Section 4.01 General
The contract between the Borrower and the consultant shall be prepared in such detail as to adequately protect the interests of both parties to the contract. As a rule, the contract shall, inter alia, include the clauses outlined below.
Section 4.02 Scope of the Project and of the Consulting Services
The contract shall describe in detail the scope and duration of the project and of the services to be rendered by the consultant.
Section 4.03 Duration of Contract
The contract shall specify the dates for the beginning and completion of the consultant's services.
Section 4.04 Conditions relating to Validity of Contract
The contract shall include a clause specifying on what conditions it will be valid.
Section 4.05 Responsibilities of the Parties
- (1) The contract shall clearly describe the responsibilities of the Borrower and of the consultant and the relationship between them.
- (2) Where the consultant is a joint venture or other form of association of firms, the contract shall state clearly whether they will both/all be "jointly and severally" responsible for performance under the contract, or whether one firm will be "solely" responsible, and shall state which firm will be acting on behalf of the joint venture (or other type of association of firms) in all its relations and communications with the Borrower.
Section 4.06 Contract Amount
The contract shall state clearly the total amount, or "ceiling", of fees to be paid to the consultant.
Section 4.07 Description of Consultants' Costs and Fees
- (1) The personnel costs and fees necessary for fulfillment of the contract shall normally be expressed in terms of fixed "man-month rates" for each expert staff member to be provided by the consultant. The "man-month rate" will include the basic salary of the staff member, the firm's overheads (including financial, social security and other benefits payable to, or for, the staff member, such as vacation pay, sick leave pay, insurance, etc.) and the firm's fee.
- (2) For extended periods of field service in the country concerned, the contract may also provide for overseas allowances in addition to the "man-month rate" mentioned in paragraph (1) of this Section.
- (3) The contract shall stipulate clearly the number of working or calendar days of vacation and sick leave to which each staff member will be entitled.
- (4) In addition to the personnel costs described under paragraph (1) of this Section, the contract shall normally provide for reimbursement, at actual cost or agreed "unit cost," for travel, equipment and other items necessary for the consulting services covered by the contract.
- (5) The contract shall normally include an amount set aside for contingencies, such as work not foreseen and rising costs, which the consultant may not use, however, without the written approval of the Borrower.
Section 4.08 Currency in which Costs and Fees are to be Expressed
ODA Loan of the BANK is denominated in Japanese Yen and the costs and fees should normally be stated in Japanese Yen. Whenever necessary, however, other international trading currencies may also be permitted. In addition, any portion which the consultant expects to spend in the Borrower's country may be stated in the currency of the country of the Borrower.
Section 4.09 Conditions and Methods of Payment
- (1) The contract shall specify the conditions and methods of payment, the currency or currencies in which payment is to be made, and the rate of exchange for any currency conversion.
- (2) Payment to the consultant shall be scheduled in such a manner as roughly to keep pace with its expenditures (i.e. the consultant shall not receive payments substantially in advance of its actual expenses for its services nor shall it have to wait long for payment for services already rendered). In line with this concept, the contract may, when appropriate, provide for the following:
- (a) An advance payment to the consultant at the time the contract becomes effective that will approximately cover its initial reimbursable expenses;
- (b) Withholding of the final payment until all services covered by the contract have been completed or certain performance guarantees have been given.
In case (b) above, however, the final payment shall be made within the disbursement period stipulated in the Loan Agreement.
Section 4.10 Ownership and Disposal of Equipment
The contract shall stipulate the ownership of equipment to be procured, and the manner of disposal of any equipment remaining after the services have been completed.
Section 4.11 Services to be provided by the Borrower
The contract shall clearly specify the services and facilities to be provided by the Borrower, such as counterpart staff, maps, aerial photographs, data and statistics, office space, housing, vehicles and equipment.
Section 4.12 Privileges and Immunities of the Consultant
The contract shall state clearly what privileges and immunities the consultant will be accorded, especially as regards visas and work permits, corporate and personal income taxes and other dues, customs duties, etc.
Section 4.13 Serious Hindrances
The contract shall require the consultant to report to the Borrower and the BANK promptly the occurrence of any event or condition which might delay or prevent completion of any significant part of the project in accordance with the agreed schedules and to indicate what steps shall be taken to meet the situation.
* Where the Borrower receives such a report from the consultant, the Borrower shall immediately forward a copy of it to the BANK, together with its comments on the report and an outline of the steps the report proposes shall be taken. (back)
Section 4.14 Reports
The contract shall specify the scope, number, type and frequency of the reports to be submitted by the consultant to the Borrower.
Section 4.15 Copyright
The contract shall specify whether the copyright of documents prepared by the consultant under the contract rests with the consultant or the Borrower.
Section 4.16 Modifications
The contract shall provide that it may only be modified by agreement in writing between the two parties.
Section 4.17 Force Majeure
The contract shall clearly establish:
- (1) The force majeure conditions which would release the consultant, temporarily or permanently, from all or part of its obligations under the contract;
- (2) The procedures to be followed by the consultant regarding determination and notification of any such conditions; and
- (3) The Borrower's and the consultant's rights and obligations (e.g., as to payments following termination, including, if appropriate, reimbursement of movement expenses) in force majeure situations.
Section 4.18 Termination
The contract shall include a clause specifying in detail on what conditions either party may terminate the contract and a clause stipulating procedures to be followed by the party wishing to terminate the contract. The contract shall state clearly the rights and obligations of both parties in the event of termination of the contract.
Section 4.19 Settlement of Disputes
- (1) The contract shall establish the procedures to be followed in case of a dispute arising between the Borrower and the consultant in connection with the contract.
- (2) For the settlement of such disputes, the BANK recommends recourse to impartial institutions specializing in such matters, such as the International Chamber of Commerce.
- (3) Whenever the laws of the Borrower's country prohibit such recourse to institutions specializing in arbitration, the contract shall include alternative provisions for the settlement of disputes between the Borrower and the consultant.
Section 4.20 Applicable Laws
The contract shall stipulate which laws shall govern its interpretation and performance.
Section 4.21 Language
The contract should be prepared in English. If another language is used in the contract, a full English text shall be incorporated in the contract and it shall be stipulated which is governing.