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CONSULTANCY AGREEMENT

Sr. No. xxxxxx01 Date : 17th September xx

xxxxxxxxxxxx,
P.O. Box xxxxx-xxxxx,
Nairobi.

Attn : Mr. xxxxx

Dear Sir,

PROPOSED xxxxxxxxxxxxxxxxxxxxxxxxxxx

We are pleased to appoint you to provide mechanical and electrical engineering consultancy
services for the above mentioned project.

1. The overall consultancy fee will be 0.5% of total construction cost exclusive of VAT.

The set of design and production drawings including architectural, structural, M&E and BQs will
be done by specialists xxxxxxxxxxxxxxx Ltd. The project is going to be executed in phases and
hence remuneration of fee shall be phased accordingly.

Scope of work : -

General scope : Advise, Co-ordinate & Supervise the entire process from initiation to

completion of the project.

Pre-construction :

1.0 The tender drawings & Bill of Quantities for the project shall be provided by the
xxxxxxxxxxxxxxxxxxxxxx. Ltd. and you are required to vet those documents, recommend &
carry out amendments if required. You may have to prepare the contract documents as per local
conditions/standard agreements followed in Kenya.

2.0 Tender process to be conducted - includes prequalification of contractors if required, calling

tender, analyzing & preparing tender report, negotiations with short listed contractors &
appointment of local contractor.

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3.0 The production drawings for construction of all the buildings shall be provided by
xxxxxxxxxxxxxxxxxx. You shall vet the drawings and recommend any changes if required, also
carry out minor changes in drawings if need be.

Construction :
Once the contractor mobilizes on site, you shall be in-charge of ensuring complete execution of
the mechanical and electrical works and hold site meetings and inspections regularly.

Your scope of work will comprise full Mechanical & Electrical engineering Consultancy Services
mentioned above including but not limited to the following :

2. Scope of Services and Payment Schedule :

Work Stage % of total

fees payable

2.1 Inception and Mobilization 0%

Obtaining initial statement of requirements from the Architect and / or Client;

Advising the Architect and / or Client on possible course of action.

2.2 Outline Proposals / Scheme Design and Preliminary Budgets 10%

Meeting with the Architect, other Consultants and the Client, site visit with other
Consultants to verify details ;Hold consultations with other members of the
design team; Prepare a detailed estimate of cost based on outlined sketch
proposals for discussions; Advise on the financial implications of alternative
design and specification proposals; Submission of preliminary budget and cost
plan.
2.3 Detailed design, Production drawings and Tender Documents 15%
Preparation

For vetting the detailed design incorporating the design work done by any
consultants. For vetting production drawings and information necessary for
Bills of Quantities. Perusal of Bills of Quantities for the mechanical & electrical
works; Preparation of tender documents for the same; Advise on appropriate
contractors procurement method or procedure; Pricing advance copy BQ to do
a budget cost check and advise appropriately; Production of final BQ and
pricing the same for a pre-tender cost check. Communicating pre-tender
estimate to the team and the Client, and seeking approval to call tenders.

2.4 Tendering Process and Contract Award 15%

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Facilitate calling and opening of tenders; Evaluate tenders and present the
report to the team for comments / concurrence; Present final tender evaluation
to the Client for appropriate action (authorization and / or award of contracts);
Formalization of Contracts with appointed Mechanical, Electrical Contractor
and Sub contractors.

2.5 Post Contract Construction Supervision 50%

(Fee commensurate with value of works done to be paid every three (3)
months)

Attend regular site meetings & site inspections; Periodic site visits to survey
progress of work and prepare interim payment valuations to the contractor in
collaboration with other Consultants; Advise the Client on financial implications
of proposed variations for discussion and appropriate action; Prepare periodic
financial appraisals in consultation with other consultants to monitor the financial
status of the project; Advise on contractual matters to avoid and at worst
minimize potential disputes; Prepare penultimate valuation for release of half
the retention money after issuance of Certificate of Practical Completion.

