The Project Management Agreement (Construction) is a critical document used when engaging professional project management services for construction projects in Indonesia. It is particularly relevant for medium to large-scale construction projects where specialized project management expertise is required to ensure successful project delivery. The agreement must comply with Indonesian construction laws, particularly Law No. 2 of 2017 on Construction Services and its implementing regulations. It typically includes detailed provisions for project planning, monitoring, coordination, quality control, and reporting, while addressing specific Indonesian requirements such as local content rules and licensing. The document is essential for establishing clear lines of authority, risk allocation, and performance standards between the project owner and the project management consultant, while ensuring all activities align with local regulatory requirements and industry standards.
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1. Parties: Identification of the Project Owner and the Project Management Consultant, including their legal details and representatives
2. Background: Context of the agreement, brief description of the construction project, and the basis for engaging the project management services
3. Definitions and Interpretation: Definitions of key terms used throughout the agreement and rules of interpretation
4. Appointment and Scope of Services: Formal appointment clause and detailed scope of project management services to be provided
5. Project Manager's Obligations: Comprehensive list of duties, responsibilities, and standards of performance expected from the Project Manager
6. Client's Obligations: Responsibilities and obligations of the client, including provision of information and access
7. Project Timeline: Project phases, milestones, and completion dates
8. Fees and Payment Terms: Fee structure, payment schedule, and invoicing procedures
9. Personnel and Resources: Requirements for key personnel, staffing, and resources to be provided
10. Reporting and Communication: Reporting requirements, meeting schedules, and communication protocols
11. Changes and Variations: Procedures for handling changes to scope, timeline, or fees
12. Quality Management: Quality standards, control procedures, and compliance requirements
13. Liability and Indemnification: Allocation of risks, liability limitations, and indemnification provisions
14. Insurance: Required insurance coverage and minimum limits
15. Intellectual Property: Ownership and usage rights of project documents and materials
16. Confidentiality: Protection of confidential information and trade secrets
17. Term and Termination: Duration of agreement, renewal terms, and termination provisions
18. Dispute Resolution: Procedures for resolving disputes, including mediation and arbitration
19. Governing Law: Specification of Indonesian law as governing law and jurisdiction
20. General Provisions: Standard boilerplate clauses including notices, assignment, and severability
1. Force Majeure: Provisions for handling unforeseen circumstances - particularly relevant in areas prone to natural disasters or political instability
2. Anti-Corruption and Compliance: Required when working with government entities or international organizations with strict compliance requirements
3. Environmental Management: Important for projects with significant environmental impact or when required by local regulations
4. Local Content Requirements: Necessary when project must comply with Indonesian local content regulations
5. Security Requirements: Required for projects in sensitive locations or involving critical infrastructure
6. Technology and Systems: Relevant when specific project management software or systems are to be used
7. Subcontracting: Required when the Project Manager may need to subcontract certain services
8. Performance Bonds: Important for high-value projects or when required by financing arrangements
1. Schedule 1 - Scope of Services: Detailed breakdown of project management services and deliverables
2. Schedule 2 - Fee Schedule: Detailed fee structure, rates, and payment milestones
3. Schedule 3 - Project Timeline: Detailed project schedule, milestones, and critical paths
4. Schedule 4 - Key Personnel: List of key personnel, their roles, qualifications, and time commitment
5. Schedule 5 - Reporting Requirements: Templates and specifications for required reports
6. Schedule 6 - Client's Requirements: Detailed technical and operational requirements for the project
7. Schedule 7 - Quality Management Plan: Detailed quality management procedures and standards
8. Appendix A - Power of Attorney: Authorization documents for representatives of both parties
9. Appendix B - Insurance Certificates: Copies of required insurance policies
10. Appendix C - Forms and Templates: Standard forms for change orders, progress reports, and other routine documents
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