TERMS AND CONDITIONS OF PURCHASE
Definition of Terminologies
following words and expressions shall have the following meanings unless
otherwise provided for :
: The Saudi Electricity Company.
: The Source through which the Company procures the required Materials.
Materials : Materials including anything
which are solid, liquid or gaseous, such as Equipment, Hardware, Spare Parts,
Chemicals or any other Materials Needed by the Company.
: A written Purchase Document, which when accepted by the
Vendor, creates a binding Contractual Relationship between the Buyer and the Supplier.
A Purchase Order is used to purchase Materials on a one-time basis, or more
Agent : A specialized Company bonded by
a Contract with the Company to conduct Testing and Inspection of Material
during manufacturing or before Delivery to ensure its compliance with
specifications and the required quality measures.
: An agreement signed by two parties (The Company and The
Supplier) to execute specific work or to supply certain Material, Acceptance of
the Agreement by the Supplier, creates a binding Contractual Relationship
between the Two Parties.
: An expression used for non-material requirement such as,
Installation, Commissioning, Training and Testing.
Agreement : A signed contract between the
Company and the Supplier for supplying frequently used Materials For a specific
period of time, by the issuance of Purchase Orders.
Of Law And Language :
1.1- The Purchase Order shall be
governed, interpreted and executed in accordance with the Laws of The Kingdom
of Saudi Arabia.
1.2- Any dispute which arises during the execution of the Purchase Order and the
two Parties failed to resolve amicably, will be referred to the concerned
Judicial Authorities in The Kingdom of Saudi Arabia.
1.3- Arabic Language is the
Official Language for the interpretation of these Terms and Conditions.
2- Nature Of
The Agreement :
2.1- The Purchase Order shall be
considered accepted upon Company receipt of the Vendor's acknowledgment signed
by the Supplier. However, if no exceptions are recorded by Supplier within
seven (7) days of the Order Receipt, total acceptance of the order is
acknowledged by Supplier without reservation or exceptions, whether or not the
Supplier has signed and returned the Acceptance copy. Any additions,
limitations, or Order modifications to the Order set forth in Supplier 's
Quotation, acceptance or otherwise shall be of no force or effect unless set
forth in the Order.
2.2- Any Technical Data,
Specifications, Standards, Drawings, Designs and the like attached to,
referenced in, or later incorporated into the Order by Change Order as provided
in Article (4) collectively referenced to as "The Saudi Electricity
Company Data" will form a part of the Order.
2.3- These terms and conditions
supersede any prior correspondence, proposals or Agreement written or oral not
set forth in the Order.
2.4- If any provision of the
Order is or becomes void or unforgeable by law, the reminder of the Purchase
Order shall be valid and enforceable.
And Subcontracting :
3.1- No Waiver of a Right by
either party shall be effective unless made expressly and in writing by such
3.2- No part of the Purchase
Order nor any Right arising under it may be assigned or sublet without the
Company's prior written consent and in such cases, the Vendor and the Subcontractor
are collectively held responsible to execute all Terms of the Purchase Order.
3.3- The Supplier shall not
assign any part of the contracted work to any Subcontractor without the
Company's prior Written Acceptance, and in such cases, the Company's Acceptance
does not relieve the Supplier from his responsibilities, as per the Purchase
4- Changes :
4.1- At any time, the Company
may make a change within the general scope of the Purchase Order
by a written Notice to Supplier, promptly upon receipt of the Company's Notice
of Changes, Supplier shall proceed with the Purchase Order as changed. Changes
may include but not limited to changes in the Technical Aspects of the
materials, method of shipment or packing, inspection standards and place of
delivery. If a change affects the Purchase Price or Delivery Date, the Company
and the Vendor shall mutually agree upon an equitable adjustment of the same.
The change, and any such adjustment, shall be set forth in a written Change Order
issued by the Company and acknowledged by the Vendor.
4.2- Unless otherwise agreed in
writing, any claim by Vendor for adjustment in the Purchase Price or Delivery
Date must be received by the Company within fifteen (15) days following receipt
by Vendor of any instruction from the Company, which Vendor believes constitute
a change. Vendor shall make available for examination by the Company, relevant
books and records supporting Vendors request.
4.3- The Company reserves the
right to increase/decrease the Quantities of the Purchase Order to a limit not
exceeding (20%) of the Purchase Order value at the same prices and conditions
during the period of executing the Order. The Supplier shall not have the right
to claim for any compensation for that, and in emergency cases the above limit
of (20%) can be exceeded at the Supplier's Acceptance. The Company and the
Supplier shall agree on the Delivery period for the Additional Quantities.
