General Conditions of Contract

General
1. Definitions 1.1 Boldface type is used to identify defined terms.
(a) The Accepted Contract Amount means the amount accepted in the Letter of
Acceptance for the execution and completion of the Works and the remedying of
any defects.
(b) The Activity Schedule is a schedule of the activities comprising the
construction, installation, testing, and commissioning of the Works in a lump sum
contract. It includes a lump sum price for each activity, which is used for valuations
and for assessing the effects of Variations and Compensation Events.
(c) The Adjudicator is the person appointed jointly by the Employer and the
Contractor to resolve disputes in the first instance, as provided for in GCC 23.2 hereunder.
(d) Bill of Quantities means the priced and completed Bill of Quantities forming part
of the Bid.
(e) Compensation Events are those defined in GCC 50 hereunder.
(f) The Completion Date is the date of completion of the Works as certified by
the Project Manager, in accordance with GCC 68.1.
(g) The Contract is the Contract between the Employer and the Contractor to execute,
complete, and maintain the Works. It consists of the documents listed in GCC 2.3 below.
(h) The Contractor is the party whose Bid to carry out the Works has been accepted
by the Employer.
(i) The Contractor’s Bid is the completed bidding document submitted by the
Contractor to the Employer.
(j) The Contract Price is the Accepted Contract Amount stated in the Letter of
Acceptance and thereafter as adjusted in accordance with the Contract.
(k) Days are calendar days; months are calendar-months.
(l) Dayworks are varied work inputs subject to payment on a time basis for the
Contractor’s employees and Equipment, in addition to payments for associated
Materials and Plant.
(m) A Defect is any part of the Works not completed in accordance with the
Contract.
(n) The Defects Liability Certificate is the certificate issued by Project Manager upon
correction of defects by the Contractor.
(o) The Defects Liability Period is the period calculated from the Completion Date
where the Contractor remains responsible for remedying defects.
(p) Drawings include calculations and other information provided or approved
by the Project Manager for the execution of the Contract.
(q) The Employer is the party who employs the Contractor to carry out the Works, as
specified in the SCC.
(r) Equipment is the Contractor’s machinery and vehicles brought temporarily to the
Site to construct the Works.
(s) Force Majeure means an exceptional event or circumstance: which is beyond a Party's
control; which such Party could not reasonably have provided against before entering
into the Contract; which, having arisen, such Party could not reasonably have avoided
or overcome; and, which is not substantially attributable to the other Party.
(t) The Initial Contract Price is the Contract Price listed in the Employer’s Letter of
Acceptance.
(u) In writing or written means hand written, type written, printed or electronically
made, and resulting in permanent record.
 (v) The Intended Completion Date is the date on which it is intended that the
Contractor shall complete the Works. The Intended Completion Date is specified in
the SCC. The Intended Completion Date may be revised only by the Project Manager
by issuing an extension of time or an acceleration order.
(w) Letter of Acceptance means the formal acceptance by the Employer of the Bid
and denotes the formation of the contract at the date of acceptance.
(x) Materials are all supplies, including consumables, used by the Contractor for
incorporation in the Works.
(y) Party means the Employer or the Contractor, as the context requires.
(z) SCC means Special Conditions of Contract
(aa) Plant is any integral part of the Works that shall have a mechanical, electrical,
chemical, or biological function.
(bb) The Project Manager is the person named in the SCC (or any other competent
person appointed by the Employer and notified to the Contractor, to act in replacement
of the Project Manager) who is responsible for supervising the execution of the Works
and administering the Contract.
(cc) Retention Money means the aggregate of all monies retained by the Employer
pursuant to GCC 54.1.
(dd) Schedules means the document(s) entitled schedules, completed by the Contractor
and submitted with the Letter of Bids, as included in the Contract. Such document may
include the Bill of Quantities, data, lists, and schedules of rates and/or prices.
(ee) The Site is the area defined as such in the SCC
(ff) Site Investigation Reports are those that were included in the bidding documents
and are factual and interpretative reports about the surface and subsurface conditions at
the Site.
(gg) Specification means the Specification of the Works included in the Contract
and any modification or addition made or approved by the Project Manager.
(hh) The Start Date is given in the SCC. It is the latest date when the Contractor
shall commence execution of the Works. It does not necessarily coincide with any of
the Site Possession Dates.
(ii) A Subcontractor is a person or corporate body who has a Contract with the
Contractor to carry out a part of the work in the Contract, which includes work on the
Site.
(jj) Temporary Works are works designed, constructed, installed, and removed by
the Contractor that are needed for construction or installation of the Works.
(kk) A Variation is an instruction given by the Project Manager which varies the Works
(ll) The Works are what the Contract requires the Contractor to construct, install, and
turn over to the Employer, as defined in the SCC.
2. Interpretation
2.1 In interpreting these GCC, singular also means plural, male also means female or
neuter, and the other way around. Headings have no significance. Words have
their normal meaning under the language of the Contract unless specifically
defined. The Project Manager shall provide instructions clarifying queries about
these GCC.
2.2 If sectional completion is specified in the SCC, references in the GCC to the
Works, the Completion Date, and the Intended Completion Date apply to any
Section of the Works (other than references to the Completion Date and
Intended Completion Date for the whole of the Works).
2.3 The documents forming the Contract shall be interpreted in the following order of
priority:
 (a) Contract Agreement,
(b) Letter of Acceptance,
(c) Letters of Bid,
(d) Special Conditions of Contract,
(e) General Conditions of Contract,
(f) Specifications,
(g) Drawings,
(h) Bill of Quantities (or Schedules of Prices for lump sum contracts), and
(i) Any other document listed in the SCC as forming part of the Contract.
3. Language and Law
3.1 The language of the Contract and the law governing the Contract are stated in the
SCC.

a. Throughout the execution of the Contract, the Contractor shall comply with the
import of goods and services prohibitions in the Employer’s country when
(a) by an act of compliance with a decision of the United Nations Security
Council taken under Chapter VII of the Charter of the United Nations, the
Borrower’s Country prohibits any import of goods from, or any payments
to, a particular country, person, or entity. Where the borrower’s country
prohibits payments to a particular firm or for particular goods by such an
act of compliance, that firm may be excluded.
4. Contract
4.1 The Parties shall enter into a Contract Agreement within 15 days after the
Agreement Contractor receives the Letter of Acceptance, unless the Special Conditions
establish otherwise. The Contract Agreement shall be based upon the attached
Contract forms in Section IX.
5. Assignment
5.1 Neither Party shall assign the whole or any part of the Contract or any benefit
or interest in or under the Contract. However, either Party
(a) may assign the whole or any part with the prior agreement of the other
Party, at the sole discretion of such other Party; and
(b) may, as security in favor of a bank or financial institution, assign its right
to any moneys due, or to become due, under the Contract.
6. Care and Supply of
6.1 The Specification and Drawings shall be in the custody and care of the Employer.
Documents Unless otherwise stated in the Contract, one copy of the Contract and of each
subsequent Drawing shall be supplied to the Contractor, who may make or
request further copies at the cost of the Contractor.

6.2 Each of the Contractor’s Documents shall be in the custody and care of the
Contractor, unless and until taken over by the Employer. Unless otherwise stated
in the Contract, the Contractor shall supply to the Engineer six copies of each of
the Contractor’s Documents.

