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IEM TRAINING CENTRE SDN. BHD.
TWO DAY INTENSIVE COURSE ON
CONTRACT ADMINISTRATION FOR
CONSTRUCTION & ENGINEERING
CONTRACTS
Presented by: IR. HARBANS SINGH K.S.
B.E. (Mech) SPORE, LLB (Hons) London
CLP, DipICArb, C. Eng, PE.
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ABOUT THE COURSE PRESENTER
Ir. Harbans Singh K.S.
B.E. (Mech) Spore, LLB (Hons) London,
CLP, DipICArb, P.E.,
C. Eng., MIEM, MIMechE,MIHEEM, MASHRAE, MCIArb, MMIArb.
Ir. Harbans Singh K.S. is a Professional and Chartered Engineer, Arbitrator,
Adjudicator, Mediator, Advocate & Solicitor (non-practising). He commenced his
career in Malaysia before working in Germany and then locally in various professional
capacities. He is presently domiciled in Malaysia where he is active in construction
law and dispute resolution. Ir. Harbans is the recipient of IEMs Tan Sri Hj. Yusoff
Prize (2001), the Cedric Barclay and the Chartered Institute of Arbitrators Awards for
the Diploma in International Commercial Arbitration Examination (Oxford 2003). He
is also the author of a series of four books entitled Engineering & ConstructionContracts Management, coauthor of the book The PAM 2006 Standard Form of
Building Contract, contributor to the Malaysian Standard Forms & Precedents:
Construction & Engineering Contracts, The Ingenieur and the Malayan Law
Journal.
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CONTRACT ADMINISTRATION FORCONSTRUCTION/ ENGINEERING CONTRACTS
DAY 1 - PROGRAMME
8.30 a.m. - 9.00 a.m. : Registration
9.00 a.m. - 10.30 a.m. : Session 1
10.30a.m. - 10.45a.m. : Tea/Coffee Break
10.45 a.m. - 12.30 noon : Session 2
12.30 noon - 1.00 p.m. : Q & A Session
1.00 p.m. - 2.00 p.m. : Lunch Break
2.00 p.m. - 3.15 p.m. : Session 3
3.15 p.m. - 3.30 p.m. : Tea/Coffee Break
3.30 p.m. - 4.45 p.m. : Session 4
4.45 p.m. - 5.00 p.m. : Q & A Session
5.00 p.m. : End of Day 1
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CONTRACT ADMINISTRATION FORCONSTRUCTION/ ENGINEERING CONTRACTS
DAY 2 - PROGRAMME
9.00 a.m. - 10.30 a.m. : Session 1
10.30a.m. - 10.45a.m. : Tea/Coffee Break
10.45 a.m. - 12.30 noon : Session 2
12.30 noon - 1.00 p.m. : Q & A Session
1.00 p.m. - 2.00 p.m. : Lunch Break
2.00 p.m. - 3.15 p.m. : Session 3
3.15 p.m. - 3.30 p.m. : Tea/Coffee Break
3.30 p.m. - 4.45 p.m. : Session 4
4.45 p.m. - 5.00 p.m. : Q & A Session
5.00 p.m. : End of Course
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CONTENTS
HSKS
1.0 CONSTRUCTION/ENGINEERING CONTRACTS: INTRODUCTION
2.0 COMMENCEMENT OF CONTRACT AT SITE
3.0 MONITORING OF WORK PROGRESS
4.0 SUPERVISION OF WORKS/CONTRACT ADMINISTRATION
5.0 PAYMENTS/COMMERCIAL MATTERS
6.0 VARIATIONS/CHANGES
7.0 DELAY AND EXTENSION OF TIME
8.0 NON-COMPLETION AND DAMAGES
9.0 COMPLETION AND HANDING OVER
10.0 DEFECTS
11.0 POST COMPLETION AND FINAL ACCOUNT
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CONSTRUCTION/
ENGINEERING CONTRACTS:INTRODUCTION
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1.0 CONSTRUCTION/ENGINEERING CONTRACTS: INTRODUCTION
TYPES OF CONTRACTSTYPES OF CONTRACTSTYPES OF CONTRACTSTYPES OF CONTRACTS
1. GENERAL CONTRACTS
2. ENGINEERING/CONSTRUCTION CONTRACTS
TYPES OF BUILDING CONTRACTSTYPES OF BUILDING CONTRACTSTYPES OF BUILDING CONTRACTSTYPES OF BUILDING CONTRACTS
COMMON CONTRACT PROCUREMENT METHODSCOMMON CONTRACT PROCUREMENT METHODSCOMMON CONTRACT PROCUREMENT METHODSCOMMON CONTRACT PROCUREMENT METHODS
1. TRADITIONAL GENERAL CONTRACTS
2. MANAGEMENT TYPES
3. PACKAGE DEAL TYPES
4. MISCELLANEOUS METHODS
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BASIC CONTRACT PRINCIPLESBASIC CONTRACT PRINCIPLESBASIC CONTRACT PRINCIPLESBASIC CONTRACT PRINCIPLES
1. CONTRACT DEFINITIONS
2. ELEMENTS OF CONTRACT
3. STANDARD FORMS OF CONTRACT
4. BREACH OF CONTRACT: REMEDIES
MISCELLANEOUS ISSUESMISCELLANEOUS ISSUESMISCELLANEOUS ISSUESMISCELLANEOUS ISSUES
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FIG. 1-1: GENERAL CONTRACTS - TYPES
SIMPLE
CONTRACTSSPECIALITYCONTRACTS
(DEED)
MATERIAL& LABOUR
CONTRACTS
SUB-SUBCONTRACTS
INDEPENDENTCONTRACTS
MATERIAL SUPPLYCONTRACT
LABOURCONTRACT
COLLATERALCONTRACTS
ORAL
CONTRACTS
EXPRESSCONTRACTS
EMPLOYMENTCONTRACTS
MAIN CONTRACTS
SUB-CONTRACTS
GENERAL
CONTRACTS:
TYPES
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ENGINEERING/CONSTRUCTION
CONTRACTS:
TYPES
FIG. 1-2 : ENGINEERING/CONSTRUCTION CONTRACTS - TYPES
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FIG. 1-3 : TYPES OF CONTRACTS BASED ON PRICING MECHANISM
TYPE OF CONTRACT
LUMP SUMCONTRACTS
LUMP SUMCONTRACTS
COSTREIMBURSEMENT
CONTRACTS
COSTREIMBURSEMENT
CONTRACTS
LUMP SUM WITHPLAN AND
SPECIFICATION
LUMP SUM WITHPLAN AND
SPECIFICATION
LUMP SUM WITHBILLS
OF QUANTITIES
LUMP SUM WITHBILLS
OF QUANTITIES
COST PLUSFIXED FEE
COST PLUSFIXED FEE
COST PLUSPERCENTAGE
COST PLUSPERCENTAGE
COST PLUSFLUCTUATING FEE
COST PLUSFLUCTUATING FEE
TARGET COSTTARGET COST VALUE COSTVALUE COST
MESUREMENTCONTRACTS
MESUREMENTCONTRACTS
BASED ONAPPROXIMATE
QUANTITIES
BASED ONAPPROXIMATE
QUANTITIES
BASED ON ASCHEDULE
BASED ON ASCHEDULE
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TRADITIONALTRADITIONALTRADITIONALTRADITIONALGENERALGENERALGENERALGENERALCONTRACTTINGCONTRACTTINGCONTRACTTINGCONTRACTTING
TRADITIONALTRADITIONALTRADITIONALTRADITIONALGENERALGENERALGENERALGENERALCONTRACTTINGCONTRACTTINGCONTRACTTINGCONTRACTTING
MANAGEMENTMANAGEMENTMANAGEMENTMANAGEMENTTYPETYPETYPETYPE
MANAGEMENTMANAGEMENTMANAGEMENTMANAGEMENTTYPETYPETYPETYPE
TURNKEYTURNKEYTURNKEYTURNKEYTURNKEYTURNKEYTURNKEYTURNKEYENGINEERING, PROCUREMENT,ENGINEERING, PROCUREMENT,ENGINEERING, PROCUREMENT,ENGINEERING, PROCUREMENT,CONSTRUCTION & COMMISSIONINGCONSTRUCTION & COMMISSIONINGCONSTRUCTION & COMMISSIONINGCONSTRUCTION & COMMISSIONING
ENGINEERING, PROCUREMENT,ENGINEERING, PROCUREMENT,ENGINEERING, PROCUREMENT,ENGINEERING, PROCUREMENT,CONSTRUCTION & COMMISSIONINGCONSTRUCTION & COMMISSIONINGCONSTRUCTION & COMMISSIONINGCONSTRUCTION & COMMISSIONING
DESIGN & BUILD/DESIGN & BUILD/DESIGN & BUILD/DESIGN & BUILD/DESIGN & CONSTRUCTDESIGN & CONSTRUCTDESIGN & CONSTRUCTDESIGN & CONSTRUCT
DESIGN & BUILD/DESIGN & BUILD/DESIGN & BUILD/DESIGN & BUILD/DESIGN & CONSTRUCTDESIGN & CONSTRUCTDESIGN & CONSTRUCTDESIGN & CONSTRUCT
FASTFASTFASTFASTTRACKINGTRACKINGTRACKINGTRACKING
FASTFASTFASTFASTTRACKINGTRACKINGTRACKINGTRACKING
CONSTRUCTIONCONSTRUCTIONCONSTRUCTIONCONSTRUCTIONMANAGEMENTMANAGEMENTMANAGEMENTMANAGEMENT
CONSTRUCTIONCONSTRUCTIONCONSTRUCTIONCONSTRUCTIONMANAGEMENTMANAGEMENTMANAGEMENTMANAGEMENT
MANAGEMENTMANAGEMENTMANAGEMENTMANAGEMENTCONTRACTINGCONTRACTINGCONTRACTINGCONTRACTING
MANAGEMENTMANAGEMENTMANAGEMENTMANAGEMENTCONTRACTINGCONTRACTINGCONTRACTINGCONTRACTING
MISCELLANEOUSMISCELLANEOUSMISCELLANEOUSMISCELLANEOUSMETHODSMETHODSMETHODSMETHODS
MISCELLANEOUSMISCELLANEOUSMISCELLANEOUSMISCELLANEOUSMETHODSMETHODSMETHODSMETHODS
PACKAGEPACKAGEPACKAGEPACKAGEDEAL TYPEDEAL TYPEDEAL TYPEDEAL TYPEPACKAGEPACKAGEPACKAGEPACKAGE
DEAL TYPEDEAL TYPEDEAL TYPEDEAL TYPE
BUILD, OPERATEBUILD, OPERATEBUILD, OPERATEBUILD, OPERATE& TRANSFER& TRANSFER& TRANSFER& TRANSFER
BUILD, OPERATEBUILD, OPERATEBUILD, OPERATEBUILD, OPERATE& TRANSFER& TRANSFER& TRANSFER& TRANSFER PARTNERINGPARTNERINGPARTNERINGPARTNERING
PARTNERINGPARTNERINGPARTNERINGPARTNERING
COMMON CONTRACT PROCUREMENT METHODS
FIG. 1-4 : COMMON CONTRACT PROCUREMENT METHODS IN USE
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1985198519851985 1990199019901990 1995199519951995 2000200020002000
1.0 TRADITIONAL GENERAL 95% 76% 31% 20%CONTRACTING
2.0 MANAGEMENT 2% 3% 2% 1%CONTRACTING
3.0 CONSTRUCTION 1% 3% 9% 10%MANAGEMENT
4.0 PACKAGE DEAL TYPE 2% 15% 52% 60%
5.0 BUILD, OPERATE AND - 2% 5% 8%TRANSFER
6.0 OTHER - 1% 1% 1%MISCELLANEOUS
FIG. 1-5 : COMPARISON OF COMMON CONTRACT PROCUREMENT METHODS
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EMPLOYEREMPLOYEREMPLOYEREMPLOYER
