COURSE ON

CONTRACT
ADMINISTRATION 101


DATE: 8
th
SEPTEMBER 2012

VENUE: PAM NORTHERN CHAPTER

PRESENTED BY: AR. DAVID CHEAH MING YEW

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 CONTRACTORS FAILURES COMMON MECHANISMS






HSKS
PARENT COMPANY GUARANTEE
LETTER OF AWARENESS
INSURANCE
PERFORMANCE BOND
STANDBY LETTER OF CREDIT LETTER OF COMFORT

PROTECTION
AGAINST CONTRACTORS
FAILURES:
COMMON MECHANISMS
FIG. 2-2 : CONTRACTORS INSURANCE POLICIES COMMON TYPES
HSKS
PUBLIC LIABILITY
INSURANCE
CONTRACTORS/
SUPPLIERS YARD/
WORKSHOP AND
TRANSIT
INSURANCES
ERECTION
ALL RISK
POLICY
WORKMENS
COMPENSATION
INSURANCE
MISCELLANEOUS
/SPECIFIC
INSURANCES
CONTRACTORS
INSURANCE
POLICIES:
COMMON TYPES
CONTRACTORS
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 EMPLOYERS 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:
EMPLOYERS 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
Contractors 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-CONTRACTORS
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

3
RD
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 NSCs 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

3
RD
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

3
rd
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
Contractors Scope

NSCs/DSCs Scope
Extension of Time

Additional Work

Direct loss and/or
expense

Miscellaneous matters


REVIEW WORK
PROGRESS

EVALUATE
CONTRACTORS
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 3
rd

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 Employers
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

Contractors
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. 3
RD
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




HSKS
FIG. 4-1 : CONTRACT ADMINISTRATORS COMMON DESIGNATIONS
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CONTRACT
ADMINISTRATORS:
COMMON
DESIGNATIONS
SUPERINTENDING
OFFICER/ S.O.
CONSTRUCTION
MANAGER
EMPLOYERS
REPRESENTATIVE

ENGINEER
ARCHITECT
PROJECT
DIRECTOR
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FIG. 4-2 : CONTRACT ADMINISTRATORS REPRESENTATIVES/ASSISTANTS - TYPICAL
EXAMPLES

CONTRACT ADMINISTRATORS
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 Js 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


Engineers Agreement:

1. Clause 8.1 and 8.7 BEM
Form (1999)

Architects 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 Keatings 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: contractors.
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.


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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 EMPLOYERS
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 ADMINISTRATORS PRINCIPAL DUTIES FOR TRADITIONAL
GENERAL CONTRACTS
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CONTRACT ADMINISTRATORS
PRINCIPAL DUTIES FOR TRADITIONAL
GENERAL CONTRACTS

OVERSEEING TRAINING OF EMPLOYERS
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
HSKS