Definition of Terminologies

The following words and expressions shall have the following meanings unless otherwise provided for :

The Company : The Saudi Electricity Company.

The Supplier : The Source through which the Company procures the required Materials.

The 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.

Purchase Order : 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 than one-time.

Inspection 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.

The Contract : 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.

The Services : An expression used for non-material requirement such as, Installation, Commissioning, Training and Testing.

Purchase 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.

1- Selection 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.

3- Waiver And Subcontracting :

3.1- No Waiver of a Right by either party shall be effective unless made expressly and in writing by such party.

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 Order.

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- Inspection :

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.

6- Packing 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.

8- 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.

9- Export License :

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- Force Majeure :

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 Regulations.

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.

13- 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.

14- 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.

16- Conflict 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.

17- Late 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.

18- Warranty 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 Conditions.

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 Supplier.

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.

19- 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.