PROFESSIONALPROFESSIONALPROFESSIONALPROFESSIONALTEAMTEAMTEAMTEAM ---- DESIGN ANDDESIGN ANDDESIGN ANDDESIGN ANDCONTRACT ADMINISTRATIONCONTRACT ADMINISTRATIONCONTRACT ADMINISTRATIONCONTRACT ADMINISTRATION
PROFESSIONALPROFESSIONALPROFESSIONALPROFESSIONALTEAMTEAMTEAMTEAM ---- DESIGN ANDDESIGN ANDDESIGN ANDDESIGN ANDCONTRACT ADMINISTRATIONCONTRACT ADMINISTRATIONCONTRACT ADMINISTRATIONCONTRACT ADMINISTRATION
SUBSUBSUBSUB----SUB SUPPLIERSSUB SUPPLIERSSUB SUPPLIERSSUB SUPPLIERSSUBSUBSUBSUB----SUB SUPPLIERSSUB SUPPLIERSSUB SUPPLIERSSUB SUPPLIERS
MAIN CONTRACTORMAIN CONTRACTORMAIN CONTRACTORMAIN CONTRACTOR(MC)(MC)(MC)(MC)
MAIN CONTRACTORMAIN CONTRACTORMAIN CONTRACTORMAIN CONTRACTOR(MC)(MC)(MC)(MC)
SUBSUBSUBSUB----SUBSUBSUBSUBCONTRACTORSCONTRACTORSCONTRACTORSCONTRACTORS
SUBSUBSUBSUB----SUBSUBSUBSUBCONTRACTORSCONTRACTORSCONTRACTORSCONTRACTORS
1. Architect2. Engineers - C&S, M&E3. Quantity Surveyor4. Other Specialist
SUBSUBSUBSUB----SUBSUBSUBSUBCONTRACTORSCONTRACTORSCONTRACTORSCONTRACTORS
SUBSUBSUBSUB----SUBSUBSUBSUBCONTRACTORSCONTRACTORSCONTRACTORSCONTRACTORS SUBSUBSUBSUB----SUB SUPPLIERSSUB SUPPLIERSSUB SUPPLIERSSUB SUPPLIERSSUBSUBSUBSUB----SUB SUPPLIERSSUB SUPPLIERSSUB SUPPLIERSSUB SUPPLIERS
NOMINATED SUPLLIERNOMINATED SUPLLIERNOMINATED SUPLLIERNOMINATED SUPLLIER(NS)(NS)(NS)(NS)
NOMINATED SUPLLIERNOMINATED SUPLLIERNOMINATED SUPLLIERNOMINATED SUPLLIER(NS)(NS)(NS)(NS)
DOMESTIC SUPPLIERDOMESTIC SUPPLIERDOMESTIC SUPPLIERDOMESTIC SUPPLIER(DS)(DS)(DS)(DS)
DOMESTIC SUPPLIERDOMESTIC SUPPLIERDOMESTIC SUPPLIERDOMESTIC SUPPLIER(DS)(DS)(DS)(DS)
Key_______ : Contractual Link_ _ _ _ _ : Responsibility
FIG. 1-6: TRADITIONAL GENERAL CONTRACTING (TGC) CONTRACTUAL RELATIONSHIPS
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EMPLOYEREMPLOYEREMPLOYEREMPLOYER PROFESSIONALPROFESSIONALPROFESSIONALPROFESSIONALADVISORSADVISORSADVISORSADVISORS
PROFESSIONALPROFESSIONALPROFESSIONALPROFESSIONALADVISORSADVISORSADVISORSADVISORS
SUBSUBSUBSUB----SUB SUPPLIERSSUB SUPPLIERSSUB SUPPLIERSSUB SUPPLIERSSUBSUBSUBSUB----SUB SUPPLIERSSUB SUPPLIERSSUB SUPPLIERSSUB SUPPLIERS
D & C CONTRACTORD & C CONTRACTORD & C CONTRACTORD & C CONTRACTORD & C CONTRACTORD & C CONTRACTORD & C CONTRACTORD & C CONTRACTOR
SUBSUBSUBSUB----SUBSUBSUBSUBCONTRACTORSCONTRACTORSCONTRACTORSCONTRACTORS
SUBSUBSUBSUB----SUBSUBSUBSUBCONTRACTORSCONTRACTORSCONTRACTORSCONTRACTORS
1. Architect
2. Engineers - C&S, M&E3. Quantity Surveyor4. Other Specialist
SUBSUBSUBSUB----SUBSUBSUBSUBCONTRACTORSCONTRACTORSCONTRACTORSCONTRACTORS
SUBSUBSUBSUB----SUBSUBSUBSUBCONTRACTORSCONTRACTORSCONTRACTORSCONTRACTORS SUBSUBSUBSUB----SUB SUPPLIERSSUB SUPPLIERSSUB SUPPLIERSSUB SUPPLIERSSUBSUBSUBSUB----SUB SUPPLIERSSUB SUPPLIERSSUB SUPPLIERSSUB SUPPLIERS
SUBSUBSUBSUB----SUPPLIERSUPPLIERSUPPLIERSUPPLIER
SUBSUBSUBSUB----
SUPPLIERSUPPLIERSUPPLIERSUPPLIERSUBSUBSUBSUB----
CONTRACTORCONTRACTORCONTRACTORCONTRACTOR
SUBSUBSUBSUB----
CONTRACTORCONTRACTORCONTRACTORCONTRACTORPROFESSIONALPROFESSIONALPROFESSIONALPROFESSIONAL
TEAMTEAMTEAMTEAM
PROFESSIONALPROFESSIONALPROFESSIONALPROFESSIONAL
TEAMTEAMTEAMTEAM
1. Architect2. Engineers - C&S, M&E3. Quantity Surveyor4. Other Specialist
1. Setting up EmployersRequirements
2. Auditing role during
construction
1. Detailed Design2. Construction supervision
Key_______ : Contractual Link_ _ _ _ _ : Responsibility
FIG. 1-7: TURNKEY CONTRACTS/DESIGN & CONSTRUCT (D&C) - CONTRACTUAL
RELATIONSHIPS
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EMPLOYEREMPLOYEREMPLOYEREMPLOYER
PROFESSIONAL TEAMPROFESSIONAL TEAMPROFESSIONAL TEAMPROFESSIONAL TEAMPROFESSIONAL TEAMPROFESSIONAL TEAMPROFESSIONAL TEAMPROFESSIONAL TEAM
TRADETRADETRADETRADECONTRACTORCONTRACTORCONTRACTORCONTRACTOR
TRADETRADETRADETRADECONTRACTORCONTRACTORCONTRACTORCONTRACTOR
MANAGEMENTMANAGEMENTMANAGEMENTMANAGEMENTCONTRACTORCONTRACTORCONTRACTORCONTRACTOR
(MC)(MC)(MC)(MC)
MANAGEMENTMANAGEMENTMANAGEMENTMANAGEMENTCONTRACTORCONTRACTORCONTRACTORCONTRACTOR
(MC)(MC)(MC)(MC)
TRADETRADETRADETRADECONTRACTORCONTRACTORCONTRACTORCONTRACTOR
TRADETRADETRADETRADECONTRACTORCONTRACTORCONTRACTORCONTRACTOR
1. Architect
2. Engineers - C&S, M&E3. Quantity Surveyor4. Other Specialist
TRADETRADETRADETRADECONTRACTORCONTRACTORCONTRACTORCONTRACTOR
TRADETRADETRADETRADECONTRACTORCONTRACTORCONTRACTORCONTRACTOR
Key
_______ : Contractual Link_ _ _ _ _ : Responsibility
FIG. 1-8: MANAGEMENT CONTRACTING (MC) - CONTRACTUAL RELATIONSHIPS
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EMPLOYEREMPLOYEREMPLOYEREMPLOYER
PROFESSIONALPROFESSIONALPROFESSIONALPROFESSIONALTEAMTEAMTEAMTEAM
PROFESSIONALPROFESSIONALPROFESSIONALPROFESSIONALTEAMTEAMTEAMTEAM
TRADETRADETRADETRADECONTRACTORSCONTRACTORSCONTRACTORSCONTRACTORS
TRADETRADETRADETRADECONTRACTORSCONTRACTORSCONTRACTORSCONTRACTORS
CONSTRUCTIONCONSTRUCTIONCONSTRUCTIONCONSTRUCTIONMANAGER (CM)MANAGER (CM)MANAGER (CM)MANAGER (CM)
CONSTRUCTIONCONSTRUCTIONCONSTRUCTIONCONSTRUCTIONMANAGER (CM)MANAGER (CM)MANAGER (CM)MANAGER (CM)
TRADETRADETRADETRADECONTRACTORSCONTRACTORSCONTRACTORSCONTRACTORS
TRADETRADETRADETRADECONTRACTORSCONTRACTORSCONTRACTORSCONTRACTORS
1. Architect2. Engineers - C&S, M&E3. Quantity Surveyor4. Other Specialist
Key
_______ : Contractual Link_ _ _ _ _ : Responsibility
FIG. 1-9: CONSTRUCTION MANAGEMENT (CM) - CONTRACTUAL RELATIONSHIPS
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* CONTRACT - DEFINATIONS
1.01.01.01.0 PER ANSONPER ANSONPER ANSONPER ANSON
* Legally binding agreement
* Between two or more parties
* By which rights are acquired by one or more* To acts or forbearances on the part of the other or others
2.02.02.02.0 PER SECTION 2(h) MALAYSIAN CONTRACTS ACT 1950 (REV. 1974)PER SECTION 2(h) MALAYSIAN CONTRACTS ACT 1950 (REV. 1974)PER SECTION 2(h) MALAYSIAN CONTRACTS ACT 1950 (REV. 1974)PER SECTION 2(h) MALAYSIAN CONTRACTS ACT 1950 (REV. 1974)
* An agreement
* Enforceable by Law
** CONTRACT - BASIC ELEMENTS
CLEAR + UNQUALIFIED + CONSIDERATION = CONTRACCLEAR + UNQUALIFIED + CONSIDERATION = CONTRACCLEAR + UNQUALIFIED + CONSIDERATION = CONTRACCLEAR + UNQUALIFIED + CONSIDERATION = CONTRACTTTTOFFEROFFEROFFEROFFER ACCEPTANCEACCEPTANCEACCEPTANCEACCEPTANCE (LEGAL(LEGAL(LEGAL(LEGAL
AGREEMENT)AGREEMENT)AGREEMENT)AGREEMENT)
FIG. 1-10: CONTRACT DEFINITIONS
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INTENTION TO CREATELEGAL RELATIONS
CERTAINTY OF TERMS
LEGAL CAPACITY TOCONTRACT
FREE CONSENT
LAWFUL OBJECT ANDCONSIDERATION
PHYSICAL/LEGALPOSSIBILITY
FIG. 1-11: ELEMENTS OF A VALID/ENFORCEABLE AGREEMENT
+
+
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FIG. 1-12 : STANDARD FORMS OF CONTRACT (PART I)
STANDARDFORMS OF
CONTRACT
DISADVANTAGES
DEFINITION/MEANING
MAIN TYPES
ADVANTAGES
CHARACTERISTICS
PURPOSE
TYPES
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GOVERNMENT/GOVERNMENT/GOVERNMENT/GOVERNMENT/PUBLIC SECTORPUBLIC SECTORPUBLIC SECTORPUBLIC SECTOR
GOVERNMENT/GOVERNMENT/GOVERNMENT/GOVERNMENT/PUBLIC SECTORPUBLIC SECTORPUBLIC SECTORPUBLIC SECTOR
STANDARD FORMS OF CONTRACT
PRIVATE SECTORPRIVATE SECTORPRIVATE SECTORPRIVATE SECTORPRIVATE SECTORPRIVATE SECTORPRIVATE SECTORPRIVATE SECTORINTERNATIONALINTERNATIONALINTERNATIONALINTERNATIONAL
CONTRACTSCONTRACTSCONTRACTSCONTRACTS
INTERNATIONALINTERNATIONALINTERNATIONALINTERNATIONALCONTRACTSCONTRACTSCONTRACTSCONTRACTS
BUILDING WORKSBUILDING WORKS
JKR / PWDJKR / PWD MISCELLANEOUSMISCELLANEOUS
1. FIDIC Conditions
2. ICE Conditions
3. IEEE Conditions
4. IMechE Conditions
5. JCT Conditions
CIVIL ENGINEERINGWORKS
CIVIL ENGINEERINGWORKS
M & E WORKSM & E WORKS
FIG. 1-13: STANDARD FORMS OF CONTRACT (PART II)
203 (Rev. 1/2010) - withoutquantities
203A (Rev. 1/2010) - with
quantities
203N (Rev. 1/2010) - For NSC
203P (Rev. 1/2010) - ForNominated Suppliers
PWD Form DB (2007 Edn.)For Design & Build Contracts
CIDB Form for:
- Building Contracts 2000 Edn.- Form CIDB.B (NSC/2002)
Modified JKR/PWD Forms e.g.LPK, MHA, etc.
IEM Conditions
- IEM.CE 2011- IEM.CES 1/90
PAM Contract 2006(with quantities)
PAM Contract 2006(without quantities)
PAM Sub-Contract 2006
IEM Conditions
- IEM.ME 1/94
TNB Conditions, etc.
