GOVERNMENT OF MALAYSIA DEPARTMENT OF IRRIGATION AND DRAINAGE

Volume 10 – Contract Administration

Jabatan Pengairan dan Saliran Malaysia Jalan Sultan Salahuddin 50626 KUALA LUMPUR

DID MANUAL

Volume 10

Disclaimer
Every effort and care has been taken in selecting methods and recommendations that are appropriate to Malaysian conditions. Notwithstanding these efforts, no warranty or guarantee, express, implied or statutory is made as to the accuracy, reliability, suitability or results of the methods or recommendations. The use of this Manual requires professional interpretation and judgment. Appropriate design procedures and assessment must be applied, to suit the particular circumstances under consideration. The government shall have no liability or responsibility to the user or any other person or entity with respect to any liability, loss or damage caused or alleged to be caused, directly or indirectly, by the adoption and use of the methods and recommendations of this Manual, including but not limited to, any interruption of service, loss of business or anticipatory profits, or consequential damages resulting from the use of this Manual.

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Foreword
The first edition of the Manual was published in 1960 and was actually based on the experiences and knowledge of DID engineers in planning, design, construction, operations and maintenance of large volume water management systems for irrigation, drainage, floods and river conservancy. The manual became invaluable references for both practising as well as officers newly posted to an unfamiliar engineering environment. Over these years the role and experience of the DID has expanded beyond an agriculturebased environment to cover urbanisation needs but the principle role of being the country’s leading expert in large volume water management remains. The challenges are also wider covering issues of environment and its sustainability. Recognising this, the Department decided that it is timely for the DID Manual be reviewed and updated. Continuing the spirit of our predecessors, this Manual is not only about the fundamentals of related engineering knowledge but also based on the concept of sharing experience and knowledge of practising engineers. This new version now includes the latest standards and practices, technologies, best engineering practices that are applicable and useful for the country. This Manual consists of eleven separate volumes covering Flood Management; River Management; Coastal Management; Hydrology and Water Resources; Irrigation and Agricultural Drainage; Geotechnical, Site Investigation and Engineering Survey; Engineering Modelling; Mechanical and Electrical Services; Dam Safety, Inspections and Monitoring; Contract Administration; and Construction Management. Within each Volume is a wide range of related topics including topics on future concerns that should put on record our care for the future generations. This DID Manual is developed through contributions from nearly 200 professionals from the Government as well as private sectors who are very experienced and experts in their respective fields. It has not been an easy exercise and the success in publishing this is the results of hard work and tenacity of all those involved. The Manual has been written to serve as a source of information and to provide guidance and reference pertaining to the latest information, knowledge and best practices for DID engineers and personnel. The Manual would enable new DID engineers and personnel to have a jump-start in carrying out their duties. This is one of the many initiatives undertaken by DID to improve its delivery system and to achieve the mission of the Department in providing an efficient and effective service. This Manual will also be useful reference for non-DID Engineers, other non-engineering professionals, Contractors, Consultants, the Academia, Developers and students involved and interested in water-related development and management. Just as it was before, this DID Manual is, in a way, a record of the history of engineering knowledge and development in the water and water resources engineering applications in Malaysia. There are just too many to name and congratulate individually, all those involved in preparing this Manual. Most of them are my fellow professionals and well-respected within the profession. I wish to record my sincere thanks and appreciation to all of them and I am confident that their contributions will be truly appreciated by the readers for many years to come.

Dato’ Ir. Hj. Ahmad Husaini bin Sulaiman, Director General, Department of Irrigation and Drainage Malaysia.

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Acknowledgement
Steering Committee: Dato’ Ir. Hj. Ahmad Husaini bin Sulaiman, Dato’ Nordin bin Hamdan, Dato’ Ir. K. J. Abraham, Dato’ Ong Siew Heng, Dato’ Ir. Lim Chow Hock, Ir. Lee Loke Chong, Tuan Hj. Abu Bakar bin Mohd Yusof, Ir. Zainor Rahim bin Ibrahim, En. Leong Tak Meng, En. Ziauddin bin Abdul Latiff, Pn. Hjh. Wardiah bte Abd. Muttalib, En. Wahid Anuar bin Ahmad, Tn. Hj. Zulkefli bin Hassan, Ir. Dr. Hj. Mohd. Nor bin Hj. Mohd. Desa, En. Low Koon Seng, En. Wan Marhafidz Shah bin Wan Mohd. Omar, Sr Md Fauzi bin Md Rejab, En. Khairuddin bin Mat Yunus, & Cik Khairiah bt Ahmad. Coordination Committee: Dato’ Nordin bin Hamdan, Dato’ Ir. Hj. Ahmad Fuad bin Embi, Dato’ Ong Siew Heng, Ir. Lee Loke Chong, Tuan Hj. Abu Bakar bin Mohd Yusof, Ir. Zainor Rahim bin Ibrahim, Ir. Cho Weng Keong, En. Leong Tak Meng, Dr. Mohamed Roseli Zainal Abidin, En. Zainal Akamar bin Harun, Pn. Norazia Ibrahim, Ir. Mohd. Zaki, En. Sazali Osman, Pn. Rosnelawati Hj. Ismail, En. Ng Kim Hoy, Ir. Lim See Tian, Sr Mohd. Fauzi bin Rejab, Ir. Hj. Daud Mohd Lep, Tn. Hj. Muhamad Khosim Ikhsan, En. Roslan Ahmad, En. Tan Teow Soon, Tn. Hj. Ahmad Darus, En. Adnan Othman, Ir. Hapida Ghazali, En. Sukemi Hj. Sidek, Pn. Hjh. Fadzilah Abdul Samad, Pn. Hjh. Salmah Mohd. Som, Ir. Sahak Che Abdullah, Pn. Sofiah Mat, En. Mohd. Shafawi Alwi, En. Ooi Soon Lee, En. Muhammad Khairudin Khalil, , Tn. Hj. Azmi Md Jafri, Ir. Nor Hisham Ghazali, En. Gunasegaran M., En. Rajaselvam G., Cik Nur Hareza Redzuan, Ir. Chia Chong Wing, Pn. Norlida Mohd. Dom, Ir. Lee Bea Leang, Dr. Hj. Md. Nasir Md. Noh, Pn. Paridah Anum Tahir, Pn. Nurazlina Mohd Zaid, PWM Associates Sdn. Bhd., Institut Penyelidikan Hidraulik Kebangsaan Malaysia (NAHRIM), RPM Engineers Sdn. Bhd., & J.U.B.M. Sdn. Bhd. Working Group : Sr Md Fauzi bin Md Rejab (Pengerusi), Pn. Norazia binti Ibrahim, Pn. Hashimah binti Said, Pn. Fazidah binti Zainal Abidin, Pn. Zalina binti Mat Zain, Pn. Rohimah binti Yusof, Pn. Nor Hasni Muhd Supian, En. Roslan bin Ahmad, Tn. Hj. Hussin bin Haron, Ir. Nasser bin Salim, Ir. Nor Hisham bin Mohd. Ghazali, Kapt. Ir. Anuar bin Yahya, En. Roslan bin Hussin, Tn. Hj. Muhd Khosim bin Hj. Ikhsan, En. Sulaimi bin Nordin, En. Ratna Rajah, En. Alexander Anak Ngindang, En. Teo Siaw Chung, En. Mohd Adnan bin Ahmad Fauzi, Ir. Hj. Mohd Razali bin Husain, En. Wan Mohd Azam bin Wan Long, Tn. Hj. Rashiddi bin Hj Hussein, En. S. Valiappan, En. Adnan bin Ab Latif, Pn. Belinda binti Adzmi, Cik Intan Suraya binti Ayob, Pn. Zaliza binti Mohamad Ibrahim, Sr Ong See Lian, Sr Nur Aziz Abu Bakar, Lt Kol (B) Ir. Shahar Abdullah, Cik Ho Sook Chin, Pn. Zilawati Hj. Yaakub & Pn. Idura binti Hj. Ariffin.

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Registration Of Amendments
Amend No. Page No. Date of Amendment Amend No. Page No. Date of Amendment

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Table of Contents
Disclaimer ............................................................................................................................ Foreword ............................................................................................................................. i ii

Acknowledgement ................................................................................................................. iii Registration of Amendments .................................................................................................. iv Table of Contents .................................................................................................................. v

List of Volumes ...................................................................................................................... vii List of Abbreviations (English) ................................................................................................ ix List of Abbreviations (Bahasa Malaysia) ................................................................................... xi Glossary ................................................................................................................................ xiii PART I - INTRODUCTION Chapter 1 Chapter 2 Chapter 3 Chapter 4 Introduction to Volume 10 DID Organisation Structure Procurement - Overview Project Implementation - Overview PART II – PRE-CONTRACT Chapter 5 Chapter 6 Chapter 7 Chapter 8 Authority Preparation of Tender Documents Invitation and Receipt of Tender Tender Evaluation and Acceptance PART III – POST-CONTRACT Chapter 9 Chapter 10 Chapter 11 Chapter 12 Chapter 13 Chapter 14 Chapter 15 Contract Documentation Payments Variations Adjustment of Contract Sum Delays and Extension of Time Non-Completion Loss and Expense
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Table of Contents
PART III – POST-CONTRACT (Cont’d) Chapter 16 Chapter 17 Chapter 18 Chapter 19 Chapter 20 Chapter 21 Determination Completion Defects Management Final Accounts and Final Certificate Prime Cost & Provisional Sums Dispute Management and Resolution

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List Of Volumes
Volume 1 Volume 2 Volume 3 Volume 4 Volume 5 Volume 6 Volume 7 Volume 8 Volume 9 Volume 10 Volume 11 FLOOD MANAGEMENT RIVER MANAGEMENT COASTAL MANAGEMENT HYDROLOGY AND WATER RESOURCES IRRIGATION AND AGRICULTURAL DRAINAGE GEOTECHNICAL MANUAL, SITE INVESTIGATION AND ENGINEERING SURVEY ENGINEERING MODELLING MECHANICAL AND ELECTRICAL SERVICES DAM SAFETY, INSPECTIONS AND MONITORING CONTRACT ADMINISTRATION CONSTRUCTION MANAGEMENT

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List of Abbreviations (English)
AtP CAO CPC CMGD CNC DB/T DID DT FD IO Engr PD PDR PH PS PM PO PST PT PWD QA QSCD SO Authorised Party Contract Administration Officer; the term CAO includes Contracts Officer and/or Quantity Surveyor Certificate of Practical Completion Certificate of Completion of Making Good Defects Certificate of Non-Completion Design and Build / Turnkey Department of Irrigation and Drainage. Design Team, or Designer Finance Division Implementation Officer Engineer Project Director Project Director’s Representative Project Head Project Supervisor Project Manager Procurement Officer Project Supervision Team Project Team Public Works Department Quality Audit / Quality Auditor Quantity Surveying and Contracts Division Superintending Officer; in DID Manual Volume 10, the term SO may include Project Director (PD) of a design and build contract unless the context requires otherwise. S.O. Representative; in DID Manual Volume 10, the term SOR may include Project Director’s Representative (PDR) of a design and build contract unless the context requires otherwise
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SOR

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List of Abbreviations (English)
QS TI TS VO Quantity Surveyor Treasury Instruction Tender Secretariat Variation Order

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List of Abbreviations (Bahasa Malaysia)
AK AP APK BUBK JKR JPS KPK PHK PK PMK SPJPS SPP Audit Kualiti (Quality Audit) Arahan Perbendaharaan (Treasury Instruction) Arahan Perubahan Kerja (Variation Order) Bahagian Ukur Bahan dan Kontrak (Quantity Surveying and Contracts Division) Jabatan Kerja Raya. (Public Works Department) Jabatan Pengairan dan Saliran. (Department of Irrigation and Drainage) Kelulusan Perubahan Kerja (Variation Approval) Pelarasan Harga Kontrak (Adjustment of Contract Sum) Perubahan Kerja (Variation) Pegawai Mentadbir Kontrak (Contract Administration Officer) Surat Pekeliling JPS (DID Circular) Surat Pekeliling Perbendaharaan. (Treasury Circular)

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Glossary
Term Addendum (Addenda) Definitioni Written information adding to, clarifying or modifying the tender documents. An addendum is generally issued by the Government to the contractor during the tender process and as such, addenda are intended to become part of the contract documents when the construction contract is executed. Prepayment, payment made on account, in advance of the commencement of works, supply or services. Guarantee submitted by a party receiving an advance payment to the Government, for advancing the payment. It provides that the advanced sum will be returned if the agreement under which the advance was made cannot be fulfilled. An alternative tender is a tender that offers an alternative proposal that still satisfies the Government's requirements. Alternative tenders will not be considered unless they are allowed in the conditions of tendering. Drawings (plans) that show the work, as actually installed. An independent examination of a work product or set of work products to assess compliance with procedures, specifications, standards, contractual agreements, or other criteria. Acceptance of a tender or proposal for a contract. The most effective and desirable method of carrying out a function or process derived from experience rather than theory. Continuous improvement in the exercise of all functions undertaken by the Government, whether statutory or not, having a regard to economy, efficiency and effectiveness. See ‘Tender’. See ‘Tenderer’. A document usually prepared by a quantity surveyor which (ideally) details the terms and conditions under which a contract is to be let, and itemises all works to enable a contractor to price the work for which he is tendering. The first main step in preparing a bill is the "taking off" or recording of dimensions from drawings or schedules of work. Similar types of work are then brought together under one item, a process known as "abstracting", all of this information is then "worked up" into the bill of quantities. A mode of business in which a project company builds and operates a property project pursuant to the concession rights granted by the government

Advance payment Advance payment guarantee Alternative tender As-Built Drawings Audit

Award Best practice Best value

Bid Bidder Bill of Quantities

Build-ownoperate (BOO)

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Term Build-operatetransfer (BOT) Definitioni A mode in which Government or local authorities grant the rights to an enterprise by concession agreement to undertake the financing, construction, operation and maintenance of a construction project. Upon expiry of the concession period, the relevant facilities will be transferred back to the contracted government authority at (usually) nil consideration. A variant of build-operate-transfer (BOT) in which the contractor undertakes the financing of construction expenditures and transfers the project back to the proprietor upon completion and inspection for acceptance. The proprietor will compensate the contractor for such construction expenditure and Financing costs in installments pursuant to agreement. See ‘Guarantee’. See ‘Payment certificate’. Document that confirms the stage reached in the contract where the Government can take beneficial occupation and/or utilise the works for its intended use, without undue interference. A written demand or assertion by a contractor seeking adjustment or interpretation of the terms of the contract documents, payment of money, extension of time, or other relief with respect to the contract documents, or determination of other disputes or matters in question between the Government and contractor regarding the contract documents or the performance of the work. The group of officers who are authorised under the Government procurement procedures to approve claims submitted by a contractor. Competitive tendering in which the tender-opening is conducted at a private venue, and in the presence only of the authorised personnel of the party requesting the tenders, ie officers of the Government. The completion of project work once the project has been implemented. The phase at the end of the project lifecycle just before the operations begin. See ‘Open tender’. See ‘Practical completion’. Certification or confirmation that the doer of an action (such as the writer of a report), or the manufacturer or supplier of a product, meets the terms of a contract; or the requirements of accepted practices, legislation, prescribed rules and regulations, specified standards. See also conformance.

