Eskom Procurement Book 2015

GLOSSARY

Contract, cost-plus- incentive-fee: A cost reimbursement type of contract for construction of a turnkey project where the supplier’s fee is linked to the actual costs in relation to the estimated or the target cost so that there is an incentive for the supplier to achieve cost reduction. Contract documents: A set of documents that conveys the contract between the buyer and the supplier in such a way as to minimise misunderstanding. It could include: The instrument of the contract – the actual document signed by both parties. General conditions of contract. Special conditions of contract. Specifications/terms of reference/drawings/ bills of quantities/timetables/schedules of rates/terms of delivery etc., copies of any relevant meeting minutes or letters that have been exchanged. Curricula vitae of staff selected to carry out the activities. Specimen of bonds. See also Contract. Contract fixed price: Acontract that provides for a fixed price not subject to any adjustment on account of cost increases that a supplier may experience in the course of execution of the contract. Contract, fixed price with revision: A variation of a fixed price type of contract which provides for the upward or downward changes in prices of specified materials and/ or of labour costs. Contract modification: Any change in the provision of any one or more of the terms and

conditions of a contract, proposed by one party and carried out with the agreement of the other party. Legally a modification in a contract amounts to agreeing to a new contract unless the intended modifications are provided for in the contract, e.g., plus/minus option on quantities, lot sizes, etc. See also Buyer’s option and Supplier’s option.

Contract period: An arrangement for the supply of goods or services established for a fixed period of time. Contract scheduling: A systems approach to help monitor contract implementation.

Particularly useful for contracts for large projects where different activities have to be carried out in a sequence within a time frame and where delay in the completion of one segment of a project is likely to delay the execution of the whole project. See also Expedite and Follow-up. Aphrase often used for a company carrying out construction works. Sometimes used in a more general way for all types of suppliers of goods, works or services.

Contractor:

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