contractor's manual _2010

8/12/2019 Contractor's Manual _2010

1/22


2/22

The Saudi Electricity Company [SEC] recognizes contractors as its business partners inproviding safe and reliable electric power that is vital to the rapid and sustainabledevelopment of the Kingdom of Saudi Arabia.

In order to enhance the contractors knowledge and understanding of the contractingbusiness and bidding system of SEC, with the primary objective of establishing a fair andwell rounded business relationship with the contracting community, SEC is pleased toprovide its contractors this manual containing SECs general contracting policies andprocedures as well as general information that will assist and guide them not only inseeking to do business with SEC and in preparing competitive bids but also inimplementing their contracted work or service to SEC.

SEC is constantly updating and automating its contracting procedures, which you will findon our website. Contractors are encouraged to visit the SEC Website in order to obtainrelevant information regarding new contractual procedures, projects, and announcedcontracts.

I am confident that contractors will benefit from this manual and provides answers to theirquestions about the bidding and contracting system of SEC .

Contractors are encouraged to familiarize themselves with the information provided in thismanual.

President & Chief Executive OfficerSaudi Electricity Company


3/22

This manua l i s pub l i shed for in form ationa lpu rpo ses on ly, and SEC reserves the r ightto d ele te or c hang e any o r a ll par ts of th ism anua l a t any t ime wi thou t p r io r no t ice.


4/22

TABLE OF CONTENTS

Section Title

Introduction

1Definitions

2Contracting Sector Responsibilities and Organization

3Contracting Information System & SEC website

4Contractors Registration

5Forms of Contracts Used by SEC

6Payment Methods Used by SEC

7Methods of Procurement

8Overview of Contract Development Process

9 Advertisement of SEC Contracts

10Bid Slates of SEC Contracts

11SEC Bid Packages

12Submission of Bids

13Review and Evaluation of Bids

14 Awarding and Signing SEC Contracts

15Bank Guarantees Requirements (Bid Bonds / Performance Bonds)

16SEC Short Form Contracts

17SEC Service Order Contracts

18Change Orders for SEC Contracts

19 Amendments to SEC Contracts

20SEC Contract Disputes and Claims

21Subcontracting SEC Contracts

22Performance of SEC Contractors

23 Applicable Laws, Rule of Employment of Saudi Nationals

24Visa Requests

25ID Request Authorization for Main and Sub Contractor Employees

26Final Receipt and Release Agreement for SEC Contracts

27SEC Contract Completion Certificates28SEC Contracting Department Reception

29SEC Contract Representatives

30SEC Contracting Department's Offices

31Contracting Sector Organization

32Forms of Interest to Contractors


5/22


6/22

9. Blanket Contracts: means two [2] or more concurrent SEC Service Order contracts with the same scope of work anduniform unit prices.

10. Multiple Contracts: means two [2] or more concurrent SEC Service Order contracts with the same scope of work butdifferent unit prices.

11. Letter of Intent : means the letter issued by SEC to the successful bidder indicating SECs intention to enter into a formalcontract with the contractor at a later date and also authorizing commencement of the work.

12. Bid : means the offer to perform a certain contract at a specified price. It may include both Commercial Proposal and aTechnical Proposal or Commercial Proposal only.

13. Best Bid : means one that is not necessarily the lowest, but rather serves the best interest of SEC.

14. Sealed Bid : means one submitted under seal and is not to be opened until a specified time at which all bids are to beopened and read.

Section 2Contracting Sectors Responsibilities and Organization

1. Responsibilities: Generally, SEC Contracting Sector [CS] is fully responsible for managing the development and procurementor bidding of Long Form Contracts required by SEC, settlement of contract claims and the development of SEC contractingpolicies, procedures and controls, in coordination with other SEC concerned organizations.

2. Organization: Contracting Sector includes five [5] contracting departments [one in each operating area] who are the contactorganizations concerning all contract development, procurement and bidding efforts of SEC. The fifth department is theContracting Systems & Claims Department. Their contact addresses may be obtained from Section 30 or from the SECwebsite www.se.com.sa .

Section 3Contracting Information System and SEC Website

1. Contracting Information System (CIS) . SEC maintains a Contracting Information System that contains on-line up to dateinformation regarding all contractors registered with SEC and all contracts and the performance of contractors on SECcontracts. In order for SEC to have up-to-date information about each contractor registered in the CIS, it is important thatcontractors update additional information or changes in their organizations such as changes in contract signatories name and

address, telephone or fax numbers and other changes permitted by the system. Information about contractors financialresources that are available from the CIS are treated as confidential and could be accessed only by persons duly authorized bySEC for specific purposes.

2. SEC Website. SEC maintains a Website (www.sec.com.sa ) that contains SEC profile, contact addresses and informationabout SEC services including but not limited to information about contracts or projects for bidding and signed contracts.Contractors are encouraged to visit the SEC Website from time to time in order to obtain relevant on-line informationparticularly for projects or contracts for bidding.

Section 4Contractors Registration

1. Objective : Registering with SEC enhances the contractors chances of doing business with SEC since the CIS is the sourceof information on contractor capabilities and resources that may be required by the different SEC organizations or branches.

SEC uses the CIS for searching for contractors who are able to perform specialized jobs and to develop Bid Slates in caseswhere projects are bid based on selective bidding method of procurement [Refer to Paragraph 1.2, Section 7] or when SECdecides to increase the number of bidders for a particular project, giving that registration does not make a contractor eligibleto enter into a contract with SEC unless it submits the required qualification documents for each individual contract or theprequalification process.

2. Registration Form : The Contractor Registration form is readily available online from the SEC website/contractor's services.

2Replaces : June 2010Issue Date: February 2012

www.se.com.sa


7/22

3. Contractor Authorized Signatories : As part of SEC registration requirements, contractors are required to register their dulyauthorized contract signatories and to submit their specimen signatures by filling the Signature Authorization Card. This Cardis to be signed by the owner of the company or his duly designated officer.

Section 5Forms of Contracts Used by SEC

The standard Forms of Contracts used by SEC as described below vary in format from the single page Short Form Contract [refer toSection 16] to the turnkey contracts for major projects. SEC also uses non-standard contracts, which are developed on an individualbasis to satisfy the requirements of a particular situation when none of the standard forms is suitable for the work to be contracted.

1. Turnkey Contracts. Used for major construction projects or facilities such as buildings, power plants, transmission lines andsubstations. Under these forms of contracts, contractors are required to design, construct, procure materials, test andcommission the work or project.

2. Construction/Repair Contracts . Used for new construction works or projects and for the upgrading or major repairing ofexisting facilities. Under this form of contract, SEC or others have done the design work.

3. Consultant Contracts . Used when companies or firms are required to provide or perform professional services of aspecialized nature. The two (2) kinds of consultant contracts used in SEC are:

3.1 Employer of Consultant Contracts . Used to secure the services of consultants.

3.2 Consultancy Contracts . Used to secure the services of a consulting firm.

4. Equipment Repair Contracts . Used for repairing or overhauling (normally referred to as T&I {Testing and Inspection}) ofSEC equipment.