Build-transfer

Bond Certificate of payment Certificate of practical completion Claim

Claims committee Closed tender

Close out Competitive tender Completion Compliance

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Glossary
Term Conceptual design Definitioni The first of three sub-phases of the design phase. The design professional ascertains the requirements of the project and prepares design studies consisting of drawings and other documents illustrating the scale and relationships of the project. Terms and conditions that set the rights and obligations of the contracting parties, when a contract is awarded or entered into. These include 'general conditions' which are common to all types of contracts, as well as 'special conditions' (or special provisions) which are peculiar to a specific contract (such as variation of price clauses). The rules governing what the tender submission should contain, how it should be submitted, and how it will be evaluated. There are general conditions of tender for building and construction that apply to all tenders, such as treatment of late tenders. Pro-forma conditions of tender for the purchase of goods and services are provided under Resources / Publications. Pro-forma conditions of tender for the procurement of works, supplies and services are provided by the Government. Certification or confirmation that a good, service, or conduct meets the terms of a contract; or the requirements of legislation, accepted practices, prescribed rules and regulations, specified standards. See also compliance. A particular type of contractor who is engaged to provide recommendations or specialist or professional advice (or more generally non-manual services) to assist or influence Government’s decision making. An amount of money reserved by the Government (project manager) for unforeseen changes in the work A mutually binding, legal relationship obligating the seller to furnish supplies or services, and the buyer to pay for them. Administrative activities usually associated with handling of contracts, such as (1) invitation to tender, (2) tender evaluation, (3) award of contract, (4) contract implementation, (5) measurement of work completed, and (6) computation of payments. It also includes monitoring contract relationship, addressing related problems, incorporating necessary changes or modifications in the contract, ensuring both parties meet or exceed each other's expectations, and actively interacting with the contractor to achieve the contract's objective(s). Also called contract management. Executed (signed) agreements, supplementary conditions, specifications, and other documents specific to a contract. drawings,

Conditions of contract

Conditions of tendering

Conformance

Consultant

Contingency Contract Contract administration

Contract documents Contract period

Number of working days or calendar days, calculated from a specified commencement date to a specified date for completion, as provided for in a contract. For works contract, also called construction period. See ‘Contract administration’.
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Glossary
Term Contract price Contract price analysis Contract sum analysis Contractor Definitioni See ‘Contract sum’. See ‘Contract sum analysis’. Examination of a cost proposal in view of the supporting data, and by applying appropriates rates and factors. Independent entity that agrees to furnish certain number or quantity of goods, material, equipment, personnel, and/or services that meet or exceed stated requirements or specifications, at a mutually agreed upon price and within a specified timeframe to the Government. Mutually agreed upon total amount that a principal (Government) pays to a contractor on completion of the contract, in accordance with contract terms and conditions and their subsequent modifications (if any). Obligation assumed by any contracting party under the terms of a contract. Approximation of the probable total cost of a product, program, or project, computed on the basis of available information. Four common types of cost estimates are: (1) Planning estimate: rough approximation of cost within a reasonable range of values, prepared for information purposes only. Also called ball park estimate. (2) Budget estimate: approximation based on well defined (but preliminary) cost data and established ground rules. (3) Firm estimate: based on cost data sound enough for entering into a binding contract. (4) Notto-exceed /Not-less-than estimate: maximum or minimum amount required to accomplish a given task, based on firm cost estimate. Fixed date specified in a contract to complete a job or project. If permitted under the terms of the contract, the date for completion may be modified or revised. The date established in a written notice to proceed with the works, from the Government to the contractor. Report, document or item that must be completed and delivered under the terms of an agreement or contract. Application of engineering or architectural theories and techno-economic approaches, based on the prevailing technical standards, for conducting allround design (including non-standardized equipment design) and technoeconomic analysis on newly constructed, expansion and reconstruction projects in respect of their technical process, land construction, civil works and environmental works; provision of design papers and blueprints as the basis for construction work. Construction contract where both the design and the construction of a structure are the responsibilities of the same contractor.

Contract sum

Contractual liability Cost estimate

Date for completion Date of commencement Deliverable Design

Design and build (DB) contract
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Glossary
Term Design-buildoperate (DBO) contract Design development Definitioni Construction contract where a single contractor has the responsibility for designing and constructing a facility, as well of operating and maintaining it for a specified period prior to handing it over to the client or principal. A project design phase in which all design decisions need to be completed. The design professional (designers) further develops the preliminary (schematic) design and detailing and ensures that basic technical issues are resolved and are capable of technical description. Plan arrangements, specific space accommodations, plant equipment and furnishings, building design, materials and colors, and complete definitions of systems serving the project are developed. The professional individual or organisation that performs the design and prepares plans and specifications for the work to be performed. The professional can be an architect, an engineer, or an organisation which combines professional services. Traditional contracting method in which design is carried out by the Government (or tendered and performed by design consultant), and the construction phase are tender and performed by contractor. The phase of the design process on a project when drawings and specifications are completed for construction tender purposes. The phase is preceded by the preliminary design phase, and followed by the tender and award phase. The field costs directly attributed to the construction of a project, including labor, material, equipment, subcontracts and their associated costs.  A term used to represent that portion of the contract documents that graphically illustrates the design, location and dimensions of the components and elements contained in a specific project.  A line drawing. Commissioned by the Government to contract the whole process or certain stages of a project based on the contract including exploration, design, procurement, construction and trial operations (inspection upon completion)

Designer

Design-tenderbuild Detailed design

Direct costs Drawings

Engineering, procurement and construction (EPC) Escalation clause Estimate Evaluation Criteria Extension of time

See ‘Variation of price clause’.  To calculate approximately the amount, extent or value of something  To form an opinion of estimated costs Evaluation criteria are used to assess the merit of offers/tenders received. The evaluation criteria are specified in the quotation or tender documentation. An extension of time to a contract period authorised by the Government for reasons of adverse weather conditions, an unusual number of variations etc. The reasons for which an extension of time may be granted are usually given in the conditions of contract.
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Glossary
Term Fair and reasonable price Fast track Definitioni A price that is fair to both parties considering quality, performance, supply situation, delivery time, and payment options. The process of dividing the design of a project into phases in such a manner as to permit construction to start before the entire design phase is complete. The overlapping of the construction phase with the design phase. A certificate stating that the works are now complete and the Government is due a full and final settlement to the contractor. The last payment from the Government to the contractor of the entire unpaid balance of the contract sum as adjusted by any approved variation orders or other contractual adjustment to the contract sum. See ‘Fixed price’ See ‘Fixed price contract’ A price which is not subject to variation. Contract that provides for a price which normally is not subject to any adjustment unless certain provisions (such as variation of price clause) are included in the agreement. Increases or decreases in costs of labour and materials. Standard clause found in construction and supply contracts, it exempts the contracting parties from fulfilling their contractual obligations for causes that could not be anticipated and/or are beyond their control. These causes usually include act of God, act of man, act of parliament, and other impersonal events or occurrences. (French for, superior force.) Standard printed form given or sold to tenderers so that they may submit the information required for evaluation of the tender, in correct format and sequence. Contractor that performs a contract all by itself, or through the use of subcontractors whose activities it supervises and coordinates. Three-party contingent liability agreement under which a third-party (the guarantor; usually bank or insurance company) agrees to be directly or collaterally responsible for the obligation (contract fulfillment) of a first-party (the principal; usually the contractor) to a second-party (beneficiary; ie the Government) in case the first-party defaults or fails to fulfill its part of a deal. Unlike a warranty, a guarantee may refer to things as well as persons and, to be legally enforceable, must be in writing.

Final certificate Final payment

Firm price Firm price contract Fixed price Fixed price contract Fluctuations Force majeure

Form of tender

General contractor Guarantee

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Glossary
Term Invitation to tender (ITT) Definitioni Initiating step of a competitive tendering process in which qualified (or prequalified) contractors or suppliers are invited to submit sealed tenders for construction works or for supply of specific and clearly defined goods or services during a specified timeframe. The period of time between when the contractor receives the order and the Government receives the goods/services. A letter that creates an immediate binding contractual relationship between the Government and the successful tenderer prior to entering into a formal contract. A letter informing a successful tenderer that it is the Government’s intention to enter into a contract with them in the future but creates no liability in regard to that future contract A fixed sum that is specified in the contract and which the contractor is assessed as a measure of damages that the Government will suffer for each day the work remains incomplete beyond the expiration of the contract time. The sum usually stated a daily rate is recovered from the contractor. The rate of LAD should be reasonable, and justifiable under the circumstances. See ‘Liquidated and ascertained damages’. A fixed price for contract work, not intended to be adjusted in any way either by variation or remeasurement. A lump sum contract therefore is a contract for an agreed amount of work for a lump sum of money. Written agreement under which the Government agrees to pay a contractor a specified amount, for completing an agreed scope of work (e.g. involving a variety of items of work which are based on drawings and specifications set out in the contract) without requiring a measurement of quantities involved. Chief contractor who has a contract with the Government, and has the full responsibility for its completion. A main contractor undertakes to perform a complete contract, and may employ (and manage) one or more subcontractors to carry out specific parts of the contract. Procedure used in converting requirements or requisitions into purchase orders or contracts. Methods of procurement include (1) open competitive tender, (2) selective competitive tender, (3) direct negotiations, and (4) direct purchase from internal pool of contractors/suppliers. See ‘Specifications’. Contract awarded on the basis of a direct agreement with a contractor, without going through the competitive tendering process.

Lead time Letter of acceptance Letter of intent

Liquidated and ascertained damages (LAD)

Liquidated damages Lump sum

Lump sum contract

Main contractor

Method of procurement

Needs statement Negotiated contract

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Glossary
Term Nominated subcontractor Nominated suppliers Definitioni A contractor whom the main contractor usually employs under instruction from the Government pursuant to terms of the contract. Usually contractors for specialist works, such as mechanical and/or electrical works. A supplier whom the main contractor usually employs under instruction from the Government pursuant to terms of the contract. Usually suppliers of goods not widely available such as some plant/equipment or a particular brand of plant/equipment which the designer considers is the most suitable for the particular job. Not practical completion. See ‘Practical completion’ Not compliance. See ‘Compliance’. Not conformance. See ‘Conformance’. Document used in sealed-tender procurement procedures through which the Government advises the potential suppliers of (1) statement and scope of work, (2) specifications, (3) schedules or timelines, (4) contract type, (5) data requirements, (6) terms and conditions, (7) description of goods and/or services to be procured, (8) general criteria used in evaluation procedure, (9) special contractual requirements, (10) technical goals, (11) instructions for preparation of technical, management, and/or cost proposals. Notices of tender are publicly advertised and contractors/suppliers respond with a detailed tender, not with only a price quotation. They provide for negotiations after sealed tenders are opened, and the award of contract may not necessarily go to the lowest tenderer.  Tender process that is open to all qualified tenderers and where the sealed tenders may be opened in public for scrutiny and are chosen on the basis of price and quality. Also called ‘competitive tender’ or ‘public tender’.  Tender submitted in response to open competitive tender request/invitation. Document verified by an officer of the Government (usually the ‘Superintending Officer’ named in the contract) that the noted work has been completed and is approved for payment by the Government to the contractor. Written guarantee from a third party guarantor (usually a bank or an insurance company) submitted to a principal (i.e. the Government) by a contractor on winning the tender. Performance bond ensures payment of a sum (not exceeding a stated maximum) of money in case the contractor fails in the full performance of the contract. These bonds usually cover 100 percent of the contract price and replace the tender bonds on award of the contract. Discussions between the Government with the prospective contractors (suppliers), after the receipt of tenders but before the award of contract. These negotiations are supposed to be confined to clarification of any points; price changes are normally ruled out. See ‘Post tender clarification’
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Non-completion Non-compliance Nonconformance Notice of tender

Open tender

Payment certificate Performance bond

Post tender clarification

Post tender negotiation
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Term Practical completion Preliminaries Definitioni Stage or designated portion of a construction project that is sufficiently complete in accordance with a contract for the Government to occupy and/or utilise it for its intended use, without undue interference. Matters which feature at the beginning of a bill of quantities or summary of tender, which are relevant to the contractor in terms of his obligations and responsibilities and which will therefore influence his costings. These would include such items as names of clients and consultants, insurance requirements, length of contract, descriptions of the site in terms of its access, working areas and adjacent buildings etc, a detailed description of the work to be undertaken and the order in which it should be tackled. The second phase of a project's design process. During this phase ancillary space is developed and dimensions are finalized. Outline specifications are developed into technical specifications; sections are delineated and elevations are defined. Preliminary stage in a tender process where it is determined if an applicant has the requisite resources and experience to complete the job as required. Screening of potential contractors, suppliers, or vendors (on the basis of factors such as experience, financial ability, managerial ability, reputation, work history, etc.) to develop a list of qualified tenderers who will receive the letter of invitation to tender. An amount included in a bill of quantities or summary of tender to cover a particular bit of work or supply of materials to be carried out by a nominated sub-contractor or a supplier. The erection, construction, alteration, repair, or improvement of any plant, structure, building, road, or other improvement. The use of integrated systems and procedures by a team of professionals during project design and construction. As applied to a construction project, project management can be used synonymously with construction management. A sum included in a bill of quantities or summary of tender for work that is required but cannot be sufficiently designed or specified at the outset of the contract. A form of partnership between the private and public sector which is normally used for high risk/high value contracts, principally to raise money for higher value projects The process of obtaining work, supplies and services - covering acquisition from third parties and from in-house providers - from preparation and processing of a requisition through to approval of the invoice/claim for payment. The process spans the whole life cycle from identification of needs, through to the end of a services contract or the end of the useful life of an asset.
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Preliminary design

Pre-qualification Pre-qualification of tenderers

Prime cost sum

Project Project management

Provisional sum

Private finance initiative (PFI) Procurement

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Glossary
Term Procurement board Professional indemnity insurance Definitioni The group of officers who are authorised under the Government’s procurement procedures to approve the award of a particular tender to a contractor/supplier. Consultants arrange insurance to cover their liability for damages and costs due to breaches of their professional duty caused by neglect, error or omission. It also covers costs of liability and their defence arising out of dishonest or fraudulent acts. Insurers usually reserve their right to take all reasonable steps of recovery against any party. Contractors with a design responsibility will also be required to obtain such insurance. The insurance taken out by the contractor for third party claims. Under the contract the contractor is usually required to indemnify the Government for any expense, loss, liability, claim or proceedings under statute or common law in respect of which personal injury or death is caused by the carrying out of the works other than that caused by the act or neglect of the employer. Additionally, the contractor is usually required to insure his obligation to indemnify the Government for any damage to property to the extent that it is due to negligence of the contractor. Very similar to a PFI arrangement, but the aim is centered more on service delivery than finance. See ‘Open tender’. Also known as procurement, purchasing is the acquisition of goods or services. Potential tenderer who meets the minimum standards of experience, financial ability, managerial ability, reputation, and work history for a specified class of supplies, services, or projects (works). Formal statement of promise (submitted usually in response to a request for quotation) by potential supplier to supply the goods; or services required by a buyer; or works required by a contractor; at specified prices, and within a specified period. It may also contain terms of sale and payment, and warranties. Acceptance of quotation by the Government constitutes an agreement binding on both parties. Price that provides the best total value—comprising of availability, delivery time, fitness for purpose, payment terms, quality, quantity, and service. A reasonable price is not necessarily the lowest price. Response to an invitation to tender that is unacceptable, because (1) another tender has been chosen, (2) tender fails to fall within the established competitive range, (3) absence of competitive tenders invalidates the tendering exercise, (4) invitation to tender is readvertised, (5) tender is void due to irresponsibility of the tenderer, or rigging or other fraud is discovered.

Public liability insurance

Public private partnership (PPP) Public tender Purchasing Qualified tenderer Quotation

Reasonable price Rejected tender

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Glossary
Term Request for information Definitioni Request made typically during the project planning phase where a Government cannot clearly identify product requirements, specifications, and purchase options. Such requests clearly indicate that award of a contract will not automatically follow. Document used in soliciting price and delivery quotations that meet minimum quality specifications for a specific quantity of specific goods and/or services. RFQ are usually not advertised publicly, and are used commonly for (1) standard, off-the-shelf items, (2) items built to known specifications, (3) items required in small quantities, or (4) items whose purchase price falls below sealed-tender threshold. Suppliers respond to a RFQ with firm quotations, and generally the lowest-priced quotation is awarded the contract. An amount, usually 5-10% held back from the sum due to a contractor, for payment at a later date. The amount will be specified in the conditions of contract. Retentions are usually released on the basis of half at the issue of the certificate of practical completion, the remainder at the issue of the final certificate. Note: the Government of Malaysia’s forms of contract do not require retentions. See ‘Retentions’. See ‘Retentions’. Factors that may adversely affect the successful completion of a project. A list of works activities or items usually priced at a rate per unit. See ‘Preliminary design’. Description (usually in chronological division) of work to be performed under a contract or subcontract in the completion of a project. Document enclosed in a glued (sealed) envelope and submitted in response to invitation to tender (ITT). Sealed tenders received up to the deadline date are generally opened at a stated time and place, and evaluated for award of a contract. Invitation to tender sent only to selected contractors, sellers, or vendors who have been pre-qualified through a screening process. Conditions of a contract that are peculiar to the project under consideration and do not fall under the general conditions.