2.6 Defects Liability Period Stage & Project Closure 10%

Value unattended snags (if any); Receive and verify Mechanical & Electrical
Contractors & Sub Contractors final measurements; Prepare final accounts
and negotiate and agree on the same with the design team, main contractor,
subcontractor and the client; Preparation of final valuation to facilitate issuance
of final payment certificate.
Total 100%

3.0 General Conditions of Contract :

3.1 General Provisions :

3.1.1 Law Governing the This Contract, its meaning and interpretation and the relationship between
Contract the parties shall be governed by the Laws of Kenya.

3.1.2 Notices Any notice, request or consent made pursuant to this Contract shall be in
writing and shall be deemed to have been made when delivered in person
to an authorized representative of the Party to whom the communication is
addressed or when sent by registered mail, telex, telegram or facsimile to

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such Party at the address specified in the subcontract.

3.1.2 Taxes and Duties The Consultant, Subconsultant(s) and their personnel shall pay such
taxes, duties, fees and other impositions as may be levied under the Laws
of Kenya, which have been included in the total agreed fee.

3.2 Commencement, Modification & Termination of Contract :

3.2.1 Effectiveness of This Contract shall come into effect on the date the Contract is signed by
Contract both Parties or such other later date as may be stated in the subcontract.

3.2.2 Commencement of The Consultant shall begin carrying out the immediately after the date the
Services Contract becomes effective or at such other date as may be specified in
the subcontract.

3.2.3 Expiration of Unless terminated earlier pursuant to Clause 3.2.6, this Contract shall
Contract terminate at the end of such time period, after the Effective Date, as is
specified in the subcontract.

3.2.4 Modification Modification of the terms and Conditions of this Contract, including any
modification of the scope of the Services or the Contract Price, may only
be made by written agreement between the Parties.

3.2.5 Force Majeure

3.2.5.1 Definition For the purposes of this Contract, “Force Majeure” means an event which
is beyond the reasonable control of a Party and which makes a Party’s
performance of its obligations under the Contract impossible or so
impractical as to be considered impossible under the circumstances.

The failure of a Party to fulfil any of its obligations under the Contract shall
not be considered to be a breach of, or default under this Contract insofar
3.2.5.2 No Breach of as such inability arises from an event of Force Majeure, provided that the
Contract Party affected by such an event (a) has taken all reasonable precautions,
due care and reasonable alternative measures in order to carry out the
terms and conditions of this Contract, and (b) has informed the other Party
as soon as possible about the occurrence of such an event.

Any period within which a Party shall, pursuant to this Contract complete
3.2.5.3 Extension of any action or task shall be extended for a period equal to the time during
Time which such a Party was unable to perform such action as a result of Force
Majeure.

During the period of his inability to perform the Services as a result of an

3.2.5.4 Payments
event of Force Majeure, the Consultant shall be entitled to continue to be
paid under the terms of this Contract.

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3.2.6 Termination

3.2.6.1 By the Client The Client may terminate this Contract by not less than thirty (30) days’
written notice of termination to the Consultant, to be given after the
occurrence of any of the events specified in this Clause;

(a) if the Consultant does not remedy a failure in the performance of his
obligations under the Contract within thirty (30) days after being
notified or within subsequently approved in writing;
(b) if the Consultant becomes insolvent or bankrupt;
(c) if, as a result of Force Majeure, the Consultant is unable to perform a
material portion of the Services for a period of not less than sixty (60)
days; or
(d) If the Consultant, in the judgment of the Client, has engaged in corrupt
or fraudulent practices in competing for or in executing the Contract.

For the purpose of this clause;

“corrupt practice” means the offering, giving, receiving or soliciting of

any thing of value to influence the action of a public official in the
selection process or in Contract execution.

