EXHIBIT 10.5
MEMORANDUM OF AGREEMENT
FOR THE SUPPLY OF GOODS AND SERVICES
FOR THE MTPO
TELEPONO SA BARANGAY PHASE IA PROJECT
KNOW ALL MEN BY THESE PRESENTS:
This MEMORANDUM OF AGREEMENT made and entered into this 18th day of November,
1998 in Pasig City, Metro Manila, Philippines, by and between:
The DEPARTMENT OF TRANSPORTATION AND COMMUNICATIONS through
the Municipal Telephone Projects Office (MTPO), with address
at ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ Street, Ortigas
Center, Pasig City, Philippines, hereinafter referred to as
MTPO and represented herein by Undersecretary/Project Director
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
- and -
SR Telecom, Inc., a corporation organized and existing under
the law of Canada with address at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇ H4S IM5, hereinafter referred to
as SRT and represented herein by its Vice President, ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇
W1TNESSETH: THAT
WHEREAS, a MEMORANDUM OF AGREEMENT was signed between MTPO and SRT on October 9,
1997 covering the Supply of Goods and Services required for the Telepono Sa
Barangay Project Phase I covering 9 Provinces, under loan No. 880-PHI-7535,
dated March 5, 1998; said CONTRACT is attached to this MEMORANDUM OF AGREEMENT
under Annex "a";
WHEREAS, this MEMORANDUM OF AGREEMENT "TSB PHASE IA"is a continuation of the TSB
Phase 1 project and consists of the expansion of Barangay Telecommunications
Center (BTC) in the two (2) provinces of Zamboanga del Norte and Tawi-tawi under
the Phase I project and establishment of new BTCs in one (1) new province of
Misamis Occidental;
WHEREAS, this project being an expansion to the Phase I project, considers with
utmost importance the technical compatibility of the system, commonality of
technology, spares and supports;
WHEREAS, the point-to-multipoint time division multiple access (PTMT-TDMA)
microwave telephone system employed in the TSB Phase I project is a technology
whose exclusive manufacturer in Canada is SRT as certified to by the Assistant
Deputy Minister of Industry of the Canadian Government; said Certification is
attached to the TSB Phase I CONTRACT;
WHEREAS, SRT has no subdealers selling the system at lower prices, and
considering the conditions of the financing offer and the fact that SRT is the
exclusive manufacturer in Canada, no suitable substitute for the system can be
obtained at a more advantageous term to the government;
WHEREAS, the financing for the procurement, acquisition and installation of the
PTMP-TDMA system will be secured from the Export Development Corporation of
Canada (EDC) through arrangements made by SRT, and is subject to the condition
that products and services to be procured from the proceeds of the loan come
from a Canadian source and have the requisite Canadian content;
WHEREAS, under Section 1.2.2 of the IRR of Executive Order No. 302, for
MEMORANDUM OF AGREEMENTs whose financing is provided by international financing
institutions or bilateral and other sources, the loan agreements negotiated and
agreed upon shall prevail; accordingly, the financing condition that the system
be procured from a Canadian source prevails;
NOW THEREFORE, for and in consideration of the foregoing premises, and the
stipulations herein, MTPO and SRT hereby agree as follows:
ARTICLE 1
MEMORANDUM OF AGREEMENT DOCUMENTS
1.1 The following documents listed in priority are attached to this
MEMORANDUM OF AGREEMENT and made an integral part of the MEMORANDUM OF
AGREEMENT as though fully written out and set forth herein:
Terms of Reference of the TSB Expansion Project
a) The Original CONTRACT of the Telepono Sa Barangay Project
Phase I;
b) Unit Price List (UPL) of TSB Expansion Project;
c) Price Schedules of TSB Expansion Project (including detailed
breakdown of same);
d) Technical Specifications of TSB expansion Project
incorporating agreements, revisions and clarifications as
mutually agreed by the parties;
e) Implementation Schedule;
f) Manufacturer's Warranty; and
g) General Terms and Conditions of the MEMORANDUM OF AGREEMENT.
ARTICLE II
SCOPE OF WORK/UNDERTAKING OF SR
2.1 Description -- SRT shall prepare and complete the detailed engineering
studies, the plans, specifications, and designs and submit the same for
approval of the MTPO, supply the required equipments, part and
materials, install the equipment and execute the construction works in
accordance with the approved plans, specification and designs,
implement the agreed training program and provide the maintenance
assistance required hereunder.
2.2 Implementation -- SRT agrees and undertakes to prepare and complete the
studies, designs, plans and specifications, supply the required parts,
materials and equipment, perform the installation and construction
works, provide training and assist in the maintenance of the System
within the period specified in the Timetable, Annex "e" hereof.
ARTICLE III
MEMORANDUM OF AGREEMENT PRICE
3.1 Consideration -- In consideration of the full and complete performance
by SRT of its undertaking under Article II hereof, MTPO shall pay SRT
the total MEMORANDUM OF AGREEMENT price of NINETY NINE MILLION THREE
HUNDRED SIXTY TWO THOUSAND NINE HUNDRED SIX U.S. DOLLARS
(US$99,362,906.00) as follows:
3.1.1 Disbursement shall be made directly to SRT by Export
Development Corporation of Canada (EDC) upon presentation of
the appropriate documentation in accordance with the General
Conditions of the MEMORANDUM OF AGREEMENT, Annex "G" hereof.
3.1.2 FOR EQUIPMENT (Representing the amount of US Dollars Due)
a) 15% downpayment upon effectivity of this MEMORANDUM
OF AGREEMENT
b) 50% upon shipment
c) 15% upon installation
d) 10% upon provisional acceptance
e) 10% upon final acceptance
3.1.3 FOR SERVICES (Representing the Amount of US Dollars Due)
a) 15% downpayment upon effectivity of this MEMORANDUM
OF AGREEMENT
b) 75% of Engineering Services upon Design Freeze on per
province basis.
c) 15% of Installation services upon Design Freeze on
per province basis.
d) 85% of Factory Training upon completion of Training.
e) 75% of Project Management upon shipment.
f) 60% of Installation services upon installation on per
province basis.
g) 75% of Provisional Acceptance Services upon
Provisional Acceptance on a per province basis.
h) 75% of Warranty and Documentation Services upon
Provisional Acceptance on a per province basis.
i) 10% of total services upon final acceptance.
ARTICLE IV
AMENDMENT TO ORDER
4.1 Necessary Adjustment -- MTPO, may at any time issue Amendments to Order
in the event that necessary adjustments within the general scope of
this MEMORANDUM OF AGREEMENT in any one or more of the following are
required in order to fully meet the requirements of the project:
a. drawings, designs or specifications;
b. method of shipment or packing; or
c. place of delivery.
If any such order increase or decrease the cost of, or the time
required for executing any part of, the work under this MEMORANDUM OF
AGREEMENT, an equitable adjustment in MEMORANDUM OF AGREEMENT price
and/or delivery schedule shall be mutually agreed upon between the
parties and the MEMORANDUM OF AGREEMENT shall accordingly be modified
in writing.
4.2 Additional Items -- MTPO may likewise issue an Amendment to Order where
there are additional items needed and necessary for the protection of
the goods which were not included in this MEMORANDUM OF AGREEMENT.
Payments for these additional items shall be based on the unit prices
in this MEMORANDUM OF AGREEMENT. If this MEMORANDUM OF AGREEMENT does
not contain any rate applicable to the additional item, then suitable
prices shall be mutually agreed upon between the parties. Requests for
payment by SRT for any additional item shall be accompanied by a
statement with approved supporting form, giving a detailed accounting
and record of amount for which SRT claims payment. The MEMORANDUM OF
AGREEMENT time shall likewise be extended, if warranted, by written
agreement of the parties.
4.3 Approval of Agency Head -- Under no circumstance shall SRT proceed to
commence work under any Amendment to Order unless the same has been
approved by the DOTC Secretary or his duly authorized representative.
