Академический Документы
Профессиональный Документы
Культура Документы
1.0
In construction projects, a project was guaranteed accessed with a valid contract that has
been agreed by the client and contractor. The contract means an agreement between two or
more parties. In construction, usually the contract is between the client and the contractor
which is occurring when contractor accepts the offer from the client.
In contract agreement, the project should be built regarding the payment agreed in a
period of time. If theres any argument, a contract can be controlled by law and it cannot be
solved by consulting. Therefore, all contracts must be based on an agreement although not
all the agreement automatically becomes a contract. Ahmad (2009) after the issuing time all
of the instruction in the document is automatically valid. After the contract is signed, all
conditions of the contract are genuine for the contractor to start the work diligently and
regularly to achieve the required time and quality.
In contrast, all clients demands can be expressed in contract with help from a
consultant as representative to explain the detail of the project that will build. Consultants
especially Quantity Surveyor must study detailed about the client requirements to state in the
contract that will sign by the contractor and client. All skills and experiences are important for
a Quantity Surveyor to make a contract which contains all clients demand for making sure
the contractor understand and responsible on it.
A contract must be made by referring the related standard form as a basis. For
example in government project the contract are formed by referring PWD 203A standard
form meanwhile for private project the contract are formed by referring PAM 2006 standard
form of contract. The purpose of referring the standard form is to avoid parties in contact are
exposed to dispute. If any dispute occurs, the standard form will save the parties because all
conditions in the contractare referring to standard form.
The presence of technology today is very helpful in preparing all the requirements for the
project to runs smoothly. Jett (2014) technology developments have make all that wprks
easier. A contract is a kind of writing deal which has been dealt when a party accepting an
acceptance from another party. Basically a contract exists according to these items:-
1.1
Offerer
According to Contract Act 1950 (Revised 1974) Section 2 (A), an offering is when
somebody makes a suggestion and tell to other people about their intention whether
to organize something in getting an agreement purposes.
1.2
Acceptance
According to Contract Act 1950 (Revised 1974) Section 2 (B), an acceptance is
accepting somebodys suggestion without forcing anyrules. Terms and conditions are
not valid and can not be forced by contract law. Johny (1951) said that when an
acceptance is qualified or when it places additional conditions on the offer, there can
be no contract unless that qualification or the condition is accepted by the other party.
1.3
Consideration
Consideration is an act done by the acceptor. The consideration act normally done by
words and behave.
1.4
Intention
The intention is to make relation between two parties in a kind, honorable and
sincere way without putting out the instruction in the contract.
1.5
Legality
All of the deals between offerer and acceptor can not cross the governments laws. It
is stated in accord to Contract Act 1950 (Semakan 1974)
1.6
1.7
Capability
It is mean bad performance in past time. Mistaken works not follow the deal, across
the validity period is a part of the handicaption.
2.0
2.1
INTRODUCTION
Extension of time means the additional time granted to the contractor to complete the works
beyond the original date of completion. The main obligation of the contractor is to complete
the work within the stipulated time. If the works are not completed within time due to defaults
on the contract or the S.O/ Architech will issue the certificate of non-completion of the
contract, the contractor must continue the work until complete and the contractor will be
charged with Liquidating Ascertain Damages (L.A.D) during the period of delay if the delay is
cause of contractor default. If no completion date specified the contractor must be completed
the work within stipulated time and the employer cannot impose L.A.D for late completion.
Most of building contract contains express provision for the contract period to extend
under certain circumstances. Such provisions are benefits to contractor because he will not
be liable to pay damages for delay during the validity extended time. The time for completion
can only be extended where the contract permits and strictly in accordance with the contract
provision. Justia (1981) said that the contractor may delay damages due to owner-caused
delays the project.
2.2
Based on PWD 203A and PAM 2006, the main categories of defaults for delay in completion
are:
3
The contractor is entitled for EOT but cannot claim for loss and expense.
The burden of such delay is shared by both parties.
The contractors claim for EOT must be based solely the following events:
2.2.1
Force majeure
-
2.2.2
2.2.3
Suspension of work
-
The S.O/ Architech can at any time for whatever reason issue instruction
to stop the work.
2.2.4
2.2.5
For example, removal of materials and work from site, opening for
inspection and etc.
2.2.6
2.2.7
2.2.8
2.2.9
The contractor can claim for EOT if the delay caused by others.
The contractor cannot foresee the problem at the time of closing tender.
Additional provisions regarding events causing of delay in PAM 2006 (with quantities) are:
a) Re-nominated of nominated sub-contractor (Clause 23.8(i))
b) Delay or failure in the supply of materials and good which the employer had agreed
to supply (Clause 23.8(k))
c) Any act of prevention or breach of contract by the employer (Clause 23.8(c))
d) War damage (Clause 23.8(n))
e) Delay caused by any appropriate authority etc (Clause 23.8(q))
f)
g) Failure of the employer to give in due time entry to or exit from the siteetc. (Clause
23.8 (u))
h) Any other ground for EOT expressly stated in the contract.
