Panel of specialised attorneys – 3-Year appointment (11 legal categories)

General Conditions of Contract (GCC) — July 2010

Applicability

• These general conditions apply to all bids, contracts and orders for functional and professional services, sales, hiring, letting and the granting or acquiring of rights, excluding immovable property unless otherwise indicated in the bidding documents.
• Special Conditions of Contract (SCC) compiled for a specific bid supplement the GCC; where they conflict, the SCC prevails.

Key definitions

• Closing time: date and hour specified in the bidding documents for receipt of bids.
• Contract: written agreement recorded in the signed contract form, including all attachments, appendices and incorporated documents.
• Contract price: price payable for full and proper performance of contractual obligations.
• Day: calendar day.
• Force majeure: event beyond the supplier’s control, not involving fault or negligence, not foreseeable (e.g. acts of the purchaser in sovereign capacity, wars, fires, floods, epidemics, quarantine restrictions, freight embargoes).
• Goods: equipment, machinery and/or other materials the supplier must supply.
• Services: functional services ancillary to the supply of goods (transportation, installation, commissioning, technical assistance, training, catering, gardening, security, maintenance, etc.).
• Performance security: security furnished by the successful bidder within 30 days of award notification, in the amount specified in the SCC.

Performance security

• Must be furnished within 30 days of receipt of award notification.
• Amount specified in the SCC.
• Forms: bank guarantee or irrevocable letter of credit from a reputable bank acceptable to the purchaser, or a cashier’s or certified cheque.
• Denominated in contract currency or a freely convertible currency acceptable to the purchaser.
• Discharged and returned not later than 30 days after completion of all performance obligations, including warranty, unless SCC states otherwise.

Inspections, tests and analyses

• Pre-bidding testing at bidder’s account.
• If bid conditions require inspection during production or on completion, the bidder’s premises must be open at all reasonable hours for inspection by the purchaser or its representative.
• Cost of inspections borne by purchaser if supplies comply; by supplier if they do not.
• Non-compliant supplies may be rejected; rejected supplies held at supplier’s cost and risk, must be removed and replaced promptly at supplier’s expense.

Packing

• Packing must prevent damage or deterioration during transit to final destination.
• Must withstand rough handling, extreme temperatures, salt, precipitation and open storage.
• Packing, marking and documentation must comply with any special requirements in the contract or SCC.

Delivery and documents

• Delivery in accordance with contract terms; shipping and other document details specified in SCC.

Insurance

• Goods must be fully insured in a freely convertible currency against loss or damage incidental to manufacture, acquisition, transportation, storage and delivery as specified in SCC.

Transportation

• If a price other than all-inclusive delivered price is required, it will be specified in SCC.

Incidental services

• Supplier may be required to provide: on-site assembly/commissioning supervision; tools for assembly/maintenance; operations and maintenance manuals; maintenance/repair for an agreed period (does not relieve warranty obligations); training of purchaser’s personnel.
• Prices for incidental services not included in contract price must be agreed in advance and not exceed prevailing rates for similar services.

Spare parts

• As specified in SCC, supplier may be required to provide spare parts, advance notification of production termination, and blueprints/drawings/specifications at no cost.

Warranty

• Goods warranted new, unused, current models, incorporating recent improvements, free from defects in design, materials or workmanship (except where design/material required by purchaser’s specifications).
• Warranty valid for 12 months after delivery and acceptance at final destination, or 18 months after shipment from source country, whichever ends earlier, unless SCC states otherwise.
• Purchaser must notify supplier in writing of warranty claims; supplier must repair or replace within period specified in SCC.
• If supplier fails to remedy, purchaser may take remedial action at supplier’s risk and expense.

Payment

• Method and conditions specified in SCC.
• Supplier must furnish invoice with copy of delivery note and fulfil other contractual obligations.
• Payments made promptly, no later than 30 days after invoice submission.
• Payment in Rand unless SCC stipulates otherwise.

Prices

• Prices charged shall not vary from bid prices, except for adjustments authorised in SCC or purchaser’s request for bid validity extension.

