Project Procurement & Contract Management

Assignment No. 2

“Contract for Environmentally Controlled Dairy Farm”

By

Mehreen Arshad (CMS No. 31584)

Ambreen Arshad (CMS No. 31583)

MS Project Management (Group B)

Department of Management Sciences

Riphah International University, Rawalpindi Campus
Contract between Environmentally Controlled Dairy Farm and Agreeko

1. Purpose: The contract is being signed by and between Environmentally controlled dairy
farm and Agreeko .This contract has been made effective as on 1,Dec,2019 and shall
remain into effect till 1,Dec,2024.
2. Scope of contract: This dairy farm supply milk million liter per day to different dairy
organization. Dairy Farm consist of Land, Machinery, Water pump, calf cage, vehicles,
generator. Dairy Farm requires generator which can be Diesel generator and gas
generator etc. I have selected agreeko and after the bidder conference fixed price contract
is assigned with agreeko.
3. Cost of contract: The total cost as agreed by the owner and the contractor to complete
the project is 18 lac Pak Rupees. The total cost of current contract is 18 lac. The dairy
farm required 20 generators (15 diesel generators and 5 gas generators). The contractor is
bound to submit all the invoices to the owner for the release of the payment. The payment
shall be according to the following schedules.
a. 30% of the total agreed amount i.e. 600000 PKR within 1 month after the start of
the project.
b. 20% of the total amount, after the three-month subject to the successful
completion of 50% of project work.
c. 40% of the total amount within 1 month after the completion of the project. The
contractor also submits all the relevant documents to the Project Directorate.
d. 10% amount released after the successful completion of the warranty period.

4. Change Request: Any alteration or change in the requirements as mentioned in the

statement of work involving additional generator cost, shall only be executed upon a
written order, signed by both parties. The additional cost for such change must be
mutually agreed in writing and included in the total cost of the project.
5. Quality of Work: All the generator to be used to complete the project shall meet the
standard. The relevant code and standards for the material is given in the statement of
work.

6. Project approval: The contractor shall develop a project charter and get it approved
from the owner in order to validate the scope of the project prior to the commencement of
the project. The project charter includes the statement of work.

7. Licensing: All the work to be performed by individuals under this contract shall be duly
licensed and authorized by law to perform the said work. It shall be the responsibility of
the contractor to get the approvals from the government/relevant bodies for the
completion as well as operation of the project.

8. Warranty: Contractor shall warrant all the work for a period of five years. The warranty
shall start from the day, the contractor hand over the project to the owner.

9. Maintenance of site: The contractor agrees to clear all the waste material and leave the
premises in a clean condition.

10. Reward for early Completion: The technical team and steering committee shall also
evaluate the performance of the contractor after the completion of the project. The
committee may recommend reward for the contractor on the basis of their
performance/for early completion of project. The reward shall be in the form of monetary
benefits. The minimum and maximum amount of reward shall be 50 k and 1 lac PKR.
The amount shall be decided by the technical team.

11. Penalty for late completion of Project: 3% of total amount shall be deducted from the
total amount for delay of every month.
 12. Termination of contract: The contract shall be terminated automatically upon the
successful completion of the project. The foresaid contract shall also be subject to
unilateral termination by either party with a notice of 1 month.

13. Performance

SN. year Type Target Achievemen Risk

t
1 2020 Gas 5 3 Time
2 2021 Diesel 5 4 Cost
3 2022 Gas 5 5 Quality
4 2023 Diesel 5 5 Scope
5 3024 Gas 5 5 Technology

Details of vendor

Official Name: Agreeko

Address: sadder Lahore

Email address:agreeko223@gmail.com

Contact No: 051-5543678

Details of buyer

Official Name: Environmentally control dairy farm

Address: Gujar khan street 3 Rwp.

Email address:ecdf56@outlook.com

Contact No: 051-0900786

Terms and Condition of the contract:

  The life of contract is five years and both parties have to follow it.
 30% payment will be received in advance and 70% payment will be received after the
installation of generators.
 All the dealing will be occurred face to face and payment would be received through cash
by vendor.
 When Dairy Farm required any technical issue in generators, Vendor will be responsible
for providing its technical personnel to facilitate dairy farm.
 The agreeko company will be delivered the following type of generator service for
‘Environmentally Controlled Dairy Farm’:
 Gas Generator
 Diesel Generator

Signature of buyer:

Signature of vendor: