The Subcontractor Letter of Intent (LOI) is a crucial preliminary document used in the Philippine business environment when a company intends to engage a subcontractor for specific project work. This document serves as a bridge between initial discussions and the final subcontract agreement, outlining key terms while maintaining flexibility for detailed negotiations. It is particularly important in the Philippine context due to strict regulations governing subcontracting relationships, including DOLE Department Order No. 174-17 and various industry-specific requirements. The LOI typically includes proposed scope, preliminary commercial terms, timelines, and any specific requirements under Philippine law, while clearly distinguishing between binding and non-binding provisions. It's commonly used when there's a need to demonstrate serious intent to proceed with a subcontracting arrangement while allowing time for due diligence, detailed negotiations, and compliance verification.
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1. Letter Header: Date, recipient details, and formal letter opening
2. Project Identification: Clear identification of the main project and scope for which subcontracting services are being considered
3. Intent Declaration: Clear statement of intent to engage the subcontractor for the specified scope of work
4. Scope Overview: Brief description of the proposed scope of work to be subcontracted
5. Commercial Terms: Preliminary pricing, payment terms, and basic commercial conditions
6. Timeline: Proposed project timeline and key milestones
7. Binding Terms: Specification of which terms are binding (e.g., confidentiality) and which are non-binding
8. Next Steps: Process for moving forward to a formal subcontract agreement
9. Validity Period: Duration for which the LOI remains valid
10. Closing and Signatures: Formal letter closing, signature blocks for both parties
1. Exclusivity: Terms regarding exclusive negotiations during the LOI period, used when there's a need to prevent the subcontractor from engaging with competitors
2. Preliminary Conditions: Any pre-conditions that need to be met before proceeding to final agreement, such as licenses or permits
3. Confidentiality Terms: Detailed confidentiality provisions, used when sensitive information will be shared during negotiations
4. Resource Allocation: Preliminary assignment of key personnel or resources, used for complex projects requiring specific expertise
5. Risk Allocation: Basic outline of proposed risk distribution, used for high-risk or complex projects
6. Local Content Requirements: Specifications for local content or labor requirements under Philippine law, used when relevant to the project
1. Preliminary Scope of Work: Detailed outline of the proposed work scope and deliverables
2. Initial Price Schedule: Preliminary breakdown of pricing and payment terms
3. Key Personnel: List of key personnel from both parties involved in the project
4. Project Timeline: Preliminary project schedule and milestones
5. Required Qualifications: List of required licenses, certifications, and qualifications under Philippine law
Relevant legal definitions
Clauses
Relevant Industries
Construction
Engineering
Manufacturing
Information Technology
Infrastructure Development
Real Estate Development
Energy
Telecommunications
Mining
Industrial Services
Facilities Management
Transportation
Relevant Teams
Legal
Procurement
Operations
Commercial
Project Management
Risk and Compliance
Business Development
Supply Chain Management
Technical Services
Construction Management
Relevant Roles
Project Manager
Contracts Manager
Procurement Manager
Legal Counsel
Commercial Director
Operations Manager
Construction Manager
Chief Operating Officer
Business Development Manager
Technical Director
Site Supervisor
Compliance Officer
Risk Manager
Managing Director
Supply Chain Manager
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