“fraudulent practice” means a misrepresentation of facts in order to

influence a selection process or the execution of Contract to the
detriment of the Client, and includes collusive practice among
consultants (prior to or after submission of proposals) designed to
establish prices at artificial non-competitive levels and to deprive the
Client of the benefits of free and open competition.

(e) If the Client in his sole discretion decides to terminate this Contract.

The Consultant may terminate this Contract by not less than thirty (30)
3.2.6.2 By the days’ written notice to the Client, such notice to be given after the
Consultant occurrence of any of the following events;

(a) if the Client fails to pay any monies due to the Consultant pursuant to
this Contract and not subject to dispute pursuant to Clause 5 within
ninty (90) days after receiving written notice from the Consultant that
such payment is overdue; or
(b) if, as a result of Force Majeure, the Consultant is unable to perform a
material portion of the Services for a period of not less than sixty (60)
days.

Upon termination of this Contract pursuant to Clauses 3.2.6.1 or 3.2.6.2,

3.2.6.3 Payment the Client shall make the following payments to the Consultant:
upon Termination
Remuneration pursuant to Clause 2 for Services satisfactorily performed
prior to the effective date of termination;

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4.0 Obligations of the Consultant :

4.1 General The Consultant shall perform the Services and carry out his obligations with all
due diligence, efficiency and economy in accordance with generally accepted
professional techniques and practices and shall observe sound management
practices, and employ appropriate advanced technology and safe methods. The
Consultant shall always act, in respect of any matter relating to this Contract or
to the Services, as faithful adviser to the Client and shall at all times support and
safeguard the Client’s legitimate interests in any dealing with Sub consultants or
third parties.

4.2 Prohibition of Neither the Consultant nor his subconsultant(s) nor their personnel shall
Conflicting Activities engage, either directly or indirectly in any of the following activities:

(a) during the term of this Contract, any business or professional activities in
the Republic of Kenya which would conflict with the activities assigned to
them under this Contract; or
(b) after the termination of this Contract, such other activities as may be
specified in the subcontract.

4.3 Confidentiality The Consultant, his sub consultant(s) and the personnel of either of them shall
not, either during the term of this Contract or within two (3) years after the
expiration of this Contract, disclose any proprietary or confidential information
relating to the Project, the Services, this Contract or the Client’s business or
operations without the prior written consent of the Client.

5.0 Settlement

5.1 Amicable The parties shall use their best efforts to settle amicably all disputes arising out
Settlement of or in connection with this Contract or its interpretation.

5.2 Dispute Any dispute between the parties as to matters arising pursuant to this contract
Settlement that cannot be settled amicably within (30) days after receipt by one party or the
other party’s request for such amicable settlement may be referred by either
party to the arbitration and final decision of a person to be agreed between the
parties. Failing agreement to concur in the appointment of an arbitrator, the
Arbitrator shall be appointed by the Chairman of the Chartered Institute of
Arbitrators, Kenya Branch, on request of the applying party.

6.0 Insurance

The limits of indemnity shall be not less than the limit of compensation defined in clause 1.0.

7.0 Important Note :

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This is a ‘subcontract’ signed between the ‘Project Architect’ and the ‘Project Mechanical & Electrical
engineer’ and is dependant on & governed by the ‘main contract’ signed between the ‘Project Architect’
and the ‘Client’. Hence, any payments delayed by the client shall have a direct effect on payments
delayed to you and therefore we cannot be held liable to pay you under circumstances of non-payment by
the client.
Also, if the client were to terminate the main contract with us then this subcontract will be deemed
terminated automatically.

Signed Countersigned

xxxxxxxxxxxxx xxxxxxxxxxxxxxx
Director Director
xxxxxxxxxxxxxx Ltd xxxxxxxxxxxxxxxxx Ltd

Acknowledgement by ‘service provider name:

I accept the above contract with its terms and conditions.

Sign & Stamp : ……………………………. In the presence of : …………………………….

Date :