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COMMENCEMENT OF
CONTRACT AT SITE
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2.0 COMMENCEMENT OF CONTRACT AT SITE
APPROACHES IN:APPROACHES IN:APPROACHES IN:APPROACHES IN:
1. TRADITIONAL GENERAL CONTRACTS2. DESIGN & BUILD / TURNKEY CONTRACTS
FORMALITIES:FORMALITIES:FORMALITIES:FORMALITIES:
1. CONDITIONS PRECEDENT2. INSURANCES, PERFORMANCE BONDS, ETC.
SITE POSSESSION : MEANING AND EFFECTSITE POSSESSION : MEANING AND EFFECTSITE POSSESSION : MEANING AND EFFECTSITE POSSESSION : MEANING AND EFFECT
SUBMITTALS :SUBMITTALS :SUBMITTALS :SUBMITTALS :1. CONSTRUCTION DRAWINGS2. SHOP DRAWINGS3. SAMPLES4. QA AND QC DOCUMENTS5. HEALTH AND SAFETY DOCUMENTS
6. METHOD STATEMENTS TEMPORARY WORKSTEMPORARY WORKSTEMPORARY WORKSTEMPORARY WORKS
ISSUES FOR ATTENDANCE OF NOMINATED SUBISSUES FOR ATTENDANCE OF NOMINATED SUBISSUES FOR ATTENDANCE OF NOMINATED SUBISSUES FOR ATTENDANCE OF NOMINATED SUB----CONTRACTORSCONTRACTORSCONTRACTORSCONTRACTORS
MISCELLANEOUS ISSUESMISCELLANEOUS ISSUESMISCELLANEOUS ISSUESMISCELLANEOUS ISSUES
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RELEVANT CASESRELEVANT CASESRELEVANT CASESRELEVANT CASES
1. THE RADIO & GENERAL TRADING CO. SDN. BHD. V WYASS & FREYTAG (M)SDN. BHD. [1998] 1 MLJ 346
2. LEC CONTRACTORS (M) SDN. BHD. V CASTLE INN SDN. BHD. & ANOR[2000]3 MLJ 339
3. KLEINWORT BENSON LTD. V MALAYSIA MINING CORP. BHD [1989] 1 WLR 379
4. NANYANG INSURANCE CO. LTD. V SALBIAH & ANOR[1967] 1 MLJ 94
5. SURREY HEALTH BOROUGH COUNCIL V LOVELL CONSTRUCTION[1988] 42 BLR 25
6. FREEMAN V HENSLER[1981] 20 BLR 78
7. TAN HOCK CHAN V KHO TECK SENG[1980] 1 MLJ 308
8. PUTRA PERDANA CONSTRUCTION SDN. BHD. V AMI INSURANCE BHD
& ORS[2005] 2 MLJ 123 HC
9. YIP SHOU SHAN V SIN HEAP LEE MARUBENI SDN. BHD. [2002] 5 MLJ43, HC`
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FIG. 2-1 : COMMENCEMENT - COMMON LABELS
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COMMENCEMENTOF CONTRACT
PERIOD
COMMENCEMENTOF CONTRACT
TAKING OVER OFTHE SITE
SITE POSSESSION
COMMENCEMENTOF WORKS
COMMENCEMENTOF OPERATIONS
ON SITE
COMMENCEMENT:
COMMON LABELS
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FIG. 2-2: PROTECTION AGAINST CONTRACTORS FAILURES COMMON MECHANISMS
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PARENT COMPANYGUARANTEE
LETTER OF AWARENESS
INSURANCE PERFORMANCE BOND
STANDBY LETTEROF CREDIT
LETTER OF COMFORT
PROTECTION AGAINSTCONTRACTORS FAILURES:
COMMON MECHANISMS
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FIG. 2-3 : PROTECTION AGAINST CONTRACTORS FAILURES AN OVERVIEW (PART I)
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PURPOSE
PROTECTION AGAINST CONTRACTORS FAILURES: AN OVERVIEW (PART I)
COMMON MECHANISMS/INSTRUMENTS: TYPES
PARENT COMPANYGUARANTEES
USENATUREPROCEDURAL
REQUIREMENTS
Preliminary review
Check for legal compliance
Check for compliance withformalities
Contractual performance ofCompany within a corporategroup is underwritten by other
members of group
E.g. Subsidiary and HoldingCompany
For commercial andadministrative convenience
Owing to requirements ofapplicable law e.g. companylaw, etc.
Risk transferring contracts
Enable recovery of compensationupon contractors default/failureunder the contract
Parent Company Guarantees
Performance Bonds
Miscellaneous Types:
1. Letters of Comfort2. Standby Letters of Credit3. Insurances
Contd.
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FIG. 2-5 : CONTRACTORS INSURANCE POLICIES COMMON TYPES HSKS
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FIG. 2-6 : INSURANCES AN OVERVIEW (PART I) HSKS
PURPOSES
INSURANCES: AN OVERVIEW (PART I)
DEFINITION TYPES
CATEGORY IICATEGORISATION PRINICPAL TYPES
Contractor: Common Types
Employer: Common Types
Occupier: Common Types
Management Corporation:Common Types
Two Main Categorization:
1. Liability based2. Loss based
Difference: basis ofcompensation
Risk allocation mechanisms
Means of seeking compensationfollowing default/failure
Per Robinson and Lavers
Voluntary assumption ofspecified risk in return for anagreed payment
CATEGORY I
Liability based
Indemnification of insuredagainst damages payable to3rd party
Examples:
1. 3rd Party LiabilityInsurance
2. WorkmensCompensation
3. Professional IndemnityInsurance
Loss based
Compensate insured forloss/damage directlyincurred by insured
Examples:
1. Contractors All RiskPolicy
2. Erection All RiskPolicy
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FIG. 2-8 : SITE POSSESSION AN OVERVIEW
PROVISIONSPROVISIONSPROVISIONSPROVISIONSFORFORFORFOR
SITE POSSESSION: AN OVERVIEW
EXCEPTIONSEXCEPTIONSEXCEPTIONSEXCEPTIONSTO GENERALTO GENERALTO GENERALTO GENERAL
PRINCIPLEPRINCIPLEPRINCIPLEPRINCIPLE
MEANINGMEANINGMEANINGMEANING DEGREEDEGREEDEGREEDEGREE POSTPONEMENTPOSTPONEMENTPOSTPONEMENTPOSTPONEMENTFAILURE TO GIVEFAILURE TO GIVEFAILURE TO GIVEFAILURE TO GIVE
POSSESSIONPOSSESSIONPOSSESSIONPOSSESSION
In Letter ofAcceptance
Or in Contract
LATEST LEGALLATEST LEGALLATEST LEGALLATEST LEGALPOSITIONPOSITIONPOSITIONPOSITION
POSSESSIONPOSSESSIONPOSSESSIONPOSSESSIONON PIECEMEALON PIECEMEALON PIECEMEALON PIECEMEAL
BASIS?BASIS?BASIS?BASIS?
No
GENERALGENERALGENERALGENERALPRINCIPLEPRINCIPLEPRINCIPLEPRINCIPLE
EXPRESSEXPRESSEXPRESSEXPRESS IMPLIEDIMPLIEDIMPLIEDIMPLIED
If not expressed, byLaw
Freeman & SonvHensler
Licence revocable byEmployer at any time
Licence to be free fromany encumbrances
Contractor entitled toSole/exclusivepossession
Express Stipulations
Case Law
Sufficient degreeof possession/access
To execute workunimpeded
To be able toperform work
Express contractstipulations permittingpostponement
GENERALGENERALGENERALGENERALLEGAL POSITIONLEGAL POSITIONLEGAL POSITIONLEGAL POSITION
EXCEPTIONSEXCEPTIONSEXCEPTIONSEXCEPTIONS
GENERALGENERALGENERALGENERALLEGAL POSITIONLEGAL POSITIONLEGAL POSITIONLEGAL POSITION
EFFECTEFFECTEFFECTEFFECT
Breach of Contract Entitles Contractor to
rescind Contract.
Contractor entitled toloss occasioned
Contractor entitled toEOT if expresslypermittedcontractually
Otherwise, LADcannot be imposed
General Position: No Exceptions:
a) Expressstipulations tocontrary
b) Where CommonLaw applies
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TIMING
SITE POSSESSION MEETINGS
EXPLANATIONOF CONTRACT
REQUIREMENTS
PURPOSEMATTERS
DEALT MINUTESPARTICIPANTS
On Date of Commencementof Contract /
Date of Site Possession
INTRODUCTIONOF PROJECT
MEMBERS
HANDOVEROF VARIOUSDOCUMENTS
1. All Project TeamMember
LETTER OFDELEGATIONOF POWERS
SET OUTPROCEDURES
COVERING
COPY OFCONTRACT
DOCUMENTS
PRICED COPYOF B.Q.
SET OFCONSTRUCTION
DRAWINGS
To officially handoverPossession of Site tothe Contractor
DISTRIBUTION/CIRCULATION
WHOPREPARES ?
Document Submittals andApprovals
Sample Submittals andApprovals
Inspection of Work
Interim Valuations
Claim Procedures
Contract Administrator To all parties
FIG. 2-9 : SITE POSSESSION MEETINGS
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HSKS
WORK PROGRAMME
WORKS UNDER CONTRACT:TYPICAL SUBMITTALS BY
CONTRACTOR
HEALTH AND SAFETYDOCUMENTS
DESIGN AND CALCULATIONSFOR WORKS UNDER P.C.
SUM, PACKAGE DEAL TYPECONTRACTS, ETC.
DRAWINGS I.E. SHOP,FABRICATION, SETTING
OUT, ETC.
MISCELLANOUESREPORTS
AND DOCUMENTS METHOD STATEMENTS
DESIGN ANDCALCULATIONS FOR
TEMPORARY WORKS
QA/QC DOCUMENTS
FIG. 2-10: WORKS UNDER CONTRACT TYPICAL SUBMITTALS BY CONTRACTOR
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MONITORING OF
WORK PROGRESS
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3.0 MONITORING OF WORK PROGRESS
PROGRAMMING OF WORKSPROGRAMMING OF WORKSPROGRAMMING OF WORKSPROGRAMMING OF WORKS
PARTIES RESPONSIBLE:PARTIES RESPONSIBLE:PARTIES RESPONSIBLE:PARTIES RESPONSIBLE:
1. EMPLOYER2. MAIN CONTRACTOR3. CONTRACT ADMINISTRATOR
PROGRESS REPORTSPROGRESS REPORTSPROGRESS REPORTSPROGRESS REPORTS
SITE RECORDSSITE RECORDSSITE RECORDSSITE RECORDS
MEETINGS:MEETINGS:MEETINGS:MEETINGS:
1. SITE POSSESSION2. PROGRESS/SITE3. NSC COORDINATION4. AD-HOC
MISCELLANEOUS ISSUESMISCELLANEOUS ISSUESMISCELLANEOUS ISSUESMISCELLANEOUS ISSUES
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RELEVANT CASESRELEVANT CASESRELEVANT CASESRELEVANT CASES
1. GLENLION CONSTRUCTION LTD. V THE GUINESS TRUST [1987] 39 BLR 89
2. YORKSHIRE WATER AUTHORITY V SIR ALFRED MCALPINE & SON(NORTHERN) LTD. [1986] 32 BLR 114
3. GREATER LONDON COUNCIL V CLEVELAND BRIDGE & ENGINEERING CO.LTD. [1986] 8 Con LR 30
4. KITSONS SHEET METAL LTD. V MATTHEW HALL MECHANICAL &ELECTRICAL ENGINEERS LTD. [1989] 47 BLR 82
5. WEST FAULKNER ASSOCIATES V LONDON BOROUGH OF NEWHAM [1994]71 BLR 1
6. EQUITABLE DEBENTURES ASSETS CORP. LTD. V MORGAN BRANCH
ROBERTS & ORS[1984] 2-CLD-10-01
HSKS
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FIG. 3-1 : WORK PROGRAMME - TYPICAL FORMS
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PRINCIPAL ACTIVITIES
IDENTIFICATION OFCRITICAL ACTIVITIESAND CRITICAL PATH
IMPORTANTMILESTONES FOR
EMPLOYER TO MEET SEQUENCE OFACTIVITIES
IMPORTANTMILESTONES FOR
CONTRACTOR TO MEET
TIMING OF ACTIVITIES
WORK PROGRAMME:PRINCIPAL CONTENTS
FIG. 3-2 : WORK PROGRAMME PRINCIPAL CONTENTS
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FIG. 3-3 : WORK PROGRAMME AN OVERVIEW
RESPONSIBILITYRESPONSIBILITYRESPONSIBILITYRESPONSIBILITY
WORK PROGRAMME: AN OVERVIEW
OPTIONS ONOPTIONS ONOPTIONS ONOPTIONS ONSUBMISSIONSUBMISSIONSUBMISSIONSUBMISSION
METHOD OFMETHOD OFMETHOD OFMETHOD OFWORKINGWORKINGWORKINGWORKING
SEQUENCE OFSEQUENCE OFSEQUENCE OFSEQUENCE OFWORKINGWORKINGWORKINGWORKING
MEANINGMEANINGMEANINGMEANING FORMFORMFORMFORM CONTENTSCONTENTSCONTENTSCONTENTS PURPOSEPURPOSEPURPOSEPURPOSE PART OFPART OFPART OFPART OFCONTRACT?CONTRACT?CONTRACT?CONTRACT?
ALTERATION/ALTERATION/ALTERATION/ALTERATION/REVISIONREVISIONREVISIONREVISION
Express Provisions
By Implication
Sequence andTiming of Activities
Critical Milestones
FOR CONTRACTFOR CONTRACTFOR CONTRACTFOR CONTRACTADMINISTRATORADMINISTRATORADMINISTRATORADMINISTRATOR
FORFORFORFORCONTRACTORCONTRACTORCONTRACTORCONTRACTOR
Approval Rejection Withholding of
Approval
SUBMITTED AFTERSUBMITTED AFTERSUBMITTED AFTERSUBMITTED AFTERTENDER AWARDTENDER AWARDTENDER AWARDTENDER AWARD
PART OF TENDERPART OF TENDERPART OF TENDERPART OF TENDERSUBMISSION?SUBMISSION?SUBMISSION?SUBMISSION?