5. General Service Contracts . Used for such services as janitorial, landscaping, catering, design and engineering,transporting, painting, testing and inspecting, repairing of office machines and other small equipment, and other types ofservices.

6. Lease Agreements . Used for leasing properties required by SEC, or properties leased out by SEC to others.

7. Medical Services Contracts . Used for medical services, both inpatient and outpatient, for SEC personnel and their eligibledependents. It is also used for Pharmacy services.

8. Water Supply and Transportation Contracts . Used for supply and transportation of water to various sites within theOperating Areas.

9. Recruitment Contracts. Used when SEC requires the services of recruiting agencies to hire from out-of-kingdom certaincategory of personnel to work for SEC.

10. Work Order (Distribution) Contracts. Used for the operation, maintenance and construction of distribution systemshandled by the various SEC Operating Areas.

Section 6Payment Methods Used by SEC

SEC uses only two [2] basic payment methods as described hereunder, although there are other types falling under each basictype. It is important that contractors understand them in order to be able to prepare a more competitive bid.

1. Fixed Price Contracts. Under this type of contract, a specific contract price is fixed for the work to be contracted. SEC doesnot entertain price increases due to inflation or other causes that may arise during the implementation of the contract. SECuses the following two [2] types of Fixed Price Contracts.

Lump Sum Contracts. Used whenever the work can be well defined; the quantity of work can be accurately determined; thespecifications and kind of materials and equipment as well as the category of labor to be used or to be incorporated

into the work can be clearly described; the duration of work can be fairly determined; and the risks are nominal (or atleast predictable) so the bidders will feel confident that they can accurately estimate the cost of the work withoutencountering excessive contingencies or assuming inordinate risks when making their bids.

Unit Rate Contracts Used only in cases where the quantity of work as well as the duration of work cannot be ascertained orguaranteed, even if the scope of work can be accurately defined. In all such cases, SEC uses Service orders or Workorders to require the contractor to perform a particular item of work as described in Section 17. Basically, SEC usesthe following two (2) types of Unit Rate Contracts:

3Replaces : October 2008Issue Date: June 2010

www.se.com.sa


8/22

Work Quantity Unit Rate Contracts. Payments are based on unit price for each measurable itemor unit of work (e.g. per linear, cubic meter, square meter, per piece or unit, etc.). SEC uses these types ofcontracts when specific items of work can be clearly defined but the quantity for each item of work cannot beascertained or guaranteed. Bidders will be supplied with estimated quantities for the required work items inorder for them to submit competitive prices, and to enable SEC to determine the rankings.

Time Unit Rate Contracts. Payments are based on labor and equipment rates (e.g. hourly, daily,weekly or monthly rate per category of labor or type of equipment). SEC uses these types of contracts whenspecific items of work cannot be defined (except in general terms) and both the quantity and duration of workcannot be ascertained.

2. Cost Reimbursable Contracts. Under this type of contract, the cost of the work is not fixed. SEC reimburses contractor forthe actual cost incurred plus the agreed fee or compensation. SEC does not normally prefer this type of contract. SEC usesthese types of contracts only when the scope of work cannot be clearly defined; and early completion of certain portions of thework is especially important, e.g. to meet commitments or because of a high rate of return from use of a facility or obtaining aservice.

2.1 Reimbursable and Non-reimbursable Costs. When SEC uses this type of contract, SEC identifies the reimbursableand non-reimbursable costs, which normally include the following:

Reimbursable Costs such as salaries and wages of contractor personnel; payroll taxes and fringe benefits; cost of materials,supplies and equipment incorporated into the work; premiums for all bonds and insurance; transportation charges; rental chargesand maintenance charges for equipment to be used in performing the work; permit fees; temporary facilities; and losses andexpenses not compensated by insurance, which result from causes other than the fault of the contractor.

Non-reimbursable Costs such as overhead expenses; capital expenses including interests on contractors capital and costsdue to negligence of contractor or subcontractor or anyone directly employed by the contractor.

2.2 Types of Cost Reimbursable Contracts. SEC uses the following two (2) types of Cost Reimbursable Contracts:

2.2.1 Cost Plus Fixed Fee . Under this type, SEC reimburses the contractor the actual and necessary cost of thework plus a fixed amount of fee that normally represents the profit of the contractor.

2.2.2 Cost Plus Percentage Fee. Under this type, SEC reimburses the contractor the actual and necessary costof the work plus a certain fee that is based on a fixed percentage of total actual cost of the work.

Section 7Methods of Procurement Used by SEC

SEC uses mainly two (2) methods to procure its contracts; one is Competitive Bidding among qualified bidders and the other isNegotiation (bidding without competition) with a single qualified contractor.

1. Competitive Bidding Method. SEC uses the following two (2) methods in obtaining bids through competition.

Open Bidding. Under this method, any interested contractor undergoes the prequalification process described in Section 10.Only those contractors who meet both the commercial and technical requirements of a contract or project are invited tosubmit bids.

Selective Bidding. Under this method a List of Pre-qualified Contractors is prepared in advance, after which contractors in thelist are invited to bid. This method is used in cases of rush or emergency jobs and for customer funded projects wherethere is not sufficient lead time to procure and complete the project within the customer's schedule requirement, andfor other special reasons and considerations.

1.2.1 Selection of Contractors. Selective bidding does not require the advertisement described in Section 9. SECselects and invites those contractors it determines to be both commercially and technically qualified to performthe work to be contracted. Normally, SEC prefers those who have experiences on similar jobs with SEC andwho have no recent record of unsatisfactory performance ratings.

1.2.2 Selection or Screening Criteria. When SEC decides to short-list the selected bidders to include only thosecontractors who are best qualified to perform the work and ensure that those selected will actually submit a bid,SEC conducts a screening process wherein a certain screening criteria is established and sends to all selectedcontractors a screening inquiry where the contractor are informed about the project and their intentions to bid,preliminary plans, current workloads and other relevant information are solicited.


www.se.com.sa


9/22

2. Negotiated Method (Single Source). It is SEC policy not to negotiate contracts with any one contractor except in situationswhere consideration of all relevant factors makes negotiation as the only logical method to procure the contract and thereforeSEC uses this method of procurement only in exceptional circumstances and when adequately justified by the absence ofcurrent market forces and shall be approved by the authorized Contract Signatory.

Section 8

Overview of SEC Contract Development and Procurement Process

SEC develops and procures its contracts in seven [7] stages as listed below:

1 st Stage-Contract/Amendment Request Approval. To initiate the development and procurement of any contract, a ContractRequest (or Contract Action Plan, if applicable), is prepared and approved by the SEC authorized Contract Signatory.

2nd Stage - Bid Slate Development. The project is advertised in the SEC website and local and international publications asrequired, and then Prequalification Forms are issued to interested contractors.

3 rd Stage - Bid Package Development. For every contract, SEC develops a Bid Package [refer to Section 11] including the Pro-forma Contract, [see Section 1 for definition] for issuance to all bidders. SEC will charge bidders a certain non-refundable fee foreach bid package. The amount depends on the magnitude of the project.