ARTICLE V
PERFORMANCE SECURITY
5.1 Bank Guarantee -- SRT shall, within thirty (30) days from the signing
of this MEMORANDUM OF AGREEMENT, post a Performance Security in the
form of a Bank Guarantee equivalent to ten (10%) percent of the total
MEMORANDUM OF AGREEMENT price, callable on demand, to guarantee the
faithful performance of its obligation to supply, deliver to the site,
install,
commission and complete the system project in accordance with the
agreed timetable/schedule and the terms and conditions of this
MEMORANDUM OF AGREEMENT.
5.2 Local Bank Confirmation -- If the Bank Guarantee is issued by a
foreign bank, the same should be confirmed by a local bank.
5.3 Additional Performance Security -- SRT shall likewise post an
additional performance security within the time specified by MTPO, in a
proportionate amount to cover any cumulative increase of more than ten
(10%) percent over the original total MEMORANDUM OF AGREEMENT price as
a result of cost adjustments and/or Amendments to Order.
5.4 Extension of Validity of Performance Security -- MTPO may likewise
require SRT to extend the validity of its performance security/ies to
cover approved time extensions.
5.5 Release of Performance Security -- Subject to the provisions of this
MEMORANDUM OF AGREEMENT, the Performance security may be released after
the issuance by MTPO of the Certificate of Acceptance of the completed
and commissioned system; provided that there are no claims filed
against SRT or the bank/surety company on account of the obligations of
SRT under this MEMORANDUM OF AGREEMENT.
ARTICLE VI
EFFECTIVITY OF MEMORANDUM OF AGREEMENT
6.1 Conditions for Effectivity -- The effectivity of this MEMORANDUM OF
AGREEMENT shall be conditioned upon the occurrence of the following
events:
a) Signing of this MEMORANDUM OF AGREEMENT by the DOTC Secretary
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and / or Undersecretary ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇;
b) Conclusion of the Loan Agreement between the Department of
Finance, representing the Philippine Government and SR
Telecom, and the execution of the Deed of Assignment by SR
Telecom in favor of the Export Development Corporation (EDC)
of Canada and the execution thereof by the Philippine
Government;
c) Issuance of a Forward Obligation Authority from the DBM or CAF
by the Chief Accountant of DOTC, pursuant to LOI No. 968.
ARTICLE VII
WARRANTIES
7.1 Against Manufacturing and Other Defects -- SRT hereby warrants the
workmanship and quality of the equipment, materials and the works for a
period of two (2) years from the issuance of the Certificate of
Acceptance on a per province basis, and accordingly assures MTPO that
manufacturing and other defects will be corrected by SRT, or equipment
with such defects will be replaced, or defective workmanship rectified,
upon demand by MTPO, at the sole account of SRT.
7.2 Special Bank Guarantee -- To assure that the foregoing warranties and
the undertakings relative thereto are complied with faithfully, SRT
shall post, before any downpayment is made under this MEMORANDUM OF
AGREEMENT, a Special Bank Guarantee, callable on demand, issued by a
bank acceptable to MTPO (if issuer is a foreign bank, a local bank
should confirm the same) equivalent to ten (10%) percent of the total
MEMORANDUM OF AGREEMENT price. The guarantee shall cover the warranty
period and may be released thereafter provided that the goods supplied
and the works are free from defects and all the conditions imposed
under this MEMORANDUM OF AGREEMENT are fully met.
7.3 Non-applicability of Warranty -- The warranty on equipment shall not
apply if maintenance and operating procedures are not carried in
accordance with the manufacturer's instructions given in the manual
accompanying the equipment.
7.4 Availability of Spare parts -- SRT hereby warrants and undertakes to
cause and maintain the availability of spare parts in sufficient number
and of appropriate quality, for at least ten (10) years from the expiry
of the warranty period referred to in 7.1. Breach of this warranty
shall make SRT liable to MTPO for liquidated damages in an amount
equivalent to ten (10%) percent of the total MEMORANDUM OF AGREEMENT
price for every year that such spare parts are unavailable within the
said ten (10) year period.
ARTICLE VIII
NON-PERFORMANCE OR DELAY
8.1 Force Majeure -- SRT shall be excused from the performance of its
obligations under this MEMORANDUM OF AGREEMENT and shall not be liable
for delay in performance if the delay is attributable to any cause
beyond its control, including but not limited to war, civil
disturbance, insurrection, sabotage, act of a public enemy, labor
difficulties or disputes (but not in its own company), fire, flood,
storm or other acts of Gods.
8.2 Other Causes -- Non-performance by SRT shall likewise be excused if the
same is caused by MTPO's fault or negligence, or action or inaction of
the Government of the Philippines including judicial or administrative
action
8.3 Suspension of Work -- MTPO may suspend the work wholly or partly by
written order for a certain period of time as it may deem necessary due
to force majeure or other causes referred to above. SRT shall take all
reasonable steps to minimize the costs allocable to the work covered by
such order during work stoppage.
Before the suspension order expires, MTPO shall either lift the order
or terminate the work covered by the same. If the order is lifted, or
if the period of the order expires, SRT shall have the right to resume
work. The parties shall by written agreement make appropriate
adjustments in the delivery schedule or MEMORANDUM OF AGREEMENT, or
both, and this MEMORANDUM OF AGREEMENT shall be modified accordingly.
ARTICLE IX
DAMAGES FOR DELAY
9.1 Liquidated Damages -- SRT shall complete the works within the time
prescribed in this MEMORANDUM OF AGREEMENT. Should SRT incur any delay
in its performance for reasons attributable exclusively to itself, SRT
shall pay MTPO liquidated damages, not by way of penalty, an amount
equal to one-tenth (1/10) of one (1%) percent of the cost of the
delayed goods/works for every day of delay until such goods are finally
delivered, and/or such works are completed, and accepted by MTPO. Such
delay, however, shall not give rise to refusal or withholding of
payment by MTPO for other completed phases.
9.2 Collection of Liquidated Damages -- The amount of liquidated damages
shall be deducted from money due or which may become due to SRT, or
collect the same from any securities or warranties posted by SRT,
whichever is convenient to MTPO. Should the total sum of liquidated
damages exceed fifteen (15%) percent of the total MEMORANDUM OF
AGREEMENT price, MTPO shall automatically terminate this MEMORANDUM OF
AGREEMENT and impose sanctions against SRT over and above the
liquidated damages.
ARTICLE X
ARBITRATION
10.1 In the event of any dispute, claim or difference of opinion, the
parties hereto shall do their best to settle the same amicably by
negotiation. In the event settlement by negotiation is not achieved,
such dispute shall, at the request of either party hereto, be first
arbitrated without recourse to court action, under the Rules of
Philippines Arbitration Law (R.A. No. 876) and any amendments thereto.
10.2 Arbitration shall be initiated by one party hereto giving thirty (30)
calendar days notice in writing to the other party, of the desired
commencement of arbitration proceedings.
10.3 Thereupon, a board of three (3) arbitrators shall be appointed, one of
whom shall be chosen by the MTPO, one by SRT and a third by agreement
of the parties, hereafter referred to as the Third Arbitrator. If
either party fails to choose its arbitrator within fourteen (14) days
after receiving a notice of the commencement of arbitration
proceedings, the Third Arbitrator shall appoint the arbitrator required
to complete the board.
10.4 The decision by a majority of this board shall be final and binding
upon the parties hereto, who shall be fully liable therefor. Execution
of such decisions, may be applied for in the proper courts of Pasig
City, Metro Manila, exclusively, should resort thereto become
necessary, the cost thereof to be borne by the losing party.
ARTICLE XI
TERMINATION
11.1 Breach of MEMORANDUM OF AGREEMENT -- Either party may terminate this
MEMORANDUM OF AGREEMENT immediately upon notice in writing to the other
party if such party shall breach any provisions in this MEMORANDUM OF
AGREEMENT in any material respect and such breach remains unremedied
within thirty (30) days after written notice from the non-breaching
party.
11.2 Termination of Convenience -- MTPO may, when the interest of the
Government so requires, terminate this MEMORANDUM OF AGREEMENT in whole
or in part, for the convenience of Government, by giving SRT a written
notice of the termination specifying the parts of the MEMORANDUM OF
AGREEMENT terminated and when the termination becomes effective. SRT
should incur no further obligations in connection with the terminated
work, and on the date set in the notice of termination it shall stop
work to the extent specified. SRT should also terminate outstanding
orders and subcontractors as they relate to the terminated work and
shall settle the liabilities and claims arising therefrom. With regards
to the work not terminated, however, SRT shall be obliged to complete
the same and may accordingly incur obligations as are necessary to do
so.