Request for quotation (RFQ)

Retentions

Retention fund Retention sum Risk Schedule of rates Schematic design Scope of work Sealed tender

Selective tender Special provisions to conditions of contract

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Glossary
Term Specification Definitioni A description of requirements and standards to which the goods, works or services should conform. Also known as a statement of needs (needs statement), a statement of requirement, an operational requirement, or a brief. Its purpose is to present prospective contractors/suppliers with a clear, accurate and full description of the Government’s needs, to enable them to propose a solution to meet them An individual or organisation that has an active interest or a stake in a particular organisation or issue. For example, funders, members, contractors, purchasers, trustees, beneficiaries, volunteers and paid staff are all stakeholders in a voluntary organisation Agreement, purchase order, or any such legal instrument issued under a main contract (by the main contractor to a third party—the subcontractor), calling for the performance of a defined piece of work or production and/or delivery of specified goods or services. Subcontracts contain special terms and conditions that are unique to the main contract, and flow-down provisions that proceed from it. Junior or secondary contractor who contracts with a main contractor (and not the Government) to perform some or all of the main contractor's contractualobligations under the main contract. Lists of jobs, like those in bills of quantities except that they contain no quantities. Rates may be inserted by tenderers Document that describes additions, alterations, or removal, of the scope (or the terms) of a contract, mutually agreed upon by the parties to the contract. See ‘supplementary agreement’.  An individual or firm who supplies and/or fabricates goods, materials or equipment for a specific portion of a construction project but does not perform any labor on the project.  One that sells goods, materials or equipment not fabricated to a special design. Survey, explore, test, and undertake overall assessment on landscape, geology and water for planning, design, implementation, operations and integrated management of the project; provide feasibility assessment and required information on the exploration results for construction; carry out rock exploration, design, management and monitoring activities. Complete proposal (submitted in competition with other tenderers) to execute specified work(s) within prescribed time, and not exceeding a proposed amount (that usually includes labor, equipment, and materials). The tender-receiving party may reject the tender, make a counter offer, or turn it into a binding contract by accepting it. See also offer and proposal.

Stakeholder

Sub-contract

Sub-contractor

Summary of tender Supplementary agreement Supplementary contract Supplier

Survey

Tender

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Glossary
Term Tender bond Definitioni Written guarantee from a third party guarantor (usually a bank or an insurance company) submitted to a principal (eg Government) by a contractor (tender) with a tender. Tender bond ensures that on acceptance of tender by the Government the contractor will proceed with the contract and will replace the tender bond with a performance-bond. Otherwise, the guarantor will pay the Government the difference between the contractor's tender and the next highest tenderer. This difference is called liquidated damages which cannot exceed the amount of the tender bond. Also called tender guarantee or tender surety. Box where tender documents (or proposal) must be lodged by the tender date to be eligible for consideration. Prescribed date and time by which a tender must be submitted (or lodged in the tender depository) to be considered. Also called tender time. Documents required to be submitted in response to an invitation to tender. These include the prescribed tender form, drawings, specifications, time lines, charts, price breakdowns, etc. Tenders not accompanied by all the required documents are considered incomplete or non-compliant tenders, and are usually automatically rejected. Contractor, supplier, or vendor (services provider) who responds to an invitation to tender. Also called offeror or quoter. The formal process of examining contractor’s (or supplier’s) tenders to identify which provides best “value for money”. The group of officers who are authorised under the Government procurement procedures to analyse received tenders. They also make recommendations on who is awarded the contract. See ‘Form of Tender’ Alternative term for tender bond. Stage in a tender process where the received tender-envelopes are opened and examined by the advertiser (ie the Government ) of an invitation to tender (ITT). In an open or public tender opening, the tenderers (and other parties) are allowed to witness the process and inspect the tenders, in a closed opening only the officers of the Government are present. The group of officers who are authorised under the Government’s procurement procedures to witness, administer and record the tender opening process. Price offered by tender (contractor, supplier, vendor) for a specific work, supply or service, and valid only for the specified period. A contractor who is responsible for the whole process of design, procurement, construction and installation work in a project. When transferred to the Government, a turnkey project is fully ready for use.
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Tender box Tender date Tender documents

Tenderer Tender evaluation Tender evaluation committee Tender form Tender guarantee Tender opening

Tender opening committee Tender price Turnkey contractor

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Glossary
Term Value engineering Value for money Definitioni A process of reviewing all aspects of a design to re-examine all assumptions and minimize the life-cycle costs of the project. Utility derived from every purchase or every sum of money spent. ‘Value for money’ is based not only on the minimum purchase price (economy) but also on the maximum efficiency and effectiveness of the purchase. Changes in work permitted under the contract. See also ‘Variation order’. Provision in a contract for increasing or decreasing the contracted price for labor, material, etc., in step with an agreed upon benchmark such as the cost index issued by the Department of Statistics. Document issued by the Government, directing variations (changes) in a contract as authorised under the contract's variation clause. The group of officers who are authorised under the Government’s procurement procedures to approve variation of works under a contract. Construction and services required by the contract documents, as amended by contract modifications, whether completed or partially completed, including all labor, materials, equipment, tools, and services provided or to be provided by the contractor to fulfill the contractor's obligations. The work may constitute the whole or part of the project.

Variation Variation of price clause Variation order (VO) Variation order committee Work

_______________________
i

Part of the items in the Glossary was extracted / modified from: www.businessdictionary.com.

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CHAPTER 1

INTRODUCTION

Chapter 1 – INTRODUCTION

Table of Contents

Table of Contents ..................................................................................................................... 1-i 1.1 1.2 1.3 INTRODUCTION .......................................................................................................... 1-1 SCOPE OF VOLUME 10................................................................................................. 1-1 CONTENTS OF VOLUME 10 .......................................................................................... 1-1 1.3.1 1.3.2 1.3.3 1.4 1.5 Part I : Introduction ........................................................................................1-1 Part II : Pre-contract .......................................................................................1-1 Part III : Post-contract ....................................................................................1-1

DOCUMENT BINDING, AND UPDATES............................................................................1-2 FLOWCHARTS, PROCEDURES, GUIDELINES, AND APPENDICES ......................................1-2 1.5.1 1.5.2 1.5.3 1.5.4 1.5.5 1.5.6 1.5.7 Flowcharts......................................................................................................1-2 Procedures .....................................................................................................1-2 Guidelines / Guidance Notes ............................................................................1-2 Reference Documents .....................................................................................1-2 Appendices .....................................................................................................1-3 References .....................................................................................................1-3 Volume 10A – Reference Documents................................................................1-3

1.6

DOCUMENT CHANGE CONTROL AND APPROVAL ............................................................1-3 Pro-Forma : Document Change Control / Approval ..........................................1A-1 Pro-Forma : Amendment Record Sheet for Revision ........................................1A-2

APPENDIX 1A APPENDIX 1B

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1 INTRODUCTION
1.1 INTRODUCTION

This chapter provides:  An overview of the scope, contents and document structure of Volume 10.  Procedures on updating the document. 1.2 SCOPE OF VOLUME 10

Volume 10 covers all general procedures and practices pertaining to contract administration, commencing from tender stage until the completion of defects liability stage. It is aimed to be the first point of reference for all matters pertaining to DID contract procedures, e.g.     1.3 the tender processes, the compilation of contract documents, contract administration, and close-out for the contracts. CONTENTS OF VOLUME 10

The chapters within the Volume 10 are grouped to 3 parts, and covering subjects, as follows: 1.3.1 Part I : Introduction

Part I gives a whistle-stop tour of the whole DID organization structure and procurement processes, including an outline on project implementation. It serves as background information only. 1.3.2 Part II : Pre-contract

Although pre-contract works are usually not considered as ‘contract administration’, it is part of the procurement process and included in Volume 10 for ease of reference. Part II covers the DID general procurement processes, and the procedures for preparation of tender documents (for works) up to the acceptance of tender (or award of contract). 1.3.3 Part III : Post-contract

Post-Contract administration can be defined as the coordination of the actions required for the performance of the contract, including guidance and monitoring necessary to assure that all contractual obligations are fulfilled by the parties to the contract, i.e. the Department of Irrigation and Drainage (representing the Government) and the Contractor. Part III covers the contract administration procedures and best practices. It also includes explanatory notes on contractual issues such as delays and extension of time, practical completion and disputes resolution.

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1.4

DOCUMENT BINDING, AND UPDATES

Volume 10 is a “live document” and shall be updated from time to time. For this purpose, the document is ring bound. Upon receipt of a document change notification, the superseded page/document shall be removed and replaced by the new page/document. Changes must be recorded in the ‘Registration of Amendments’ sheet at the front of the Volume. 1.5 FLOWCHARTS, PROCEDURES, GUIDELINES, AND APPENDICES

Where applicable, the information are presented in the following manner and order: 1.5.1 Flowcharts

The flowchart provides an overview of the processes set out within the chapter, and the sequence and interrelationship between the processes. 1.5.2 Procedures

The procedures section describes work processes outlined in the flowchart. 1.5.3 Guidelines / Guidance Notes

The guidelines or guidance notes on contract administration practices are set out after the procedures. These shall be presented in bullet-point format, as far as possible. The guidelines or guidance notes are summaries only. For further details, reference must be made to the relevant and current DID Circulars, Treasury Circulars and Treasury Instructions. See ‘References’. 1.5.4 Reference Documents

A list of Reference Documents is included in each chapter. Reference documents are sample documents and other documents

Comment [scho1]: “”list of sample documents (which are compiled under Volume 10A’ deleted.

as may be relevant to the chapter. The Reference Documents are compiled under Volume 10A – Reference Documents.

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1.5.5

Appendices

The Appendix or Appendices are appended at the end of each chapter, and generally include checklist(s) of work processes relating to that chapter. 1.5.6 References

A list of the relevant DID Circulars, Treasury Circulars and Treasury Instructions are included at the end of each chapter. 1.5.7 Volume 10A – Reference Documents

Sample documents or pro forma documents are set out in Volume 10A of the DID Manual. 1.6 DOCUMENT CHANGE CONTROL AND APPROVAL

An officer may propose changes to the contents or procedures set out in Volume 10, by using the Document Change Control Form. The officer should state the proposed amendments together with reasons for the amendments in the Amendment Record Sheet. Upon approval, the new document shall be inserted, and the Registration of Amendments sheet at the front of the Volume 10 must be updated.

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Chapter 1 – Introduction to Volume 10 APPENDIX 1A

Pro-Forma - Document Change Control / Approval

Revision Number : Revision Date :

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APPENDIX 1A

PRO-FORMA : DOCUMENT CHANGE CONTROL/APPROVAL

TO :…………………………………………….

CHANGE REQUEST DOCUMENT REFERENCE PROPOSED AMENDMENT

DID MANUAL VOLUME 10

................................................................... [OFFICER] Name : Designation: Contact No : APPROVAL RECORD

........................................ Date

Approved for Implementation

Not Approved

Remarks :

................................................................. [APPROVING OFFICER] Name : Designation: Contact No :

..............................…....... Date

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Chapter 1 – Introduction to Volume 10 APPENDIX 1B

Pro-Forma - Amendment Record Sheet for Revision

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APPENDIX 1B

AMENDMENTS RECORD SHEET FOR REVISION

AMENDMENT RECORD SHEET FOR REVISION : _______

TO:………………………………………. The amendment enclosed herewith is the revision to your DID Manual. DOCUMENTS ISSUED REMOVE INSERT AMENDMENT/ DOCUMENTED PROCEDURE REASON FOR AMENDMENT/ DOCUMENTED PROCEDURE

Volume 10, Chapter ………. Page ____ to Page ___, Rev. ___ Page ___ to Page ___, Rev. ___

Attachment ___, Page ___ to Page ___ , Rev. ___

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Volume 10, Chapter ………. Page ____ to Page ___, Rev. ___ Page ____ to Page ___, Rev. ___

Attachment ___, Page ___ to Page ___ , Rev. ___

Attachment ___, Page ___ to Page ___ , Rev. ___

After Revision : ____ has been inserted, please complete the Registration of Amendments Sheet on Page ___ of your Manual.

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DID MANUAL VOLUME 10 CONTRACT ADMINISTRATION PART I : INTRODUCTION

CHAPTER 2

DID ORGANISATION STRUCTURE

Chapter 2 – DID ORGANISATION STRUCTURE

Table of Contents

Table of Contents .......................................................................................................................2-i List of Figures ...........................................................................................................................2-ii 2.1 2.2 2.3 2.4 INTRODUCTION ............................................................................................................. 2-1 BACKGROUND ................................................................................................................ 2-1 CORPORATE INFORMATION............................................................................................ 2-2 ORGANISATION STRUCTURE .......................................................................................... 2-3

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List of Figures

Figure Figure 2.1

Description Organisation Chart

Page 2-4

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2 DID ORGANISATION STRUCTURE
2.1 INTRODUCTION

This chapter provides:  Brief history and background information of the DID.  An overview of the organisation structure of the DID. 2.2 BACKGROUND

"It was the vital need for irrigation facilities - to open new areas for a fledging paddy growing industry - that provided the impetus for the establishment of the Department of Irrigation and Drainage or the DID as it is popularly known." Prior to the formation of DID in 1932, all works in connection with drainage and irrigation was related to by the Public Works Department. Following the slump in the tin and rubber industries in the late twenties and the worsening rice situation in the country, the then British High Commissioner appointed in 1930 a Rice Cultivation Committee to determine "the best steps to be taken in order to encourage rice cultivation in Malaya". The Committee made a comprehensive survey and published its report in 1931. One of its main recommendations was "that an Irrigation and Drainage Department should be established which will execute in the Straits Settlement and Federated Malay States and advisory in the Unfederated Malay States, which will absorb the Hydraulics Branch of the Public Works Department, Federated Malay States". This recommendation was accepted as a separate department on the 1st. of January 1932. During the first 10 years of the Department's existence up to the Japanese occupation, 20,000 hectares of new padi land were developed and improved, irrigation and drainage facilities were provided to some 50,000 hectares of existing padi lands. The Department took over the maintenance of drainage works on 40,000 hectares of estate and smallholder lands in Selangor and Perak. Reconstruction of these works and their extension raised the total area to about 80,000 hectares in 1942. During the Japanese Occupation, little or no new development took place apart from the completion of some structures that were partly finished when the war broke out. In the drainage areas, neglect resulted in drains being silted up and overgrown with plants, and in some instances almost entirely filled up. On the re-occupation of Malaya in 1945, emphasis was given to the rehabilitation of irrigation works. The established policy of the Government was to reduce the country's dependence on imported food supplies, with emphasis towards self-sufficiency in rice, and every effort was made to increase the local production of rice. Following the Independence of Malaya in 1957, greater emphasis was placed on increasing the income and employment opportunities of the rural poor. With this objective, the irrigation and drainage programmes were formulated to provide adequate irrigation facilities to enable double cropping of padi lands, and drainage facilities for improved production of tree crops especially in small holdings.

