The Contractor shall perform the Works for the Contract Price plus any VAT thereon payable in Vietnam. The Contract Price shall be full consideration to the Contractor for the complete performance of the Works in accordance with this Contract. The Contract Price is a fixed price that may be adjusted only:
(a) pursuant to a Variation in accordance with Clause 12;
(b) in accordance with Clause 15.2 below; or
(c) as otherwise expressly provided for in this Contract.
15.2 Adjustments for Changes in Cost
(a) If the Notice to Proceed has not been issued on or before 31 May` 2013 (the Reference Date) the Contract Price shall be subject to adjustment as follows:
(i) that part of the Contract Price being VND[•] (the LNTP1 Works Amount), being the estimated costs of the LNTP1 Works, shall be adjusted for rises or falls in the cost of labour and materials in the period from the Reference Date until the earlier of (A) the Commencement Date or (B) the LNTP1 Commencement Date, by the addition or deduction of the amounts determined by the formulae set out below;
(ii) that part of the Contract Price being VND[•] (the LNTP2 Works Amount), being the estimated costs of the LNTP2 Works, shall be adjusted for rises or falls in the cost of labour and materials in the period from the Reference Date until the earlier of (A) the Commencement Date or (B) the LNTP2 Commencement Date, by the addition or deduction of the amounts determined by the formulae set out below; and
(iii) the Contract Price (or the balance of the Contract Price, as applicable, following deduction of the LNTP1 Works Amount and the LNTP2 Works Amount) pursuant to paragraphs (i) and (ii) above), shall be adjusted for rises or falls in the cost of labour and materials in the period from the Reference Date until the Commencement Date by the addition or deduction of the amounts determined by the formulae set out below.
[Formulae to be inserted]
(b) To the extent that full compensation for any rise or fall in costs is not covered by Clause 15.2 above or any other Clause, the Contract Price shall be deemed to have included amounts to cover the contingency of other rises and falls in costs.
15.3 Payment for LNTP1 Works and LNTP2 Works
The Employer shall make payment for LNTP1 Works and LNTP2 Works in the amounts and upon the terms agreed by the Parties and stated in the relevant Limited Notice to Proceed.
15.4 Advance Payment
(a) The Employer shall make an advance payment in an amount of not more than VND[•], as an interest-free loan for mobilisation and design, when the Contractor has submitted:
(i) a request in writing for such advance payment in an amount of not more than VND[•]; and
(ii) the Advance Payment Security issued by an Acceptable Credit Provider in an amount being not less than the amount of the advance payment requested by the Contractor.
(b) The Employer shall make the advance payment to the Contractor by not later than the later of:
(i) [14] days after the date of receipt by the Employer of the documents referred to in Clause 15.4 above; and
(ii) the Commencement Date.
(c) The Contractor shall ensure that the advance payment security is valid and enforceable until the advance payment has been repaid, but its amount may be progressively reduced by the amount repaid by the Contractor in accordance with paragraph (d) below. If the terms of the advance payment security specify its expiry date, and the advance payment has not been repaid by the date 28 days prior to the expiry date, the Contractor shall extend the validity of the advance payment security until the advance payment has been repaid.
(d) The advance payment shall be repaid through percentage deductions from moneys payable to the Contractor under Clause 15.5 below at the amortisation rate of 12.5% of the amount of each Milestone Payment payable by the Employer (excluding for the avoidance of doubt the advance payment) until such time as the advance payment has been repaid.
(e) If the advance payment has not been repaid prior to taking over of the Works or prior to termination under Clause 16 the whole of the balance then outstanding shall immediately become due and payable by the Contractor to the Employer.
15.5 Milestone Payments
(a) Payments to the Contractor shall be based upon completion of milestones (each, a Payment Milestone) specified in the Annex hereto (each such payment, a Milestone Payment).
(b) The Contractor may submit an application for payment (an Application for Milestone Payment) in the form approved by the Employer for payment of Payment Milestones completed on the tenth day of the month following the month in which the Contractor considers a Payment Milestone to have been completed. Each Application for Milestone Payment shall be accompanied by:
(i) reasonable evidence that:
(A) all of the Works described in the Application for Milestone Payment are in accordance with the terms of this Contract; and (B) all Works comprising the Payment Milestone(s) for which
payment is being requested have been fully completed and the Contractor is entitled to payment in the amount of the Application for Milestone Payment;
(ii) any other information necessary to demonstrate progress of the Works and completion of such Payment Milestones;
(iii) a lien release with respect to all Works performed by the Contractor through the date of such Application for Milestone Payment, in a form approved by the Employer and executed by the Contractor; and
(iv) a lien release with respect to all Works performed by each Subcontractor through the date of such Application for Milestone Payment, in a form approved by the Employer and executed by that Subcontractor.
(c) The Employer will notify the Contractor within twenty one days after receipt of a proper and complete Application for Milestone Payment and all required submittals whether such Application for Milestone Payment is accepted or rejected (in whole or in part), and if accepted, the amount of such requested Milestone Payment(s) accepted (less the retention to which the Employer is entitled pursuant to Clause 15.6).
(d) After the Contractor’s receipt of the Employer’s acceptance of any part of an Application for Milestone Payment the Contractor shall submit an invoice in such format as the Employer may reasonably require for that part of the Contract Price comprised in the amount of such Application for Milestone Payment accepted by the Employer, provided that not more than one invoice may be submitted by the Contractor in any calendar month.
