16.1 If any time before practical Completion of the Works, the Employer wishes to take possession of the Occupied Part, the Architect shall issues a Certificate of Partial Completion. The Certificate of Partial Completion shall state the Architect;s estimate of the approximate total value of the Occupied Part and for all purposes of Clause 16.0, the value so stated shall be deemed to be the total value of the Occupied Part; and the following shall appy:
16.1(a) within fourteen days from the date on which employer has takaen possession of the oCcupied part, the architect shall issues a certificate of partial completion. Tjhe certificate of partial completion shall state the Architect's estimate of the approximate total value of the Occupied Part and for all purposes of Clause 16.0, the value so stated shall be deemed to be the total value of the Occupied Part:
16.1(b) for the purposes of Clause 15.4, 15.5 and 16.1(f), Practical Completion of the Occupied Part shall be deemed to have occured and the Defects Liability Period in respect of the Occupied Part shall be deemed to have commenced on the date which the Employer has taken possession;
16.1(c) the LD under clause 22.1 shall be reduced by the ratio of the estimated value of the Occupied Part to the Contract Sum;
16.1(d) Upon issuance of the Certificate of Partial Completion, the Architect shall within 14 days issue a certificate to release half the amount of the Retention Fund in the ratio of the estimated value of the Occupied Part to the Contract Sum. The Contractor shall be entitled to payment within the Period of Honouring Certificates. The amount of the Limit of the Retention Fund shall then be reduced by the same amount;
within 14 days release half of Retention Fund in proportion to Occupied Part.
- All events inherent ewith issuance of CPC shall also appy to the Occupied Part. These events shall start and finish earlier compared to other parts. The evenets are DLP, making good, reduce insurance taken, certificates, release of half and later balance of Retention Fund .
16.1(e) when in the opinion of the Architect all Defects in the Occupied Part which he may have required to be made good under CLause 15.4 or 15.5 have been made good, he shall issue a Certificate of Making Good Defect under Clause 15.6 in respect of the Occupied Partl and
16.2 (P) The employer may, without prejudice to any other right and remedies whiuch he may possess under the Contract, eneter and occupy such part of the Works prior to the completion of the while of the works without the consent of the Contractor under clause 16.1 providd always that :
(a) the compeltion of the works has beend elay and CNC has been issued by archtect under clause 22.1
(b) such entry and occupation of the Occupied part can be effected wwithout any disturbance to the progress of the Contractor remaining work .
16.2 Employer can occupy those parts of works completed even if whole works not completed Without Contractor's consent so long as CNC issued and the occupation cause no unreasonable disturbance to the Contractor remaining work
16.3 If the Employersr takes possession of the Occupied Part undr Clause 16.1 or 16.2, the Contractor shall upon the written instruction of the Architect remove his site facilities, construction plant or equipment, materials and goods from the Occupied Part.
Assign,ment and Sub- Contracting
17.1 Other than assigning his right, interest or benefits under the Contract to his financial institution, the Employer shall not without the written consent of the Contractor (such consent shall not be unreasonably delayed or witheld) assign the same to other parties.
Ex: Employer can assign his rights, interest or benefits to his financial institution only. If Employer wants to assign the Contract to other parties he need Contractor's writte consent e.g. Contractor can object if Employer assigns a multi-million projects to a small company.
17.2 Other than assigning any payment due or to become due under the Contract to his financial institution, the Employer shall not without the written consent of the Employer (such consent shall be at the sole discretion of the Employer ) assign his rights, interests or benefits under the Contract to other parties.
Ex: Cntractor can olny assign payment due to fiannce institution. To assign his rights, contractor need Employer written consent, Contract allows Contractor to assign interim payments as repayments if loan taken from banki as startup capital for Contract. The Contractor's liability to the Contract remains. To assign to others is not permitted.
17.3 Except where otherwise provided by the Contract, the Contractor shall not wholly or substantially sub-contract the works. Where the Contractor sub-contract labour only of crafsmen, skilled or semi-skilled workmen to caryr out any portion of the works, this shall not constiutute sub-contracting within the meaning of this clause.
17.3 Contractor cannot sub-contract works. Sub-contracting labour of craftsmen, skilled or semi-skilled workmen is acceptable .
- It is normal to sub-contrat much of the works in the industry nowadayus .
- the assigned parties are dscs to Contractor.
18.0 Injury To Person or Loass and / Or damage of property and Indemnity To Employer
- Contractor;s indemnity to Employer
18.1 The contractor shall be laible for and shall indemnify the Employer against any damage, expense, liability, loss, claim or proceedings whatsoever whether arising at common law or by statute in respect of personal injury to or death of any person arising out of or in the course of or caused by the carrying out of the Works and provided always that the same is due to any negligence, omission, default and / or breach of contract by the Contractor or of any person for whom the Contractor is responsible .
18.1 Ex: Contractor indemnity Employer against injury or death to any person as a result of Contractor's fault.
18.2 The Contractor shall be liable for and shall indemnify the Employer against any damages, expense, liability , loss, claim or proceeding due to loss and . or damage of any kind whatsover to any property real or personal, including te Works and any other property of the Employer, in so far as such loss and / or damage arises out of or in the course of or by reason of the execution of the Works and provided always that the same is due to any negligence, omission, default and /or breach of contract by the Contractor or of any Person for whom the Contractor is responsible.
Contractor indemnify Employer agains damages to property real / personal due to Contrator's fault .
18.3 The contrator shall be liable for and shall indemnify the Employer against any dmage, expense, liability, loss, claim or proceedings whatsoever arising out of claims by any and every workman employed in and for trhe execution of the Works and for payment of compensation under or by virtue of the Workmen's Compensation Act 1952 and the eMPLOYEES' Social Security Act 1969.
Ex : Contractor indemnifies Employer against claim on WOrkmen's Compensation and SOCSO.
18.4 THe indemnities given by the Contractor under Clause 18.1 to 18.3 shall not be defeated or reduced by reason of any negligence or omission of the Employer, Architect, Consultant or other authorised representatives in failing to supervise or cotrol the Contractor's site operation or methods of working or temporary work to detect or prevent or remedy defective work or to ensure proper performance of any obligation of the Contractor under the Contract.
Ex: Indemnities not be cancelled / reduced due to Employer's or agents' neglect/ failure to find Contractor mistakes which cause accident.
- Clause 37.5 allows Employer to call on Bond when Contractor breaches Contract. Therefore if Contrattor fails to indemnify EMployer, Bond can be utilised.
19.0 Insurance Against Injury To Person And Loss And/ Or Damage of Property
19.1Without prejudice to his liability to indemnify the Employer under Clause 18.0, the Contractor shall, as a condition precedent to the commencement of any work under the contract, take out and maintain in the joint names of the Employer, Contractor, sub-contractor and all interested parties in respect of personal injuries or death and injury or lossand/ or damage of property real or personal arising out of or in the course of or by reason of the execution of the Works and whether or not such injury, death , loss and / r damage is caused by negligence, omission, default and ./ or breach of contract by the Contractor, Employer, sub-contractor and interested parties and any of their servants and agents. Such insurance policy shall provide cover in respect of third party liability for personal injury or death and damage to property for the amounts stated in the Appendix. If the Contractor having regards to his indemnity to the Employer under Clause 18.0 desires to increase any of the injsurance coverage, he shall do so and allow for any additional cost. The insurance policy shall include the following endorsements:
19.1 explanation : Contractor take out insurance from insurance company with automatic extension / renewal before commencement of works, with endorsement of :
19.1 (a) a "cross liability" endorsement to provide insurtance cover to the Employer and Contreactor and any other parties invoilved in the Works as though they are separately insured for their respetive rights and interest;
explanation : Cross liability means it cover accidents not only due to Contractor's carelessness but Employuer;s , COnsultants and their respresentative as well
19.1(b) an endorsement to the effect that the Architect, Consultant and any other professional consultants (* as applicable and their emloyees and respresentatives , Site staff, empoyees and representatives of the Employer , are deemed to be third parties ;
19.1(c) an endorsement for waiver of all expressed or implied rights of subrogation or recoveries against the insured; and
explanation : Insurer to waive his rights to subrogation i.e. entitled to reimbursement by insured parties.
explanation : an endorsement for waiver of all expressed or implied rights of subrogation or recoveries against the insured ; and
19.1(d) an endorsement for automatic extension or renewal of the insurance up to the issuance of the Certificate of Making Good Defects .