GeneralPolicies
Mode ofAlternatives /Revision
Effect ofAlternatives/Revision
BARBARBARBARCHARTSCHARTSCHARTSCHARTS
CRITICAL PATHCRITICAL PATHCRITICAL PATHCRITICAL PATHANALYSISANALYSISANALYSISANALYSIS
PERTPERTPERTPERT
PRIMIVERA/PRIMIVERA/PRIMIVERA/PRIMIVERA/MICROSOFTMICROSOFTMICROSOFTMICROSOFTPROJECTPROJECTPROJECTPROJECT
MISCELLANEOUSMISCELLANEOUSMISCELLANEOUSMISCELLANEOUS
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FIG. 3-4 : PROGRESS MONITORING EMPLOYERS PURPOSES
HSKS
TO LEVY CONTROL OVERPROGRESS OF THE WORKS
TO TAKE NECESSARYREMEDIAL MEASURES IF
DELAY OCCURS OR IFEMPLOYER IS AT FAULT
MISCELLANEOUSPURPOSES
TO ENSURE CONTRACTIS COMPLETEDACCORDING TO
SCHEDULE
TO PLAN ANDSTREAMLINE FINANCIAL
ARRANGEMENTSTO OBVIATE DEFAULT
TO WARN CONTRACTORTO TAKE REMEDIAL
MEASURES IN CASEDELAY OCCURS
PROGRESS MONITORING:EMPLOYERS PURPOSES
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HSKSFIG. 3-5 : PROGRESS MONITORING AN OVERVIEW
DURATIONDURATIONDURATIONDURATION
PROGRESS MONITORING: AN OVERVIEW
SITE PROGRESSSITE PROGRESSSITE PROGRESSSITE PROGRESSMEETINGSMEETINGSMEETINGSMEETINGS
PURPOSEPURPOSEPURPOSEPURPOSE METHODSMETHODSMETHODSMETHODS BASISBASISBASISBASIS
FREQUENCY/FREQUENCY/FREQUENCY/FREQUENCY/NATURE OFNATURE OFNATURE OFNATURE OF
CHECKSCHECKSCHECKSCHECKS
SUBSUBSUBSUB----CONTRACTORSCONTRACTORSCONTRACTORSCONTRACTORS
MEETINGMEETINGMEETINGMEETING
COORDINATION/COORDINATION/COORDINATION/COORDINATION/PROJECTPROJECTPROJECTPROJECT
MANAGEMENTMANAGEMENTMANAGEMENTMANAGEMENTMEETINGSMEETINGSMEETINGSMEETINGS
DURATIONDURATIONDURATIONDURATION
SITESITESITESITEDIARYDIARYDIARYDIARY
OFFICIAL WORKOFFICIAL WORKOFFICIAL WORKOFFICIAL WORKRECORDSRECORDSRECORDSRECORDS
OFFICIALOFFICIALOFFICIALOFFICIALPROGRESSPROGRESSPROGRESSPROGRESSREPORTSREPORTSREPORTSREPORTS
PROGRESSPROGRESSPROGRESSPROGRESSMEETINGSMEETINGSMEETINGSMEETINGS
SITESITESITESITERECORDSRECORDSRECORDSRECORDS
SITESITESITESITEPOSSESSIONPOSSESSIONPOSSESSIONPOSSESSION
MEETINGSMEETINGSMEETINGSMEETINGS
ADADADAD----HOCHOCHOCHOCMEETINGSMEETINGSMEETINGSMEETINGS
PURPOSEPURPOSEPURPOSEPURPOSE METHODSMETHODSMETHODSMETHODS EVIDENTIAL VALUEEVIDENTIAL VALUEEVIDENTIAL VALUEEVIDENTIAL VALUE
PARTIESPARTIESPARTIESPARTIESRESPONSIBLERESPONSIBLERESPONSIBLERESPONSIBLE
From SitePossession
To Issue of FinalCertificate
Normally up toPractical Completiononly
Use of ContractorsWork Programme
Primary Purposes Secondary Purposes
Employer/ contractadministrator
Contractor
On regular basis Normally monthly
Maybe
i. Weeklyii. Fortnightlyiii. Quarterly, etc.
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FIG. 3-6 : POST CONTRACT AWARD STAGE PRINCIPAL TYPES OF MEETINGS
HSKS
POST CONTRACTAWARD STAGE:
PRINCIPAL TYPESOF MEETINGS
SITE POSSESSIONMEETINGS
MISCELLANEOUSMEETINGS
SUB-CONTRACTORSMEETINGS
COORDINATION/PROJECT
MANAGEMENTMEETINGS
SITE PROGRESSMEETINGS
AD-HOCMEETINGS
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FIG. 3-7 : SITE PROGRESS MEETINGS AN OVERVIEW
HSKS
TIMING
SITE PROGRESS MEETINGS: AN OVERVIEW
ENABLEENABLEENABLEENABLECONTRACTOR TOCONTRACTOR TOCONTRACTOR TOCONTRACTOR TO
PURPOSE ISSUES/MATTERS DEALT MINUTES
PARTICIPANTS
PERMIT WORKPERMIT WORKPERMIT WORKPERMIT WORKPROGRESS TOPROGRESS TOPROGRESS TOPROGRESS TO
MISCELLANEOUSMISCELLANEOUSMISCELLANEOUSMISCELLANEOUS
S.O./ ContractAdministrator
DISTRIBUTION/DISTRIBUTION/DISTRIBUTION/DISTRIBUTION/CIRCULATIONCIRCULATIONCIRCULATIONCIRCULATION
WHOWHOWHOWHOPREPARES?PREPARES?PREPARES?PREPARES?
Officially presentprogress report
Present problemsencountered
Be reviewed onregular basis
Identify areas andcauses of delay
Enable Employer/ C.A. toredress delay caused byhim/them
Keep track of financialprogress/allocation
CONTRACTCONTRACTCONTRACTCONTRACTADMINISTRATORADMINISTRATORADMINISTRATORADMINISTRATOR
MAINMAINMAINMAINCONTRACTORCONTRACTORCONTRACTORCONTRACTOR
CONSULTANTSCONSULTANTSCONSULTANTSCONSULTANTS NSCsNSCsNSCsNSCs EMPLOYEREMPLOYEREMPLOYEREMPLOYER
Chairs Meeting
Main participant
Observers Only
Participants if contractadministrator's assistants/representatives
By invitation only Observer only
To all parties/attendees
Main participant
ONLY SITE ISSUESONLY SITE ISSUESONLY SITE ISSUESONLY SITE ISSUES FINANCIAL ISSUESFINANCIAL ISSUESFINANCIAL ISSUESFINANCIAL ISSUES3333RDRDRDRD PARTYPARTYPARTYPARTY
ISSUES AFFECTINGISSUES AFFECTINGISSUES AFFECTINGISSUES AFFECTINGCONTRACTCONTRACTCONTRACTCONTRACT
MISCELLANEOUSMISCELLANEOUSMISCELLANEOUSMISCELLANEOUSISSUESISSUESISSUESISSUES
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FIG. 3-8 : SUB-CONTRACTORS MEETINGS AN OVERVIEW
HSKS
TIMING
SUB-CONTRACTORS MEETINGS: AN OVERVIEW
TO ENABLE SUBTO ENABLE SUBTO ENABLE SUBTO ENABLE SUB----CONTRACTOR TOCONTRACTOR TOCONTRACTOR TOCONTRACTOR TO
PURPOSE ISSUES/MATTERS DEALT
MINUTES
TO PERMITTO PERMITTO PERMITTO PERMITCONTRACTOR TOCONTRACTOR TOCONTRACTOR TOCONTRACTOR TO
MainContractor
DISTRIBUTION/DISTRIBUTION/DISTRIBUTION/DISTRIBUTION/CIRCULATIONCIRCULATIONCIRCULATIONCIRCULATION
WHOWHOWHOWHOPREPARES?PREPARES?PREPARES?PREPARES?
Officially presentprogress report toContractor
Present problemsencountered
Review NSCs progress,areas of delay, etc.
Identify and sortcoordination problems
CONTRACTORCONTRACTORCONTRACTORCONTRACTOR(MAIN)(MAIN)(MAIN)(MAIN)
NOMINATEDNOMINATEDNOMINATEDNOMINATEDSUBSUBSUBSUB----
CONTRACTORSCONTRACTORSCONTRACTORSCONTRACTORS
DOMESTICDOMESTICDOMESTICDOMESTICSUBSUBSUBSUB----
CONTRACTORSCONTRACTORSCONTRACTORSCONTRACTORS
OTHERSOTHERSOTHERSOTHERS(BY(BY(BY(BY
INVITATIONINVITATIONINVITATIONINVITATION))))
Chairs Meeting Employer
Third Parties
ContractAdministrator
To all parties/attendees
PARTICIPANTS
Usually monthly priorto site meetings
If necessary morefrequently
COORDINATIONCOORDINATIONCOORDINATIONCOORDINATIONMATTERSMATTERSMATTERSMATTERS
SITE PROBLEMSSITE PROBLEMSSITE PROBLEMSSITE PROBLEMS FINANCIAL ISSUESFINANCIAL ISSUESFINANCIAL ISSUESFINANCIAL ISSUES 3333RDRDRDRD PARTY ISSUESPARTY ISSUESPARTY ISSUESPARTY ISSUES MISCELLANEOUSMISCELLANEOUSMISCELLANEOUSMISCELLANEOUS
ISSUESISSUESISSUESISSUES
Design
Site Work
Possession
Access
Security
Payments
V.O.s
Claims
Authorities
Utilities Providers
Others
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FIG. 3-9 : AD-HOC MEETINGS AN OVERVIEW
HSKS
AD-HOC MEETINGS: AN OVERVIEW
AS AND WHENAS AND WHENAS AND WHENAS AND WHENNECESSARY FROMNECESSARY FROMNECESSARY FROMNECESSARY FROM
TIME TO TIMETIME TO TIMETIME TO TIMETIME TO TIME
TIMINGTIMINGTIMINGTIMING PURPOSEPURPOSEPURPOSEPURPOSE
USUALLYUSUALLYUSUALLYUSUALLYDICTATED BYDICTATED BYDICTATED BYDICTATED BY
CIRCUMSTANCESCIRCUMSTANCESCIRCUMSTANCESCIRCUMSTANCES
TO DISCUSSTO DISCUSSTO DISCUSSTO DISCUSSSPECIFIC ISSUES /SPECIFIC ISSUES /SPECIFIC ISSUES /SPECIFIC ISSUES /
MATTERSMATTERSMATTERSMATTERS
EMERGENCYEMERGENCYEMERGENCYEMERGENCYISSUESISSUESISSUESISSUES
FINANCIALFINANCIALFINANCIALFINANCIALISSUESISSUESISSUESISSUES
TECHNICALTECHNICALTECHNICALTECHNICALISSUESISSUESISSUESISSUES
ADMINISTRATIVEADMINISTRATIVEADMINISTRATIVEADMINISTRATIVEMATTERSMATTERSMATTERSMATTERS
Site Issues
Design/ Work Issues
3rd Party Issues
Training
Maintenance
As-Built Records
Payments
V.O.s
Claims
Design
Construction/Installation
Testing andCommissioning
Defects
CONVENORSCONVENORSCONVENORSCONVENORS(AS APPLICABLE)(AS APPLICABLE)(AS APPLICABLE)(AS APPLICABLE)
The Employer
The Contract Administrator
The Contractor
The Sub-Contractors
MISCELLANEOUSMISCELLANEOUSMISCELLANEOUSMISCELLANEOUSISSUESISSUESISSUESISSUES
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FIG. 3-10 : SITE RECORDS AN OVERVIEW
HSKS
DURATIONDURATIONDURATIONDURATION
SITE RECORDS: AN OVERVIEW
PURPOSEPURPOSEPURPOSEPURPOSE METHODSMETHODSMETHODSMETHODS EVIDENTIAL VALUEEVIDENTIAL VALUEEVIDENTIAL VALUEEVIDENTIAL VALUE
From Date of Commencement /Site Possession to
Completion of works
Normally up to PracticalCompletion only
OFFICIALOFFICIALOFFICIALOFFICIALPROGRESSPROGRESSPROGRESSPROGRESS
REPORTREPORTREPORTREPORT
OFFICIAL WORKOFFICIAL WORKOFFICIAL WORKOFFICIAL WORKRECORDSRECORDSRECORDSRECORDS
Contractors Scope
NSCs/DSCs Scope
Extension of Time
Additional Work
Direct loss and/orexpense
Miscellaneous matters
REVIEW WORKREVIEW WORKREVIEW WORKREVIEW WORKPROGRESSPROGRESSPROGRESSPROGRESS
EVALUATEEVALUATEEVALUATEEVALUATECONTRACTORCONTRACTORCONTRACTORCONTRACTORSSSS
CLAIMS TOCLAIMS TOCLAIMS TOCLAIMS TO
PERMITPERMITPERMITPERMITDECISION MAKINGDECISION MAKINGDECISION MAKINGDECISION MAKING
PROVIDE NECESSARYPROVIDE NECESSARYPROVIDE NECESSARYPROVIDE NECESSARYINFORMATION/ EVIDENCEINFORMATION/ EVIDENCEINFORMATION/ EVIDENCEINFORMATION/ EVIDENCE
TOTOTOTOSITE DIARYSITE DIARYSITE DIARYSITE DIARY
DULY SIGNED/DULY SIGNED/DULY SIGNED/DULY SIGNED/ENDORSED RECORDSENDORSED RECORDSENDORSED RECORDSENDORSED RECORDS