(e) The Employer will pay each Milestone Payment within seven Business Days of receipt of the Contractor’s invoice.
(f) The Contractor shall not be entitled to payment in respect of a Payment Milestone if:
(i) another Payment Milestone for the Contractor should have, but has not, been completed pursuant to the Milestone Payment Schedule and the period of delay for such Payment Milestone is three months or more;
or
(ii) the payment due in respect of that Payment Milestone, when aggregated with payments previously made to the Contractors in respect of Payment Milestones, constitutes a percentage of the Contract Price that is greater than the cumulative percentage of the Contract Price listed in the Milestone Payment Schedule in the month corresponding to the month of submission of the Application for Milestone Payment.
(g) If the Employer rejects any Application for Milestone Payment, it shall promptly notify the Contractor of the reason for such rejection.
15.6 Retention
(a) The Employer shall retain from payments for the LNTP1 Works and LNTP2 Works, Milestone Payments and payments for any additional Cost (to the extent such additional Cost has not been reflected in an adjustment to Milestone Payments) 5% of the value thereof.
(b) The amount of the retention shall be payable to the Contractor by no later than 28 days after the expiry date of the Defects Notification Period, provided that if any work remains to be executed under Clause 11 the Employer shall be entitled to withhold payment of 150% of the estimated cost of this work until it has been executed.
15.7 Conditions of payments
Notwithstanding Clause 15.5 above, the Employer shall not be required to make any payment to the Contractor:
(a) the Contractor has complied with its obligations under Clause 3.1 in respect of the delivery and maintenance of the performance security;
(b) the Contractor has complied with its obligations under Clause 3.11 in respect of the Quality Assurance Plan;
(c) unless all monthly progress reports required to be provided pursuant to Clause 8.5 as of the date of such Application for Milestone Payment have been so provided;
(d) the Contractor has complied with its obligations under Clause 15.4 in respect of the delivery and maintenance of the advance payment security;
(e) for Works performed by the Contractor, unless the Contractor has delivered a lien release in accordance with paragraph (b)(iii) of Clause 15.5 in respect of those Works;
(f) for Works performed by any Subcontractor, unless the Contractor has delivered a lien release in accordance with paragraph (b)(iv) of Clause 15.5 in respect of those Works; and
(g) for so long as any of the events or circumstances listed in Clauses 16.1(a) to (g) is continuing.
15.8 Withholding to protect Employer from loss
(a) Notwithstanding Clause 15.6, the Employer may withhold all or any portion of any payment to such extent as may be necessary in the Employer’s reasonable opinion to protect the Employer from loss due to:
(i) defective or incomplete work by the Contractor or any of its Subcontractors;
(ii) claims filed by third parties arising out of the Contractor’s performance of the Works (other than contractual payments claimed to be due to Subcontractors);
(iii) failure of the Contractor to make undisputed payments when due to Subcontractors;
(iv) damage to the Employer caused in whole or in part by Contractor's Personnel;
(v) liens or encumbrances filed by the Contractor, a Subcontractor or any other person claiming through a Subcontractor or Contractor against the Power Facility (or any portion thereof), the Site or any other property of the Employer;
(vi) the Contractor’s failure to maintain the insurance required by this Contract;
(vii) the Contractor’s failure to perform the Works in accordance with this Contract; or
(viii) the Contractor’s failure to fulfil any of its other material obligations under this Contract.
(b) In the event the Employer exercises its rights under paragraph (a) above, the Employer will, upon such exercise or as soon as reasonably practicable thereafter, provide to Contractor notice in writing of its reasons for withholding all or any portion of any payment.
(c) When the Contractor has remedied the cause for withholding any payment and has furnished evidence of such remedy that is satisfactory to the Employer, the Contractor may include, in the next Application for Milestone Payment to be submitted, a request for payment of the amounts withheld by the Employer.
(d) If the Contractor, after receipt of notice from the Employer, fails or refuses to remedy the cause for withholding such payment within the time specified in the notice, then the Employer may, without prejudice to any other rights the Employer may have, remedy it and deduct the Employer’s costs, including counsel and other legal fees and disbursements, from the compensation payable to any Contractor under this Contract. Any such action by the Employer shall not constitute a waiver of any default by the Contractor under this Contract.
(e) If this Contract is terminated at any time before the expiry of the period for notifying defects in the Works under Clause 11.1, the Employer shall not be obligated to make further Milestone Payments or other payments except in accordance with Clause 16.8.
15.9 Set off
The Employer may set off or deduct any sums payable by the Contractor to the Employer under this Contract against or from any payment due to the Contractor under this Contract.
15.10 Payment or use not acceptance
No Milestone Payment or other payment to the Contractor or any use of the Works by the Employer or any other person shall constitute an acceptance thereof or shall relieve the Contractor of any of its obligations or liabilities under this Contract.
15.11 No duty to Subcontractors
The Employer shall have no duty or obligation to ensure any payment to a Subcontractor. No Subcontractor or other third party shall be deemed a third party beneficiary of the Employer’s obligations to pay the Contractor. Notwithstanding the foregoing, the Employer shall have the right to pay any Subcontractor directly if the Contractor fails to do so, but such payment shall be deducted from amounts owing, or to be owed, to any Contractor, and no such payment shall give rise to any duty or obligation by the Employer with respect to such Subcontractor.