherwise specified in the SCC, the warranty shall
remain in effect for a period whose termination shall be the
earlier of the following periods: Twelve (12) months from
the date on which the goods or any part of them as deemed
appropriate, have been delivered and accepted at their final
destination specified in the Contract, or eighteen (18)
months from the date of shipment from the port or place of
freight in the country of origin.
27.4 The Contracting Party shall notify the Contractor of the
nature of any defects and will provide all available
evidence, immediately after discovery. The Contracting
Party will permit the Contractor reasonable facilities to
inspect such defects.
27.5 Upon receipt of such notice by the Contractor, and within
the time specified in the SCC, heit mustshall repair or
replace as quickly as possible, the defective Goods, at no
cost to the Contracting Party.
27.6 If the Contractor after having been notified, fails to correct
the defects within the period specified in the SCC, tThe
Contracting Party, within a reasonable time, may proceed to
take the necessary steps to remedy the situation, for at the
expensethe account and risk of the Contractor and without
prejudice to other rights that the Contracting Party may have
against the Contractor under the terms of the Contract.
28. Compensation 28.1 In accordance with Sub-Clause 28.2 of the SCC, the
for Patent Rights Contractor shall indemnify and hold harmless the
Contracting Party and its employees and officers in the
 30

event of lawsuits, actions or administrative proceedings,

claims, demands, losses, damages, costs and expenses of
any nature, including expenses and legal fees, that the
Contracting Party may face as the result of infringement or
alleged infringement of patent rights, model use, registered
design, trademark, copyright or other registered intellectual
property right or otherwise existing at the date of the
Contract due to:
(a) The installation of the goods by the Contractor or the
use of the Goods in the country of the Project site; and
(b) the sale of products produced by the Goods in any
country.
Such compensation shall not proceed if the Goods or any
part thereof were used for purposes unforeseen in the
Contract or for purposes that could not reasonably be
inferred from the Contract. The compensation does not
cover any infringement resulting from use of the Goods or
any part thereof, or any product produced as the result of
association or combination with other equipment, plant or
materials not supplied by the Contractor under the Contract.
28.2 If any proceedings are brought or any claims are made
against the Contracting Party as the result of any situations
described in Sub-Clause 28.1 of the GCC,. the Contracting
Party shall promptly notify the Contractor and may, for its
own risk and account and in the name of the Contractor,
respond to such proceedings or demand, and conduct the
necessary negotiations to reach and agreement on such
proceedings or claim.
28.3 If the Contractor does not notify the Contracting Party
within twenty-eight (28) days from the receipt of said
notice, of its intention to proceed with such proceedings or
claim, the Contracting Party shall be entitled to take such
action on its own behalf.
28.4 The Contracting Party shall, at the request of the Contractor,
render provide all possible assistance to the Contractor to
answer these legal actions or claims. The Contracting Party
shall be reimbursed by the Contractor for all reasonable
expenses incurred.
28.5 The Contracting Party shall indemnify and hold harmless,
the Contractor and hisits employees, officers and
Subcontractors from any suit, action or administrative
 31

proceedings, claims, demands for loss, damage, costs and

expenses of any nature, including attorney’s fees and
expenses, which could affect the Contractor as the result of
any infringement or alleged infringement of patents,
equipment models, registered designs, trademarks
copyrights or other intellectual property rights registered or
otherwise, existing at the date of the Contract which may
arise in connection with any design, data, drawings,
specifications or other documents or materials that have
been supplied or designed by or in the name of the
Contracting Party.
29. Limitation of 29.1 Except in cases of gross negligence or bad faith,
LiabilityLimited
Liability (a) the Contractor shall have no liability in contract, tort, or
otherwise against the Contracting Party for loss or
indirect or consequential damages, usage loss,
production loss, or profit loss or interest costs, providing
that this exclusion shall not apply to any of the
Contractors obligations to pay the Contracting Party for
losses and damages under the Contract, andthe
Contractor shall have no liability in contract, tort, or
otherwise against the Contracting Party for loss or
indirect or consequential damages, loss of use, loss of
production, or loss of profits or interest costs, providing
that this exclusion shall not apply to any of the
Contractors obligations to pay the Contracting Party for
losses and damages under the Contract, and
(b) the Contractor’s total liability against the Contracting
Party, whether in contract, tort or otherwise, shall not
exceed the Contract Price, provided that this limitation
shall not apply to the cost of repairing or replacing
defective equipment, or affect the Contractor’s obligation
to indemnify the Contracting Party with respect to patent
infringements.
30. Changes in 30.1 Unless otherwise specified in the Contract, if after 28 days
Laws and before prior to the presentation of Bids, any law, regulation,
Regulations decree, ordinance or statute as law comes into force, the is
enactmentenacted, repealed or is modified in the country of
the Contracting Party where the Project is located ( including
any change in interpretation or application by the competent
authorities), which affects that later affects the Delivery Date
and/or the Contract Price, such Delivery date and/or Contract
Price shall be increased or reduced as appropriate, to the
extent that the Contractor has been affected by these changes
in the performance of hisits obligations under the Contract.
 32