Contract amendments

• No variation or modification except by written amendment signed by the parties.

Assignment

• Supplier may not assign obligations in whole or in part without purchaser’s prior written consent.

Subcontracts

• Supplier must notify purchaser in writing of all subcontracts awarded under the contract if not already specified in the bid; notification does not relieve supplier of liability.

Delays and penalties

• Delivery and performance must follow the purchaser’s prescribed time schedule.
• Supplier must promptly notify purchaser in writing of any delay, its likely duration and cause.
• Purchaser may extend time with or without penalties; extension ratified by contract amendment.
• Delay renders supplier liable to penalties calculated at the current prime interest rate on the delivered price of delayed goods/unperformed services for each day of delay until actual delivery/performance.
• Purchaser may also consider termination for default.
• If delay exceeds delivery period, purchaser may purchase substitute supplies of similar quality up to same quantity at supplier’s expense and risk, return late deliveries, or cancel contract and claim damages.

Termination for default

• Purchaser may terminate by written notice if supplier fails to deliver within specified period, fails to perform any other obligation, or engages in corrupt/fraudulent practices.
• On termination, purchaser may procure similar goods/works/services; supplier liable for excess costs.
• Purchaser may impose restriction penalty prohibiting supplier from public sector business for up to 10 years.
• Supplier allowed 14 days to provide reasons against restriction; failure to respond allows imposition.
• Restriction extends to associated enterprises and persons exercising control.
• Purchaser must notify National Treasury within 5 working days of restriction with supplier details, commencement date, period and reasons.
• Conviction under Prevention and Combating of Corrupt Activities Act may lead to endorsement on Register for Tender Defaulters (5–10 years prohibition).

Anti-dumping and countervailing duties

• State not liable for provisional payments, anti-dumping or countervailing duties imposed after bid date; favourable differences must be paid to State or deducted from moneys due to contractor.

Force majeure

• Supplier not liable for forfeiture of performance security, damages or termination for default if delay/failure results from force majeure.
• Supplier must promptly notify purchaser in writing of force majeure event and cause; continue performance as far as reasonably practical; seek alternative means.

Termination for insolvency

• Purchaser may terminate by written notice if supplier becomes bankrupt or insolvent; termination without compensation to supplier.

Dispute settlement

• Parties must attempt amicable resolution by mutual consultation.
• After 30 days, either party may give notice to commence mediation; mediation rules specified in SCC.
• If mediation fails, dispute may be settled in a South African court of law.
• Parties continue performing obligations during proceedings; purchaser pays supplier any monies due.

Limitation of liability

• Except for criminal negligence, wilful misconduct or patent infringement: supplier not liable for indirect/consequential loss, loss of use, production, profits or interest costs (does not exclude penalties/damages).
• Aggregate liability limited to total contract price (does not apply to cost of repairing/replacing defective equipment).

Governing language and law

• Contract written in English; all correspondence in English.
• Contract interpreted in accordance with South African law unless SCC specifies otherwise.

Notices

• Written acceptance of bid posted by registered/certified mail; other notices by ordinary mail to address in bid or later notified address; posting deemed proper service.
• Time for performance after notice reckoned from date of posting.

Taxes and duties

• Foreign supplier responsible for all taxes, duties, licence fees outside purchaser’s country.
• Local supplier responsible for all taxes, duties, licence fees until delivery.
• No contract concluded with bidder whose tax matters are not in order; tax clearance certificate from SARS required before award.

National Industrial Participation Programme (NIPP)

• NIP Programme administered by Department of Trade and Industry applies to all contracts subject to NIP obligation.

Prohibition of restrictive practices

• Collusive bidding (bid rigging) prohibited under Competition Act No. 89 of 1998.
• Purchaser may refer matter to Competition Commission for investigation and administrative penalties.
• If found guilty, purchaser may invalidate bid(s), terminate contract, restrict bidder/contractor from public sector business for up to 10 years, and claim damages.