Project Title :

DEVELOPMENT OF RABIGH INDUSTRIAL CITY - PHASE I

Document Title :

PROCEDURE FOR VARIATION ORDER

22-08-2015 0 Issue for Review & comment PQM QAM PM

DOC. NO.: DCS-RAB1-001-002-012 Contract No.: 1401 Rev 01

Date 22-08-2015

DOC. TITLE : PROCEDURE FOR CHANGE ORDER

VO PROCEDURE REV 01 Page 2 of 4 Doc No.: DCS-RAB1-01-002-0012

INTRODUCTIONSaudi Industrial Property Authority (MODON), a company organized and existing under the

laws of Kingdom of Saudi Arabia (hereinafter referred as the “Owner”) has awarded a re-

measurable contract of Development of Rabigh Industrial City Phase-01 (hereinafter referred

to as the “Contract”) to Saudi Pan Kingdom for Trading, Industrial & Contracting (SAPAC), a

company organized and existing under the laws of the Kingdom of Saudi Arabia whose

registered office is at PO Box 85153, Riyadh 11691, Kingdom of Saudi Arabia (hereinafter

referred to as the “Contractor”). The Owner has engaged Saudi Arabian Parsons Limited to

serve as Owner Representative/Engineer to manage and coordinate the Project and to undertake

the activities as per the Contract.

OBJECTIVE

The objective of this document to underline the procedure between the Contractor and the

Owner/Engineer for changes/variations, which may arise during the currency of the contract

FLUCTUATION OF QUANTITY

The Contractor shall submit a revised Bill of Quantities within reasonable time which shall

constitute of revised quantities and any additional items along with unit rate, to the Engineer for

Owner’s approval. The Owner/Engineer shall upon the receipt of such revised Bill of Quantities

evaluate and provide its consent within Thirty (30) days.

In the course of performance of the Works, if the Contractor detects increase or decrease in

bill of quantities of the Works which will materially affect the Agreement Price and/or the

Completion of the Works as a whole, the Contractor shall so notify to Owner within a

reasonable time and shall proceed with the Works under Owner's instruction to minimize an

adverse effect on the schedule of the Works.

Issuance by the Contractor of such notice of fluctuation of quantity shall, in every respect, not

be deemed to release the Contractor from accomplishing the Completion of the Works as per

terms and conditions of the Contract.

CHANGES IN THE WORK

DOC. NO.: DCS-RAB1-001-002-012 Contract No.: 1401 Rev 01

Date 22-08-2015

DOC. TITLE : PROCEDURE FOR CHANGE ORDER

VO PROCEDURE REV 01 Page 3 of 4 Doc No.: DCS-RAB1-01-002-0012

Owner may at any time give in writing any change request for the Works in accordance to

terms and conditions of the Contract. Upon receipt of such request, the Contractor shall submit

to Engineer as soon as possible but not later than Fourteen (14) consecutive calendar days after

receipt thereof, a written change proposal comprising estimated costs, time schedule of change

work, schedule effect on the Completion of the Works because of the performance of such

change work, and other effects on the terms and conditions of the Agreement.

In preparing a cost estimate for the Change in the Works, the Contractor shall make good use of

the rates and prices set out in Scope of Work to the Agreement on a proportional basis in order

to establish new unit rates. If the Agreement does not contain any rates or prices applicable to

the establishment of new rates or prices for the Change in the Works, suitable rates or prices

shall be agreed upon between Owner/Engineer and the Contractor. In the case of disagreement,

Contractor shall provide and substantiate its proposed unit rates with necessary documents and

reasonable justification.

Depending on the nature of the Change in the Works, the Contractor shall at Owner's

instruction submit a lump sum price to cover a full compensation for such change.

Upon receipt of written change proposal from Contractor, the Owner/Engineer shall evaluate

such change proposal and provide its comments (approval or rejection) within Fourteen (14)

consecutive calendar days.

Should the Contractor's proposal for the Change in the Works be acceptable to Owner, a written

approval and authorization shall be issued to the Contractor. The approved and authorized

Change in the Works shall be deemed to be additional bill of quantities and shall therefore

constitute a part of the Works.

If Owner/Engineer does not agree with Contractor’s submitted change proposal, both parties

shall negotiate and settle the Change proposal in good faith, within twenty eight (28) days of

receipt of Owner’s written comments and/or rejection. Pending issuance of a Change Order, the

Contractor shall not delay any work (other than the work that is contained in the relevant

proposal) whilst awaiting a response.

For the avoidance of doubt, the Contractor shall not be obligated to commence any such change

unless settled and approved by the Owner. Change in the Works shall not be commenced nor

DOC. NO.: DCS-RAB1-001-002-012 Contract No.: 1401 Rev 01

Date 22-08-2015

DOC. TITLE : PROCEDURE FOR CHANGE ORDER

VO PROCEDURE REV 01 Page 4 of 4 Doc No.: DCS-RAB1-01-002-0012

made by the Contractor without an order in writing from Owner. If the Contractor has proceeded

with any change work prior to its receipt of written order from Owner, no compensation shall be

made by Owner.

In the event of emergency, Owner/Engineer may give a change order in writing without a price.

Upon receipt of such change order, the Contractor shall immediately commence the works

contained in the change order.

In the meantime, the price for this change order shall parallel be settled between Owner and the

Contractor in line with the procedures stipulated hereinabove.

If at any time the Contractor believes that any instructions of the Owner or the Engineer

constitute a Change but no corresponding Change Order has been issued, the Contractor shall

within (10) days of discovery of such matter or any reasonable time, submit a written Change

request to the Engineer and/or Owner explaining in detail the basis for the request. The Owner

will either issue a Change Order (which shall be communicated to the Contractor by written

approval) or deny the request in writing.

SAPAC incorporate and adopt MODON VO Procedure as described in the MODON PMO

Change Management Procedure.