Notwithstanding the foregoing, the increase or decrease in the

cost will not be paid separately nor credited if it has been
taken into account in the provisions for the adjustment of the
price, if applicable, and in accordance with Clause 14 of the
GCC.
31. Force 31.1 The Contractor shall not be subject to the execution of hisits
Majeure Performance Bond, liquidation for losses and damages or
termination for non-compliance if the delay or failure to fulfil
hisits obligations under the Contract is the result of an event
of Force Majeure.
31.2 For the purposes of the Clause, “Force Majeure” means an
event or situation beyond the control of the Contractor which
is unforeseeable, unavoidable, and is not caused by
carelessness or negligence by the Contractor. Such events
may include but are not limited to, acts by the Contracting
Party in its sovereign capacity, wars or revolutions, fires,
floods, epidemics, quarantine restrictions and freight
embargoes.
31.3 ShouldShall an event of Force Majeure occur, the Contractor
shall notify, in writing, the Contracting Party as soon as
possible about this event and its cause. Unless the Contracting
Party indicate otherwise in writing, the Contractor shouldshall
continue to perform its obligations under the Contract as far
as reasonably possible and is to seek all reasonable alternative
means as to avoid being affected by the Force Majeure
situation.
32. Change Order 32.1 The Contracting Party may at any time, make changes within
and Amendments the general framework of the Contract, by written order to the
to the Contract Contractor in accordance with Clause 8 of the GCC, in one or
more of the following aspects:
(a) Plans, designs or specifications, where the Goods to be
supplied under the Contract are to be manufactured
specifically for the Contracting Party;
(b) The method of shipping or packing;
(c) The place of delivery and/or
(d) Related Services to be provided by the Contractor
32.2 If any of such change causes an increase or reduction in cost
or time required for the Contractor to fulfil any obligation
under the Contract, an equitable adjustment shall be made to
the Contract Price or the Delivery/ Completion Schedule or
 33

both, and the Contract shall be amended accordingly. The

Contractor shall submit the application for adjustment under
this Clause, within twenty-eight (28) days from the date from
the date when heit received the request for the order change,
received from the Contracting Party.
32.3 The prices to be charged by the Contractor for any Related
Services that may be needed but were not included in the
Contract, shall be agreed upon between the Parties, and shall
not exceed the prices currently charged by the Contractor to
third parties, for similar services.
32.4 Subject to the above, no changes or modifications are to be
made to the Contract, except by written amendment, executed
by both Parties.
33. Extension of 33.1 If at any time during the execution of the Contract, the
Time Contractor or hisits Subcontractors find themselves in a
situation which affects the timely delivery of the Goods or
provision of the Related Services, in accordance with Clause
12 of the GCC, the Contractor shall promptly report in
writing to the Contracting Party regarding the delay, its
probable duration and cause. As soon as the report is received
from the Contractor, As soon as possible after being advised
by the Contractor, the Contracting Party shall assess the
situation and at its discretion may extend the Contractor’s
completion deadline. In such circumstances, both Parties shall
ratify the extension through an amendment to the Contract.
33.2 Except in the case of Force Majeure, as indicated in Clause
31 of the GCC, any delay in the discharge performance of its
obligations for Delivery and Compliance shall render the
Contractor liable for claims for and damages in accordance
with Clause 26 of the GCC, unless an extension is agreed
under Sub-Clause 33.1 of the GCC.
34. Completion 34.1 Termination for Breach of ContractDefault
(a) The Contracting Party, independent of other proceedings
or claims received for breach of contractwithout
prejudice to other resources available, may terminate
the Contract entirely or in part, by means of a written
note of non-compliance to the Contractor in any of the
following circumstances:
(i) If the Contractor fails to deliver any or all of the
Goods within the period specified in the Contract
or within the permitted extended period approved
 34

