Master Procurement Agreement Template for Indonesia

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Key Requirements PROMPT example:

Master Procurement Agreement

"I need a Master Procurement Agreement template for my Indonesian technology manufacturing company to purchase electronic components from multiple international suppliers, with specific quality control requirements and compliance with Indonesian electronics industry regulations."

Document background
This Master Procurement Agreement template is designed for use in Indonesian business transactions where parties wish to establish a long-term procurement relationship with standardized terms and conditions. It provides a framework under which multiple purchases can be made without negotiating new terms for each transaction. The agreement complies with Indonesian legal requirements, including the Civil Code (Kitab Undang-undang Hukum Perdata) and Law No. 7 of 2014 on Trade, and addresses key aspects such as language requirements under Law No. 24 of 2009. It is particularly useful for companies engaging in regular procurement activities in Indonesia, whether domestic or international, and includes provisions for purchase orders, pricing mechanisms, quality control, compliance requirements, and dispute resolution under Indonesian jurisdiction.
Suggested Sections

1. Parties: Identification of the parties entering into the agreement, including full legal names, registration numbers, and addresses

2. Background: Context of the agreement, relationship between parties, and general purpose of the procurement arrangement

3. Definitions and Interpretation: Comprehensive definitions of terms used throughout the agreement and rules of interpretation

4. Scope of Agreement: Framework terms governing the overall procurement relationship and future purchase orders

5. Ordering Process: Procedures for submitting, accepting, and processing purchase orders under the agreement

6. Pricing and Payment Terms: Price determination mechanisms, payment terms, invoicing requirements, and currency provisions

7. Delivery and Acceptance: Terms governing delivery, inspection, acceptance criteria, and rejection procedures

8. Quality Requirements: Quality standards, specifications, and compliance requirements for goods/services

9. Warranties and Representations: Standard and specific warranties regarding the goods/services and party capabilities

10. Term and Termination: Duration of the agreement, renewal provisions, and termination rights

11. Confidentiality: Protection of confidential information exchanged during the relationship

12. Liability and Indemnification: Allocation of risks, limitation of liability, and indemnification obligations

13. Force Majeure: Events excusing performance and procedures for handling force majeure situations

14. Compliance with Laws: Obligations to comply with applicable laws, including anti-corruption and trade regulations

15. Dispute Resolution: Procedures for resolving disputes, choice of forum, and governing law provisions

16. General Provisions: Standard boilerplate clauses including notices, amendments, and assignment

Optional Sections

1. Intellectual Property Rights: Required when the procurement involves IP-sensitive goods or technology transfer

2. Insurance Requirements: Detailed insurance obligations when dealing with high-value or high-risk goods

3. Environmental Compliance: Specific environmental requirements for procurement of regulated materials or substances

4. Service Levels: Include when the agreement covers services with specific performance requirements

5. Security Requirements: Necessary when dealing with sensitive data or access to facilities

6. Personnel Requirements: Important when supplier personnel will be working on customer sites

7. Import/Export Compliance: Required for international procurement activities

8. Business Continuity: Important for critical supply relationships

9. Local Content Requirements: Necessary when dealing with regulated industries or government-related procurement

Suggested Schedules

1. Schedule 1 - Goods and Services Description: Detailed specifications of goods/services covered under the agreement

2. Schedule 2 - Pricing Schedule: Detailed pricing structures, including any volume discounts or pricing mechanisms

3. Schedule 3 - Service Levels and KPIs: Performance metrics and measurement criteria

4. Schedule 4 - Order Form Template: Standard form for submitting purchase orders under the agreement

5. Schedule 5 - Technical Requirements: Detailed technical specifications and standards

6. Schedule 6 - Approved Subcontractors: List of pre-approved subcontractors if applicable

7. Schedule 7 - Compliance Requirements: Detailed compliance obligations and certification requirements

8. Schedule 8 - Quality Control Procedures: Detailed quality assurance and control processes

9. Appendix A - Contact Details: Key contact information for both parties

10. Appendix B - Required Documents: List of documents required for ordering, delivery, and payment processes

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions
Clauses
Relevant Industries

Manufacturing

Technology

Retail

Construction

Energy

Mining

Healthcare

Automotive

Electronics

Consumer Goods

Industrial Equipment

Telecommunications

Food and Beverage

Pharmaceuticals

Agriculture

Logistics and Supply Chain

Relevant Teams

Legal

Procurement

Supply Chain

Finance

Operations

Compliance

Risk Management

Commercial

Vendor Management

Strategic Sourcing

Business Development

Quality Assurance

Relevant Roles

Procurement Manager

Supply Chain Director

Legal Counsel

Contract Manager

Commercial Director

Operations Manager

Chief Financial Officer

Purchasing Officer

Vendor Manager

Compliance Officer

Risk Manager

Supply Chain Analyst

Category Manager

Strategic Sourcing Manager

Business Development Manager

General Counsel

Finance Director

Industries
Indonesian Civil Code (Kitab Undang-undang Hukum Perdata): Fundamental law governing contracts, obligations, and civil relationships in Indonesia. Particularly Book III on Contracts and Obligations is crucial for procurement agreements.
Law No. 7 of 2014 on Trade: Regulates trading activities in Indonesia, including domestic and international trade, which is relevant for procurement relationships.
Presidential Regulation No. 16 of 2018 on Government Procurement: While primarily for government procurement, it provides important guidelines and best practices that may be relevant for private procurement agreements.
Law No. 25 of 2007 on Investment: Relevant for foreign companies engaging in procurement activities in Indonesia, covering investment requirements and business operations.
Law No. 40 of 2007 on Limited Liability Companies: Governs corporate entities' legal status and operations, including their capacity to enter into procurement agreements.
Law No. 11 of 2020 on Job Creation (Omnibus Law): Recent comprehensive law affecting business operations, licensing, and commercial relationships in Indonesia.
Law No. 8 of 1999 on Consumer Protection: May be relevant if the procurement involves goods or services that ultimately reach consumers.
Government Regulation No. 80 of 2019 on Trading Through Electronic Systems: Important for procurement agreements involving e-commerce or electronic transactions.
Law No. 42 of 2009 on Value Added Tax: Critical for tax considerations in procurement relationships, particularly regarding VAT obligations.
Law No. 24 of 2009 on National Flag, Language, Emblem and Anthem: Requires contracts involving Indonesian entities to have an Indonesian language version.
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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