ARTICLE XII
ASSIGNMENT
12.1 Written Consent -- Neither party shall assign this MEMORANDUM OF
AGREEMENT in whole or in part without the written consent of either
party. Such consent shall not be unreasonably withheld.
12.2 Assignee Acceptable to MTPO -- SRT may assign this MEMORANDUM OF
AGREEMENT, wholly or partly, to any entity acceptable to MTPO. For this
purpose, MTPO may require prior to its giving of consent, the
submission of documents and other evidence of the proposed assignee's
legal, technical and financial qualifications.
ARTICLE XIII
ENTIRE AGREEMENT
13.1 Contents of Documents -- This MEMORANDUM OF AGREEMENT contains the
entire agreement between the parties hereto as of the date hereof, and
supersedes any and all previous understanding, commitments, agreements
or representations whatsoever, whether oral, written or implied,
between the parties with respect to the subject matter hereof. No
modification, deletion of, or addition to the terms or provisions
herein shall be binding on either party unless made in writing and duly
signed by both parties through their duly authorized representatives.
ARTICLE XIV
WARRANTY AGAINST CORRUPTION
14.1 No Offer of Consideration or Commission -- SRT hereby warrants that it
or its representatives did not offer any government or MTPO official or
employee any consideration or commission for this MEMORANDUM OF
AGREEMENT, and it or its representatives did not exert or utilize any
corrupt or unlawful influence to secure or solicit this MEMORANDUM OF
AGREEMENT for any consideration or commission.
SRT shall not subcontract any portion of the works under this
MEMORANDUM OF AGREEMENT to any person known by SRT to be an official or
employee of MTPO, or to the relatives within the third degree of
consanguinity or affinity of any MTPO official or employee directly or
indirectly involved in the project presentation or MEMORANDUM OF
AGREEMENT award. SRT shall disclose the name of the person to whom a
commission is paid or to be paid, and the amount thereof.
14.2 Violation -- Any violation of this warranty shall be sufficient ground
for termination of this MEMORANDUM OF AGREEMENT and the deduction from
the MEMORANDUM OF AGREEMENT price of the commission paid without
prejudice to the filing of civil or criminal action against SRT and its
representatives and MTPO officials and employees under the Anti-Graft
and Corrupt Practices Law and other laws.
IN WITNESS WHEREOF, the parties hereto affix their signatures on the date and
place first above written.
DEPARTMENT OF TRANSPORTATION
AND COMMUNICATIONS (DOTC) THROUGH SR TELECOM, INC.
THE MUNICIPAL TELEPHONE PROJECTS OFFICE (MTPO)
by: by:
/s/ ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
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▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
UNDERSECRETARY VICE PRESIDENT
SIGNED IN THE PRESENCE OF:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ (APD MTPO) ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ (AMBASSADOR OF CANADA)
--------------------------------- -------------------------------------
IN WITNESS WHEREOF, the parties hereto affix their signatures on the date and
place first above written.
DEPARTMENT OF TRANSPORTATION
AND COMMUNICATIONS (DOTC) THROUGH SR TELECOM, INC.
THE MUNICIPAL TELEPHONE PROJECTS OFFICE (MTPO)
by: by:
/s/ ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
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▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
UNDERSECRETARY VICE PRESIDENT
SIGNED IN THE PRESENCE OF:
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
APD MTPO AMBASSADOR OF CANADA
GENERAL TERMS AND CONDITIONS OF THE
MEMORANDUM OF AGREEMENT
I. DEFINITIONS
In this MEMORANDUM OF AGREEMENT Document, terms hereinafter set forth
shall have the following meanings, unless otherwise stated:
1.1 GOVERNMENT means the Government of the Republic of the Philippines
1.2 DOTC means the Department of Transportation and Communications.
1.3 SECRETARY means the Secretary of the DOTC.
1.4 MTPO means the Municipal Telephone Projects Office, which is duly
authorized by DOTC to implement the project, and through which the DOTC
acts in this MOA; also referred to herein as MTPO.
1.5 THE PROJECTS DIRECTOR means the head of the MTPO designated by DOTC to
supervise the implementation of the Municipal Telephone Project.
1.6 PROJECT OFFICER means the MTPO staff duly authorized to act in the
implementation of the Project personally or through authorized
assistants.
1.7 INSPECTOR means any staff of MTPO duly authorized to undertake all the
necessary inspection of the work performed or being performed, or of
goods and services (as hereinafter defined respectively).
1.8 PROJECT means the Municipal Telephone Project Office "Telepono sa
Barangay Phase IA" Expansion Project to be implemented under this MOA.
1.9 CONTRACTOR means SR Telecom Inc. of ▇▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇, or
SRT, as referred to in the MEMORANDUM OF AGREEMENT.
1.10 SUBCONTRACTOR means any party or parties having a direct MOA or
contracts with the Contractor for the performance of any part or parts
of the work to be executed under the MEMORANDUM OF AGREEMENT.
1.11 MEMORANDUM OF AGREEMENT (MOA) means the written agreement covering the
supply of goods and services and the performance of the work. The MOA
shall include any and all supplemental agreements and amendment to
orders which may be executed to complete the work in accordance with
the intent
of the MOA. This written agreement shall include the following MOA
documents:
(1) Unit Price List (UPL)
(2) Technical Specifications incorporating agreements, revisions
and clarifications as mutually agreed by both parties
(3) Price Schedule
(4) Implementation Schedule
(5) Financing
(6) Manufacturer's Warranty
(7) General Terms and Conditions of the MOA
1.12 GOODS means all kinds of machinery, apparatus, materials, equipment,
articles, and necessary spare parts to be provided by the Contractor to
MTPO in the implementation of the project, under this MOA.
1.13 WORK or WORKS means the provision of goods and services by the
Contractor, necessary for the implementation of the Project as defined
in the Technical specifications.
1.14 SERVICES means services ancillary to the supply of the Goods, such as
transportation and insurance and any other incidental services, such as
installation, commissioning, provision of technical assistance,
training and other such obligations of the Contractor covered under the
MOA;
1.15 TECHNICAL SPECIFICATIONS means the specifications which include
Technical Requirements, Equipment specifications, the Contractor's
Statements of Compliance and all other revisions, clarifications
mutually agreed upon by both parties.
1.16 SITE means the actual place where Goods are to be delivered and where
the Work is to be done by the Contractor.
1.17 CONTRACTOR'S GOODS means the equipment, tools and machinery brought to
the site by the Contractor for the execution of the Work in the
Philippines, but not part of the Goods as defined in par. 1.1 2.
1.18 PROVISIONAL ACCEPTANCE means acceptance of all the goods and services
as defined in the Technical Requirements (See.TR5/3.0).
1.19 FINAL ACCEPTANCE means acceptance of all the goods and services as
defined in the Technical Requirements (Sec.TR5/4.0).
1.20 DESIGN REVIEW MEETING or DRM means a meeting with MTPO and the
Contractor's representatives that shall be held upon completion of the
site survey of each system in order to finalize and freeze the system
design. At the end of each DRM, a revised ▇▇▇▇ of Quantities (BOQ) and
minutes of meeting shall be signed by both parties and shall form
integral parts of the Contract.
1.21 SYSTEM means all the equipment supplied and installed per province,
which form part of a contiguous network interfacing with the National
Public Switched Telephone Network (PSTN) at a single designated
connection point (per province basis).
1.22 PROJECT IMPLEMENTATION SCHEDULE means the schedule for implementing
work starting from the Effective Date of the MOA and ending on the Date
of Provisional Acceptance of the last System.
1.23 NOTICE TO PROCEED means a letter from the MTPO informing the Contractor
to commence the implementation of the Project.
1.24 LENDER/S means SR Telecom Inc. and Export Development Corporation
(EDC).