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Subsequent to the formation of Malaysia in 1963, additional State Drainage and Irrigation Departments were established in Sabah and Sarawak and this increased the number of State Departments to thirteen with the Federal Headquarters being responsible for the overall drainage and irrigation matters in the country. The significant increase in development since 1957 is reflected in the areas provided with irrigation facilities increasing from 205,000 hectares (3,000 hectares with double cropping facilities) to 332,000 hectares (249,000 hectares with double cropping facilities) by the end of 1981. The areas provided with drainage facilities, too, has increased from 142,000 hectares to 476,000 hectares in the same period. In 1970/71, severe floods occurred in many parts of West Malaysia and the situation was so serious that a national disaster had to be declared on January 5th. 1971. Subsequent to this occurrence, flood mitigation and hydrology was made an additional responsibility of the Department from 1972 onwards. From 1986, coastal engineering has become an added function of the DID. The River Management Conference was held on 1988, and a subsequently lead to the establishment of the River Engineering Division in 1990. The Department has moved from the Ministry of Agriculture (MOA) to the Ministry of Natural Resources & Environment (NRE) on March 27th, 2004 and taken on new and expanded responsibilities. Today, the DID's duties encompass :      Hydrology and Water Resources River Management Flood Mitigation Coastal Management Stormwater Management

The DID can look back on its history of successfully executed programmes with pride. The experience and knowledge that it has gained, together with its current dynamism have placed the Department in the forefront as the custodian of the nation's water resources. 2.3 Vision To be a world class organization by the year 2010. Mission To manage water resources, river basins, flood risks and coastal zones to achieve environmental sustainability and enhanced quality of life. Objective To provide engineering services which are beyond the capability of the target group itself and subsequently to ensure optimum land utilization and more efficient management of the nation's water resources. CORPORATE INFORMATION

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Core Values Doing The Right Things, and Doing Things Right with   

Quality Integrity Caring

Q Policy DID Malaysia is committed to an excellence work culture focused on continuous improvement towards customer and employee satisfaction. 2.4 ORGANISATION STRUCTURE

The organisation structure of the DID is set out in Figure 2.1. The Department consists of    15 divisions 15 state departments special project teams.

The DID is headed by the Director-General and assisted by Deputy Director-General (Development) and Deputy Director-General (Operation). Each division and state department is headed by a Director, and assisted by Deputy Directors and officers. The special projects are under the purview of the Project Management Division, and each project is headed by its Project Engineer. Please refer to the DID official website for the current name and contact of the Director General, Deputy Director General, and Division and State Directors : http://www.water.gov.my/. The organisation structure and corporate information of each division and state can be obtained through the links to the website.

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DIRECTOR GENERAL

DEPUTY DIRECTOR GENERAL (DEVELOPMENT)

CORPORATE DEVELOPMENT

DEPUTY DIRECTOR GENERAL (OPERATIONS)

DIRECTOR PROJECT MANAGEMENT

FLOOD MITIGATION

LEGAL ADVISOR MANAGEMENT SERCVICES STATE RTB MSC

RIVER JOHOR KEDAH

HYDROLOGY & WATER RESOURCES

RTB SUNGAI MUDA

COASTAL MELAKA PERLIS

MECHANICAL & ELECTRICAL SERVICES

RTB KUALA LUMPUR

URBAN DRAINAGE

N. SEMBILAN

KELANTAN

TRAINING & CAREER DEVELOPMENT

RTB SUNGAI PERAI

STRUCTURAL GEOTECHNICAL AND DAM

SELANGOR

TERENGGANU

HUMID TROPIC CENTRE

RPSA BERIS

QUANTITY SURVEYING & CONTRACT

W.P.PUTRAJAYA

PAHANG INFORMATION TECHNOLOGY UPPP KELANTAN

PERAK

SABAH QUALITY & PERFORMANCE AUDIT RTB SUNGAI KLANG

PULAU PINANG

SARAWAK

LABUAN

SMARTCONTROL CENTRE

RANCANGAN PENGAIRANMUDA

Figure 2.1 Organisation Chart  Organisation chart of DID, Malaysia effective from 1st June 2008. Please refer to the official website, http://www.water.gov.my, for the current chart and other corporate information.

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DID MANUAL VOLUME 10 CONTRACT ADMINISTRATION PART I : INTRODUCTION

CHAPTER 3

PROCUREMENT – OVERVIEW

Chapter 3 – PROCUREMENT- OVERVIEW

Table of Contents

Table of Contents .......................................................................................................................3-i List of Figures ...........................................................................................................................3-ii List of Tables.............................................................................................................................3-ii 3.1 3.2 3.3 INTRODUCTION ............................................................................................................. 3-1 GENERAL PROCUREMENT STRATEGY .............................................................................. 3-1 METHODS OF PROCUREMENT......................................................................................... 3-3 3.3.1 3.3.2 3.3.3 3.4 3.4.1 3.4.2 3.5 3.5.1 3.5.2 Quotation Exercise ............................................................................................. 3-3 Tender Exercise ................................................................................................. 3-3 Direct Negotiation .............................................................................................. 3-3 Procurement for Goods ...................................................................................... 3-4 Procurement for Services.................................................................................... 3-5 General Principles .............................................................................................. 3-5 Conventional Or Traditional ................................................................................ 3-6 3.5.2.1 3.5.2.2 3.5.3 3.5.3.1 3.5.3.2 3.5.4 3.5.4.1 3.5.4.2 3.5.5 3.6 3.7 Advantages under the traditional lump sum contract ............................. 3-7 Disadvantages under the traditional lump sum contract......................... 3-7 Advantages associated with Design and Build ....................................... 3-8 Disadvantages associated with Design and Build ................................... 3-8 The Advantages of PFI ........................................................................ 3-9 The Disadvantages of PFI .................................................................... 3-9

METHODS OF PROCUREMENT FOR GOODS AND SERVICES .............................................. 3-4

PROCUREMENT OPTIONS FOR WORKS............................................................................ 3-5

Design And Build................................................................................................ 3-7

Private Finance Initiative (PFI) ............................................................................ 3-8

Forms Of Contract.............................................................................................. 3-9

REFERENCE DOCUMENTS ..............................................................................................3-10 REFERENCES.................................................................................................................3-10 Procurement of Goods.................................................................................... 3A-1 Procurement of Works.................................................................................... 3A-9 Procurement of Services ............................................................................... 3A-15

APPENDIX 3A APPENDIX 3B APPENDIX 3C

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List of Figures

Figure Figure 3.1

Description Government Procurement

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Table Table 3.1

Description Procurement of Goods

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3 PROCUREMENT
3.1 INTRODUCTION

This chapter provides:  An overview of the procurement strategy  An outline of DID’s procurement strategy for supplies, works and services.  The standard forms of contract used for DID projects 3.2 GENERAL PROCUREMENT STRATEGY

“Procurement” is about making choices and can be defined as the process of acquiring goods (or supplies), works and services from suppliers, contractors and consultants, as the case may be as shown in Figure 3.1. The procurement process covers the whole life cycle from identification of needs, through to the satisfactorily delivery of goods or service or handing over of completed works. Procurement, therefore, has a broader meaning than that of simply purchasing. It is concerned with securing services and products that best meet the needs of users and stakeholders. The key objectives of the procurement should be met. The Treasury1 requires good governance practices when procuring for the Government through tenders. The Project Team should be mindful of these principles when acquiring goods, works or services:      Public accountability. Transparency. Value for Money. Open and fair competition. Fair dealings.

The determination the most acceptable price for the procurement of works, goods or services generally shall be carried out through:    quotation exercise, or tender exercise, or negotiation.

1

Surat Pekeliling Perbendaharaan Bil. 5 Tahun 2007 - Tatacara Pengurusan Perolehan Kerajaan Secara Tender
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Government Procurement

Supplies

A brief outline on procurement process for supply of goods is set out in Appendix 3A of Chapter 3

Works

An overview on procurement and procurement strategy for Works are covered in Chapter 3. The guidelines and procedures for Construction Management are set out in DID Manual Volume 11. The guidelines and procedures for Contract Administration are set out in DID Manual Volume 10.

Services

A brief outline on procurement process for services is set out in Appendix 3C of Chapter 3

Figure 3.1 Government Procurement

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3.3 3.3.1

METHODS OF PROCUREMENT Quotation Exercise

The quotation exercise is used where the estimated value of works, goods or service does not exceed RM500,000.00 per year. (Please refer to Treasury Circulars for current thresholds). The quotation exercise is a simplified version of the tender exercise. 3.3.2 Tender Exercise The

The tender processes involve a combination of ‘Open’ and ‘Selective’ tendering methods. following are some of the often used processes.

 Open tender - Suppliers, contractors or consultants are invited through advertisement. All respondents to the advertisement who request tender documentation will be invited to submit a tender. There is no pre-qualification questionnaire or short-listing stage prior to invitation to tender. Minimum standards of suitability may be lay down for respondent, failing which no tender document will be issued.  Selective tender - Only suppliers, contractors or consultants who are short-listed will be invited to submit a tender. Care must be taken to ensure that the number invited is adequate to provide competition. The tender list may be drawn from DID’s existing database, or through a prequalification exercise.  Pre-Qualification Exercise - Tenderers shall be invited through advertisements. All respondents to the advertisement will be given a set of questionnaires to complete. The responses are assessed based on agreed criteria. The tender list is prepared, based on the respondents who qualified under the assessment, and shall be invited to tender.  ‘Two Envelope’ Tenders – This method is often used in private sector only and not applicable on Government Projects. The purpose of the "two-envelope" tender method is to eliminate any perceived or actual pre-judgment that may develop for, or against, lower or higher priced tenders before non-price criteria are evaluated. The ‘technical bid’ and the ‘financial bid’ are evaluated separately, by separate evaluation committees. Refer to Chapter 7 for more details on the process and procedures. For Government projects all procurement whether works, supply of goods or service exceeding RM500,000.00 per year shall be invited through tender. 3.3.3 Direct Negotiation

Goods, services or works may be directly sourced through direct negotiations, where usually there is no competitive process. Direct negotiation is permitted where a directive is given by the Ministry of Finance to procure particular goods, services or works from an identified party. Detailed written records of negotiations must be maintained to avoid disputes, and provide transparency. The process and procedures shall be as described in Appendix 3B (Procurement of Works).

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3.4

METHODS OF PROCUREMENT FOR GOODS AND SERVICES

The general procurement strategy of goods and services are outlined in Section 3.4. Reference must be made to the current Government Circulars on the purchasing of goods and services, in respect of:     The financial thresholds for purchasing goods and services and by what method The standard terms and conditions of contract The procedure for opening tenders, evaluating them and awarding contracts The non-commercial considerations that need to take place in advertising tenders and tender evaluation. Procurement for Goods

3.4.1

The general procurement route for supply of goods for Government projects is as follows: Table 3.1 Procurement of Goods Value of each item per annum Exceeding RM500,000 Exceeding RM100,000 but not exceeding RM500,000 Exceeding RM50,000 but not exceeding RM100,000 Not exceeding RM50,000 Tender Quotation from at least 5 registered suppliers Quotation from at least 5 registered Bumiputera suppliers Direct purchase or negotiations from registered or non registered suppliers (both Bumiputera and non Bumiputera). Procurement Option

Reference : AP170 and 171 Procurement for Emergency Cases Exemptions to the Treasury Instructions are permitted for emergency cases only subject to the conditions stated in Treasury Instruction 173.2. A brief outline on procurement process for supply of goods is set out in Appendix 3A (Procurement of Goods) of this Chapter.

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3.4.2

Procurement for Services

The scope of services is divided into two categories, namely: a) b) Consultancy Services Non Consultancy services

The consultancy services encompasses consultancy services for both physical and non physical development and other category required by the Ministry/ Department and decided by Treasury from time to time. The non consultancy services covers services such as provision of training and courses, maintenance and repairs, cleaning, rental and building management, security and others. A brief outline on procurement process for services is set out in Appendix 3C (Procurement of Services) of this Chapter. 3.5 3.5.1 PROCUREMENT OPTIONS FOR WORKS General Principles

For Government projects the following procurement routes are commonly adopted: a) Work order or indent - value of works not exceeding RM100,000 and shall be based on approved Schedule of Rates for Civil Engineering and Building Works. For Electrical Work the value shall not exceed RM50,000 and shall be based on approved Schedule of Rates for Electrical Works. b) Requisition works - minor and repair works (which do not alter the original structure) which value do not exceed RM100,000 and shall be based on approved Schedule of Rates. c) Non requisition works – works which are not based on approved Schedule of Rates and the value of works does not exceed RM500,000. d) Works which estimated value exceeds RM500,000 must be procured through tender, either through conventional or design and build contract. The procurement strategy should be consistent with the objectives of the project and should enable the risks (i.e. uncertainties of time, cost and performance) to be controlled to achieve a successful outcome. It is the outcome of a series of decisions which are made during the early stages of a project and the chosen strategy influences the allocation of risk, the design strategy and the employment of consultants and contractors. It has a major impact on the time scale and ultimately the cost of the project. The main types of procurement option commonly adopted by the Government are as follows: a) Conventional or traditional : design by consultants (or in house) is completed before contractors tender for, then carry out the construction works b) Design and build : design and construction are both undertaken by a single contractor in return for a lump sum price.

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The chosen option should also reflect the Government’s technical ability and resources and the amount of control over the process which the Government wishes to exert directly or indirectly. Therefore, Project Head and/or Project Team must have a clear understanding of where the ultimate authority and responsibility for controlling and managing the important risks lie. There are a number of key factors to be considered when selecting a procurement option. These include:      the the the the the availability of in-house resources and experience; project size and complexity; importance of timescales and possible phased completion requirements; importance of quality and issues surrounding whole-life use of the facility; and availability of funding (in addition to setting and agreeing the budget for the project).

Whatever procurement route is chosen, sufficient time must be built into the overall programme to allow for all planning stages to be fully completed (both before construction starts and during the progress of the project). Good planning will include getting the construction sequence right, assessing and managing project risks, and using value management to assess the contribution of each part of the construction process. These steps will minimise the likelihood of delays, extra costs, and waste/inefficiency. The procurement routes briefly described in Sections 3.6 to 3.7 may be adopted for a DID project. 3.5.2 Conventional Or Traditional

Under the ‘conventional’ or ‘traditional’ contract, the contractor builds to a defined scope of work for a fixed lump sum price. It is sometimes referred to as lump sum contract. The fixed lump sum price contract may be based on drawings, specifications and quantities or based on drawings and specifications only. With this type of contract, the Design Team (whether in-house designers, or Consultants appointed by the Government) are to fully develop the design prior to going out to tender. The contract is with the main contractor who has responsibility only for the construction works. If the design has been fully thought out, developed and frozen, then in theory, this type of contract should provide a reasonable degree of cost certainty at tender stage. However, the need to work to tight timescales may mean that a fully developed design cannot be prepared in advance of tendering, in which case, subsequent design changes will invariably lead to cost escalation

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3.5.2.1      

Advantages under the traditional lump sum contract

Competitive fairness. Design-led, facilitating a high level of quality in design and construction is achievable as the scope of the work is prescribed on an input basis. The Government retains direct contractual relationships with the design team, cost consultant and main contractor. Price certainty and transfer of risk to the main contractor is achieved at contract award provided no subsequent changes are instructed to the design. The procedure is well known, and changes to the works can be easily arranged and valued based on known prices obtained in competition without necessarily excessive cost or time implications. Satisfactorily public accountability. Disadvantages under the traditional lump sum contract

3.5.2.2    

The overall programme may be longer due to the need to produce a fully detailed design before the project goes out to competitive tender and work starts on site i.e. no parallel working. No buildability input by contractor. The Government must have the resources and access to the expertise necessary to administer the contracts of consultants and the main contractor since the traditional method often results in adversarial relationship developing. Claims for delay and disruption can arise if the design is not fully detailed prior to agreeing the contract sum or if the Government varies the design afterwards. Thus it could be open to abuse, resulting in less certainty. Design And Build

3.5.3

Under a design and build contract, a single contractor assumes the risk and responsibility for designing and building the project in return for a fixed lump sum price. Since it is a fast track procurement strategy, construction normally commences before the completion of all detailed design but at the contractor’s risk. The range of design and build options available ranges from “turnkey” where the Government has little involvement in the design development or construction procurement process, to “develop and construct” where the Government appoints the designers to develop the brief to a level of sophistication which will leave the design and build contractor to develop the detail or specifications elements. Under design and build the risk is transfer to the contractor and the Government loses some control over the project. Any requirement which is not directly specified in the Needs Statement or tender documents will invariably constitute variation to the contract which are usually more expensive to introduce after the contract is awarded compared with other types of procurement strategy. Therefore the Needs Statement must be fully and unambiguously defined in the tender documents (i.e. clear, accurate and delivered on time) and if the requirements are not specific, then the performance specifications should be provided at the tender stage. Under this procurement option the contractor is likely to deliver the greatest performance benefits to the Government through innovation and standardisation, where appropriate output specifications are used.