4 th Stage Bidding. During this stage SEC conducts the Job Explanation Meeting [Site Visit is also conducted when deemednecessary or requested by bidders]. Bidders are invited to attend these meetings; failure to do so may cause SEC to reject the bid.SEC may also change any portion of the Bid Package by issuing Addenda to all the bidders. SEC also answers all biddersquestions and provides the same answers to all the bidders. All bids are required to be prepared and submitted in accordance withthe Invitation for Bids and the Instructions to Bidders.

5 th Stage - Bid Evaluation. Promptly after the opening of bids SEC evaluates the bids as shown in paragraph 1-1 of section 13,regardless of the bid opening method used (Single or Multi-stage). During the evaluation of bids, SEC conducts bid clarificationmeetings to obtain clear understanding of the bids,.

6 th Stage - Award Recommendation Development & Approval. After evaluating the bids, SEC prepares the AwardRecommendation for approval of the Contract Signatory. After approval of the Award Recommendation, SEC prepares the Notice of

Award and issues it to the successful bidder.7 th Stage - Finalizing and Signing the Contract. Promptly after approval of the Award Recommendation, SEC finalizes thecontract in two [2] duplicate originals. CD endorses the final contract for signature of the duly authorized Contract Signatory andthen obtains the successful bidders signature. SEC issues one [1] duplicate original to the successful bidder.

Section 9Advertisements of SEC Contracts

It is the policy of SEC to publicly advertise its contracts procured through open bidding. The advertisements are made as describedhereunder.

1. Long Form Contracts . SEC advertises its long form contracts at the SEC Website, local newspapers and at selectedInternational Magazines [for major projects only].

2. Short Form Contracts. SEC advertises its Short Form Contracts at the SEC Website.

3. Issuance of Prequalification [PQ] Forms . SEC issues Prequalification [PQ] forms only to contractors whose CommercialRegistrations includes the work to be contracted.

Section 10Bid Slates for SEC Contracts

[Prequalification]

The purpose of prequalification is to identity contractors who have the technical and financial resources to satisfactorily perform aparticular project or contract within the prescribed period. SEC normally develops the Bid Slates for its contracts/projects one [1]year in advance of the start of work. In order for any contractor to be able to participate in bidding SEC projects procured throughcompetitive bidding, it must pass a certain criteria on both technical, financial, and commercial considerations, however, SEC may,at its discretion, include in the Bid Slate those existing contractors for the same types of work without undergoing the prequalificationprocess, provided that they have no record of unsatisfactory performance.


www.se.com.sa


10/22

1. Prequalification Criteria. SEC uses the following general criteria in developing bids slates:

1.1 Technical Considerations

1.1.1 Experience on Similar Works . A bidder must have sufficient experience in the work to be contracted.

Present Organization. A bidder must have a clear and functional organization.

Manpower Resources. A bidder must have adequate and qualified manpower that is ready to be mobilizedwithin the required period.

Proposed Equipment. A bidder must have adequate equipment that is ready to be mobilized within therequired period.

Performance on SEC Contracts. A bidder must not have any "Unsatisfactory" Performance Rating on anyof its recent contracts (not to exceed one year) with SEC.

1.2 Commercial and Financial Considerations

1.2.1 Contractors Commercial Registration Certificate (CRC) . A bidder must possess a valid CommercialRegistration that covers the work to be contracted.

1.2.2 Contractor Classification Certificate ( CCC ). A bidder's CCC, if required, must be valid, covering the workto be contracted, and of a Classification Grade that meets the requirement of the work to be contracted.

1.2.3 Zakah and GOSI Certificates . A bidder must possess valid Zakah and GOSI Certificates (if applicable).

1.2.4 Certificate of Saudization : A certificate issued by the Labor Office attesting to adherence of Contractor tothe official Saudization percentage .

1.2.5 Financial Resources . A bidder must have adequate financial resources that meet the annual requirementsof the work to be contracted, determined based on the bidders current audited financial statements.

1.2.6 A contractor may not submit more than one bid to perform similar work within a bid, either as a partner orthe owner of separate qualified bidders (please refer to section 11- paragraph 3 "Conflict of Interest").

2. Debriefing Contractors

2.1 It is SECs policy to be transparent as to the evaluation of contractors submittals, therefore upon concernedcontractors written request; SEC clarifies the basis for their disqualifications. Contractors are encouraged to requestfor Debriefings in order to know their deficiencies and be able to correct them in similar future projects. SEC providessuch clarifications in a meeting referred to as "Debriefing".

2.2 SEC conducts Debriefings before the job explanation for the particular contract/project has been done. DuringDebriefings with any contractor, it is the policy of SEC not to discuss or disclose to the contractor the submittals of

other contractors.3. Tips for Preparing Good PQ Documents

In order to allow SEC evaluators to be able to make a proper and accurate assessment of contractors capabilities, contractorsare encouraged to fill out the PQ forms completely; comply with all written instructions; submit all documents required; providecomplete and accurate information; describe in detail their plans to perform the work and means of providing the requiredresources; and provide any necessary additional information that will help assess their capabilities; and to submit a wellorganized package. It is of utmost importance for contractors to be able to show their experiences on similar jobs. [When indoubt, always ask for clarifications; do not assume].

Section 11SEC Bid Packages

It is the policy of SEC to put all its bidders for a specific contract on the same plane of equality; therefore, SEC issues each bidderthe same and complete Bid Package on which they prepare their bids.

1. Contents. Generally, while the complexity and details of a bid package vary with the size and nature of the work, SEC bidpackages normally include Invitation for Contract Proposal; Instructions to Bidders for Commercial Proposal (and TechnicalProposal if applicable); Bid Forms for Commercial Proposal and Technical Proposal, if applicable; and the Proforma Contract,consisting the Contract Signature Document and the standard documents listed below.


www.se.com.sa


11/22

1.1 Schedule "A" - General Terms and Conditions, and, if any, special terms and conditions to suit a particular contract.

1.2 Schedule "B" - Scope of Work and Technical Provisions, including Technical Specifications and drawings.

1.3 Schedule "C" - Payment provisions including special terms and conditions (for compensation, if any), and pricingattachments.

1.4 Ancillary documents like Performance Guarantee and Warranty Certificates format.2. Confidentiality

2.1 SEC Proprietary Information. SEC Bid packages and contracting standard forms contain provisions for ensuring theconfidentiality of proprietary information or technology provided by or developed by SEC. Bidders are requested not todisclose any proprietary information to any third party without SECs prior written consent. When SEC requires aConfidentiality Agreement because the Bid Package discloses or reveals SEC's proprietary information or technology,it is to be executed by the bidder before it is issued the Bid Package. For Cost Reimbursable Contracts, Confidentiality

Agreements are not executed until the contracts are awarded. In this case SEC informs the bidders during the biddingstage that the successful bidder shall be required to sign a Confidentiality Agreement.

2.2 Bidders/Contractor Submittals. Other than the total bid prices that are announced during the opening of bids, SECkeeps all contractor submittals confidential, including those documents that are submitted during the prequalificationprocess or screening inquiry described in Sections 10.

