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SUBCONTRACT AGREEMENT
FOR
______________________________
SEPTEMBER ...th
, 20_,_,
BETWEEN
PT. ___________________
AND
PT. ___________________

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SUBCONTRACT AGREEMENT
This SUBCONTRACT AGREEMENT (herein-after called “Subcontract”) is made and entered into
September ...th
, 20_,_, by and between:
1. PT. ___________________, a limited liability company duly established and existing under the
laws of the Republic of Indonesia, having its address at ..........................................................,
(herein-after called “Contractor”); and
2. PT. ___________________, a limited liability company duly established and existing under the
laws of the Republic of Indonesia, having its address at ...............................................................,
(herein-after called “Subcontractor”).
The Contractor and the Subcontractor are collectively hereinafter referred to as the “Parties” and
separately as the “Party”.
WITNESSETH :
A. Whereas, the Contractor has engaged the Subcontractor to perform building work including but
not limited to plumbing work, electrical work (herein-after called “the Work”) for
the ................................ Project (hereinafter called “Project”).
B. Whereas, the Subcontractor has agreed to perform the Work for the Project under the terms and
conditions set for herein.
Now therefore, in consideration of the mutual promises and covenants contained herein, the Parties
hereto agree as follows :
1. Main Contract and Subcontract Documents
1.1 Subcontractor shall be deemed to have full knowledge of the provisions of this Subcontract.
1.2 The Subcontract documents consist of this Subcontract agreement and its attachments hereto
such as final Subcontract Cost including cost summary of this Subcontract, cost breakdown
sheet , Subcontractor’s proposal and drawings.
1.3 The terms and conditions of this Subcontract shall take priority over any other terms and
condition hereto attached.

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2. The Work by the Subcontractor
The Work to be performed by Subcontractor under this Subcontract is defined in item and quantity
of Subcontract price attached hereto. However, the item and quantity under this Subcontract will be
changeable.
3. Commencement and Completion
3.1 Subcontractor shall commence and complete The Work within this Subcontract period. This
Subcontract period is clearly defined as follows ;
- Total duration of this Subcontract is: 5 (five) Months after the signing date of this
Subcontract by the Parties.
3.2 Subcontractor shall be eligible to apply to the Contractor in writing for the Completion
Certificate of the Work performed.
3.3 Within fourteen (14) days after receipt of such application, Contractor shall respond to
Subcontractor in writing either by issuing such a completion certificate or by advising why
such application is not acceptable.
4. The Subcontract Price
4.1 Subcontractor shall consider that Subcontract price is fixed lump sum based on drawing and
scope of work provided in the bidding stage.
4.2 This Subcontract amount of the Work under this Subcontract type mentioned above is
IDR .......................,- (................................................................... Indonesian Rupiah) as full
compensation for the execution of the Work and fulfillment of all Subcontractor’s
obligations and responsibilities under this Subcontract.
4.3 This Subcontract price is detailed in the cost summary excluding VAT (10% of total
subcontract amount), cost breakdown sheet with unit rate attached hereto. Unit rates of this
Subcontract price shall be fixed and not subject to any escalation, any site variation and any
local situation for the duration of this Subcontract until the end of the Work.
4.4 Adjustment of Direct Cost
The Subcontract amount shall be re-adjusted and finalized in due course during performance
of the Work in accordance with final based on the final revised drawing “Approved For
Construction (AFC)” for in the following manner.
- Unit cost in direct cost breakdown sheet of subcontract price shall be firm and not be
subject to any change such as escalation or change of exchange rate.
- If new item and its relevant work occur, it will be valued with such the unit cost, which
has most similar nature of the work items in the original contract or its unit cost will be
negotiable in the proper way.
4.5 Adjustment of Indirect Cost