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Where in some circumstances where the design and build procurement contract is extended to cover the maintenance and/or the operation of the facility for a substantial period, the contractor has increased opportunity for adopting innovative solutions that provide greater value for money when considering the whole life costs. Design and Build contract may be procured through negotiation or tender process. See Appendix 3 – Flow Chart on Procurement of a Design and Build Contract through Direct Negotiation. 3.5.3.1     Advantages associated with Design and Build

Single point responsibility for design and cost risks (i.e. the Government has only to deal with one firm). Price certainty is obtained before construction starts provided the Government’s requirements are adequately specified and changes are not introduced. Potential for more economical construction due to early consideration of building methods ('buildability'). Reduced total project time due to the possibility of early completion i because of overlapping activities. Disadvantages associated with Design and Build

3.5.3.2     

Difficulties in preparing adequate Government’s Requirements / Needs Statement. The Government’s design needs must be properly specified as variations to the scope of the project, once awarded, can be expensive. The Government has little control over design and quality standards once the contract is awarded, as the building is specified on a performance basis. There is no design overview unless separate check consultants are appointed by the Government for this purpose. Government has to commit itself before the detailed designs are completed. Relatively fewer capable local construction firms undertaking the design and build projects so there is less real competition. Design liability offered by design and build contractors is limited. Private Finance Initiative (PFI)

3.5.4

The Private Finance Initiative or PFI is a form of public-private partnership (PPP) that combines two (2) procurement options, i.e.   where the Government purchases capital items from the private sector, and where the Government the contracts-out the provision of public services from the private sector.

PFI differs from privatisation in that the public sector retains a substantial role in PFI projects, either as the main purchaser of services or as an essential enabler of the project. PFI differs from contracting-out in that the private sector provides the capital asset as well as the services. The PFI also differs from other PPPs in that the private sector contractor also arranges finance for the project. Under the most common form of PFI, the private sector designs, builds, finances and operates (DBFO) facilities based on ‘output’ specifications decided by public sector managers and their departments.

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The private sector already builds most public facilities but the PFI also enables the design, financing and operation of public services to be carried out by the private sector. Under the PFI, the public sector does not own an asset, such as a hospital or school but pays the PFI contractor a stream of committed revenue payments for the use of the facilities over the contract period. Once the contract has expired, ownership of the asset either remains with the private sector contractor, or is returned to the public sector, depending on the terms of the original contract. PFIs are usually initiated at the Treasury or Ministry levels. There are no ‘standard’ terms and conditions, as each PFI largely depends on the assets and services requirements and the financing package. 3.5.4.1 The Advantages of PFI

Benefits include:    The process is service rather than project focused and concentrates on the whole life of the service and associated assets. There is a single point of responsibility for service delivery. There is an opportunity to draw on a wider range of management and innovation skills.

Construction projects of high capital value are more likely to achieve value for money under the PFI route. All PFI projects should be assessed on a case-by-case basis. 3.5.4.2 The Disadvantages of PFI

Risks include:     The process will be at risk without a long-term commitment from both the Government and "service providers". The process leading up to the completion of a new building can take a long time and needs an extensive and fully refined brief at the outset. There is a significant cost to the industry in tendering which has to be recovered by each bidder. Change is difficult to achieve and potentially expensive to incorporate once the contract is let. Forms Of Contract

3.5.5

Forms of contract that are used by the DID include  For works o PWD203 – Standard Form of Contract To Be Used Where Drawings and Specifications form Part of the Contract PWD 203A – Standard Form of Contract To Be Used Where Bills of Quantities Form Part of The Contract PWD 203N – Standard Form of Contract for Nominated Sub-Contractor Where the Main Contract is based Upon PWD Form 203 or 203A PWD DB/T – Standard Form of Design and Build Contract

o

o

o

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 For Goods o PWD 203P – Standard Form of Contract for Nominated Supplier Where the Main Contract is based Upon PWD Form 203 or 203A PWD 203E – Standard Form of Contract for Supply and Delivery of Engineering Equipment and Plant

o

 For consultants (where the professional fees are based on Scale of Fees prescribed by the respective professional boards) o o o 3.6 BEM/JKR FORM A – For Engineers BAM/JKR FORM B – For Architects BQSM/JKR FORM C – For Quantity Surveyors REFERENCE DOCUMENTS

Royal Institution of Chartered of Surveyors – The Procurement Guide 3.7 REFERENCES

Treasury Circular (Surat Pekeliling Perbendaharaan) [1] Bil 2 Tahun 1999: Had Nilai Perolehan dan Kuasa, Tanggungjawab Lembaga Perolehan dan Jawatankuasa Sebutharga [2] [3] Bil 8 Tahun 2006: Peraturan Perolehan Perkhidmatan Perunding Bil 5 Tahun 2007: Tatacara Pengurusan Perolehan Kerajaan Secara Tender

[4] Bil 12 Tahun 2007: Had Nilai Dan Syarat-syarat Pembelian Terus Bagi Bekalan Dan Perkhidmatan [5] Bil 5 Tahun 2009: Pembahan Had Nilai dan Tatacara Pengurusan Perolehan Secara Sebutharga Treasury Instruction (Arahan Perbendaharaan) [1] Arahan Perbendaharaan 31 Julai 2008 DID Circulars (Surat Pekeliling / Edaran JPS) [1] SP JPS Bil. 3/2004: Garis Panduan Perolehan Kerja Secara Sebutharga [2] SP JPS Bil 3/2008: Tatacara Baru Permohonan dan Perlantikan Perunding di JPS Malaysia

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DID MANUAL Volume 10 Contract Administration

Chapter 3 – Procurement - Overview APPENDIX 3A

Procurement of Goods

Revision Number : Revision Date :

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Chapter 3 – PROCUREMENT- OVERVIEW

APPENDIX 3A

PROCUREMENT OF GOODS

Estimated Value of Goods / Supplies

Any type or class of Goods, up to the value of RM 50,000 per year

Exceeding RM 50,000 Up to RM 100,000

Exceeding RM 100,000 Up to RM 500,000

More than RM 500,000

Direct purchase from any suppliers

Quotation from minimum 5 Bumiputera registered suppliers

Quotation from minimum 5 registered suppliers

Open Tender

Selective Tender

 

Ref: Arahan Perbendaharaan 170 SPP Bil 5/2009

Flowchart 3A.1 – Procurement Options (Based on value of supplies)

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Chapter 3 – PROCUREMENT- OVERVIEW

Flowchart
1 1.

Description
Establish Government’s needs.

Action By
Head of Department

2

2.

Ascertain the budget allocation including approval.

Controlling Officer

3

3.

Ascertain the procurement route to be used (Direct purchase, quotation or tender?)

Procurement Officer

4

4.

Procurement Process.

Procurement Officer

5

5.

Issue Purchase Order (AM 75), and of Letter of Acceptance (for purchases through either Quotation or Tender).

Procurement Officer

6

6.

Receive Goods and Purchase Order signed by the supplier. Check that the Goods are in good order.

Receiving Officer

7

7.

Payment

Finance Division

Flowchart 3A.2 – Process for Procurement of Goods

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Flowchart
1 1.

Description
Establish Government’s needs.

2

2.

Ascertain the budget allocation including approval.

3

3.

Preparation of quotation document.

4

4.

Invite and Display of Quotation Notice.

5

5.

Issuance, receiving at closing date and time and opening of Quotation Submission.

6

6.

Evaluation Report and Recommendation.

7

7.

Decision and Approval.

8

8.

Issue Local Order, with cover letter.

9

9.

Receive goods and signed Local Order.

10

10. Payment

Flowchart 3A.3 – Quotation Process

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Chapter 3 – PROCUREMENT- OVERVIEW

Flowchart

Description

1

1.

Establish Government’s needs.

2

2.

Ascertain the budget allocation including approval.

3

3.

Planning.

4

4.

Preparation of Tender Documents and comply with Government’s needs.

5

5.

Tender Advertisements.

6

6.

Issuance, receiving at closing date and time and opening of tender submission.

7

7.

Tender Evaluation Report and Recommendation.

8

8.

Decision and Approval.

9

9.

Prepare and signing Letter of Acceptance.

10

10. Issue Letter of Acceptance and Letter informing Acceptance of Tender.

11

11. Preparation & signing of Contract Documents.

12

12. Receipt of Goods.

13

13. Payment.

Flowchart 3A.4 – Tender Process

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3A.1

PROCEDURES

Please refer to Flowchart 3A.2 – Process for Procurement of Goods. Step Procedures / Tasks General For the purposes of these procedures, the “Procurement Officer” may be one of more persons who is/are given the duties of carrying out tasks of procuring Goods for or on behalf of the Department or section. 1&2 Establish Needs and Ascertain Budget Establish the Department’s (or section) needs for the particular Goods, including o o o Quantity Quality When the Goods is required. Action By: Head of Department/ Procurement Officer Action By For information

Ascertain that budget is allocated for the Goods. 3&4 Ascertain the procurement route to be used & The Procurement Process Generally, the procurement route is pre-determined by the value of the Goods (or supplies) to be purchased and shall Comply with the current Government’s guidelines on direct purchase  Direct purchase/ Quotations Procurement Option Tender Quotation from at least 5 registered suppliers Quotation from at least 5 registered Bumiputera suppliers Direct purchase from registered or non registered suppliers (both Bumiputera and non Bumiputera). Action By: Procurement Officer

Value of each item per annum Exceeding RM500,000 Exceeding RM100,000 up to RM500,000 Exceeding RM50,000 up to RM100,000 Not exceeding RM50,000

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Chapter 3 – PROCUREMENT- OVERVIEW

Step

Procedures / Tasks  Tender exercise. o o Open tender or selective tender. If procurement through selective tender: For the value of the Goods up to RM50 million, then the tender list and the acceptance of tender must be approved by the Procurement Board convened under the Department / Ministry. For the value of the Goods exceeding RM50 million, then the tender list and the acceptance of tender must be approved by the Procurement Board convened under the Ministry of Finance level.

Action By

-

5

Issue Purchase Order (AM 75), and Letter of Acceptance (for purchases through either Quotation or Tender) All purchases of goods by direct order The current Form AM75 shall be used. All purchases of goods by quotation or tender The Letter of Acceptance of Quotation / Letter of Acceptance of Tender shall be used

Action By: Procurement Officer

6

Receive Goods and Purchase Order signed by the supplier. Check that the Goods are in good order. The officer who receives the Goods (Receiving Officer) shall ensure that the Goods are in good order, including  that the Goods are in accordance with the quantity and description stated on the Purchase Order  free from damage or visual defects  is received on time  a copy of the Purchase Order is duly signed and accompanies the Goods. Refuse or reject all damaged Goods, or Goods not in accordance with the description stated in the Purchase Order.

Action By: Receiving Officer

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Step 7

Procedures / Tasks Payment Forward the claims and supporting documents for payment to the relevant Finance Division. The Finance Division shall check and submit the supporting documents together with payment voucher to the Accountant General, Ministry’s Accountant or State Treasury (as the case may be) to honour payment. Please also refer to DID Manual Volume 10, Chapter 10 – Payments.

Action By Action By: Receiving Officer

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(This page is deliberately left blank)

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DID MANUAL Volume 10 Contract Administration

Chapter 3 – Procurement - Overview APPENDIX 3B

Procurement of Works

Revision Number : Revision Date :

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Chapter 3 – PROCUREMENT- OVERVIEW

APPENDIX 3B

PROCUREMENT OF WORKS
(Estimated Value of Works not exceeding RM500,000)
Project Brief

Select procurement route

Requisition for minor and repair works which do not alter original structure

Non Requisition Works

Value?

Value?

> RM 200,000 up to RM500,000

RM 20,000 up to RM200,000

< RM20,000

< RM20,000

RM 20,000 up to RM100,000

> RM 100,000 up to RM200,000

> RM 200,000 up to RM 500,000

Direct appointment of registered Class F Contractor

Appointment of registered Class F Contractor to be based on approved Schedule of Rates

Quotations from registered Class F Contractor

Quotations from registered Class E Contractors

Quotations from registered Class F Contractors

Direct appointment of registered Class F Contractors

Construction by contractor

 Ref: Arahan Perbendaharaan 180  SPP Bil 5/2009

Completion and Hand-over to DID

Flowchart 3B.1 – Direct Appointment/ Quotation Procurement Options
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Chapter 3 – PROCUREMENT- OVERVIEW

(Estimated Value of Works exceeding RM500,000) Project Brief

Select procurement route Design and Build Contract (Tender-designconstruct) Conventional Contract (Design-tenderconstruct)

In-House

Design inhouse or by consultants?

By consultants

Prepare Needs Statement (By DID)

Appointment of consultants

Design stage Tender / Direct Negotiation Process Design stage

Tender / Direct Negotiation Process Design and construction by contractor

Construction by contractor

Completion and Hand-over to DID

Flowchart 3B.2– Tender/ Direct Negotiation Procurement Options

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Flowchart

Description 1. Establish Government’s needs.

Action by -

1

2

2. Ascertain the budget allocation including approval. 3. Preparation of quotation document.

3

4

4. Invite and Display of Quotation Notice.

5

5. Issue, receive at closing date and time and opening of Quotation Submission. 6. Evaluation Report and Recommendation.

6

7

7. Decision and Approval.

8

8. Issue Works Indent.

9

9. Contractor completes the Work and returns Works Indent duly signed. 10.Payment.

10

Flowchart 3B.3 – Quotation Process

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Flowchart 1 2

Description
1. 2. Establish Government’s needs. Ascertain budget allocation including approval. Preparation of tender documents and preliminary estimates. Check tender documents and Bills of Quantities. Tender documents in order? Tender notice and advertisement. Issue tender documents to Contractors for pricing, and received priced tender documents. Tender Evaluation Report, and Recommendation. Decision and approval

Action By
Implementation Department/PH PO/ Engr

3

3.

4 No

4.

PO /QS or Engr

5 Yes 6

5. 6. 7.

PO BUBK

7

8

8.

Evaluation Officer/ Evaluation Committee / BUBK Tender Procurement Board PO AtP PO/SO

9 10 11 12

9.

10. Prepare Letter of Acceptance 11. Sign Letter of Acceptance 12. Issue Letter of Acceptance, and Letter informing the acceptance of Tender 13. Preparation of contract documents 14. Signing of contract documents; and distribution of copies of contract documents 15. Post-contract Administration

13

CAO AtP; CAO

14 15

SO

16

16. Payment

SO

Flowchart 3B.4 – Tender WORKS PROCUREMENT OF Process

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Flowchart
1

Description
1. Establish Government’s needs.

Action By
-

2

2.

Ascertain budget.

Implementation Department/PH -

3

3.

Received Instruction / Approval from Ministry of Finance. Issue Letter of Intent to Contractor.

4

4.

AtP

5

5.

Preparation of tender documents and preliminary estimates. Check tender documents and Bills of Quantities.

PO/ Engr

6

6.

PO /QS or Engr

No

7

7.

Tender documents in order? Issue tender documents to Contractor for pricing, and received priced tender documents. Analyse contractor’s price.

BUBK

Yes
8 8.

9

9.

Evaluation Officer/ Evaluation Committee / BUBK Price Negotiation Committee BUBK

10

10. Price Negotiation Committee Meeting.

11

11. Report Price Negotiation result to Ministry for endorsement. Forward endorsed report to Ministry of Finance for approval. 12. Approval from Ministry of Finance. 13. Prepare Letter of Acceptance 14. Sign Letter of Acceptance. 15. Issue Letter of Acceptance of Tender and Letter informing the acceptance of Tender 16. Preparation of contract documents 17. Signing of contract documents and distribution of copies of contract documents 18. Post-contract Administration

12 13 14

PO AtP PO/SO

15 16

CAO AtP; CAO

17

18 19

SO

19. Payment

SO

Flowchart 3B.5 – Direct Negotiation for Conventional Contract

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Chapter 3 – PROCUREMENT- OVERVIEW

Flowchart
1

Description
1. 2. Establish Government’s needs. Ascertain budget.