3. Conflict of Interest

A Contractor may not have a conflict of interest in competing for the contract as provided for in the Instructions to Bidders forCommercial Proposal and shall not have a conflict of interest in executing the contract. A contractor may be considered tohave a conflict of interest in the execution of the contract with one or more parties, if:

3.1 Bidder has an interest in another bidder in the same bid. If during the submission and opening of bids it appears thatthe Bidder own or is an owner of another bidder in this bid, SEC shall have the right to reject such bids (totally orpartially).

3.2 Bidder has received any information that directly or indirectly affects bids from any bidders in this bid.

3.3 Bidder is represented by the same legal representative as other bidders for purposes of this bid .

3.4 Bidder has a direct relationship with other bidders, directly or through common third parties, that puts them in aposition to have access to information about or influence on the bid of another Bidder, or influence the decisions ofCOMPANY regarding this bidding process.

3.5 Bidder participates in more than one bid as a principal bidder in this bidding process. SEC shall have the right tototally or partially reject all Bids in which such Bidder is involved. Exception shall be the inclusion of the samesubcontractor in more than one bid, and a Bidder may submit a subcontract bid or quote prices on materials orequipment to other Bidders and also submit a bid as principal bidder for the contract either by itself, or as a partner in a

joint venture or consortium.

3.6 Bidder participated as a consultant in the preparation of the design or technical specifications of this bid, or the Bidderis associated or affiliated with the firm or organization that participated in the preparation of the design or technicalspecifications of this bid.

3.7 Any Contractor's director, officer , agent, employee, appointed representative or independent consultant has aconflict of interest in the bidding and award of a subcontract for a portion of the work, or a purchase order for supply ofmaterial or equipment for the contract .

3.8 Where any Contractor's director, officer, agent, employee, appointed representative or independent consultant hasinterest (personal, professional, financial or otherwise), directly or indirectly, in a subcontractor being considered for asubcontract or purchase order for a portion of the work under the contract. In such a case, the Contractor shall presentrelevant evidence to SEC demonstrating that no conflict of interest has occurred in bid solicitation and award of thesubcontract or purchase order, and that competition was fair and transparent.

4. Bid Package Fee 4.1 Amount of Bid Package Fee. The fee charged for a Bid Package is determined in accordance with SEC established

guide-lines. Only the Contracting Department is authorized to collect bid package fees.

4.2 Refund of Bid Package Fee. SEC does not refund bid package fees charged to bidders. However, under specialcircumstances, the Manager of Contracting Department can authorize a refund as follows:


www.se.com.sa


12/22

4.2.1 The full amount of the fee is to be refunded to all the bidders when the project is cancelled. In this case, thebidders are required to return the Bid Package, if possible, as a condition of refund.

4.2.2 A proportionate amount may be refunded to all the bidders when the scope of work awarded wassubstantially reduced from the scope of work included in the Proforma Contract. The Manager of ContractingDepartment determines the amount of such refund.

5. Modifications to Bid Packages [Addenda]. If, during the bidding stage, additional information or changes to the Bid Packageare necessary due to changes in SEC requirements, such additional information or changes are issued to all the bidders in theform of an Addendum to the Bid Package.

Section 12Submission of Bids

SEC conducts its biddings in accordance with SEC established guidelines and with generally accepted international biddingprocedures. Due to the sensitive nature of bids, it is SEC policy to maximize security in the handling of bids, and as a deterrent toirregularities, to make such security measures visual. SEC gives sufficient time for bidders to review bid packages and to preparetheir bids. Described below are some SEC bidding procedures and guidelines.

1. Job Explanation Meetings. In all cases SEC conducts a Job Explanation Meeting ( JOBEX ), except for contracts for which theManager of Contracting Department has waived such meetings because the bidding requirements are so clear that no benefit

would be obtained by holding such meeting. The purpose of JOBEXs is to explain in detail SEC bidding and contractrequirements and to answer or clarify any questions the bidders may have. All contractors are required to attend the JOBEXs.Where a contractor cannot attend, it is required to submit a written explanation to SEC. Failure by any contractor to attend aJOBEX may cause SEC to not accept such contractors bid. SEC, for its own purposes, records JOBEXs for the recordand to refer to it when necessary.

2. Answers to Bidders Questions. Except questions raised during the JOBEX, SEC requires that any question about theproject be made in writing. SEC answers each question and provides the same replies to all the bidders.

3. Receipt of Bids. SEC requires that bids be delivered to the Bid Opening Committee [BOC] at the time and place specified inthe Invitation for Contract Proposal. The BOC first receives all the bids before starting the bid opening. SEC does not allow anybidder who does not submit a bid to witness the opening of bids. The BOC opens and reads the bids in accordance with SEC established guidelines.

4. Bids to be Opened . In competitive bidding, the only bids that are to be opened and read are those that are delivered to theBOC on or before the Bid Closing Date and time. SEC does not accept any bid sent to Contracting Department through mailand not received on or before the Bid Opening Date/Time. Such bid is to be returned promptly to the bidder unopened. SECrejects outright and returns to the bidder any bid that is not accompanied with a Bid Bond, if required.

5. Handling Late Bids. In competitive bidding, SEC considers as Late Bid any bid that is not delivered to the BOC on or beforethe Bid Opening Time. It is a policy of SEC not to accept Late Bids . Therefore, it is important that contractor submit theirbids on time.

Section 13Review and Evaluation of Bids

1. The nature and emphasis of the bid review and evaluation by SEC depend on the nature of the work to be contracted and thetype of the contract. SEC takes into consideration several factors and rules in determining the contractor that meets SECrequirements and could serve the best interest of SEC. SEC emphasizes the use of high standard of ethics and fairness at alltimes during the review and evaluation of bids.

1.1 Technical Proposal of the Lowest Bidder is the First to be evaluated. When bids are required to include both

Commercial Proposals [CP] and Technical Proposals [TP] and to be opened simultaneously, SEC first reviews the bidof the lowest bidder. If the bid of the lowest bidder is determined to be non-complying and/or is not acceptable, then thebid of the second low bidder shall be considered. This procedure is followed until an acceptable bid is determined.However, there are cases where the CPs and TPs are not to be opened simultaneously, wherein the TPs are to beopened and evaluated first; and all the CPs are kept with the bidders until the evaluation of all the TPs is completed.Only the CPs of bidders whose TPs are determined to be acceptable are to be opened.

1.2 Bid with Exception or Deviation may be Disqualified. SEC disqualifies bids that include exceptions or deviationsfrom the contract or work requirements.


www.se.com.sa


13/22

1.3 Alternative Bids that are not called are rejected. SEC rejects any "Alternative Bid" that is not called for in the BidForm or Instructions to Bidders.

1.4 Lowest Price shall prevail. It is the policy of SEC to have the lowest price prevail whenever there are discrepancies inthe bid prices of any bidder.

1.5 Bid Prices shall not be changed after Bid Opening. SEC does not allow, under any circumstance, a bidder to

change its bid price after the opening of bids. 2. Debriefing Contractors. SEC recognizes the fact that bidders incur expenses in preparing their bids and normally, the greater

the magnitude of the project, the greater the expense. Therefore, as in the prequalification process, it is also SECs policy tobe transparent as to the evaluation of contractors bids by providing clarifications to bidders why their bids are not accepted.SEC procedures for debriefing unsuccessful bidders are the same as described in Paragraph 2 of Section 10.

