Construction Management Contract Template for Indonesia

The Construction Management Contract is a specialized agreement used in Indonesian construction projects where professional construction management services are required. It is particularly suitable for complex projects where the owner needs expert oversight of multiple contractors and construction activities. The contract, governed by Indonesian law and complying with Law No. 2 of 2017 on Construction Services, establishes the Construction Manager's role as the owner's representative in managing and coordinating all aspects of the construction process. This includes project planning, contractor coordination, schedule management, cost control, quality assurance, and compliance with local regulations. The document is structured to address the unique aspects of Indonesian construction law while incorporating international best practices in construction management. It includes detailed provisions for risk allocation, payment mechanisms, change management, and dispute resolution, making it suitable for both domestic and international construction projects in Indonesia.

1. Parties: Identification of the Principal/Owner and the Construction Manager, including their legal details and representatives

2. Background: Context of the project, purpose of the agreement, and brief description of the construction works

3. Definitions: Definitions of key terms used throughout the contract

4. Appointment and Scope of Services: Formal appointment of the Construction Manager and detailed scope of construction management services

5. Construction Manager's Obligations: Core responsibilities including project management, coordination, scheduling, cost control, and quality assurance

6. Principal's Obligations: Owner's responsibilities including provision of information, approvals, and payment obligations

7. Project Timeline: Key milestone dates, project schedule, and completion requirements

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

9. Changes and Variations: Process for managing changes to scope, timeline, or costs

10. Quality Management: Quality standards, inspection requirements, and quality control procedures

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

12. Subcontracting: Rules and procedures for engaging and managing subcontractors

13. Insurance and Indemnity: Required insurance coverage and indemnification obligations

14. Intellectual Property: Ownership and usage rights of project documentation and designs

15. Confidentiality: Protection of confidential information and trade secrets

16. Term and Termination: Contract duration, renewal terms, and termination provisions

17. Dispute Resolution: Dispute resolution procedures including mediation and arbitration requirements

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

19. General Provisions: Standard boilerplate clauses including notices, assignment, and severability