2.3
Procedures of claim for EOT is stated in both standard form of contract. The procedure
should be used in every occasion that delay occurs. In PWD 203A the provision are put
under Clause 43.1 meanwhile in PAM 2006 (with quantities) are put under Clause 23.1
which are stating if contractors are seeing the delay becoming apparent, he should apply for
EOT to S.O/ Architech. The contractor must give written notice to S.O/ Architech stating the
causes of delay and relevant event with supporting documents to apply EOT. The procedure
as below:-
S.O/ Architech to
estimate lenght of
delay
Contractor can
contest S.O/
Architechs decision
through arbitration)
REGISTERING CLAIMS
PWD 203A (Rev. 2010)
Clause 43.1
The
notice
must
content
sufficient
includes:
a) Causes of delay by stating specified
events.
b) Particular of causes of delay
b) Information to support the claim.
If the contractorfails to submit the notice
c) Particulars of likely effects.
a) The
contractoris
considered
EOT.
The content of claim is all particular for
Clause 23.3
request
contractor
to
to
provide
required
10
2.5
Clause 43.1
Clause 23.4
sufficient:
application
EOT.
If
the
S.O
decides
to
reject
Clause 22.3
the
Certificate
of
Non-
2.6
2.6.1
In this case, the Contractor right was abolished to deduct liquidated damages for the
time before the variation. The Plaintiff claimed that it was entitled to complete 54
weeks from the extension date rather than from the original date, 9 months
previously. The court decided that the Architects should be adhered to giving Plaintiff
18 weeks to complete. The Architect was correct in using the net method for
calculating the time extension.
2.6.2
CA, where the parties had already agreed that if there were two concurrent causes of
delay, one of which was a non-inexcusable event and the other was an inexcusable
event, then the Contractor was entitled to an EOT for the period of delay caused by
the non-inexcusable event, notwithstanding the concurrent effect of the culpable
event.
2.6.3
12
3.0
CERTIFICATE OF PAYMENT
3.1
INTRODUCTION
the
is
approved
In construction, during the project are going on it has two certificates of payment will
be issued to the contractor which is interim payment and final payment. Interim payment will
be paid in term of monthly based on progress work done by contractor after quantity
surveyor (QS) evaluates the contractor work. After QS satisfied with contractor work he will
issue the payment and also will issue certificate of interim payment meanwhile for final
payment is the amount pay for final work.
The contractor is paid according to the agreement signed in the contract form of
PWD 203A or PAM 2006 form and fully tied to the rules in the contract. As an example in the
form of PWD 203A it have been shown that client have to pay an Advance Payment before
the work start. The advance payment is for financial support for the contractor and will be
used as expenses for preliminary works on a project.
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The client will certify the interim payment for each month for the work that have been
done by the contractor. After the project finished, the contractor will be paid the total amount
of the project in the final account.
3.2
INTERIM PAYMENT
Most standard forms of contract state an entitlement on the part of the contractor to interim
payment. These payments assist in the contractors cash flow, but the actual determination
of the contractors entitlement is not made until the final certificate. The interim payments are
therefore sums paid on account of whatever the contractor might eventually be entitled to
recover from the employer. David (2001) described interi payment is reffering to payment
made by instalments, periodically or in stages during the progress of a building contract.
Most standard forms make the issue of a certificate a condition precedent to the contractors
right to payment.
The quantity surveyer will issue the interim certificate to the client before the payment
will be made. It is being provided after the value of the work done and unfabricated material
that have been send on site. Besides, it is used to avoid any problems and argument. That is
the way for the contractor to identify the way on how they been paid by the client.
Quantity surveyor will make the first site valuation not late from a month from site
possession. Other valuation will be made periodically until the end of the contract period.
Work valuation by the contractor is includedpreliminary work and generally. Preliminary work
has to be paid half-yearly at the first and separated by the next months.
14
As an example, if the price put by the contractor for insurance is higher rather than
the actual premium amount paid so it will be paid at the first stage and the rest ofthe money
will be paid progressively in term of monthly.
Besides the valuation of sub-contractor and supplier work is made by the S.O and directly
given to the quantity surveyor to be inserted in the monthly interim valuation before the
submission date of interim valuation to the S.O to be approved. Valuation of construction
material on site will be evaluated and put into monthly interim payment.
Price rate used for unfabricated material have to base on price rate in the contract.
The complete interim certificate must be totally add to the total materials cost at the site
where the amount 75% took in the total amount.
Although interim valuation is made at least once in a month it did not mean this
certification must be brought out once at every each of the interim valuation made. There are
two minimum valuation to valuate the certification:
The value progress and 75% of material values supplied to the site must 10%
of construction work's value before the first interim certification brings out.