19.2 Without prejudice to his liability to indemnify the Employer under Clause 18.0 , the Contractor shall register or cause to regfister all local workmen employed on the Works and who are subject to registration under the Employees' Social Security Scheme ( hereinafter referred to as "SOCSO") in accordance with the
Explanation : Contractor to register and make contribution to SOCSO for all local workmen who are eligible.
- Currently for those whose montly income is RM 3,0000 and below per months.
19.3 WIthout prejudice to his liability to indemnify the Employer under Clause 18,0 , the Contractor shall, as a condition precedent to the commencement of any work under the Contract, take out and maintain in the joint names of the Employer and Contractor and shall cause all sub-contractors to take out and maintain a similar insurance policy for local workmen who are not subject to registration under SOCSO. such insurance policy shall be effected and maintained as necessary to cover all liabilities including common law liability in respect of any claim which may arise in the course of the execution of the Works. The insurance policy shall be valid up to the Completion Date and the extended maintenance cover shall be for the Defects Liability Period plus a further three (3) months . If the Contractor is unable to complete by the COmpletion Date or comlete making food the Defects wthin the insured period, he shall ensure that the insurance is accrodngly extended for the same period of delay. THe Contractor shall effect the said extension of the inssurance cover not less than one months before the expiry of the insurance currently in force.
explanation : Contractor to take out contract workmen's compensation for local workmen not eligible for contribution to SOCSO. Coverage includes DLP plus 3 months.
19.4 Without prejudice to his liability to indemnify the Employer under Clause 18.0, the Contractor shall, as a condition precedent to the commencement of any work under the Contract, take out and maintain in the name of the Contractor and shall cause all sub-contractor to take out and maintain a similar insurance policy for all foreign workers employed on the Works as required by the Workmen;s Compensation Act 1952 and Workmen;s Compensation (Foreign Worker;s Compensation Scheme) (Insurance) order 1998. Such inssurance policy shall be effected and maintained as necessary to cover all liabilities including common law liability in respect of any claim which may arise in the course of the execution of the Works. The insurance policy shall be valid up to the Completion Date and the extended maintenance cover shall be fore the Defects Liability Period plus a further three months. If the Contractor is unable to complete by the Completion Date or complete making good the Defects within the insured period, he shall ensure that the insurance is accordingly extended for the same period of delay. The Contractor shall effect the said extension of the insurnace cover not less than one (1) Month before the expiry of the insurnace currently in force.
Explanation : For foreign workmen, Contractor take out Workmen's Compensation Under Foreign Worker's Compensation Scheme and extends it for period of delay. W.C. be extended by Contractor 1 months before expiry.
20.A Insurance of new building works - by the contractor
20.A.1 Without prejudice to his liability to indemnify the Employer under Clause 18.0, the Contractor shall, as a condition precedent to the commencement of any work under the Contract, take out and maintain in the joint names of the EMployer, Contractor, sub-contractor and all interested parties a CAR Insurance policy for a value not less than the Contract Sum, plus the sum to cover professional fees for reinstatement and the sum to cover the removal of debris all as stated in the Appendix. Unless covered by the standard CAR Insurance policy, the insurance shall have endorsements to cover against loss and / or damage by fire, lightning, explosion, earthquake, volcanism, tsunami, storm, cycloine, flood, unundation, landslide, theft, ground subsidence, existing underground cablees and/ or damage by fire, lightning, explosion, earthquake, volcanism, tsunami, storm, cyclone, flood, inundation, landslide, theft, ground subsidence, existing underground cables and / or pipes or other underground facilities, bursting or overflowing of water tanks, apparatus or pipes, aircraft and other aerial devices or articles drooppped therefrom, stike, riot and civil commotion, malicious damage, trespass, cessation of work whether total or partial, vibration and weakening of support. Unless otherwise insured by the Contractor, the CAR Insurance policy will exclude cover for construction plant, tool and equipment owned or hired by the Contractor or any sub-contractors. The Contractor shall keep such works so insured notwithstanding any arrangement for Sectional Comletion under Clause 21.0 or Partial Possession under Clause 16.0. The insurance policy shall be valid up to the Completion Date and the extended maintenance cover shall be for the Defects Liability Period plus a further three (3) Months. If the Contractor is unable to complete by the Completion Date or complete making good the Defects within the insured period, he shall ensure that the insurance is accordingly extended for the same period of delay. The Contractor shall effect the said extension of the insurance cover not less than one (1) Month before the expirty of the insurnace currently in force. Where deductibles are specified in the Appendix or in the insurance policy, the Contractor shall bear the amount of all deductibles. The insurance policy shall also include the endorsement under Clauses 19.1 (a) to (d) .
20.A.1 Xontractor take out Contractor All Risk (CAR) Insurance, in the joint names of all interested parties and also to cover professional fees. CAR be extended for EoT and extension be effected 1 months before expiry.
- This plicy covers perils as listed in Contract plus a sum to cover professional fees for reinstatement usually at 10% of Contract Sum.
- Insurances be extended accordingly when EoT has been granted. On the other hand, Partial Completion or early CPC require proportionate reduction of insurances coverage.
- Architect / Q.S. to check all policies and receipts of premiums paid to ensure the project is properly covered.
- Insurance usually excldes cover for construction plants, tool, equipment owned/ hired by Contractor where required a separate insurance be taken .
20.A.2 Any additional risks or endorsements in addition to those stated in Clause 20.A.1 which may be required to be covered under the CAR Insrance policy shall be specified in the Contract Bills. If the Contractor having regard to his indemnity to the Employer under Clause 18.0, desired to have any additional endorsements to the insurance in addition to the risks specifried, he shall do so at his own cost.
Explanation : Other than risks covered under Clause 20.A.1. additional risks required e.g." vibration cover" for piling need be specified in Contrat Bills. Contractor can cover for additional risks.
20.A.3 The insurance referred to in Clause 20.A shall be plcaed with licensed insurance companies approved by Employer, and the Contractor shall deposit with the Employer the policy and the receipt of premiums paid. If the Contractor makes default in insuring or continuing to insure as aforesaid, the Employer may insure against any risks in respect of which the default has occurred and the amount of premiums and any other cost incurred or paid by the Employer shall be set-off by the Employer under Clause 30.4
Explanation : If Contractor fails to insure or extrend insurance coverage period, Employer have insure and set-off from money to COntractor in next payment certificate.
20.A.4 Upon the occurrence of any loss and / or damage to the Works or unfixed materials and goods prior to Practical COmpletion of the Works from any cause whatsoever, and notwithstanding that settlement of any insurance claims has not been completed, the Contractor shall with due diligence restore, replace ore repair the same, remove and disposeof any debris and proceed with the carryyuing out and completion of the works. All money of and when received from the insurance under this clause hsll be paid in the first place to the Employer. The Employer shall retain the amount paid by the insurnace companies in respect of professional fees for reinstatement and pay the balance to the Contractor and / or Nominated Sub- Contractor by installements under separate certificates to be isseud by the Architect. The Contractor shall not be entitled to any adidtional payments in respect of the restoration of the damaged work and replacement of repair of any unficxed materials and goods and the removal and disposal of debris other than the monies received under the aforesaid insurance.
