Construction Subcontracts Template for Indonesia

Construction Subcontracts are essential documents in the Indonesian construction industry, used when a main contractor needs to delegate specific portions of a construction project to specialized subcontractors. These agreements must comply with Indonesian law, particularly Law No. 2 of 2017 on Construction Services and its implementing regulations, which set specific requirements for construction service providers, licensing, and project implementation standards. The document is crucial for defining the scope, terms, and conditions of the subcontracted works, ensuring proper risk allocation, and establishing clear responsibilities between parties. It includes detailed provisions for payment, quality standards, safety requirements, and dispute resolution mechanisms, all tailored to meet both project-specific needs and Indonesian regulatory requirements.

1. Parties: Identification of the Main Contractor and Subcontractor, including registration details and licensing information as required under Indonesian law

2. Background: Context of the main construction project, relationship to the main contract, and basis for the subcontract

3. Definitions and Interpretation: Definitions of key terms and interpretation rules, including language requirements for Indonesian contracts

4. Scope of Work: Detailed description of the subcontracted works, including technical specifications and standards

5. Contract Price and Payment Terms: Payment amount, currency, payment schedule, and invoicing requirements

6. Duration and Timeline: Project schedule, milestones, completion dates, and extension mechanisms

7. Subcontractor's Obligations: Key responsibilities including workforce, materials, equipment, and compliance with local regulations

8. Main Contractor's Obligations: Responsibilities including site access, information provision, and coordination

9. Quality and Workmanship: Quality standards, inspection requirements, and acceptance criteria

10. Health, Safety and Environment: HSE requirements complying with Indonesian regulations and site-specific requirements

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

12. Performance Security: Requirements for performance bonds or guarantees as per Indonesian construction regulations

13. Variations: Procedures for changes to scope, pricing, or timeline

14. Suspension and Termination: Rights and procedures for work suspension and contract termination

15. Dispute Resolution: Dispute resolution procedures including mandatory reference to Indonesian arbitration

16. Governing Law: Confirmation of Indonesian law as governing law and relevant jurisdictional provisions

17. General Provisions: Standard boilerplate clauses adapted for Indonesian law requirements