5.1- To enable the Company or
its designated Inspection Agency to be present for Inspection and Test, the
Supplier is required to advise the Company in writing a minimum of fifteen (15)
days prior to the scheduled date for Inspection. The Company reserves the
rights to postpone the Inspection for a period of sixty (60) days if deemed
necessary. In case long duration Inspection Time is needed, the actual Date of
Commencement shall be subject to Agreement between both Parties. If the results
of the Tests are not satisfactory, the Supplier shall conduct the Tests at his own
cost and responsibility and without any extension in the Delivery Date.
5.2- A Pre-Delivery Inspection
Report shall be prepared by the Supplier on Machinery, Transportation
Equipment, etc. and shall be forwarded to the Company before the Delivery of
the subject Equipment at no extra cost to the Company. The Supplier understands
that any Delivery made without Pre-Delivery Inspection Report is subject to
rejection and return at the Supplier's expense. The late Delivery Penalty
Clause will be in effect until the Pre-Delivery Inspection Report is received
regardless of the actual Delivery Date of the required Materials. It is the
Suppliers' responsibility to report any Shipment, Transportation Damage
incurred to the Materials.
5.3- The Company shall not make
any payment for Suppliers Invoice for Materials with inspection requirements,
supplied against the Purchase Order without copy of the "Release for
Shipment Certificate" issued by the designated Inspection Agency authorized
by the company and / or "Inspection Release" issued by the concerned
Party in the Company.
5.4- The Company or its designated
Inspection Agency Reserves the rights to perform Quality Assessment, Audit,
Surveillance Activities and to inspect Materials at Suppliers' / Manufacturers'
/ Subcontractor's facility to verify compliance with Purchase Order's Terms and
Conditions and its related Documents, and to check any / all tests specified in
the required Documents, without any extra charges.
5.5- The Company or its
designated Inspection Agency reserves the right to visit Suppliers' / Subcontractors'
facilities to perform visual Inspection and Testing as deemed necessary,
including but not limited to those related to Workmanship, Materials Surface
Defects, Component Dimensions and Paint Specifications, the Supplier or the Subcontractor
shall provide all the possible support for the Company to conduct all these
activities without extra charges. Moreover, the Supplier shall include in all
Contracts with the Subcontractors a provision to allow the Company or its
Designated Agent to visits their Facilities.
5.6- The Company reserves the
right to require Certificate and Data from the Supplier on any pertinent aspect
of the Manufacturing Process including but not limited to Mill Test Reports,
Heat Treatment Certificates, Welders and Welding Procedure Qualification
Records, non-Destructive Examination Records and the Quality Control Manual,
that will form part of the non-Material requirement and it shall be shipped
with the Materials as a "Document Package". The Supplier shall submit
all these Certificates and Data without any extra charges.
5.7- The Inspection criteria
stated in the above Articles do not relieve the Supplier or his Subcontractor
of his contractual Responsibility for Quality and its control. Issuance of
Acceptance Certificates from Inspection Committees shall not relieve the
Supplier from his responsibilities if the Final Inspection at the Company’s Warehouse
shows that the Materials do not comply with the conditions and the required
Specifications and without violation of the statement in Article (No. 5.8).
5.8- The Company reserves the
right to perform Final Inspection for all Materials and Equipment. The Final
Inspection shall be the basis for Final Acceptance or Rejection by the Company,
all other Inspection and Releases notwithstanding.
And Delivery :
6.1- All Materials must be
packed in accordance with the Company Packing Specifications and in such a
manner that protect the Materials against damage or destruction during transit
till Delivery to the designated Delivery Point, without violating Article (No. 4.1).
Materials supplied against a single Line Item, which consists of more than one
component, may be assembled or individually packed, but all components shall be
delivered at the same time.
6.2- The Supplier shall make all
shipments and deliveries strictly in accordance with the requirements of the
Order. The Supplier shall promptly notify the Company of any anticipated or
actual delay, the reasons for the delay, and the actions being taken by the
Supplier to overcome or minimize the delay. Such Notification shall in no way
relieve Supplier of his obligations from the Order.
7- Title And
Risk Of Loss :
The Title to the Material and
Risk of Loss shall pass from the Supplier to the Company only upon Delivery of
Materials to the Company's designated Delivery Location.
Cancellation For Cause :
The Company reserves the right
to cancel the Purchase Order by a written Notification to the Supplier which
will be sent through the Registered Mail and without the need to undertake
formalities or resort to jurisdictions. However, the Company shall reserve the
right to claim for compensation for the sustained damages. In such case, the
Company may execute the Purchase Order or the remaining portion in the way
deems suitable and claim price difference, Administrative expenses and delay
charges in the following cases :
8.1- If the Company discovers
acts of cheating and manipulation.
8.2- If the Supplier proved to
have used inappropriate practices against the Public interests.