ACKNOWLEDGEMENTACKNOWLEDGEMENTACKNOWLEDGEMENTACKNOWLEDGEMENTOF RECEIPT RECORDSOF RECEIPT RECORDSOF RECEIPT RECORDSOF RECEIPT RECORDS
Best evidential value
Some evidential value
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FIG. 3-11 : OFFICIAL WORK RECORDS AN OVERVIEW
HSKS
TIMING OFTIMING OFTIMING OFTIMING OFSUBMISSIONSUBMISSIONSUBMISSIONSUBMISSION
OFFICIAL WORK RECORDS: AN OVERVIEW
RECORD OFRECORD OFRECORD OFRECORD OFSITE INFORMATIONSITE INFORMATIONSITE INFORMATIONSITE INFORMATION
PURPOSEPURPOSEPURPOSEPURPOSE CONTENTSCONTENTSCONTENTSCONTENTS PROCEDURALPROCEDURALPROCEDURALPROCEDURALMATTERSMATTERSMATTERSMATTERS
FOR CONTRACTFOR CONTRACTFOR CONTRACTFOR CONTRACTADMINISTRATIONADMINISTRATIONADMINISTRATIONADMINISTRATION
SIGNING ORSIGNING ORSIGNING ORSIGNING ORENDORSEMENTENDORSEMENTENDORSEMENTENDORSEMENT
TIME OFTIME OFTIME OFTIME OFENTRYENTRYENTRYENTRY
FOR BASISFOR BASISFOR BASISFOR BASISOF OFFICIALOF OFFICIALOF OFFICIALOF OFFICIAL
PROGRESS REPORTPROGRESS REPORTPROGRESS REPORTPROGRESS REPORT
Planned
Undertaken
SAFESAFESAFESAFEKEEPINGKEEPINGKEEPINGKEEPING
DAILYDAILYDAILYDAILY WEEKLYWEEKLYWEEKLYWEEKLY FORTNIGHTLYFORTNIGHTLYFORTNIGHTLYFORTNIGHTLYUSE OFUSE OFUSE OFUSE OF
DESIGNATEDDESIGNATEDDESIGNATEDDESIGNATEDSTAFF FORSTAFF FORSTAFF FORSTAFF FOR
SITE WORK/SITE WORK/SITE WORK/SITE WORK/ACTIVITIESACTIVITIESACTIVITIESACTIVITIES
RECORDRECORDRECORDRECORDOF WORKERSOF WORKERSOF WORKERSOF WORKERS
RECORD OFRECORD OFRECORD OFRECORD OFPLANT/MACHINERPLANT/MACHINERPLANT/MACHINERPLANT/MACHINER
YYYY
WEATHERWEATHERWEATHERWEATHERCONDITIONSCONDITIONSCONDITIONSCONDITIONS
PROBLEMSPROBLEMSPROBLEMSPROBLEMSENCOUNTEREDENCOUNTEREDENCOUNTEREDENCOUNTERED
INSTRUCTIONSINSTRUCTIONSINSTRUCTIONSINSTRUCTIONS MISCELLANEOUSMISCELLANEOUSMISCELLANEOUSMISCELLANEOUS
Skilled
Unskilled
Design
Site
Coordination
Due to 3rd Parties
Received
Carried Out
Outstanding
Site/ FactoryVisits
Inspections
Preparing
Maintaining
Submitting
Daily
By authorizedPerson(s)
S.O/ ContractAdministrator
On site
By S.O./Contractadministrator
Up to lapse ofperiod oflimitation
Affecting work
Delaying siteoperations
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FIG. 3-12 : SITE DIARY AN OVERVIEW
HSKS
NATURENATURENATURENATURE
SITE DIARY: AN OVERVIEW
CONTENTSCONTENTSCONTENTSCONTENTS PROCEDURALPROCEDURALPROCEDURALPROCEDURALMATTERSMATTERSMATTERSMATTERS
Undertaken
PRESENTATIONPRESENTATIONPRESENTATIONPRESENTATIONON REQUEST/ON REQUEST/ON REQUEST/ON REQUEST/
DEMANDDEMANDDEMANDDEMAND
CHECKING /CHECKING /CHECKING /CHECKING /ENDORSEMENTENDORSEMENTENDORSEMENTENDORSEMENT
SAFE KEEPING/SAFE KEEPING/SAFE KEEPING/SAFE KEEPING/CUSTODYCUSTODYCUSTODYCUSTODY
ENTRIES ONENTRIES ONENTRIES ONENTRIES ONDAILY BASISDAILY BASISDAILY BASISDAILY BASIS
SITE WORK/SITE WORK/SITE WORK/SITE WORK/ACTIVITIESACTIVITIESACTIVITIESACTIVITIES
PROBLEMSPROBLEMSPROBLEMSPROBLEMSENCOUNTEREDENCOUNTEREDENCOUNTEREDENCOUNTERED
INSTRUCTIONSINSTRUCTIONSINSTRUCTIONSINSTRUCTIONS RECORD OFRECORD OFRECORD OFRECORD OF MISCELLANEOUSMISCELLANEOUSMISCELLANEOUSMISCELLANEOUS ATTACHMENTSATTACHMENTSATTACHMENTSATTACHMENTS
As to Site Work
Coordination
Site/ factory visits
Weather conditions
Disruption to siteactivities
As-Built sketches,drawings, diagrams,etc.
As-erected/ As-Installed Work/ plant,etc.
By EmployersRepresentative/
Designatedperson
Accuracy ofentries
By S.O./ contractadministrator
Up to lapse ofperiod oflimitation
Preferably kept byeach and every sitepersonnel
Personal record of siteactivities
Otherwise bydesignated sitesupervision teammember
Issued to Contractors
Carried out byContractor
Contractorsdefaults/omissions
DURATIONDURATIONDURATIONDURATION
From commencement ofwork on site untilcompletion
If necessary until the endof the contract
By designatedperson
By Employer/S.O./ any
interested party
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HSKS
SUPERVISION OF WORKS/
CONTRACT ADMINISTRATION
4 0 SUPERVISION OF WORKS/CONTRACT ADMINISTRATION
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4.0 SUPERVISION OF WORKS/CONTRACT ADMINISTRATION
1.01.01.01.0 CONTRACT ADMINISTRATIONCONTRACT ADMINISTRATIONCONTRACT ADMINISTRATIONCONTRACT ADMINISTRATION
PURPOSE
DESIGNATION
ROLES SOURCES OF DUTIES AND POWERS
REPRESENTATIVE/ASSISTANTS
PRINCIPAL DUTIES
LIABILITY
2.02.02.02.0 SUPERVISIONSUPERVISIONSUPERVISIONSUPERVISION
FORMS
DURATION
LEVEL
LIABILITIES
3.03.03.03.0 DISCUSSION OF CASE LAWDISCUSSION OF CASE LAWDISCUSSION OF CASE LAWDISCUSSION OF CASE LAW
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CONTRACTADMINISTRATION:
PRIMARY PURPOSES
FIG. 4-1 : CONTRACT ADMINISTRATION PRIMARY PURPOSES
ENSURE THAT CONTRACTORFULFILLS HIS OBLIGATIONS
UNDER THE CONTRACT
ENSURE THAT EMPLOYERSPOSITION ADEQUATELY
PROTECTED AGAINST VARIOUSCLAIMS
ENSURE WORKS
SATISFACTORILYCOMPLETED WITHINORIGINAL CONTRACT PERIOD
AND PRICE
ENSURE THAT EMPLOYERFULFILLS HIS OBLIGATIONS
UNDER THE CONTRACT
ENSURE THAT NEEDS/OBLIGATIONS OF CONTRACT
ADMINISTRATOR UNDERCONTRACT/STATUTE
ADEQUATELY FULFILLED
ENSURE THAT EMPLOYERFULFILS HIS
STATUTORY/LOCALAUTHORITY REQUIREMENTS
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FIG. 4-2 : CONTRACT ADMINISTRATORS COMMON DESIGNATIONS
HSKS
CONTRACTADMINISTRATORS:
COMMONDESIGNATIONS
SUPERINTENDINGOFFICER/ S.O.
CONSTRUCTIONMANAGER
EMPLOYERSREPRESENTATIVE ENGINEER
ARCHITECTPROJECT DIRECTOR
AS TO
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CONTRACTADMINISTRATOR:RANGE OF ROLES
PERFORMED
WITH EXPRESSAUTHORITY
AS AN AGENTOF THE EMPLOYER
AS AN ADVISORTO THE EMPLOYER
AS AN INDEPENDENTCONTRACTOR
AS AN INDEPENDENT/IMPARTIAL
ADJUDICATOR
WITH IMPLIED/OSTENSIBLEAUTHORITY
WHERE SUCHWORK
IS REQUIREDPOST-
CONTRACT
FOR MAINLY
DESIGN/DETAILING
WORK
AS TO MATTERSOF COST
AS TO OTHERMATTERS
RIGHTS/ DUTIES UNDERTHE CONTRACT
AS TO DISPUTE
RESOLUTIONAS TO
CERTIFICATION
FIG. 4-3 : CONTRACT ADMINISTRATOR RANGE OF ROLES PERFORMED
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CONTRACT ADMINISTRATOR: SOURCES OF DUTIES AND POWERS
TERMS OFREFERENCE OFAPPOINTMENT
IN-HOUSE EMPLOYEE EXTERNAL BODY/PERSON
CONDITIONSOF CONTRACT
BEINGADMINISTERED
CONDITIONSOF
ENGAGEMENT/SERVICES
AGREEMENT
CONDITIONS OFCONTRACT
BEINGADMINISTERED
FIG. 4-4 : CONTRACT ADMINISTRATOR SOURCES OF DUTIES AND POWERS
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FIG. 4-5 : CONTRACT ADMINISTRATORS REPRESENTATIVES/ASSISTANTS - TYPICALEXAMPLES
CONTRACT ADMINISTRATORSREPRESENTATIVES/ ASSISTANTS:
TYPICAL EXAMPLES
ARCHITECT
ELECTRICAL ENGINEER
PROJECT MANAGER STRUCTURAL ENGINEER
SPECIALISTCONSULTANT CIVIL ENGINEER
QUANTITY SURVEYOR MECHANICAL ENGINEER
PROGRESS MONITORINGOVERALL SUPERVISION
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FIG. 4-6: CONTRACT ADMINISTRATORS PRINCIPAL DUTIES FOR TRADITIONAL GENERALCONTRACTS
CONTRACT ADMINISTRATORS PRINCIPAL DUTIES FORTRADITIONAL GENERAL CONTRACTS
OVERSEEING TRAINING OF EMPLOYERSO & M PERSONNEL
ADVISING EMPLOYER
ORDERING VARIATIONS
PARTICIPATING IN PREPARATION OF MIGRATION/FACILITIES MANAGEMENT PLANS CLOSING-OFF CONTRACT
PARTICIPATING IN TESTING AND COMMISSIONING
ISSUING INFORMATION,DRAWINGS, DETAILS, ETC.
ADMINISTRATION OF PAYMENTS
GRANTING APPROVALS, CONSENTS, ETC.
NOMINATING SUB-CONTRACTORS, ETC.
ISSUING RELEVANT INSTRUCTIONS
INSPECTIONS OF WORKS
MONITORING
RECTIFICATION OF DEFECTS
OVERSEEING COMPLETION &HANDING OVER OF WORKS
PREPARING FINAL ACCOUNT
CHECKING AND APPROVING O & M MANUALS &AS-BUILT DRAWINGS
ISSUING NECESSARY REPORTS
MONITORING SERVICING AND MAINTENANCE
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FIG. 4-7 : FORMS OF SUPERVISION COMMON LABELS
FORMS OF SUPERVISION:COMMON LABELS
FULL-TIME SUPERVISION
PART-TIME SUPERVISION
NOMINAL SUPERVISION STANDINGSUPERVISION
PERIODIC SUPERVISION CONSTANT SUPERVISION
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FIG. 4-8 : SUPERVISION/INSPECTIONS OVERVIEW (PART I)
HSKS
TYPICALTYPICALTYPICALTYPICALCLAUSES INCLAUSES INCLAUSES INCLAUSES IN
AGREEMENTSAGREEMENTSAGREEMENTSAGREEMENTS
TYPICALTYPICALTYPICALTYPICALCLAUSES INCLAUSES INCLAUSES INCLAUSES IN
AGREEMENTSAGREEMENTSAGREEMENTSAGREEMENTS
SUPERVISION/INSPECTIONS: OVERVIEW (PART I)
NATURENATURENATURENATUREAND MEANINGAND MEANINGAND MEANINGAND MEANING
NATURENATURENATURENATUREAND MEANINGAND MEANINGAND MEANINGAND MEANING
PURPOSESPURPOSESPURPOSESPURPOSESPURPOSESPURPOSESPURPOSESPURPOSESTYPICALTYPICALTYPICALTYPICAL
PROVISIONS INPROVISIONS INPROVISIONS INPROVISIONS INBYBYBYBY----LAWSLAWSLAWSLAWS
TYPICALTYPICALTYPICALTYPICALPROVISIONS INPROVISIONS INPROVISIONS INPROVISIONS IN
BYBYBYBY----LAWSLAWSLAWSLAWS
Terms used synonymously
See Newey Js definition
Distinction: Inspection imposes alesser duty: William Tompkinsonv St. Michael in the Hamlet.