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The original indirect costs shall also be just re-adjusted in proportion for the variation
(excessive or deductive percent) of the finalized direct cost.
5. Terms of Payment
5.1 Advance Payment for this Subcontract is twenty percent (20%) of total the Subcontract
amount and the Contractor will pay the advance payment within fifteen (15) days
commencing from the date of this Subcontract signed by the Parties. However,
Subcontractor shall submit insurer guarantee bond as stipulated in Article 9 paragraph 9.1 of
this Subcontract before the Contractor releases advance payment to the Subcontractor.
5.2 Amortization (or Repayment) according to advance payment shall be deducted from the
earned value (means approved interim payment) approved by Contractor.
5.3 Disbursement under this Subcontract
Eighty percent (80%) of total the Subcontract amount against the invoice approved by
Contractor and based on actual measured progress of every month will be paid to
Subcontractor under consideration of advance payment and payment retention.
5.4 Payment Retention
Contractor will reserve five percent (5%) of approved invoice for defect liability. and then
Contractor will pay the reserved amount within thirty (30) days after the end of defect
liability period.
However, if Subcontractor submits the insurance guarantee bond of ten percent (10%) of
total Subcontract amount for Defect Liability to the Contractor in accordance with final
Subcontract amount under the condition, then Subcontractor can request a payment for the
retention money of the Work. Then Contractor will pay the retention amount within thirty
(30) days through review of the guarantee from the date received the request letter by
Subcontractor.
5.5 All payment will be transferred in Indonesian Rupiah by telegraphic bank system within
fifteen (15) calendar days commencing from the invoice date. In this regard, Subcontractor
shall submit VAT application “Faktur Pajak Standar” for the payment amount approved and
confirmed by Contractor under Indonesian taxation. Therefore, Subcontractor shall be
confirmed the amount for the progressed payment from Contractor prior to submission of
VAT Application “Faktur Pajak Standar” during performance of the Work.
5.6 Subcontractor shall submit an application document (formal letter, application for payment)
for Interim Progress Payment with supporting document (detailed progress measurement,
cost breakdown sheet, etc.) to the Contractor.
5.7 When completion of the Work, Subcontractor shall submit a document stating its service
performance with its supporting document and its work completion report including
execution, safety and quality control of the Work to the Contractor.
5.8 Contractor will pay the settled final amount to Subcontractor within thirty (30) days

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commencing from the approval date of Subcontractor’s final invoice.
5.9 All invoice made by Subcontractor shall be submitted in two (2) original copies by hand-
carry.
6. Taxes and Duties
Subcontractor shall be responsible for all of taxes, duties for the Work under Indonesian laws and
regulations. Also, the followings shall be emphasized and shall be paid by Subcontractor when due
and payable, all deemed to be included in this Subcontract.
6.1 All or any taxes and duties imposed wherever or to whoever by reason of the Work
undertaken by Subcontractor including, but not limited to, all sales, exercise, storage,
consumption and use of taxes, license, permit and registration, commission, income, profit,
franchise corporate and personal property tax.
6.2 All employment taxes and contribution imposed by local laws or regulations, with respect to
or measured by compensation (wages, salaries, or others) paid to employees of
Subcontractor related to the Work, but not limited to, taxes and contribution for various
legally required compensation, insurance, fund and the like.
6.3 Subcontractor shall apparently defend and shall apparently indemnify Contractor from any
liability resulting from the failure or delay by Subcontractor in making any payment required
to be made by Subcontractor in accordance with taxes and duties conditions hereof.
6.4 Subcontractor shall pay withholding tax under this Subcontract. However, in this case,
withholding tax under this Subcontract shall be paid by the Contractor to tax office of
Indonesia on behalf of the Subcontractor.
7. Delay Penalty and Liquidated Damages
7.1 In the event that progress on any work is significantly delayed in comparison with the
schedule, Subcontractor shall immediately and without any additional cost from Contractor
take all necessary measures including required plan to remedy and to catch up such
deficiency.
7.2 Subcontractor’s liability for every delayed day from the date of the Work completion clearly
stated under this Subcontract and for liquidated damages due to non-achievement of the
performance shall be zero point three percent (0.3%) of total Subcontract amount per day.
However, in aggregate not to exceed ten percent (10%) of total Subcontract amount.
Contractor will, absolutely and without prejudice to any other method of recovery, deduct
the amount valued for such damages from any monies due to Subcontractor.
8. Insurance
Subcontractor shall be responsible for all of insurances related to the Work under Indonesian laws
and regulations except insurance of erection all risk (EAR). Also, the followings shall be

