Volume – III Chapter -8

VOLUME III
TERMS OF REFERENCE FOR EPC

PT KRAKATAU STEEL
HOT STRIP MILL #2 PROJECT

CHAPTER – 8
BIDDER’S OBLIGATION

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CONTENTS

8 BIDDER’S OBLIGATION..............................................................................................................2

8.1 GENERAL............................................................................................................................................2

8.2 SUPPLY OF THE FACILITIES.........................................................................................................2

8.3 DESIGN AND ENGINEERING.........................................................................................................2

8.4 TECHNOLOGY AND KNOW-HOW TRANSFER.........................................................................3

8.5 DRAWINGS AND TECHNICAL INFORMATION.........................................................................3

8.6 PACKING, CONSIGNMENT AND STORAGE..............................................................................4

8.7 CIVIL WORKS....................................................................................................................................5

8.8 QUALITY CONTROL, INSPECTION AND TESTING.................................................................5

8.9 SPARE PARTS.....................................................................................................................................5

8.10 TRAINING...........................................................................................................................................5

8.11 COMPUTER AND CONTROL SYSTEM........................................................................................5

8.12 RESPONSIBILITIES FOLLOWING MECHANICAL COMPLETION......................................6

8.13 MISCELLANEOUS FINAL CLEAN-UP.........................................................................................6

8.14 MONTHLY PROGRESS REPORT...................................................................................................7

8.15 SITE FACILITIES...............................................................................................................................7

8.16 ADDITIONAL INFORMATION/REQUIREMENTS..........................................................................7

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8 BIDDER’S OBLIGATION

8.1 GENERAL

The information contained in this Scope of Work is by no means exhaustive and shall not limit Bidder's
ability and freedom, subject to PTKS's approval, to introduce a better plant design, and it will not relieve
Bidder in any way from its responsibilities to perform its obligations under the Contract and to provide
for the complete construction of the Facilities meeting all requirements of the Contract.

Bidder shall take the overall responsibility for the project that is, the Bidder shall take full responsibility
for the project activities, such as the process design, equipment design, equipment manufacturing,
supervision, installation, commissioning, personnel training, Adjustment Trial Tests and Final
Acceptance and so on. In order to guarantee the smooth production process, Bidder shall consider
carefully the connections between all process procedures of the project, and describe it in the Bidder’s
bidding document.

8.2 SUPPLY OF THE FACILITIES

Bidder shall provide all Special Tools, Equipment, Materials and services, outside of the PTKS Scope of
Work, required for the Facilities to meet the operational and performance requirements set forth in this
Scope of Work, which special Tools, Equipment and Materials and services shall include, but shall not
be limited to, those items set forth in this document and also in volume I and II of the bidding document.

Except as otherwise agreed by the parties, all procurement whether of Equipment and Materials or
Special Tools shall be made in the name of Bidder, with documentation to be in accordance and
consistent with PTKS's requirements for purposes of importation and consistent with PTKS's title
thereto in accordance with the draft Contract as specified in volume II of the bidding document.

8.3 DESIGN AND ENGINEERING

Bidder shall perform all design and engineering services and shall prepare and deliver the complete
engineering (including process, civil, structural, piping, electrical and control system, mechanical
engineering and field design) necessary or appropriate for the procurement of all Equipment and
Materials and the performance of all construction and installation supervisory and other services for, and
Final Acceptance of, the Facilities as a whole.

The Facilities shall be engineered and designed using only proven equipment to enable the Facilities to
meet Standard Performance Warranties.

The design and engineering work included within the Scope of Work are as follows:

 Design philosophy, process design, conceptual engineering, basic engineering and detail
engineering of the Facilities and all associated Equipment and Materials, auxiliary system and
inside plant utilities, as well as interconnection with TOP (Take Over Point) Facilities in accordance
with the applicable international engineering standards.

 Detail design and engineering for control and distribution of cooling water, and utilities associated
with the Facilities, including the provision of detailed fabrication and erection drawings, welding
details and procedures, testing and commissioning procedures necessary for the site fabrication,
erection, testing such as NDT inspection or hydrostatic test including pickling and flushing and
commissioning of the pipe work system. Engineering and detail design for all necessary process
instrumentation and control of the Facilities, including piping and instrument cable routing
drawings, electrical and circuit diagrams and cable schedules. Engineering and detail design for
communication and alarm system also design and engineering to control and monitor the process
variables.

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 Design and detail engineering for electrical transformation, control and distribution equipment that
will be used.