3. Tips for Preparing Responsive Bids. In order to be able to submit a responsive bid, contractors are encouraged to: strictlycomply with the Instructions to Bidders; bid only for what is required; submit all documents required together with bids; fill outthe bid forms completely [indicate not applicable as the case may be]; not submit conditions, exceptions or deviations; notsubmit alternate bids when it is not solicited; not submit unnecessary and unsolicited documents; and to not revise the formsreceived from SEC. When in doubt, contractors are advised to always seek clarifications and not make assumptions. Also inorder that they may be able to prepare competitive bids, it is always helpful for contractors to know their competitors and not tounderestimating them.

Section 14Awarding and Signing SEC Contracts

SEC applies the procedures described below in awarding and signing contracts.

1. Notice of Award. SEC normally awards its contracts by issuing to the successful bidder a written Notice of Award".

2. Letter of intent. In special cases SEC issues a Letter of Intent to successful bidder in lieu of the Notice of Award. Refer toSection 1 for definition.

3. Awarding Blanket Service/Work (Unified Rated) Contracts. SEC normally awards two [2] or more Blanket contacts foroperation and maintenance services such as Construction and Maintenance of Overhead and Underground DistributionSystems for the various SEC Operating Areas. Refer to Section 1 for definitions and also to Section 17.

4. Awarding Multiple Service Order Contracts. Similar to Blanket Contracts, SEC also normally awards two [2] or moreMultiple Service Order contracts for general services. Refer to Section 1 for definitions and also to Section 17.

5. Contract Signing. After SEC has signed the contract, two [2] duplicate originals of the contract are presented to thesuccessful bidder for signature by duly authorized signatory. Contractors are encouraged to ensure that their duly authorizedsignatories are recorded with the SEC CIS. Contractor signatories that are not listed in the CIS are required to submit theirauthorizations during contract signing.

6. Notification to Unsuccessful Bidders. After both parties have signed the contract, a general announcement to allunsuccessful bidders is posted in the SEC website, that the contract has been awarded indicating the name of the successfulbidder.

Section 15Bank Guarantees Requirements ( Bid Bonds / Performance Bonds )

SEC requires assurances from third parties on behalf of the contractors, in order to reasonably protect SEC from the risk of varioustypes of losses, which could occur while dealing with contractors.

1. Bid Bonds (BB). For those contracts requiring bid bonds, SEC indicates the following Bid Bond :

Amount - not less than two percent (2%) of the bidder's total bid price.

Validity - throughout the validity period of the bids as indicated in the Bid Forms. In cases where the evaluation of bids isprolonged, SEC requires bidders to extend the validity of their bids and corresponding BBs.

Forms - unconditional and irrevocable Bank Guarantee that conforms to the format prescribed by the Saudi Arabian Monetary Agency (SAMA). SEC will not, under any circumstance, accept BBs in the form of Cash or Checks.

9Replaces :Issue Date: October 2008

www.se.com.sa


14/22

Release - after the successful bidder has posted its Performance Bond (see paragraph 2 of this section). Only ContractingDepartment is authorized to release Bid Bonds. Please note that as per directive of the Ministry of Finance, The BBmay be extended after issuance of the Notice of Award and without the Bidder's approval, if the contract is awardedand the successful Contractor delays or fails to submit the requisite Performance Bond mentioned in paragraph 2 ofthis section .

Forfeiture - SEC forfeits BBs in the following cases:

a bidder declines to accept the contract award or sign the contract, or

a bidder withdraws its bid prior to contract award, even if that bidder is not among the three (3) lowestbidders, or

a bidder withdraws its bid prior to offering the SEC's Working Unit Rates in Blanket Contracts, even ifthe bidder is not among the initial prospective awardees of one of the Blanket Contracts.

2. Performance Bonds (PB). SEC normally indicates the following Performance Bond requirements in its applicable contracts:

2.1 Amount - not be less than five percent (5%) of the total estimated contract value.

2.2 Validity - throughout the duration of the contract and until all the contractor's obligations are met, including its contractwarranty obligations, if applicable.

2.3 Form - unconditional and irrevocable Bank Guarantee that conforms to the format prescribed by SAMA . PBs in theform of Cash or checks are not acceptable .

2.4 Release after the contractor has fully fulfilled its obligations under the contract. Only Contracting Department isauthorized to release PBs.

2.5 Forfeiture SEC forfeits PBs in the event that the contract is terminated due to the contractors own fault or in theevent that the contractor fails to perform or complete any corrective work or any of its contract warranty obligations, asdefined in the contract.

3. Performance Guarantees (From Manufacturers). When applicable, SEC stipulates in the Bid Package, that if the successfulbidder is a Joint Venture company between a Saudi contractor and a foreign manufacturer, it is required to submit aPerformance Guarantee ( PG ) signed by the manufacturer (or parent company) before such bidder may sign the contract

4. Bank Guarantee for Advance Payments. In cases where SEC provides the contractor with an advance payment under aparticular contract, SEC requires the contractor to provide an unconditional Bank Guarantee to cover the entire amount of theadvance payment. SEC releases Bank Guarantees for advance payments only after it has recovered the full amount of theadvance payment from the contractors invoices.

Section 16

SEC Short Form Contracts

SEC uses Short Form Contracts ("SFC") as defined in Section 1 of this Manual. Some of the procedures and guidelines applied bySEC are described below.

1. SFC Payments

1.1 One Time Payment. SEC normally does not allow progress payments in SFCs except as described Paragraph 1.2 ofthis Section. SEC makes full financial settlement of the SFC after completion of the work by the contractor andacceptance by SEC.

1.2 Partial Payments. If the work is not completed within six (6) months due to delays attributable to SEC, then SEC andthe contractor agree on the amount of work completed up to the 6 months period, so that payment could be made. Inthis case, SEC terminates the existing SFC and executes a new SFC, with a new SFC number, to cover theuncompleted work at the previously agreed price.

1.3 Payment for Unit Rate SFCs. Since the exact amount of Unit Rate SFCs cannot be determined until after thecompletion of the work, SEC clearly indicates in the pricing Section of the SFC, that the total value is "approximate

only.1.4 Scope of Work Changes (SFC Revisions). SFCs do not include a change order provision; therefore the scope of

work cannot be changed through the use of change orders. Should changes in value occur due, for example, to anunanticipated change in the scope of work, whether for a less or greater amount, SEC cancels the existing SFC andthen issues a new one, bearing the same SFC number and incorporating the necessary changes.


www.se.com.sa


15/22

Section 17SEC Service Order Contracts

SEC may from time to time need certain recurring services from contractors. To be able to quickly acquire such services as andwhen required, SEC may enter into contracts ahead of time, which define the agreed rate of compensation and other matters, andthen issue "Service Orders" when a specific item of work is needed as per the basic contract.

