LETTER OF AWARD

Date: 31st, August, 2020

To: xxxxxx
Subject: Mechanical Erection Works of PACKAGE A Contract of Power Generation
Phase 1 for PCIHBV Garraf Operations Project

Dear Sir,
We, SEPCOIII Electric Power Construction Co., Ltd. Iraq Branch (hereinafter called "Contractor" or
“SEPCOIII”), are pleased to inform you, xxxxxxxx. (hereinafter called "the Subcontractor" ), that by this Letter
of Award dated , SEPCOIII confirms its intention to award xxxxxxxxxx the Contract for the
construction of the Mechanical Erection Works of PACKAGE A in Power Generation Phase 1 For Pcihbv
Garraf Operations Project Site (hereinafter called "the Contract") strictly in accordance with the corresponding
Main Contract Technical Specifications signed between XXXXXXXXXXXXXX & SEPCOIII subject to following
broad terms and conditions:

1. Scope of Work

The works to be performed under this Subcontract are the Mechanical Erection Works of PACKAGE A for
POWER GENERATION PHASE 1 FOR PCIHBV GARRAF OPERATIONS PROJECT as required and conditioned under
the Contract. The listing and/or description of the Subcontract Works as stated in the Subcontract Documents
shall not be taken to limit the nature, range, and extent of such Works which shall be completed in accordance
with the Subcontract Conditions, Technique Specifications and Drawings, and be handed-over in a fully
functional condition to the entire satisfaction and approval of the Contractor, the Engineer and the Owner.
The scope of works is deemed to include, but not limited to, temporary facilities, manpower, water, electrical,
machinery, service, permission, construction supply, installation, provision of all equipment, devices, material,
testing, and warranty of the Works as detailed and implied in the Contract documents. The scope does further
includes but not limited to reviewing of the Conditions, Drawings and Specifications, and reporting to the
Contractor of any shortage, discrepancy or omission therein, provision of site test records including test
procedures, shop in coordination with the Contractor, other concerned subcontractors and presentation of all
relevant documentation required for the Project handing-over to the Contractor.
Without prejudice to or limitation of the Scope of Work inclusion and the contents of the Contract requirements,
Bill of Quantities, Specifications and Drawings, the items of the Scope of Works to be engineered, supplied,
installed, maintained and tested are listed as follows:

Package C

Consist of but not limited to the following building:

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 works included but not limited that described in “the scope of work”, “BOQ” and “technical
specification” within the interface boundary line.
It is hereby understood and agreed that the total value of the Works executed under the related package.
Above shall be on the basis of the Milestone Payment Schedule and the actual quantities executed and
approved by the Contractor.
It is also understood and agreed that each item of the Subcontract Works is a complete unit, and the listing of
these units or their description in the Contractor, shall not limit the nature, range or extent of the
Subcontractor’s obligations to meet the requirements pertaining to such works which must be completed in
accordance with and to fit the purpose intended in the Contract and be handed over in a fully functional
condition to the entire satisfaction and approval of the Contractor and Owner.
It is also understood and agreed that Contractor is entitled to adjust the scope of work according to the actual
construction capacity of Subcontractor and progress of site work, Subcontractor shall follow the adjustment
unconditionally.
1.It is further understood and agreed that the scope of works includes all related accessories and components
and all fixing accessories whether mentioned in the Drawings and/or Technical Specifications or not. The
Subcontractor is deemed to have allowed for the provision of all materials, works and services necessary for
execution and completion of the Subcontract works.
Whenever the Contractor is required to provide the Owner with a Warranty or Guarantee for certain material
or installation under contract between Contractor and Owner, the Subcontractor shall before clearance is
made, provide the Contractor with such Warranties and/or Guarantees as required by the Contractor.
The Contractor has the right to correct and/or amend the measurement statements and the progress
payments pertaining to the Subcontract works in order to reflect the right position and any correction or
amendment made by the Owner in this respect. Consequently the Contractor has the right to recover from the
Subcontractor the sums that were paid to the Subcontractor – if any- in excess of the right dues before doing
such reduction and/or amendment and such until Defects Liability Certificate.
The works has to be executed according to the drawings “Approved for Construction” from time to time
supplied by the Contractor.

2.Contract Price

In consideration of the Subcontractor carrying out the Works, the Contractor hereby covenants to pay to the
Subcontractor at the time and in the manner prescribed in the payment schedule subject to such
deductions/adjustments as may be allowable in the Contract.