Explanation : Contractor start to restore loss / damage work while wating for insurance payument so long as all necessary investigateion have been compleed .
Insurance money paif to Empoyer who retain portion meant for professional fees and pay abalance to Contractor based on progress of satisfactory restored works certified by Architect up to limit paid by insurnace company.
These certificates are different from the monthly construction progreess interim progress certificates.
If insufficient, COntractor to bear shortfall .
20.BInsurance of New Building / Works - By the Employer
- Even though CL 18 provides for Contractor's indemnity to EMployer in event of accident, payout may be insufficient whjich results in Contractor slow down works. Hence under Cl 20.B, Employer can take insurnace himself and pays premium .
20.B.1 Without prejudice to the Contractor's liability to indemnify the Employer under Clause 18.0, the Employer shall, as a conmdition precedent to the commencement of any work under the Contract, take out and maintain in the joint names of the Employer, Contractor, sub-contractors and al interested parties a CAR insurance policy for a value not less than the Contract Sum, plus the sum to cover professional fees for reinstatement and the sum to cover the removal of debris all as stated in the Appendix. Unless covered by the standard CAR Insurance policy, the insurnace shall have endorsements to cover against loss and / or damage by fire, lightning, explosion, earthquake, volcanism, tsunami, storm, cylioe, flood, inundation, landslide, ground subsiidence, existing underground cables and / or pipes, aircraft and other aerial devices or articles dripped therefrom, stike, riot and civil commotion, malicious damage, trespass, cessation of work whether total or partial, vibration and weakening of support. Unless separately required by the Contractor at his own cost , the CAR Insurance policy will exclide cover for construction plant, tools and equipment owned or hired by the COntractor or any sub-contractor . The employer shall keep such works so insured notwithstanding any arrangement for sectional completion under clause 21.0 or Partial Possession under CLause 16.0. The insurnace policy shall be valid up to the Completion Date and the extended maintenance cover shall be for the Defect Liability Period plus a further 3 months. If the Contractor is unable to complete by Completion Date or complete making good the Defects within the insured period, the Employer shall ensure that the insurance is accordingly extended for the same period of delay. The Employer shall effect the said extension of the insurance cover not less than 1 Month before the expiry of the insurance currently in force. Where deductibles are specified in the Appendix. The insurance policy shall also include the endorsement under Clause 19.1(a) to (d)
- Relatred matters are betwen the Employer and insurance company. In this case, Contractor has more responsibility
- Matters on restorations and insurace money are same as 20.A
20.C Insurance of Existing Building or Extnsion - By the Employer
- Similar to 20.B, only this is for existing building e.g. for extension or renovation and insurance to also cover contenst of building.
Date of Commencement, Postponement and Completion date
- On the Date of Commencement, possession of the Site shall be given to Contractor who shall commence the execution of the works and regulary and diligently proceed with and complete the same on or before the completion Date. In the event there is delay by the Employer in giving possession of the Site to the Contractor, the Architect shall grant an extension of time under clause 23.8(f) . Provided always that the delay in giving possession of the Site does not exceed periodf of Delay stated in the appendix, the Contractr shall not be entitled to determne his own employment under the Contract.
- Employer to give possession of Site to Contractor on Date of Commencement
21.2 Where there are difference Dates of Commencement for section of the works, these shall be stated in the appendix.
21.3 Where there are different Completion Dates for sections of the Works stated in the Contract Documents, the Architect shall issue a Certificate of Sectional Completion when the sections of the Works are Practically Completed. THe provision in the Contract in regard to Practical Completion and the Defects Liability Period under clause 15.0, extension of time under clause 23.0, Liquidated Damage under clause 22.0 and release of rentention Fund under Clause 30.6 shall apply with necessary changes as if each such section was a separate and distinct contract.
\- If Contract has different Completion Dates for Sections, Architect issue Certificates of Sectional Completion. Provisions regarding Practical Completion, DLP, EoT, LD and Retention Fund be treated as if the Sections are separate contracts by themselves.
21.4 The Architect may issue an AI regard to the postponement or suspension of all or any part of the Works to be executed under the Contract for a continuous period not exceeding the Perod of Delay stated in the Appendix. If the insurance is covered by the Contractor under Clause 19.0 and 20.A, the Contractor shall ensure full insurance coverage for the whole period of postponement or suspension or if the insurance is covered by the Employer under Clause 20.B or 20.C, the Employer shall ensure similar insurance coverage.
21.4 A.I on postponement/ suspension of Works not exceeds Period of Delay i.e. 3 months .
* Architect has no power to instruct stop work, only to suspend. Stop Work Order can only be given by local authorities.
22.0 Damages For Non-Completion
22.1 If the Contractor fails to complete the works by the Completion Date, and the Architect is of the opinion that the same ought reasonably so tto have been comleted, the Architect shall issue a Certificate of Non-Completion. Upon the issuance of the Certificate of Non-Com,pletion, the Contractor shall pay or allow to the Employer a sum calculated at the rate stated in the Appendix as Liquidated Damages for the period from the Completion Date tro the date of Practical Completion. The Employer may recover such sum as a debt or maydeduct such sum from any monies due or to becomje due to the Contractor under the Contract or the EMployer may recover such sum from the Performance Bond. The Emplyer shall inform the Contractor in writing of such deduction or such debt due from the Contractor. The imposition of Liquidated Damages by the Employer shall not be taken into account by the Architect in the issuance of payment certific ates and Final Certificate, and is not subject to the set-off procedures under Clause 30.4 and adjudication.
- Architect issue CNC when Contractor cannot complete within contract period. Impose Liquidated Damanges (LD) which amount shall be stated in the appendix . LD be recxovered from monies due to Contractor or performance bond but not be set-off
- LD imposed on calendar day including days of rest but exclude gazetted holiday
22.2 The LD is stated in the Appendix is genuine pre-estimate of the lopss and / or damage which EMployer will suffer in the event that the Contractor is in breach of Clause 21.0 and 22.0 . The parties agrtee that by entering into the contract, the Contractor shall pay to the Employer said amount, if the same becoomes due without the need for the Employer to prove his loss nad/damage unless the contrary is proven by the Contractor
LD is pre-estimate of genuine loss/damage suffers by Employer when completion is delay by the Contractor
- Architect/ Q.S should establish as accurate a value as possible for LD, during tender period based on true losses if non-completion occur e.g. the cost to the Employer to continue renting existing premis, poayment of storage rental to supplier for equipments ordered and delivered especially from overseas, etc. LD amount in Appendix need not be proven to the Contractor under the Contrat. By signing Contract, ontractor deemed agreed with the LD amount. as genuine and pre-estimate and paid the LD amount. However, if the amount is challaged in arbitration / litigation by the Contrtactor, Contractor shal be asked to proved the LD amount is not genuine pre-estimate.
Case law : Judge will ask Contractor to prove LD amount is not genuine , if employher can counter prove LD is higher , then Contractor have to paid higher LD.
22.3 In the event the Architect issues a Certificate of Extension of Time under Clauses 23., 23.9 and 23.10 whic have effect on fixing a Completion Date which is later than the date stated in a Certificate of Non-Completion previosuly issued, such certificate shall have the effect of revoking the Certificate of Non-Completion earlier issued. The Employer shall then revise the amount of Liquidated Damages he is entitled to retain. In the event the amount of Liquidated Damages retained exceeds the amount the Employer is entitled to retain, he shall repay the surplus amount to the Contractor within the Period of Honouring Certificates from the date of the latest Certificater of Extension of TIme. If the Works is not completed by the Completion Date stated in such Certificate of Extension of Time, the Architect shall issue a further Certificate of Non-Completion .
