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COURSE ON
‘CONTRACT
ADMINISTRATION 101’
DATE: 18TH JUNE 2011
VENUE: TAYLOR'S UNIVERSITY COLLEGE,
LAKESIDE CAMPUS, PJ
PRESENTED BY: IR. HARBANS SINGH K.S.
B.E. (Mech) S'pore, LLB (Hons) London,
CLP, DipICArb, C. Eng, PE.
CONTENTS
1.0 CONSTRUCTION CONTRACTS: INTRODUCTION
2.0 COMMENCEMENT OF CONTRACT AT SITE
3.0 MONITORING OF WORK PROGRESS
4.0 SUPERVISION OF WORKS
5.0 CONTRACT ADMINISTRATION (GENERAL)
© HSKS
© HSKS
CONSTRUCTION
CONTRACTS:
INTRODUCTION
1.0 CONSTRUCTION CONTRACTS: INTRODUCTION
TYPES OF CONTRACTS
1. GENERAL CONTRACTS 2. CONSTRUCTION CONTRACTS
TYPES OF BUILDING CONTRACTS BASED ON PRICING COMMON CONTRACT PROCUREMENT METHODS
1. TRADITIONAL GENERAL CONTRACTS 2. MANAGEMENT TYPES 3. ‘PACKAGE DEAL’ TYPES 4. MISCELLANEOUS METHODS
© HSKS
BASIC CONTRACT PRINCIPLES
1. CONTRACT DEFINITIONS 2. ELEMENTS OF CONTRACT 3. STANDARD FORMS OF CONTRACT 4. BREACH OF CONTRACT: REMEDIES
MISCELLANEOUS ISSUES
© HSKS
FIG. 1-1: GENERAL CONTRACTS - TYPES
SIMPLE
CONTRACTS
SPECIALITY
CONTRACTS
(DEED)
MATERIAL
& LABOUR
CONTRACTS
SUB-SUB
CONTRACTS
INDEPENDENT
CONTRACTS
MATERIAL SUPPLY
CONTRACT
LABOUR
CONTRACT
COLLATERAL
CONTRACTS
ORAL
CONTRACTS
EXPRESS
CONTRACTS
EMPLOYMENT
CONTRACTS
MAIN CONTRACTS
SUB-CONTRACTS
GENERAL
CONTRACTS:
TYPES
© HSKS
© HSKS
CONSTRUCTION CONTRACTS:
TYPES’
PERIODIC
CONTRACT
LUMP SUM
CONTRACT
PARTNERING
PROJECT
MANAGEMENT
CONTRACTS
MANAGEMENT
CONTRACTING
CONSTRUCTION
MANAGEMENT
‘FAST-TRACK’
CONTRACT
TERM
CONTRACT
MEASURE &
VALUE CONTRACTS
TARGET COST
CONTRACT
FEE
CONTRACTING
PACKAGE DEAL
CONTRACT
SERIAL
CONTRACT
VALUE COST
CONTRACT
B.O.T.
CONTRACT
COST REIMBURSEMENT
CONTRACTS
FIG. 1-2 : CONSTRUCTION CONTRACTS - TYPES
© HSKS
FIG. 1-3 : TYPES OF CONTRACTS BASED ON PRICING
TYPE OF CONTRACT
LUMP SUM
CONTRACTS
COST REIMBURSEMENT
CONTRACTS
LUMP SUM
WITH PLAN AND
SPECIFICATION
LUMP SUM
WITH BILLS
OF QUANTITIES
COST PLUS
FIXED FEE
COST PLUS
PERCENTAGE
COST PLUS
FLUCTUATING FEE
TARGET COST
VALUE COST
MESUREMENT
CONTRACTS
BASED ON
APPROXIMATE
QUANTITIES
BASED ON A
SCHEDULE
© HSKS
TRADITIONAL
GENERAL
CONTRACTTING
MANAGEMENT
TYPE
‘TURNKEY’
ENGINEERING, PROCUREMENT,
CONSTRUCTION &
COMMISSIONING
DESIGN & BUILD/ DESIGN &
CONSTRUCT
FAST TRACKING
CONSTRUCTION
MANAGEMENT
MANAGEMENT
CONTRACTING
MISCELLANEOUS
METHODS
PACKAGE
DEAL TYPE
BUILD, OPERATE
& TRANSFER
PARTNERING
COMMON CONTRACT PROCUREMENT METHODS
FIG. 1-4 : COMMON CONTRACT PROCUREMENT METHODS IN USE
FIG. 1-5: ‘TRADITIONAL GENERAL CONTRACTING (TGC) - CONTRACTUAL
RELATIONSHIPS
© HSKS
EMPLOYER
PROFESSIONAL
TEAM - DESIGN AND
CONTRACT ADMINISTRATION
SUPPLIERS
MAIN CONTRACTOR
(MC)
SUB-SUB
CONTRACTORS
1. Architect
2. Engineers - C&S, M&E
3. Quantity Surveyor
4. Other Specialist
SUB-SUB
CONTRACTORS
SUPPLIERS
NOMINATED SUB-
CONTRACTOR (NSC)
DOMESTIC SUB-
CONTRACTOR (DSC)
Key
_______ :
Contractual Link
_ _ _ _ _ :
Responsibility
© HSKS
EMPLOYER
PROFESSIONAL
ADVISORS
SUPPLIERS
D & C CONTRACTOR
SUB-SUB
CONTRACTORS
SUB-SUB
CONTRACTORS
SUPPLIERS
SUB-
CONTRACTOR
SUB-
CONTRACTOR
PROFESSIONAL
TEAM
1. Architect