The Provisional Contract Price under this Contract shall be USD xxxxxx (Say US Dollar xxxxxxxxxxxx only) as
per item rates and tentative quantities mentioned in the BOQ which includes all taxes and duties and fees.

The final total contract price will be finally worked out by multiplying actual completed quantity by the
Subcontractor as per the drawing by the fixed item rate in the BOQ, and may be adjusted according the
relevant clauses of the Contract.

The unit rates in the BOQ will remain firm during the tenure of the Contract and no escalation shall be payable
under whatever reasons unless otherwise stated explicitly in the Contract.

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3. Terms of Payment

In general, payments under this Contract will be effected in the currency. Application for payment becoming
due and payable by the Contractor will be reviewed, modified as required and approved by the Contractor's
Representative and then issue direct payment to the Subcontractor. The Subcontractor should comply with
the payment procedures and instructions issued by the Contractor.

3.1 Methods of Payment

The following will regulate the method of payment by the Contractor to the Subcontractor.

3.1.1 Advance Payment: (Not Applicable)

3.1.2 Progress Payment

Each progress payment shall base on the milestone basis as “Section G Project Schedule & Milestone of
Payment”.

Submission of irrevocable, unconditional Performance Bank Guarantee of 10% (ten percent) of the
provisional total contract price until Project Taking Over Date, and Upon Project Taking Over Date, the
amount of the Performance Bond shall be reduced to five (5) percent of Provisional Contract Price provided
that all outstanding liquidated damages have been paid by the Subcontractor or Disputes in relation to such
liquidated damages have been resolved. Upon expiry of the Warranty Period, the Performance Bond shall be
further reduced to a value equal to one hundred and fifty (150) per cent. of the value of any repaired or
replaced works remaining under warranty, as determined by the Contractor acting reasonably.

Payments to the Subcontractor shall be made on the basis of invoices prepared by the Subcontractor,
according to a format approved by the Contractor. Computations of quantities, relevant measurements,
relevant quality inspection documents/reports approved by the Contractor and other documents required by
Contractor should be attached to the invoices.

Each payment shall be paid as follow:

a) 85% (eighty-five percent) of the monthly valuations based on progressive measurements and the
milestone valuations based on progress shall be released to Subcontractor against certificated by the
Contractor’s engineer and project manager according to Milestone Payment Schedule which mutual agreed
by both parties, within 40 days after received correct invoice and documents from the Subcontractor for
release of payment.

b) 10% (ten percent) payment shall be paid as retention money within 45 days after Provisional Acceptance of
the Work by Contractor.

c) 5% (five percent) payment as warranty money shall be paid within 60 days after the receipt of Final
Acceptance Certificate.

- On or before the 26th of each month the Subcontractor shall submit to the Contractor his payment planning
covering the cost of the work as same determined, for the previous calendar month.

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The Subcontractor shall submit to the Contractor on a regular basis his forecast of interim valuations related
to the Works including budgetary advice on variations (if any).

3.1.3 The Contractor shall be entitled to hold any due payment or retain any sum if the works completed by
the Subcontractor are not in compliance with specification and the requirement from Contract.

4. Completion Dates:

The Completion Time shall as per Section G-Project Schedule for completion of the Works from the
commencement date.

5. Effective Date and Commencement Date:

The Effective Date of the Contract shall be the date of issued the Letter of Award by the Contractor. The
commencement date of the Contract shall be the date of the Notice To Proceed(NTP).

If the Subcontractor fails to be approved by the Owner, this Contract shall be terminated by the Contractor
without any reimbursement to the Subcontractor.

The Subcontractor undertakes to complete the Works as per the Section Project Schedule& Milestone and
appendix. The Subcontractor covenants that should he fail to complete the work within the agreed contractual
period, the Contractor shall duly enforce the Liquidated Damages in conformity with what is stated in the
Contract Documents.

6.0 Confirmation of Receipt

Subcontractor is requested to start mobilization and commence site activities immediately in coordination with
Contractor’s requirement and submit the detailed program for completion of all works as per the intermediate
project Milestone Schedule mentioned in this Letter of award. This Letter of award is issued to enable you to
facilitate mobilization at site and to request mobilization advance after fulfilling the contractual requirements.

This Letter of award is being issued in duplicate. Subcontractor is requested to return the duplicate copy duly
signed on each page as a proof of the unequivocal acceptance.

Thanking you!

Yours truly,

----------------------------------------

Project Manager

SEPCOIII Electric Power Construction Co., Ltd. Iraq Branch

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