Action By
Implementation Department/PH -

2

3

3.

Received Instruction / Approval from Ministry of Finance Issue Letter of Intent and pre-bid documents to Contractor Received Contractor’s Proposal Evaluate the proposal

4

4.

Implementation Department/PD Departmental Design Team -

5

5. 6.

6

No

7

7.

Complying with Needs Statement?

Yes
8 8. Analyse contractor’s price Evaluation Officer/ Evaluation Committee / BUBK Price Negotiation Committee BUBK

9

9.

Price Negotiation Committee Meeting.

10

10. Report Price Negotiation result to Ministry for endorsement. Forward endorsed report to Ministry of Finance for approval. 11. Approval from Ministry of Finance.

11

PO

12

12. Prepare Letter of Acceptance

13

13. Sign Letter of Acceptance.

AtP

14

14. Issue Letter of Acceptance of Tender and Letter informing the acceptance of Tender 15. Preparation of contract documents

PO/SO

15

CAO

16

16. Signing of contract documents and distribution of copies of contract documents 17. Post-contract Administration

AtP; CAO

17

SO

18

18. Payment

SO

Flowchart 3B.6 – Direct Negotiation for Design and Build

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DID MANUAL Volume 10 Contract Administration

Chapter 3 – Procurement - Overview APPENDIX 3C

Procurement of Services

Revision Number : Revision Date :

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Chapter 3 – PROCUREMENT- OVERVIEW

APPENDIX 3C

PROCUREMENT OF SERVICES

Type of Services

Non Consultancy (Conducting courses and training, maintenance and repairs, cleaning and clearing, rental and building management, security and etc.

Consultancy

Value per annum Exceeding RM500,000 Exceeding RM100,000 up to RM500,000 Exceeding RM50,000 up to RM100,000 Not exceeding RM50,000

Procurement Option - Tender - Quotation from at least 5 registered suppliers - Quotation from at least 5 registered Bumiputera suppliers -Direct purchase from registered or non registered suppliers (both Bumiputera and non Bumiputera).

Physical Development Consultancy

Physical / Non Physical Studies Consultancy

Direct Appointment (physical development scope of works, land and environmental survey and where the required expertise is limited)

Appointment through Technical and Financial Proposal (physical and non physical development and/or when the implementing agency does not have the expertise

 

Reference: AP 185 – 190; 31 July 2008 SPP Bil 5/2009 Flowchart 3C.1 – Procurement of Services

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Flowchart
1 2 3 No

Description
1. Propose 5 names of Consultant, prepare evaluation, scoring marks and recommendation paper. Receive the recommendation paper for the appointment of Consultant. Check. Agree with recommendation paper? [8] Propose different consultants Approval of new selection. [1] Submit the recommendation paper to the Authorised Party and inform PH. Approval from Authorised Party Issue Letter of Intent to Consultant.

Action by
PH

2. 3. 4. 5. 6. 7.

BUBK BUBK BUBK BUBK Deputy Director General (Development) BUBK PH -

4

5 Yes 6

7 8 9 10

8 9.

10. Consultant submits Technical and Financial Proposal. 11. Evaluation of Technical Proposal and Financial Proposal. 12. Negotiation.

11

PH

12 Disagree 13 14

Technical and Financial Negotiation Committee PH BUBK

13. Evaluation and recommendation. 14. Check and submit recommendation to Authorised Party for approval. 15. Decision from Authorised Party. [11] Approve

15

-

16 17 18 19

16. Issue Letter of Acceptance to Consultant. 17. Sign the Consultancy Agreement 18. Consultant performs the Work. 19. Payment.

PH AtP -

Flowchart 3C.2 – Direct Appointment of Consultants (Ref : SPP 8/2006 and SP JPS 3/2008)

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Flowchart
1 2 3

Description
1. Propose minimum 5 names of Consultants, prepare evaluation, scoring marks and recommendation paper. Receives the recommendation paper for the appointment of Consultants. Check. Agree with recommendation paper? Secretariat proposes different name(s). Approval of new selection). Submit the recommendation paper to the Authorised Party. Approval from Authorised Party Invitation to shortlisted consultants to submit Technical and Financial Proposals. Shortlisted consultants submit Technical and Financial Proposals

Action by
PH

2. 3.

BUBK BUBK BUBK BUBK Deputy DG (Development)

No

4

Yes 4. 5.

5

6 7 8

6. 7.

8 9 10 9.

10

11 12 13 Approve without negotiation 11. Evaluation of Technical Proposals and Financial Proposals. 12. Forward recommendation (report) to BUBK. 13. Check and submit recommendation on cost to Authorised Party for decision. 14. Authorised Party approves recommendation? Approve requiring negotiation 15 16 17 Disagree Agree 18 18. Decision by Approving Authority 19 19. Issue Letter of Acceptance to Consultant. 20 20. Sign the Consultancy Agreement. 21 21. Consultant performs the services. 22 22. Payment. 15. Issue Letter of Intent to Consultant. 16. Technical and Financial negotiation with Consultant 17. Secretariat prepares and submits recommendation paper to Approving Authority for decision PH/PO BUBK

Disagree

14

Flowchart 3C.3 – Appointment of Consultants through Technical and Financial Proposal (Ref : SPP 8/ 2006 and SP JPS 3/2008)
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Chapter 3 – PROCUREMENT- OVERVIEW

3C.1

LIMIT OF AUTHORITHY FOR THE APPOINTMENT AND APPROVAL OF COST OF CONSULTANCY SERVICES

The Authorised Party and limit of authority for the appointment and approval the cost of consultancy services are as follows: a) Physical Development Projects Authorised Party a. Treasury b. Procurement Board “A” Ministry of Natural Resources and Environment Authority Limit Project Cost Exceeding RM50 million Up to RM50 million Consultancy Cost Exceeding RM5 million Up to RM5 million

b) Physical/ Non Physical Studies Authorised Party a. Treasury b. Procurement Board “A” Ministry of Natural Resources and Environment Authority Limit for approving the appointment and consultancy cost Exceeding RM1 million Up to RM1 million

c) Land Survey and Environmental Works Authorised Party a. Treasury b. Procurement Board “A” Ministry of Natural Resources and Environment Authority Limit for approving the appointment and consultancy cost Exceeding RM300,000 Up to RM300,000

d) Additional Consultancy Cost Authorised Party a. Treasury b. Procurement Board “A” Ministry of Natural Resources and Environment Authority Limit for approving the additional consultancy cost Exceeding 30% of original cost Up to 30% of original cost

(Ref : Treasury Circulars No. 8/ 2007 and DID Circular JPS No 3/2008).

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DID MANUAL VOLUME 10 CONTRACT ADMINISTRATION PART I : INTRODUCTION

CHAPTER 4

PROJECT IMPLEMENTATION – OVERVIEW

Chapter 4 – PROJECT IMPLEMENTATION – OVERVIEW

Table of Contents

Table of Contents .......................................................................................................................4-i List of Figures ...........................................................................................................................4-ii 4.1 4.2 4.3 INTRODUCTION ............................................................................................................. 4-1 FUNCTION OF PROJECT MANAGEMENT ........................................................................... 4-1 PROJECT LIFE CYCLE...................................................................................................... 4-3 4.3.1 4.3.2 4.3.3 4.3.4 4.3.5 4.3.6 4.3.7 4.3.8 4.3.9 4.4 4.5 Project Initiation ................................................................................................ 4-4 Project Planning Stage ....................................................................................... 4-6 Design and Build .............................................................................................. 4-6 Conceptual Design Stage .................................................................................... 4-6 Design and Build .............................................................................................. 4-6 Preliminary Design Stage (Schematic Design Stage) ............................................. 4-7 Design and Build .............................................................................................. 4-7 Detailed Design Stage ........................................................................................ 4-7 Design and Build .............................................................................................. 4-7 Tender Stage ..................................................................................................... 4-7 Construction Stage............................................................................................. 4-8 Completion and Hand-Over................................................................................. 4-8 Defects Liability Stage & Close Out...................................................................... 4-9

SPECIAL PROJECTS ........................................................................................................ 4-9 IMPLEMENTATION OF PROJECT: PROJECT TEAM, AND RESPONSIBILITES .......................4-10 4.5.1 4.5.2 4.5.3 4.5.4 4.5.6 4.5.7 4.5.8 4.5.9 Project Team (PT).............................................................................................4-10 Project Head (PH) .............................................................................................4-12 Superintending Officer’s Representative (SOR)....................................................4-12 Procurement Officer (PO) ..................................................................................4-13 Contract Administration Officer (CAO) ................................................................4-13 Project Supervisor (PS)......................................................................................4-13 Design Team or Designer (DT) ..........................................................................4-13 Consultant ........................................................................................................4-14 Superintending Officer (SO) or Project Director (PD) ...........................................4-14 SO’s Representatives (SOR) and PD’S Representatives (PDR)...............................4-14 Contractor ........................................................................................................4-15

4.6

PARTIES NAMED IN THE CONTRACT ..............................................................................4-14 4.6.1 4.6.2 4.6.3

4.7

AUTHORISED PARTY .....................................................................................................4-15

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List of Figures

Figure Figure 4.1 Figure 4.2 Figure 4.3 Figure 4.4

Description Functional Project Organisation Project Life Cycle Flow Chart (Outline) Project Initiation Chart (Other than Special Projects) Project Team Organisation

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4 PROJECT IMPLEMENTATION - OVERVIEW
4.1 INTRODUCTION

This chapter provides:  An overview of the process of implementing and managing the projects undertaken by the DID.  A brief outline of the roles and responsibilities of the various member of the project team.

4.2

FUNCTION OF PROJECT MANAGEMENT

Project management may be defined as the overall planning, co-ordination and control of a project from inception to completion aimed at meeting the Government’s and stakeholders’ requirements in order to produce a functionally and financially viable project that will be completed on time within authorized cost and to the required quality standards.
From inception to completion, a project involves many parties, e.g.  the stakeholders, who have vested interest in the success or outcome of the project. Internal stakeholders include the Government department who is the originator of the project, or the end-user of the works. External stakeholders include such parties who may be affected by project, including neighbouring landowners and those who may benefit from the completion of the project (say, residents at a flood prone area, under a flood mitigation project).  the various professionals and specialists forming the project team. These professionals and specialists contribute knowledge and experience to the decision matrix at each stage of the project implementation.  the contractors(s) and nominated subcontractors / suppliers who shall deliver the completed project. The functional relationship of the various parties in the project is as shown in Figure 4.1. The task of project management is to bring all the parties together and co-ordinate the actions to enable them to make their best possible contribution in the most efficient manner. In larger scale projects, the management function of a project is often separated from the design and execution functions, whilst in smaller projects both the management and design functions may be carried out by the leader of the design team. The roles of the Project Team and the parties in connection with the implementation or project and administration of contract are further discussed in section 4.5, below.

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Internal Stakeholders

External Stakeholders

PROJECT TEAM

Contractor

Nominated SubContractors / Suppliers

Legend: Direct Relationship Indirect Relationship

Figure 4.1 Functional Project Organisation

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4.3

PROJECT LIFE CYCLE

The project is implemented in a number of steps or stages. For the purpose of this Chapter, the stages in the project life cycle are summarised into the nine (9) main stages, as outlined below and represented in Figure 4.2. The main activities and responsibilities of the Project Team at each state are set out below. Volume 10 shall only cover Tender, Construction, Completion and Hand-over and Defects Liability and Close out Stage.

START

Volume 10: Contract Administration

PROJECT INITIATION STAGE

TENDER STAGE

PROJECT PLANNING STAGE

CONSTRUCTION STAGE

CONCEPTUAL DESIGN STAGE

COMPLETION AND HAND-OVER

PRELIMINARY DESIGN STAGE

DEFECTS LIABILITY & CLOSE OUT STAGE

DETAILED DESIGN STAGE

END

Figure 4.2 Project Life Cycle Flow Chart (Outline)

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4.3.1

Project Initiation

Government projects implemented by DID may be initiated by  The Treasury or  The Ministry’s Development Division or  A DID Division or State The project initiation and implementation chart is set out in Figure 4.3. At this stage, the general objectives of the project are established and a budget may be allocated for its implementation. Once the project is approved, and the budget is allocated, the Controlling Officer or Director-General (as the case may be) shall delegate the implementation of the project to the respective Division or State Director. The Division or State Director shall then appoint the Project Head for the implementation of the project. At the pre-implementation or pre-tender stages of each project and/or contract, the Project Head and Project Team must check that sufficient budget is available for the project and/or contract. (The remainder of this page is deliberately left blank)

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1. Ministry / Controlling Officer

1. The Ministry approves the budgetary allocation and list of projects to be implemented by DID. The Controlling Officer shall notify the Director-General the approved allocations and project list. 2. The Director-General shall assign the project to the relevant implementing Division or State Director, and sets the project’s ceiling budget, for the execution and completion of the project. 3. The implementing Division / State Director shall manage and be responsible for the execution and completion of the project. The Division or State Director shall appoint an officer as the Project Head. The implementing Division / State and the Project Head shall be assisted by officers from the implementing Division / State, and officers from the supporting Divisions, e.g. Contracts and Quantity Surveying Division, Mechanical and Electrical Services Division, Hydrology and Water Resources Division, etc. 4. The Project Head shall identify the resources and personnel requirements for the project. The Project Head shall recommend and appoint the members of the Project Team and Design Team from within DID, or where necessary, Consultants shall be appointed. 5. The PH / Project Team shall determine the planning data and design criteria. Further studies such as geotechnical studies, environmental impact studies, etc. shall be carried out as necessary. 6. The Project Head / Project Team shall determine the design brief and criteria. Once the scope of works is determined, the PH/Project Team shall consider the procurement option best suited for the implementation of the project, including whether to design in-house or to appoint Consultants. Please refer to Chapter 3 [Procurement] for procurement processes and procedures.

2. DG of DID

3. Implementing Division / State

4. Project Head

5. Project Team

6. Design & Procurement

Figure 4.3 Project Initiation Chart (Other than Special Projects)

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4.3.2

Project Planning Stage

At the project planning stage, the Project Head and his team shall develop the package strategy for the overall implementation of the project, including:  The project brief and project cost plan (preliminary estimate)  Project master programme, outlining the procurement of Consultants (if required), design stages, tendering, construction and handover. The programme should include key stages, including the review, verification and validation of various design output produced by the Design Team / Consultant. Considerations should be given, and decision made, whether to procure under a traditional contract (i.e. design-tender-construct), or under a design a build contract. Further studies may be required before the Conceptual Design Stage may commence, or to be carried out concurrently with the Conceptual Design Stage, including:      Feasibility study Site investigation Hydrological and Hydraulic investigation Geotechnical investigation Environmental impact assessment.

Other issues to be considered and included in the project planning stage are:  Land acquisition.  Co-ordination and liaison with other Government departments and agencies Design and Build For design and build contracts, the Needs Statement shall be prepared by DID to be included in the pre-bid document to be issued to the Tenderers for the submission of the technical and commercial proposal. 4.3.3 Conceptual Design Stage

The Design Team / Consultants shall develop the conceptual design based on the Needs Statement. The conceptual design process should provide the outline design to a level such that the scope of works can be fully confirmed and agreed. The endorsement of the Division / State Director is required before proceeding to Preliminary Design Stage. Design and Build For design and build contracts, the Tenderer’s proposal shall include the conceptual design. This shall be one of the basis for consideration for the award of contract.