2. Engineers - C&S, M&E
3. Quantity Surveyor
4. Other Specialist
1. Setting up Employers
Requirements
2. Auditing role during
construction
FIG. 1.6: ‘TURNKEY’ CONTRACTS/DESIGN & CONSTRUCT (D&C) –
CONTRACTUAL RELATIONSHIPS
1. Architect
2. Engineers - C&S, M&E
3. Quantity Surveyor
4. Other Specialist 1. Detailed Design
2. Construction supervision
Key
_______ : Contractual Link
_ _ _ _ _ : Responsibility
© HSKS
FIG. 1.7: MANAGEMENT CONTRACTING (MC) - CONTRACTUAL RELATIONSHIPS
EMPLOYER
PROFESSIONAL
TEAM
TRADE
CONTRACTOR
MANAGEMENT
CONTRACTOR (MC)
TRADE
CONTRACTOR
1. Architect
2. Engineers - C&S, M&E
3. Quantity Surveyor
4. Other Specialist
TRADE
CONTRACTOR
Key
_______ :
Contractual Link _ _ _ _ _ :
Responsibility
FIG. 1-8: CONSTRUCTION MANAGEMENT (CM) - CONTRACTUAL RELATIONSHIPS
© HSKS
EMPLOYER
PROFESSIONAL
TEAM
TRADE
CONTRACTORS
CONSTRUCTION
MANAGER (CM)
TRADE
CONTRACTORS
1. Architect
2. Engineers - C&S, M&E
3. Quantity Surveyor
4. Other Specialist
Key
_______ : Contractual Link _ _ _ _ _ _ : Responsibility
* CONTRACT - DEFINATIONS
1.0 PER 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
2.0 PER SECTION 2(h) MALAYSIAN CONTRACTS ACT 1950 (REV. 1974)
* An agreement
* Enforceable by Law
** CONTRACT - BASIC ELEMENTS
CLEAR + UNQUALIFIED + CONSIDERATION = CONTRACT
OFFER ACCEPTANCE (LEGAL AGREEMENT)
FIG. 1-9: CONTRACT DEFINITIONS
© HSKS
+
+
FIG. 1-10: ELEMENTS OF A VALID / ENFORCEABLE AGREEMENT
FIRM OFFER /
PROPOSAL
UNQUALIFIED
ACCEPTANCE
CONSIDERATION
INTENTION TO CREATE
LEGAL RELATIONS
CERTAINTY OF TERMS
LEGAL CAPACI TY TO
CONTRACT
FREE CONSENT
LAWFUL OBJECT AND
CONSIDERATION
PHYSICAL/LEGAL
POSSIBILITY
VALID / ENFORCEABLE
AGREEMENT
© HSKS
© HSKS
GOVERNMENT/
PUBLIC SECTOR
STANDARD FORMS OF CONTRACT
PRIVATE SECTOR
INTERNATIONAL
CONTRACTS
BUILDING WORKS
1. 203 (2007) - without
quantities
2. 203A (2007) - with quantities
3. 203N (2007) - For NSC
4. 203P (2007) - For Nominated
Suppliers
5. JKR Form For DB (2007
Edn.) For Design&Build
Contracts
1. IEM Conditions
IEM.CE 1/89
IEM.CES 1/90
JKR / PWD
MISCELLANEOUS
1. CIDB Form for Building
Contracts 2000 Edn.
2. Modified JKR/PWD
Forms e.g. LPK, MHA,
etc.
1. FIDIC Conditions
2. ICE Conditions
3. IEEE Conditions
4. IMechE Conditions
5. JCT Conditions
CIVIL ENGINEERING
WORKS
1. PAM 2006 - with quantities
2. PAM 2006 - without quantities
3. PAM NSC 2006
M & E WORKS
1. IEM Conditions
- IEM.ME
1/94
2. TNB Conditions, etc.
FIG. 1-11 : STANDARD FORMS OF CONTRACT
© HSKS
DAMAGES
BREACH OF CONTRACT: REMEDIES
SPECIFIC
PERFORMANCE
INJUNCTIONS
NATURE
STATUTORY
PROVISIONS
Equitable/
Discretionary remedy
Sections 74
and 76 of
Contracts Act
1950
Prohibitory
Mandatory
Interlocutory
‘Quia-Timet’
‘Mareva’
‘Anton Pillar’
APPLICATION
MODE
STATUTORY
PROVISIONS
TYPES
DUTY TO
MITIGATE
General damages
Special damages
Nominal damages
Exemplary damages
Liquidated damages
Unliquidated
damages
Express duty
Kabatasan Timber
Extraction v Chong
Fah Shing
‘Ex-Parte’
‘Inter-Partes’
WHERE REFUSED
WHERE GRANTED
Land transactions
Executionary Contracts
Where actual damage
cannot be ascertained.
