The Cost Plus Contract Form is primarily utilized in complex projects under UAE jurisdiction where the scope cannot be fully defined at the outset or where flexibility is required in project execution. This contract type is particularly suitable for large-scale construction, engineering, or development projects in the UAE where the final scope may evolve during execution. The document provides a structured framework for managing costs, defining allowable expenses, establishing markup calculations, and implementing cost control mechanisms. It includes specific provisions required under UAE law, including compliance with Federal Law No. 5 of 1985 (Civil Code) and other relevant regulations. The agreement is designed to protect both client and contractor interests while maintaining transparency in cost management and providing clear audit trails for all expenditures.
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1. Parties: Identification of contracting parties with full legal names and addresses
2. Background: Context of the agreement and relationship between parties
3. Definitions and Interpretation: Definitions of key terms and interpretation rules
4. Scope of Work: Detailed description of services or works to be performed
5. Cost Definition and Components: Detailed breakdown of what constitutes allowable costs
6. Fee Structure and Markup: Definition of the contractor's fee/markup percentage and calculation method
7. Payment Terms and Procedures: Payment mechanics, timing, and documentation requirements
8. Cost Verification and Audit Rights: Procedures for verifying costs and client's audit rights
9. Contractor's Obligations: Key responsibilities and performance requirements
10. Client's Obligations: Client's responsibilities including access, information, and approvals
11. Change Management: Procedures for handling changes to scope or costs
12. Records and Documentation: Requirements for maintaining cost and project records
13. Term and Termination: Contract duration and termination provisions
14. Liability and Indemnification: Risk allocation between parties
15. Force Majeure: Provisions for unforeseen circumstances
16. Confidentiality: Protection of confidential information
17. Governing Law and Dispute Resolution: UAE law governance and dispute resolution procedures
1. Performance Incentives: Optional bonus structures for exceptional performance
2. Warranty Provisions: Required for contracts involving physical works or products
3. Insurance Requirements: Detailed insurance obligations beyond standard coverage
4. Security Requirements: For projects requiring specific security measures or clearances
5. Environmental Compliance: For projects with environmental impacts
6. Local Content Requirements: For projects subject to UAE local content rules
7. Intellectual Property Rights: For projects involving IP creation or licensing
8. Step-In Rights: For critical projects requiring client step-in capabilities
9. Anti-Corruption Provisions: Enhanced compliance requirements for high-risk projects
1. Schedule 1 - Detailed Scope of Work: Comprehensive technical specifications and requirements
2. Schedule 2 - Cost Breakdown Structure: Detailed categorization of allowable costs
3. Schedule 3 - Rate Card: Agreed rates for labor, equipment, and materials
4. Schedule 4 - Key Personnel: List of key team members and their roles
5. Schedule 5 - Payment Procedures: Detailed invoicing and payment processes
6. Schedule 6 - Performance Standards: Specific KPIs and performance metrics
7. Schedule 7 - Required Reports: List and templates of required cost and progress reports
8. Schedule 8 - Form of Cost Statement: Template for cost reporting and verification
9. Appendix A - Insurance Requirements: Detailed insurance specifications
10. Appendix B - HSE Requirements: Health, safety, and environmental requirements
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