The Letter Of Intent To Award Construction Contract is a critical document in Indonesian construction projects that bridges the gap between contractor selection and final contract execution. It is typically issued after the completion of a tender process and internal approval procedures, but before the signing of the main construction contract. This document serves multiple purposes: it confirms the selection of the winning contractor, outlines key commercial terms and conditions precedent, and provides a framework for moving forward with contract finalization. Under Indonesian law, particularly considering Law No. 2 of 2017 on Construction Services and the Indonesian Civil Code, while this document indicates a serious intention to proceed, it generally does not create a binding commitment to award the contract. It is commonly used in both private and public construction projects throughout Indonesia, particularly for medium to large-scale developments where formal procurement processes are required.
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1. Letter Header: Company letterhead, date, reference number, and formal addressing to the selected contractor
2. Project Identification: Clear identification of the construction project, including project name, location, and reference to the tender process
3. Bid Reference: Reference to the contractor's submitted bid, including bid number and date
4. Intent Statement: Clear statement of intent to award the contract, subject to conditions
5. Contract Value: Statement of the accepted bid amount and any applicable taxes
6. Key Terms Summary: Brief overview of key contract terms including scope, timeline, and major deliverables
7. Conditions Precedent: List of conditions that must be met before formal contract award
8. Timeline: Expected timeline for contract finalization and project commencement
9. Closing and Signature: Formal closing, authorized signature block, and company stamp
1. Performance Security Requirement: Details of any required performance bonds or guarantees, included when specific security instruments are required
2. Insurance Requirements: Specific insurance requirements that need to be secured before contract award, included when insurance requirements are complex or unusual
3. Local Content Requirements: Specific requirements for local content or partnership, included when project falls under Indonesian local content regulations
4. Validity Period: Specific period for which the letter of intent remains valid, included when there's a need to set a deadline for conditions to be met
5. Confidentiality Statement: Statement regarding confidentiality of the letter and process, included when dealing with sensitive projects or information
1. Schedule A - Scope Summary: Brief summary of the agreed scope of works from the bid
2. Schedule B - Price Breakdown: Summary of the accepted price components and payment terms
3. Schedule C - Key Personnel: List of key personnel proposed in the bid and accepted by the client
4. Schedule D - Project Timeline: High-level project milestone schedule
5. Appendix 1 - Required Documents: List of documents required for contract finalization
6. Appendix 2 - Insurance Requirements: Detailed insurance requirements and minimum coverage amounts
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