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emphasized and shall be paid by the Subcontractor when due and payable, all deemed to be
included in this Subcontract.
8.1 Workmen’s Compensation Insurance
Subcontractor, during the execution of the Work, shall obtain and maintain workman’s
compensation insurance for his employee(s) in accordance with all of Indonesian regulations
and laws.
8.2 Automobiles
Subcontractor, during the performance of the Work shall obtain and maintain automobiles
injury and property liability insurance, covering automobiles owned or hired by the
Subcontractor in accordance with all of Indonesian regulations and laws.
9. Guarantee
9.1 Subcontractor shall provide an Insurer Guarantee bond of Advance Payment for twenty
percent (20%) of total Subcontract amount within fifteen (15) days after the date of this
Subcontract signed by the Parties.
9.2 Within fifteen (15) days after signing of this Subcontract, the Subcontractor shall provide a
“Performance Guarantee” for the due and faithful performance of this Subcontract in the
amount equal to ten percent (10%) of total Subcontract amount covering the Work period.
9.3 The performance guarantee shall be drawn from the Insurer acceptable to the Contractor
and/or from the guarantor classified into first grade insurer in Indonesia.
10. Safety, Environment and Health Hygienic
Subcontractor shall be responsible for all of safety activities, environmental activities and health
hygienic activities during the performance of the Work.
In this regard, the followings shall especially be emphasized ;
- Subcontractor shall provide all of safety facilities and protection gears for the Work and
Subcontractor’s personnel satisfying all regulations above mentioned.
- Also, Subcontractor shall furnish any other provisions to protect existing facilities closed
to all working areas of the Work and the properties of third parties in compliance with
Contractor, local government and/or local community.
- All of the cost including expenses shall be borne by Subcontractor and all of the cost has
been included in this Subcontract.
11. Quality Control
Subcontractor shall maintain work quality according to terms and conditions of general condition
and specification of the Project and Subcontractor shall also be responsible for quality assurance of
the Work.

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12. Termination
12.1 If for any reason, the Contractor’s employment under the Work is terminated (whether by
Contractor or by employer (Owner) and whether due go any default of Contractor or
otherwise), then the employment of Subcontractor under this Subcontract shall thereupon
also be terminated.
12.2 Contractor shall have the right to terminate the Work in progress and to cancel this
Subcontract, if the Subcontractor failed to carry out his services and obligations under this
Subcontract and its attachment.
12.3 In the event the Contractor terminates this Subcontract, the Subcontractor shall return any
and all payment which has been paid by the Contractor to the Subcontractor and/or the
Contractor has the right to automatically call and request of the guarantee bond of advance
payment, the performance bond and/or the guarantee bond for defect liability (if any).
12.4 The Parties hereby waive Article 1266 of Indonesian Civil Code in relation to the
termination of this Subcontract.
13. Defect Liability
In the event that the Contractor notifies Subcontractor of any defects in the Work within defect
liability period, the Subcontractor shall carry out all of necessary works to correct any defects in the
Work arising from any default of Subcontractor.
Defect liability shall remain valid and in full effect under satisfying all of following conditions:
- Twelve (12) months from the completion date of the Work certified by the Contractor.
14. Language and Units
All documents, drawings and other writings under this Subcontract shall be in English unless
otherwise expressly agreed upon. All measurement generally shall be recorded in metric system.
15. Non-disclosure of Information
Subcontractor hereby agrees that the contents of this Subcontract including contract condition,
drawing, specification, exact location and all other data required in and pertinent to the
implementation of the Subcontract shall not be communicated or disclosed to any third party who is
not directly related to the Work without prior written permission of Contractor.
16. Variation of The Work
Subcontractor shall not be approved of any variation in the Work under this Subcontract unless
otherwise agreed by the Parties. In this regard, Contractor will approve the Work variation through
authorization processing with all of the following personnel’s signatures :
- Construction Manager; and/or
- Work supervisor in charge of the work; and/or