6.3 The Contractor shall keep, on the Site, a copy of the Contract, publications named
in the Specification, the Contractor’s Documents (if any), the Drawings and
Variations and other communications given under the Contract. The Employer’s
 Personnel shall have the right of access to all these documents at all reasonable
times.
6.4 If a Party becomes aware of an error or defect in a document which was prepared
for use in executing the Works, the Party shall promptly give notice to the other
Party of such error or defect.
7. Confidential
7.1 The Contractor’s and the Employer’s Personnel shall disclose all such confidential
Details and other information as may be reasonably required in order to verify the
Contractor’s compliance with the Contract and allow its proper implementation.

7.2 Each of them shall treat the details of the Contract as private and confidential,
except to the extent necessary to carry out their respective obligations under
the Contract or to comply with applicable Laws. Each of them shall not publish
or disclose any particulars of the Works prepared by the other Party without the
previous agreement of the other Party. However, the Contractor shall be
permitted to disclose any publicly available information, or information
otherwise required to establish his qualifications to compete for other projects.

7.3 Notwithstanding the above, the Contractor may furnish to its Subcontractor(s)
such documents, data and other information it receives from the Employer to
the extent required for the Subcontractor(s) to perform its work under the
Contract, in which event the Contractor shall obtain from such Subcontractor(s)
an undertaking of confidentiality similar to that imposed on the Contractor
under this Clause.
8. Compliance with
8.1 The Contractor shall, in performing the Contract, comply with applicable Laws.
Laws

9. Joint and Several

9.1 If the Contractor is a joint venture of two or more entities , all such entities
Liability shall be jointly and severally liable to the Employer for the fulfillment of
the provisions of the Contract, and shall designate one of such persons
to act as a leader with authority to bind the joint venture. The contractor
shall not handover the responsibility of the contract to any one
member or some members of Joint Venture or any other parties, not
involved in the contract. The composition or the constitution of the joint
venture shall not be altered without the prior consent of the Employer.
10. Project
10.1 Except where otherwise specifically stated, the Project Manager shall decide
Manager's Decisions contractual matters between the Employer and the Contractor in the role
representing the Employer.
11. Delegation
11.1 The Project Manager may delegate any of his duties and responsibilities to other
people after notifying the Contractor, and may cancel any delegation after
notifying the Contractor.
12. Communications
12.1 Communications between parties that are referred to in the Conditions shall be
effective only when in writing. A notice shall be effective only when it is delivered.
13. Subcontracting
13.1 A list of approved Subcontractors including its value/works is included as Article 2
(k) of contract Agreement. Approval by the Employer for any of the
Subcontractors shall not relieve the Contractor from any of its obligations,
duties, or responsibilities under the contract.
14. Other
14.1 The Contractor shall cooperate and share the Site with other contractors, public
Contractors authorities, utilities, and the Employer between the dates given in the Schedule
of Other Contractors, as referred to in the SCC. The Contractor shall also provide
facilities and services for them as described in the Schedule. The Employer may
modify the Schedule of Other Contractors, and shall notify the Contractor of any
such modification
15 Personnel and
15.1 The Contractor shall employ the key personnel and use the equipment
Equipment identified in its Bid to carry out the Works, or other personnel and equipment
approved by the Project Manager. The Project Manager shall approve any proposed
replacement of key personnel and equipment only if their relevant qualifications or
characteristics are substantially equal to or better than those proposed in the
Bid.
15.2 If the Project Manager asks the Contractor to remove a person who is a member
of the Contractor’s staff or work force, stating the reasons, the Contractor shall
ensure that the person leaves the Site within seven days and has no further
connection with the work in the Contract.
15.3 If the Employer, Project Manager, or Contractor determines, that any employee
of the Contractor be determined to have engaged in corrupt, fraudulent,
collusive, coercive, or other prohibited practices during the execution of the
Works, then that employee shall be removed in accordance with Clause 15.2
above.
16. Employer’s and
16.1 The Employer carries the risks which this Contract states are Employer’s risks,
Contractor's Risk and the Contractor carries the risks which this Contract states are Contractor’s
risks.
17. Employer’s Risks
17.1 From the Start Date until the Defects Liability Certificate has been issued, the
following are Employer’s risks:
(a) The risk of personal injury, death, or loss of or damage
to property (excluding the Works, Plant, Materials, and Equipment), which are
due to
(i) use or occupation of the Site by the Works or for the purpose of the
Works, which is the unavoidable result of the Works or
(ii) negligence, breach of statutory duty, or interference with any legal
right by the Employer or by any person employed by or contracted
to him except the Contractor.
(b) The risk of damage to the Works, Plant, Materials, and Equipment to the
extent that it is due to a fault of the Employer or in the Employer’s
design, or due to war or radioactive contamination directly affecting the
country where the Works are to be executed.
17.2 From the Completion Date until the Defects Liability Certificate has been issued, the
risk of loss of or damage to the Works, Plant, and Materials is an Employer’s risk
except loss or damage due to
(a) a Defect which existed on the Completion Date,
(b) an event occurring before the Completion Date, which was not itself an
Employer’s risk, or
(c) the activities of the Contractor on the Site after the Completion Date.
18. Contractor’s
18.1 From the Starting Date until the Defects Liability Certificate has been issued, the
Risks risks of personal injury, death, and loss of or damage to property (including, without
limitation, the Works, Plant, Materials, and Equipment) which are not Employer’s
risks are Contractor’s risks.
19. Insurance
19.1 The Contractor shall provide insurance in the joint names of the Employer and
the Contractor from the Start Date to the end of the Defects Liability Period, in the
amounts and deductibles stated in the SCC for the following events which are due
to the Contractor’s risks:
(a) loss of or damage to the Works, Plant, and Materials;
(b) loss of or damage to Equipment;
(c) loss of or damage to property (except the Works, Plant, Materials, and
Equipment) in connection with the Contract; and
(d) Personal injury or death.

19.2 Policies and certificates for insurance shall be delivered by the Contractor to the
Project Manager for the Project Manager’s approval before the Start Date. All
such insurance shall provide for compensation to be payable in the proportions
of Nepalese Rupees required to rectify the loss or damage incurred.
19.3 If the Contractor does not provide any of the policies and certificates
required, the Employer may affect the insurance which the Contractor should
have provided and recover the premiums the Employer has paid from payments
otherwise due to the Contractor or, if no payment is due, the payment of the
premiums shall be a debt due.
19.4 Alterations to the terms of insurance shall not be made without the approval
of the Project Manager.
19.5 Both parties shall comply with any conditions of the insurance policies.
20. Site
20.1 The Contractor, in preparing the Bid, shall rely on any Site Investigation Reports
Investigation referred to in the SCC, supplemented by any information available to the
Reports Contractor.

21. Contractor to
21.1 The Contractor shall construct and install the Works in accordance with the
Construct the Works Specifications and Drawings.

22. The Works to Be

22.1 The Contractor may commence execution of the Works on the Start Date and
Completed within shall carry out the Works in accordance with the Program submitted by the
intended Contractor, as updated with the approval of the Project Manager, and
Completion Date complete them within the intended Completion Date.

