Article 1: Obligations of the Supplier
Article 2: Assignment
Article 3: Sub-Contracting
Article 4: Origin
Article 5: Technical Specifications
Article 6: Spare-parts
Article 7: Delivery Conditions
Article 8: Packaging
Article 9: Delivery Period
Article 10: Delayed Delivery
Article 11: Acceptance Conditions
Article 12: Provisional Acceptance
Article 13: Final Acceptance
Article 14: Warranty Obligations
Article 15: After-sales Service
Article 16: Payments
Article 17: Spreading of Payments
Article 18: Payment Procedures
Article 19: Delay of Payment
Article 20: Guarantee
Article 21: Taxation
Article 22: Liability
Article 23: Force majeure
Article 24: Terminating of Contract
Article 25: Law applicable
Article 26: Arbitration

OBLIGATIONS OF THE SUPPLIER

1. Award of the contract obliges the successful Tenderer and Supplier to deliver the goods tendered to site, including such installation, testing and commissioning as the Contract provides, to perform all other requirements and respect all other conditions laid down in the contract.
2. If the Supplier is a joint venture or consortium of two or more persons, all such persons shall be jointly and severally bound to fulfil the terms of the contract according to the law applicable.
3. The Supplier shall deliver the goods to full property and unrestricted use of the Contracting Authority or the persons for whom they are purchased, free from any lien in favour of third parties.

ASSIGNMENT

1. An assignment shall be valid only if it is a written agreement by which the Supplier transfers his Contract or part thereof to a third party.
2. The Supplier shall not, without the prior written consent of the Buyer, assign the Contract for any part thereof, or any benefit or interest thereunder, except in the following cases:
   1. a charge, in favour of the Supplier's bankers, of any monies due or to become due under the Contract; or
   2. assignment to the Supplier's insurers, of the Supplier's right to obtain relief against any other person liable in cases where the insurers have discharged the Supplier's loss or liability.
3. The approval of an assignment by the Buyer shall not relieve the Supplier of his obligations under the contract, neither for the part of the Contract already performed nor the part not assigned.
4. If the Supplier has assigned his Contract without authorization, the Buyer may, without giving formal notice thereof, apply as of right the sanctions for breach of Contract .
5. Assignees must satisfy the eligibility criteria applicable to the award of the Contract.

SUB-CONTRACTING

1. A subcontract shall be valid only if it is a written agreement by which the Supplier entrusts performance of a part of his Contract to a third party.
2. The Supplier shall not subcontract without the prior written authorization of the Buyer. The elements of the Contract to be subcontracted and the identity of the subcontractors shall be notified to the Buyer. The Buyer shall, within 30 days of receipt of the notification, notify the Supplier of its decision, stating reasons should he withhold such authorization.
3. Sub-contractors must satisfy the eligibility criteria applicable for the award of the Contract.
4. The Buyer shall have no contractual relations with the sub-contractors, but may prevail itself of any rights the Supplier has acquired against them.

ORIGIN

1. The goods must originate in a member State of the European Community or in one of the beneficiary countries of the PHARE programme(¹).
2. The origin of a product shall be determined according to the rules laid down in the Community Customs Code.
3. The Supplier must certify that the goods tendered comply with this requirement, specifying the respective country of origin. The Supplier may be required to provide more detailed information in this respect and/or to provide an official certificate of origin.

Unless otherwise provided, the supplies must in all respects satisfy the requirements laid down in the Technical Specification.

SPARE PARTS

1. If the Contract so provides, the Supplier shall include in the items supplied a quantity of spare parts, drawn up in accordance with the Special Conditions and in the light of his professional experience and taking account of the place of use and including those, that require replacing more frequently (e.g. fast moving, exposed to heavy duty use etc.).
2. Unless otherwise provided, the spare parts shall be delivered together with the supplies themselves.

DELIVERY CONDITIONS

1. The Supplier shall deliver the supplies to their respective place(s) of destination in accordance with the terms specified in the Contract. Unless otherwise provided, delivery shall include all operations necessary to provide the supplies there ready for acceptance, such as packaging, shipping, carriage and insurance, completion of all administrative or commercial formalities involved therein, customsclearance and installation, unloading and storage at arrival, conveyance from storage to the place of installation, assembly, installation, verification, testing adjustment, supervision of all operations, or any other service to ready the supplies for acceptance at their places of destination. He shall be responsible for the lay out and equipment of his site unless otherwise provided.
2. Unless otherwise provided, the Supplier shall bear all risks until provisional acceptance is pronounced.

With provisional acceptance the Contracting Authority acquires full title and ownership to the goods supplied and the right to make full and unimpaired use of the supplies delivered.

