This Framework Agreement (Construction) is designed for use in the Indonesian construction sector where parties anticipate an ongoing relationship involving multiple construction projects or works packages. It provides a master agreement structure under which individual work orders can be issued, saving time and reducing negotiation costs for subsequent projects. The agreement is fully compliant with Indonesian construction laws, particularly Law No. 2 of 2017 and its implementing regulations, and includes all necessary provisions for construction services, licensing requirements, and local content rules. This type of agreement is particularly valuable for organizations undertaking regular construction works, as it establishes standardized terms, pricing mechanisms, and operational procedures while maintaining flexibility for project-specific requirements. The Framework Agreement (Construction) includes comprehensive provisions for risk allocation, quality standards, and dispute resolution mechanisms tailored to the Indonesian legal context.
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1. Parties: Identification of the principal parties entering into the framework agreement
2. Background: Context of the agreement and general intention of the parties
3. Definitions and Interpretation: Key terms used throughout the agreement and rules of interpretation
4. Framework Structure: Overview of how the framework operates, including work order processes
5. Scope of Services: General description of construction services covered under the framework
6. Work Order Process: Procedures for issuing, accepting and executing specific work orders
7. Duration: Term of the framework agreement and any extension provisions
8. Pricing and Payment: Framework rates, pricing mechanisms, and payment terms
9. Performance Standards: Required quality standards and performance metrics
10. Contractor Obligations: General obligations of the contractor under the framework
11. Principal Obligations: General obligations of the principal under the framework
12. Insurance and Liability: Required insurance coverage and liability provisions
13. Compliance and Permits: Regulatory compliance requirements and responsibility for permits
14. Termination: Grounds and procedures for termination of the framework or work orders
15. Dispute Resolution: Procedures for resolving disputes under Indonesian law
16. General Provisions: Standard boilerplate clauses including notices, amendments, etc.
1. Security Package: Optional section for performance bonds or other security requirements, used for high-value frameworks
2. Local Content Requirements: Section addressing Indonesian local content requirements, needed when applicable to specific projects
3. Design Obligations: Required when contractor has design responsibilities in addition to construction
4. Environmental Compliance: Detailed environmental requirements, needed for environmentally sensitive projects
5. Technology and IP: Required when framework involves significant technological components or IP rights
6. Force Majeure: Detailed force majeure provisions, recommended for long-term frameworks
7. Step-in Rights: Principal's right to step in and take over works, needed for critical infrastructure projects
1. Schedule 1 - Framework Rates: Detailed pricing structure and rates for different types of works
2. Schedule 2 - Form of Work Order: Template for individual work orders under the framework
3. Schedule 3 - Technical Standards: Specific technical and quality standards applicable to all works
4. Schedule 4 - Key Personnel: List of key personnel and their roles/qualifications
5. Schedule 5 - Required Insurance: Detailed insurance requirements and minimum coverage levels
6. Schedule 6 - HSE Requirements: Health, safety, and environmental requirements
7. Schedule 7 - Performance Metrics: Detailed KPIs and performance measurement criteria
8. Schedule 8 - Required Permits: List of permits and approvals required for typical works
9. Appendix A - Site Access Procedures: Standard procedures for accessing work sites
10. Appendix B - Quality Assurance Plan: Standard quality assurance requirements and procedures
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