23. Design by
23.1 The contractor shall be responsible for the design of permanent works as
contractor and specified in SCC.
Approval by the
23.2 Contractor shall be responsible for design of the Temporary Works. The
Project Manager Contractor shall submit Specifications and Drawings showing the proposed
Temporary Works to the Project Manager, for his approval.
23.3 All Drawings prepared by the Contractor for the execution of the temporary
 or permanent Works, shall be subject to prior approval by the Project Manager
before their use.
23.4 The Project Manager’s approval shall not alter the Contractor’s responsibility for
design of temporary works.
24. Safety, Security
24.1 The Contractor shall, throughout the execution, and completion of the works
and Protection of and remedying of any defects therein:
the Environment
a. Have full regard for the safety of all persons entitled to be upon the site and
keep the site (so as the same is under his control) and the works (so far as
the same are not completed or occupied by the Employer) in an orderly state
appropriate to the avoidance of danger to such persons.
b. Provide and maintain at his own cost all lights, guards, fencing, warning signs
and watching, when necessary or required by the Project Manager or by any
duly constituted authority, for the protection of the Works of for the safety
and convenience of the public or others.
c. Take all reasonable steps to protect the environment on and off the site and
to avoid damage or nuisance to persons
or to property of the public or others resulting from pollution, noise or other
causes arising as a consequence of his methods of operation.
d. Ensure that any cut or fill slopes are planted in grass or other plant cover as soon
as possible to protect them from erosion.
e. Any spoil or material removed from drains shall be disposed of to designated
stable tipping areas as directed by the Project Manager.
f. Shall not use fuel wood as a means of heating during the processing or
preparation of any materials forming part of the works.
g. The Project Manager shall have the power to disallow any working practice
or activity of the Contractor or direct that such practices or activities be
modified should the Project Manager consider, on the advice of the relevant
Government Departments, that the practices or activities will be harmful
to wildlife.
h. Provide on the Site such lifesaving apparatus as may be appropriate and
an adequate and easily accessible first aid outfit or such outfits as may
be required by any government ordinance, factory act, etc., subsequently
published and amended from time to time.
25. Discoveries
25.1 Anything of historical or other interest or of significant value unexpectedly
discovered on the Site shall be the property of the employer. The Contractor shall
notify the Project Manager of such discoveries and carry out the Project Manager’s
instructions for dealing with them.
26. Possession of
26.1 The Employer shall give possession of all parts of the Site to the Contractor. If
the Site possession of a part is not given by the date stated in the SCC, the Employer shall
be deemed to have delayed the start of the relevant activities, and this shall be a
Compensation Event.
27. Access to the
27.1 The Contractor shall allow the Project Manager and any person authorized by the
Site Project Manager access to the Site and to any place where work in connection
with the Contract is being carried out or is intended to be carried out.
28.Instructions,
28.1 The Contractor shall carry out all instructions of the Project Manager which
Inspections and comply with the applicable laws where the Site is located.
Audits
28.2 The Contractor shall keep, and shall make all reasonable efforts to cause its
Subcontractors and sub consultants to keep accurate and systematic accounts
and records in respect of the Works in such form and details as will clearly
identify relevant time changes and costs.
28.3 The Contractor shall permit the GoN/DP and/or persons appointed by the
GoN/DP to inspect the Site and/or the accounts and records of the Contractor and
its sub-contractors relating to the performance of the Contract, and to have such
accounts and records audited by auditors appointed by the GoN/DP if required
by the GoN/DP. The Contractor’s attention is drawn to Sub-Clause 73.2 which
provides, inter alia, that acts intended to materially impede the exercise of the
GoN’s/DP’s inspection and audit rights provided for under this Sub-Clause
constitute a obstructive practice subject to contract termination.
29. Dispute 29.1 The Employer and the Contractor shall attempt to settle amicably by direct
Settlement negotiation any disagreement or dispute arising between them under or in
connection with the Contract.
29.2 Any dispute between the Parties as to matters arising pursuant to this Contract
which cannot be settled amicably within thirty (30) days after receipt by one
Party of the other Party‘s request for such amicable settlement may be referred
to Arbitration within 30 days after the expiration of amicable settlement period.
30. Procedures for
30.1 In case of arbitration, the arbitration shall be conducted in accordance with the
Disputes arbitration procedures published by the Nepal Council of Arbitration (NEPCA) at
the place given in the SCC.
B. Staff and Labor
31. Forced Labor
31.1 The Contractor shall not employ forced labor, which consists of any work or
service, not voluntarily performed, that is exacted from an individual under
threat of force or penalty. This covers any kind of involuntary or compulsory
labor, such as indentured labor, bonded labor, or similar labor–contracting
arrangements.
32. Child Labor
32.1 The Contractor shall not employ children in a manner that is economically
exploitative, or is likely to be hazardous, or to interfere with, the child's
education, or to be harmful to the child's health or physical, mental, spiritual,
moral, or social development. Where national laws have provisions for
employment of minors, the Contractor shall follow those laws applicable to the
Contractor. Children below the age of 18 years shall not be employed in
dangerous work.

33.Non-
34.1 The Contractor shall not make employment decisions on the basis of personal
discrimination and characteristics unrelated to inherent job requirements. The Contractor shall
Equal Opportunity base the employment relationship on the principle of equal opportunity and
fair treatment, and shall not discriminate with respect to aspects of the
employment relationship, including recruitment and hiring, compensation
(including wages and benefits), working conditions and terms of employment,
access to training, promotion, termination of employment or retirement, and
discipline. In countries where national law provides for non-discrimination in
employment, the Contractor shall comply with national law. When national
 laws are silent on nondiscrimination in employment, the Contractor shall meet
this Sub clause's requirements. Special measures of protection or assistance to
remedy past discrimination or selection for a particular job based on the
inherent requirements of the job shall not be deemed discrimination.
Time Control
34. Program
34.1 Within the time stated in the SCC, after the date of the Letter of Acceptance,
the Contractor shall submit to the Project Manager for approval a Program
showing the general methods, arrangements, order, and timing for all the activities
in the Works. In the case of a lump sum contract, the activities in the Program shall
be consistent with those in the Activity Schedule.
34.2 An update of the Program shall be a program showing the actual progress achieved
on each activity and the effect of the progress achieved on the timing of the
remaining work, including any changes to the sequence of the activities.
34.3 The Contractor shall submit to the Project Manager for approval an updated
Program at intervals no longer than the period stated in the SCC. If the Contractor
does not submit an updated Program within this period, the Project Manager
may withhold the amount stated in the SCC from the next payment certificate and
continue to withhold this amount until the next payment after the date on which
the overdue Program has been submitted. In the case of a lump sum contract, the
Contractor shall Provide an updated Activity Schedule within 15 days of being
instructed to by the Project Manager.
34.4 The Project Manager’s approval of the Program shall not alter the Contractor’s
obligations. The Contractor may revise the Program and submit it to the Project
Manager again at any time. A revised Program shall show the effect of Variations
and Compensation Events.
35. Extension of the
35.1 The Project Manager shall extend the Intended Completion Date if a
Intended Completion Compensation Event occurs or a Variation is issued which makes it impossible
Date for Completion to be achieved by the Intended Completion Date without the
Contractor taking steps to accelerate the remaining work, which would cause
the Contractor to incur additional cost.
35.2 The Project Manager shall decide whether and by how much to extend
the Intended Completion Date within 21 days of the Contractor asking
the Project Manager for a decision upon the effect of a Compensation
Event or Variation and submitting full supporting information at least 21
days prior to the intended completion date. If the Contractor has failed to
give early warning of a delay or has failed to cooperate in dealing with a
delay, the delay by this failure shall not be considered in assessing the new
Intended Completion Date.
36. Acceleration
36.1 When the Employer wants the Contractor to finish before the Intended
Completion Date, the Project Manager shall obtain priced proposals for
achieving the necessary acceleration from the Contractor. If the Employer
accepts these proposals, the Intended Completion Date shall be adjusted
accordingly and confirmed by both the Employer and the Contractor.
36.2 If the Contractor’s priced proposals for acceleration are accepted by the Employer,
they are incorporated in the Contract Price and treated as a Variation.
37. Delays Ordered
37.1 The Project Manager may instruct the Contractor to delay the start or progress
by the Project of any activity within the Works.
Manager

