Article 32 general allocation of responsibility of the parties for the design

32.1 Each Party shall be responsible for the elements of Design allocated to that Party in the Subcontract.

32.2 The Main Contractor shall provide and be responsible for any information reasonably required by the Subcontractor for the purposes of the Subcontractor’s development of any design allocated to it in the Subcontract and the Main Contractor’s Requirements, Design allocated to the Main Contractor, materials or Plant that it specifies or requires, or for which there is no practical alternative. The Subcontractor is responsible for the Tender, and all Design, goods, materials, Plant and Equipment it supplies and uses.

32.3 Without limiting the generality of Article 32.2, each Party shall be responsible for the correctness of the data and information provided by (or on behalf of) that Party, including, without limitation:

  1. definitions of intended purposes of the Subcontract Works or any Section of them;
  2. parameters for the testing and performance of the Subcontract Works;
  3. measurements, data and information that cannot be reasonably verified by the other Party, having regard to Costs and time; and
  4. any Design supplied by any other subcontractor of the Party or by the Party itself.

32.4 Unless otherwise agreed or is reasonable in the circumstances, the Subcontractor shall carry out, and in accordance with the Subcontract be responsible for, the development of the Design that is allocated to it. The Main Contractor shall have the right to be informed of the Design development.

32.5 The Subcontractor holds itself, its designers and design subcontractors as having the experience and capability necessary for the Design allocated to it. The Subcontractor undertakes that the designers shall be available to attend discussions with the Main Contractor at all reasonable times during the Subcontract.

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Article 33 The design review process

33.1 The purpose of these Design elaboration and review provisions is to ensure that Design development is orderly and that the Parties’ rights and responsibilities are clearly set out. The Main Contractor has an interest in seeing the Subcontract Works performed at the initially agreed Subcontract Price, and the Subcontractor has an interest in performing the Subcontract Works in an efficient fashion at a budget within the range originally intended. The following provisions are to be interpreted with these objectives in mind. They will apply unless it has been expressly stated in the Subcontract or otherwise agreed that they are not to apply.

Documents the Subcontractor is to prepare

33.2 The Subcontractor shall prepare all Subcontractor’s Documents. Unless otherwise stated in the Subcontract or allowed on a case-by-case basis, the Subcontractor’s Documents shall be written in the ruling language. The Subcontractor’s Documents shall comprise the technical documents specified in the Subcontract, documents required to satisfy all regulatory approvals, and the documents described below in the Articles relating to as-built documents and operation and maintenance manuals.

33.3 The Subcontractor shall also prepare any other documents necessary to instruct the Subcontractor’s Personnel.

Submission of specified Design documents

33.4 If the Subcontract describes the Subcontractor’s Documents that are to be submitted to the Main Contractor for review, they shall be submitted accordingly. The Subcontractor is required to submit only those Documents that are specified as requiring review.

Review period

33.5 Unless otherwise agreed, each review period shall not exceed 35 Days, calculated from the Date on which the Main Contractor receives Subcontractor’s Documents stated to be ready for review in accordance with this Article 33. If the Subcontractor is not notified of a Subcontractor Document review status within the review period, such document is deemed to have been reviewed by the Main Contractor and approved.

Main Contractor notices in respect of alleged non-compliant Design

33.6 If the Subcontractor’s Documents are acceptable to the Main Contractor, they will be returned marked “Reviewed by the Main Contractor” with the Date noted. The Main Contractor may, within the review period, give Notice to the Subcontractor that a Subcontractor’s Document fails (to the extent stated and as identified) to comply with the Subcontract. If the Subcontractor receives such Notice and the Subcontractor’s Document does in fact fail to comply with the Subcontract, it shall be rectified and resubmitted for review again in accordance with this Article 33.

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Variations to compliant Design

33.7 The Main Contractor may instruct material changes to the Subcontractor’s Documents even if the Subcontractor’s Document complies with the Subcontract. If the Subcontractor considers the change to be a Variation, the Subcontractor shall give Notice to the Main Contractor and the Variation provisions of Article 35 will apply.

Work before review

33.8 In principle and unless otherwise agreed between the Parties or instructed by the Main Contractor, no work should commence before the end of the relevant review period for Subcontractor’s Documents to which the work applies. If the Subcontractor chooses to commence work in respect of matters described in such Subcontractor’s Documents without review, or prior to the end of the review period, such work is done at the Subcontractor’s own risk.

Contractor changes to Design

33.9 If the Subcontractor wishes to modify any Subcontractor’s Document that has previously been submitted for review, the Subcontractor shall immediately give Notice to the Main Contractor. Thereafter, the Subcontractor shall submit revised Subcontractor’s Documents to the Main Contractor in accordance with the review procedure pursuant to this Article 33.