Where contract terms uncertain
Delay in bringing action
Evidence of fraud
Where constant court
supervision required
TYPES
Equitable remedy
Principles:
following
American Cyanide
v Ethican
NATURE
Sections 20 and 21 Specific
Relief Act 1950 (Rev. 1974)
FIG. 1-12 : BREACH OF CONTRACT : REMEDIES
© HSKS
COMMENCEMENT OF
CONTRACT AT SITE
2.0 COMMENCEMENT OF CONTRACT AT SITE
APPROACHES IN :
1. TRADITIONAL GENERAL CONTRACTS 2. DESIGN & BUILD / TURNKEY CONTRACTS FORMALITIES
1. CONDITIONS PRECEDENT 2. INSURANCES, PERFORMANCE BONDS, ETC. SITE POSSESSION : MEANING AND EFFECT SUBMITTALS :
1. CONSTRUCTION DRAWINGS 2. SHOP DRAWINGS 3. SAMPLES 4. QA AND QC DOCUMENTS 5. HEALTH AND SAFETY DOCUMENTS 6. METHOD STATEMENTS TEMPORARY WORKS ISSUES FOR ATTENDANCE OF NOMINATED SUB-CONTRACTORS MISCELLANEOUS ISSUES
© HSKS
RELEVANT 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
MLJ 43, HC`
© HSKS
FIG. 2-1: PROTECTION AGAINST CONTRACTOR’S FAILURES – COMMON MECHANISMS
© HSKS
PARENT COMPANY GUARANTEE
LETTER OF AWARENESS
INSURANCE PERFORMANCE BOND
STANDBY LETTER OF CREDIT LETTER OF COMFORT
PROTECTION AGAINST CONTRACTOR’S
FAILURES: COMMON MECHANISMS
FIG. 2-2 : CONTRACTOR’S INSURANCE POLICIES – COMMON TYPES
© HSKS
PUBLIC LIABILITY
INSURANCE
CONTRACTOR’S/
SUPPLIER’S YARD/
WORKSHOP AND
TRANSIT
INSURANCES
ERECTION
ALL RISK
POLICY
WORKMEN’S
COMPENSATION
INSURANCE
MISCELLANEOUS
/SPECIFIC
INSURANCES
CONTRACTOR’S
INSURANCE
POLICIES:
COMMON TYPES
CONTRACTOR’S
ALL RISK
POLICY
FIG. 2-3 : SITE POSSESSION MEETINGS
© HSKS
TIMING
SITE POSSESSION MEETINGS
EXPLANATION
OF CONTRACT
REQUIREMENTS
PURPOSE
MATTERS
DEALT
MINUTES
PARTICIPANTS
On Date of
Commencement of
Contract
Date of Site Possession
INTRODUCTION
OF PROJECT
MEMBERS
HANDOVER
OF VARIOUS
DOCUMENTS
1. All Project
Team Member
LETTER OF
DELEGATION
OF POWERS
SET OUT
PROCEDURES
COVERING
COPY OF
CONTRACT
DOCUMENTS
PRICED COPY
OF B.Q.
SET OF
CONSTRUCTION
DRAWINGS
To officially handover
Possession of Site to the
Contractor
DISTRIBUTION/
CIRCULATION
WHO
PREPARES?
Document Submittals and
Approvals
Sample Submittals and
Approvals
Inspection of Work
Interim Valuations
Claim Procedures
Contract
Administrator
To all parties
FIG. 2-4 : SITE POSSESSION – AN OVERVIEW
© HSKS
PROVISIONS
FOR
SITE POSSESSION: AN OVERVIEW
EXCEPTIONS
TO GENERAL
PRINCIPLE
MEANING
DEGREE
POSTPONEMENT
FAILURE TO GIVE
POSSESSION
In Letter of
Acceptance
Or in
Contract
LATEST LEGAL
POSITION
POSSESSION
ON PIECEMEAL
BASIS?
No
GENERAL
PRINCIPLE
EXPRESS
IMPLIED
If not expressed,
by Law
Freeman & Son v
Hensler
Licence revocable by
Employer at any time
Licence to be free
from any encumbrances
Contractor entitled
to Sole/exclusive
possession
Express Stipulations
Case Law
Sufficient degree
of possession/
access
To execute work
unimpeded
To be able to
perform work
Express contract
stipulations permitting
postponement
GENERAL
LEGAL POSITION
EXCEPTIONS
GENERAL
LEGAL POSITION
EFFECT
Breach of Contract
Entitles Contractor
to rescind Contract.