8.3- If the Supplier violates
any of the Purchase Order's Terms and Conditions or neglects any of his
obligation and does not rectify the same within (30) days from his notification
in writing to remedy the same.
8.4- If the Supplier had been
subjected to bankruptcy, failed to deliver the materials, a Partner or a Member
in a Company was subjected to bankruptcy or liquidity.
The Supplier shall apply for
obtaining any license required to export the Material from the Country of
Origin. The Company shall have the right to immediately cancel the Order
without Liability to the Supplier if the Export License Application is disapproved
or unreasonably delayed for a period not exceeding thirty (30) days in the
Company's sole judgment.
10.1- "FORCE MAJEURE"
shall mean any act, cause or occurrence which is not within the reasonable
control of the Company, Supplier or any of the Supplier's Subcontractor and
which render either party unable to perform its obligations.
10.2- If a party is unable to
perform any of its obligations as a result of Force Majeure, performance of
such obligations shall be excused during the period of Force Majeure, such
party shall immediately give written notice to the other party of the date of
starting of the Force Majeure condition and the extent to which it will affect the performance. After a period
of Force Majeure the Company and the Supplier may execute a Change Order
reflecting mutually agreeable adjustment in the Delivery Date. If the Force
Majeure continues for more than (29) cumulative days or a total of (15)
separate days, the Company may cancel the Order in whole or in part and the
Company shall have no liability to the supplier for costs of damages arising
out of such cancellation.
11- Right Of Offset :
Upon written notice, any sum
payable to the Supplier under the Order may be set off by the Company against
any sum payable to the Company by the Supplier under Order or any such other
Orders between the Company and the Supplier or to deduct such amounts from the
Final Performance Guarantee without Notification or Judicial procedures.
12- Taxes :
12.1- The prices shown on the
Purchase Order include all Taxes, Duties, Fees or other Government obligations
relating to the purchase and delivery of the Materials unless otherwise
indicated in the Order. If any changes occurs in the Custom Duty charges or any
other Taxes imposed during the period from Date of submission of the Tender and
the Last Date of Delivery, the difference in prices shall be settled
accordingly provided that the Supplier submit all supporting Documents for the
payment of Customs Duty or the other Taxes or the imported Materials with the
revised increased rates and in case of the Reduced Rates, the difference shall
be deducted from the Contract value unless the Supplier prove that charges were
paid against the original Rates prior to the change and the Purchase Order was
awarded to the Supplier upon the understanding that the prices charged are not
violating any pricing Regulations and that the Supplier Acceptance of the
Purchase Order shall constitute Supplier's Warrantee compliance with all such
12.2- In the event of delaying
the Delivery beyond the specified Delivery Date and the changes in the Customs
Rates or the other Taxes occurred after the Delivery Date, then the Supplier
shall bear all increases in prices unless the delay in Delivery was due to
Force Majeure or for causes related to the Company, and in cases of reduction
in the Custom Rates or the other Taxes, the difference shall be deducted from
the Contract Value.
Protection Against Infringement :
The Supplier warrants that the
Materials do not infringe any Patent Rights, Copy Rights, Trade Marks, or Trade
Secret owned or controlled by any third party, either in the country of
manufacture or use. The Supplier agrees to defend, indemnify and hold the
Company harmless against any and all liability, loss or expenses arising out of
Patent, Copy Right, Trade Mark infringement or Trade Secret misappropriation
claim relating to the Materials or any part thereof.
Confidentiality Of Information :
14.1- The Supplier shall
safeguard, treat as Confidential and shall not divulge any Company Data to
anyone other than that of his source of supply or other persons designated in
writing by the Company, so long as, and to the extent that, such of the Company
Data does not become part of the Public Domain; does not correspond to
information furnished or made known to Supplier as a matter of Right or an
unrestricted basis by a third party or was not within the Supplier's lawful
possession at the time of disclosure.
14.2- Should the Supplier desire
to publish or release any publicity or public relations materials of any kind
concerning or relating to the Order or to the Supplier's activities in
connection with the Order, the Supplier shall first submit such materials to
the Company for review and Approval. The Supplier shall not publish or release
and shall ensure that its sources do not publish or release any such materials
without the Company's prior written Approval.
15- Title To
Technical Data :
The Company Data shall remain
the Company's property and shall be returned to the Company upon request and
the Supplier not allowed to keep any copy of such Data. All Designs, Drawings
and Calculations prepared by the Supplier for the Company shall become the
Company's property. All Rights to any Inventions Processes or Technology
developed for the Order shall become the Company's property.
Of Interest :
The Supplier shall ensure that
neither he nor his employees or agents make, receive, provide or offer
substantial gifts, entertainments, payments, loans or considerations for the
purpose of influencing individuals or organizations to any course of conduct in
anyway relating to or affecting the Order. Failure to observe the provision of
this Article shall be a Materials Breach of the Order and shall constitute a
cause for an immediate termination and the Supplier shall be obligated to
compensate the Company for any physical damages.