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4.3.4

Preliminary Design Stage

At the preliminary design stage, the Project Team shall appraise the soundness of various design proposal and assess the buildability, as more information is gathered following the approval of the conceptual design. Value management should be carried out during the process so as to have optimal performance at the advantageous economic value. The Project Head / Project Team shall appraise the various options, and propose to the relevant Division / State Director or Funding Body for implementation. The output from the preliminary design process should secure a preliminary endorsement from the Division / State Director or Funding Body, and enable the Design Team to proceed to the Detailed Design Stage. Design and Build This process is also applicable for Design and Build Contracts, where the approval of the Preliminary Designs shall enable the Contract Sum to be finalized. The PH ensures that the decisions and matters agreed in the earlier stages are effectively and efficiently implemented. 4.3.5 Detailed Design Stage

During the detailed design stage, the Design Team shall carry out technical design and production of drawings concurrently. The Designer shall ensure that the design coordination is carried out closely. Interaction between the End-User is also required, especially in the selection of materials, goods and plants. The Design Team should advise on the suitability and reliability of the selected items. The Design Team must allow sufficient time for the End-User to consider and approve the submitted designs and drawings. Design and Build This process is also applicable for Design and Build Contracts, where the detailed design stage is carried out by the Contractor. 4.3.6 Tender Stage

At this stage, the Project Team has sufficient information to identify the various scope of works, e.g. the various construction packages ranging from main contractor, nominated sub-contractors and nominated suppliers. The Project Team should formulate the procurement strategy, including:      Pre-qualification of tenderers Type of Tender (Open, selective or direct negotiation) Preparing list of tenders for approval by Tender Procurement Board Packaging the works into multiple contracts Types of contract, e.g. with quantities (JKR203A) or without quantities (JKR203). The decision to use design and build contract (JKR DB/T) is usually made at the Project Planning Stage.  Activity schedule for the tendering process, until construction completion. Please refer to Part II – Pre-Contract for the tendering and award process and procedures.

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4.3.7

Construction Stage

In this stage, the Project Team is principally involved in monitoring the performance of the Contractor, and the progress of the works. The principle activities include:                  Ensuring contract documents are prepared and issued to the Contractor Ensuring the contracts are signed Arranging the handover of the Site to the Contractor Reviewing contractor’s construction programme and method statements Ensuring that procedures are in place and being followed Ensuring that site meetings are held and documented Confirming the insurance cover, performance bond and other deliverables from the Contractor are in accordance with the Contract Reviewing progress for the Contractor Monitoring the Contractor’s performance Ensuring that the design information required by the Contractor is supplied by the Design Team (where the works are not contracted under a ‘design and build’ contract) Monitoring financial status Preparing payments and arranging payment authorisation Managing variations Managing adjustments to the Contract Sum(s) Anticipate and resolve potential problems before they develop or escalate. Assisting the Superintending Officer (or Project Director) in the assessment of contractor’s claims for extension of time and for loss and/or expense Reporting to the Superintending Officer (or Project Director), the Director-General or Controlling Officer, or Funding Body, as the case may be.

Please refer to Volume 10, Part III – Post-Contract for the contract administration process and procedures for the construction stage. Please refer to Volume 11 for the construction management process and procedures for the construction stage. 4.3.8 Completion and Hand-Over

The Project Team shall ensure that all prerequisites as per the contract has been completed and delivered (except the obligations to be carried out in Defects Liability Stage, or deferred/exempted under the terms of the Contract) before the Certificate of Practical Completion is issued, including:    All testing, commissioning and/or endurance tests must be successfully completed. The relevant records, documents and drawings are handed over. Design Guarantee (if applicable) is submitted.

The Consultants / Superintending officer’s Representative shall prepare and submit the recommendation report, together with the Schedule of Defects and list of acceptable outstanding works, if any, to the Project Team. Refer to Volume 11, for the process and procedures relating to project completion and hand-over.

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4.3.9

Defects Liability & Close Out Stage

The Project Team shall demobilise upon the issuance of the Certificate of Practical Completion, save for such remaining members who are given the responsibilities of monitoring and managing the Defects Liability Stage, and the preparation of the Final Accounts and Final Certificate (Close Out Team). The Close Out Team is to ensure that  all defective works which had been identified during the defects liability period have been rectified, and properly closed out.  Upon the expiry of the Defects Liability Period, a Schedule of Defects (if necessary) is prepared and the defects therein rectified by the Contractor.  The Final Accounts are prepared and signed off by the Contractor.  the final inspection shall be arranged, and jointly carried out by the relevant parties, and the Certificate of Making Good Defects is issued as per the Contract.  The final deliverables, such as statutory declaration (or letter from the Labour Department) are submitted prior to issuance of the Final Certificate. Refer to Volume 11, for the process and procedures relating to the on-site management of Defects Liability Stage. Refer to Volume 10, chapters 18 and 19 for contract administration for defects management, and Final Account and Final Certificate. 4.4 SPECIAL PROJECTS

Special Projects are one-off projects, initiated by the Government or by a third party, to meet a particular need. The source of funding may be an external Funding Body, or funded through alternative procurement strategies such as Private Finance Initiative (PFI), Build-Operate-Transfer and other methods of procurement. Examples of such special projects include: the Sg. Muda Flood Mitigation Project, SMART Tunnel, Bertam - Kepala Batas Flood Mitigation Project, etc. The project initiation, planning and implementation procedures (including terms of the contract and contract administration) are dependant on the particular circumstances, and are excluded from this Manual. Nevertheless, the procedures and description set out in this manual may be used as general guidelines, subject to the needs and circumstances of the project, and terms and conditions of the contract.

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4.5 4.5.1

IMPLEMENTATION OF PROJECT: PROJECT TEAM, AND RESPONSIBILITES Project Team (PT)

The DID practices the project team concept to perform the activities required to complete a project. The Project Team Organisation is set out in Figure 4.4. The DID Project Head (PH) is the leader of this project team, and is ultimately responsible for the execution and delivery of a project. During the implementation a project, the PH will rely on  the Procurement Officer (PO) to perform tender administration duties;  the Contract Administration Officer (CAO) to perform contract administration duties, and  the Superintending Officer’s Representative (SOR) and Project Supervisor (PS) to perform construction management duties.  Where third party consultants (Consultant) are appointed, these duties are performed by the Consultant and audited by the CAO or SOR, as the case may be.

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Tender Secretariat

Procurement Officer

Design Team / Designer

Project Head Contract Administration Officer

Implementation Officer / SOR

Consultant(s) Project Supervisor

Figure 4.4 Project Team Organisation

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Typical duties for the PH, SOR, PO, CAO, PS and other project team members are detailed below: 4.5.2 Project Head (PH)

The PH has overall responsibility and authority for entire execution of the project. The PH is the single point of contact for all project activities from planning through project close out. The PH may delegate responsibilities to members of his project team, including on-site construction management duties to the Superintending Officer’s Representative, but the PH remains fully accountable for the execution of the project within the scope, schedule, and budget parameters established for the project. The duties and responsibilities of the PH includes but not limited to:  Responsibility for the project’s technical and financial directions and for ensuring external and internal stakeholder satisfaction with project results.  Administer professional service, design and construction contracts, including involvement in design contract negotiations.  Establish initial project budgets, cost estimates, cash flow projections and master schedules.  Develop and provide periodic updates (monthly or such period set by the Stakeholders) of project schedules and budgets.  Monitor project schedules and budgets to ensure financial and schedule milestones are met.  Resolve public questions and concerns about the project.  Co-ordinate with other Government departments and agencies and/or private utilities and companies involved in the project.  Oversee easement acquisition/utility relocation and permitting activities.  Prevent or resolve problems occurring during project development and execution.  Participate in the development of bidding documents and the construction contract award process (as applicable).  Analyse problems occurring during the project and take actions to ensure project goals are met.  Provide regular progress reports and monthly briefings.  Ensure project records and documentation are properly maintained.  Select and assign projects to staff, SOR and consultants.  Set schedules for interim project reviews.  Supervise the quality assurance manager and safety and health officer for the project. 4.5.3 Superintending Officer’s Representative (SOR)

The PH may delegate duties or responsibilities to the SOR, or PDR for design and contracts. The SOR will ensure that the Contractor’s work is supervised and routinely inspected. The SOR must confirm that the Contractor complies with all required contractual, cost, schedule, safety and quality obligations, including environmental requirements.

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4.5.4

Procurement Officer (PO)

For the purpose of this Manual, the Procurement Officer (PO) is responsible for the pre-contract administration functions including coordination with the PH to choose a project-delivery method, selecting and appointing Consultants and carrying out exercises for selection of contractors. The PO shall facilitate the necessary approvals from the appropriate Authorised Party. 4.5.5 Tender Secretariat (TS)

The Tender Secretariat is responsible for the preparation of the tender evaluation paper for the Tender Procurement Board meeting. 4.5.6 Contract Administration Officer (CAO)

The Contract Administration Officer is responsible for all post-contract functions, including facilitating payment applications, tracking changes and costs, assisting the SO/PD or their Representative in the assessment of contractor’s claims for additional time and payments, and project close out with the project team. The CAO shall facilitate the necessary approvals from the appropriate Authorised Party. 4.5.7 Project Supervisor (PS)

The Project Supervisor (PS) will perform day-to-day construction management activities in support of the SOR. The PS’s responsibilities include daily supervision of the Contractor’s work, daily preparation of written reports, and facilitating communications between the Contractor and SOR. The PS reports to the SOR. 4.5.8 Design Team or Designer (DT)

The Designer is responsible for designing the project and preparing plans, specifications and estimates and design manuals. DID’s own engineering staff, especially on smaller design projects where a quick turn around is required, may perform Designer services inhouse. Large projects requiring a full range of professional services (soils, investigation, survey, public involvement, hydraulic analysis, etc.) are typically performed by the Consultant who has been awarded a qualification-based professional services contract with the DID.

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4.5.9

Consultant

Where Consultant is appointed to carry out design works or to provide specialist services, the PH may also appoint the Consultant as his representative on contract-related and construction-related matters. Within the limits of the delegation, the Consultant will inspect the Contractor’s work and ensure that the Contractor meets the required contractual, cost, schedule, safety and quality obligations. The Consultant may be assisted by his own site staff. 4.6 PARTIES NAMED IN THE CONTRACT

Notwithstanding the roles and responsibilities of the parties implementing the project under the contract, the execution and supervision are ultimately the responsibilities of the SO/PD and the Contractor. 4.6.1 Superintending Officer (SO) / Project Director (PD)

The administration of the construction contract is the responsibility of the SO/PD duly named in the contract. Who may be appointed or named as the SO/PD depends on a number of factors, including:    Value of the works (please refer to section 5.3) Whether the project is undertaken at HQ or State level The location of the works.

The PH and the SO/PD need not be the same officer. 4.6.2 SO’s Representatives (SOR) / PD’S Representatives (PDR)

The supervision of the construction work is generally carried out by the SOR/PDR. The SO/PD may delegate powers to more than one officer to perform different duties on his behalf, as follows:  Principal SO’s Representative / PD’s Representative Overall supervision and direction of the execution of the works.  Specialist SO’s Representative / PD’s Representative E.g. an electrical or mechanical construction manager to supervise the execution of electrical or mechanical works. The format of letters delegations are appended under Volume 10A, Chapter 9 – Contract Documentation.

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4.6.3

Contractor

For the purposes of this Volume 10, the Contractor refers to the general contractor on a DID construction project. The Contractor is the prime contract holder with ultimate responsibility for completion of the construction work. The PH, SOR/PDR and other DID officers typically should only have direct communications with the Contractor (i.e. the PH should not correspond directly with subcontractors). For the purposes of this Volume 10, the PH’s primary point of contact with the Contractor is the Contractor’s representative, as designated by the Contractor. The PS’s primary point of contact with the Contractor is the Contractor’s site agent (or foreman). 4.7 AUTHORISED PARTY

The DID is required to comply with the procurement and payment procedures set by the Treasury. Only such person who is duly authorised (Authorised Party) may accept, approve, certify or otherwise act on behalf of the Government, in matters of procurement or administration of contract, irregardless who the Project Head or Superintending Officer / Project Director may be. Such Authorised Party may be:   An officer, by virtue of his office, or A board or committee duly convened and comprising the relevant officers.

Further details of the Authorised Party and the limit of authority are set out in Chapter 5 – Authority.

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DID MANUAL VOLUME 10 CONTRACT ADMINISTRATION PART II : PRE-CONTRACT

CHAPTER 5

AUTHORITY

Chapter 5 – AUTHORITY

Table of Contents

Table of Contents ....................................................................................................................... 5-i List of Tables……………………………………………………………………………………………………………………….. 5-ii 5.1 5.2 5.3 INTRODUCTION ............................................................................................................. 5-1 AUTHORISED PARTY....................................................................................................... 5-1 LIMITS OF AUTHORITY ................................................................................................... 5-1 5.3.1 5.3.2 5.3.3 5.3.4 5.3.5 5.3.6 5.3.7 5.3.7 5.3.8 5.4 5.5 Selection of Tenderers ....................................................................................... 5-2 Limit and Authority of Procurement Board for Acceptance of Tenders ................... 5-3 Execution of Contracts ....................................................................................... 5-4 Superintending Officer / Project Director and Contract Administration................... 5-5 Certification under the Terms of Contract............................................................ 5-6 Approval of Variation Order ................................................................................ 5-7 Instruction for Variation for Special Cases ........................................................... 5-8 Expenditure of Provisional Sums ......................................................................... 5-9 Approval of Contractor’s Claims for Loss and Expense, Permitted under the Contract………………………. .............................................................................……5-9

CIRCULATION OF DOCUMENTS ....................................................................................... 5-9 REFERENCES ................................................................................................................ 5-10 Distribution of Documents for Works Funded by Federal Government [Pengedaran Dokumen-Dokumen (Kontrak Kerja) Biayaan Persekutuan] .......... 5A-1

APPENDIX 5A

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List of Tables

Table Table 5.1 Table 5.2 Table 5.3 Table 5.4 Table 5.5 Table 5.6 Table 5.7 Table 5.8 Table 5.9

Description Selection of Tenderers Acceptance of Tenders Execution of Contracts Contract Administration Terms of Contract Approval of Variation Order Special Cases Provisional Sums Loss and Expense

Page 5-2 5-3 5-4 5-5 5-6 5-7 5-8 5-9 5-9

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5 AUTHORITY
5.1 INTRODUCTION

This chapter provides:  A brief explanation on the demarcation between administration of contract, and the authority to accept, approve or certify on behalf of the Government.  The types and limits of authority applicable to contracts let by the DID.  Circulation of documents to the relevant parties. 5.2 AUTHORISED PARTY

The DID complies with the procurement guidelines set under the current relevant Treasury Instructions. The person who is duly authorized (‘Authorised Party’) may accept, approve, certify or otherwise act on behalf of the Government, in matters of procurement or administration of contract, irregardless who the Project Head or Superintending Officer / Project Director may be. Such Authorised Party may be:  An officer, by virtue of his office, or  A board or committee duly convened and comprising the relevant officers. The limit of authority is usually dependent on the value or estimated value of the contract. 5.3 LIMITS OF AUTHORITY

For pre-contract and post-contract procedures, all actions requiring acceptance, approval or certification and the Party who is authorised to act on behalf of the Government / DID are set out in the following sub-sections.

Notwithstanding these summaries, reference should be made to the latest DID circulars, Treasury Circulars and Treasury Instructions for the current limits of authority, or for further details.

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5.3.1

Selection of Tenderers

In general any works estimated exceeding RM200,000 or supplies which value exceeding RM200,000 per annum for each item must be procured through open tenders with the exception for supplies where the qualified suppliers under each trade is known to be less than five (5) suppliers then approval from the Chief Secretary of Treasury or State Financial Officer (where applicable) must be obtained before tender notice can be sent through registered letter or express delivery. The Authorised Party for approval of list of tenderers for selective tenders or direct negotiation purposes is as follows: Table 5.1 Selection of Tenderers Authorised Party Works Ministry of Finance Ministry / Department Procurement Board Exceeding RM5 million Up to RM 5 million Limit of Authority Supplies/ Services Exceeding RM 5 million Up to RM 5 million

Ref : Ministry of Finance Guidelines for Tender Evaluation (January 2008 Edition).