Contractor entitled
to loss occasioned
Contractor entitled
to EOT if expressly
permitted
contractually
Otherwise, LAD
cannot be imposed
General Position: No
Exceptions:
a) Express
stipulations to
contrary
b) Where Common
Law applies
© HSKS
WORK PROGRAMME
WORKS UNDER CONTRACT: TYPICAL SUBMITTALS
BY CONTRACTOR
HEALTH AND SAFETY
DOCUMENTS
DESIGN AND CALCULATIONS
FOR WORKS UNDER P.C. SUM,
‘PACKAGE DEAL’ TYPE
CONTRACTS, ETC. DRAWINGS I.E. SHOP, FABRICATION,
SETTING OUT, ETC.
MISCELLANOUES REPORTS AND
DOCUMENTS METHOD STATEMENTS
DESIGN AND CALCULATIONS
FOR TEMPORARY WORKS
QA/QC DOCUMENTS
FIG. 2-5: WORKS UNDER CONTRACT – TYPICAL SUBMITTALS BY CONTRACTOR
© HSKS
MONITORING OF
WORK PROGRESS
3.0 MONITORING OF WORK PROGRESS
PROGRAMMING OF WORKS
PARTIES RESPONSIBLE:
1. EMPLOYER
2. MAIN CONTRACTOR
3. CONTRACT ADMINISTRATOR
PROGRESS REPORTS
SITE RECORDS
MEETINGS:
1. SITE POSSESSION
2. PROGRESS/SITE
3. NSC COORDINATION
4. AD-HOC
MISCELLANEOUS ISSUES
© HSKS
RELEVANT 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
WORK
PROGRAMME:
TYPICAL
FORMS
FIG. 3-1 : WORK PROGRAMME - TYPICAL FORMS
© HSKS
‘MICROSOFT
PROJECT’
PROGRAMME SIMPLE BAR
CHART
PROJECT
ACTIVITY
FLOW CHART
WORK
BREAKDOWN
STRUCTURE
GANNT CHART
PROJECT
EVALUATION
REVIEW
TECHNIQUE
PROJECT
NETWORK
CHART
MULTI-LEVEL
PROJECT
SCHEDULING
‘PRIMIVERA’
PROGRAMME
CRITICAL PATH
ANALYSIS
© HSKS
PRINCIPAL ACTIVITIES
IDENTIFICATION OF CRITICAL
ACTIVITIES AND CRITICAL PATH
IMPORTANT MILESTONES
FOR EMPLOYER TO MEET SEQUENCE OF ACTIVITIES
IMPORTANT MILESTONES
FOR CONTRACTOR TO MEET TIMING OF ACTIVITIES
WORK PROGRAMME:
PRINCIPAL CONTENTS
FIG. 3-2 : WORK PROGRAMME – PRINCIPAL CONTENTS
© HSKS
FIG. 3-3 : WORK PROGRAMME – AN OVERVIEW
RESPONSIBILITY
WORK PROGRAMME: AN OVERVIEW
OPTIONS ON
SUBMISSION
METHOD OF
WORKING
SEQUENCE OF
WORKING
MEANING
FORM
CONTENTS
PURPOSE
PART OF
CONTRACT?
ALTERATION/
REVISION
Express
Provisions
By Implication
Sequence and
Timing of
Activities
Critical
Milestones
FOR CONTRACT
ADMINISTRATOR
FOR
CONTRACTOR
Approval
Rejection
Withholding
of Approval
SUBMITTED AFTER
TENDER AWARD
PART OF TENDER
SUBMISSION?
General
Policies
Mode of
Alternatives /
Revision
Effect of
Alternatives/
Revision
BAR
CHARTS
CRITICAL PATH
ANALYSIS
PERT
PRIMIVERA/
MICROSOFT
‘PROJECT’
MISCELLANEOUS
FIG. 3-4 : PROGRESS MONITORING – EMPLOYER’S PURPOSES
© HSKS
TO LEVY CONTROL OVER
PROGRESS OF THE WORKS
TO TAKE NECESSARY REMEDIAL
MEASURES IF DELAY OCCURS OR IF
EMPLOYER IS AT FAULT
MISCELLANEOUS PURPOSES
TO ENSURE CONTRACT IS
COMPLETED ACCORDING
TO SCHEDULE
TO PLAN AND STREAMLINE
FINANCIAL ARRANGEMENTS
TO OBVIATE DEFAULT
TO WARN CONTRACTOR
TO TAKE REMEDIAL
MEASURES IN CASE
DELAY OCCURS
PROGRESS MONITORING: EMPLOYER’S PURPOSES
© HSKS
FIG. 3-5 : PROGRESS MONITORING – AN OVERVIEW
DURATION
PROGRESS MONITORING: AN OVERVIEW
SITE
PROGRESS
MEETINGS
PURPOSE
METHODS
BASIS
FREQUENCY/
NATURE OF
CHECKS
SUB-
CONTRACTORS
MEETING
COORDINATION/
PROJECT
MANAGEMENT
MEETINGS
DURATION
SITE
DIARY
OFFICIAL WORK
RECORDS
OFFICIAL
PROGRESS
REPORTS
PROGRESS
MEETINGS
SITE
RECORDS
SITE
POSSESSION
MEETINGS
‘AD-HOC’
MEETINGS
PURPOSE
METHODS
EVIDENTIAL VALUE
PARTIES
RESPONSIBLE
From Site
Possession
To Issue of Final
Certificate
Normally up to
Practical
Completion only
Use of
Contractor’s Work
Programme
Primary Purposes
Secondary Purposes
Employer/
contract
administrator
Contractor
On regular basis
Normally ‘monthly’
Maybe
i. Weekly
ii. Fortnightly
iii. Quarterly, etc.