- If Architect graqnts EOT after CNC issued, CNC be automatic revoked, the the Employer should revise the LD accordingly. If the LD have been paid and the amount exceed the revised value, balance will be give back to the Contractr within Period of Hounoring Certificate . If Contractor still cannot complete with EoT, Architect shall issue CNC thereafter.
Extension of TIme
23.1 If the Contractor is of the opinion that the completion of the Works is or will be delayed beuyong the Completion Date by any of the REelevant Events stated in clause 23.8, he may apply for an extension of time provided always that :
* Contractor to apply to Architect for the exztension of time (Eot) with contractually valid reasons that actuall contributed to the delay.
- In granting EoT, Architect should act fairly and not be influenced by Employer or Contractor
- Eot is usually a preluide to Contractor claiming Loss and / or Expense.
23.1(a) the Contractor shall give written notice to the Architect his intention to claim for such extension of time together with an initial estimnate of the extension of time he may require supported with all particulars of the cause of delay. Such notice must be given within twnty eight (28) days from the date of the AI, CAI or the commencement of the Relevant Event, whichever is earlier. The giving of such written notice shall be a condition precedent to an entitlement of extension of time; and
- Contrqdtor to give written notice to Architect within 28 days of Relevant Events, of intetion to claim EoT, with estimate od days and supported by particulars. Without this written notice, Contractor cannot claim or be entitled to EoT later.
- Notice is to allow Architect to reconsider earlier A.I. or to mitigate delay .
23.1(b) within twenty eight (28) days of the end of the cause of delay, the Contractor shall send to the Architect his final claim for extension of time duly supported with all particular to enable the Architect to assess any extension of time to be graned. If the Contractor fails to submit such particulars within the stated time ( or within such longer period as may be agreed in writing by the Architect), it shall be deemed that the Contractor has assessed that such Relevant Event will not delay the completion of the Works beyond the Completion Date.
- within 28 days of end of Relevant Event, Contractor make written claim for EOT with supporting documents to enable Architect to assess.
23.4 When the Contractor has submitted sufficent particulars for the Architect's consideration, the architect shall subject to clause 23.5, 23.6 and 23.9 consider the Contractor;s submission and shall either reject the Contractor's application or issue a Certificate of Extension of Time within siz(6) Weeks from the receipt of sufficient particulars. The Architect may issue the written notice of rejection or the Certificate of Extension of Time before or after the Completion Date.
- Certificate of Extension of Time be isued within 6 weeks ofr Architect having received sufficient particulars from Contractor.
23.5 In assessing the extension of time, the Architect may take into account the following:
- When assessing eot claim, architect shall consider the following :
23.5(a) the effect or extent of any work omitted under the Contract, provided always that the Architect shall not fix a Completion Date earlier than the Completion Date stated in the Appendix; and
- also consider works omitted but EoT given cannot be earlier than orginal contract period.
23.5(b) Any other Relevant Events which in the Architect's opinion will have an effect on the Contractor;s entitlement to an extension of time.
- Other events not specified under CL. 23,8
- e.g. non-hounoring of payment certificate by Employer in which case irrespective whether Contractor applied for EoT on this event, Architect can grant EoT to avoid Contractor determine own employment.
23.6 The Contreactor shall constantly use his best endeavour to prevent or reduce delay in the progress of the Works, and to do all that may reasonably be required to the satisfdaction the Architect to prevent adn reduce delay or further delay in the completion of the Works beyonf the Completion Date.
- Contractor shall try his best to prevent or reduce delay,
e.g. acceleration of the works by working slightly longer hours/ and slightly bigger workforce. Unreasonable to increase drastically. L.A> / Management control working hours.
- If delay caused both Employer and Contractor then Eot Granted but no compensation to Contractor.
Consequences of EOT
- new completion date provided
- No LD be imposed for present time
- May open to claims by Contractors for direct loss and / of expense
- Cannot isue CNC before EoT resolved .
23.8 The folownmg are the relevant event reffered to in caluse 23.0
Force Majeure ( act of god)
eg. Typhoon, include terrorism, epidemics, natural disaster e.g. earthquake, tsunami.
23.8 (b) Exceptionally inclement weather
- based on past 5 year's record, sometime can be more
e.g. snow, heavy thunder storm, etc. Interesting to note whether in future, temperature be considered e.g. heat island effect of KL - bird;s nest .
23.9 Where a Relevant Event occurs after the issuance of the Certificate of Non-Completion, the Architect shall grant extension of time. The extension of time greandted shall be added to the completion Date of the Works or any section of the Works.
- Architect can still grant EoT when Relevant Events occur after issuance of CNC.
- This allow CNC automatically revoked later EoT certificate.
23.10 The Architect may ( but not obliged to ) within 12 weeks after the date of Practical Completion review and fix a Completion Date later than that previously fixed, if in his opinion the fixing of such later Completuioj Date is fair and reasonable having regard to any of the Relevant Events, whether upon reviewing a previous decision or otherwise andwhether or not a Relevant Event has been specifically notified by the Contractor under Clause 23.1 No such final review of extension of time shall result in a decrease in any extension of time already granted by the Architect. In the event the fixing of such later Completion Date affects the amount of Liquidated Damages the Employer is entitled to retain, he shall repay any surplus amount to the Contractor within the Period of Hounoring Certificates.
- Architect can ( but do not have to ) within 12 weeks after issuance of CPC, review EoT previously granted If new EoT result in lesser LD, surplus LD paid by the Contractor shall be refunded.
24.0 Loss and / Or expense Cause by matters affecting the regular progress of the work
24.1 Where the regular progress of the works or any section of the works has been or is likely to be materially affected by any of the matters expressly referred to in Clause 24.3, and the Contractor has incurred or is likely to incur loss and / or expense which could not be reimbursed by a paymenbt made under any other provision in the Contract, the Contractor may make a claim for such loss and / or expense provided always that :
- When delay incur loss and / or expense ( L&E) nmot payuable under other clause to COntractor :
(a) The contractor shall give written notice to Architect of his intention to claium for such loss and expense together with and initial estimate of his claim duly supported with all necessary calculations. Such notice must be given within 28 days from the date of the AI, CAI or the start of the occurrence of the matters referred to in Clause 24.3, whichever is the earlier. The giving of ssuch written notice shall be a condition precedent to any entitlement to loss and / or expense that the Contractor may have under the Contract and / or Common Law ; and
- COntractor writtes to Arechitect of intention to claim L&E allowable under Contrat/ Common law within 28 days of receipt of AI/CAI or matter which incur L&E occur. Failure carry this out, Contrtactor cannot claim later.
- within 28 days after the matters referred to in CLause 24.3 have ended, the Contractor shall send to the Architect and Quantity Surveyor, complete particulars of his claim for loss and/ or expense together with all necessary calculations to substantiate his claims. If the Contractor fails to submit the required particulars within the stated time (or within such longer period as may be agreed in writing by the Architect), it shall be deemed that the Contractor has waived his rights for loss and / or expenses.
- within 28 days of completion of matters, Contractor submits to Architect and Q.S. particulars of claims with calculation. If Contractor fails to do so, he is considered not wanting to claim L&E.
24.2 The COntractor shall keep contemporaneous records of all his claims for loss and . or expense and shall submit all particulars to the Architect. The Architect and Quantiuty Surveyor shall have access to all books, documents, reports, papers or records in the possession, custody to control of the Contractor that are material to the claim and the Contractor shall provide free of charge, a copy each to the Architect and Quantity Surveyor when requested. All such documentrs shall remain available in accordance with this clause until all clais have been resolved. The Contractor shall use hos best endeavour to ensure that all such documents in the possession, custody or control of sub-contractors and/ or suppliers that are material tot he claim are similarly available.