2. LANGUAGE AND UNIT STANDARD
All drawings, design, specifications, manuals, name plates, markings,
instructions, schedules, notices, documents and all written
communications between MTPO and Contractor concerning the Work shall be
in the English language. The metric symbol of weights and measures
shall be used unless otherwise specified or required by MTPO.
3. AUTHORIZED REPRESENTATIVES AND NOTICES
3.1 The Projects Director of the MTPO shall be duly authorized to act on
behalf of the MTPO with respect to the implementation of the project.
3.2 The representative of the Contractor shall be duly authorized to act on
behalf of the Contractor with respect to any or all matters relating to
the implementation of
the MOA, and shall be stationed in the Philippines during the period
commencing not later than two (2) months prior to the commencement of
the construction/installation work and shall leave one month after the
Provisional Acceptance of the last system. He shall give full technical
information to MTPO at its request.
3.3 Contractor, immediately after the signing of the Contract, shall
appoint its duly authorized representative who has professional
knowledge and experience in the telecommunications field and notify
MTPO for approval thereof. The biodata of the Contractor's
representative and key personnel to be dispatched to the Philippines
shall also be submitted to MTPO for approval.
3.4 All notices required to be given by one of the parties to the other
during the implementation of the Work shall be in writing and sent by
telegraph, telefax, or telex or given either by personal delivery or by
registered mail to the party concerned at the address specified below.
In general, notices shall be effective upon receipt by any of the
parties.
Purchaser: Project Director, MTPO, 21st Floor, Strata ▇▇▇ ▇▇▇▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇; Fax: ▇▇▇-▇▇-▇▇ /
Telephone nos. ▇▇▇-▇▇▇▇, ▇▇▇-▇▇▇▇
Contractor: SR Telecom Inc., TEXTRON ▇▇▇▇. ▇/▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇.,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇.
4. USE OF LOCAL PERSONNEL
Contractor shall utilize Filipino personnel whenever possible, and
Contractor's personnel shall be limited only to engineers, specialized
technicians and administrative personnel.
5. CONTRACTOR'S RISK RESPONSIBILITY
5.1 Contractor shall take upon itself the whole risk of executing the Work
in compliance with the provisions of the MOA Documents, and all the
Goods obtained for the purpose of the MOA shall be its responsibility
until the date of the Provisional Acceptance of each portion of the
Work subject to the provisions on Warranty under thus MOA.
5.2 Contractor or MTPO shall not take advantage of any apparent error or
omission in the MOA Documents. In the event Contractor or MTPO
discovers any apparent
error or discrepancy in the MOA documents, it shall immediately notify
the other party for a joint evaluation and resolution.
5.3 Contractor shall pay due attention to the Work and shall cooperate in
every possible way with the Project Officer and Inspector, and further
with other contractors of the Government having connection with the
execution of the Project.
5.4 Any approvals made by MTPO shall not relieve the Contractor from its
obligation and responsibilities under the MOA.
6. RESPONSIBILITY OF PROJECT OFFICER
6.1 The duties of the Project Officer are to supervise the Work and examine
the workmanship employed in its execution. The Project Officer shall
have no authority to relieve the Contractor of any of its duties or
obligations under the Contract.
6.2 Any written instruction or approval given by the Project Officer to the
Contractor within the terms of such delegation shall bind Contractor as
if it had been given by MTPO.
7. ENVIRONMENTAL CONDITIONS
Subject to the Technical Specifications, the Contractor must take every
precaution in the design and construction of the telecommunications
systems and ancillary facilities taking into account the environmental
conditions prevailing in the Philippines, and in particular, typhoons
and earthquake hazards.
8. PROVISION OF GOODS AND LABOR BY CONTRACTOR
Unless otherwise specifically stipulated herein, Contractor shall
provide and pay for all labor, materials, equipment, tools,
construction equipment and machinery, water, electricity, oil fuel,
utilities, transportation and other facilities and services, as well as
any temporary offices and other structures necessary for proper
execution and completion of the Work.
9. QUALITY OF GOODS AND WORKMANSHIP
The Contractor warrants that the Goods and Services supplied shall
conform with the Technical Specifications of the Contract. The
Contractor further warrants that all materials and equipment are new
and of good quality, free from faults and defects. If required by MTPO,
Contractor shall furnish satisfactory evidence as to the kind and
quality of materials and equipment supplied.
10. CONSTRUCTION AND INSTALLATION PROCEDURES
Contractor shall execute the Work, using its best skill and attention.
It shall be solely responsible unless otherwise directed by MTPO for
all construction and installation means, methods, techniques, sequences
and procedures and for coordinating all portions of the Work under the
MOA until the date of Provisional Acceptance.
11. OPERATION AND MAINTENANCE INSTRUCTIONS
Contractor shall furnish MTPO on the date of Provisional Acceptance,
the Operation and Maintenance Instructions together with the as-built
drawings with sufficient detail to enable MTPO employees to maintain
and adjust all plans of the system as needed during the Provisional
Acceptance Period. The Work shall not be considered turned over under
the terms of Paragraph 30 if such Operation and Maintenance
Instructions have not been turned over to MTPO. Final as-built drawings
shall be supplied by Contractor not later than the date of Final
Acceptance.
12. SUBCONTRACTORS
The Contractor shall notify the MTPO in writing of the names of its
subcontractors under the MOA if not already specified in the proposal.
Such notification shall not relieve the Contractor from any obligation
or liability under the Contract. The Contractor shall be responsible
for acts, defaults and negligence of its subcontractors, servants and
workmen as if they were the acts of the Contractor provided however
that the provision of labor on a piecework basis shall not be deemed to
be subcontracting under this paragraph.
13. CONTRACTOR'S EMPLOYEES
13.1 Employees of the Contractor for the execution of the Work under this
MOA shall at all times be idealized and recognized as the employees of
the Contractor under its administrative control and supervision and
shall at no time be identified as employees of MTPO or DOTC.
13.2 Contractor, shall with the assistance of MTPO if required, obtain and
furnish necessary personnel passports, visas, security clearances,
permits, licenses, authorizations and other documents for its personnel
under this Contract.
13.3 At all limes under this Contract, Contractor shall exercise complete
administrative control and supervision over its employees. Contractor
and its employees shall conform with all applicable local laws,
regulations and ordinances, and shall promptly correct any violations
brought to its attention.
13.4 Contractor shall be responsible for the professional and technical
competence of its employees and do its best to select and employ only
those persons who in its judgment shall be reliable and competent and
who shall comply with local laws and customs and conform to a high
standard of moral and ethical conduct.
13.5 Contractor agrees, upon written request from MTPO and after mutual
agreement, to terminate the work assignment of any of its employees
performing the work under this Contract, if MTPO considers that such
termination is necessary to protect the interest of the Government.
Contractor shall bear all expenses necessary for such termination of
work assignment and shall provide replacement of equal or better
qualifications and acceptable to MTPO, within a reasonable period of
lime, at its own expense.
14. GOVERNING LAWS
Any work done in the Philippines by Contractor shall comply with all
the laws of the Philippines and the regulations, orders and rulings in
force therein.
15. PATENT RIGHTS, ROYALTIES AND INDEMNITY
15.1 Contractor shall indemnify the MTPO against all third party claims of
infringement of patent, trademark or industrial design which arise from
use of the Goods or any part thereof in the manner specified in the
specifications or drawings. MTPO shall promptly notify the Contractor
of any pending suit and upon such notification, Contractor shall take
sole responsibility for the defense and/or settlement of the dispute.
15.2 If the Purchaser shall be prevented by permanent injection from the use
of any equipment in the System, the Contractor shall substitute, at no
additional cost to the MTPO, such equipment or parts thereof with
other equally suitable equipment or parts.
15.3 The Purchaser agrees to indemnify the Contractor against claims
incurred by the Contractor by reason of infringement of any registered
patent or copyright arising out of:
a. the manufacture, sale, or use of the work from designs,
models, plans furnished by the MTPO and
b. Contractor's compliance with MTPO's instructions directing
changes to the work which leads to the infringement; provided
that Contractor shall timely warn MTPO of any infringement or
possibility thereof resulting from changes to the Work upon
MTPO's instructions.