FIG. 3-6 : POST CONTRACT AWARD STAGE – PRINCIPAL TYPES OF MEETINGS
© HSKS
POST CONTRACT AWARD STAGE:
PRINCIPAL TYPES OF MEETINGS
SITE POSSESSION MEETINGS
MISCELLANEOUS MEETINGS
SUB-CONTRACTOR’S MEETINGS
COORDINATION/ PROJECT
MANAGEMENT MEETINGS
SITE PROGRESS MEETINGS
AD-HOC MEETINGS
FIG. 3-7 : SITE PROGRESS MEETINGS – AN OVERVIEW
© HSKS
TIMING
SITE PROGRESS MEETINGS: AN OVERVIEW
ENABLE
CONTRACTOR TO
PURPOSE
ISSUES/
MATTERS DEALT
MINUTES
PARTICIPANTS
PERMIT WORK PROGRESS TO
MISCELLANEOUS
S.O./ Contract Administrator
DISTRIBUTION/ CIRCULATION
WHO PREPARES?
Officially present progress report
Present problems encountered
Be reviewed on regular basis
Identify areas and causes of delay
Enable Employer/ C.A. to redress delay caused by him/them
Keep track of financial progress/allocation
CONTRACT
ADMINISTRATOR
MAIN
CONTRACTOR
CONSULTANTS
NSCs
EMPLOYER
Chairs Meeting
Main participant
Observers Only
Participants if contract administrator's assistants/
representatives
By invitation only
Observer only
To all parties/ attendees
Main participant
ONLY SITE ISSUES
FINANCIAL ISSUES
3RD PARTY ISSUES AFFECTING
CONTRACT
MISCELLANEOUS ISSUES
FIG. 3-8 : SUB-CONTRACTORS MEETINGS – AN OVERVIEW
© HSKS
TIMING
SUB-CONTRACTORS MEETINGS: AN OVERVIEW
TO ENABLE SUB-
CONTRACTOR TO
PURPOSE
ISSUES/
MATTERS DEALT
MINUTES
TO PERMIT
CONTRACTOR TO Main
Contractor
DISTRIBUTION/ CIRCULATION
WHO
PREPARES?
Officially present progress report to Contractor
Present problems encountered
Review NSC’s progress, areas of delay, etc.
Identify and sort coordination problems
CONTRACTOR
(MAIN)
NOMINATED SUB-
CONTRACTORS
DOMESTIC SUB-
CONTRACTORS
OTHERS (BY
INVITATION)
Chairs Meeting
Employer
Third Parties
Contract Administrator
To all parties/ attendees
PARTICIPANTS
Usually monthly prior to site meetings
If necessary more frequently
COORDINATION
MATTERS
SITE PROBLEMS
FINANCIAL ISSUES
3RD PARTY ISSUES
MISCELLANEOUS ISSUES
Design
Site Work
Possession
Access
Security
Payments
V.O.s
Claims
Authorities
Utilities Providers
Others
FIG. 3-9 : ‘AD-HOC’ MEETINGS – AN OVERVIEW
© HSKS
‘AD-HOC’ MEETINGS: AN OVERVIEW
AS AND WHEN
NECESSARY FROM TIME TO TIME
TIMING
PURPOSE
USUALLY
DICTATED BY CIRCUMSTANCES
TO DISCUSS
SPECIFIC ISSUES / MATTERS
EMERGENCY
ISSUES
FINANCIAL
ISSUES
TECHNICAL
ISSUES
ADMINISTRATIVE
MATTERS
Site Issues
Design/ Work Issues
3rd Party Issues
Training
Maintenance
‘As-Built’ Records
Payments
V.O.s
Claims
Design
Construction/Installation
Testing and Commissioning
Defects
CONVENORS (AS APPLICABLE)
The Employer
The Contract Administrator
The Contractor
The Sub-Contractors
MISCELLANEOUS
ISSUES
FIG. 3-10 : SITE RECORDS – AN OVERVIEW
© HSKS
DURATION
SITE RECORDS: AN OVERVIEW
PURPOSE
METHODS
EVIDENTIAL VALUE
From Date of Commencement
/Site Possession to
Completion of works
Normally up to Practical Completion only
OFFICIAL
PROGRESS REPORT
OFFICIAL WORK
RECORDS
Contractor’s Scope
NSC’s/DSC’s Scope
Extension of Time
Additional Work
Direct loss and/or expense
Miscellaneous matters
REVIEW WORK
PROGRESS
EVALUATE
CONTRACTOR’S CLAIMS TO
PERMIT
DECISION MAKING
PROVIDE NECESSARY
INFORMATION/ EVIDENCE TO
SITE DIARY
DULY SIGNED/
ENDORSED RECORDS
ACKNOWLEDGEMENT OF RECEIPT RECORDS
Best evidential value
Some evidential value