- Contractor keep accurate and orginating records pertaining to all L &E claims and to submit relevant particulars to Architect. Records shall be accessible to Architect and QS.
24.3 The following are the matters referred to in clause 24.1
- Entitlement to L&E only f caused by following matter
(a) delayed or non-issuance of required AI
- e,g, for PC / Provisional SUms, drawings, infor, etc despite Contractor;s application in writing at appropriate time.
(b) Employer delay in giving possession of Site to Contractor .
(c) Ai on postponement or suspension of Works.
(d) delay caused by Employer;'s direct sub-contractor / supplier .
(e) When employer fails or delay to suppl materials if such is the Contract.
(f) opening up of works for inspection /. testing , the cause of requirement to open up not due to Contractor i.e. Contractor have given required notice for inspection before closing up works and nothign was found wrong after opened up .
(g) when employer breaches of Contract
(h) delay due to discovery of antiquities.
(i) appointment of replacement consultants by Employer
(j) compley with AI regarding solving disputes with neighbour if dispute not caused by Contractor
(k) extra works in Provisional Quantity due to such quantity not reasonably accurate.
(l) failure of Employer to give access to Site to Contractor
- e.g. Employer subsequently leased land of access to others.
(n) suspension of works by Contractor due to non-payment by Employer or due to Consultants' suspension of supervision of works instructed by Local Authorities.
(n) suspension of Works by authorities due to fault of Employer or Consultants.
25.0 Determination of Contractor;s Employment By Employer
- Notice of determination is issued by Employer. If Architect issues, he must express in notice that he has been instructed by Employer to do so.
25.1 The Employer may determine the employment of the Contractor if the Contractor defaults in any of the following Contractor's default :
if without valid reasonable cause, he fails to commence the works in accordance with the contract
(a) fails to start works
If without reasoinable cause, he wholly, or substantially suspends the carrying out of the Work before completion
(b) suspends works without contractually valid reasons
if he fails to proceed regularly and or diligently with the Works;
(c) stop work, start and stop again .
if he persistenly refuses or neglects to comply with an AI
(d) persistenly not comply AI.
(e)Assign and sub-contract where not permitted by Contract
if he fails to comply with the provisions in Clause 17.0, or
(f) abondoned works
- If a Contract is determined, it does not means it ceases to apply i.e. it does not come to an end but remain in force. The clauses within can still be enforced. An example is Final Account still has to be prepared and settled
25.2 Upon the occurerence of any default under Clause 25.1 , and if the Employer decides to determine the Contractor;s employment, the Employer or Architect on his behalf shall give to the Contractor notice delivered by hand or by registered post specifying the default. If the Contractor shall continue with such default for 14 days from the receipt of such notice, then the Employer may, within 10 days from the expiry of the said 14 days, by a further writtenn notice deliveed by hand or by registered post, forthwirth determine the employment of the Contractor under the Contract. Provided always that such notice shall not be given unreasonably or vexatiously.
- Procedures to be adhered to by Employer / Architect to proceed with the determination of Contractor employment.
* issue written/ Notice of Default to Contractor, by registered post / hand delivery specifying Contractor;s default.
* Upon receipt of notice , if Contractor continue default for 14 days, Architect can advice Employment to determinate contract within the next 10 days. If Employer decides on determination within this period, then Employer shall write to Contractor by registered post/ hand delivery. Determination is effective on Contractor receiving notification. Should Employer not issues determination notice inside the 10 days, the process required of the 14 and 10 days respectively be repeated.
- If Contractor discontunue default upon receiving warning, then Employer cannot proceed with determination. However, if Contractor repeat the same default after that, no warning letter is required. Employer can straight away issue letter of determination.
25.3 In the event of the COntractor becoming insolvent or making a composition or arrangement with his creditors, or have a winding up order made, or (except for purposes of reconstruction or amalgamation) a resolution for voluntary winding up, or having a liquidator or receiver or manager of his business or udnertaking duly appointed, or having possession taken by or on behalf of the holders of any debentures secured by a floating charge, or of any property com,prised in or subject to the floating charge, the employment of the Contractor shall be forthwith automatically determined.
- When Contractor becomes insolvent, bankrupt, etc. employment of Contractor is immediately automatically determined.
- Contract does not require Contractor to report insolvency, etc. Therefore Employer relies on 3rd party's report e.g. receive who may not do so. Determination may be based on hearsay , risking invalidation .
25.4 In the event that the employment of the Contravctor is determined under clause 25.1 or 25.3, the following shall be the respective rights and duties of the Employer and Contractor :
- Upon determination of Contract
25.4(a) the Contractor shall vacate the Site and return possessionm of the Site to the Employer who may employ and pay other Person to carry out and complete the Works and to make good any defects. Such Person may enter upon the Works and use all temporary buildings, construction plant, tools, materials and goods intended for, delivered to and placed on or adjacent to the Site (except those construction plant that is on hire by the Contractor) and may purchase all materials and goods necessary for the carrying out and the completion of theWorks. The Contractor if so required by the Employer or by the Architect on behalf of the Employer shall within twenty one (21) Days of the date of determination, assign to the Employer the benefit of any agreement for the continuation of the hire of construction plant and equipment already on the Site;
- Constructor stops all construction works, leave and hand Site back to Employer.
- If Contractor refused to leave site, Employer can apply to the courts eviction order/prohibility injunction with determination notice. Police to enforce the order.
- Employer repossesses Site and awards remaining works to another Contractor.
- Employer claims against performance bond . Contractor leave behind all machineries, plant (except hired), quipment, material and temporary buildings for use by the new Contractor.
- Those paid for by Employer, belong to employer. New Contractor can use.
Money receive from the sell - cost of selling = profit will give contractor
- Those unpaid but found useful, new Contractor can purchase. When instructed by Employer/Architect, Contractor to assign within 21 days of determination, agreements of hiring plants, machineries which are already at Site.
25.4 In the event of the Contrtactor becoming insolvent or making a composition or arrangement with his creditors, or have a winding up order made, or (except for purposes of reconstruction or amalgamation) a resolution for voluntary winding up, or having a liquidator or receiver or manager of his business or undertaking duly appointed, or having possession taken by or on behalf of the hlders of any debentures secured by a floating charge, or of any property comprised in or subject tot he floating charge, the employment of the Contractor shall be forthwith automatically determined.
25.4(b)the Contractor if so required by the Employer or Architect, shall within twenty one Days of the date of determination, assign to the Employer without payment the benefit of any agreement for the supply of materials, good and /or for the execution of any work for the purposes of the Contract to the extent that the same is assignable ;
- when required by Employer/ Architect, Contractor shall within 21 days of determination, assign agreements for supply materials, to Employer.
25.4(c) the Contractor when instructed in writing by the Arcvhitect shall remove from the Works any temporary buildings, construction plant, tools, equipment, materials and goods belonging to or hired by him. If within a reasonable time after anyu such instruction has been issued to the Contractor, and he has not complied therewith, then the Employer may without laiblity remove and sell any such property belonging to the Contractor except those are on hire and hold the proceeds less all costs incurred to the credit of the Contractor, and
- When instructed by Architect, Contractor to remove from Site, temporary buildings, plants, tools etc. Failure to remove, these ( except hired) can be removed or sold by Employer.
- Deduct all cost of selling
- Balance be used to set-off with money owed to Employer by Contractor.