In absence of express provisionsto contrary courts imply a duty ofsupervision:Alexander Corfield vDavid Grant.
Malaysia: Statutory provisions
necessitate supervision
Building (Federal Territory ofKuala Lumpur) By-Laws 1985:
1. By-Law 6: Supervision of
Works
2. By-Law 23(1): Certificate ForOccupation
By-Law 5(1) City of KualaLumpur (Earthworks) By-Laws1975
Engineers Agreement:
1. Clause 8.1 and 8.7 BEMForm (1999)
Architects Agreement
1. Clause 5(4)(iv) Part II:Architects (Scale ofMinimum Fees)(Amendment) Rules 1992
2. Clause 9 Conditions ofEngagement of Architect
See Keatings definition inBuilding Contracts
Three fold purpose:
1. To ensure contractorcarries out work inaccordance with contract.
2. To enable contractadministrator to dischargehis obligations to employer.
3. To enable contract
administrator to meet hisstatutory obligations
SUPERVISION/INSPECTIONS OVERVIEW (PART II)
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FIG. 4-9 : SUPERVISION/INSPECTIONS OVERVIEW (PART II)
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DURATIONDURATIONDURATIONDURATIONDURATIONDURATIONDURATIONDURATION
SUPERVISION/INSPECTIONS: OVERVIEW (PART II)
RESIDENTRESIDENTRESIDENTRESIDENTSITE STAFFSITE STAFFSITE STAFFSITE STAFFRESIDENTRESIDENTRESIDENTRESIDENT
SITE STAFFSITE STAFFSITE STAFFSITE STAFF LIABILITIESLIABILITIESLIABILITIESLIABILITIESLIABILITIESLIABILITIESLIABILITIESLIABILITIES
LEVEL OFLEVEL OFLEVEL OFLEVEL OFSUPERVISIONSUPERVISIONSUPERVISIONSUPERVISION
REQUIREDREQUIREDREQUIREDREQUIRED
LEVEL OFLEVEL OFLEVEL OFLEVEL OFSUPERVISIONSUPERVISIONSUPERVISIONSUPERVISION
REQUIREDREQUIREDREQUIREDREQUIRED
Necessity for Resident SiteStaff (RSS)
Typical examples:
1. Resident architect/engineer2. Clerk-of-works.3. Other relevant staff
Engagement:
1. By employer; or2. By contract administrator
Powers and duties determinedby engineering/constructioncontract being administeredand/or letter of delegation ofpower.
Responsibilities of:
1. RSS2. Contract Administrator
Determined by:1. Conditions of engagement
2. Applicable statutoryprovisions e.g. By-Laws
Prevailing Forms:
1. Category I: Full-time/Standing/ Constantsupervision
2. Category II: Part-Time/Periodic Supervision
3. Category III: NominalSupervision
Legal Position:
1. Must be reasonable forworks involved
2. Must be sufficient to checkthe important elements
3. Adequate to meet statutoryrequirements
4. Sufficient to meetobligations of engagement
Determining factors:1. Nature of works under
contract
2. Conditions of engagement
Normal periods:
1. Up to issue of PracticalCompletion; or
2. Up to application of certificate
for occupation; or3. Up to issue of Certificate of
Making Good Defects
Common practice is up to issue ofCertificate of Making GoodDefects
Primary responsibility forsupervision: contractors.See East Ham Corp. vBernard Sunley.
Heads of liabilities of contractadministrator for defaults/breaches:
1. Contractual2. In tort3. Statutory
Position of contractadministrators who areprofessional engineers,architects, etc.
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FIG. 4-10 : CONTRACT ADMINISTRATORS LIABILITIES AN OVERVIEW (PART I)
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HEADS OF LIABILITIESHEADS OF LIABILITIESHEADS OF LIABILITIESHEADS OF LIABILITIESHEADS OF LIABILITIESHEADS OF LIABILITIESHEADS OF LIABILITIESHEADS OF LIABILITIES
CONTRACT ADMINISTRATORS LIABILITIES: AN OVERVIEW (PART I)
LEGAL KNOWLEDGELEGAL KNOWLEDGELEGAL KNOWLEDGELEGAL KNOWLEDGEAND PERSONAL DUTYAND PERSONAL DUTYAND PERSONAL DUTYAND PERSONAL DUTYLEGAL KNOWLEDGELEGAL KNOWLEDGELEGAL KNOWLEDGELEGAL KNOWLEDGE
AND PERSONAL DUTYAND PERSONAL DUTYAND PERSONAL DUTYAND PERSONAL DUTY
STANDARD OF CARESTANDARD OF CARESTANDARD OF CARESTANDARD OF CARESTANDARD OF CARESTANDARD OF CARESTANDARD OF CARESTANDARD OF CAREGENERAL POSITIONGENERAL POSITIONGENERAL POSITIONGENERAL POSITIONGENERAL POSITIONGENERAL POSITIONGENERAL POSITIONGENERAL POSITION
General position: Required to haveknowledge of all legal mattersrelating to work being undertaken
Nature of matters.
Consequences of failure
Duty is personal and non-delegable
Action by employer under termsof contract of engagement
If no express terms, implied bylaw
Contract of engagement:
1. Standard forms, or2. Bespoke Forms
Three main categories:1. Contractual2. Tortious3. Statutory
Characteristics:
1. Not distinct/mutually exclusive
2. Concurrent/complementary
3. Choice of option on aggrieved part
CONTRACTUALCONTRACTUALCONTRACTUALCONTRACTUALLIABILITYLIABILITYLIABILITYLIABILITY
CONTRACTUALCONTRACTUALCONTRACTUALCONTRACTUALLIABILITYLIABILITYLIABILITYLIABILITY
Prove no validexpress/implied contractof engagement
If there is such validcontract prove:
1. Contract didnt imposeparticular duty breachof which claimed, or
2. Service actuallyrendered was of thestandard reasonablyexpected under thecircumstances
EFFECT OF BREACHEFFECT OF BREACHEFFECT OF BREACHEFFECT OF BREACHEFFECT OF BREACHEFFECT OF BREACHEFFECT OF BREACHEFFECT OF BREACH
Two options available toemployer:
1. Rescind contract and sue for
damages; or2. Affirm contract and sue for
damages
Right of election of optionbelongs to employer
Duty of care owed to employer
Usually to use reasonable skilland care
Duty and standard of care either:
1. Expressed in contract ofengagement, or
2. Implied by law
DEFENCESDEFENCESDEFENCESDEFENCESDEFENCESDEFENCESDEFENCESDEFENCES
CONTRACT ADMINISTRATORS LIABILITIES: AN OVERVIEW (PART II)
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FIG. 4-11 : CONTRACT ADMINISTRATORS LIABILITIES AN OVERVIEW (PART II)
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TORTIOUS LIABILITYTORTIOUS LIABILITYTORTIOUS LIABILITYTORTIOUS LIABILITY
REASONABLEREASONABLEREASONABLEREASONABLESKILL & CARESKILL & CARESKILL & CARESKILL & CAREDEFINITIONDEFINITIONDEFINITIONDEFINITION
BASICBASICBASICBASICELEMENTSELEMENTSELEMENTSELEMENTS
STANDARDSTANDARDSTANDARDSTANDARD
OF CAREOF CAREOF CAREOF CARE
ESTABLISHINGESTABLISHINGESTABLISHINGESTABLISHINGLIABILITYLIABILITYLIABILITYLIABILITY DEFENCESDEFENCESDEFENCESDEFENCES
LIABILITY TOLIABILITY TOLIABILITY TOLIABILITY TO3333RDRDRDRD PARTIESPARTIESPARTIESPARTIES
Laid down inDonoghue vStevenson
Neighbourhoodprinciple
Important elements:
1. Causation2. Forseeability
D owed P duty ofcare
D breached this duty
Consequence: Psufferedloss/damage
Loss/damagesuffered not remote
CONTRACT ADMINISTRATOR S LIABILITIES: AN OVERVIEW (PART II)
Duty of care in tort of negligence concurrentwith contractual duty: Brown v Boorman
Common Forms:
1. Acts/omissions2. Mis-statements
GENERAL POSITIONGENERAL POSITIONGENERAL POSITIONGENERAL POSITION NEGLIGENCENEGLIGENCENEGLIGENCENEGLIGENCE
Application of theBolam Test
Use of ReasonableMan test
Use by MalaysianCourts
2 Categories:
1. Reasonableskill & care
2. Fitness forpurpose
Criterion: Objective
Less onerous
Use of standardsprevailing at time ofdefault
Proscribe use ofhindsight
See Eckersly vBinnie & Partners
Per Hunter vHenley
1. There is a usualand normalpractice
2. D did not adoptthe practice
3. Practice
adopted by Dwould not beadopted byanotherreasonable D
Need to satisfy all 3element on balanceof probabilities
Only 3 types:
1. Deny existence ofduty of care
2. Prove claim madenot of typecurrentlyrecognized
3. Show service
rendered meetsBolam Test
No immunity to suit:Sutcliffe v Thackrah
Situation per PureEconomic Loss
No liability tocontractor
Possibleexceptions:See Para 5.9B5.
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FIG. 4-12 : CONTRACT ADMINISTRATORS LIABILITIES AN OVERVIEW (PART III)
HSKS
STATUTORY LIABILITYSTATUTORY LIABILITYSTATUTORY LIABILITYSTATUTORY LIABILITYSTATUTORY LIABILITYSTATUTORY LIABILITYSTATUTORY LIABILITYSTATUTORY LIABILITY
For professional contractadministrator
Under specific Acts ofParliament
Possible sanctions:1. Fine2. Suspension3. Cancellation of
registration
Liability under various By-Laws e.g. UBBL, etc.
Penalties/sanctions stipulatedin the By-Laws
PROFESSIONALPROFESSIONALPROFESSIONALPROFESSIONALLIABILITYLIABILITYLIABILITYLIABILITY
PROFESSIONALPROFESSIONALPROFESSIONALPROFESSIONALLIABILITYLIABILITYLIABILITYLIABILITY
CONTRACT ADMINISTRATORS LIABILITIES: AN OVERVIEW (PART III)
Various Acts of Parliamentapplicable
Principal example: S71 Street,Drainage & Building Act 1974
Penalty for mis-supervision, etc.
GENERAL POSITIONGENERAL POSITIONGENERAL POSITIONGENERAL POSITIONGENERAL POSITIONGENERAL POSITIONGENERAL POSITIONGENERAL POSITION DIRECTDIRECTDIRECTDIRECTSTATUTORY LIABILITYSTATUTORY LIABILITYSTATUTORY LIABILITYSTATUTORY LIABILITY
DIRECTDIRECTDIRECTDIRECTSTATUTORY LIABILITYSTATUTORY LIABILITYSTATUTORY LIABILITYSTATUTORY LIABILITY
In addition to Contractual andTortious Liability
Various sub-heads:
1. Direct statutory liability2. Under delegated legislation3. Professional liability
LIABILITIES UNDERLIABILITIES UNDERLIABILITIES UNDERLIABILITIES UNDERDELEGATEDDELEGATEDDELEGATEDDELEGATED
LEGISLATIONLEGISLATIONLEGISLATIONLEGISLATION
LIABILITIES UNDERLIABILITIES UNDERLIABILITIES UNDERLIABILITIES UNDERDELEGATEDDELEGATEDDELEGATEDDELEGATED
LEGISLATIONLEGISLATIONLEGISLATIONLEGISLATION
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PAYMENTS/
COMMERCIAL MATTERS
5.0 PAYMENTS/COMMERCIAL MATTERS
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LEGAL OBLIGATION OF EMPLOYERLEGAL OBLIGATION OF EMPLOYERLEGAL OBLIGATION OF EMPLOYERLEGAL OBLIGATION OF EMPLOYER
PAYMENT TO MAIN CONTRACTOR/TURNKEY CONTRACTORPAYMENT TO MAIN CONTRACTOR/TURNKEY CONTRACTORPAYMENT TO MAIN CONTRACTOR/TURNKEY CONTRACTORPAYMENT TO MAIN CONTRACTOR/TURNKEY CONTRACTOR
PAYMENT TO SUBPAYMENT TO SUBPAYMENT TO SUBPAYMENT TO SUB----CONTRACTORSCONTRACTORSCONTRACTORSCONTRACTORS
BACK TO BACKBACK TO BACKBACK TO BACKBACK TO BACK PAYMENTSPAYMENTSPAYMENTSPAYMENTS
BREACHES IN PAYMENT OBLIGATIONSBREACHES IN PAYMENT OBLIGATIONSBREACHES IN PAYMENT OBLIGATIONSBREACHES IN PAYMENT OBLIGATIONS
RELEVANT CASESRELEVANT CASESRELEVANT CASESRELEVANT CASES
SUTCLIFFE V THACKRAH[1974] 1 ALL ER 319
* CROUDACE LTD. V THE LONDON BOROUGH OF LAMBETH[1986] 33 BLR 20
* GUNUNG BAYU SDN. BHD. V SYARIKAT PEMBINAAN PERLIS SDN. BHD. [1987] 2 MLJ 332
* HAJI ABU KASSIM V TEGAP CONSTRUCTION SDN. BHD. [1981] 2 MLJ 149
* KAH SENG CONSTRUCTION SDN. BHD. V SELSIN DEVELOPMENT SDN. BHD. [1997] 1 CLJ
SUPP 448
* YONG MOK HIN V UNITED MALAY STATES SUGAR INDUSTRIES LTD. [1966] 2 MLJ 286
* JALLCON (M) SDN. BHD. V NIKKON METAL (M) SDN. BHD. (No. 2) [2001] 5 MLJ 716, HC.