by the Contracting Party in accordance with

Clause 33 of the GCC :or
(ii) if the Contractor fails to comply with any
obligation under the Contract, or
(iii) if the Contractor, in the opinion of the
Contracting Party, during the bidding process or
execution of the Contract, has engaged in acts of
fraud and corruption, as defined in Clause 3 of
the GCC.
(b) If the Contracting Party terminates the Contact, in
whole or in part, in accordance with Clause 34.1(a) of
the GCC, it may acquire under terms and conditions
that it deems to be appropriate, Goods and Related
Services similar to those undelivered or offered. In
these cases, the Contractor mustshall pay to the
Contracting Party the additional costs resulting from
the acquisition. However, the Contactor shall remain
liable to complete the execution of those obligations
which have remained unfinished.
34.2 Termination for Insolvency
(a) The Contracting Party may terminate the Contract at
any time by written notice to the Contractor if the
latter shouldshall be declared bankrupt or otherwise
insolvent. In this case, the termination shall be without
compensation to the Contractor, provided that such
termination does not prejudice damage or affect any
right of action or remedy which has or may accrue
thereafter to the Contracting Party.
34.3 Termination for Convenience.
(a) The Contracting Party, by notice to the Contractor, may
terminate the Contract in whole or in part, at any time,
for reasons of convenience. The notice of termination
shall specify that the termination is for convenience of
the Contracting Party, the extent of the termination and
of the liabilities of the Contractor regarding the
Contract and the effective date of the termination.
 35

(b) The Ggoods that are ready and complete and ready for
shipment within twenty-eight (28) days following
receipt by the Contractor, of the notice of termination
mustshall be accepted by the Contracting Party in
accordance with the terms and prices established in the
Contract. As for the rest of the Goods, the Contracting
Party may choose from the following options:
(i) that any a portion is completed and delivered in
accordance with the conditions and prices of the
Contract: or
(ii) cancel pay-off the remainder balance and pay the
Contractor an agreed amount for these those
goods or Related Services that would have been
partially completed and for the materials and
parts already procured by the Contractor.
35. Assignment 35.1 Neither the Contracting Party nor the Contractor may assign
all or part of the obligations that they havehas been assumed
under the Contract, except with the prior written consent of
the other Party.
 36

III. The Special Conditions of the Contract

The following Special Conditions of the Contract SCC) shall supplement and/or amend the
General Conditions of the Contract (GCC). In the case of conflict, the provisions herein shall
prevail over those of the GCC.

GCC1.1(i) The country of the Contracting Party is: The Dominican Republic.

GCC1.1(j) The Contracting Party is: Corporación Dominicana de Empresas

Eléctricas Estatales (CDEEE).
During the execution of the Contract, the Contracting Party will be
represented by the distribution company EDEESTE. EDEESTE will be
responsible for overseeing the work done by the Contractor, ensuring that
such works are executed in compliance with all the requirements set out in
the Contract. EDEESTE will be directly responsible for interacting with
the Contractor, setting the guidelines necessary for the proper execution of
the works, in conformity with the provisions of the Contract. EDEESTE
will be represented by the available staff, according to their standing.
EDEESTE will represent the Contracting Party for the purpose of carrying
out the work awarded to the Contractor having, but not limited to, the
following functions:
a. Chairing meetings with the Contractor and the Works Project Manager
or their representatives;
b. Prepare and ensure faithful execution of the work under the Contract;
c. Prepare monthly Performance Reports to be submitted to the
Contracting Party, on the general situation of the Project and a summary
of jobs being executed so that they are known at each meeting, as well as
progress reports as deemed may be appropriate;
d. Prepare every two months a summary report on the active and passive
status of the Project, which will be made available to the Contracting
Party;
e. Outline at in each meeting with the Contractor everything related to the
life of the project, as well as the tasks to be undertaken towards
implementation of the work timetableschedule:
f. Initiate, authorize and process all forms of actions, by express
instruction from the Contracting Party; aimed at authorizing or granting
consent or settlements, waivers, cancellations, discharges, acceptances or
payment;
 37