-Any remaining money be returned to Contractor
25.4(d) the Contractor shall allow or pay to the Employer all cost incurred to complete the Works including all loss and / or expense suffered by the Employer. Until after the completion of the Works under Clause 25.4(a), the Emloyer shall not be bound by any provision in the Contract to make any further payment to the Contractor, including payments which have been certified but not yet paid when the employment of the Contractor was determined. Upon completion of the Works, an account taking into consideration the value of works carried out by the Contractor and all cost inccurred by the Employer to complete the Works including loss and/ or expense suffered by the Employer shall be incorporated in a final account prepared in accordance with clause 25.6 .
-Contractor to pay cost of completing works and losses/damages suffered by Employer as a result of the determination. No further payment, including certified amount to Contractor until final completion.
25.5 The architect or Quantity Surveyor shall within 28 days of the determination of the Contractor employment, give a written notice to the Contractor of the date of inspection on Site to jointly record the extent of the Works executed and the materials and good delivered to the Site. The Contravcto shall provide all necessary assistance to the Architect and Quantity Surveyor to perform their task. Upon completion of the record by the Architect or Quantity SUrveyor, a copy shall be sent to the Contractor and such records shall form the basis for the evaluation of the value of the works executed and materials and goods delivered to the Site by the Contractor up to the date of determination.
- Architect/ Q/S within 28 days organizes joint inspection/ record Wroks done and amterials on Site for evaluation.
25.6 The Architect or Quantity SUrveyor shall within 28 days of the determination of the Contractor;s employment, give a written notice to the Cotractor of the date of inspection on Site to jointly record the extent of the Works executed and the materials and goods delivered to the Site. The Contractor shall provide all necessary assistance to the Architect and Quantiy Surveyor to perform their task. Upon completion of the record by the Architect or Quantity Surveyor, a copy shall be sent to the Contractor and such records shall form the basis for the evaluation of the value of the works executed and materials and goods delivered to the Site by the Contractor up to the date of determination.
- if Employer/ Contractor not dispute final account within 3 months, deemed agreed. If the cost of completion is higher than the Contract sum, the balance be deducted from Performance Bond or a debt from Contractor to Employer. If amount is less, then difference be paid to Contractor.
25.6 (b)If either party has any dispute on the final account, the party disputing the final account shall by written notice to the other party (with copies to the Architect and Quantity Surveyor ) set out any disagreement complete with particulars within three months of the date of receipt of the final account from the Architect or Quantity Surveyor. The Architect or Quantity Suyrveyor within 3 months from the date of receipt of the grounds of dispute shall either amend or not amend the final account. ANy party disagreing with the amended final account or decision not to amend the final account shall refer the dispute to arbitration under Clause 34.0 within three moinths fromn the date of receipt of the amended final account or decision not to amend the final account. Failure to refer the dispute to arbitration within the stipulated time, the final account or amended final account shall deem to be conclusive and agreed by the parties.
- If one party dispute the final account, he write to the other within 3 months, listing disagreements. Architect/ Q.S within 3 moinths to amend or not the final account. Refer to arbitration if has further disagremeent.
25.6 (c) Any dispute on Liquidated Damages, set-off and interest which the Employer is entitled to make under the Contract shall be referred to arbitration.
- Dispute on Liquidated Damages, set-off and if Employment want interest, then refer to arbitration.
25.7 Upon reciept of written notice by the Contractor from the Employer to determine the employment of the Contractor, the Contractor shall yield possession of the Site within 14 days from the receipt of the said written notice and shall remove his personnel and labour force ( but not construction plant, tools and equpment unless so instructed by the Architect) from the Site. Irrespective of the validity of the said written notice the Contractor;s remedy shall be limited to compensation for damages only.
- Within 14 days of determination, Contractor hand possession of Site back to Employer and remove his personnel from Site. Even if Determination found uncontractual later, Contractor only entitle to compensation for damages.
26.0 Determination of Own employment by contractor
26.1 Contractror can determine his own employment if Employer commits the following defaults:
(a) employer not pay Contractor within the Period of Honouring Certificates.
(b) Employer interferes with Architect in issuing certificates.
(c) Employer fails to nominate succeding Architect/ Consultants within 28 days after the earlier consultant ceased.
* rather than determination Contractor can choose to suspend works under that consultant's purview.
(d) Works suspended longer than Period of Delay (usually a continuous period of 3 months), due to the following :
(i) AI on discrepancies, late in handing over possession of site to Contractor or postponement/ suspension of Works
(ii) Contractor having applied fror and not received required instruction on expenditure of P.C. and Provisional Sums, further drawings/ info.
(iii) delay by employer direct sub-Contractor / supplier.
26.1 (d) opening up of works for inspection/ test unless COntractor's default
26.2 a) Contractor send written Nortice of Default by registered post/ hand to Employer specifying defaults committed by Employer . If employer continues defauylt for 14 days from ceitp of the Contractor within 10 days send determination letter to Employer and forthwioth determine Employment.
26.4 Upon determination
a) Contractor within 14 days remove from Site temporary buildings, plants, materials, etc.
b) Employer pays Contractor work satisfactory done, materials supplied and L&E. Materials must comply with CL. 30.2 i.e. delivered when needed, properly stored, etc.
26.5 Within 28 days Contractor write to Architect and Q.S. for carrying out joint inspection. Contractor to prepare joint record of Works done./ materials on Site and submit a copy each to Employer, Architect and Q.S.
26.6 Within 6 months Contractor to submit final accoutn plus L&E to same 3 parties for acceptance.
a) If no objection within 3 months. Employer make final payment to Contractor within Period of Honouring Certificate.
b) If Employer dispute, within 3 months give written notice to Contractor who amend within 3 months or go arbitration.
26.7 Other than Cl. 26.6 above, Contractor can still exercise other rights/ remedies
27.0 Nominated Sub-Contractors
27.1 The following provisions shall appy where P.C. Sums are included in the Contract Bills or arise as a result of an AI given in regard to the ependiture of Provisional Sums in respect of a Person to be nominated by the Architect to supply and fix materials and good or to execute works. SUch sums shall be expended in favour of such Person as the Architect shall instruct, and such Person who is nominated by the Architet is hereby referred to as "Nominated Sub-Contractor; employed by the Contractor. If the Nominated sub-Contractor proposes any alrternative design tot he sub-contract drawings or if the sub-contract leaves any matter od design, specification or choice of materials, good sand workmanship to the Nominated sub-contractor, the nominated sub-contractore and not the Contractor shall be responsible to ensure that such sub-contract works are fit for it spurpose.
- NSC nominated by Architect, for carryoiung out PC Sum Work. E.g. are piling, earthworks, A//C, fire fighhting. If NSC proposes alternative design, he ensureres and be responsible it is 'fit for its purpose'.
27.2 The Architect shall not nominate any Person as Nominated Sub-Contractor agains whom the Contractor makes reasonable objection in accordance with Clause 27.3. The Contractor shall make such reasonable objection inw riting not later than foiurtenn days from receipt of the nomination instruction from the Architect. The Architect shall not nominate ( except where the Architect and Contractor otherswise agree) any Person who will not enter into a contract with the Contractor based upon the terms and conditions of the PAM Sub-Contract 2006 which provides inter alia:
NSC :
27.2 (a) that the Nominated Sub-Contractor carry out and complete the sub-contract works in every respect to the reasonable satisfaction of the Contractor and Architect and in conformity witrh all reasonable directions and requirements of the Contractor;
- complete sub-contract works to reasonable satisfaction of Contractor and Architect. To conform to directions/ requirements of Contractor.
27.2 (b) that the nominated sub-contractor observe, perform and comply with all the provisions of the Contract which the Contractor is obliged to perform and comply with so far as they relate and apply to the sub-contract works;
- comply with Contract, similar to Contractor.
(c) indemnify Contractor against same liabilities under sub-contract when Contractor has to indemnify Employer.