38. Management
38.1 Either the Project Manager or the Contractor may require the other to attend a
Meetings management meeting. The business of a management meeting shall be to review
the plans for remaining work and to deal with matters raised in accordance with the
early warning procedure.
38.2 The Project Manager shall record the business of management meetings and
provide copies of the record to those attending the meeting and to the Employer.
The responsibility of the parties for actions to be taken shall be decided by the
Project Manager either at the management meeting or after the
management meeting and stated in writing to all who attended the meeting.
39. Early Warning
39.1 The Contractor shall warn the Project Manager at the earliest opportunity of
specific likely future events or circumstances that may adversely affect the
quality of the work, increase the Contract Price, or delay the execution of the
Works. The Project Manager may require the Contractor to provide an estimate
of the expected effect of the future event or circumstance on the Contract
Price and Completion Date. The estimate shall be provided by the Contractor
as soon as reasonably possible.
39.2 The Contractor shall cooperate with the Project Manager in making and
considering proposals for how the effect of such an event or circumstance can
be avoided or reduced by anyone involved in the work and in carrying out any
resulting instruction of the Project Manager.
C. Quality Control
40. Identifying
40.1 The Project Manager shall check the Contractor’s work and notify the Contractor of
Defects any Defects that are found. Such checking shall not affect the Contractor’s
responsibilities. The Project Manager may instruct the Contractor to search for
a Defect and to uncover and test any work that the Project Manager considers may
have a Defect.
41. Tests
41.1 If the Project Manager instructs the Contractor to carry out a test not specified in
the Specification to check whether any work has a Defect and the test shows that
it does, the Contractor shall pay for the test and any samples. If there is no Defect,
the test shall be a Compensation Event.
42. Correction of
42.1 The Project Manager shall give notice to the Contractor of any Defects before
Defects the end of the Defects Liability Period, which begins at Completion, and is defined
in the SCC. The Defects Liability Period shall be extended for as long as Defects
remain to be corrected.
42.2 Every time notice of a Defect is given, the Contractor shall correct the notified
Defect within the length of time specified by the Project Manager’s notice.
43. Uncorrected
43.1 If the Contractor has not corrected a Defect within the time specified in the
Defects Project Manager’s notice, the Project Manager shall assess the cost of having
the Defect corrected, and the Contractor shall pay this amount.
D. Cost Control
44. Contract Price
44.1 In the case of a Unit Rate contract, the Bill of Quantities shall contain priced
items for the Works to be performed by the Contractor. The Bill of Quantities is
 used to calculate the Contract Price. The Contractor will be paid for the quantity
of the work accomplished at the rate in the Bill of Quantities for each item.
44.2 In the case of a lump sum contract, the Activity Schedule shall contain the priced
activities for the Works to be performed by the Contractor. The Activity Schedule is
used to monitor and control the performance of activities on which basis the
Contractor will be paid. If payment for Materials on Site shall be made
separately, the Contractor shall show delivery of Materials to the Site separately
on the Activity Schedule.
45. Changes in the
45.1 In the case of an Unit Rate contract:
Contract Price
(a) If the final quantity of the work done differs from the quantity in the Bill of
Quantities for the particular item by more than 25 percent, provided the
change exceeds 2 percent of the Initial Contract Price, the Project Manager
shall adjust the rate to allow for the change.
(b) The Project Manager shall not adjust rates from changes in quantities if
thereby the Initial Contract Price is exceeded by more than 10 percent,
except with the prior approval of the Employer.
(c) If requested by the Project Manager, the Contractor shall provide the Project
Manager with a detailed cost breakdown of any rate in the Bill of Quantities.
45.2 In the case of a lump sum contract, the Activity Schedule shall be amended by the
Contractor to accommodate changes of Program or method of working made at
the Contractor’s own discretion. Prices in the Activity Schedule shall not be
altered when the Contractor makes such changes to the Activity Schedule.
46. Variations
46.1 All Variations shall be included in updated Programs, and, in the case of a lump
sum contract, also in the Activity Schedule, produced by the Contractor.

46.2 The Contractor shall provide the Project Manager with a quotation for carrying
out the Variation when requested to do so by the Project Manager. The Project
Manager shall assess the quotation, which shall be given within seven (7)
days of the request or within any longer period stated by the Project Manager
and before the Variation is ordered.
46.3 If the Contractor’s quotation is unreasonable, the Project Manager may order
the Variation and make a change to the Contract Price, which shall be based on
the Project Manager’s own forecast of the effects of the Variation on the
Contractor’s costs.
46.4 If the Project Manager decides that the urgency of varying the work would
prevent a quotation being given and considered without delaying the work, no
quotation shall be given and the Variation shall be treated as a Compensation
Event.
46.5 The Contractor shall not be entitled to additional payment for costs that could
have been avoided by giving early warning.

46.6 In the case of an Unit Rate contract, if the work in the Variation corresponds to an
item description in the Bill of Quantities and if, in the opinion of the Project
Manager, the quantity of work above the limit stated in GCC 45.1 or the timing of
its execution do not cause the cost per unit of quantity to change, the rate in the
Bill of Quantities shall be used to calculate the value of the Variation. If the cost
per unit of quantity changes, or if the nature or timing of the work in the Variation
does not correspond with items in the Bill of Quantities, the quotation by the
 Contractor shall be in the form of new rates for the relevant items of work.
47. Cash Flow
47.1 When the Program, or, in the case of a lump sum contract, the Activity Schedule,
Forecasts is updated, the Contractor shall provide the Project Manager with an updated
cash flow forecast.
48. Payment
48.1 The Contractor shall submit to the Project Manager monthly statements of the
Certificates estimated value of the work executed less the cumulative amount certified
previously.
48.2 The Project Manager shall check the Contractor’s monthly statement and certify
the amount to be paid to the Contractor within 30 days of submission by
contractor.
48.3 The value of work executed shall be determined by the Project Manager.
48.4 The value of work executed shall comprise:
(a) In the case of an Unit Rate contract, the value of the quantities of work
in the Bill of Quantities that have been completed; or
(b) In the case of a lump sum contract, the value of work executed shall
comprise the value of completed activities in the Activity Schedule.
48.5 The value of work executed shall include the valuation of Variations and
Compensation Events.
48.6 The Project Manager may exclude any item certified in a previous certificate or
reduce the proportion of any item previously certified in any certificate in the
light of later information.
49. Payments
49.1 Payments shall be adjusted for deductions for advance payments and retention.
The Employer shall pay the Contractor the amounts certified by the Project
Manager within 30 days of the date of each certificate. If the Employer makes a
late payment, the Contractor shall be paid interest as indicated in the SCC on the
late payment in the next payment. Interest shall be calculated from the date by
which the payment should have been made up to the date when the late payment
is made.

49.2 If an amount certified is increased in a later certificate or as a result of an

award by an Arbitrator, the Contractor shall be paid interest upon the delayed
payment as set out in this clause. Interest shall be calculated from the date upon
which the increased amount would have been certified in the absence of dispute.

49.3 Items of the Works for which no rate or price has been entered in BOQ shall not be
paid for by the Employer and shall be deemed covered by other rates and prices in
the Contract.
50. Compensation
50.1 The following shall be Compensation Events:
Events
(a) The Employer does not give access to a part of the Site by the Site Possession
Date pursuant to GCC 26.1.
(b) The Employer modifies the Schedule of Other Contractors in a way that affects
the work of the Contractor under the Contract.
(c) The Project Manager orders a delay or does not issue Drawings,
 Specifications, or instructions required for execution of the Works on time.
(d) The Project Manager instructs the Contractor to uncover or to carry out
additional tests upon work, which is then found to have no Defects.
(e) The Project Manager unreasonably does not approve a subcontract to be
let.
(f) Ground conditions are substantially more adverse than could reasonably have
been assumed before issuance of the Letter of Acceptance from the
information issued to bidders (including the Site Investigation Reports),
from information available publicly and from a visual inspection of the Site.
(g) The Project Manager gives an instruction for dealing with an unforeseen
condition, caused by the Employer, or additional work required for safety or
other reasons.
(h) Other contractors, public authorities, utilities, or the Employer does
not work within the dates and other constraints stated in the Contract,
and they cause delay or extra cost to the Contractor.
(i) The advance payment is delayed.
(j) The effects on the Contractor of any of the Employer’s Risks.
(k) The Project Manager unreasonably delays issuing a Certificate of Completion.

50.2 If a Compensation Event would cause additional cost or would prevent the work
being completed before the Intended Completion Date, the Contract Price shall
be increased and/or the Intended Completion Date shall be extended. The
Project Manager shall decide whether and by how much the Contract Price shall
be increased and whether and by how much the Intended Completion Date
shall be extended.
50.3 As soon as information demonstrating effect of each Compensation Event upon
the Contractor’s forecast cost has been provided by the Contractor, it shall be
assessed by the Project Manager, and the Contract Price shall be adjusted
accordingly. If the Contractor’s forecast is deemed unreasonable, the Project
Manager shall adjust the Contract Price based on the Project Manager’s own
forecast. The Project Manager shall assume that the Contractor shall react
competently and promptly to the event.
50.4 The Contractor shall not be entitled to compensation to the extent that
the Employer’s interests are adversely affected by the
Contractor’s not having given early warning or not having cooperated with the
Project Manager.
51. Tax
51.1 The Project Manager shall adjust the Contract Price if taxes, duties, and other
levies are changed between the date 30 days before the submission of bids for
the Contract and the date of the last Completion certificate. The adjustment shall
be the change in the amount of tax payable by the Contractor, provided such
changes are not already reflected in the Contract Price or are a result of GCC 53.
52. Currency
52.1 The currency of Contracts shall be Nepalese Rupees.
53. Price 53.1 Prices shall be adjusted for fluctuations in the cost of inputs only if provided for
Adjustment in the SCC. If so provided, the amounts certified in each payment certificate,
before deducting for Advance Payment, shall be adjusted by applying the
respective price adjustment factor to the payment amounts due.
 53.2 Adjustment Formulae1: The formulae will be of the following general type:

𝐿𝑛 𝑀𝑛 𝐸𝑛
𝑝𝑛 = 𝐴 + 𝑏 + 𝑐 + 𝑑 + 𝑒𝑡𝑐.
𝐿𝑜 𝑀𝑜 𝐸𝑜
Where:
pn is a price adjustment factor to be applied to the amount for the payment
of the work carried out in the subject month, determined in accordance with
Clause 49;
A is a constant, specified in the Bidding Forms- Table of Price Adjustment data,
representing the nonadjustable portion in contractual payments;2b, c, d, etc.,
coefficients representing the estimated proportion of each cost element (labor,
materials, equipment usage, etc.) in the Works or sections thereof, net of
Provisional Sums, as specified in the SCC;
Ln, Mn, En, etc., are the current cost indices or reference prices of the cost elements
for month “n,” determined pursuant to Sub-Clause 53.4, applicable to each cost
element; and
Lo, Mo, Eo, etc., are the base cost indices or reference prices corresponding to
the above cost elements at the date specified in Sub-Clause 53.4

53.3 Sources of Indices and Weightings: The sources of indices shall be those
listed in the Bidding Forms- Table of Price Adjustment data, as approved by the
Project Manager and stated in SCC. Indices shall be appropriate for their
purpose and shall relate to the Contractor’s proposed source of supply of
inputs on the basis of which his Contract shall have been computed. As the
proposed basis for price adjustment, the Contractor shall have submitted with
his bid the tabulation of Weightings and Source of Indices in the Bidding Forms,
which shall be subject to approval by the Project Manager.
53.4 Base, Current and Provisional Indices: The base cost indices or prices shall be
those prevailing on the day 30 days prior to the latest date for submission of
bids. Current indices or prices shall be those prevailing on the day 30 days prior
to the last day of the period to which a particular Interim Payment Certificate
is related. If at any time the current indices are not available, provisional
indices as determined by the Project Manager will be used, subject to
subsequent correction of the amounts paid to the Contractor when the current
indices become available.
53.5 Weightings: The weightings for each of the factors of cost given in the Bidding
Forms shall be adjusted if, in the opinion of the Project Manager, they have been
rendered unreasonable, unbalanced or inapplicable as a result of varied or
additional work already executed or instructed under Clause 46 or for any other
reason.

1
For complex Works involving several types of construction work with different inputs, a family of
Formulae will be necessary. The various items of Day work may also require different formulae,
depending on the nature and source of the inputs
2
Insert a figure for factor A only where there is a part of the Contractors’ expenditures which will not be
subject to fluctuation in cost or to compensate for the unreliability of some indices. A should normally
be 0.15. The sum of A, b, c, d, etc., should be one.
 53.6 Where, price adjustment provision is not applicable pursuant to Sub-clause 53.1
then the Contract is subject to price adjustment only for construction material
in accordance with this clause. If the prices of the construction materials stated
in the contract is increased or decreased in an unexpected manner in excess of
ten (10%) percent in comparison to the base price construction material
stated in Section –IV, Bidding Forms-Table of Price Adjustment Data, then
the price adjustment for the increase or decrease of price of the construction
material beyond 10% shall be made by applying the following formulas:
For unexpected increase in price
P =[R1 -(R0 ×1.10)]× Q
For unexpected decrease in price P
= [R1 -(R0 ×0.90)]× Q
Where:
“P” is price adjustment amount
“R1” is the present price of the construction material (Source of indices shall be
those listed in the Bidding forms)
“R0” is the base price of the construction material
“Q” is quantity of the construction material consumed in construction during the
period of price adjustment consideration If the Base price and source is to be
proposed by the Bidder as per the provision made in Section –IV, Bidding Forms-
Table of Price Adjustment Data then the Base price and source filled by
Bidder for the construction material stated in the Bidding Form shall be
subject to the approval of the Project manager and shall be as stated in
SCC..
53.7 The Price Adjustment amount shall be limited to a maximum of the initial Contract
Amount as specified in the SCC.
53.8 The Price Adjustment provision shall not be applicable for delayed period if
the contract is not completed in time due to the delay caused by the contractor
or the contract is a Lump sum Contract
54. Retention
54.1 The Employer shall retain from each payment due to theContractor the
proportion stated in the SCC until Completion of the whole of the Works.
54.2 Upon the issue of a Defects Liability Certificate by the Project Manager, in
accordance with GCC 70.1, half the total amount retained shall be repaid to the
Contractor and half when the Contractor has submitted the evidence of
submission of tax return to the concerned Internal Revenue Office. On completion
of the whole works, the Contractor may substitute retention money with an “on
demand” bank guarantee.
55. Liquidated
55.1 The Contractor shall pay liquidated damages to the Employer at the rate per day
Damages
stated in the SCC for each day that the Completion Date is later than the Intended
Completion Date. The total amount of liquidated damages shall not exceed the
amount defined in the SCC. The Employer may deduct liquidated damages from
payments due to the Contractor. Payment of liquidated damages shall not affect
 the Contractor’s liabilities.
55.2 If the Intended Completion Date is extended after liquidated damages have been
paid, the Project Manager shall correct any overpayment of liquidated damages
by the Contractor by adjusting the next payment certificate. The Contractor shall
be paid interest on the overpayment, calculated from the date of payment to
the date of repayment, at the rates specified in GCC.49
56. Bonus
56.1 The Contractor shall be paid a Bonus calculated at the rate per calendar day
stated in the SCC for each day (less any days for which the Contractor is paid
for acceleration) that the Completion is earlier than the Intended Completion
Date. The Project Manager shall certify that the Works are complete, although they
may not be due to be complete.
57. Advance
57.1 The Employer shall make advance payment to the Contractor of the amounts
Payment stated in the SCC in two equal installments by the date stated in the SCC,
against provision by the Contractor of an unconditional bank guarantee from
Commercial Bank or Financial Institution eligible to issue Bank Guarantee as per
prevailing Law in a form acceptable to the Employer in amounts equal to the
advance payment. The guarantee shall remain effective until the advance
payment has been repaid, but the amount of the guarantee shall be
progressively reduced by the amounts repaid by the Contractor. Interest shall not
be charged on the advance payment.