16. PRICES
16.1 All payments and other financial terms regarding the MOA price shall
be in US Dollars.
17. TERMS OF PAYMENT
17.1 Equipment
a. Downpayment
15% downpayment upon effectivity of MOA
b. Shipment
50% of the price of the Goods shall be paid within 30 days from the
date of shipment of each delivery against presentation to the
Lender/MTPO or MTPO of a copy of the following documents:
(1) Ocean ▇▇▇▇ of lading or airway ▇▇▇▇
(2) Commercial invoice
(3) Packing List
(4) Insurance Certificate
(5) Factory Inspection Certificate of Equipment
(6) Delivery Certificate (for local portion only)
c. Installation
15% of the price of the Goods shall be paid within 30 days upon
installation of Goods at Site (per site basis) against presentation to
the Lender/MTPO of certificates from the MTPO confirming the
installation of goods at site and a Contractor's Invoice.
However, if the installation cannot be achieved because of MTPO's
fault, payment shall be claimed after delivery and inspection of the
equipment at site and shall not be unduly withheld In such case,
payment shall be made against a delivery certificate issued by MTPO as
soon as decision not to install has been mutually agreed by both
parties.
d. Provisional Acceptance
10% of the price of the Goods shall be paid within 30 days after the
completion of the Provisional Acceptance of each system or other items
not related to any system such as NMC spares or training system and
against presentation to the Lender/MTPO of a Provisional Acceptance
Certificate and Contractor's invoice.
If Provisional Acceptance Certificate is not received within 30 days
from completion of the Provisional Acceptance for reasons not
attributed to the Contractor as Section 3.12/TR5 of the Technical
Specifications, Annex "E", of the Contract, Provisional Acceptance
shall be deemed to have occurred.
e. Final Acceptance
10% of the price of the Goods shall be paid within thirty (30) days
after the date of Final Acceptance of each system and/or other items
not related to any system such as NMC spares or training system and
against presentation to the Lender/MTPO of a Final Acceptance
Certificate and Contractor's invoice.
If Final Acceptance Certificate is not received within 30 days from
completion of the Final Acceptance for reasons not attributed to the
Contractor as Section 3.12/TR5 of the Technical Specifications, Annex
"E", of the Contract, Final Acceptance shall be deemed to have
occurred.
17.2 Services
a. Downpayment
15% downpayment upon effectivity of MOA
b. Engineering Services upon Design Freeze
75% of the MOA Price, of the Services for Engineering Services shall be
paid after design freeze of each province duly approved by the MTPO and
Contractor's invoice to the Lender/MTPO.
c. Installation Services upon Design Freeze
15% of the MOA Price of the Services for Installation Services shall be
paid after design freeze of each province duly approved by the MTPO and
Contractor's invoice to the Lender/MTPO.
d. Factory Training
85% of the MOA Price of the Services for Factory Training shall be paid
within 30 days from the completion of said training against
presentation to the Lender/MTPO of a Contractor's invoice countersigned
by the Purchaser.
e. Project Management
75% of the MOA Price of the Services for Project Management services
shall be paid upon initial shipment of goods against submission of
corresponding report to the Purchaser and Contractor's invoice to the
Lender/MTPO.
f. System Services upon Installation
60% of the MOA Price of the Services for System Services upon
installation for each province shall be paid within 30 days upon
completion of said services upon presentation of a certificate from the
MTPO of such completion and Contractor's invoice to Lender/MTPO.
g. Provisional Acceptance Services
75% of the MOA Price of the Services for Provisional Acceptance
Services shall be paid upon the issuance of a Provisional Acceptance
Certificate from the MTPO on a per province basis against presentation
to the Lender/MTPO of Contractor's invoice.
If Provisional Acceptance Certificate is not received within 30 days
from completion of the Provisional Acceptance for reasons not
attributed to the Contractor as Section 3.12/TR5 of the Technical
Specifications, Annex "E", of the Contract, Provisional Acceptance
shall be deemed to have occurred.
h. Warranty and Documentation Services
75% of the MOA Price of the Services for the Warranty and Documentation
Services shall be paid upon issuance of a Provisional Acceptance
Certificate on a per province basis against presentation to the
Lender/MTPO of Contractor's invoice.
i. Final Acceptance
10% of the price of the Services shall be paid within 30 days from the
date of Final Acceptance of each province and NMC spares and/or
training system and against presentation to the Lender/MTPO of a Final
Acceptance Certificate and Contractor's invoice.
If Final Acceptance Certificate is not received within 30 days from
completion of the Final Acceptance for reasons not attributed to the
Contractor as Section 3.12/TR5 of the Technical Specifications, Annex
"E", of the Contract, Final Acceptance shall be deemed to have
occurred.
18. SECURITIES
18.1 Performance security
Within one month upon signing of the Contract, the Contractor shall
furnish the MTPO with a Performance Security in the form of a Bank
Guarantee equivalent to 10% (ten percent) of the total MOA Price
callable on demand, to guarantee the faithful performance of its
obligations to supply, deliver to the site, install, commission and
complete the system/project in accordance with the agreed
timetable/schedule and the terms and conditions of this Contract.
19. SHIPMENT
19.1 Delivery
Items to be shipped or delivered under this MOA shall be limited to
Goods and Contractor's Equipment required for the execution of the
Contract.
Delivery shall be considered to be made FOB Port/Airport of loading
and then CIF site under Contractor shipping instructions and MTPO
acting as the IMPORTER (CONSIGNEE).
The terms and conditions of FOB and CIF shall be in compliance with the
trade of "INCOTERMS 1990 with relevant Amendments" being accepted as
the International Rules by the International Chamber of Commerce
(I.C.C.).
Contractor may ship Goods to the Philippines either by air or by sea at
its discretion. The airway ▇▇▇▇ shall be considered as the ▇▇▇▇ of
lading.
Upon the shipment of Goods, Contractor shall notify Purchaser and the
Insurance Company by fax or telex of the full details of shipment, Port
of discharge etc., and shall send the following documents to MTPO by
international courier service, which should be received by MTPO at
least 10 days prior to arrival of shipment so that MTPO can take the
necessary actions and make necessary arrangements with the Philippine
authorities concerned for exemption from taxes, duties and all
impositions to be levied on Goods in the Philippines:
a) Commercial Invoice : Five (5) copies
b) Packing List : Five (5) copies
c) Non-negotiable
▇▇▇▇ of lading or : Five (5) copies
House Air Waybill
d) Insurance Certificate : Two (2) copies
e) Manufacturer's
Guarantee Certificate : Five (5) copies
f) Inspection Certificate: Five (5) copies
19.2 Partial Shipment
Partial shipment is acceptable, as well as transhipment.
20. PACKING OF GOODS
With respect to packing, Contractor shall give particular attention to
the following:
(1) Goods to be supplied by Contractor shall be securely fastened and
packed to avoid damage during transportation to their destinations or
storage for reasonable period of time in any warehouse. Contractor
shall give particular attention to the protection of Goods for
transportation by sea and handling on land under tropical climatic
conditions. Such packing must be sufficient to ensure safe arrival at
destination and to withstand such hazards as rough handling and
possible corrosion by exposure to salty seawater spray.
(2) The destination of Goods, crate identification, etc., shall be
indicated clearly on the external surface of each bale or package as
shown below:
To: Republic of the Philippines/ "Telepono sa Barangay" Project
MOA No. :
License No. :
Name of Station :
Port of Destination :
Case No. a/b/c/: A/B (see Remarks hereinafter)
Net Weight :
Gross Weight :
Dimension of Case:
Remarks A = Serial number of case
B = Total number of cases in batch
21. INSURANCE
Without limiting its obligations and responsibilities under this
Contract. Contractor shall effect the following insurance against all
loss and damage from whatever cause for which it is responsible under
the terms of the Contract:
21.1 Freight Insurance
Contractor shall arrange for an all-risks overseas and inland
transportation insurance from the port of loading to the Site covering
all Goods to be supplied under the MOA to the full CIF value.
