This template provides a complete Clarion-standard EPC contract structure for Serbian energy, industrial, and high-tech projects, ready for formal procurement or Owner’s Engineer use.
ENGINEERING, PROCUREMENT & CONSTRUCTION (EPC) CONTRACT
For Energy, Heavy Industry & High-Tech Projects in Serbia
Clarion Engineers – clarion.engineer (Owner’s Engineer Template)
1. PARTIES
1.1 Employer / Investor (“Employer”)
Full legal name, address, company registration details, and authorized signatories.
1.2 EPC Contractor (“Contractor”)
Full legal name, address, company registration details, and parent company reference (if applicable).
1.3 Project
Description, capacity, technology, location, coordinates, and grid connection details.
2. CONTRACT SCOPE
2.1 Turnkey Responsibility
The Contractor shall deliver all Works on a full turnkey, single-point-responsibility basis.
2.2 Works Included
Civil, mechanical, electrical, engineering design, procurement, FAT, logistics, construction, commissioning, performance testing, training, and documentation.
2.3 Fit-for-Purpose Deliverable
The facility must be delivered defect-free, meeting all contractual performance guarantees.
3. CONTRACT PRICE & PAYMENT TERMS
3.1 Lump Sum Price
The Contract Price is a fixed lump sum covering all Works.
3.2 Milestone Payments
Payments are linked to defined milestones such as engineering completion, manufacturing, delivery, mechanical completion, commissioning, and COD.
3.3 Advance Payment
If issued, the Employer must receive an Advance Payment Guarantee.
3.4 Taxes and Duties
Contractor covers all duties and import-related costs unless otherwise stated.
4. TIME FOR COMPLETION
4.1 Schedule Requirements
Contractor must complete the Works by the Time for Completion as defined in the schedule.
4.2 Delay Liquidated Damages (DLDs)
Applicable for each day/week of delay, up to the defined DLD cap.
4.3 Extensions of Time (EOT)
Allowed for Employer-caused delay or valid force majeure, with notice submitted within 7 days.
5. PERFORMANCE GUARANTEES
5.1 Guaranteed Parameters
Output, efficiency, availability, auxiliary consumption, environmental compliance, degradation rates, and power quality.
5.2 Performance LDs (PLDs)
Applied for underperformance relative to guaranteed values.
5.3 Minimum Threshold Failure
If minimum thresholds are not met after retesting, Employer may terminate the Contract.
6. SECURITY PACKAGE
6.1 Performance Bond
10% on-demand guarantee.
6.2 Advance Payment Guarantee
Equal to the advance paid.
6.3 Parent Company Guarantee
Mandatory for subsidiaries or SPVs.
6.4 Retention
5% withheld until Final Acceptance unless replaced by a Retention Bond.
7. INSURANCE REQUIREMENTS
7.1 Required Insurance Types
Construction All-Risks, Third-Party Liability, Marine Cargo, DSU (if required by lenders), and Professional Indemnity for design.
7.2 Duration
Coverage must be maintained through the Defects Liability Period.
8. DEFECTS LIABILITY
8.1 Defects Liability Period (DLP)
Minimum 24 months from COD.
8.2 Latent Defects
5–10 years depending on equipment and structure.
8.3 Remedy Process
Defects must be rectified within 7–14 days of notice.
8.4 Step-In Rights
Employer may repair at Contractor’s cost if Contractor fails to act.
8.5 Spare Parts and OEM Warranties
Contractor must submit a spare parts list and pass through OEM warranties.
9. VARIATIONS & CHANGE ORDERS
9.1 Variation Procedure
All variations must be written, quantified, priced, and approved prior to execution.
10. TERMINATION
10.1 Employer’s Right to Terminate
Grounds include insolvency, chronic delay, performance failure, breach, or failure to remedy defects.
10.2 Consequences of Termination
Contractor reimburses cost-to-complete, including replacement contractor costs.
11. DISPUTE RESOLUTION
11.1 Negotiation Phase
Initial attempt at amicable settlement.
11.2 Expert Determination
Used for technical disputes.
11.3 Arbitration
All unresolved disputes settled by arbitration under agreed rules.
12. GOVERNING LAW
Serbian law applies unless otherwise agreed.