57.2 The Contractor is to use the advance payment only to pay for Equipment, Plant,
Materials, and mobilization expenses required specifically for execution of the
Contract. The Contractor shall demonstrate that advance payment has been used
in this way by supplying copies of invoices or other documents to the Project
Manager.
57.3 The advance payment shall be repaid by deducting proportionate amounts, as
stated in SCC, from payments otherwise due Contractor, following the
schedule of completed percentages of the Works on a payment basis. No
account shall be taken of the advance payment or its repayment in assessing
valuations of work done, Variations, price adjustments, Compensation Events,
Bonuses, or Liquidated Damages.
58. Securities
58.1 The Performance Security, including any additional security required as per ITB
32.5 and ITB 37.1, shall be provided to the Employer no later than the date
specified in the Letter of Acceptance and shall be issued in an amount
specified in the SCC, by a Commercial Bank or Financial Institution eligible to
issue Bank Guarantee as per prevailing Law acceptable to the Employer, and
denominated in Nepalese Rupees. The Performance Security shall be valid until
a date 30 days from the date of issue of the Defect Liability Certificate in the case
of a bank guarantee.
Any additional performance security required as per ITB 32.5 shall be valid until
a date 30 days from the date of issue of the certificate of Completion in the case
of a bank guarantee.
Any additional performance security required as per ITB 37.1 shall be valid until
a date 30 days from the date of issue of the certificate of DLP in the case of a
bank guarantee.
 58.2 The performance security issued by any foreign Bank outside Nepal must
be counter guaranteed by an Commercial Bank or Financial Institution eligible
to issue Bank Guarantee as per prevailing Law in Nepal.
59. Day works
59.1 If applicable, the Day works rates in the Contractor’s Bid shall be used for small
additional amounts of work only when the Project Manager has given written
instructions in advance for additional work to be paid for in that way.
59.2 All work to be paid for as Day works shall be recorded by the Contractor on forms
approved by the Project Manager. Each completed form shall be verified and
signed by the Project Manager within two days of the work being done.
59.3 The Contractor shall be paid for Day works subject to obtaining signed Day works
forms.
60. Cost of Repairs
60.1 Loss or damage to the Works or Materials to be incorporated in the Works
between the Start Date and the end of the Defects Correction periods shall be
remedied by the Contractor at the Contractor’s cost if the loss or damage
arises from the Contractor’s acts or omissions.
F. Force Majeure
61. Definition of
61.1 In this Clause, “Force Majeure” means an exceptional event or circumstance,
Force Majeure
(a) which is beyond a Party’s control;
(b) which such Party could not reasonably have provided against before
entering into the Contract;
(c) which, having arisen, such Party could not reasonably have avoided or
overcome; and
(d) which is not substantially attributable to the other Party.

61.2 Force Majeure may include, but is not limited to, exceptional events or
circumstances of the kind listed below, so long as conditions (a) to (d) above
are satisfied:
(a) war, hostilities (whether war be declared or not), invasion, act of foreign
enemies;
(b) rebellion, terrorism, sabotage by persons other than the Contractor’s
Personnel, revolution, insurrection, military or usurped power, or civil
war;
(c) riot, commotion, disorder, strike or lockout by persons other than the
Contractor’s Personnel;
(d) munitions of war, explosive materials, ionizing radiation or contamination
by radio-activity, except as may be attributable to the Contractor’s use of
such munitions, explosives, radiation or radio-activity; and
(e) natural catastrophes such as earthquake, hurricane, typhoon or volcanic
activity.
62. Notice of Force
62.1 If a Party is or will be prevented from performing its substantial obligations under
Majeure the Contract by Force Majeure, then it shall give notice to the other Party of the
event or circumstances constituting the Force Majeure and shall specify the
 obligations, the performance of which is or will be prevented. The notice shall
be given within 14 days after the Party became aware, or should have become
aware, of the relevant event or circumstance constituting Force Majeure.

62.2 The Party shall, having given notice, be excused performance of its obligations
for so long as such Force Majeure prevents it from performing them.

62.3 Notwithstanding any other provision of this Clause, Force Majeure shall not
apply to obligations of either Party to make payments to the other Party under
the Contract.
63. Duty to Minimize
63.1 Each Party shall at all times use all reasonable endeavors to minimize any delay
Delay in the performance of the Contract as a result of Force Majeure.

63.2 A Party shall give notice to the other Party when it ceases to be affected by the
Force Majeure.
64. Consequences of
64.1 If the Contractor is prevented from performing its substantial obligations under
Force Majeure the Contract by Force Majeure of which notice has been given under GCC 62,
and suffers delay and/or incurs Cost by reason of such Force Majeure, the
Contractor shall be entitled subject to GCC 30 to
(a) an extension of time for any such delay, if completion is or will be delayed,
under GCC35 ; and
(b) if the event or circumstance is of the kind described in sub-paragraphs (a)
to (d) of GCC 61.2 and, in the case of subparagraphs (b) to (d), occurs in
the Country, payment of any such Cost, including the costs of rectifying
or replacing the Works and/or Goods damaged or destructed by Force
Majeure, to the extent they are not indemnified through the insurance
policy referred to in GCC 19.

