CONTRACT AGREEMENT

FORM
SUPPLY AND DELIVERY OF
P. P. WOVEN BAGS
 CONTRACT AGREEMENT FORM
THIS AGREEMENT made on the [insert number] day of [insert month], [insert
year], between HETAUDA CEMENT INDUSTRIES LTD.
of Lamsure,Hetauda-9, Makawanpur, Nepal (hereinafter “the
Purchaser”), of the one part, and [insert complete name of Supplier] of [insert
complete address of Supplier] (hereinafter “the Supplier”), of the other part:
WHEREAS the Purchaser invited Bids for Supply & Delivery of 1.2 Million Nos
P.P.Woven Bags and has accepted a Bid by the Supplier for the supply of those
Goods and Related Services in the sum of NRs ……..[insert amount of contract
price in words and figures including taxes] (hereinafter “the Contract Price”).
NOW THIS AGREEMENT WITNESSETH AS FOLLOWS:
1. In this Agreement words and expressions shall have the same meanings as are
respectively assigned to them in the Conditions of Contract referred to.
2. The following documents shall be deemed to form and be read and construed as
part of this Agreement, viz.:
(a) the Purchaser’s Notification to the Supplier of Award of Contract;
(b) the Bid Submission Form and the Price Schedules submitted by the
Supplier;
(c) the Conditions of Contract;
(d) [indicate other documents required]
This Contract shall prevail over all other Contract documents. In the event of any
discrepancy or inconsistency within the Contract documents, then the documents
shall prevail in the order listed above.
3. In consideration of the payments to be made by the Purchaser to the Supplier as
indicated in this Agreement, the Supplier hereby covenants with the Purchaser to
provide Supply & Delivery of 1.2 Million Nos P.P. Woven Bags and to
remedy defects therein in conformity in all respects with the provisions of the
Contract.
4. The Purchaser hereby covenants to pay the Supplier in consideration of the
provision of the Supply & Delivery of 1.2 Million Nos P.P.Woven Bags and
the remedying of defects therein, the Contract Price or such other sum as may
become payable under the provisions of the Contract at the times and in the
manner prescribed by the Contract.
IN WITNESS whereof the parties hereto have caused this Agreement to be executed
in accordance with the laws of “Nepal” on the day, month, and year indicated
above.
Signed by [insert authorized signature for the Purchaser] (for the Purchaser)
witness
Signed by [insert authorized signature for the Supplier] (for the Supplier)
Witness

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 SECTION-V
CONDITIONS OF CONTRACT

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CONDITIONS OF CONTRACT

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 TABLE OF CONTENTS
1. Definitions CONDITIONS OF CONTRACT
2. Application
3. Country of Origin
4. Standards of P.P.Woven Bags
5. Use of contract Documents and Information; Inspection and Audit
6. Performance Security
7. Unloading
8. Delivery of P.P.Woven Bags
9. Insurance & Transportation
10. Weight of P.P.Woven Bags
11. Payment
12. Quality Analysis
13. Price
14. Contract Amendments
15. Assignment
16. Delays in the supplier's performance
17. Liquidated Damages
18. Termination for Default
19. Force Major
20. Termination for Insolvency
21. Termination for Convenience
22. Settlement of Disputes
23. Governing Language
24. Applicable Law
25. Notice
26. Taxes and Duties
27. Supplier's Responsibilities
28. Purchaser's Responsibilities