HSKS
PROCEDURES AND CONDITIONSPRECEDENT
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PAYMENT: ASPECTS OF CONTRACTORSENTITLEMENTS/EMPLOYERS OBLIGATIONS
TIMING ENFORCEMENT/HONOURING
PRECEDENT
QUANTUM/AMOUNT SET-OFF/DEDUCTIONS
FIG. 5-1: PAYMENTS ASPECTS OF CONTRACTORS ENTITLEMENT/EMPLOYERS OLIGATIONS
TIMING OF PAYMENT TO CONTRACTOR PRINCIPAL SCHEMES/SCHEDULES
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FIG. 5-2 : TIMING OF PAYMENT TO CONTRACTOR PRINCIPAL SCHEMES/SCHEDULES
PERIODIC SCHEDULEPERIODIC SCHEDULEPERIODIC SCHEDULEPERIODIC SCHEDULEDURING CURRENCYDURING CURRENCYDURING CURRENCYDURING CURRENCYOF THE CONTRACTOF THE CONTRACTOF THE CONTRACTOF THE CONTRACT
TIMING OF PAYMENT TO CONTRACTOR: PRINCIPAL SCHEMES/SCHEDULES
STAGES/MILESTONESTAGES/MILESTONESTAGES/MILESTONESTAGES/MILESTONEPAYMENTPAYMENTPAYMENTPAYMENT
ADVANCE PAYMENTADVANCE PAYMENTADVANCE PAYMENTADVANCE PAYMENT
PERIODIC SCHEDULEPERIODIC SCHEDULEPERIODIC SCHEDULEPERIODIC SCHEDULEAFTER COMPLETION/AFTER COMPLETION/AFTER COMPLETION/AFTER COMPLETION/END OF CONTRACTEND OF CONTRACTEND OF CONTRACTEND OF CONTRACT
AFTER COMPLETION/AFTER COMPLETION/AFTER COMPLETION/AFTER COMPLETION/END OF CONTRACTEND OF CONTRACTEND OF CONTRACTEND OF CONTRACT
AFTER ISSUE OFAFTER ISSUE OFAFTER ISSUE OFAFTER ISSUE OFFINAL CERTIFICATEFINAL CERTIFICATEFINAL CERTIFICATEFINAL CERTIFICATE
AFTERAFTERAFTERAFTERISSUE OF CPCISSUE OF CPCISSUE OF CPCISSUE OF CPC
FINANCIALFINANCIALFINANCIALFINANCIALPHYSICAL WORKSPHYSICAL WORKSPHYSICAL WORKSPHYSICAL WORKS
OF WHOLEOF WHOLEOF WHOLEOF WHOLECONTRACT SUMCONTRACT SUMCONTRACT SUMCONTRACT SUM
OF PART OFOF PART OFOF PART OFOF PART OFCONTRACT SUMCONTRACT SUMCONTRACT SUMCONTRACT SUM
AFTER ISSUEAFTER ISSUEAFTER ISSUEAFTER ISSUEOF CPCOF CPCOF CPCOF CPC
AFTER ISSUE OFAFTER ISSUE OFAFTER ISSUE OFAFTER ISSUE OFFINAL CERTIFICATEFINAL CERTIFICATEFINAL CERTIFICATEFINAL CERTIFICATE
MISCELLANEOUS/MISCELLANEOUS/MISCELLANEOUS/MISCELLANEOUS/METHODSMETHODSMETHODSMETHODS
START
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Are they includedin the Project ProceduresManual?
No
Contract administrator to issueformal record of issues agreed
upon by all relevant parties
A
Yes
Contract administrator toresolve all preliminary issues
Have these beensorted- out following award of
contract?
Yes
Yes
Have thesebeen formalized by all the
parties?
No
No
Are the preliminarymatters expressly stipulated
in the contract?
Yes
No
All relevant partiesto take necessary steps to
implement issues
Contract administratorto take necessaryaction forthwith
FIG. 5-3: FLOWCHART ON GENERAL PROCEDURE FOR PROCESSING OF PAYMENTS (PART I)
HSKS
A
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Has heexecuted any physicalwork?
Yes
C
No
Establish if the contractorhas fulfilled his firstpre-condition to payment
Contract administratornot obliged to initiatethe progress payment
Has hedelivered materials to
site?
Yes
Yes
Does the contractcontain an express termthereto?
No
Has the contractorcommenced with the work
under the contract?No
Yes
Prima facie, contractormay be entitled to payment
Establish if it is necessaryfor the contractor to apply for
the required payment
Contractor notentitled to any
payment
D
No
B
FIG. 5-4: FLOWCHART ON GENERAL PROCEDURE FOR PROCESSING OF PAYMENTS (PART II)
HSKS
DCB
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GE F
Has themethod for valuation been
confirmed?
Yes
Have theparties involved been
identified?
Yes
Yes
Have therelevant pre-conditions beenfulfilled?
Yes
Contract administrator to proceedwith the next stage i.e. valuation
Has thedate of valuation been
reached?
Yes
Is it mandatory?
No Contractor maynot be entitled topayment untilhe satisfies
pre-conditions
Hascontractor complied with
requirements?
Yes
No
Contractor notobliged to apply
NoDeficiencies/omissionsto be addressed
forthwith to enableprocess to continue
Contract administratorobliged to initiate
process on his ownvolition
No
No Prima facie, valuation
may not be initiateduntil achievementof necessaryrequirements
No
FIG. 5-5: FLOWCHART ON GENERAL PROCEDURE FOR PROCESSING OF PAYMENTS (PART III)
HSKS
F GE
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IH KJ
Valuation of works to be carried
out jointly by the relevant parties
Valuers to prepare a valuation report
Does thecontractor agree with the valuation?
Does he officiallyregister his protest with
valuers?
Do the valuersconsider the objections
protest?
Do theyagree with the
objections?
Valuers may revise/amendthe valuation as necessary
Valuers to endorse/sign offthe valuation report prepared
Does hesign off the
valuation report?
Valuation deemed to havebeen accepted by the
contractor
Contractor may protest tothe certifier if necessary
Does theContractor
protest to thecertifier?
Yes
Yes
Yes
Yes
Yes
Yes
No
No
No
No
No
No
FIG. 5-6: FLOWCHART ON GENERAL PROCEDURE FOR PROCESSING OF PAYMENTS (PART IV)
HSKS
KJH I
V l ti t t th ith
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M ON
L
Valuation report together withall other necessary documents to
be submitted to the certifier
Certifier to carry out preliminary reviews
Is the valuationreport complete, sufficient and
accurate?
Has thecontractor any valid grounds
for objecting?
Certifier not to considerobjections any further
Is the datefor certification
imminent?
Has the stipulatedminimum value of work been exceeded?
Certifier to proceed with thenecessary certification procedures
Certifier to takeobjections into
consideration beforeundertaking certification
Certifier may exercisehis discretion in
undertaking certification
Should inhis discretion a
certificate beissued?
Certifier to clarify/discuss deficiencies/omissions with the
valuers
Deficiencies/omissions maycompromise the
certification
Certifier has no discretion tocarry out certification
Yes
Yes
Yes
Yes
Yes
No
No
NoNo
No
FIG. 5-7: FLOWCHART ON GENERAL PROCEDURE FOR PROCESSING OF PAYMENTS(PART V)
HSKS
OM L N
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SP TQ
-
R
Is the 1st Interim Certificate due?
Have allthe stipulated pre-conditions been met?
Is thesubsequent Interim Certificate
due?
Have allthe relevant pre-conditions been met?
Certifier to proceed withpreparation of Interim Certificate
Is there astandard form of certificate prescribed?
Has a bespoke form been generated?
Certifier to develop an ad hoc formmeeting the necessary criteria/contents
requirements
Utilize the formunless foundnot suitable
Prima facie,certificate cannot
be issued
Use thestandard formas prescribed
No
No
No
No
No
No
Yes
Yes
Yes
Yes
Yes
Yes
FIG. 5-8: FLOWCHART ON GENERAL PROCEDURE FOR PROCESSING OF PAYMENTS (PART VI)
HSKS
TRP SQ
Certifier to fill in all details
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XU V W
Certifier to fill in all detailscompletely, sufficiently and
correctly in certificate
Are thereany NSCs/Nominated
Suppliers?
Arethere any official
assignees?
Areall procedural requirements met?
Are
all formal requirementsmet?
Is the signatory anauthorized person under the
contract?
Have all therelevant checks for errors,etc. been undertaken?
Certificate may bechallenged as invalid and
unenforceable, if andwhen issued
Amount certifiedfor such partiesto be indicated
separately in certificate
Deficiencies/ errors maycompromise validity ofcertificate
Yes
Yes
Yes
Yes
Yes
Yes
No
No
No
No
No
No
FIG. 5-9: FLOWCHART ON GENERAL PROCEDURE FOR PROCESSING OF PAYMENTS (PART VII)
HSKS
XVU W
C d i i CA to rectify
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ABY AAZ
Contract administrator to
issue relevant certificate
Is there acertification period stipulated
in the contract?
Is certificateissued within the said
period?
Is the recipientof the original copy
stipulated?
Is the certificateissued to the stipulated
person?
Are copiesissued to the relevant
parties?
Is the serviceof certificate formally
evidenced?
Prima facie, employer maybe in breach of contract.
Contractor may takeappropriate action for
employers breach
Contractor tobe furnished with
original copy
CA to rectifydeficiencies/errors
as soon as possible
Certificate to be issuedwithin a reasonable timeof application/ valuation
Default in service mayconstitute a breach of
contract on employers part.To be corrected/ rectifiedforthwith
Relevant parties have aright to demand the
necessary copies fromcontract administrator
No
No
No
No
No
No
Yes
Yes
Yes
Yes
Yes
Yes
FIG. 5-10: FLOWCHART ON GENERAL PROCEDURE FOR PROCESSING OF PAYMENTS (PART VIII)
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ABAAY Z
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-
AFAC AEAD
Establish the specific post-
certification requirements
Do therecipients formally
acknowledge receipt ofdocument?
Is presentationof certificate stipulated in the
contract?
Is there aperiod stipulated for the
presentation?
Is presentationformally effected within this
period?
Does employerformally acknowledges receipt
of the certificate fromcontractor?
Employer to reviewcertificate for validity
Contractormay present
certificate withina reasonable
period of receipt
Omission toacknowledge may
lead to future evidentialproblems
Contract administrator
to procure saidacknowledgements assoon as possible
Delay may postponeemployers obligation to
honour certificate
Omission to acknowledge maylead to future evidential
problems and may affect thehonouring of certificate
Contractor to procuresaid acknowledgement
as soon as possible
No
No
No
No
No
Yes
Yes
Yes
Yes
Yes
FIG. 5-11: FLOWCHART ON GENERAL PROCEDURE FOR PROCESSING OF PAYMENTS (PART IX)
HSKS
AFAEAC AD
Are Employer may challenge
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-
-
there grounds forchallenging validity of
certificate?
Employer to proceed with honouringcertificate issued/ presented (as
applicable)
Are there anyset-offs/deductions to be
made?
Are theseexpressly permitted by the
contract?
Has the
amount certified less the set-offs/ deduction beenestablished?
Has the finalsum due been paid to the
contractor?
Has this been done in thestipulated honouring
period?
STOP
Employer mustpay amountas certified
to the contractor
Employer to determine amount
due before the stipulatedhonouring period lapses
Employer may challengecertificate and refuse to
honour it citing therelevant grounds
Employer culpableof breach of contract.