FIG. 3-11 : OFFICIAL WORK RECORDS – AN OVERVIEW
© HSKS
TIMING OF
SUBMISSION
OFFICIAL WORK RECORDS: AN OVERVIEW
RECORD OF
SITE INFORMATION
PURPOSE
CONTENTS
PROCEDURAL
MATTERS
FOR CONTRACT
ADMINISTRATION
SIGNING OR
ENDORSEMENT
TIME OF ENTRY
FOR BASIS OF OFFICIAL
PROGRESS REPORT
Planned • Undertaken
SAFE KEEPING
DAILY
WEEKLY
FORTNIGHTLY
USE OF DESIGNATED
STAFF FOR
SITE WORK/ ACTIVITIES
RECORD
OF WORKERS
RECORD OF
PLANT/MACHINERY
WEATHER
CONDITIONS
PROBLEMS
ENCOUNTERED
INSTRUCTIONS
MISCELLANEOUS
Skilled Unskilled
Design
Site
Coordination
Due to 3rd Parties
Received
Carried Out
Outstanding
Site/ Factory Visits
Inspections
Preparing • Maintaining
• Submitting
Daily
By authorized Person(s)
S.O/ Contract Administrator
On site
By S.O./Contract administrator
Up to lapse of period of limitation
Affecting work
Delaying site operations
FIG. 3-12 : SITE DIARY – AN OVERVIEW
© HSKS
NATURE
SITE DIARY: AN OVERVIEW
CONTENTS
PROCEDURAL
MATTERS
Undertaken
PRESENTATION ON REQUEST/ DEMAND
CHECKING /
ENDORSEMENT
SAFE KEEPING/
CUSTODY
ENTRIES ON DAILY BASIS
SITE WORK/ ACTIVITIES
PROBLEMS
ENCOUNTERED
INSTRUCTIONS
RECORD OF
MISCELLANEOUS
ATTACHMENTS
As to Site Work
Coordination
Site/ factory visits
Weather conditions
Disruption to site activities
‘As-Built’ sketches, drawings, diagrams, etc.
‘As-erected’/ ‘As-Installed’ Work/ plant, etc.
By Employer’s Representative/ Designated person
Accuracy of entries
By S.O./ contract administrator
Up to lapse of
period of limitation
Preferably kept by each and every site personnel
Personal record of site activities
Otherwise by designated site supervision team member
Issued to Contractors
Carried out by Contractor
Contractor’s defaults /omissions
DURATION
From commencement of work on site until completion
If necessary until the end of the contract
By designated person
By Employer/ S.O./ any interested party
© HSKS
SUPERVISION
OF WORKS
© HSKS
4.0 SUPERVISION OF WORKS
PURPOSE FOR:
1. EMPLOYER/CONTRACT ADMINISTRATOR
2. MAIN CONTRACTOR
PARTIES RESPONSIBLE:
1. EMPLOYER
2. CONTRACT ADMINISTRATOR
3. MAIN CONTRACTOR
4. SUB-CONTRACTOR
5. 3RD PARTIES
METHODS
RESPONSIBILITY AND LIABILITY
ROLE OF RESIDENT SITE STAFF (RSS)
MISCELLANEOUS ISSUES
RELEVANT CASES
1. EQUITABLE DEBENTURES ASSETS CORP. LTD. V WILLIAM MOSS GROUP & ORS [1984] 3 CONSTR. LR 1
2. WILLIAM TOMKINSON & SONS V ST. MICHAEL IN THE HAMLET [1991]
Chartered Surveyor Weekly 4 July
3. JAMESON V SIMON [1899] 1 F (Ct. of Sess) 1211: 7 SLT 133
4. SAUNDERS & COLLARD V BROADSTAIRS LOCAL BOARD [1890] HBC
(4th edn) Vol 2, p 164 (DC)
5. EAST HAM CORP. V BERNARD SUNLEY [1965] 3 All ER 619
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FIG. 4-1 : CONTRACT ADMINISTRATORS – COMMON DESIGNATIONS
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CONTRACT
ADMINISTRATORS:
COMMON
DESIGNATIONS
SUPERINTENDING
OFFICER/ S.O. CONSTRUCTION
MANAGER
EMPLOYER’S
REPRESENTATIVE
ENGINEER
ARCHITECT PROJECT
DIRECTOR
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FIG. 4-2 : CONTRACT ADMINISTRATOR’S REPRESENTATIVES/ASSISTANTS - TYPICAL
EXAMPLES
CONTRACT ADMINISTRATOR’S REPRESENTATIVES/
ASSISTANTS: TYPICAL EXAMPLES
ARCHITECT
ELECTRICAL ENGINEER
PROJECT MANAGER STRUCTURAL ENGINEER
SPECIALIST CONSULTANT CIVIL ENGINEER
