Construction Management Agreement Template for Indonesia

The Construction Management Agreement is a critical document used when an Owner/Employer requires professional construction management services for their project in Indonesia. This agreement, governed by Indonesian law including Law No. 2 of 2017 on Construction Services, defines the appointment of a Construction Manager to oversee and manage construction activities on behalf of the Owner. It is particularly suitable for complex projects requiring specialized project management expertise, coordination of multiple contractors, and comprehensive oversight of construction activities. The agreement covers both pre-construction services (such as design review, cost planning, and procurement strategy) and construction phase services (including schedule management, quality control, and contractor coordination). It incorporates specific Indonesian regulatory requirements, including licensing, professional certification, and local content requirements where applicable.

1. Parties: Identification of the Owner/Employer and the Construction Manager, including their legal status and registration details

2. Background: Context of the project, brief description of the works, and the basis for appointing the Construction Manager

3. Definitions and Interpretation: Definitions of key terms, rules of interpretation, and hierarchy of documents

4. Appointment and Scope of Services: Formal appointment and detailed scope of Construction Manager's services for both pre-construction and construction phases

5. Construction Manager's Obligations: Core duties, professional standards, coordination responsibilities, and specific deliverables

6. Owner's Obligations: Owner's responsibilities including provision of information, approvals, and site access

7. Project Schedule: Timeline, milestones, and program management requirements

8. Compensation and Payment: Fee structure, payment terms, and procedures for invoicing and payment

9. Changes and Variations: Procedures for handling changes to scope, schedule, or fees

10. Quality Management: Quality assurance and control requirements, including inspection and testing provisions

11. Health, Safety and Environment: HSE requirements and compliance with Indonesian regulations

12. Subcontracting and Procurement: Rules and procedures for managing subcontractors and procurement processes

13. Insurance and Liability: Required insurance coverage and liability limitations

14. Force Majeure: Definition and consequences of force majeure events

15. Termination: Grounds and procedures for contract termination

16. Dispute Resolution: Dispute resolution procedures compliant with Indonesian law

17. Governing Law: Confirmation of Indonesian law as governing law and jurisdiction

18. General Provisions: Standard boilerplate clauses including notices, amendments, and entire agreement