g. In general, without the above being exhaustive, direct, agree, delegate,

organize, conduct any kind of transactions or eventsactions, after
consulting with the Contracting Party in order to make or finish complete
actions,events the object of which have not beenare not specifically
mandated.
The Project Implementation Unit of the CDEEE will be responsible for
coordinating all technical and administrative activities related to the
execution of the works. All instructions, approvals, rejections and other
actions and communications concerning the conduct of business between
the Contractor and EDEESTE will be processed through the Project
Implementation Unit of the CDEEE.

GCC1.1(o) The Project Site is: Santo Domingo, East Zone II to Lot III (EDEESTE).

GCC 4.2(b) The version of the edition of the Incoterms will be: Incoterms 2000

GCC 5.1 The language shall be: Spanish.

GCC 8.1 For notices, the address of the Contracting Party is:
AttentionTo: Lic. Celso José Marranzini Pérez, Executive Vice
President.
Postal Mailing address: Av. Independencia No. 604,corner Fray
Cipriano de Utrera, Centro de los Héroes de Constanza, Maimón and
Estero Hondo.
Floor/Office: 3rd. Floor
City: Santo Domingo
Country: The Dominican Republic.
Telephone: 809-535-9098 Ext. 3056 and 3013
E-mail: uep-adquisiciones@cdeee.gob.do

For notices, the address of the Contractor is:

Attention: Lic. ________, Vice President, Authorized Agent of Korea
Electric Power Corporation (KEPCO).
411, Yeongdongdaero, Gangnam-gu, Seoul 135-791, Korea; and

Calle Mario García Alvarado, No 63, Edificio ESD,

Quisqueya, Santo Domingo, República Dominicana.
Telephone(s): 82. 2. 3456. 5888 (Korea);_1-809-533-6650 (Santo
Domingo) Fax: 1-809-533-5267 (Santo Domingo)_____
 38

E-mail: _________

GCC 9.1 The governing law is that of: The Dominican Republic.

GCC 10.2 The rules of for the procedure for of the arbitration proceedings process in
accordance with Clause 10.2 of the GCC will shall be:
(a) Contract with a foreign Contractor:
GCC 10.2 (a) - any dispute, controversy or claim arising out of or in
connection with this Contract, or any breach, termination or cancellation
thereof, shall be settled by arbitrations under the UNCITRAL
Arbitration Rules.
For that purpose, the Parties shall select the city of New York, United
States of America.
(b) Contracts with Contractors, citizens of the country of the Contracting
Party:
In the case of a dispute between the Contracting Party and the
Contractor, who is a citizen of the country of the Contracting Party,
the dispute shouldshall be referred to trial or arbitration in accordance
with the laws of the country of the Contracting Party.

GCC 12.1 Details of shipping documents and other documents which mustshall be
provided by the Contractor are:
(i) The shipping documents (invoice, manifest shipping or packing
list, certificate of origin, insurance certificate, waybill or Bill of
Lading, etc.).
(ii) The manufacturer’s warranty.
The Contracting Party shall receive the above documents before arrival of
the Goods and, if not received;, all resulting charges will be for the
account of the Contractor.
The Contractor shall provide to the Distributor EDEESTE or the
Supervisor, a detailed chronological program within 20 days of the date of
receipt of the notification for the Start of the Works. The Contractor shall
submit a revised program the case whenin the case the previous program
was not consistent with the actual progress or with the Contractor’s
obligations. Each one of the programs mustshall include:
(a) The order in which the Contractor intends to carry out the Works,
including the schedule of for each stage of design (if applicable)
contract documents, procurement, deliveries to the work site,
assembly and testing.
(b) each of the stages of work of for each Sub-Contractor.
 39

(c) the sequence and timing of the inspections and tests specified in the
Contract, and
(d) a support report that includes:
(i) an overview of the methods to be adopted envisaged by the
Contactor and the main stages in the execution of the Works,
and
(ii) details that reflect the Contractor’s reasonable estimate of thein
terms of number of each type of employee and the equipment
of each type required by the Contractor will require at the
Work Site for each main stage.