 Detail design of all structural steel work and structural steel buildings.

 The detail design of all cabling, including schedules, routing drawings and cable supporting steel
works.

All drawings furnished to Bidder by PTKS shall be for reference only. Bidder shall verify all pertinent
dimensions, co-ordinates and other information by field checking at the PT Krakatau Steel Plant Site.

Bidder shall submit the drawings, documents, etc., related to all equipment and facilities to be supplied
to the PTKS for PTKS's approval. PTKS's approval or comments on such items shall be transmitted to
the Bidder within 15 calendar days after receipt of said items by PTKS. Approval by PTKS shall not in
any way relieve Bidder of any of its obligations.

8.4 TECHNOLOGY AND KNOW-HOW TRANSFER

Bidder shall be available to transfer the technology and know-how to PTKS’s personnel as described at
Chapter 16 (Technical Know-How and Patent Provided By Bidder).

8.5 DRAWINGS AND TECHNICAL INFORMATION

8.5.1 Engineering, Documentation and As Built Drawings

1. Contractor shall provide Basic Engineering to be approved by Krakatau Steel before Detail Engineering
Drawing & Shop Drawing and Static Calculation to be provided.
2. Contractor shall provide Detail Engineering Drawing & Shop Drawing and Static Calculation to be
approved by Krakatau Steel before procuring material & spare parts and fabrication.
3. Contractor shall provide as built drawings (completed with Krakatau Steel Drawing Numbering System)
and documentation as follows:
a. 2 (two) sets of electronic files of As Built drawings (all drawings running under the latest version
of AutoCad™ for Windows™) in CD-ROM.
b. 1(one) set of reproducible copy of transparent plastic film in original sizes drawing.
c. 4 (four) sets of paper copies in original size drawing.
d. 4 (four) sets paper copies in A3 size drawing.
e. 1 (one) set of original and 4 (four) sets of paper copy of documentations contains of operation and
maintenance manual, Static Calculation, test reports certificates, equipment manufacturer
certificates, brochures, catalogues and other technical information.
f. 2(two) sets of electronic files of all technical information documentations contains of operation
and maintenance manual, Static Calculation, test reports certificates, equipment manufacturer
certificates, brochures, catalogues and other technical information in Microsoft® Office™ and
Adobe Acrobat™ files saved in CD-ROM.
g. The size of the drawings shall be according to ISO standard. The size of drawing is depending on
the type of drawing, as following:
- General Layout A0 size.
- General Assembly A1 size.

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- Detail Drawing A1 size.

- Electrical drawing A3 size

4. Contractor shall provide Vertical Cabinet to store all reproducible copy of transparent plastic film in
PTKS’s Document Center.

Bidder shall provide two sets of drawing in CD-ROM running under AutoCad 2000 for Windows, two
reproducible copies of original sizes drawing, two reproducible copies of transparent original sizes
drawing, 7 set copies of original size drawing, 7 set copies of A3 size drawing, 7 sets prints of all
technical information and two sets of electronic files of all technical information in the form of
Microsoft Office XP and Adobe Acrobat files saved in CD-ROM. The size of the drawings shall be
according to ISO standard.

The size of drawing are depending on the type of drawing, as followings:

1. General Layout A0 size.

2. General Assembly A1 size.

3. Detail Drawing A1 size.

4. Electrical drawing A3 size

Metric system shall be used for design and detailing the machinery and equipment. All drawings,
technical information, manuals, correspondence and any other data sheets and information provided by
Bidder shall include the equipment item number. This equipment item number must be used through out
the duration of the contract and should be the same for control, requisition, purchasing, fabrication,
subcontracting, shipment, etc.

All drawings and technical information provided by Bidder shall become the property of PTKS, and will
be used in any manner described by PTKS for the repair, maintenance and operation of the facilities as
well for procurement of spare parts when required.

Provision of schematic, finalized and detail cross-section drawings of all items of the facilities. These
drawings must shown all principal dimension, overall clearances and removal allowances, the method of
operation and assembling, the relationship of parts and critical assembly dimensions of the equipment,
including the number and location of weld subject to radiographic or ultrasonic examination.

Provision of all necessary specifications and instruction, engineering information, bill of material,
construction and erection drawings for all equipment and materials supplied.

Provision of shop drawings of all equipments including, but shall not be limited to, imported equipment,
local supply, spare parts, erection, manuals, special tools for erection and maintenance including
proprietary items.