PACKAGING

1. The Supplier shall provide such packaging of the Supplies as is required to prevent their damage or deterioration in transit to their final destination. The packaging shall be sufficient to withstand, without limitation, rough handling, exposure to extreme temperatures, salt and precipitation during transit and open storage. Package size and weights shall take into consideration, where appropriate, the remoteness of the final destination of the Supplies, and the possible absence of heavy handling facilities at all points in transit.

The packaging of the supplies shall become the property of the Buyer.

 

DELIVERY PERIOD

1. The supplies shall be delivered to their place(s) of destination within the delivery period specified in the Contract. Unless otherwise provided the delivery period shall include all operations necessary for installation, verification and testing to present the supplies ready for acceptance.
2. If a special delivery period is fixed for each lot, the periods shall not be cumulative where more than one lot is awarded to the same supplier. In this case the delivery period for each lot shall run concurrently.

DELAYED DELIVERY

1. The Supplier shall ensure that the Supplies are delivered to the place of destination as stipulated and in time to allow the person responsible to proceed with acceptance of the Supplies. The Supplier is deemed to have fully appreciated the difficulties which he might encounter in this respect, and he shall not be permitted to advance any grounds for delay in fulfilling his obligations.
2. In the case of delay in delivery of more than one week the Supplier shall be liable to pay liquided damages calculated from the expiry of the contractual period for each day the delay lasts, such damages to be fixed at 1/1000 of the value of the undelivered supplies.
3. Such penalty shall not exceed 15% of the total contract value.
4. However, if the defaulting party prevents the normal use of the supplies as a whole, the liquidated damages for delay will be calculated on the basis of the total cost of all the supplies.
5. The damages shall be deducted from the sums due under the contract.

ACCEPTANCE CONDITIONS

1. Delivery of the supplies shall be subject to provisional and final acceptance. If there is no warranty for the supplies, provisional acceptance shall be deemed to constitute final acceptance.
2. The organization responsible for provisional and final acceptance of the supplies shall be specified in the Contract. The supplies shall be accepted at the place of destination and in the presence of the supplier, if so requested by him. The European Communities may be represented at the acceptance formalities.

PROVISIONAL ACCEPTANCE

1. The Supplies shall be taken over on provisional acceptance, when they have been delivered to their place of destination in accordance with the contract, have satisfactorily passed the required tests and are ready for use.
2. Provisional acceptance will take place at the earliest possible opportunity and at the latest within two weeks of presentation of the supplies for acceptance at the place of destination. The Supplier must give notice thereof to the organization responsible for acceptance.
3. If the supplies are found to be damaged or defective or not in conformity with the order, a report shall be drawn up forthwith and forwarded to the Supplier, who shall be requested to verify the facts (possibly on the spot)- and to notify his findings within 15 days. Supplies which do not comply with the conditions laid down in the contract shall be either repaired or replaced, as may be decided by the Buyer, by the supplier at his own expense. If replacement or repair is not performed satisfactorily, the Buyer shall have the right to reject the supplies, which shall be returned to the supplier.
4. A certificate of provisional acceptance will be drawn up recording acceptance or rejection together with any reservations or observations made. This certificate shall state the date of provisional acceptance and shall entitle the Supplier to the relative payments.
5. This certificate is deemed to have been issued, if provisional acceptance or rejection have not been pronounced within a period of 30 days as from the date at which the responsible organization has received the Supplier's notice or from any other date as may have been arranged between them.

Final acceptance shall be pronounced of the earliest possible opportunity after the expiration of the warranty period and on the condition that the goods are found in full working order and compliance with the contract specifications.

A certificate of final acceptance shall be drawn up entitling the Supplier to the relevant payments.

WARRANTY OBLIGATIONS

1. The Supplier shall warrant that the Supplies are new, unused, of the most recent models and incorporate all recent improvements in design and materials, unless otherwise provided. The Supplier shall further warrant that all Supplies shall have no defect arising from design, materials or workmanship, except in so far as the design of materials are required by the specifications, or from any act or omission of the Contracting Authority or Buyer, that may develop under use.

1.1. The Supplier shall warrant that the supplies are fit for the purpose for which they are to be used, operate as stated in the manufacturer's technical specifications and may be freely used without infringing third parties industrial property and patent rights or copyrights.