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1. Definitions
In this Contract, the following terms shall be interpreted as indicated:
a) “The Contract” means the agreement entered into between the
Purchaser and the Supplier, as recorded in the Contract Form signed
by the parties, including all attachments and appendices thereto and
all documents incorporated by reference therein.
b) “Contract Documents” means the documents listed in the
Agreement, including amendments thereto. Subject to the order of
precedence set forth in the Agreement, all documents forming the
Contract (and all parts thereof) are intended to be correlative,
complementary and mutually explanatory.
c) “The Contract Price” means the price payable to the Supplier
under the Contract for the full and proper performance of its
contractual obligations.
d) “The Goods” means P.P.Woven Bags as specified herein which
the Supplier is required to supply to the Purchaser under the
Contract.
e) “The Services” means those services ancillary to the supply of the
Goods, such as transportation and insurance, and any other
incidental services, such as installation, commissioning, provision of
technical assistance, training, and other such obligations of the
Supplier covered under the Contract.
f) “Delivery" means the transfer of the Goods from the Supplier to the
Purchaser in accordance with the terms and conditions set forth in
the contract.
g) “Completion” means the fulfillment of the related services by the
Supplier in accordance with the terms and conditions set forth in the
contract.
h) “The Purchaser” means the organization purchasing the Goods.
i) “The Supplier” means the individual or firm supplying the Goods
under this contract.
j) “The Plant Site” means the place or places where plant is located.
k) “Day” means calendar day.
l) "The Governing Language" of the contract shall be English/
Nepali.
2. Application
These Conditions shall apply to the extent that they are not superseded
by provisions of other parts of the Contract.

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3. Country of Origin
3.1 All Goods supplied under the Contract shall have their origin in Nepal or
in the countries stated by the bidder or as mentioned in the contract.
3.2 For purposes of this Clause, “origin” means the place where the
P.P.Woven Bags was manufactured or produced.
3.3 The origin of Goods is distinct from the nationality of the Supplier.

4. Standards of P.P.Woven Bags:

The P.P.Woven Bags to be supplied under this Contract shall confirm to the
Technical Specifications prescribed in Section VI.