Provision of single line wiring diagrams for all equipment indicating the horse power, voltage,
frequency and load of electrical equipment.
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Provision of schematic instrument diagram showing the control loops and equipment and their function
in relation to the operation of the facilities Interconnecting wiring diagrams and description of the
sequence of operation of all electrical components shall be provided.

Provision of "As Built detail drawing and document" of the equipment materials supplied with all the
machinery tolerances and specifications together with instruction, installation, operation and
maintenance manuals to permit PTKS to assemble, maintain, dismantle, re-assemble and Adjust all and
every part of the Facilities. These manuals shall include step by step procedures for dismantling and re-
assembling the equipment, and recommendations about the methods for avoiding damage in handling,
recommended procedures for removal or the parts where shrink fit are employed, full and detailed
information regarding clearances and tolerances required for satisfactory operation of the equipment,
procedures for the replacement of the wearing parts, and lubrication recommendations regarding the
type of oil and greases, including their properties and the frequency of their use. Bidder shall be
responsible for approval of "As built detail drawings and document" of others which shall under the
scope of supervision of bidder. The as built documentation shall include also detailed information on the
calibration procedure of control and protection equipment, and set points, constants values, etc.

Provision of a numbering system similar to PTKS's existing system drawing equipment, materials, etc.
Vendor's drawing shall be submitted to PTKS as delivered by the vendor and shall not be altered by
Bidder.

In addition to the above, any other information or drawings that PTKS may require shall be promptly
(no later than 5 days) submitted upon request by PTKS.

Bidder shall indicate the latest date from the Effective Date that the above-mentioned drawings and
technical information will be supplied to PTKS and their relationship with procurement, construction,
erection, commissioning, start-up and as-built drawings.

All the specifications, data sheets and requisitions along with their classifications index shall be made by
Bidder on its forms, but in any case shall state that the content is being issued for this Contract. A copy
of each such item shall be sent to PTKS.

Bidder shall provide PTKS with sets of drawings and documents requiring approval from any
governmental authority.

Bidder shall provide and identification numbering system, approved by PTKS, for identification and
control of all Equipment and Materials and Special Tools that will be used and or installed during
project execution.

8.6 PACKING, CONSIGNMENT AND STORAGE

Bidder shall be responsible for arranging the complete handling and protection of all equipment and
materials, all Special Tools and all other materials and supplies used in the performance of the Work. All
Equipment and Materials and Special Tools shall be carefully packed for sea and land transportation and
accordance with good practices and standards to withstand the climatic condition prevailing at site and
during transportation. Bidder shall submit to PTKS for approval its procedures for doing so.

The equipment or machine element requiring a bright surface to ensure a precision fit shall not be
painted but shall be protected against corrosive action suitable protective coating.

Protective coating commodities shall be of the types and formula which ensure adequate protection of
the surface in transit to the final destination. All other machine parts shall receive one coat of high
quality paint before assembly. Parts not accessible for painting after final assembly shall receive two
coats of paint prior to assembly.

Bidder shall be responsible for the secure, weatherproof storage and warehousing of equipment supplied
prior to erection and shall comply with the storage requirements set out in Vol. II. The storage and
warehousing shall be built by Bidder and shall be handed over to PTKS when is project finished.

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8.7 CIVIL WORKS

Bidder shall design and install all civil works required in order to allow Bidder to satisfy all of its
obligation hereunder. Bidder shall supply all necessary interface drawings and all the drawing shall be
produced by CAD (Computer Aided Design).

All works performed and all materials for the execution of civil works and steel structures elaborated for
the implementation of the project shall conform to Indonesian standard or International standard and/or
other equivalent applicable international relevant standards. The scope of civil works and steel structures
shall include all civil works and steel structures required for the function of the project.

8.8 QUALITY CONTROL, INSPECTION AND TESTING

Bidder shall carry out or supervise the tests, quality control assurance procedures and the inspections
required of specified by standards and statutory requirements as described at Chapter 18 (Quality
Control Standards for Equipment Design and Manufacture).

8.9 CONSUMABLE MATERIALS AND OPERATIONAL CHANGE PARTS

During the period of commissioning, start-up, adjustment trial run, performance test and up to
Provisional Acceptance of the Facilities, all consumable materials and operational change parts, except
for materials supplied by owner as set forth in Chapter 7 (PTKS Responsibility), necessary to perform
any test as specified in this term of reference document and other bidding documents for this project
until Provisional Acceptance shall be provided by Bidder.