GCC 13.1 The Contractor shall sketch the Works based on the original points, lines
and benchmarks specified in the Contract or notified to the Supervisor.
The Contractor shall be responsible for the correct positioning of all the
parts of the Works, and will correct any error in the position, levels,
dimensions or their alignment. The Contracting Party shall be responsible
for any errors in the benchmarks indicated or notified, but the Contractor
will reasonably attempt to verify the accuracy of the data before it is used.

If the Contractor suffers a delay incurs costs in performing the work

required as a result of an error in the benchmarks, which an experienced
contractor could not reasonably detect, and avoid such delay or additional
cost, THE CONTRACTOR shall notify this to the Supervisor and be
entitled to the following:or incurs in costs for performing work required as
a result of an error in the benchmarks, which an experienced contractor
could not reasonably detect, and avoid this delay or additional cost, the
Contractor shall notify this to the Supervisor and be entitled to the
following:

(a) an extension of time for the time of the delay, if there has been a
delayit has delayed or will be a delay in the Completion of the
Works, in virtue of Sub-Clause 33.1 Extension of Time, and

(b) payment for incurred Costs plus profit, which the corresponding
amount shall be included in the Contract Price,payment of such Cost
plus profit, an amount that will be included in the Contract Price, in
accordance with the provisions of clause 32.1 GCC and SCC.

GCC 14.1 The prices of the Goods supplied and the Related Services performed will
not be adjustable.
The Contractor shall be deemed:
 40

(a) to be satisfied with the Accepted Contract Amount in terms of

appropriateness and adequacy, and
(b) to be have based the Accepted Contract Amount on the data,
interpretations, the required information the inspections, the
examinations and compliance with all relevant matters specified in
the tender documents.

GCC 15.1 The form and terms of payment to the Contractor under the Contract
shall be the following:
Payment in foreign currency will be made in United States Dollars
in the following manner:
(i) Advance Payment: Ten percent (10%) of the Contract Price
shall be paid within thirty (30) days following the signing of the
Contract, against payment request and the presentation of a bank
guarantee issued by a financial institution of the formal sector with
representation in the Dominican Republic for an amount
equivalent and valid until the goods have been delivered in the
manner set out in the bidding documents or in such manner as the
CONTRACTING PARTY may find acceptable. The bank
guarantee shall be issued in the same currency as the Advance
Payment.
(ii) Partial payments against delivery and installation of the
goods: Eighty percent (80%) of the price of the goods
delivered and installed, as set out in the Contract, will be paid
against the presentation of the documents specified in clause
12 of the GCC. These percentages will be divided by paying
the corresponding percentages each time that partial deliveries
and installations are completed, subject to the satisfactory
acceptance by THE CONTRACTING PARTY or its
representative, until the 80% has been completed. These partial
and periodic payments are to be processed according to the
requests for approval of payment drawn up with the
participation of the Supervision.
(iii) On acceptance of the goods: The ten per cent (10%)
remaining of the Contract Price, shall be paid within thirty (30)days
following receipt and installation of the goods, as well as the
completion of the related services that are subject to this contract
against the presentation of a payment request accompanied by an
acceptance certificate issued by the Supervisor. This payment
corresponds to the final payment, prepared by THE
CONTRACTOR and the Supervisor: with the verification by the
Audit Firm.
(i) Advance: Ten percent (10%) of the Contract Price shall be
 41

paid within thirty (30) days following the signing of the

Contract, against payment request and the presentation of a
bank guarantee issued by a financial institution of the formal
sector with representation in the Dominican Republic for an
amount and equivalent and valid until the goods have been
delivered in the manner set out in the bidding documents or in
such manner as the Contracting Party may find acceptable. The
bank guarantee shall be issued in the same currency as the
Advance.