Design errors

33.10 If errors, omissions, ambiguities, inconsistencies, inadequacies or other Defects are found in the Subcontractor’s Documents at any time by any party, they and the Subcontract Works shall be corrected by the Subcontractor at the Subcontractor’s expense, notwithstanding any review under this Article 33. Where because of errors, omissions, ambiguities, inconsistencies, inadequacies or other Defects in the Subcontractor’s Documents the Main Contractor’s other contractors and/or consortium partners have to rework or correct any of their works, design and/or any other documents, then the Subcontractor shall further hold the Main Contractor harmless against and indemnify the Main Contractor from any additional Cost that the Main Contractor incurs or will incur in connection with such rework or correction by his respective other contractors and/or consortium partners. Any such liability for any such error, omission, ambiguity, inconsistency, inadequacy or other Defect shall be subject to the limitations under Articles 52.4 through 52.6.

Samples

33.11 If agreed between the Parties or instructed by the Main Contractor as a Variation, the Subcontractor shall submit samples and relevant information to the Main Contractor for pre-construction review. Each sample should be labelled with its origin and intended use in the Subcontract Works.

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As-built drawings

33.12 The Subcontractor shall prepare, and keep up-to-date, a complete set of records of the execution of the Subcontract Works, showing the exact as-built locations, sizes and details of the Subcontract Works as executed. A preliminary copy shall be supplied to the Main Contractor in sufficient time before Taking -Over.

33.13 In addition, the Subcontractor shall supply to the Main Contractor on a Date as set out in the Schedule of Subcontractual Amendments (or to be agreed between the Parties) the final as-built drawings of the Subcontract Works, if they are different from the documents described in Article 33.12, showing all Subcontract Works as executed.

Training and operation and maintenance manuals

33.14 The Subcontractor shall carry out the training of Employer’s Personnel or such other personnel as specified in the Main Contract in the operation and maintenance of the Subcontract Works to the extent specified in the Subcontract.

33.15 Any training in addition to training specified in the Subcontract shall be considered to be a Variation.

33.16 In sufficient time but in any event not later than four months prior to Taking- Over of the Works (or the respective Section) under the Main Contract, unless otherwise agreed, the Subcontractor shall supply to the Main Contractor preliminary operation and maintenance manuals in sufficient detail for the Main Contractor and/or Employer to operate and maintain the Subcontract Works according to the Main Contractor’s Requirements and Employer’s Requirements.

33.17 Final operation and maintenance manuals will be handed over on a Date to be agreed between the Parties.

Article 34 Intellectual property rights

34.1 As between the Parties, the Subcontractor shall retain the copyright and other intellectual property rights in the Subcontractor’s Documents and other Design documents made by (or on behalf of) the Subcontractor.

34.2 Subject to the confidentiality obligations of Article 59, the Subcontractor shall be deemed (by signing the Subcontract) to give to the Employer, the Main Contractor as well as the operator employed by or on behalf of the Employer a non-terminable, transferable, non-exclusive and royalty-free right to copy, use and communicate the Subcontractor’s Documents for the purposes set out in Article 34.3 but not for any other purpose. The value of the fee for this right is included in the Subcontract Price.

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34.3 The right shall:

  1. apply throughout the actual or intended working life (whichever is longer) of the relevant parts of the Subcontract Works;
  2. entitle any person in proper possession of the relevant part of the Subcontract Works to copy, use and communicate the Subcontractor’s Documents for the purposes of completing, operating, maintaining, adjusting, repairing or demolishing the Subcontract Works; and
  3. in the case of Subcontractor’s Documents that are in the form of computer programs and other software, permit their use in object code on any computer on the Site and other places as envisaged by the Subcontract, up to the maximum number of computers stated in the Subcontract, including replacements of any computers. The Employer and the Main Contractor each are entitled to make copies of such software for back-up purposes.

34.4 The Subcontractor’s Documents and other Design documents made by (or on behalf of) the Subcontractor shall not, without the Subcontractor’s consent, be used, copied or communicated to a third party by (or on behalf of) the Main Contractor for purposes other than those permitted under this Article 34.

34.5 The Subcontract Works may contain freeware, shareware or open source software for the use of which no licence fee is charged to Main Contractor. Regarding such portions of software, the Main Contractor hereby accepts the specific licence conditions either being part of the software documentation or accompanying the hardware. Upon request of the Main Contractor, the Subcontractor is prepared to provide a copy of the source code of the open source software, if required by the specific licence conditions. To the extent there is a conflict between this Subcontract and the specific licence conditions, the terms of the specific licence conditions shall prevail over the terms and conditions of this Subcontract with regard to the open source software.