64.2 After receiving this notice, the Project Manager shall proceed in accordance with
GCC 10 to agree or determine these matters.
65. Force Majeure
65.1 If any Subcontractor is entitled under any contract or agreement relating to the
Affecting Works to relief from force majeure on terms additional to or broader than those
Subcontractor specified in this Clause, such additional or broader force majeure events or
circumstances shall not excuse the Contractor’s nonperformance or entitle him
to relief under this Clause.
66.Optional
66.1 If the execution of substantially all the Works in progress is prevented for a
Termination, continuous period of 90 days by reason of Force Majeure of which notice has
Payment and been given under GCC 62, or for multiple periods which total more than 150
Release days due to the same notified Force Majeure, then either Party may give to the
other Party a notice of termination of the Contract. In this event, the
termination shall take effect 7 days after the notice is given, and the Contractor
shall proceed in accordance with GCC 72.5.
 66.2 Upon such termination, the Project Manager shall determine the value of the
work done and issue a Payment Certificate, which shall include
(a) the amounts payable for any work carried out for which a price is stated
in the Contract;
(b) the Cost of Plant and Materials ordered for the Works which have been
delivered to the Contractor, or of which the Contractor is liable to accept
delivery: this Plant and Materials shall become the property of (and be at
the risk of) the Employer when paid for by the Employer, and the
Contractor shall place the same at the Employer’s disposal;
(c) other Costs or liabilities which in the circumstances were reasonably and
necessarily incurred by the Contractor in the expectation of completing
the Works;
(d) the Cost of removal of Temporary Works and Contractor’s Equipment
from the Site and the return of these items to the Contractor’s works in
his country (or to any other destination at no greater cost); and
(e) the Cost of repatriation of the Contractor’s staff and labor employed
wholly in connection with the Works at the date of termination.
67. Release from 67.1 Notwithstanding any other provision of this Clause, if any event or circumstance
Performance outside the control of the Parties (including, but not limited to, Force Majeure)
arises, which makes it impossible or unlawful for either or both Parties to fulfill
its or their contractual obligations or which, under the law governing the
Contract, entitles the Parties to be released from further performance of the
Contract, then upon notice by either Party to the other Party of such event or
circumstance,
(a) the Parties shall be discharged from further performance, without
prejudice to the rights of either Party in respect of any previous breach
of the Contract; and
(b) the sum payable by the Employer to the Contractor shall be the same as
would have been payable under GCC 66 if the Contract had been
terminated under GCC 66.
G. Finishing the Contract
68. Completion
68.1 The Contractor shall request the Project Manager to issue a certificate of
Completion of the Works, and the Project Manager shall do so upon deciding that
the work is completed.
68.2 In addition to the other provisions, before acceptance of the completed
works, Employer shall verify and assure that such works are within the set
objective, quality and appropriate to operate and use.
69. Taking Over
69.1 The Employer shall take over the Site and the Works within seven days of the
Project Manager’s issuing a certificate of Completion.
70. Final Account
70.1 The Contractor shall supply the Project Manager with a detailed account of the
total amount that the Contractor considers payable under the Contract before the
end of the Defects Liability Period. The Project Manager shall issue a Defects
 Liability Certificate and certify any final payment that is due to the Contractor
within 60 days of receiving the Contractor’s account if it is correct and complete.
If it is not, the Project Manager shall issue within 60 days a schedule that
states the scope of the corrections or additions that are necessary. If the
Final Account is still unsatisfactory after it has been resubmitted, the Project
Manager shall decide on the amount payable to the Contractor and issue a
payment certificate.
71. Operating and
71.1 If “as built” Drawings and/or operating and maintenance manuals are required, the
Maintenance Contractor shall supply them by the dates stated in the SCC.
Manuals
71.2 If the Contractor does not supply the Drawings and/or manuals by the dates stated
in the SCC pursuant to GCC 71.1, or they do not receive the Project Manager’s
approval, the Project Manager shall withhold the amount stated in the SCC from
payments due to the Contractor.
72. Termination
72.1 The Employer may terminate the Contract at any time if the contractor;
a. does not commence the work as per the Contract,
b. abandons the work without completing,
c. fails to achieve progress as per the Contract.
72.2 The Employer or the Contractor may terminate the Contract if the other party
causes a fundamental breach of the Contract.
72.3 Fundamental breaches of Contract shall include, but shall not be limited to, the
following :
(a) The Contractor uses the advance payment for matters other than the contractual
obligations,
(b) the Contractor stops work for 30 days when no stoppage of work is shown on the
current Program and the stoppage has not been authorized by the Project
Manager;
(c) the Project Manager instructs the Contractor to delay the progress of the Works,
and the instruction is not withdrawn within 30 days;
(d) the Employer or the Contractor is made bankrupt or goes into liquidation
other than for a reconstruction or amalgamation.
(e) a payment certified by the Project Manager is not paid by the Employer to the
Contractor within 90 days of the date of the Project Manager’s certificate;
(f) the Project Manager gives Notice that failure to correct a particular Defect is a
fundamental breach of Contract and the Contractor fails to correct it within a
reasonable period of time determined by the Project Manager;
(g) the Project Manager gives two consecutive Notices to update the Program and
accelerate the works to ensure compliance with GCC Sub clause 22.1 and the
Contractor fails to update the Program and demonstrate acceleration of the
works within a reasonable period of time determined by the Project Manager;
(h) the Contractor does not maintain a Security, which is required;
(i) the Contractor has delayed the completion of the Works by the number of days
for which the maximum amount of liquidated damages can be paid, as defined in
the SCC; and
(j) If the Contractor, in the judgment of the Employer has engaged in corrupt or
fraudulent practices in competing for or in executing the Contract, pursuant to
GCC 73.1.
 72.4 When either party to the Contract gives notice of a breach of Contract to the
Project Manager for a cause other than those listed under GCC 72.3 above, the
Project Manager shall decide whether the breach is fundamental or not.
72.5 Notwithstanding the above, the Employer may terminate the Contract for
convenience.
72.6 If the Contract is terminated, the Contractor shall stop work immediately, make
the Site safe and secure, and leave the Site as soon as reasonably possible.
73.Fraud and
73.1 If the Employer determines that the Contractor has engaged in corrupt,
Corruption fraudulent, collusive, coercive or obstructive practices, in competing for or in
executing the Contract, then the Employer may, after giving 15 days’ notice to the
Contractor, terminate the Contractor's employment under the Contract and expel
him from the Site.
73.2 Should any employee of the Contractor be determined to have engaged in corrupt,
fraudulent, collusive, coercive, or obstructive practice during the execution of the
Works, then that employee shall be removed in accordance with GCC Clause 15.
For the purposes of this GCC 73;
(i) “corrupt practice” is the offering, giving, receiving or soliciting, directly or
indirectly, of anything of value to influence improperly the actions of another
party.
(ii) “fraudulent practice”5 is any act or omission, including a misrepresentation,
that knowingly or recklessly misleads, or attempts to mislead, a party to
obtain a financial or other benefit or to avoid an obligation;
(iii) “collusive practice”6 is an arrangement between two or more parties
designed to achieve an improper purpose, including to influence
improperly the actions of another party;
(iv) “coercive practice”7 is impairing or harming, or threatening to impair or
harm, directly or indirectly, any party or the property of the party to
influence improperly the actions of a party;
(v) “obstructive practice” is
(aa) deliberately destroying, falsifying, altering or concealing of
evidence material to the investigation or making false statements to
investigators in order to materially impede a investigation into
allegations of a corrupt, fraudulent, coercive or collusive practice;
and/or threatening, harassing or intimidating any party to prevent
it from disclosing its knowledge of matters relevant to the
investigation or from pursuing the investigation; or
(bb) acts intended to materially impede the exercise of the GON’s/DP’s
inspection and audit rights provided for under GCC28.3.
74. Black Listing
74.1 Without prejudice to any other rights of the Employer under this
Contract, GoN, Public Procurement Monitoring Office (PPMO), on the
recommendation of procuring entity, may blacklist a Bidder for its
conduct for a period of one (1) to three (3) years on the following
grounds and seriousness of the act committed by the bidder:
(a) if it is established that the Contractor has committed substantial
defect in implementation of the contract or has not substantially
fulfilled its obligations under the contract or the completed work is not
 of the specified quality as per the contract.
(b) If convicted from a court of law in a criminal offense liable to be
disqualified for taking part in procurement contract,
(c) If it is established that the Contractor has engaged in corrupt or
fraudulent practices in competing for or in executing the Contract.
75. Payment upon
75.1 If the Contract is terminated because of a fundamental breach of Contract by the
Termination Contractor, the Project Manager shall issue a certificate for the value of the work
done and Materials ordered less advance payments received up to the date of
the issue of the certificate. Additional Liquidated Damages shall not apply. If the
total amount due to the Employer exceeds any payment due to the Contractor,
the difference shall be a debt payable to the Employer.
75.2 If the Contract is terminated for the Employer’s convenience or because of a
fundamental breach of Contract by the Employer, the Project Manager shall issue
a certificate for the value of the work done, Materials ordered, the reasonable cost
of removal of Equipment, repatriation of the Contractor’s personnel employed
solely on the Works, and the Contractor’s costs of protecting and securing the
Works, and less advance payments received up to the date of the certificate.