5. Use of Contract Documents and Information; Inspection and Audit.

5.1 The Supplier shall not, without the Purchaser’s prior written consent,
disclose the Contract, or any provision thereof, or any specification, plan,
drawing, pattern, sample, or information furnished by or on behalf of the
Purchaser in connection therewith, to any person other than a
person employed by the Supplier in the performance of the Contract.
Disclosure to
any such employed person shall be made in confidence and shall extend
only so far as may be necessary for purposes of such performance.
5.2 The Supplier shall not, without the Purchaser’s prior written consent,
make use of any document or information enumerated above
except for
purposes of performing the Contract.
5.3 Any document, other than the Contract itself, specified in Clause 5.1
shall remain the property of the Purchaser and shall be returned (all
copies) to
the Purchaser on completion of the Supplier’s performance under the
Contract if so required by the Purchaser.
6. Performance Security
6.1 The contractor shall cause performance security to be furnished to the
purchaser in the amount of 5% (Five Percent) of the total contract
price(inclusive of VAT where applicable). Such performance security shall
be provided in the form provided herein or in form satisfactory to the
purchaser at the time of signing of the contract agreement.
6.2 The proceeds of the performance security shall be payable to the
Purchaser as compensation for any loss resulting from the Supplier’s
failure to complete its obligations under the Contract.
6.3 The performance security shall be denominated in the currency of
the contract, or in a freely convertible currency acceptable to the
purchaser and shall be in one of the following forms:
a) a bank guarantee issued or counter guaranteed by an "A"
class commercial bank of Nepal in the form provided herein or
another form acceptable to the purchaser.
b) cash deposited in the bank account of purchaser As shown in
Section VII-5.
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 6.4 The validity of the performance security shall be One Hundred
Fifty
(240) days from the date of signing of the contract agreement.
6.5 The performance security will be released only after 30 days of
successful completion of supply of goods under the contract.
7. Unloading
Unloading of P.P.Woven Bags at plant site, Hetauda will be done by the
supplier at his own cost. Unloading time will be opened from 6 AM to 6 PM or
as mutually agreed.
8. Delivery of P.P.Woven Bags
Delivery of P.P.Woven Bags by the supplier at HCIL's plant site, Hetauda,
Nepal shall be started within 7 days from the date of agreement or receipt of
L/C (whichever is applicable) and completed within 120 days ( One
hundred Twenty ) as given below.
Days P.P.Woven Bags (White) Qty.
30 Days 3,00,000 Nos
60 days 6,00,000 Nos
90 days 9,00,000 Nos
Total Qty. in 120 days 12,00,000 Nos
A) The supplier will bear L/C extension charges or bank draft charges in
case of delayed supply even if an extension of delivery period has been
granted by HCIL, except in case extensions granted by HCIL are
attributable to force majeure.
B) The delivery of total quantity of P.P.Woven Bags may be increased or
decreased upto 15% as per the requirement of HCIL .
9. Insurance & Transportation
Supplier need not submit insurance policy, invoice of transporter etc to the
purchaser as payment is to be made after receipt and acceptance
of
P.P.Woven Bags at plant site, Hetauda. Supplier can take insurance policy
for
his own safety. Each truck carrying the P.P.Woven Bags will submit the
Challan alongwith the weight of P.P.Woven Bags taken by the supplier at his
own weigh bridge. Trucks should be covered with tarpaulin to avoid rain water.
10. Weight of P.P.Woven Bags
Weight of each bag including paper used in valve for antifriction should not be
less than 80 gm (+ 5%) and the same will be ascertained on the basis of
weight of full load of each truck weighed at HCIL's weigh bridge. In case the
weight of full truck load is found to be less than the tolerance limit, the lot of
such bags may be rejected or amount on this account may be deducted on
prorata basis.
11. Payment
Payment will be made as follows by A/C payee cheque/bank draft and or
irrevocable letter of credit (whichever is applicable) to be opened in favour
of
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supplier.
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 (i) 90% amount of each consignment of minimum 50,000 Pcs of
P.P.Woven Bags on presentation of the following original documents
after delivery at plant site, Hetauda, Nepal subject to adjustment in
price
for less weight of weighed truck as specified in clause no.10 and after
deducting income tax on total invoice value before VAT as per prevailing
rules of Government of Nepal.
a) Commercial Invoice in case of Non-Nepalese supplier and tax
invoice in case of Nepalese supplier.
b) Certificate of receipt, acceptance and actual weight of
P.P.Woven Bags issued by HCIL.
(ii) Balance 10% of remaining C I F value and VAT will be released within
10 days after receipt and acceptance of the total contractual quantity of
P.P.Woven Bags at plant site, Hetauda of purchaser.
(iii) Any expenses on L/C such as reimbursement charges advising
commission and interest incurred out side Nepal and at negotiating
bank should be borne by the supplier.
12. Quality analysis
i) The suppliers will have to furnish test and inspection report issued by
HCIL's representative in case of bags are manufactured in Nepal. In
case of bag manufactured outside Nepal, Inspection Certificate issued by
SGS/ Lloyds / Bureau Veritas Inspection Agency (cost for the same will be
borne by suppliers). The inspection agency will carry out the
Inspection/test as per their standard practice and draft inspection report
to be sent to the purchaser for approval prior to dispatch of bags.
(ii) In addition to inspection of P.P.Woven Bags as mentioned above HCIL
reserves the right to inspect the bags at the place of manufacturer &
also if required HCIL may either opt to collect sample and get them
tested in
any laboratory or appoint third party inspector to carry out the test in
their laboratory, Such inspection will take place before despatch &
expenses of
such test & inspection will be borne by HCIL.
(iii) The supplier may depute his representative at the time of weighing,
sampling and testing of P.P.Woven Bags.
13. Price : Price of P.P.Woven Bags for the specification as mentioned in Section
VI will be Rs./IRs/US$ ........... per Piece.
14. Contract Amendments
No variation in or modification of the terms of the Contract shall be made
except by written amendment signed by the parties.
15. Assignment
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The Supplier shall not assign, in whole or in part, its obligations to perform
under this Contract, except with the Purchaser’s prior written consent.

