Interactive Bridge Toolkit
Step 31: Termination
Step 31: Termination
The Contract may be terminated by the Employer or the Contractor if the other party causes a fundamental breach of the Contract, refer ▬►PPR-2007, Rule 127; SBD (for medium contract for construction of bridge) Section IV GCC: clause 58 to 60 Termination
PPR - 2007, Rule 127
127. Payment to be Made on Termination of Contract on Convenience Ground:
(1) Where the Public Entity has terminated a contract on the grounds of convenience for public interest in accordance with Sub-section (4) of Section 59 of the Act, it shall have to pay the following amount to the concerned supplier, construction entrepreneur, consultant or service provider. In making such payments, where s/he has received any advance amount, payment shall be made only after deducting such advance.
(a) Payment, if any, remaining to be made for the works, supply or services completed to the acceptable conditions,
(b) The price of the goods manufactured for the purpose of the Public Entity according to the procurement contract, construction materials brought in the construction site,
(c) A reasonable cost to be incurred for removal of equipment from the construction site,
(d) Repatriation expense for foreign employees employed only in construction work, and
(e) If necessary, protection and security cost for the construction work.(2) Notwithstanding anything contained in Sub-rule (1), the Public Entity shall have to accept goods ready for shipment and goods manufactured within seven days of the receipt by the supplier of the notice given by it for termination of procurement contract on grounds of convenience, at the terms and conditions and price of such contract.
(3) In respect of the goods other than those referred to in Sub-rule (2), the Public Entity may do as follows:-
(a) Procuring the goods after causing it to be completed in accordance with the terms and conditions and at the price stated in the procurement contract, or
(b) Canceling the supply order of residual goods, and make payment of an amount to be agreed through mutual consent to him/her for the goods or services partially prepared by him/her and materials or parts purchased by him/her prior to termination of contract.
SBD (for medium contract for construction of bridge) Section IV GCC: clause 58 to 60 Termination
58. Termination
58.1 The Employer or the Contractor may terminate the Contract if the other party causes a fundamental breach of the Contract. 58.2 Fundamental breaches of Contract shall include, but shall not be limited to, the following:
a. The Contractor stops work for 30 days when no stoppage of work is shown on the current Program and the stoppage has not been authorised by the Project Manager.
b. The Project Manager instructs the Contractor to delay the progress of the Works, and the instruction is not withdrawn within 30 days.
c. The Employer or the Contractor is made bankrupt or goes into liquidation other than for a reconstruction or amalgamation.
d. 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.
e. 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.
f. The Contractor does not maintain a Security, which is required.
g. 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.
h. If the Contractor, in the judgment of the Employer, has engaged in corrupt or fraudulent practices in competing for or in executing the Contract.
For the purpose of this paragraph: “corrupt practice” means the offering, giving, receiving or soliciting of any thing of value to influence the action of a public official in the procurement process or in contract execution. “fraudulent practice” means a misrepresentation of facts in order to influence a procurement process or the execution of a contract to the detriment of the Employer, and includes collusive practice among Bidders (prior to or after bid submission) designed to establish Bid Prices at artificial non-competitive levels and to deprive the Employer of the benefits of free and open competition. “coercive practice
i. The Contractor does not comply with sub-clauses 9.3 and 9.4 of the General Conditions of Contract.
58.3 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 Sub-Clause 58.2 above, the Project Manager shall decide whether the breach is fundamental or not.
58.4 Notwithstanding the above, the Employer may terminate the Contract for convenience. 58.5 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.
59. Payment upon Termination
59.1 If the Contract is terminated because of a fundamental breach of Contract by the 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 and less the percentage to apply to the value of the work not completed, as indicated in the stated in the SCC. 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.
59.2 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.
60. Property
60.1 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.