Penalties

Penalties levied upon a Contractor for non-fulfillment of his commitment will be 6% of the unfulfilled portion of that commitment. The assessments of progress will normally be made in annual increments and will compare achievement with the schedule as planned initially. The assessments of progress may be carried out at the discretion of the Ministry of Finance (Program Executive Office)

Examples :

Example 1 Example 2

Commitment value KD 500,000 KD 2 million

Commitment term 4 years 6 years

Obligations after 2 years KD 250,000 KD 666,667

Assessment after 2 years KD 200,000 KD 500,000

Shortfall KD 50,000 KD 166,667

@ 6.0 % 50,000 x 6% 166.667 x 6%

Penalty KD 3,000 KD 10,000

The Ministry of Finance will inform the contractor in writing within 30 days of the assessment date of the penalty due. The contractor is required to tender a certified cheque for the amount within a further 30 days after which, any extenuating circumstances may be discussed.