(f) request from Architect CPC for completion of sub-contract works
(g) pay Contractor L&E or Liquidated Damages (LD) if cannot complete works
(h) he paid by Contractor within 7 days expiry of Period of Honouring Certificate
- Unfair to Contractor because he still need to pay NSC even if he ddint receive pauyment from Employer.
27.3 Contractor can reject nomination of NSC with Contractually valid reasons.
27.4 Upon objection of Contractor to NSC's nomination, Architect can either issue instructions removing objection, cancel nomination and omit such PC Sum work or nominate another NSC.
27.5 Amount payable to NSC be stated in Interim Certificate IIC) and informed to NSC. COntractor to pay NSC within 7 days after Employer's Period of Honouring Certificate.
- THis not 'pay when paid' i.e. Contractor need to pay NSC regardless whether Employer pays Contractor which is unfair to Contractor.
- CIPA (COnstruction Industry Payment and Adjudication Act) has outlawed 'pay when paid".
27.6 If Contractor not paid or cannot prove already paid NSC, Architect can issue a payment certificate to Employer to pay (not obligated) NSC direct the previous amount not paid. Such certificate need to be monthly IC.
27.7 If Arechitect wants to make final payment to NSC before final payment to Contractor, Architect can issue certificate to Contractor to do so.
- Not stated Employer should pay Contractor first. Appears unfair to Contractor who need to pay out of own money.
27.8 Contractor needs Architect's consent to determine NSC.
27.9 Contraactor be fully responsible to NSC.
27.10 No privity of contract between Employer and NSC.
- ANy claim by Employer against Contractor or vice versa must go though Contractor.
-0 Even though Employer has no contract with NSC, NSC still has responsibility to Employer under Law of Tort.
- If Employer desires to take action against NSC direct e.g. on design, material used, etc. When it is insufficient to take action against Contractor alone, a collateral agreement must have already been entered into to enable such action be taken.
27.14 Contractor can tender and carry out PC Sums works, in which case he is not entitle to profit and attendance (P&A)
- if PC sum work is carried out by NSC, Contractor is entitle to P&A because he is also to earn a profit and be apdi for supervising NSC.
- Since Contractor also deoes NSC work, then his price has already included for profit and supervision.
Advantages of NSC over DSC :
- Consultant/ Employer decide on appointment NSC, usually base on good tack record.
- NSC's prices more competitive, familiar with consultant's procedures involved in certification of payment/ EoT, lessen time and resources taken
- Nomination based on PAM Standard Sub-Contract with known risk allocation .
-nSC usually offer better price since they know Employer can pay them direct when Contractor fail to do so.
- Less risk to Contractor will result in lesser mark-up for P&A will result in lower contract sum.
Disadvantages of NSC against DSC:
- Possibility of renomination which can result in extra cost to cause delay to Contract.
28.0 Nominated Suppliers
- Generally the conditions are similar to those for NSC.
28.2(b) Nominated Supplier (NS) shall make good/ replace defective materials that appear within DLP unless the defects are such that :
(i) before fixing the Contractor ought to have noticed it.
(ii) caused by Contractor e.g. poor fixing workmanshiop, misuse or improper storage.
(d) once delivered, Contractor owns materials regardless of payment to NS
28.2(e) Contractor pays NS within 7 days after Employer's Period of Honouring Certificate regardless Employer paid Contractor or not.
- If NS takes legal action against Contractor for non-payment, Contractor can do same with Employer if Employer did not pay.
28.6 Contractor shall retain the Retention Sum but cannot use it to invest
28.6 No provision for Employer t pay NS direct if Contractor did not pay NS, unlike NSC's case.
- Reason unknown. Provided for NSC, should provide for NS as well.
- NS to take legal recourse to recover payment from Contractor.
29.0 Works by crafsmen, trademen or other contractors employed or engaged by employer
- such person sign direct contract with Employer, hence Contractor are not responsible over them, not even coordinate their work or provide facilities.
- Contractror has sole right to decide when such works can be carried ut at site, but he must be reasnable. Contractor entitles EoT and L&E should progress be delayed by them.
30.0 Certificates and Payment
30.1 Contractor to make Interim Claim to Architect and copy to Q.S. Within 21 days of receipt of COntractor;s claim and received Q.S.'s valuation, Architect issues Interim Certificate (IC) to Employer and copy to Contractor. EMployer pays Contractor within Period of Honouring Certificate starting from date receipt IC. If no claim from Contractor, Architect may/ not issue IC. Even after issuance of CPC, IC can still be issued where required.
- If Architect takes more than 21 days to send out IC, Architect breached time stated in Contract. Time is ' directory. not mandatory because no punitive action specified. Therefore to ' compensate' Contractor and resolve issue, Employer pays Contractor within Period of Honouring Certificate less extrra days Architect took to issue IC.
- Since Period of Honouring Certificate starts from date receipt IC, Architect ensure Employer receive IC promptly.
30.2 Amount in IC shall be total value of works properly executed, plus materials delivered to site but not off-site (unless the contract is on stage ppayment which means COntractor only receives payment upon completion of each statge rather than the usual monthly payment). Such materials must be for incorporation in the permanent works, not be brought to site prematurely, properly stored and protected.
- Incorporate in permanent works exclude materials for temporary works e.g. scaffold, formwork.
- Suppliers be fully paid to ensure title transferred to Contractor (Romalpa clause) so that When employer paid for such materials, title then transferred to him. If supplier not paid, in the event COntractor abandon works, supplier can take back posession of materials.
- Difficult to administer this clause because most reputable Contractor has credit facility with supplier, some up to 60 days. This clause means Contractor forced to pay supplier in order to get paid even if payment to supplier was not due.
30.3 Other than clerical, arithmetical or typing errors in which case Architect can issue revised IC to correct errors, otherwise no certificate can be amended. Correction/ modification be made in next IC which is to say it has temporary finality i.e. errors can be corrected in next IC.
30.4 - listed what Emloyer can set-off , exclude LD.
(a) details of set-off be submitted to Contractor by Architect/Q/S.
(b) Employer/ Architect has given Contracto 28 days advance written notice of intention to set-off, the amount and for what purposes before Employer can deduct same from payment.
Set-off from payment to Contractor, Performance Bond or as debt. If Contractor disputes set-off, give written notice to Employer within 21 days of Employer's written instruction to set-off . If both parties cannot agree within another 21 days, refer to adjudication.
30.6(a) Employer only hold Retention Fund in trust for Contractor , NSC and NS but cannot use it to invest. The money actually belong to Contractor so Employer cannot use it for any other puseposes other than by Architect's certificate deducting money from Contractor for non-compliance of rectification. Contractor, NSC or NS can demand and pay for a trust account be opened by Employer for banking in Retention Fund. Cost incurred be borne by requested.
30.6(b)" When the Employer exercises any right ......". This does not mean Employer deduct money straight away himself. This is actually done by the Architect in administering the Contract.
30.6(c) upon CPC within 14 days, Architect issue certificate of release of half the Retention Fund.
(d) within 14 days after issuance of CMGD, Architect issues certificate of relese remainder of Retention Fund.
30.7 If COntractor does not want to determine his own employment yet without payment from Employer, he can give written notice to Employer to pay and if Employer still does not pay within 14 days on receipt notice, COntractor can within 14days give written notice to Employer and suspend works. Only resume after Employer pays.
30.8 When Architect/ Consultants inform Contractor in writing their withdrawal from supervision, Contractor suspends Works till their resumption.
- odd for this caluse be put under " Certificates and Payment"
30.9 Contractor protects suspended workjs and takes out a separate cessation insurance . Cost of such be added to Contract Sum.