1.2. Unless otherwise provided this warranty shall cover spare parts and accessories.

2. Unless otherwise provided, this warranty shall remain valid for 360 days after the Supplies or any portion thereof, as the case may be, have been delivered and commissioned at the final destination. The obligation to maintain the Supplies shall be subject to any stipulations in the Contract and specifications which shall determine the period and conditions thereof.
3. The Supplier shall be responsible for making good any defect in or damage to any part of the Supplies which may appear or occur during the Warranty Period, or within 30 days after its expiration and which arise either:
   1. from the use of defective materials, faulty workmanship or design of the Supplier; or
   2. from any act or omission of the Supplier during the Warranty Period; or
   3. in the course of an inspection made by, or on behalf of, the Buyer.
4. The Supplier shall at his own cost make good the defect or damage as soon as practicable. The Warranty Period for all items replaced or repaired shall recommence from the date when the replacement or repair was made to the satisfaction of the Buyer. If the Contract provides for partial acceptance, the warranty period shall be extended only for the part of the Supplies affected by the replacement or repair.
5. If any such defects appear or such damage occurs during the warranty period, the Buyer shall notify the Supplier. If the Supplier fails to remedy a defect or damage within the time limit stipulated in the notification, the Buyer may:
   1. remedy the defect or the damage itself, or employ someone else to carry out the work at the Supplier's risk and cost, in which case the costs incurred by the Buyer shall be deducted from monies due to or from guarantees held against the Supplier or from both; or
   2. terminate the Contract.
6. In case of emergency, where the Supplier cannot be reached immediately or, having been reached, is unable to take the measures required, the Buyer may have the work carried out at the expense of the Supplier. The Buyer shall as soon as practicable inform the Supplier of the action taken.  

If the Contract so provides, and in accordance with the details stipulated there, the Supplier shall provide or secure the provision of reliable and regular after-sales and maintenance service at the place of destination/installation of the goods supplied, guaranteeing their upkeep and repair and the rapid replenishment of spare parts.

The obligation to provide after-sales service shall begin after the warranty period has expired.

Unless otherwise provided payments shall be made in ECU or the currency provided for in the contract on the basis of the equivalent value of the ECU on the day preceding payment.

Unless otherwise provided , payments shall be spread as follows:

1. 60% of the contract price for the goods to be supplied, at the time the contract is placed, on provision of a guarantee securing repayment of the full amount of the payment instalment. The guarantee will be released on provisional acceptance, against presentation of any document proving provisional acceptance endorsed by the Authority or Authorities specified in the Contract.
2. 30% of the contract price for the goods to be supplied following provisional acceptance of the supplies at the place indicated for delivery . This amount will be paid on presentation of any document proving acceptance endorsed by the competent Authority or Authorities.
3. 10% of the contract price, for the goods to be supplied, as payment of the balance outstanding, on expiry of the guarantee period and following final acceptance of the supplies. This amount will be paid on presentation of any document proving final acceptance endorsed by the Authority of Authorities named in the Contract.
   
   However, payment of the 10% balance may, if the Supplier so wishes, be made at the same time as the 30% instalment referred to above, if the Supplier provides a guarantee securing repayment of the full amount of the 10% payment instalment.
   
   The guarantee will be released on final acceptance, against presentation of any document proving final acceptance endorsed by the Authority or the Authorities named in the Contract. When no such acceptance has been granted, it will be released two months after expiry of the guarantee period, save where the Buyer has submitted a claim.
4. Where only part of the supplies have been delivered, the 30% payment instalment due following provisional acceptance shall be calculated not on the total contract price, but on the value of the part of the supplies which have actually been accepted.

PAYMENT PROCEDURES

1. Payments shall be authorized and made by the authority or authorities specified in the Contract.
2. Unless otherwise provided, in order to obtain payments, the Supplier or his representative must forward to the relevant authority above the following documents:
3. For the first instalment of 60%, in addition to the invoices in duplicate, a photocopy of the Letter of Contract and the original of the guarantee, with one photocopy.
4. For the second instalment of 30% the invoices in triplicate.
5. For the balance of 10%, the invoices in triplicate or where appropriate, the original of the guarantee, with one photocopy.
6. In all cases where invoices are forwarded to the authorities of the country issuing the invitation to tender, the Supplier must inform the Commission delegate, if any, thereof by sending a copy of the correspondence to the address given in the Contract.
7. The percentages referred to in this article shall mean the unit and overall price of the goods to be supplied, excluding the separately quoted prices of spare-parts, accessories, after-sales-service or training. The latter prices shall be paid in full after delivery of such parts or services.

DELAY OF PAYMENT

1. Unless otherwise provided, payments shall be made within 60 days of receipt of the request for payment and shall be deemed to have been made on the date on which they are debited to the Contracting Party's account.
   