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16. Delays in the Supplier’s Performance
16.1 Delivery of the P.P.Woven Bags shall be made by the Supplier in
accordance with the delivery schedule pursuant to clause No.8.
16.2 If at any time during performance of the Contract, the Supplier should
encounter conditions impeding timely delivery of the P.P.Woven Bags
the Supplier shall promptly notify the Purchaser in writing of the fact of
the delay, its likely duration and its cause(s). As soon as practicable after
receipt of the Supplier’s notice, the Purchaser shall evaluate the situation
and may at its discretion extend the Supplier’s time for performance,
with or without liquidated damages, in which case the extension shall be
ratified by the parties.
16.3 Except as provided under Clause 19, a delay by the Supplier in the
performance of its delivery obligations shall render the Supplier liable to
the imposition of liquidated damages pursuant to Clause (17), unless an
extension of time is agreed upon pursuant to Clause 16.2 without the
application of liquidated damages.

17. Liquidated Damages

If the Supplier fails to deliver the P.P.Woven Bags within the time period (in
accordance with agreed schedule) specified in the contract, the Purchaser
shall,
without prejudice to its other remedies under the contract, deduct from
the contract price, as liquidated damages, a sum equivalent to 0.05 percent of
the
delivered price excluding VAT of the delayed portion for each day of delay
until actual delivery, up to a maximum deduction of 10 percent of the contract
price
excluding VAT except in case of force Majeure provided in clause 19.

18. Termination for Default

18.1 The Purchaser, without prejudice to any other remedy for breach of
Contract, by written notice of default sent to the Supplier, may terminate
this Contract in whole or in part:
a) if the Supplier fails to deliver the P.P.Woven Bags within the
period(s) specified in the Contract, or within any extension thereof
granted by the Purchaser pursuant to Clause 16; or
b) if the Supplier fails to perform any other obligation(s) under the
Contract.
c) if the Supplier, in the judgment of the Purchaser, has engaged in
corrupt or fraudulent practices in competing for or in executing the
Contract.
18.2 In the event the Purchaser terminates the Contract in whole or in part,
pursuant to Sub - Clause 18.1, the Purchaser may procure, upon such

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terms and in such manner as it deems appropriate, P.P.Woven Bags
similar to those undelivered, and the Supplier shall be liable to the

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 Purchaser for any excess costs for such similar P.P.Woven
Bags. However, the supplier shall continue performance of the
contract to the
extent not terminated.
19. Force Majeure
19.1 In the event that the supplier or the purchaser is delayed in
performing any of their respective obligation under the contract, and
such delay is
caused by force majeure, including but not limited to war, civil
insurrection, fires, floods, epidemics, earthquakes, quarantine
restriction
and freight embargoes, such delay may be excused and the period of
such delay may be added to the time of performance of the obligation
delayed.
19.2 If a force majeure situation arises, either of the parties shall
promptly notify in writing of such conditions and the cause thereof.
Unless otherwise directed by the purchaser in writing, the supplier shall
continue to perform its obligations under the contract as far as is
reasonably practical, and shall seek all reasonable alternative means for
performance not prevented by the force majeure event.

20. Termination for Insolvency

The Purchaser may at any time terminate the Contract by giving written notice
to the Supplier if the Supplier becomes bankrupt or otherwise insolvent. In this
event, termination will be without compensation to the Supplier, provided that
such termination will not prejudice or affect any right of action or remedy which
has accrued or will accrue thereafter to the Purchaser.

21. Termination for Convenience

21.1 The Purchaser, by written notice sent to the Supplier, may terminate
the Contract, in whole or in part, at any time for its convenience. The
notice of termination shall specify that termination is for the Purchaser’s
convenience, the extent to which performance of the Supplier under the
Contract is terminated, and the date upon which such termination
becomes effective.
21.2 The P.P.Woven Bags which is ready for shipment within seven (7)
days after the Supplier’s receipt of notice of termination shall be
accepted by the Purchaser at the Contract terms and prices.
22. Settlement of Disputes
22.1 If any dispute or difference of any kind whatsoever shall arise
between the Purchaser and the Supplier in connection with or arising
out of the
Contract, the parties shall make every effort to resolve amicably
such dispute or difference by mutual consultation.