1. Service Order Forms. SEC uses several work authorization forms of Service Orders (SOs)" including forms #s SEC 15052

[Service Order]; SEC 16295, 16298, 16299 & 16300 [Work Orders]; SEC 15371 [Service Work Order] or SEC 15295 [On/OffHire Form].

2. Forms of Service Order Contracts. When SEC requires more than one (1) SO contract for the same type of services to berendered concurrently by more than one (1) contractor, SEC uses any one of the following forms of SO contracts:

2.1 Blanket Contracts . Used when the scope of work, the terms and conditions and unit prices are the same for all theindividual contracts.

2.2 Multiple Contracts. Used when the scope of work and the terms and conditions are the same for all the contracts but theunit prices (and in some cases the work locations) are different for each of the individual contracts.

3. Bidding for Multiple Contracts. All SEC Multiple Contracts wherein the basis of payments include Labor Rates and/orEquipment Rates, include a provision that the SOs may be competitively bid upon by the contractors. The bidding establishesthe total number of man-hours and/or equipment utilization period by category that each contractor anticipates will be utilizedfor the particular SO. SEC may then issue the SO to the contractor who offered the lowest total estimated value based on thecontract unit rates and estimated man-hours or equipment utilization period, which is to be set as the maximum SO price.

4. General Guidelines on the Issuance of Service Orders. SECs standard guidelines for issuing SOs are indicated in eachapplicable SO contract. An example of these guidelines is that SEC issues SOs before commencement of the work, except inemergency situations, wherein SEC issues after-the-fact SOs during or after completion of the work. It is important thatcontractors complete the work covered in each SO to avoid penalty assessments.

5. Changes to Service Orders. SECs standard guidelines for changing SO are clearly indicated in each applicable SEC SOcontract. An example of these guidelines is that SEC may revise a SO when the scope of work needs to be changed in order toreflect the work that will be actually performed by the contractor. For example: for the repair of equipment, SEC may initiallyissue a SO to cover only the inspection portion, and then after inspection, SEC revises the SO to include the repair workrequired and identified during inspection.

Section 18Change Orders for SEC Contracts

SEC normally authorizes changes to its contracts scopes of work, technical specifications and working conditions due to

unforeseen field conditions by using the standard form (SEC 15036 A). These changes are normally within the general scope ofthe contracts. By SECs definition, changes are within the general scope of the contracts when the subject of modification islogically and inherently related to the contract but do not constitute a major fundamental change in the contractors obligations.SEC applicable contracts stipulate the Change Order Request (COR) requirements. Upon approval of the COR, the ChangeOrder Agreement (SEC 15036B) (COA) shall be duly filled and signed.

1. Application of Change Orders . Normally, SEC may issue CORs to accomplish certain objectives including, but not limited to,any one or more of the following:

To add, modify or delete work or services to be accomplished under the contract.

To add, modify or delete standards, drawings or technical specifications.

To change the Project Execution Requirements, if any, contained in the contract.

To modify a portion of the work already completed while the work is in progress.

To perform repairs, or to correct deficient work required by SEC for which the contractor is not responsible by warranty orotherwise under the contract.

To modify the sequence of work performance, as a result of alteration of work or change in the scope of work.

To authorize other types of contractual modifications that SEC determines are to be accomplished by a COR.

To implement changes requested by the contractor and agreed by SEC to be treated as changes.


www.se.com.sa


16/22

2. General Guidelines on Use of Change Order Requests . In general, SEC applies the following guidelines on the use ofChange Order Requests:

2.1 SEC uses COAs only in accordance with the terms of the contract. If the contract does not have a CO provision, SECdoes not use COAs.

2.2 SEC does not use COAs for changes to the Final Acceptance Date or Critical Milestone Dates of a contract due to ForceMajeure events or delays caused by SEC. SEC normally makes such changes through an Amendment to the contract asdescribed in Section 19.

2.3 SEC may issue a single COA to cover multiple changes.

2.4 SEC issues COAs before the contractor is allowed to perform the changed work ,

3. Modification or Cancellation of Change Order Agreements. Normally, SEC contracts specifies that when circumstancesrequire that a COR be changed or modified, SEC cancels the COA and issues a new one bearing the same number of thecanceled COA.

4. Payment for Change Order Request. SECs applicable contracts specify the following] in paying COA.

4.1 SEC pays contractors only after completion of the COA work. However, for COA work that continues over a long period,SEC may allow progress payments if the corresponding contract provides for such progress payments.

4.2 SEC uses the Settlement for Contract Change Order (SCCO), Form No. SEC 15037, that serves as the authorization topay the contractor for the completed COA work, except Cost Reimbursable Contracts where SCCO is not required.

4.3 SEC may settle more than one COA under a single SCCO form. However, the value of each COA is to be clearlyindicated.

4.4 For COAs that allow progress payments, a separate SCCO form for each progress payment is not required. Thecertification of each invoice is sufficient to allow payment of the work completed. However, SEC uses the SCCO form inmaking the final payment of the COA.

Section 19Amendments to SEC Contracts

SEC contracts normally stipulates that SEC and its contractors may, at any time, during the contracts periods, agree to amend ormodify any of the contracts terms and conditions, provided that the modifications are made in a manner permitted by the contracts.Unless the desired modification is one that can be accomplished by a CO as described in Section 18, the modification is madethrough a formal contract amendment, signed by both parties.

Application of Contract Amendments. SEC contracts clearly specify that SEC and the contractor may agree to amend a particular

contract to accomplish certain objectives including but not limited to, any one or any combination of the following:1. To add, change or delete any of the contract terms and conditions.

2. To extend the Final Acceptance Date or any of the Critical Milestone Dates indicated in the contract as a result of ForceMajeure events or SEC delays.

3. To assign the contract to another contractor, when requested by the original contractor.

4. To change any of the contractor's legal information, such as its name and Commercial Registration Number.

5. To settle a claim or dispute where the SEC determines that the disputed work or compensation should have been covered by acontract amendment.

Section 20

SEC Contract Disputes and Claims

SEC normally treats a written request to obtain monetary recovery from the other party as either a dispute or a claim and bothparties have the contractual obligation to settle them amicably.

1. Filing of Claims. SEC contracts clearly stipulate the procedures and requirements for handling disputes and claims.Contractors must file claims according to the terms and conditions of their specific contracts.


www.se.com.sa


17/22

2. Evaluation of Claims. It is the policy of SEC to provide for the fair resolution of disputes or claims that may arise betweenSEC and its contractors in accordance with SEC established procedures. Resolution of claims are done through the SECClaims process and approved by the SEC contract signatory or the SEC Chief Executive Officer when the amount ofsettlement exceeds a certain level.

3. Claims Settlement. SEC uses the following instruments to execute a claim settlement with its contractors:

3.1 Contract Claim Settlement Form [form # SEC 15035].3.2 Final Receipt and Release Agreement [form # SEC 15076].3.3 Contract Change Order Agreement as described in Section 183.4 Contract Amendment as described in Section 19.

4. Claim Appeals. SEC contracts also clearly stipulate that contractors have the right to appeal the SEC decisions about theirclaims. Contractors must submit their appeals according to the provisions of their specific contracts.