- odd for this clause be put under " Certificate and Payment"
30.10 Within 6 months after Practical Completion, Contractor to submit documents necessary for preparing Final Account to Architect/Q.S who shall complete Final Account within another 6 months.
(a) If Employer or Contractor do not dispute Final Account within 3 months, it is deemed agreed.
(b) Party who disputes, shall give written notice to the other with copies to Architect and QS who shall then within 3 months amend / not the Account.
Further dispute with amendment/ not shall refer matter to arbitration .
30.10 (c) Dispute on LD, set-off and interest be referreed to arbitration.
30.11 LD, set-offs and any interest payable shall not be included in Final Account.
30.11(g) Settlement of interest is between Employer and Contractor . Therefore it shall not hinder Final Account .
30.12 Final Account is conclusive, unless found to be as follow and hence be rectified:
fraudulent
arithmetical errors
30.13 Architect issues Penultimate Certificate for release retention sum and outstanding payment to NSC/NS not later than 14 days of CMGD issued.
30.14 Final Certificate ... be issued :
30.14 (a) within 21 days after Period of Honouring Certificate for Penultimate Certificate or
30.14 (b) within 28 days after CMGD issued, if no Penultimate Certificate.
30.16 Final Certificate not be used as evidence of works satisfactory done and materials used in other words not conclusive.
30.17 If Employer fails to pay Contractor after Period of Honouring Certificate or if Contractor owes a debt to Employer , then interest be charged on the amount based on Maybank;s BLR + 1 %
31.0 Outbreak of Hostilities
31.1 During outbreak of hostilities requireing the mobilization of armed forces, where the project is , either the EMploiyer or Contractor can serve written notice to other party to determine Contract, after 28 days from Government's order of general mobilization.
31.2 Such notice not be given :
(a) before expiry of 28 days from general mobilization.
(b) after practical Completion unless such works are on damages caused by war .
31.3- Within 14 days of determination notice served, Architect can instruct Contractor to carry out protective work to the project. If within 3 months of complying with AI, Contractor prevented from completing protective works, it can be abandoned.
31.4 Upon determination or abandonment, contractor can remove temporary buildings and materials and Employer to pay Contractor for works done.
WAR DAMAGE
32.1 wORKS OR MATERIALS DAMAGED DURING WAR :
(a) not be paid to Contractor.
(b) Ai be issued to Contractor to remove / dispose debris or be protected .
(c) Contractor reinstate works and be given EoT.
(d) removal/ protection carried out is Variation.
33.0 Antiiquities
- Fossil / antiquities found at site belong to Employer .
- Law of country sepecifies items belong to government which Employer has to surrender.
- Contractor to stop work in that area and take measures to preserve objects .
- Contractor to immediately notify Architect who issue AI for further action.
Adjudication and Arbhitration
34.1 Disputes on set-off execept after Practical Completion ( in which case refer straight to arbitration), must first be refferered to adjudication then only to arbitration. With both parties ' written agreement, other disputes can also be refferred to adjudication. E.g. enter into a separate agreement such as for valuation disputes be referred to adjudication to save time and cost.
- Disputes upon CPC issued need be referred to arbitration.
34.2 Adjudicator used, be agreed by both parties . If no agreement after 21 days party who wanted adjufication can reefer to PAM to appoint one.
34.4 If one arty disputes adjudication decision, he is still bound to it till Practical Completion. Meanwhile he gives written notice within 6 weeks to other party to refer to arbitration.
- Arbhitration is a private and confidential matter between the parties involved. Unlike case law, arbitrator;s award may not be used as a precedent.
Under Section 17 of Arbitration Act, the arbitrator;s award is final and binding but the High Court may study award of arbitrator for reconsideration on the following:
a) Any defect to enable court to change award.
b) Mistake admitted by arbitrator
c) Discovery of new an important evidence, etc.
- Disputes between Employer/ Architect and Contractor can be referred to arbitration which generally takes shorter time e.g. conclude within 90days, thean litigation which can take years and is costly.
34.6 the 2 parties can mutually agree to appointment of an arbitator
(b) if thjere is no agreement after 21 days, partuy who wanted arbitration , can then write to the Presendent of PAM to request to appoint one.
- Arbitration hearing is private and the award is final. It is binding to both parties unless one party can prove the hearing was conducted unfairly.
- Hearing can be "ex parte", meaning in the absence of 1 party, so long as proper notice has been served to him.
- Except for apointment of second consultant or whether AI is valid when arbitration can commence forthwith, other dispute like under outbreak of Hostilities and War Damage arbitration open after CPC.
- If one party does not comply with award of arbitration, then second party can apply to the court to ensure award being adhered to .
34.8 Arbitrator has power to :
(a) rectify Contract to true meaning of agreement.
(c) ascertain and award any sum.
(d) renew and change certificate, decision or notice
(f) award interest.
34.10 Arbitration to commence after Practical Completion or determination unless Employer and Contractor agree to be earlier, except for following:
(a) whether an instruction given is within the power of the Contract
(b) dispute under Outbreak of Hostility and war damage.
(c) whether a certificate is unfairly not issued.
(d) whether payment to Contractor is unfairly not given.
MEDIATION
35.1 Applicable only if both parties agreed to this optional method of resolving disputes. If after 21 days, a mediator cannot be agreed on , then party who wanted mediation to write to PAM to appoint one.
35.2 Using mediation is not a condition before adjudication / arbitration. Even after having referred to mediation, can still go for adjufication/ arbitration.
- A successful mediation can be completed in a day and say plust 2 weeks to study case. Can be quick solution. The success rate in HK, UK and Australia is 85%
- To make decision of mediation enforceable, get lawyer to prepare settlement Agreement or sign agreement to make mediation result binding, before hand.
- Employer and Contractor can refer their disputes to a mediator who is appointed by the president/ of PAM
- The function of the mediator is to try to resolve any dispute amicably between the parties without going for arbitration for litigation which are most costly and time consuming.
- If disputes cannot be resolved by mediation, the parties still seek arbitration .
Mewdiation is for simple case which settlement is binding , arbitration settlement is binding and enforceable when registered in high court, where as Litigation is for complex and legal case and settlement is binding and legally enforceable. In mediation the person involve is mediator, arbitration is arbitrator and litigation is judge. In mediation and arbitration the parties agree on the person , and in litigation no body can choose the judge. Mediation is to assist parties to settle the problem and arbitration is award the parties whereas litigation is judgement. Mediation have no laws and evidence apply, arbitration sometimes law of evidence apply ,
36.0 Notice
36.1 Notices or documents be sent by :
hand
Normal mail , but better registered post
* difficult to prove whether sent or received if normal post is used.
facsimile
* Even though emails are commonly used nowadays, there is no provision for this.
* E.g. can a proper AI transmitted by email be considered as valud or as other written forms, etc ?
26.2 Notices/ document considered received :
(a) if delivered by hand, at time of delivery
(b) 3 days after posting by normal or registered post.
(c) at time of fax transmission.
- important for parties to agree in writing in advance on what notices can/ cannot be emailed e.g. emailed determination notice is invalid.
36.3 For proving notices/ documents served :
(a) get acknowledgement of recipts
(b) registered post receipt
(c) transmission report/ journal
37.0 Performance Bond
37.1 Before starting work, Contractor to submit Performance Bond to Employer. Bond is security for due performance of Contractor under contract.
37.3 Duration of Bond be up to 3 months after CPC. Be extended similarly with EoT.
37.4 If Contractor fails to provide maintain Bond, Employer can withold / deduct amount equal to BOnd from payment
37.5 Employer to use Bond to complete Contract when he determines Contractor's employment and for L&E . Balance refund to Contractor
37.6 If Contractor determine, Employer to return Bond within 28 days for cancellation and get refund premium for unused period.