Contractor to takeappropriate action.
No
No
No
No
No
No
Yes
Yes
Yes
Yes
Yes
Yes
FIG. 5-12: FLOWCHART ON GENERAL PROCEDURE FOR PROCESSING OF PAYMENTS (PART X)
HSKS
RECOVERY OF THE UNPAIDAMOUNT
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DEFAULT IN PAYMENT:TYPICAL CONTRACTUAL
REMEDIES
FIG. 5-13 : DEFAULT IN PAYMENT - TYPICAL CONTRACTUAL REMEDIES
RIGHT TO SUSPEND WORK
MISCELLANEOUSREMEDIES
INTEREST ON THEUNPAID AMOUNT
RIGHT TO DETERMINEEMPLOYMENT UNDER
CONTRACT
RIGHT TO REDUCE RATEOF EXECUTING WORK
CERTIFICATE WRONG ON ITS FACE
CERTIFICATE FUNDAMENTALLY INACCURATE
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INTERIM CERTIFICATES:TYPICAL CHALLENGES
CERTIFICATE FUNDAMENTALLY INACCURATE
CERTIFICATE NOT IN CORRECT FORM
CERTIFICATE ISSUED BY UNAUTHORISED PERSON
CERTIFICATE ISSUED IN UNAUTHORISED MANNER
CERTIFICATE ISSUED OUT OF TIME
CERTIFIER ACTING ULTRA VIRES
CERTIFIER IMPROPERLY PRESSURIZED/INFLUENCED
CERTIFICATE SUBJECT TO FRAUD/COLLUSION
FRAUD, DISHONESTY/FRAUDULENT CONCEALMENT BY CONTRACTOR
MISCELLANEOUS CHALLENGES
FIG. 5-14: INTERIM CERTIFICATES TYPICAL CHALLENGES
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DIRECT PAYMENT BY THEEMPLOYER
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PAYMENT TO SUB-CONTRACTORS:PRINCIPAL METHODS
PAYMENT UPON CERTIFICATION CONTINGENT PAYMENT
FIG. 5-15 : PAYMENT TO SUB-CONTRACTORS PRINICPAL METHODS
-
START
Sub-Contractor (SC) forwards details of amount SC to make fresh submission in the
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A
-
claimed to Main Contractor (MC) officially
Is it withinthe prescribed time
limits?
MC to includeSCs details in his claim
MC to submit consolidated claimto the Contract Administrator (CA)
CA to carry out the necessary valuation
CA to issue interimpayment certificate to MC
Employer to pay certified amount toMC within the Honouring Period
Establish if there is aContingent Payment Type IIclause in the sub-contract
next application
Does theMC accept thesubmission?
YesYes
No
No
FIG. 5-16: FLOWCHART ON GENERAL PROCEDURE FOR TYPE II CONTINGENT PAYMENT (PART I)
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A
Is there No
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STOP
such a clause in thecontract?
Is theperiod for payment
stated?
Does the MCpay the SC within thesaid period?
SC to pursue the remediesavailable under the contract
Are thereany contractual remediesavailable?
Is therean arbitrationagreement?
SC to pursue his commonlaw remedies if necessary
MC may pay SC withina reasonable time of receipt of
monies from the Employer
SC to initiate the contractualremedies as applicable
SC to initiate the Arbitrationprocess if necessary
Yes
Yes
Yes
Yes
Yes
No
No
No
No
No
FIG. 5-17: FLOWCHART ON GENERAL PROCEDURE FOR TYPE II CONTINGENT PAYMENTS(PART II)
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PAYMENT IN PACKAGE DEAL TYPES OF CONTRACTS: AN OVERVIEW
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CONTRACT SUMANALYSIS
CONTRACT SUMANALYSIS
QUANTITIESQUANTITIES MEASUREMENTMEASUREMENT
For Tender Analysis
For Interim Payment
Valuation ofChanges/
Provisional Sums
For any PriceAdjustment
SITUATIONSWHERE USED
SITUATIONSWHERE USED ACCURACYACCURACY
PURPOSEPURPOSE DRAFTINGDRAFTING
Normally byContractor
Samples may begiven by Employer
in EmployersRequirements
ERRORS/OMISSIONS
ERRORS/OMISSIONS PREPARATIONPREPARATION
Contractor responsible
If Employer prepares,risk for errors/omissionsnormally passed on toContractor
EXPRESSPROVISIONS
EXPRESSPROVISIONS
STRUCTURESTRUCTURE
Given in some Formse.g. JCT 98, PWDForm DB/T, etc.
Required for:
1. Overall Works2. Sections or
Phases
GENERALPOSITION
GENERALPOSITION
Effect ofmeasurementexpresslystipulated in
some forms Mostly deals with
patent errors
As based onLump Sum anddue to nature ofcontract
No requirementfor measurement
Changes/V.O.s
UnforeseenConditions
Included in mostStandard Forms
E.g. Clause 55(1) ICE,Clause 13.1(d) FIDIC, etc.
Risk on Contractor
E.g. Clause 55(2) ICEForm
GENERALPOSITION
GENERALPOSITION
Whenever used, effectnot similar to TGC
Are deemed to be onlyestimates
FIG. 5-18 : PAYMENT IN PACKAGE DEAL TYPES OF CONTRACTS: AN OVERVIEW
FINAL AMOUNT TO WHICHCONTRACTOR ENTITLED TO UNDER
THE CONTRACT
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FINAL ACCOUNT: PRINCIPAL CONTENTS
FINAL ADJUSTMENTS TOTHE CONTRACT SUM
FINAL AMOUNT (SET OFFS/DEDUCTIONS) TO WHICH
EMPLOYER ENTITLED TO UNDERTHE CONTRACT
FIG. 5-19 : FINAL ACCOUNT PRINCIPAL CONTENTS
APPROVED VARIATIONSTO THE CONTRACT
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ADJUSTMENT TO THECONTRACT SUM: TYPICAL
HEADS/ITEMS
REMEASUREMENT OFPROVISIONALITEMS/WORK
ADJUSTMENT FOR PRICEFLUCTUATION, ETC.
PERMITTED COSTS FORTESTING, OPENING UP OF
WORK, ETC.
MISCELLANEOUSADJUSTMENTS APPROVED
CONTRACTORS CLAIMS
ADJUSTMENT FOR P.C.SUMS/ PROVISIONAL
SUMS
FEES AND CHARGES FORPERMANENT
CONNECTIONS
FIG. 5-20 : ADJUSTMENT TO THE CONTRACT SUM TYPICAL HEADS/ITEMS
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HSKS
VARIATIONS/CHANGES
6.0 VARIATIONS/CHANGES
WHAT CONSTITUTESWHAT CONSTITUTESWHAT CONSTITUTESWHAT CONSTITUTES VARIATIONS/CHANGESVARIATIONS/CHANGESVARIATIONS/CHANGESVARIATIONS/CHANGES
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WHAT CONSTITUTESWHAT CONSTITUTESWHAT CONSTITUTESWHAT CONSTITUTES VARIATIONS/CHANGESVARIATIONS/CHANGESVARIATIONS/CHANGESVARIATIONS/CHANGES
ISSUES AS TO VALIDITYISSUES AS TO VALIDITYISSUES AS TO VALIDITYISSUES AS TO VALIDITY
PROBLEMS WITH VARIATIONSPROBLEMS WITH VARIATIONSPROBLEMS WITH VARIATIONSPROBLEMS WITH VARIATIONS
INVALID VARIATION ORDERS AND EFFECTSINVALID VARIATION ORDERS AND EFFECTSINVALID VARIATION ORDERS AND EFFECTSINVALID VARIATION ORDERS AND EFFECTS
LIMITATIONS OF VARIATIONSLIMITATIONS OF VARIATIONSLIMITATIONS OF VARIATIONSLIMITATIONS OF VARIATIONS
RELEVANT CASESRELEVANT CASESRELEVANT CASESRELEVANT CASES
* SHARPE V SAN PAULO RAILWAY[1873] L.R. 8 CH. APP. 597
* RE CHITTICK & TAYLOR[1954] 12 WWR 653
* MITSUI CONSTRUCTION CO. LTD. V A.G. OF HONG KONG[1986] 33 BLR 1
* CARR V JA BERRIMAN PTY LTD. [1953] 27 A.L.J.R. 273
* COMMISSIONER FOR MAIN ROADS V REED & STUART PTY LTD. & ANOR[1974] A.L.J.R.461
* SIR LINDSAY PARKINSON & CO. LTD. V COMMISSIONERS OF HIS MAJESTYS WORKSAND PUBLIC BUILDINGS[1950] 1 ALL ER 2008
* ANTARA ELEKTRIK SDN. BHD. V BELL & ORDER BHD[2002] 3 MLJ 321, HC.
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VARIATIONS
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FIG. 6-1: VARIATIONS: OVERVIEW
TYPESFACTORS DETERMINING
A VALID V.O.
OMISSIONADDITION
FORMALITIES
ISSUE BYDESIGNATED
OFFICER
PROCEDURALREQUIREMENTS
EXPRESS CONTRACTCONDITIONSAPPLICABLE
HYBRID
LEGAL NATURE OFPROPOSED CHANGE
APPLICABLECOMMON
LAW RULES
CHANGE TO BE IN RELATIONTO SCOPE OF THE WORK
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CHANGES/VARIATIONS: BASIC ELEMENTS
A CHANGE BEING EFFECTED
SCOPE OF WORK BEINGCHANGED MUST BE AS
EXPRESSLY OR IMPLIEDLY
CONTAINED IN CONTRACTDOCUMENTS
FIG. 6-2 : CHANGES/VARIATIONS BASIC ELEMENTS
INCREASE/DECREASE
QUANTITY OF
WORK
OMIT
WORK
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FIG. 6-3: VARIATIONS - TYPICAL EXAMPLES
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WORK WORK
CHANGEDIMENSIONS OF
WORK
CHANGESEQUENCE OF
WORK
CHANGECHARACTER OF
WORK
CHANGEKIND OF WORK
CHANGE POSITIONOF WORK
CHANGE TIMINGOF WORK
ACTIVITIES
EXECUTEADDITIONAL WORK
OF ANY KIND
VARIATIONS:VARIATIONS:VARIATIONS:VARIATIONS:TYPICALTYPICALTYPICALTYPICAL
EXAMPLESEXAMPLESEXAMPLESEXAMPLES
CHANGE QUALITYOF WORK
CHANGE LEVELSOF WORK
ADDITIONS HYBRID
OMISSIONS
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ACCORDING TO IDENTITY
OF INITIATOR OF CHANGE
ACCORDING TO
CONSEQUENCES/EFFECTOF THE CHANGE
ACCORDING TO NATUREOF THE CHANGE
EMPLOYERCONTRACT
ADMINISTRATORFINANCIAL
CONSIDERATIONSCOMBINATION
OF BOTH
TIME IMPLICATIONS
CONTRACTOR NSC
FIG. 6-4: TYPES OF VARIATIONS MAIN METHODS OF CLASSIFICATION
HSKS
TYPES OF VARIATIONS:
MAIN METHODS OF CLASSIFICATION
CHANGES INEMPLOYERS
REQUIREMENTS
DEFECTIVE
DRAWINGS
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REQUIREMENTS DRAWINGS
WRONG/NEGLIGENT ADVICEFROM CONTRACTADMINISTRATOR
MAL-ADMINISTRATION
OF CONTRACT
DEFECTIVESPECIFICATIONS
CHANGES DUE
TO STATUTORY/LEGISLATIVE
CHANGES
INTEFERENCEBY EMPLOYER
ITEMS
CONSTITUTINGVARIATIONS
DEFECTIVECONTRACT
DOCUMENTS
DIFFERENCESBETWEEN BILLED
AND ACTUALQUANTITIES
FIG. 6-5: ITEMS CONSTITUTING VARIATIONS
WHAT CONSTITUTES VARIATION WORKS
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LEGAL POSITIONLEGAL POSITIONLEGAL POSITIONLEGAL POSITIONLEGAL POSITIONLEGAL POSITIONLEGAL POSITIONLEGAL POSITIONCONTRACTS BASED ONCONTRACTS BASED ONCONTRACTS BASED ONCONTRACTS BASED ON
DRAWINGSDRAWINGSDRAWINGSDRAWINGSAND SPECIFICATIONSAND SPECIFICATIONSAND SPECIFICATIONSAND SPECIFICATIONS
CONTRACTS BASED ONCONTRACTS BASED ONCONTRACTS BASED ONCONTRACTS BASED ONDRAWINGSDRAWINGSDRAWINGSDRAWINGS
AND SPECIFICATIONSAND SPECIFICATIONSAND SPECIFICATIONSAND SPECIFICATIONS
VARIATION TESTVARIATION TESTVARIATION TESTVARIATION TEST
PER RE:PER RE:PER RE:PER RE:CHITTICK & TAYLOR
VARIATION TESTVARIATION TESTVARIATION TESTVARIATION TESTPER RE:PER RE:PER RE:PER RE:
CHITTICK & TAYLOR