75.3 If the Contract is terminated because of fundamental breach of Contract or for

any other fault by the Contractor, the performance security shall be forfeited by
the Employer.
In such case, amount to complete the remaining works as per the Contract shall
be recovered from the Contractor as Government dues.
76. Property
76.1 All Materials on the Site, Plant, Equipment, Temporary Works, and Works shall be
deemed to be the property of the Employer if the Contract is terminated because
of the Contractor’s default.
77.Release from
77.1 If the Contract is frustrated by the outbreak of war or by any other event entirely
Performance outside the control of either the Employer or the Contractor, the Project Manager
shall certify that the Contract has been frustrated. The Contractor shall make the
Site safe and stop work as quickly as possible after receiving this certificate and
shall be paid for all work carried out before receiving it and for any work carried
out afterwards to which a commitment was made.
78. Suspension of DP
78.1 In the event that the DP suspends the loan/ credit/grant to the Employer from
Loan/Credit/Grant which part of the payments to the Contractor are being made:
a. the Employer is obligated to notify the Contractor of such suspension
within 7 days of having received the DP's suspension notice; and
b. if the Contractor has not received sums due him within the 30 days for
payment provided for in GCC 49.1, the Contractor may immediately issue a
15-day termination notice.
79. Eligibility
79.1 The Contractor shall have the nationality of an eligible country as specified in
Section V of the bidding document. The Contractor shall be deemed to have
the nationality of a country if the Contractor is a citizen or is constituted, or
incorporated, and operates in conformity with the provisions of the laws of that
country. This criterion shall also apply to the determination of the nationality of
proposed subcontractors or suppliers for any part of the Contract including
related services.

79.2 The materials, equipment, and services to be supplied under the Contract shall
 have their origin in eligible source countries as specified in Section V of the
bidding document and all expenditures under the Contract will be limited to
such materials, equipment, and services. At the Employer’s request, the
Contractor may be required to provide evidence of the origin of materials,
equipment, and services.

79.3 For purposes of GCC 79.2, “origin” means the place where the materials and
equipment are mined, grown, produced, or manufactured, and from which the
services are provided. Materials and equipment are produced when, through
manufacturing, processing, or substantial or major assembling of components,
a commercially recognized product results that differs substantially in its basic
characteristics or in purpose or utility from its components.
80.ProjectManager’
80.1 The Project Manager’s duties and authorities are restricted to the extent as
s Duties and stated in the SCC.
Authorities

81.Quarries and
81.1 Any quarry operated as part of this Contract shall be maintained and left in
Spoil Dumps a stable condition without steep slopes and be either refilled or drained and be
landscaped by appropriate planting. Rock or gravel taken from a river shall be
removed over some distance so as to limit the depth of material removed at any
one location, not disrupt the river flow or damage or undermine the river banks.
The Contractor shall not deposit excavated material on land in Government
or private ownership except as directed by the Project Manager in writing
or by permission in writing of the authority responsible for such land in
Government ownership, or of the owner or responsible representative of the
owner of such land in private ownership, and only then in those places and
under such conditions as the authority, owner or responsible representative may
prescribe.
82. Local Taxation
82.1 The prices bid by the Contractor shall include all taxes that may be levied in
accordance to the laws and regulations in being in Nepal on the date 30 days
prior to the closing date for submissions of Bids on the Contractor’s equipment,
plant and materials acquired for the purpose of the Contract and on the
services performed under the Contract. Nothing in the Contract shall relieve
the Contractor from his responsibility to pay any tax that may be levied in
Nepal on profits made by him in respect of the Contract.
83. Value Added Tax
83.1 The Contract is not exempted from value added tax. An amount specified in
the schedule of taxes shall be paid by the Contractor in the concerned VAT office
within time frame specified in VAT regulation.
84. Income Taxes on
84.1 The Contractor’s staff, personnel and labor will be liable to pay personal
Staff income taxes in Nepal in respect of their salaries and wages, as are chargeable
under the laws and regulations for the time being in force, and the Contractor
shall perform such duties in regard to such deductions as may be imposed on him
by such laws and regulations.
84.2 The issue of the Final Account Certificate pursuant to clause GCC 70 shall be
made only upon submittal by the Contractor of a certificate of income tax
clearance from the Government of Nepal.
85. Duties, Taxes
85.1 Any element of royalty, duty or tax in the price of any goods including fuel oil, and
and Royalties lubricating oil, cement, timber, iron and iron goods locally procured by the
Contractor for the works shall be included in the Contract rates and prices
and no reimbursement or payment in that respect shall be made to the
Contractor.
85.2 The Contractor shall familiarize himself with GON the rules and regulations with
regard to customs, duties, taxes, clearing of goods and equipment,
immigration and the like, and it will be necessary for him to follow the required
procedures regardless of the assistance as may be provided by the Employer
wherever possible.
85.3 The Contractor shall pay and shall not be entitled to the reimbursement of cost
of extracting construction materials such as sand, stone/boulder, gravel, etc.
from the river beds or quarries. Such prices will be levied by the local District
Development Committee (DDC) as may be in force at the time. The
Contractor, sub-contractor(s) employed directly by him and for whom he is
responsible, will not be exempted from payment of royalties, taxes or other kinds
of surcharges on these construction materials so extracted and paid for to the
DDC.
86. Member of
86.1 No member or officer of GoN or the Employer or the Project Manager or any of
Government, etc, their respective employees shall be in any way personally bound or liable
not Personally Liable for the act or obligations of the Employer under the Contract or answerable
for any default or omission in the observance or performance of any of act,
matter or thing which are herein contained.
87. Approval of Use
87.1 No explosives of any kind shall be used by the Contractor without the prior
of Explosives consent of the Employer in writing and the Contractor shall provide, store
and handle these and all other items of every kind whatsoever required for
blasting operations, all at his own expense in a manner approved in writing by the
Employer.

88 Compliance with 88.1 The Contractor shall comply with all relevant ordinances, instructions and
Regulations for regulations which the Government, or other person or persons having due
Explosives authority, may issue from time to time regarding the handling, transportation,
storage and use of explosives.
89. Permission for
89.1 The Contractor shall at all times maintain full liaison with and inform well in
Blasting advance, and obtain such permission as is required from all Government
authorities, public bodies and private parties whatsoever concerned or affected,
or likely to be concerned or affected by blasting operation.
90.Records of
90.1 Before the beginning of the Defects Liability Period, the Contractor shall account
Explosives to the satisfaction of the Project Manager for all explosives brought on to
the Site during the execution of the Contract and the Contractor shall remove
all unused explosives from the Site on completion of works when ordered by
the Project Manager.

91. Traffic Diversion

91.1 The Contractor shall include the necessary safety procedures regarding and
pedestrian traffic diversion that is needed in execution of the works. The
Contractor shall include in his costing of works, any temporary works or diversion
that are needed during the construction period. All traffic diversion should be
designed for the safety of both the motoring public and the men at work. It shall
ensure the uninterrupted flow of traffic and minimum inconvenience to the
public during the period concerned. As such, adequate warning signs, flagmen
and other relevant safety precautionary measures shall be provided to warn
motorists and pedestrians well ahead of the intended diversion as directed by the
Project Manager. All traffic devices used shall be designed in accordance with the
instruction of Project Manager.