5. Evaluation of Appeals. Promptly after receiving the contractors Appeal, SEC forms the Claim Settlement Board [AppealBoard] who will further review and reevaluate the contractors claim..

Section 21Subcontracting SEC Contracts

It is policy of SEC to allow its main contractors to subcontract any portion of their work contracted with SEC. SEC does not allowsubcontracting the entire contract. SECs requirements for subcontracting are clearly stipulated in SEC contracts. Described beloware the 6 steps in obtaining SEC approval of subcontractors.

1. Obtain form # CD 041A, Subcontractor Approval Request from Contracting Departments Reception or from the ContractingSectors website/Contractor Services page.

2. Fill out the form completely and correctly, have it signed by the main contractors duly authorized signatory and stamped withthe main contractor's official seal.

3. Submit the duly filled out form to the SEC Contract Proponent Department [together with all documents required] for technicalevaluation and for filling out the Technical Evaluation by Proponent Department block of the form and signature by theContract Proponents Project Manager or higher level.

4. If the Contract Proponent determines that the proposed subcontractor is technically qualified, submit the form duly signed bythe Contract Proponent to the Contracting Departments Reception for processing and evaluation of proposed subcontractorscommercial documents.

5. Collect from the CD Reception the original of the Subcontractor Request duly signed by the Manager of ContractingDepartment.

6. Submit the Subcontractor Request duly signed by the CD Manager to the Contract Proponent for issuance of the No

Objection Letter.

Section 22Performance of SEC Contractors

It is the policy of SEC to monitor and evaluate the performances of its contractors in order that SEC may be able to determine thecorrective actions that are appropriate when a particular contractor is lagging on its performance. It also helps SEC to identify andcorrect problems of its own that may contribute to the unsatisfactory performance of a contractor. SEC evaluates the performance ofits contractors in accordance with established procedures, using the SEC standard Contractor Performance Report [CPR] form.

1. Applicability and Frequency of CPRs. Contract Proponents accomplish a CPR for every contract every six [6] months withone [1] final CPR covering the entire contract duration. An exception is that if a contractor's overall performance rating falls intoUnsatisfactory level, a CPR is prepared immediately, and every month thereafter until the contractors performance improvesto at least Satisfactory level or the contract is terminated or otherwise the work is completed..

2. CPR Review Authority. CPRs are SEC proprietary information and are not shown to contractors. They are released to SECpersonnel only on a need to know basis. Contracting Department keeps and controls all CPRs.

3. Contractor Performance Review Meetings. Whenever a contractor's performance falls to Unsatisfactory level, it is thepolicy of SEC to determine the causes and corrective actions to be taken in order to improve the contractors performance.This effort is done through Contractor Performance Review Meetings where problems or deficiencies are identified andcorrective measures to be undertaken are agreed upon by both parties.


www.se.com.sa


18/22

4. Actions to be taken if Contractor Fails to Improve its Performance. If a particular contractor fails to improve itsperformance despite the efforts taken as described in Paragraph 3 of this Section, SEC applies the following actions:

4.1 Six (6) Months Prohibition to Bid. A contractor is prohibited from bidding on all SEC contracts for a period of six (6)months if within a given contract period, the contractor is given three (3) consecutive overall Unsatisfactory performanceratings. However, if the reason for unsatisfactory performance is purely technical, as determined by SEC, the contractor isonly prohibited from bidding for contracts with similar scope of work. The six (6) months period commences on the date ofthe third consecutive Unsatisfactory CPR. However, if within the six (6) months period, the contractor's performanceimproves to at least Satisfactory level, the contractor may then be allowed to bid effective on the date of thecorresponding Satisfactory CPR .

4.2 Nine (9) Months Prohibition to Bid. A contractor is prohibited from bidding on all SEC contracts for a period of nine (9)months if after completion of the work (or at the end of the contract duration), the contractor is given a final overallUnsatisfactory performance rating. However, if the reason for unsatisfactory performance is purely technical, asdetermined by SEC, the contractor is only prohibited from bidding for contracts with similar scope of work. The nine-monthprohibition period commences on the Final Acceptance Date or expiration date of the contract.

4.3 One (1) Year Prohibition to Bid. A contractor is prohibited from bidding for all SEC contracts for a period of one (1) yearif SEC terminates the contract for cause as a result of Unsatisfactory performance. However, if the reason fortermination is purely technical, as determined by SEC, the contractor is only prohibited to bid for contracts with similarscope of work. The one (1) year prohibition period commences on the effective date of termination of the contract.

5. Delinquent Contractors. Contractors are encouraged to comply with Government regulations to pay their employees on time.SEC applies the following administrative procedures [consistent with Government directives] in dealing with contractors, aswell as subcontractors, who are delinquent in paying the salaries and benefits of their employees. Upon receipt of a writtennotice from the Contract Proponent or any other SEC organization that a particular contractor or subcontractor is delaying the

payment of the salaries of their employees, CD conducts a meeting with the contractor to instruct it to immediately complywithin thirty [30] days with the Government requirement to pay its employees and to advise its subcontractor to do the same,as applicable. If, after the lapse of the thirty (30) days period, the contractor or its subcontractor failed to comply, CD notifiesthe concerned authorities in the Ministry of Labor in writing.

6. Actions Normally Taken by SEC for Work Delays. Contractors are also encouraged to complete their SEC contracts on timein order to avoid penalty. SEC normally includes in its contracts a provision that SEC assesses liquidated damages [penalties]against contractors failing to meet their contractual obligations to complete the work within the specified completion date. Themaximum penalty that may be assessed against any contractor shall not exceed the amount equal to 10% of the estimatedtotal contract value plus the actual amount that may be paid by SEC to its construction-monitoring consultant who is contractedto manage or supervise the project.

Section 23Applicable Laws, Rules and Employment of Saudi Nationals

SEC encourages its contractors to employ Saudi nationals to perform their contracts with SEC and comply with applicable laws andregulations. SEC contracts stipulate the following requirements concerning applicable laws and contractors are encouraged tocomply:

1. Labor Law. By signing an SEC contract, contractors acknowledge their responsibilities to their personnel pursuant to theLabor and Workmen Law and to comply with all applicable laws and regulations of the Kingdom of Saudi Arabia.

2. SEC Work Rules. Contractors personnel working in SEC premises or facilities are required to comply with all applicable workrules and instructions issued by SEC to its own employees.

3. Employment of Saudi Nationals. Contractors are required to give priority to Saudi nationals when obtaining additionalpersonnel to supplement their permanent staff in the performance of the work and to ensure that its subcontractors do thesame.

4. Restriction on Employment of SEC Personnel. The Instructions to Bidders of SEC Bid Packages specifies the restrictionsfor employing SEC personnel. Contractors are advised to strictly comply with the restrictions.

14Replaces :Issue Date: October 2008

www.se.com.sa


19/22

Section 24Visa Requests

SEC normally provides assistance to its prime contractors in obtaining the required working visas when SEC finds it necessary and justifiable for contractors to employ expatriates in performing the contracted work by endorsing the contractors Visa Request to theMinistry of Labor. Described below are the steps in obtaining SEC assistance.