21.2 Erection All-Risks Insurance
The Contractor shall also secure Erection All-Risks Insurance to cover
against all risks (except war risk, nuclear risk, and other risks
normally excluded from such policies) during the Work against physical
loss of or damage to all Goods and the Work to the full value until the
effective date of Provisional Acceptance of each relevant system.
21.3 The Contractor shall replace or repair the damaged, lost or destroyed
Goods until their Provisional Acceptance upon the written direction of
the MTPO. If any loss, damage, or destruction of the Goods causes an
increase in the time required for the Contractor's performance of any
part of the work under the Contract, the Project Implementation
Schedule shall be extended accordingly by written agreement of the
parties.
21.4 Workmen's Compensation Insurance
Prior to commencement of physical work under this Contract, Contractor
shall obtain, pursuant to Philippine Laws, Workmen's Compensation
Insurance for all personnel employed by it in connection with the Work
under this MOA and maintain the same during the MOA Period, as security
for compensation benefits against work-related injury or employer's
liability.
22. INLAND TRANSPORTATION AND STORAGE
22.1 The MTPO shall act as the Importer (CONSIGNEE) in this Project. The
Contractor shall undertake to secure the customs clearance of goods
with the assistance of the MTPO. The Government shall shoulder all
relevant taxes and duties and shall accomplish applicable import
documents. The Project Implementation Schedule is predicated upon the
timely release of goods from the Philippines Customs. To the extent the
Contractor, with the assistance of the MTPO, is unable to obtain the
release of the Goods within the time set forth in Annex "G" of the
Contract, the Project Implementation Schedule shall be extended
accordingly by written agreement of the parties.
22.2 Goods shall be stored in Contractor's warehouses under its
responsibility before delivery to the sites.
22.3 Contractor shall be responsible for the handling and safe movements of
Goods in off-loading from the on-loading to its transport at the
storage areas well as at Site.
22.4 Contractor shall be responsible for payment of expenses for execution
and arrangements of clearing Goods through ports/airports of
destination, storage and transportation to site, exclusive of
applicable taxes and duties.
23. TARIFFS, DUTIES AND TAXES
23.1 Export tariffs, duties or other taxes or charges, if any, levied
outside the Philippines shall be paid by Contractor, and Contractor
shall not demand reimbursement from the Government for payments made
for those tariffs, duties and taxes.
23.2 All taxes, value added tax, Philippine duties, license fees, and other
such levies imposed, directly or indirectly by or inside the
Philippines on any Goods, materials, equipment, vehicles and Services,
purchased or acquired for, or related to the Project shall, unless the
Contractor is exempted from same, be paid for by the MTPO.
24. WORK PERMIT, CERTIFICATE AND OTHER AUTHORIZATION
24.1 MTPO shall assist the Contractor to obtain in the Philippines any of
the required authorizations, including entry visa and work permits for
Contractor's employees. For this purpose, Contractor shall submit to
MTPO the list of Contractor's personnel to be dispatched on a full-time
basis for the Work, one (1) month before their arrival in the
Philippines.
24.2 MTPO shall issue identification cards and other Certificates for
Contractor's personnel, when necessary for execution of the Work.
24.3 MTPO shall allow Contractor to use, free of charge, during the
execution of the Work the tools, cards or measuring equipment, etc., to
be supplied under this Contract. In case damage or losses should occur
on such tools, cards or measuring equipment, they shall be repaired or
replaced with non-defective ones by Contractor as soon as possible at
no cost to the MTPO. Furthermore, measuring equipment shall be checked
and calibrated by Contractor before returning to MTPO.
25. LICENSES AND PERMITS
Licenses and Permits shall be obtained by the Contractor with the
assistance of MTPO pursuant to the Technical Requirements of the
Contract.
The Contractor shall maintain an Office in the Philippines for the
purpose of performing its obligations under this MOA and other
contracts involving this Project. To this effect, the MTPO shall assist
the Contractor in obtaining any governmental license or permit for the
maintenance of such Project Office.
26. ACCEPTANCE OF WORK
26.1 Provisional Acceptance
(1) Provisional Acceptance Test
Provisional Acceptance Test shall be carried on a province per province basis as
follows:
(a) When all the construction and installation works have been completed,
the Provisional Acceptance Test shall be executed by the Contractor in
the presence of and under the direction of the Project Officer in
accordance with the Technical Specifications.
Prior to initiating the test procedures, Contractor shall submit for
approval to MTPO the test or commissioning procedures. MTPO shall have
thirty (30) days from receipt of the procedures to register its
observations in writing to Contractor. Should MTPO fail to inform
Contractor of its observations within that period, the said documents
shall then be considered as approved.
(b) Contractor shall give MTPO at least three (3) weeks prior written
notice of the date on which the Provisional Acceptance Test shall be
conducted. Unless otherwise agreed upon within seven (7) days from the
receipt of said notice the Provisional Acceptance Tests shall take
place at the date proposed by the Contractor in his written notice.
(c) Contractor shall supply necessary labor, materials, equipment,
apparatus, instruments, power, fuel and the like necessary for the
execution of the Provisional Acceptance Test.
(d) If Contractor and MTPO disagree on the interpretation of a test result
each shall give a statement of its findings to the other within
fourteen (14) days after such disagreement arises. The statement shall
be accompanied by all relevant evidence.
(e) The tests shall be conducted according to the procedures abovementioned
and shall be declared completed as soon as the equipment satisfies the
said procedures as indicated in the Technical Specifications.
(f) It is understood that the tests shall be considered as valid even if
the nominal values for which the equipment is designed are not reached
at the time of the testing period due to conditions beyond Contractor's
control (such as smaller number of subscribers actually connected or no
connection available with other external networks).
(g) The Work shall be considered accepted when:
All Acceptance Tests have been carried out and results show
that all tests meet the Acceptance criteria as per the Technical
Specifications;
The MTPO shall notify the Contractor in writing of such
Acceptance. If the MTPO fails to notify the Contractor within ten (10)
working days from the date when results of the Acceptance Tests shall
have been issued as greed upon, the Provisional Acceptance Certificate
shall be deemed to have been issued as of the date when results of the
Acceptance Tests meet the objectives. In the event that the system
fails to meet the Acceptance criteria due to causes not imputable to
the Contractor, Acceptance of the work shall be deemed to have taken
place on the date of completion of Acceptance Tests, and any extra work
required to correct any such performance deficiencies shall be for the
account of MTPO.
(2) Provisional Acceptance Certificate
Provisional Acceptance Certificate shall be delivered on a per province
basis.
a. After the Provisional Acceptance Tests shall have been completed but
not later than 15 days thereafter, satisfying all the relevant
requirements under the MOA except minor defects not affecting the
overall operation of the said system, MTPO shall issue the Provisional
Acceptance Certificate for that province.
b. Before the issuance of the Provisional Acceptance Certificate,
Contractor shall hand over and submit to MTPO the spare parts, units,
materials, test equipment, tools, instruction handbooks and other
information necessary for the operation and the maintenance of the
system.
c. If for reasons beyond Contractor's control, such as but not limited, to
Force Majeure, some stations of a system cannot be entirely installed,
the acceptance tests for that system shall be conducted by Contractor,
attended by MTPO representative on the partially installed system.
Contractor shall deliver the
equipment of the station(s) that cannot be installed to the appropriate
MTPO storage area.
A Delivery Certificate shall be drawn up and signed by MTPO and
Contractor. This Certificate shall constitute the provisional
acceptance of the stations concerned, thus permitting the issue of the
Provisional Acceptance Certificate for the relevant system. Contractor
is however not relieved of its responsibility to install the relevant
portion of the system should its installation become possible.
d. Upon issuance of the Provisional Acceptance Certificate, that system
shall be deemed to have been turned over to MTPO. In case a decision is
made not to install such equipment or facility, then an appropriate
deduction on the installation cost shall be made.
e. In case the Purchaser puts any portion(s) of the Work executed by the
Contractor into commercial service the portion(s) shall be deemed to
have been provisionally accepted at the time of such commercial service
and the Purchaser shall issue the Provisional Acceptance Certificate
for the said portion(s) within seven (7) days after the start-up of
commercial service.