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- Construction superintendent; and/or
- Field control manager.
17. Approval
Technical and non-technical documents to be prepared under this Subcontract shall be subject to the
approval of the Contractor.
However, even though any technical documents have been approved, the Contractor will not relieve
the Subcontractor for omission or other defects described in above mentioned documents or
drawings, which are disclosed after such approval.
18. Validity of the Subcontract
This Subcontract shall come into effect on the date of signing by both Parties hereto and shall
remain in full force until all responsibilities under the terms and conditions of this Subcontract are
discharge.
19. Modification of Subcontract
This Subcontractor may amend or modify by mutual agreement between the Parties hereto. All
such amendment or modification shall be in writing signed by the duly authorized representative of
the Parties hereto.
20. Governing Law and Settlement of Disputes
20.1. The governing law of this Subcontract and of the relations of the Parties arising from it
shall be the laws of the Republic of Indonesia.
20.2. Any dispute arising out or in relation to this Subcontract shall be settled with amicably by
the Parties.
20.3. In the event the Parties deadlock on such disputes then the Parties agree to settle such
dispute in the Court of South Jakarta.
21. Miscellaneous
21.1. The Subcontractor shall not assign, transfer, or otherwise convey its’ obligations hereunder
in whole or in part to any individual, firm, corporation, other entity or any other party
without the prior written consent of the Contractor. In the event the Contractor accepted
such assignment, transfer and/or conveyance, the relevant assignee and/or transferee (if
any) shall be bound by and fulfill the obligations or duties as stipulated in the Subcontract.
21.2. Any and all attachments, appendixes, addendum, and/or amendment to the Subcontract
and/or any documents referred herein and/or any specification as agreed by the Parties from
time to time (if any) shall be regarded as an integral and inseparable part of this Subcontract.
21.3. Matters that have not been regulated or insufficiently provided in this Subcontract and/or
any documents referred herein, will be discussed in good faith by the Parties and will be set

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out in a written document that will be signed by the Parties.
21.4. This Subcontract and/or any documents referred herein and/or any specification as agreed
by the Parties from time to time (if any) constitutes the entire agreement between the
Parties with respect to the subject matter hereof and cancels and supersedes any prior
understandings and agreement between the Parties with respect thereto.
21.5. In the event that any provision or part of a provision in this Subcontract and/or any
documents referred herein and/or any specification as agreed by the Parties from time to
time (if any) shall for any reason be determined by any court or arbitral tribunal to be illegal,
invalid or unenforceable, then the Subcontract and/or any documents referred herein shall
not be affected and/or the remaining provisions and other parts of the provision shall not be
affected, impaired or invalidated and shall remain in full force and effect and shall continue
to be binding upon the Parties. The Parties shall, in any such event, agree on new
provision(s) that would replace such provision(s).
21.6. The Subcontract is an independent contractor to the Contractor and this Subcontractor does
not create any agency, joint venture or partnership between the Parties. The Subcontractor is
and shall be the sole employer and principal of each person which performing the Work on
behalf of the Contractor, and the Subcontractor shall be obligated to perform all
requirements of an employer under all applicable laws. The Subcontractor shall not impose
or create any obligation or liability of any kind, express or implied, or make any contracts,
promises, representations or warranties on behalf of or in the name of the Contractor, or to
enter into any obligation binding upon the Contractor.
21.7. Without prejudice to any other rights and remedies which the Contractor may has under the
applicable law, any breach to the provisions of this Subcontract that conducted by the
Subcontractor shall gives the Contractor the right to claims, demands, suits, actions,
proceeds and/or prosecutes the Subcontractor for any damages, losses, costs and/or
expenses which incurred by the Contractor, and/or to claim indemnity instead of
performance to the Subcontractor, as the result of or in connection with such breach.
Each of the undersigned (i) represents that it has read this Subcontract, and understands its English
language contents and its consequences, (ii) represents that it has made and entered into this
Subcontract freely and without duress, (iii) represents that it has received independent legal advice with
regard to this Subcontract, and (iv) undertakes that it will not challenge the validity of this Subcontract
based on any failure to comply with Law 24 or the implementing Presidential Regulation.
Setiap penandatangan dengan ini (i) menyatakan bahwa pihaknya telah membaca Subkontrak ini, dan
memahami isinya yang dibuat dalam Bahasa Inggris dan akibat Subkontrak ini, (ii) menyatakan bahwa
pihaknya telah membuat dan menandatangani Subkontrak ini secara sukarela tanpa adanya paksaan,

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(iii) menyatakan bahwa pihaknya telah menerima nasihat oleh penasihat hukum independen berkenaan
dengan Subkontrak ini dan (iv) berjanji bahwa pihaknya tidak akan menolak keabsahan Subkontrak ini
atas dasar tidak ditaatinya Undang-undang No 24 atau Peraturan Presiden pelaksanaannya.
IN WITNESS WHEREOF, the Parties hereto have made this Subcontract on the day and year
specified above.
Signed and delivered for and on behalf of
PT ___________________
__________________________________
Name : _________________
Title : PRESIDENT DIRECTOR
Signed and delivered for and on behalf of
PT ___________________
________________________________________
Name : .....................................
Title : .....................................
Attachment)
1) Subcontract Cost including Cost Breakdown
2) Construction Drawings
3) Master Schedule