   If acceptance takes place after receipt of said request, the payment period shall commence upon receipt of proof of acceptance.
2. The Contracting Party may, however, after giving notice to the Contractor, defer payment if the services covered by the request for payment are contested by the Contracting Party or if the vouchers in support of the request are incomplete. Where payment is so deferred, the Contracting Party shall not be liable to pay interest or indemnities of any kind.
3. The Contracting Party shall be bound to comply with payment periods only if requests for payment are properly presented at the address indicated in Article 4 of the Contrat.
4. The 60 days payment period does not include any delays occurring as a result of banking procedures followed by the banks in the state of the registered office of the Supplier.
5. If the time-limits fixed for payments are exceeded, and the contract has not given rise to any claim, the Supplier shall be automatically and without notice be entitled to interest calculated pro rata on the basis of the number of calendar days by which payment is delayed, at the rediscount rate of the issuing institute of the state in which the Supplier has his registered office.
6. The Supplier shall be entitled to such payment without prejudice to any other right or remedy under the contract.

GUARANTEE

1. The guarantee to secure repayment of advances must be provided for the full amount of the advance paid . The guarantee may include interest for the full period of validity at a rate to be determined. No payments shall be made to the supplier prior to the provision of this guarantee.
2. The guarantee shall be denominated in the currency in which payments are to be made and drawn up in favour of the Buyer or any other Authority specified in the Contract.
3. The guarantee may be provided in the form of a bank guarantee, a banker's draft, a certified cheque, a bond provided by an insurance and/or bonding company, an irrevocable letter of credit or a cash deposit made with the Buyer. If the guarantee is to be provided in the form of a bank guarantee, a banker's draft, a certified cheque or a bond, it shall be issued by a bank or bonding and/or insurance company established in the recipient State or a Member State of the EC and approved by the Contracting Authority in accordance with the eligibility criteria applicable for the award of the Contract. The guarantee shall be independent and payable on first demand.
   
   If acceptance takes place after receipt of said request, the payment period shall commence upon receipt of the proof acceptance. The Contracting party may, however, after giving notice to the Contractor, defer payment if the services covered by the request for payment are contested by the Contracting party or if the vouchers in support of the request are incomplete. Where payment is so deferred, the Contracting Party shall not be liable to pay interest or indemnities of any kind.
4. The guarantee may also contain the following provision:

4.1. Any request to pay under the terms of the guarantee must be countersigned by the Commission delegate, if any, in the recipient State;

4.2. The guarantee may stipulate a specific expiry date, on condition that this falls at least three months following the date laid down in the contract for provisional acceptance, or two months following the expected date of final acceptance; alternatively, the guarantee may be stated to expire:

- on return of the original of the guarantee.

- on receipt of any document signed by the authority responsible for acceptance and transmitted by the Commission delegate, if any, in the recipient State, certifying that provisional or final acceptance has been granted.

4.3. Where the guarantee bears an expiry date, and should it appear that acceptance may be delayed until after the expiry date, the validity of the guarantee must be extended, at the request of said authority by successive periods of three months, until such time as acceptance is granted.

5. If the natural or legal person providing the guarantee is not able to abide by his commitments, the Buyer shall give formal notice to the Supplier to provide a new guarantee on the same terms as the previous one; Should the Supplier fail to provide a new guarantee, the Buyer may terminate the Contract.
6. If the Contract is terminated for any reason whatsoever, the guarantees securing the advances may be invoked forthwith in order to repay the balance of the advances still owed by the Supplier, and the guarantor shall not delay payment or raise objection for any reason whatever.
7. Unless otherwise provided, the guarantee shall be released as stated in Article 17 of the General Conditions.
8. The law applicable to the guarantee shall be that of the State of the institution issuing the guarantee.

Article 21

Taxation

1. Taxes, duties and charges (such as customs and import duties) shall be excluded from Community financing.
2. The Contractor shall be responsible for complying with the national tax laws applicable to him in respect of revenue received under the contract.

LIABILITY

1. The Supplier shall be liable to the Buyer for full performance of all obligations resulting from the Contract, repair any damage caused to the Buyer or the persons for whom the supplies were purchased as a result of any action or omission relating to the performance of the Contract, which is attributable to him as a result in particular of his warranty or negligence, errors or omissions.
2. Whenever the use of the supplies involves copyrights patents, registered designs, trade marks, brand names, industrial designs or models belonging to third parties, the Supplier shall indemnify the Buyer or the persons for whom they are purchased against any claim or action for infringement which may be brought against them.