26.2 Final Acceptance Certificate
MTPO shall issue the Final Acceptance Certificate on a per province
basis upon confirmation by the Project Director that all the duties of
the Contractor under the MOA relevant to that system have been
completed against the notification presented by Contractor stating that
all defects and faults have been cleared.
27. WARRANTY
27.1 The Contractor warrants that the Goods supplied and the Work shall
conform with the Technical Specifications. The Contractor further
warrants that the Goods supplied under this MOA shall be free of front
failure due to defective material or faulty workmanship and the Work
performed in accordance with the designs, specifications and
internationally accepted standards for the same or similar services for
a period of twenty four (24) months from the date of Provisional
Acceptance.
27.2 The MTPO shall promptly notify the Contractor in writing of any claims
arising under this warranty.
27.3 This warranty does not apply to:
a) Equipment or components normally consumed in operation or
which have a normal life inherently shorter than twelve (12)
months.
b) Equipment or parts which have been:
(i) misused, altered, abused, or dated in any way by the
MTPO;
(ii) improperly stored, or operated or maintained not in
accordance with the written instructions of the
Contractor; or
(c) Equipment used in conjunction with or connected to
non-Contractor supplied equipment which does not perform in
accordance with the Technical Specifications; or
(d) Equipment repaired by others without the Contractor's written
consent or not in accordance with the Contractor's written
consent or not in accordance with the Contractor's
instructions.
27.4 Provided that written notice of defect is promptly given to the
Contractor, within the applicable warranty period, the Contractor shall
within a reasonable period repair or replace the defective goods
thereof at no cost to the Purchaser. If Contractor fails to make good
any defects within a reasonable time, MTPO may proceed to make good the
same at Contractor's expense after a thirty (30) day written notice to
the Contractor.
27.5 Repairs or replacement shall not interrupt or extend the Contractor's
warranty period. Any equipment replaced under the Contractor's warranty
shall be subject to the manufacturer's warranty. No equipment shall be
repaired or replaced pursuant to the warranty provisions hereof without
the Contractor's written authorization and instructions, which shall
not be unreasonably withheld.
27.6 The MTPO under the supervision of Contractor shall be responsible for
detecting the origin of the faults and identifying the faulty parts,
shipping them to Contractor's premises within two (2) weeks of fault
discovery, at the expense of Contractor which shall replace them with
brand new spare parts taken out from the spare parts lot, and shall
restart the system in accordance with the 2nd level maintenance
procedures detailed in the Technical Specifications.
27.7 The total liability of the Contractor and its suppliers of every type
on any and all claims shall not exceed the price allocated to the
equipment, or part thereof which gave rise to the claims, except as
otherwise provided herein.
27.8 Until the expiration of the warranty period or any extension thereof,
Contractor shall have access to the project sites, at its own risk and
expense, at all reasonable times.
27.9 Contractor warrants to make available and provide to MTPO at reasonable
prices, terms and conditions. The same type of components and spare
parts or their equivalents needed for the operation and maintenance of
the system at any time during a period of ten (10) years from the date
of issuance of the Final Acceptance Certificate.
27.10 The spare parts buffer of MTPO shall be replenished up to the normal
level of inventory by the Contractor at its expense before the expiry
of the warranty period.
28. TIME OF COMPLETION
28.1 Completion of the Work up to Provisional Acceptance of all systems
shall be within twenty-four (24) months after effectivity of the
Contract.
28.2 Should performance by the Contractor be delayed or should the
Contractor be unable to comply with its duties and responsibilities for
reasons attributable to Paragraphs 30, 31 and 33 the completion ▇▇▇▇
shall be extended accordingly.
28.3 Should performance by the Contractor be delayed or should the
Contractor fail to comply with its duties and responsibilities for
reasons not attributable to the Contractor such as but not limited to
reasons attributable to the Government or reasons attributable to Force
Majeure, extensions of the Project Implementation Schedule shall be
granted to the Contractor and these extensions shall be equal in time
to the duration of the delays incurred.
29. AMENDMENT TO ORDER
29.1 MTPO may at any time issue Amendments to Order in the event that the
necessary adjustments within the general scope of this MOA in any one
or more of the following are required in order to fully meet the
requirements of the project:
a. drawings designs or specifications;
b. method of shipment or packing; or
c. place of delivery.
If any such order increases or decreases the cost of, or the time
required for executing any part of the work under this contract, an
equitable adjustment in MOA price and/or delivery schedule shall be
mutually agreed upon between the parties concerned and the MOA shall
accordingly be modified in writing.
29.2 MTPO may likewise issue an Amendment to Order where there are
additional items needed and necessary for the protection of the goods
which were not included in this Contract. Payments for these additional
items shall be based on the unit prices in this Contract. If this MOA
does not contain any rate applicable to the additional item then
suitable prices shall be mutually agreed upon between the parties.
Requests for payment by SRT for any additional item shall be
accompanied by a statement with the approved supporting form, giving a
detailed accounting and record of amount for which SRT claims payment.
The MOA time shall likewise be extended if warranted by written
agreement of the parties.
29.3 Under no circumstance shall SRT proceed to commence work under any
Amendment to Order unless the same has been approved by the DOTC
Secretary or his duly authorized representative.
30. FORCE MAJEURE
30.1 Contractor shall not be responsible for delay of the MOA completion
date or non-performance of its contractual obligations due to Force
Majeure such as Acts of God, of a public enemy, insurrection, civil
war, social unrest, acts of Government in its sovereign capacity,
fires, floods, earthquakes, landslide, natural disasters and other
conditions, epidemics, restrictions, strikes, lockouts, sabotage,
combination of workmen and freight embargoes, etc. which cause failure
to perform the MOA and in which case are beyond control of the
Contractor
30.2 In case of such Force Majeure, this MOA may be amended or extended or
terminated wholly or partially by mutual agreement of both parties.
30.3 If any damage or loss has been caused to any Work done or to Goods by
Force Majeure as defined in Paragraph 31.1 for which neither of the
parties is responsible Contractor shall promptly notify MTPO of the
event and shall if possible make good such damage or loss if required
by MTPO to do so at mutually agreed prices.
If such damage is covered by Insurance the amount of its coverage shall
be deducted from the amount of damage to be borne by the Government.
30.4 Likewise, Contractor shall not be held responsible for damages to the
equipment and works caused by unforseeable external occurences such as
but not limited to:
- Earthquakes, volcanic eruptions, typhoons flooding.
- Blasting and the likes resulting from war combat, mining.
31. SUSPENSION OR TERMINATION OF CONTRACT
31.1 In case of Force Majeure
In case of Force Majeure as stipulated in Section 30 Contractor shall
be entitled to suspend the execution of the MOA for the period such
Force Majeure shall last. In this case Contractor shall properly
protect and secure the Work during this Suspension period.
If such protection and securing of the Work are deemed impossible, the
Contractor shall notify MTPO in writing, giving the reasons, and the
matter shall be settled through negotiation between the parties hereto.
Should such suspension last for a period exceeding six (6) months,
either of the parties hereto shall be entitled unless otherwise agreed
upon to terminate this MOA with respect to the remaining Work and shall
give Notice of Termination by registered mail to the other party. In
case of such termination the MTPO shall pay within one month therefrom
to the Contractor the value of all equipment already shipped to the
Philippines and the cost of the Work executed prior to the date of
termination.
For all the other expenses to be made by Contractor or its
subcontractors for the termination of MOA equitable solutions shall be
found through negotiations between the parties.
31.2 In case of Contractor's Default
If Contractor should fail to perform the MOA with due diligence and/or
refuse or neglect to comply with any reasonable orders of MTPO with
respect to the MOA or contravene any provision of the Contract, MTPO
may give a notice to Contractor to make good the said failure, neglect
or contravention.
Should Contractor fail to comply with the said notice within 30 days
from receipt of such notice, the MTPO may terminate the MOA by giving
notice of termination by registered mail to Contractor. In this event
the MTPO shall be entitled to retain the balance due to the Contractor
in order to pay for the costs to be incurred for the due completion of
the Works.