34.6 As between the Parties, the Main Contractor shall retain the copyright and other intellectual property rights in the Main Contractor’s Requirements and other documents made by (or on behalf of) the Main Contractor. The Subcontractor may, at its expense, copy, use, and obtain communication of these documents for the purposes of the Subcontract. They shall not, without the Main Contractor’s consent, be copied, used or communicated to a third party by the Subcontractor, except as necessary for the purposes of the Subcontract.

Intellectual property infringement indemnity by the Parties

34.7 The Subcontractor shall indemnify the Main Contractor against all claims of infringement of any patent, registered design, copyright, trade mark or trade name, or other intellectual property right, if the claim or proceedings arose out of the Design, construction, manufacture or use of the Subcontract Works, unless the infringement (or allegation of infringement):

  1. was the result of part (or all) of the Subcontract Works being used for a purpose other than that indicated by, or reasonably to be inferred from, the Subcontract; [Page41:]
  2. was the result of part (or all) of the Works being used in association or combination with any thing not supplied by the Subcontractor; and/or
  3. was the direct result of the Subcontractor’s compliance with the Design or Instructions of the Main Contractor.

34.8 Where a claim of infringement of intellectual property rights as referred to in Article 34.7 is made against either Party and the Subcontractor is not liable to indemnify the Main Contractor under that Article, then the Main Contractor shall indemnify the Subcontractor against such claim and the provisions of Article 34.11 shall apply with the necessary changes being made.

34.9 The obligation to indemnify set out in Articles 34.7 and 34.8 shall be subject to the indemnifying Party’s right to mitigate the potential loss by acquiring directly or indirectly the right to use the relevant intellectual property rights, or by modifying the Design so it no longer infringes such rights or otherwise.

34.10 The Parties’ remedies under this Article 34 shall be in place of and to the exclusion of any other remedies in relation to any infringement of any intellectual property rights as described in this Article.

Notification and handling of claims for infringement

34.11 Each Party shall promptly give Notice to the other Party of any Subcontractrelated claim of infringement of intellectual property rights made against it by the Employer or any other third party. The indemnifying Party may, at its expense, conduct negotiations for the settlement of such claim, and any litigation or arbitration that may arise from it. The other Party or its representatives shall not make any admission that might be prejudicial to the indemnifying Party, unless the indemnifying Party has failed to take over the conduct of the negotiations, litigation or arbitration within a reasonable time after having been requested so to do.

Article 35 variations and changes to the subcontract works Variations – general principles

35.1 The purpose of these Variations provisions is to ensure that the Subcontractor is paid a reasonable price for any changes in the Subcontract Works and the Main Contractor preserves its right, within the framework of this Subcontract, to change the Subcontract Works and maintain its right to Delay Damages as the Subcontract Works progress. Variations may be instructed by the Main Contractor or proposed by the Subcontractor.

35.2 Except to the extent that the Variation was necessitated by the Subcontractor’s default, the fair and reasonable Cost plus profit of all Variations shall be taken into account in ascertaining the Subcontract Price. Variations that arise from the defaults of the Subcontractor are to be paid for by the Subcontractor.

35.3 The Subcontractor has no obligation to make a change that is not instructed as a Variation. Each Variation, and the combined effect of all Variations, shall be taken into consideration in the assessment of the Time to Taking-Over.

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Main Contractor’s right to vary the Works

35.4 The Main Contractor shall have the right to request and subsequently order Variations to the Subcontract Works from time to time during the performance of the Subcontract until the complete Subcontract Works have been taken over, or if the Variation is agreed by the Subcontractor, until the end of the last Defect Correction Period.

35.5 Variations may not, without the agreement of the Subcontractor, consist of the omission of any part of the Subcontract Works in order to have that work executed by parties other than the Subcontractor. Where there is a Variation resulting in an omission of a part of the Subcontract Works, the value of the Variation will include compensation for underrecovered overheads and profit of the Subcontractor.

Subcontractor’s right to refuse a Variation

35.6 The Subcontractor may refuse to carry out any Variation that:

  1. is unrelated to the Subcontract Works;
  2. is not technically practicable; or
  3. will reduce the safety of the Subcontract Works.

Subcontractor-proposed Variations

35.7 The Subcontractor may at any time propose to the Main Contractor any Variation, including any Variation that, in the Subcontractor’s opinion, will improve the Subcontract Works, including, without limitation, the quality, efficiency or safety of the Subcontract Works, or should reduce the expense to the Main Contractor of executing the Subcontract Works. The Subcontractor shall outline the foreseen benefits of any proposed Variation, including the financial aspects. Any value of the benefits, unless otherwise agreed, will be shared equally.

Procedure for Variations

35.8 If the Main Contractor requests a Variation, whether or not the Variation was first suggested by the Subcontractor, the Main Contractor shall send to the Subcontractor a Notice describing the Variation. If the Main Contractor so wishes, the Subcontractor shall first give an estimate of the Cost of preparing a Subcontractor’s Variation Proposal and time required for its execution.