QUANTITY SURVEYOR MECHANICAL ENGINEER
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FIG. 4-3 : FORMS OF SUPERVISION – COMMON LABELS
FORMS OF SUPERVISION:
COMMON LABELS
FULL-TIME SUPERVISION
PART-TIME SUPERVISION
NOMINAL SUPERVISION STANDING SUPERVISION
PERIODIC SUPERVISION CONSTANT SUPERVISION
FIG. 4-4 : SUPERVISION/INSPECTIONS – OVERVIEW (PART I)
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TYPICAL
CLAUSES IN
AGREEMENTS
SUPERVISION/INSPECTIONS: OVERVIEW (PART I)
NATURE
AND MEANING
PURPOSES
TYPICAL
PROVISIONS IN
BY-LAWS
Terms used synonymously
See Newey J’s definition
Distinction: Inspection
imposes a lesser duty:
William Tompkinson v St.
Michael in the Hamlet.
In absence of express
provisions to contrary courts
imply a duty of supervision:
Alexander Corfield v David
Grant.
Malaysia: Statutory
provisions necessitate
‘supervision’
Building (Federal Territory
of Kuala Lumpur) By-Laws
1985:
1. By-Law 6: Supervision
of Works
2. By-Law 23(1):
Certificate For
Occupation
By-Law 5(1) City of Kuala
Lumpur (Earthworks) By-
Laws 1975
Engineer’s Agreement:
1. Clause 8.1 and 8.7 BEM
Form (1999)
Architect’s Agreement
1. Clause 5(4)(iv) Part II:
Architects (Scale of
Minimum Fees)
(Amendment) Rules
1992
2. Clause 9 Conditions of
Engagement of
Architect
See Keating’s definition in
‘Building Contracts’
Three fold purpose:
1. To ensure contractor
carries out work in
accordance with
contract.
2. To enable contract
administrator to
discharge his
obligations to
employer.
3. To enable contract
administrator to meet
his statutory
obligations
FIG. 4-5 : SUPERVISION/INSPECTIONS – OVERVIEW (PART II)
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DURATION
SUPERVISION/INSPECTIONS: OVERVIEW (PART II)
RESIDENT
SITE STAFF
LIABILITIES
LEVEL OF SUPERVISION
REQUIRED
Necessity for Resident Site Staff (RSS)
Typical examples:
1. Resident architect/engineer
2. Clerk-of-works. 3. Other relevant staff
Engagement:
1. By employer; or 2. By contract
administrator
Powers and duties determined by engineering/construction contract being administered and/or letter of delegation of power.
Responsibilities of:
1. RSS 2. Contract Administrator
Determined by:
1. Conditions of engagement
2. Applicable statutory provisions e.g. By-Laws
Prevailing Forms:
1. Category I: Full-time/Standing/ Constant supervision
2. Category II: Part-Time/Periodic Supervision
3. Category III: ‘Nominal’ Supervision
Legal Position:
1. Must be reasonable for works involved
2. Must be sufficient to check the important elements
3. Adequate to meet statutory requirements
4. Sufficient to meet obligations of engagement
Determining factors:
1. Nature of works under contract
2. Conditions of engagement
Normal periods:
1. Up to issue of Practical Completion; or
2. Up to application of certificate for occupation; or
3. Up to issue of Certificate of Making Good Defects
Common practice is up to issue of Certificate of Making Good Defects
Primary responsibility for supervision: contractor’s. See East Ham Corp. v Bernard Sunley.
Heads of liabilities of contract administrator for defaults/ breaches:
1. Contractual 2. In tort 3. Statutory
Position of contract administrators who are professional engineers, architects, etc.