1. Obtain form CD 039A, Visa Endorsement Request for Main Contractor, or CD 039G, Main Contractor Additional Manpower

Endorsement Request, or CD 039H, Visa Endorsement Request for Sub-Contractor ] as applicable - from the ContractingSectors website/Contractor Services page.

2. Fill out the form completely and correctly and then stamp it with your companys official seal.

3. Submit the form to the Proponent Department.

4. Upon validation of the manpower requirements in accordance with the contract requirements and approval of the form by theProponent Department, SEC will issue a Visa Recommendation letter to the Labor Office.

Section 25ID Request Authorization for Main and Sub Contractor Employees

For Security reasons, SEC requires the personnel of its contractors and subcontractors to wear SEC Contractor Identification Cards[IDs] when working within any SEC premises or facilities. Costs for issuing such IDs shall be borne by the Contractor. Describedbelow are the steps in obtaining approval of ID Requests.

1. ID Request Authorization for Main Contractor Employees

1.1 Obtain form # CD 040A, ID Request Authorization for Main Contractor Employees from the Contracting Sectorswebsite/Contractor Services page.

1.2 Fill out the form completely and correctly, have it signed by your companys duly authorized signatory and then stamp itwith your companys official seal.

1.3 Submit the duly filled out form to the SEC Contract Proponent for filling out the Contract Information block of the form andsignature of the Contract Proponents Division Manager or higher level.

1.4 Collect duly approved the ID Request from the Proponent Department .

1.5 Present the approved ID Request to the SEC Industrial Security Department [ISD] and obtain schedule and instructionsfor processing the SEC IDs of your personnel. Your duly authorized legal representative indicated in the approved IDRequest is the one required to deal with ISD.

2. ID Request Authorization for Sub Contractor Employees

2.1 Obtain form # CD 040B, ID Request Authorization for Subcontractor Employees from the Contracting Sectorswebsite/Contractor Services page.

2.2 Fill out the form completely and correctly, affix your companys official seal and then obtain the prime contractorssignature and have it stamped with the prime contractors official seal.

2.3 Submit the duly filled out form to the SEC Contract Proponent for filling out the Contract Information block of the form andsignature of the Contract Proponents Division Manager or higher level.

2.4 Collect duly approved the ID Request from the Proponent Department

2.5 Present the approved ID Request to the SEC Industrial Security Department [ISD] and obtain schedule and instructionsfor processing the SEC IDs of your personnel. Your duly authorized legal representative indicated in the approved IDRequest is the one required to deal with ISD.

SEC contracts specify that Contractors and subcontractors are obliged to keep and use SEC Contractor ID Cards in accordancewith prescribed Government rules and regulations. SEC deducts from contractors final invoices a certain fee for each loss SEC

Contractor ID Card.


www.se.com.sa


20/22

Section 26Final Receipt and Release Agreement for SEC Contracts

It is a policy of SEC to record all its contracts in its Contracting Information System [CIS] after signing and then closes them out byindicating its status as Inactive in the CIS whereupon no further transaction, whatsoever, can be made. SEC closes out majority ofits contracts by requiring contractor to sign and submit form # SEC 15076, Final Receipt and Release Agreement [FRRA] inaccordance with the terms and conditions of the contracts. However, when there is a pending claim, SEC does not process theFRRA until both parties settle the claim. Described below are the 2 steps in signing FRRAs.

1. Submit your Final Invoice together with all the required documents [refer to Schedule C of your contract] to the ContractProponent for certification of the amount and preparation of the FRRA .

2. Sign the FRRA prepared by the Contract Proponent.

Section 27SEC Contract Completion Certificates

SEC recognizes its obligation to issue Work Execution Certificates to any of its contractors who successfully complete theircontracted work. To obtain one, the contractor should visit the Contracting Sectors website/Contractor Services page to request acompletion certificate .

Section 28SEC Contracting Department Reception

SEC has a central point for the issuance of, and receipt of letters, bid packages and all other documents related to bidding andcontracts, which is the Contracting Department Reception Counter located at the Contracting Department Offices. SEC applies thefollowing rules/procedures and encourages contractor to follow:

1. Contractors are required to deliver and collect letters, bid packages and all other documents from the CD Reception Counter.

2. Contractors are not normally allowed to deliver or collect letters and documents directly to the Contract RepresentativesOffices.

3. In cases where the personnel assigned to the CD Reception Counter is not available, telephone is available at the counter andthe number to be called.

Section 29SEC Contract Representatives

SEC assigns Contract Representatives to handle the development and procurement of SEC contracts. These professionals are theofficial SEC contact individuals for specific contracts. Their names and contact telephone numbers are normally indicated in eachand every Invitation for Bids or Proposals for contracts, Contractors are encouraged to directly contact the Contract Representativewhen inquiring about a specific contract assigned to them. However, other inquiries that are not related to specific contracts may bereferred to the CD Division Managers or to the Contracting Department Manager.


www.se.com.sa


21/22

Section 30SEC Contracting Department's Offices

Contracting Department Offices of the four SEC Operating Areas are located at any of the following addresses:

Eastern Operating Area Southern Operating AreaRoom 3-106W, Phase III, EOA - HQ Bldg. 2 nd Floor, SOA - HQ Bldg.Dammam AbhaTelephone No. 03-858-6788 Telephone No. 07-231-9880Fax No. 03-858-6246 Fax No. 07-227-0273

Central Operating Area Western Operating AreaBldg. 6 ; COA - HQ Building Complex 1 st floor, WOA - HQ Bldg.Riyadh JeddahTelephone No. 01- 408-6170 Telephone No. 02-653-8300Fax No. 01-408-6171 Fax No. 02-651-8325

Section 31SEC Contracting Sector Organization Chart

17Replaces : June 2010Issue Date: February 2012

www.se.com.sa

Manager,Contracting Dept.- EOA

Manager,Contracting Dept.- COA

Manager,Contracting Dept.- WOA

Manager,Contracting Dept.- SOA

Manager Systems &Claims Dept.

Manager,Transmission Contracts Div.

Manager, Generation& Distribution Contracts Div.

Manager, GeneralServices Contracts Div.

Manager, ContractingInformation

System Support Section

Manager, Contracting

Information Systems Div.

Manager,Claims Div.

Manager,Systems and Procedures Div.

Manager, ContractingPlanning & Performance Div.

ExecutiveDirector

ContractingSector

SupplyChain

BusinessUnit

Materials Sector

Manager,Central Contracts Div.


22/22

Section 32[Forms of Interest to Contractors]

The above forms may be obtained from the Contracting Sectors website/Contractor Servicespage at the following link:

http://e-dhq-webapp3/CServices/index.aspx


www.se.com.sa

Form No. Title1. CD 039A Main Contractor Visa Endorsement Request2. CD 039H Subcontractor Visa Endorsement Request3. CD039G Main Contractor Additional Manpower Endorsement Request4. CD 040A ID Request Authorization for Main Contractor Employees5. CD 040B ID Request Authorization for Subcontractor Employees6. CD 041 Subcontractor Approval Request