FORCE MAJEURE

1. Neither party shall be considered to be in default or in breach of his obligations under the Contract if the performance of such obligations is prevented by any circumstances of force majeure which arise after the date of notification of award or the date when the Contract becomes effective, whichever is the earlier.
2. The term "force majeure", as used herein shall be construed according to Community law as interpreted by the jurisprudence of the European Court of Justice. In order to rely upon force majeure, the Supplier or the Buyer must show that they were unable to perform the relevant operations within the periods laid down, as a result of unusual circumstances outside their control, the consequences of which, in spite of the exercise of all due care on their part, they could not have avoided except at the cost of excessive sacrifice.
3. Notwithstanding the provisions of Article 20, the Supplier shall not be liable for liquidated damages or termination for default if, and to the extent that, his delay in performance or other failure to perform his obligations under the Contract is the result of an event of force majeure. The Buyer shall similarly not be liable, notwithstanding the provisions of Article 19, to payment of interest on delayed payments, for non-performance or for termination by the Supplier for default, if, and to the extent that, the Buyer's delay or other failure to perform its obligations is the result of force majeure.
4. If either party considers that any circumstances of force majeure have occurred which may affect performance of his obligations, he shall promptly notify the other party , giving details of the nature, the probable duration and the likely effect of the circumstances. Unless otherwise directed, the Supplier shall continue to perform his obligations under the Contract as far as is reasonably practicable, and shall seek all reasonable alternative means for performance of his obligations which are not prevented by the force majeure event. The Supplier shall not put into effect such alternative means for performance of his obligations which are not prevented by the force majeure event. The Supplier shall not put into effect such alternative means unless directed so to do.
5. If circumstances of force majeure have occurred and continue for a period of 90 days then, notwithstanding any extension of time for completion of the Contract that the Supplier may by reason thereof have been granted, either party shall be entitled to serve upon the other 30 days' notice to terminate the Contract. If at the expiry of the period of 30 days, force majeure still continues, the Contract shall terminate and, in consequence thereof under the law governing the Contract, the parties shall be released from further performance of the Contract.

TERMINATION OF THE CONTRACT

1. Unless otherwise provided, the Buyer may, after giving 7 days notice to the Supplier, terminate the Contract in any of the following cases where:
   1. the Supplier fails to provide the Supplies in strict accordance with the provisions of the Contract;
   2. the Supplier fails to comply within a reasonable time with a notice given by the Authority responsible for acceptance requiring him to make good any neglect or failure to perform his obligations under the Contract which seriously affect the proper and timely performance of the Contract;
   3. the Supplier refuses or neglects to carry out Administrative Orders given by the Buyer;
   4. the Supplier assigns the Contract or sub-contracts without the authorization of the Buyer;
   5. The Supplier becomes bankrupt or insolvent; or has a receiving order made against him, or compounds with his creditors, or carries on business under a receiver, trustee or manager for the benefit of his creditors, or goes into liquidation;
   6. any adverse final judgment is made in respect of an offence relating to the professional conduct of the Supplier;
   7. any other legal disability hindering performance of the Contract occurs;
   8. any organizational modification occurs involving a change in the legal personality, nature or control of the Supplier, unless such modification is recorded in an endorsement to the Contract;
   9. the Supplier fails to provide the required guarantee or insurance, or if the person providing the earlier guarantee or insurance is not able to abide by his commitments;
2. Termination shall be without prejudice to any other rights or powers under the Contract of the Buyer and the Supplier. The Buyer may, thereafter, conclude any other contract with a third party for the account of the Supplier. The Supplier's liability for delay in completion shall immediately cease upon termination without prejudice to any liability thereunder that may have already occurred.

    

LAW APPLICABLE

1. All texts of the contract shall be construed according to the provisions and principles of the law of the European Community. For all matters not covered by the contract provisions, the performance of the contract shall be governed by the law referred to, where appropriate, in the Contract Form.
2. Contracts concluded with the Commission on its own behalf shall be subject to Belgian law.  

RESOLUTION OF DISPUTES/ ARBITRATION

1. In the case of a dispute between the Buyer and a Supplier, which is a national of the recipient State, the dispute shall be referred to the competent tribunals of this State.
2. Where disagreement arises in the course of performance of the contract between the Contracting Authority and a foreign Supplier, all disputes shall be finally settled under the rules of Conciliation and Arbitration of the International Chamber of Commerce (PARIS) by one or more arbitrators appointed in accordance with the said Rules. The venue and the language of such arbitration or the arbitrators shall be determined in the Contract Form.
3. No request for settlement shall be submitted to the arbitrator unless an attempt has first been made to settle the dispute amiably within 120 days as from the notification of the complaints or any other period the parties agree upon. The request for arbitration must be submitted within 60 days as from the end of said period of conciliation.
4. All disputes arising out of Contracts concluded with the Commission on its own behalf shall be referred to the exclusive jurisdiction of the Brussels Courts.