31.3 In case of Default of MTPO
In the event the MTPO is in default of its obligations under this
Contract, the Contractor may give the MTPO a written notice of default.
If the MTPO fails to remedy the condition of default within a period of
thirty (30) days from receipt of such notice the Contractor may
terminate the MOA without prejudice to its other remedies under the
Contract.
32. SECURITY OF THE PERSONNEL
32.1 The security of the personnel of the Contractor and its Subcontractor/s
shall be respected as the most important factor during the execution of
the Contract.
32.2 Before the commencement of installation, MTPO shall ensure that the
sites have been made available for Contractor's works.
MTPO shall in accordance with the time schedule, grant Contractor free
access to the sites in order to carry out all its obligations during
the whole period of the Project under the Implementation Schedule of
the contract.
32.3 The Contractor may suspend the execution of the MOA subject to
consultation and agreement with MTPO if the security of any of its
personnel is threatened by possible or actual civil commotion,
hostilities, terrorism, bomb threat, guerrilla activity, warfare,
rebellion, murder, sabotage, extortion, unexplained industrial
accidents, kidnapping or any other social unrest or upheaval. In case
of emergency the representatives of the Contractor and MTPO shall make
the decision to suspend the execution of the Contractor to ensure the
security of the personnel, and the Contractor shall notify MTPO as soon
as possible.
32.4 MTPO in case of threat to the security of the Contractor's personnel,
shall render all possible assistance and cooperation to the Contractor
to endure their safety, well-being, medical care and safe evacuation
out of the unsecured area.
32.5 The implementation of the MOA if suspended due to the above situation
shall be resumed from the date mutually agreed upon by both parties.
The Project Implementation Schedule shall likewise be accordingly
adjusted by agreement of the parties.
33. PROTECTION OF TELECOMMUNICATION ACTIVITY
During the installation period, Contractor shall pay special attention
to the protection of the existing telecommunications facilities from
damage, interference or trouble.
If such damage, interference or trouble should occur, Contractor shall
immediately suspend the Work and ask MTPO for instructions.
34. PREVENTION OF DAMAGE
34.1 Contractor shall, at its expense, provide facilities necessary to
prevent damage to the Work, Goods and adjacent structures of a third
party until the Work shall have been completed and accepted.
34.2 At existing stations the Contractor shall take all possible precautions
against disturbance to operational equipment, and shall in no respect
impede the work of MTPO.
34.3 The Contractor shall maintain the work places at each site in an
orderly condition, and shall remove all combustible materials from the
vicinity of the station.
34.4 Contractor shall, whenever it considers it especially necessary to do
so for the prevention of accidents, take proper measures at its own
cost, and notify Project Officer of the measures taken.
34.5 Contractor shall not, for any purpose, enter other properties than
those belonging to the Project, without obtaining the permission of the
person in charge or Project Officer.
34.6 MTPO shall assist Contractor to clear the locations (above and
underground) where the work and equipment related to the microwave
stations, are to be erected and constructed. Contractor shall not be
held responsible for any encroachment into any private or public
property related thereto or for any trespassing into third party
estates if MTPO has failed to acquire the necessary land and to keep
Contractor informed of the same.
35. DAMAGE TO THIRD PARTY
35.1 Contractor shall be responsible for all direct damages only, to the
property of any person resulting from any neglect, or misconduct in its
manner or method of executing the Work, or defective Work or materials,
or acts of its employees, and the said responsibility shall not be
released until the Work shall have been completed and accepted. In the
case of such damage, Contractor shall restore the damaged property, at
its own expense, to the condition equivalent to that existing before
such damage or injury.
35.2 In case it is difficult for Contractor to settle the matters mentioned
above by itself, the MTPO shall cooperate with Contractor. However,
expenses needed for such measures shall be borne by Contractor.
35.3 Contractor shall indemnify and keep the MTPO indemnified against all
losses and claims for such injuries or direct damages as mentioned
above, and all claims, demands, proceedings, damages, cost, charges and
expenses in respect or in relation thereto. No extension of lime shall
be made in connection therewith.
35.4 Contractor shall not be responsible for any damage or injury
attributable to the Government or any third party.
36. ARBITRATION
In the event of any dispute, claim or difference of opinion, the
parties hereto shall do their best to settle the same amicably by
negotiation. In the event settlement by negotiation is not achieved,
such dispute shall, at the request of either party hereto, be first
arbitrated without recourse to court action, under the Rules of the
Philippines Arbitration Law (R A. No. 876) and any amendments thereto.
Arbitration shall be initiated by one party hereto giving thirty (30)
calendar days notice in writing to the other party of the desired
commencement of arbitration proceedings.
Thereupon, a board of three (3) arbitrators shall be appointed, one of
whom shall be chosen by the MTPO, one by the Contractor and a third by
agreement of the parties hereafter referred to as the Third Arbitrator.
If either party fails to choose its arbitrator within fourteen (14)
days after receiving a notice of the commencement of arbitration
proceedings, the Third Arbitrator shall appoint the arbitrator required
to complete the board.
The decision by a majority of this board shall be final and binding
upon the parties hereto, who shall be fully liable therefor. Execution
of such decisions may be applied for in the proper courts of Pasig
City, Metro Manila, exclusively, should resort thereto become
necessary, the cost thereof to be borne by the losing party.
37. MONTHLY PROGRESS REPORT
Contractor shall submit to the MTPO "Monthly Progress Reports" the Work
executed for each month, within the first ten (10) days of the
following month and in a form and number of copies to be determined by
MTPO. The MTPO shall
confirm in writing the quantity of the Work stated in the report within
ten (10) days after its submission. In case confirmation or objection
to the quantity of the Work is not given within the said ten (10)
working days, the Monthly Progress Report shall be considered approved
by MTPO.
38. CLEANING-UP
Contractor shall at all times pay due attention to sanitation at the
Site and shall keep it free from accumulation of waste materials or
garbage caused by its operations.
Upon completion of the Work it shall remove all the surplus materials
and garbage from the site as well as its tools, equipment, machinery,
and waste materials within the time designated by MTPO.
39. MATTERS NOT STIPULATED IN CONTRACT
All matters not stipulated in the MOA shall be determined by
negotiation between the MTPO and Contractor as required, and no
agreement or understanding shall be binding on either of the parties
hereto unless in writing and signed by authorized representatives of
both parties.
40. EFFECTIVE DATE OF THE MEMORANDUM OF AGREEMENT (MOA)
The Effective Date of this MOA is the date when all of the following
conditions are fulfilled:
a. Signing of this MOA by the DOTC Secretary ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
and/or Undersecretary ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇;
b. Conclusion of the Loan Agreement between the Department of
Finance, representing the Philippine Government and SR
Telecom, and the execution of the Deed of Assignment by SR
Telecom in favor of the Export Development Corporation of
Canada (EDC) and also the execution thereof by the Philippine
Government;
c. Issuance of a Forward Obligation Authority from the DBM or CAF
by the Chief Accountant of DOTC, pursuant to LOI 968.
41. CONFIDENTIALITY
Both parties shall treat all proprietary information concerning the
Project as private and confidential.
42. WORKING HOURS
The normal working hours of Contractor are eight (8) hours/day from of
8:00 a.m. - 5:00 p.m. except Saturdays, Sundays, and legal holidays.
43. LIQUIDATED DAMAGES
43.1 SRT shall complete the works within the time prescribed in this
Contract. Should SRT incur any delay in its performance for reasons
attributable exclusively to itself, SRT shall pay MTPO liquidated
damages, not by way of penalty, an amount equal to one -tenth (1/10) of
one percent (1%) of the cost of the delayed goods /works for every day
of delay until such goods are finally delivered, and/or such works are
completed, and accepted by MTPO. Such delay, however, shall not give
rise to refusal or withholding of payment by MTPO for other completed
phases.
43.2 The amount of liquidated damages shall be deducted from money due or
which may become due to SR, or collect the same from any securities or
warranties posted by SR, whichever is convenient to MTPO. Should the
total sum of liquidated damages exceed fifteen percent (15%) of the
total MOA price, MTPO shall automatically terminate this MOA and
impose sanctions against SRT over and above the liquidated damages.
