5. Legal issues
129 pdg Partnership for Democratic Governance
Changes in the law
Miscellaneous provisions
The contract can include a clause that sets forth what happens if the underlying law changes. For example, if the contract provides for supply of trucks with gasoline engines and the law is amended to require that all government vehicles be electric powered, what are the obligations of the contractor? Or if a change in the law increases or decreases costs, should the remuneration and reimbursable expenses be increased or decreased?
There may be various miscellaneous provisions that need to be included in a particular jurisdiction. These include clauses such as on waivers (e.g. a failure to exercise a right does not preclude thepdg future exercise of that right), authorised representa-Partnership for Democratic tives and assignment (normally assignment of theGovernance contract should be precluded). Or they may include a statement that the contract is the entire agreement between the parties (no oral or prior agreements are included in the contract).
Budget Often a budget for a project will be included as part of the contract. Budgeting is discussed in detail in Chapter 3. Tax exemptions The contract might grant certain tax exemptions to the contractor to either encourage bidders, eliminate the steps of the government paying for the taxes due to the government itself, or to encourage foreign personnel, equipment and supplies to be brought into the country. Conflicts of interest In some cases the contract should spell out what arrangements and relationships will constitute prohibited conflicts of interest. Confidentiality The parties should consider whether any of the information relating to the contract should be confidential and how it should be designated. The parties might also include means to obtain consent to disclose confidential information. Financing arrangements These are discussed in the main text. Capacity building The contract can make the contractor responsible for developing the capacity of government staff, project staff, or others.
OECD PDG HANDBOOK ON CONTRACTING OUT GOVERNMENT FUNCTIONS AND SERVICES IN POST-CONFLICT AND FRAGILE SITUATIONS Š OECD 2010