(ii) Partial payments against delivery and installation of the

goods: Eighty percent (80%) of the price of the goods
delivered and installed, as set out in the Contract will be paid
against presentation of the documents specified in clause 12 of
the GCC. These percentages will be divided, paying the
corresponding percentages each time that partial deliveries and
installations are completed, subject to the satisfactory
acceptance by the Contracting Party or his representative, until
the 80% is completed. These partial and periodic payments are
to be processed according to the certification drawn up with
the participation of the Supervision.

(iii) On acceptance of the goods: Ten per cent (10%) remaining of

the Contract Price, shall be paid within thirty (30)days
following receipt and installation of the goods, against
presentation of a payment request accompanied by an
acceptance certificate issued by the Supervisor. This payment
corresponds to the stage or final payment, prepared by the
Contractor and the Supervisor: with the verification by the
Audit Firm.

GCC 15.2 THE CONTRACTOR shall submit to the Supervisor at the end of each
month a request for approval of payment or request for payment, in three
copies, in a manner agreed with the Supervisor, which contains full details
of the amounts deemed to be payable, together with the supporting
documents that shall include a monthly progress report.The Contractor
shall submit to the Distributor EDEESTE or the Supervisor, at the end of
each month a detailed progress report, or the payment request, in three
copies, in the manner agreed with the Supervision, in which figure in a
detailed manner, the amounts that are considered to be due, together with
the supporting documentation that should include a progress report. . The
period for the preparation and approval of the program shall be fifteen
(15) days counted from the cut off date previously set between the
 42

Contractor and the Contracting Party. The Contractor shall be allowed

five (5) days for the preparation and presentation of the payment schedule;
and the supervisor will be allowed five (5) days for approval and
handling.
It will shall be considered that the Contractor has fulfilled hisits
obligations when the Superviserion issues a Certificate of Compliance,
which indicates the date when the Contractor completed hisits obligations
under the Contract.
The Supervisor shall issue the Certificate of Compliance within 28 days
after the last expiration date of the deadline of the Period for Notification
of Defects, which shall extend for 12 months computed from the moment
of work completion, or as soon as, after that date, THE CONTRACTOR
has presentedof the last date of the expiry of the deadline of the Period for
Notification of Defects, which shall extend for 12 months calculated from
the moment of the completion of the works, or as soon as possible after
that date, the Contractor having presented all the Contractor’s Documents
and completed and tested all the Works, including the making good of any
defects. A copy of the Certificate of Completion will be issued to the
Contracting Party.
It will be considered that only the Certificate of Compliance constitutes
acceptance of the Works.
Within a period of 56 days after receipt of the Certificate of Completion,
the Contractor shall submit to the Supervisor a draft of final request for
approval of payment in three copies and, in a format approved by the
Supervisor, which show in detail:
(a) The value of all work completed in accordance with the Contract, and
(b) any additional amounts which the Contractor considers to be payable
to him itself under the Contract.
(c) Submission of As-built Drawings

GCC 15.5 The payment term after which the Contracting Party mustshall pay interest
to the Contractor is 45 days. The rate of interest to be applied is 0.5 % of
the amount payable for each month of delay, up to 10% of the total
payable.

GCC 17.1 A Performance Bond equal to 10% of the Contract amount is required.

GCC 17.3 If a Performance Bond is required, it mustshall be in the form

of: A Bank Guarantee.
If a Performance Bond is required, it mustshall be denominated in a freely
convertible currency acceptable to the Purchaser, issued by a financial
institution in the formal sector with representation in the Dominican
 43

Republic.

GCC 17.4 The release of the Performance Bond shall take place on the date indicated
in Sub-Clause 17.4 of the GCC.

GCC 20.1 The Contractor shall notify the Distributor EDEESTE or the Supervisor at
least ___ days in advance of the planned date of commencement of work
of each subcontractor, and the commencement of work at the Project Site.
Each subcontract shall include provisions that give the Contracting Party
the right to demand that the subcontract be re-assigned in the event of
termination under Clause 34 Termination, as appropriate.

GCC 21.1(b) The Contracting Party and/or EDE-Este shall have the power to make
changes within the parameters of the Contract. Any change in plans,
specifications, etc., shall be effected through a Change Order and the
Contractor shouldshall assist in the design and implementation of the
alteration. The Contracting Party shall bear the resulting variations in the
price and time of execution of the signed contract.