8.10 SPARE PARTS

During the period of commissioning, start-up, adjustment trial run, performance test and up to
Provisional Acceptance of the Facilities, all spare parts required shall be supplied by Bidder for Bidder's
account. PTKS is willing to allow Bidder to use the one year spare parts supply purchased by PTKS
provided that Bidder shall replace such spare parts in a period not longer than sixty days after
Provisional Acceptance of the Facilities. Spare parts shall be further described at Chapter 11
(Operational Change Parts and Spare Parts List)

8.11 TRAINING

Bidder shall provide training for PTKS personnel in accordance to Chapter 12 (Training) of this
document.

8.12 COMPUTER AND CONTROL SYSTEM

The Bidder shall design and furnish a completely tested and operating instrumentation and control
system, with the necessary hardware and software which are required for the Facilities.

Make all necessary measurements of actual plant characteristics required for control system
mathematical models including supervision and training of PTKS's personnel such that they can carry
out the work themselves.

Furnish detailed control system hardware specifications, including description of the device, quantity,
name of manufacturer, model number and version number, if applicable.

Furnish the required sets of final permanent reproducible drawings as specified in Section 8.5, titled
Drawings and Technical Information.

Furnish complete computer system documentation, operating and maintenance manuals in English
language as specified.

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Furnish complete PLC system documentation, operating and maintenance manuals including source
code application programs in English language as specified.

Perform off and on site staging and system testing to demonstrate acceptable integrated control system
performance. This test shall include testing of all hardware, I/O's, basic and application software
modules, and all communication links.

Provide facilities for and assist PTKS to review, approve and participate in Bidder's software design and
development methodology, models, application software module structure, documentation format and
control and data flow diagrams.

Furnish special test equipment necessary to properly maintain and trouble shoot all control system
hardware and software.

Guarantee to provide application software support and support from hardware and system software
suppliers for a minimum period of ten years after Provisional Acceptance of the Facilities.

8.13 RESPONSIBILITIES FOLLOWING MECHANICAL COMPLETION

After Mechanical Completion of each part of the Facilities, Bidder shall provide supervision, direction
and advisory assistance in connection with the operation and maintenance of such unit and provide
sufficient personnel for the prompt performance of any remedial work required until Provisional
Acceptance of the Facilities.

For any extended period of performance warranty tests agreed by Bidder and PTKS, Bidder shall
provide Supervision at Bidder’s account.

Bidder shall co-ordinate the activities of all concerned to ensure that the foregoing procedures are
carried out in a timely and efficient manner.

8.14 MISCELLANEOUS FINAL CLEAN-UP

Before Mechanical Completion:

 Bidder shall furnish PTKS with definitive operation and maintenance manuals for plant equipment
and instrumentation, mechanical catalogues, and data books for the Facilities, including all systems
and parts thereof, and including design basis data books for final Equipment and Materials supplied.
Such operation and maintenance manuals for operators shall be prepared in English and shall be
suitably bound in hard covers.

Prior to Final Acceptance of the Work:

 Bidder shall hand over to PTKS all surplus item, including saleable scrap.

 Bidder shall prepare final fixed asset records for the Facilities and inventory lists of surplus
materials and spare parts therefore, which shall be prepared in accordance with the code of accounts
furnished by PTKS.

 Bidder shall prepare a final construction report and shall recommend methods and procedures for
control of the costs of production, especially operation and maintenance.

8.15 MONTHLY PROGRESS REPORT

Bidder shall submit to PTKS the monthly progress report. The report contains the work progress being
done up to the latest Friday of the month. The submission to PTKS shall be conducted within 5 days
after latest Friday of the month.

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8.16 SITE FACILITIES

Bidder shall provide all site facilities required for the project including, but shall not be limited t:

 Buildings, furniture, and equipments for site office. The site office shall include four of 20 M 2
rooms for Krakatau Steel’s use during the project execution. Such facilities might be used later on
by PTKS after the project completed.

 Building and equipment for warehousing and shops.

 Sanitary sewer with septic chamber

 Rain drains

 Lighting facilities

 Lightning protection

 Fire fighting facilities

 Electrical installation. Bidder shall include breaker, metering, and protection system. Bidder shall
specify the energy required during construction.

 Fences as deemed necessary.

 Security control of equipment and goods.

 Medical services for Bidder personnel.

 Industrial water installation from battery limit to the Bidder or users.

 Telephone, fax, telex system.

 Other facilities as necessary

8.17 ADDITIONAL INFORMATION/REQUIREMENTS

In preparing this chapter, bidder shall consider other requirements as specified in volume I and II of the
bidding document. This chapter will become exhibit A of the contract document

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