35.9 After receipt of the Main Contractor’s request for a Variation and unless otherwise agreed, the Subcontractor shall within 14 Days prepare and submit a proposal (“Subcontractor’s Variation Proposal”) comprising:

  1. a description of the proposed Design and work to be executed;
  2. a program for the execution of the Variation;
  3. a proposal for any necessary modifications to the Time Schedule and the Time to Taking-Over; [Page43:]
  4. a lump sum price for the Variation (including a breakdown of the elements it comprises, for informational purposes) or, if so requested by the Main Contractor, a price estimate comprising quantities and either a list of all-in unit prices or a list of prices per unit subject to the application of a mark-up for general overheads and profit; and
  5. other elements of the Subcontract likely to be affected by the Variation.

If, however, the Subcontractor objects to the Variation with reference to its right to refuse under Article 35.6, the Subcontractor shall, within same period, instead of a Subcontractor’s Variation Proposal, submit a Notice to the Main Contractor clearly describing the reasons for this refusal and, if possible, proposing an alternative.

35.10 The Main Contractor shall make its decision on whether or not to proceed with the Variation within 42 Days from receipt of the Subcontractor’s Variation Proposal or Notice under Article 35.9 and give Notice to the Subcontractor of that decision forthwith. If the Main Contractor instructs the Subcontractor to proceed with the Variation, but does not accept the Subcontractor’s Variation Proposal, the Main Contractor shall state how the Subcontractor’s Variation Proposal shall be amended and the reasons for and Cost consequences of the changes to the Subcontractor’s Variation Proposal. The Subcontractor shall then be obliged to carry out the Variation, but may refer the dispute over its consequences to be settled in accordance with Chapter 13.

35.11 If the Main Contractor decides not to implement the Variation or if it fails to order the Variation within 42 Days after receipt of the Subcontractor’s Variation Proposal, then, unless the Variation was suggested in writing by the Subcontractor, the Main Contractor shall be obligated to pay the Subcontractor the Cost of preparing the Subcontractor’s Variation Proposal.

35.12 If the Subcontractor has objected to a Variation in accordance with the requirements under Article 35.6, the Main Contractor shall not have the right to instruct the Subcontractor to carry out the Variation, but may refer the dispute to be settled in accordance with Chapter 13.

Disputed Variations

35.13 If the Parties disagree as to whether certain work or delivery of supplies or materials, which the Main Contractor requires or required to be performed, is already included in the Subcontractor’s obligations, and consequently whether such work or deliveries constitutes a Variation, then the following procedure shall be followed:

  1. The Main Contractor shall in a Notice to the Subcontractor describe the work or delivery in question and give the reasons why, in the Main Contractor’s opinion, it is included in the Subcontractor’s obligations. Alternatively, the Subcontractor may produce a Notice stating why the work or delivery in question is not within the scope of the Subcontract.
  2. Unless otherwise agreed, the Subcontractor shall then prepare a proposal containing the information specified in Article 35.9, and, if it has not already done so, shall give the reasons why, in the Subcontractor’s opinion, the requested work or supplies constitute a Variation. [Page44:]
  3. The Main Contractor may then instruct the Subcontractor to perform the work or supplies in question. Such work or supply shall be regarded as a disputed Variation.
  4. Either Party may then require the dispute to be settled in accordance with Chapter 13.
  5. If the Subcontractor refuses to perform the work or supplies in accordance with the requirements under Article 35.6, the Main Contractor shall not be entitled to instruct the work or supplies to be performed.

35.14 Any and all claims to additional payment, however they may arise, will be dealt with under the provisions of Chapter 13.

Daywork

35.15 For work of a minor or incidental nature, the Main Contractor may instruct that a Variation shall be executed on a daywork basis. In this instance, any work so instructed shall then be valued in accordance with the Daywork Schedule included in this Subcontract, and the following procedure shall apply. If a Daywork Schedule is not included in this Subcontract, this Article 35.15 shall not apply.

Before ordering goods for such work, the Subcontractor shall submit quotations to the Main Contractor. When applying for payment, the Subcontractor shall submit invoices, vouchers and accounts or receipts for any goods.

Subsequent to any work being performed pursuant to an Instruction referred to above, then the Subcontractor shall deliver each day to the Main Contractor, accurate statements in duplicate which shall include the following details of the resources used in executing the previous day's work:

a) the names, occupations and time of Subcontractor’s Personnel;

b) the identification, type and time of Subcontractor’s Equipment and Temporary Subcontract Works, and

c) the quantities and types of Plant and materials used.

One copy of each statement will, if correct, or when agreed, be signed by the Main Contractor and returned to the Subcontractor. The Subcontractor shall then submit priced statements of these resources to the Main Contractor, prior to their inclusion in the next application for payment under Article 42.