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22.2 If, after thirty (30) days, the parties have failed to resolve their dispute
or difference by such mutual consultation, then either the Purchaser or
Supplier may give notice to the other party of it’s intention to commence

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 arbitration, as hereinafter provided, as to the matter in dispute, and no
arbitration in respect of this matter may be commenced unless such
notice is given.
22.2.1 Any dispute or difference in respect of such a notice of intention to
commence arbitration has been given in accordance with this Clause
shall be finally settled by arbitration board prior to or after delivery of
goods under this contact.
22.2.2 Arbitration proceedings shall be conducted in accordance with the rules
of Nepal Council of Arbitration .
22.3 Notwithstanding any reference to arbitration herein,
a) the parties shall continue to perform their respective obligations
under the Contract unless they otherwise agree; and
b) the Purchaser shall pay the Supplier any monies due the
Supplier.
23. Governing Language
The Governing Language shall be English or Nepali. Subject to Clause 24,
the version of the Contract written in the English shall govern its interpretation.
24. Applicable Law
The Contract shall be interpreted in accordance with the laws of Nepal.
25. Notices
25.1 Any notice given by one party to the other pursuant to this Contract
shall be sent to the other party in writing or by facsimile and confirmed
in writing to the other party’s address.
Purchaser's Address:
Hetauda Cement Industries Ltd.
P.O. Box No. 24, Hetauda-9, Lamsure
Makawanpur, Nepal.
Email: [email protected]
Supplier's Address: ……………………………………
…………………………………….
25.2 If a notice given pursuant to Sub Clause 25.1 fails to be delivered due to
failure to trace the address of the party then the notice shall be
published as public notice in a National daily newspaper and when the
notice is so published then the notice shall be considered to be delivered
to the concerned party.
25.3 A notice shall be effective when delivered or on the notice’s effective date,
whichever is later.
26. Taxes and Duties
The supplier shall be entirely responsible for all taxes, stamp duties, custom
duty, license fees, income tax and other such levies imposed inside and
outside
Nepal. However the custom duty and taxes to be paid in the custom office of
Nepal by the foreign supplier will be reimbursed to the supplier as mention
in clause 12.4 instruction to the bidder.

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27. Supplier’s Responsibilities
The Supplier shall supply and deliver the total quantity of P.P.Woven Bags as
per the contract.

28. Purchaser’s Responsibilities

Whenever the supply of Goods requires that the Supplier obtain permits,
approval and import and other licenses from local public authorities, the
Purchaser shall, if so required by the Supplier, makes its best effort to assist the
Supplier in complying with such requirements in a timely and expeditious
manner.

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 Section VI
SPECIFICATION
OF
P. O. WOVEN BAGS

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 SPECIFICATION OF P.P. WOVEN BAGS
1 Specifications of PP Woven Bags( White ):

(i) Bag Size - 28" x 18.5" with tolerance of plus ½" minus zero
(inside dimension)
(ii) Side Valve - 4" x 6.5"
(iii) Mesh - 9 x 9 to 10 x 10 per square inch
(iv) Gussetted - 1.5" on both sides.
(v) Width of Tape - 2.5 mm approx.
(vi) Printing in red color as instructed by HCIL.
(vii) Bailing - 500/1000 bags in each bale.
(viii) Double stitching at top and bottom of the bags.
(ix) Weight of each bag including paper used in valve for antifriction
should not be less than 80 gm (+5%) and the same will be
ascertained on the basis of weight of full load of each truck
weighed at HCIL's weigh bridge. In case the weight of full truck
load is found to be less than the tolerance limit, the lot of such
bags may be rejected or amount on this account may be deducted
on prorata basis.
(x) Weight of paper in valve : 10 gms (maximum).
(xi) Suitable for packing 50 Kgs. Cement.
(xii) Colour of P.P. Woven Bag should be White.

Note:- Randomly drop test of filled bag will be carried out from 7 ft.
height.

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