The project is a new $70$ MW hydro$-$electric power station in Central Vietnam. The company has

been asked to bid for the engineering, procurement and construction management of the

mechanical and electrical engineering $($M&E$)$ works, with a contract value of approximately US$$45$

M$.$ The project calls for the commissioning of two turbines, one to be completed in two years and

t h e other following $3$ to $6$ months later. The owner has requested that a $100\%$ financing

proposal is required, i$.$e$.,$ the contractor will need to find a bank o r export credit agency or finance it

in some other manner during construction. The bid will be fixed price.

The form of contract will be the client's own conditions and the governing law of the contract

will be the laws of Vietnam, al t ho ug h the contract language will be E n g l i s h and payment will

b e in US dollars. Advance payments of $10\%$ are available for both equipment and construction

management although the follow$-$up payments are upon receipt of major equipment and on a

monthly measure basis for construction management work.

The contract documents call for the following: $$500,000$ bid bond, Performance security of $10\%$ of

contract price, recognition of the usual force$-$majeure situations, a defects liability period of $12$ months

from handover although it will be specifically $6000$ hours use for the actual turbines. There are no

retention clauses specified although liquidated damages for delay can be up to $10\%$ of contract value and

for performance can be up to $2\mathrm{.}5\%$ of turbine cost.

The company would like to work with a consortium which is led by a large Japanese company. The

Japanese are known to the company but they have no previous experience of working together.