© HSKS
CONTRACT
ADMINISTRATION
(GENERAL)
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5.0 CONTRACT ADMINISTRATION: GENERAL
DEFINITION PURPOSES PRINCIPAL DUTIES: 1. FOR TRADITIONAL GENERAL CONTRACTS 2. FOR DESIGN & BUILD/TURNKEY INFORMATION TO THE CONTRACTOR
ADVICE TO EMPLOYER INSTRUCTIONS TO CONTRACTOR DECISION MAKING FUNCTIONS LIABILITIES MISCELLANEOUS ISSUES RELEVANT CASES 1. CHUAH NGAH CHIN V NG KIE EN [1968] 1 MLJ 267 2. PACIFIC ASSOCIATES INC. V BAXTER [1989] 2 ALL ER 159
3. GUNUNG BAYU SDN. BHD. V SYARIKAT PEMBINAAN PERLIS SDN. BHD. [1987] 2 MLJ 332
4. ALEXANDER CORFIELD V DAVID GRANT [1992] 59 BLR 102 5. PEARSON V DUBLIN CORPORATION [1907] AC 351 6. DAY V OST [1972] 2 NZLR 385 7. PRATT V GEORGE J HILL ASSOCIATES [1987] 38 BLR 25 8. NYE SAUNDERS & PARTNERS V BRISTOW [1987] 37 BLR 92 9. EMS BOWE (M) SDN. BHD. V KFC HOLDINGS (M) BHD & ANOR [1999] 6
CLJ 513 10. SWEE PTE. LTD. V LIM KIAN CHAI [1983] 1 MLJ 353 11. SUTCLIFFE V THACKRAH [1974] 727 (HC) 12. TOKEN CONSTRUCTION CO. LTD. V CHARLTON ESTATES LTD. [1973] 1
BLR 50 13. H. FAIRWEATHER LTD. V ADEN SECURITIES LTD. [1979] 12 BLR 40 14. DR. ABDUL HAMID ABDUL RASHID V JURUSAN MALAYSIA
CONSULTANTS & 4 ORS [1997] 3 MLJ 546 15. STEVEN PHOA CHENG LOON & 72 ORS V HIGHLAND PROPERTIES SDN.
BHD. & 9 ORS [2000] 3 AMR 3567 16. SAMI MOUSAWI-UTAMA SDN. BHD. V KERAJAAN NEGERI SARAWAK
[2004] 2 MLJ 414, CA
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CONTRACT ADMINISTRATION:
PRIMARY PURPOSES
FIG. 5-1 : CONTRACT ADMINISTRATION – PRIMARY PURPOSES
ENSURE THAT CONTRACTOR
FULFILLS HIS OBLIGATIONS
UNDER THE CONTRACT
ENSURE THAT EMPLOYER’S
POSITION ADEQUATELY PROTECTED
AGAINST VARIOUS CLAIMS
ENSURE WORKS SATISFACTORILY
COMPLETED WITHIN ORIGINAL
CONTRACT PERIOD AND PRICE
ENSURE THAT EMPLOYER
FULFILLS HIS OBLIGATIONS
UNDER THE CONTRACT
ENSURE THAT NEEDS/OBLIGATIONS
OF CONTRACT ADMINISTRATOR
UNDER CONTRACT/STATUTE
ADEQUATELY FULFILLED
ENSURE THAT EMPLOYER
FULFILS HIS
STATUTORY/LOCAL
AUTHORITY REQUIREMENTS
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CONTRACT ADMINISTRATOR: RANGE OF ROLES
PERFORMED
WITH EXPRESS
AUTHORITY
AS AN AGENT OF THE EMPLOYER
AS AN ADVISOR TO THE EMPLOYER
AS AN INDEPENDENT CONTRACTOR
AS AN INDEPENDENT/ IMPARTIAL
ADJUDICATOR
WITH IMPLIED/
OSTENSIBLE
AUTHORITY
WHERE SUCH WORK
IS REQUIRED POST-
CONTRACT
FOR MAINLY DESIGN/
DETAILING WORK
AS TO
MATTERS OF COST
AS TO
OTHER MATTERS
AS TO
RIGHTS/ DUTIES UNDER
THE CONTRACT
AS TO DISPUTE
RESOLUTION
AS TO
CERTIFICATION
FIG. 5-2 : CONTRACT ADMINISTRATOR – RANGE OF ROLES PERFORMED
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CONTRACT ADMINISTRATOR: SOURCES OF DUTIES AND POWERS
TERMS OF REFERENCE
OF APPOINTMENT
EXTERNAL BODY/ PERSON
‘IN-HOUSE’ EMPLOYEE
CONDITIONS OF CONTRACT
BEING ADMINISTERED
CONDITIONS OF ENGAGEMENT/
SERVICES AGREEMENT
CONDITIONS OF CONTRACT
BEING ADMINISTERED
FIG. 5-3 : CONTRACT ADMINISTRATOR – SOURCES OF DUTIES AND POWERS
FIG. 5-4 : CONTRACT ADMINISTRATOR’S PRINCIPAL DUTIES FOR TRADITIONAL
GENERAL CONTRACTS
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CONTRACT ADMINISTRATOR’S PRINCIPAL DUTIES FOR TRADITIONAL
GENERAL CONTRACTS
OVERSEEING TRAINING OF EMPLOYER’S O & M PERSONNEL
PROGRESS MONITORING
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
OVERALL SUPERVISION
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
THANK YOU
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