GCC 22.2 The packing, marking and documentation inside and outside the packages
shall be as follows: The packaging mustshall be done so as to ensure the
integrity of the goods, against any severe or rough handling. It mustshall
also carry the destination name as well as the address. The packages, boxes
or other items mustshall be identified: Corporacion Dominicana de
Empresas Electricas Estatales (CDEEE), followed by the destination
address.

GCC 23.1 The insurance cover shall be as specified in Incoterms 2000.

GCC 24.1 The responsibility for transportation of the Goods shall be as specified in
Incoterms 2000.

GCC 25.1 The inspections and tests are to be as follows: The initial tests are carried
out by the Contractor at hisits discretion, in order to control the
development and the appropriate and timely progress of the works related
to testing and start-off. for internal control and development and to ensure
progress and sufficient advance of the jobs in hand. However, at the
request of CDEEE-EDEESTE, the Contractor shall permit their attendance
during testing. (As stated in Section VI. Checklist).

GCC 25.2 The inspections and tests are to be carried out in the circuits in: the East
Zone II (EDEESTE); or in any other location that is indicated by the
Contracting Party.

GCC 26.1 The value of settlement for damages shall be: 0.5 % per week.
 44

GCC 26.1 The maximum amount of settlement for damages shall be: 10 %.

GCC 27.3 10%.The period of validity of the warranty of the goods shall be 12 months
after delivery of the goods have been delivered, installed and accepted in
operation as working at their final destination. For purposes of the
Warranty, the final destination(s) shall be:
The final destination shall be: Santo Domingo for Lots III, at each circuit
site.
When there are unexpected setbacks whose causes are not attributable to
the Contractor, they are to be managed as indicated in Clause GCC 27.3.

GCC 27.5 The period for repair and replacement shall be: 15 days.

GCC 31.2 Also, to be considered as Force Majeure incidents are those weather events
of magnitude greater than normal, such as Tidal Waves and Tsunamis.

GCC 32.1 Change Orders will be delivered by the Contracting Party to the
Contractor, preferably through Distributor EDEESTE or the Supervisor,
with the prior recommendations of the Audit Firm.

When the Change Orders bring about a accumulated cost that exceeds the
original Contract’s amount by more than fifteen percent (15%), premium
accumulated in the original Contract amount, greater than fifteen percent
(15%), the Contract shouldshall be amended, with the prior approval of the
IDB. When the Change Orders bring about an accumulated cost that
exceeds the original Contract’s amount by less than fifteen percent (15%),
the Contract shall be amended and notified to the IDB. premium
accumulated in the original Contract amount, greater than fifteen percent
(15%), the Contract should be amended, with the prior approval of the
IDB.
When the Goods to be supplied under the Contract are to be manufactured
specially for the Contracting Party, tThe Contracting Party may order
changes or improvements or adjustments to designs or standards which
improve the effectiveness of the facilitiesinstallations, or need deemed
necessaryto be made.

GCC 32.2 Changes in cost or time, or both, that resulst from an Order Change(s),
shall be considered when the causes are not attributable to THE
CONTRACTOR. If the change in cost or time,Alterations to the cost or
the time or in both cases, which are the result of Order Change(s), shall be
considered when the causes are not attributable to the Contractor. If the
alterations in cost or time, or both, are due to causes attributable to the
Contractor, the contract conditions will not alter and the Contractor shall
make the necessary corrections and adjustments to hisits own cost and with
 45

the prior approval of the Contracting Party.

GCC 32.3 The Contractor shall submit to the Contracting Party, through Distributor
EDEESTE or the Supervisor, an estimate of the costs of the necessary
Related Services, and identify them bearing in mind, market prices,
provided that those prices are convenient to the interests of the Contracting
Party. The Contracting Party shall issue its approval within a period not
exceeding ten (10) working days counted computed from the receipt of
such estimate.

GCC 32.4 The Contracting Party may arrange approval by way of a Change Order.
The results of the Change Order will be incorporated into the Contract by
way of an Amendment.