Delivery Penalty :
17.1- The Company will invoke
Later Delivery Penalty if the Supplier is delinquent in meeting with the
Delivery Date stated in the Order, the Supplier shall be charged at the rate of
one per cent (1%) of the price of the Delayed Items(s) per week, or part
thereof even if the Penalty Charges exceeded the value of the Delayed Item to
the maximum of Four Per cent (4%) of the total Purchase Value. The Company
reserves the right to deduct any applicable Late Delivery Penalty from the
Supplier's Invoices due for payment. Also the Company reserves the right to
cancel the Purchase Order if the total Penalty charges amounted to four per
cent (4%) of the total Purchase Order Value and to procure the Materials from
another source and deduct any difference in prices from the supplier and
without violating the Company Rights to claim for compensation for any other
damages. The Late Delivery Penalty to be invoked on the total Purchase Order
Value if the Materials cannot be used due to the Delay in Delivery and the
Company reserves the Right to suspend the Supplier or to decline its
participation in future Bidding, temporarily or permanently.
17.2- The Penalty For Demurrages
And Containers The Supplier should send copies of Shipping Documents concerning
the consignment to the Company immediately after shipping the Materials,
through Fax, E-Mail or through the Fast Mail. Any delays in sending the
Shipping Documents or differences/discrepancies in the Documents, create delays
in the clearance of the Materials from customs, the Supplier shall bear all
costs attributed to this Delay and the Company reserves the Right to deduct
these charges from the Supplier's Invoices due for Payment or any other amount
payable to the Supplier.
And Rejection :
The Supplier Warrants That :
18.1- Upon Delivery to the
Company, the Supplier shall convey clear title to the Materials free of any
Lien, Encumbrance or Security interest.
18.2- The Materials shall
conform to the Company Data and shall be new and unused, of high quality and
workmanship within generally recognized industry standards and shall be fit for
the purpose or use for which they are intended to the extent such purpose or
use is known or reasonable should be known to the Supplier.
18.3- The Materials shall be
free from Repair, Rectification work or Rework. The Company reserves the Sole
Right to approve such work on ordered Materials. In case it is discovered that
such work has been performed without the Approval after Delivery to the
Company, it shall be considered sufficient causes for cancellation of the
Purchase Order and treated under Article Number Eight (8) of these Terms and
18.4- If the Materials are sold
by sample, they shall conform to the sample.
18.5- If the Materials are found
not to conform to the foregoing warrantees at any time within Eighteen (18)
months following Delivery to the Port of Export or Twelve (12) months from the
commencement of use in the Kingdom of Saudi Arabia, whichever is late، the Company
may require the Supplier to repair or replace non-conforming Materials at
Supplier's cost including the cost of Transportation. Should the Supplier fail
to repair or replace non-conforming Material within a period of Thirty (30)
days from the Date of Notification, the Company may repair or replace such Materials
either itself or through others and charge the cost thereof to the Supplier.
18.6- If at any time prior to or
within the six (6) months following Delivery to the Company in Saudi Arabia,
the Company determined that the Materials or any portion thereof, or their
Tender are not strictly in conformance with the Terms of the Order, the Company
may reject, refuse acceptance or revoke acceptance of any or all of the
Materials or Tender thereof and cancel the Order without any obligation to the
Supplier. In addition, the Company may, at any time, revoke its acceptance of
the Materials should the Company discover Latent Defects in the Materials or
any part thereof, and procure the Materials from another source if the Supplier
fail to repair the Materials within thirty (30) days, all costs incurred by the
Company as a result of such cancellation shall be for the Supplier's Account.
18.7- The Supplier shall
withdraw the rejected Materials within one (1) month from Date of Notification
and to supply the replacement and in the event that the Supplier fails,
stocking charges will be computed at the rate of one per cent (1%) from the
Value of the rejected Materials for each week from the Date of Notification and
the Company reserves the Right to deduct these charges from any payment due to
18.8- If the Supplier fails to
withdraw the rejected Materials, within three (3) months from the Date of
Notification, the rejected Materials shall become the property of the Company
and the Company shall have the Right to dispose them in the appropriate way and the Supplier shall have no
right to claim for any compensation.
Performance Bond :
The Supplier shall be obliged to
submit a Performance Bond at five per cent (5%) of the Purchase Order Value if
the Order Value exceeds One Million Riyals or its equivalent, within ten (10)
days from the Date of Receipt of the Order as a step to return back the initial
Bid Bond. The Final Performance Bond shall be valid for Three (3) months, from
the Date of receiving the last Shipment at the Company's Warehouses.