The work done been aided by 75% from materials value or material supplied
achieve 25% of themonthly average of construction work scheduled or half of
the minimum value can be brought together. Besides, S.O has no power to
put out any certification if they cannot put the minimum level of interim
payment.
15
3.3
16
Contractor
shall
application
(Clause28.1)
30.1)
at
submit
interim
claim
payment
interval
amount
due
to
the
contractor.
(Clause28.3)
subject
to
any
agreement
between
17
materials
(Clause30.2)
delivered
or
adjacent
to
site.
(Clause28.4)
certificate),
government
will
bond
or
performance
28.6(a) and
(b).
3.4
FINAL PAYMENT
18
and
goods
stated
in.
Final Payment will be made after construction works completed. It will be made as soon as
possible after the contractor fulfill the obligation in the contract includes making good all
defects. All left payment will be paid after the end of construction work and it paid to the
contractor based on final account made by the quantity surveyor.
This final account will calculate together all cost involved in the construction to get
the actual cost for the project. After that the quantity surveyor will make his valuation of the
payment left and not been fully paid by the client like variation order and claim from the
contractor.
Final account and end certificate need to be prepared before 3 months after
certification of the defect liability period. A final certificate will be issued by S.O/ Architect
after he satisfied with the calculation of the final account and approved it. All consultants and
contractor will get a copy of final account. The calculation final account involved are:
Calculation all levelling of total price for variation, contract claim and others.
3.5
Practical
enabling
S.O
prepare
the
final
them
to
make
Final
account.
(Clause 31.1)
accounts(Clause 31.2)
of
the
Certificate
of
20
the
or
S.O
shall
issue
the
Final
Quantity
Surveyor,
agreed
or
on
behalf
Final
made
the
of
the
21
-Not Stated-
by
the
parties
PembinaanLeow Tuck Chui Sdn. Bhd. Vs. DrLeelas Medical Centre Sdn. Bhd. (1995)
In this case, PAM standard form was used as a contract between both
parties. The defendant didnt want to pay the contractor the amount as stated
in the interim certificate. Judge, the Employer cannot deny the amount as
stated in the interim certificate as per evaluated by Quantity Surveyor and
endorsed by Architect even the amount covered for defect works.
The possible ways for Employer to solve this problem:
3.6.2
i)
Ask the Architect to make an updating for the next progress payment.
ii)
If the Architect didnt want to do so, Employer can refer to the Arbitrator.
iii)
Sue Architect.
4.0
STUDENTS ANALYSIS
22
The contractor works are actually must be completed on 30 November 2015 but
contractor fails to complete the works due to variation order of works. Because of that, he
applied for EOT. The consultant replied the contractor application and agreed to grant EOT
to contractor because the event of delay as followed in standard form.
After that, the contractor applies for EOT for the second time. The reason are he
required the extension of time for the purpose of additional work for external works and
landscape work. The contractor must carried out the work immidiately and he must comply
all the instruction given by the S.O in letter of instruction that verifed by the landscape
architect. The contractor must comply all the condition of the standard form of the contract
based on Clause 43.0 (e).
23
Because of this project are not completed yet, the payment is involve only for interim
payment. The progress payment for this project can be refer to Appendix iv. The progress
payment did by Quantity Surveyor of MITG Sdn. Bhd. (QS) is after he go to site and valuate
the contractors works. After he ensure all item that claimed by contractor are done, QS will
issue the Certificate of payment to contractor.
5.0
CONCLUSION
24
Contract Management is a very important item which determine either the project was
successful managed or not to achieve the planning that needed especially to develop our
country. The best managed of contract will show the best result. This contract management
needs all parties to cooperate in realizing the project. It is because each party has their own
functions to work on the project. Especially for quantity surveyor who needs to manage from
beginning until the project was completely done when final account was prepared by QS.
The full knowledge about the contract is important to solve each part of the contract.
Each part of the contract has own functions which it needs all parties especially contractor
about their tasks in proceed the project. The client also needs to take seriously in managing
and follow the contract. Chawla (200) said with this contract or not always blamed when
facing with problems such as overdue to finish the project and payments that important
especially for contractors.
6.0 REFERENCES
25
i)
ii)
2010).
Ahamad Abdullah (2009), Hands Out For PROFESSIONAL PRACTICE II (QSM
609)
Business
Dictionary.com,
Certificate
for
Payment.
Retrieved
http://www.businessdictionary.com/definition/certificate-for-payment.html
iii)
on
at
12
Febuary 2013.
H.L. Chawla (2000), President, Tecknovate Solutions and World Bank Consultant
New
Delhi.
arbitration/20913-
http://www.nbmcw.com/articles/project-managementeffective-contract-management-some-important-issues-and-
iv)
suggestions.html
Jett Catanzaro (2014), Contract Management Survey Reveals Untapped
v)
vi)
vii)
26
Appendix iii
27
Appendix iv
28