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5.3.2

Limit and Authority of Procurement Board for Acceptance of Tenders

The limit of value and authority of the procurement board for acceptance of tenders is as follows: Table 5.2 Acceptance of Tenders Limit of Authority Authorised Party Ministry of Finance Works a) Open tender exceeding RM 100 million b) Selective tender – exceeding RM5 million Ministry / Department Procurement Board a) Open tender - Up to RM 100 million b) Selective tender – Up to RM5 million Federal Procurement Board (State level) a) Open tender - Up to RM 20 million b) Selective tender – Up to RM1 million Supplies / Services a) Open tender exceeding RM 50 million b) Selective tender – exceeding RM5 million a) Open tender - Up to RM 50 million b) Selective tender – Up to RM5 million Not permitted to consider and accept tender for supplies and services at state level

Where the procurement process requires the approval from the Ministry of Finance, the Tender Committee shall submit the Procurement Board’s recommendation to the Ministry of Finance for further decision. In addition if the decision is not unanimous then it must be referred to the Ministry of Finance. Ref : Ministry of Finance Guidelines for Tender Evaluation (January 2008 Edition) and AP198.1

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5-3

Chapter 5 – AUTHORITY

5.3.3

Execution of Contracts

Section 2 of Government Contracts Act 1949 (Revision 1973) states that all contracts made in Malaysia on behalf of the Government shall, if reduced to writing, be made in the name of the Government of Malaysia and may be signed by a Minister or by any public officer duly authorised in writing by a Minister, either specially in any particular case, or general for all contracts below a certain value in his department or otherwise as may be specified in the authorisation. For the execution (signing) of any contracts, the officer authorised to sign on behalf of the DID is as follows: Table 5.3 Execution of Contracts Authorised Party Minister of Ministry of Natural Resources and Environment Chief Secretary Ministry of Natural Resources and Environment Deputy Chief Secretary I Ministry of Natural Resources and Environment Deputy Chief Secretary II Ministry of Natural Resources and Environment Head of Department at Head Quarters Deputy Head of Department at Head Quarters Divisional Secretary of Administration and Finance, Ministry of Natural Resources and Environment Departmental Divisional Directors at Head Quarters Departmental Directors at State Level Departmental Deputy Directors at State Level Chief Assistant Secretary (Finance) of Administration and Finance Division, Ministry of Natural Resources and Environment Chief Assistant Secretary (Administration) of Administration and Finance Division, Ministry of Natural Resources and Environment Assistant Secretary (Finance) of Administration and Finance Division, Ministry of Natural Resources and Environment Not exceeding RM 100,000 Not exceeding RM 500,000 Not exceeding RM 1 million Not exceeding RM 5 million Limit of Authority Works, Suppliers & Services Exceeding RM100 million Not exceeding RM100 million Not exceeding RM30 million Not exceeding RM 10 million

Ref : Minister of NRE Delegation of Power under Section 2, Government Contracts Act 1949 dated 18 February 2009 and AP198.1

5-4

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Chapter 5 – AUTHORITY

5.3.4

Superintending Officer / Project Director and Contract Administration

For contract administration, the appropriate DID officers to be named as Superintending Officer (JKR Form 203 or 203A) or Project Director (JKR Form DB/T) or to exercise the relevant powers under the conditions of contract, are as follows: Table 5.4 Contract Administration SO Representative / PD Representative Superintending Officer / Project Director Officer(s) empowered to take action on behalf of the Government / DID in respect of**:  Liquidated Damages for noncompletion  Delay and Extension of time  Determination of the employment of Contractor  Effects of War or Earthquake  Arbitration  Mutual Termination

Contract Sum

Supervision by DID officer

Supervision by Consultant

More than RM 100.0 million Not more than RM 100.0 million Not more than RM 25.0 million Not more than RM 10.0 million Not more than RM 500,000.00

Director General or Officer named by the Director General

Officer named by the Director General Federal Director / State Director / Project Engineer Project Engineer / District Engineer

Director General

Director General

Federal Director / State Director / Project Engineer

Appointed Consultant

Deputy Director General

Deputy Director General

District Engineer

Engineer

The Superintending Officer /Project Director named in the Contract

The Superintending Officer /Project Director named in the Contract

**Subject Matter Liquidated Damages for noncompletion Delay and Extension of time Determination of the employment of Contractor Effects of War or Earthquake Arbitration Mutual Termination Ref: SP JPS Bil 1/2003
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Form JKR 203 / 203A Clause 40 Clause 43 Clause 51 Clause 52 Clause 54 Not applicable

Form DB/T Not applicable Clause 45 Clause 54 Clause 55 Clause 56 Clause 40

5-5

Chapter 5 – AUTHORITY

5.3.5

Certification under the Terms of Contract

The DID officer who is empowered to certify (sign) or give recommendation under the terms of the contract are set out below: Table 5.5 Terms of Contract Authorised Party Superintending Officer / Project Director Superintending Officer / Project Director Superintending Officer / Project Director, or Principal SO’s Representative / Principal PD’s Representative Superintending Officer / Project Director Superintending Officer / Project Director, or Principal SO’s Representative / Principal PD’s Representative Superintending Officer / Project Director, or Principal SO’s Representative / Principal PD’s Representative Superintending Officer / Project Director Superintending Officer / Project Director, or Principal SO’s Representative / Principal PD’s Representative Superintending Officer / Project Director Superintending Officer / Project Director Certificate or Recommendation Variation Order* Adjustment of Contract Sum Certificate of Practical Completion

Certificate of Non-completion Certificate of Sectional Completion

Certificate of Partial Possession

Certificate of Delay and Extension of Time Certificate of Completion of Making Good Defects

Interim Certificate Final Certificate

* Subject to the approval of the Variation Order Committee. Please refer to Section 5.3.7. Ref: SP JPS Bil 1/2003

5-6

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Chapter 5 – AUTHORITY

5.3.6

Approval of Variation Order Table 5.6 Approval of Variation Order Authorised Party Limit of Authority (Value of Variation) Where the original Contract Sum is less than RM10 million, and the aggregate value of variation works is not more than 10% of the Contract Sum, Or Where the original Contract Sum is more than RM10 million, and the aggregate value of variation works is not more than RM 1 million. Where the original Contract Sum is less than RM10 million, and the aggregate value of variation works is not more than 20% of the Contract Sum, Or Where the original Contract Sum is more than RM10 million, and the aggregate value of variation works is not more than RM 2 million.

Variation Order Committee chaired by the SO or PD named in the Contract (If the Deputy Director General is the S.O. or P.D., then the Authorised Party shall be the Variation Order Committee chaired by the Deputy Director General).

Variation Order Committee chaired by the Deputy Director General of DID

Variation Order Committee chaired by the Director General of DID

Where the original Contract Sum is less than RM20 million, and the aggregate value of variation works is not more than 30% of the Contract Sum, Or Where the original Contract Sum is more than RM20 million, and the aggregate value of variation is not more than RM 6 million.

Chief Secretary to the Treasury Ref : AP202.2

All other cases

Note: the officer who applies for or presents the request for Variation Order approval may not be the chairman of the Variation Order Committee, or be a member of the Committee. For the composition of the committee please refer to SP JPS Bil 2/2008.

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Chapter 5 – AUTHORITY

5.3.7

Instruction for Variation for Special Cases Table 5.7 Special Cases Authorised Party Variation Category Instructions for Variations / Re-measurement of provisional quantities not involving addition or variation to the original scope of works, and which result in reduction in contract sum Price adjustments as approved by the Treasury Adjustment of Prime Cost Sum, Provisional Sum and re-measurement of provisional quantities in accordance with provisions of contract. Re-measurement of provisional quantities without addition or variation to original scope of works

Superintending Officer / Project Director

Superintending Officer / Project Director Superintending Officer / Project Director

Variation Order Committee chaired by the SO or PD named in the Contract

a) value of price increase for the remeasurement of quantities allowed upto 30% of original contract sum but not exceeding RM3 million which ever is the lowest b) value of price increase for the remeasurement of quantities allowed upto 40% of original contract sum but not exceeding RM4.5 million which ever is the lowest c) value of price increase for the remeasurement of quantities allowed upto 50% of original contract sum but not exceeding RM6 million which ever is the lowest d) In all other case

Variation Order Committee chaired by Deputy Director General

Variation Order Committee chaired by Director General

Chief Secretary of Treasury or State Finance officer where relevant

Ref : SPP 7/2007 and AP 202 (31 July 2008); SP JPS Bil. 5/2008 For the composition of committee for re-measurement of provisional quantities, please refer to SP JPS Bil 5/2008.

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Chapter 5 – AUTHORITY

5.3.8

Expenditure of Provisional Sums

The Authorised Party, for approval of expenditure of Provisional Sums under any contract, is as follows: Table 5.8 Provisional Sums Authorised Party VO Committee at level of SO VO Committee at level of Deputy Director General VO Committee at level of Director General Value Not exceeding 1 million Exceeding RM1 million – RM 3 million Exceeding RM 3 million

5.3.9 Approval of Contractor’s Claims for Loss and Expense, Permitted under the Contract Table 5.9 Loss and Expense Authorised Party A committee chaired by Head of Department, and includes the Legal Advisor A committee chaired by Head of Department, and includes the Legal Advisor A committee chaired by Head of Department A committee chaired by Head of Department Types of Claim Loss and expense due to delay on the part of the Government, and/or due to compliance with statutory requirements. Discrepancies in or documents. between the contract

Other claims permitted under the conditions of contract. Any other costs in connection with fees and charges for relocation of sewerage, water supply, electric supply, etc.

Ref : SPP 7/2007 and AP 202 (31 July 2008) 5.4 CIRCULATION OF DOCUMENTS

In the administration of the contract, pertinent documents or information such as:      Letter of Acceptance (Chapter 8) Contract documents (Chapter 9) Certificate of Adjustment of Contract Sum (Chapter 12) Extension of time (Chapter 13) Etc.

must be conveyed to various pertinent parties, who may not be directly connected to the contract. Refer to Appendix 5A : Distribution of Documents for Works Funded by Federal Government (Pengedaran Dokumen-dokumen (Kontrak Kerja) Biayaan Persekutuan), and ensure that copies of such documents or information are forwarded to the relevant parties.
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Chapter 5 – AUTHORITY

5.5

REFERENCES

Please refer to the latest Treasury Circulars and DID Circulars for the limits of authority. Treasury Circular (Surat Pekeliling Perbendaharaan) [1] SPP Bil. 2/1999: Had Nilai Perolehan, Kuasa, Tanggungjawab Lembaga Perolehan Dan Jawatankuasa Sebutharga. [2] SPP Bil. 2/2001 (Tambahan Pertama Kepada SPP Bil. 2/1999): Had Nilai Perolehan, Kuasa, Tanggungjawab Lembaga Perolehan Dan Jawatankuasa Sebutharga. [3] SPP Bil. 11/2001 (Tambahan Kedua Kepada SPP Bil. 2/1999): Perubahan Had Nilai Dan Kuasa Lembaga Perolehan Agensi [4] Bil 7 Tahun 2007: Peraturan Arahan Perubahan Kerja (Variation Order) [5] Bahagian Perolehan Kerajaaan Ministry of Finance: Garis Panduan Penilaian Tender (Edisi Januari 2008) Treasury Instruction (Arahan Perbendaharaan) [1] AP 198: Setuju Terima Tender [2] AP 202: Arahan Perubahan Kerja [3] AP 203: Pengiraan Nilai Arahan Perubahan Kerja DID Circulars (Surat Pekeliling / Edaran JPS) [1] SPJPS.UB 1/1997: Peraturan dan pihak-pihak Berkuasa Meluluskan Pengukuran Semula Kuantiti Sementara [2] (36)dlm. PPS.10/4/2 CUB Jld.3 (27/7/98): Pengedaran Dokumen-dokumen (Kontrak Kerja) Biayaan Persekutuan [3] (37) dlm. PPS. 10/4/2 CUB Jld.3 (21/9/98): Urusan Dengan Lembaga Perolehan Kementerian Sumber Asli dan Alam Sekitar & Perbendaharaan Malaysia [4] SP JPS Bil. 2/2001: Peraturan dan Pihak-Pihak Berkuasa Meluluskan Pengukuran Semula Kuantiti Sementara (Tambahan Pertama Kepada Surat Pekeliling JPS.UB.1/1997) [5] SP JPS Bil. 1/2003: Perlantikan Pegawai Penguasa (P.P), Perwakilan Kuasa Pegawai Penguasa (Wakil P.P) Dan Pegawai-Pegawai Yang Diberi Kuasa (PYDK) Dalam Urusan Pentadbiran Kontrak. [6] SP JPS Bil. 2/2008: Peraturan Mengenai Arahan Perubahan Kerja Dan Pelarasan Harga Bagi Kontrak Kerja [7] Minister of Natural Resources and Environment: Pemberian Kuasa Di Bawah Seksyen 2 Akta Kontrak 1949 tarikh 18 Februari 2009

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DID MANUAL Volume 10 Contract Administration

Chapter 5 – Authority APPENDIX 5A

Distribution of Documents for Works Funded by Federal Government [Pengedaran Dokumen-Dokumen (Kontrak Kerja) Biayaan Persekutuan]

Revision Number : Revision Date :

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Chapter 5 – AUTHORITY

APPENDIX 5A

DISTRIBUTION OF DOCUMENTS FOR WORKS FUNDED BY FEDERAL GOVERNMENT [PENGEDARAN DOKUMEN-DOKUMEN (KONTRAK KERJA) BIAYAAN PERSEKUTUAN]
Adjustment of Contract Sum Certificate of Delay and Extension of Time Certificate of Noncompletion Certificate of Completion/ Certificate of Completion of Making Good Defects

Item

Office

Letter of Acceptance

Contract Document

1.

Chief Secretary, Ministry of Natural Resources and Environment Auditor General Internal Audit Unit, Ministry of Natural Resources and Environment Director General, Board of Income Tax Banks/ Insurance Companies Pusat Khidmat Kontraktor CIDB State Labour Office

√ √

√ √

√ √

√ √

√ √

√ √

2. 3.

4.

5. 6. 7. 8. 9. 10. 11. 12. 13.

√ √ √ √

√(AR) √

√(AR) √

√ √

State PERKESO Contractor Divisional Director, DID HQ Director QSCD * Director Administration Service , DID HQ ** Senior Accountant Treasury (State) State Director/ Project Engineer Consultants (if any) Ministry of Finance, Government Procurement Administration Division (For direct negotiated contracts only)

√ √√(AR) √ √ √√(AR) √√ #√√ (original) √ √ √ √ √ √ √ √ √ √

√ √ √ √

14.

15. 16. 17.

√ √

√√ √√

√ √

√ √

√ √

√ √

Notes: √√ AR * ** #

-

Contract Documents and Plans Registered Post if payment made at HQ only if payment made at State only Contract exceeding RM 1 million only

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5A-1

DID MANUAL VOLUME 10 CONTRACT ADMINISTRATION PART II : PRE-CONTRACT

CHAPTER 6

PREPARATION OF TENDER DOCUMENTS

Chapter 6 – PREPARATION OF TENDER DOCUMENTS

Table of Contents

Table of Contents .......................................................................................................................6-i List of Flowcharts ......................................................................................................................6-ii 6.1 6.2 6.3 INTRODUCTION ............................................................................................................. 6-2 PROCEDURES................................................................................................................. 6-2 GUIDANCE NOTES.......................................................................................................... 6-6 6.3.1 6.3.2 6.3.3 6.4 6.5 Prime Cost (P.C.) And Provisional Sums............................................................... 6-6 Tender Documents And Tender Table Documents ................................................ 6-6 Pre-bid Documents for Design-and-Build ............................................................. 6-7

REFERENCE DOCUMENTS ............................................................................................... 6-7 REFERENCES.................................................................................................................. 6-8 Tender Document Checklist ............................................................................ 6A-1

APPENDIX 6A

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6-i

Chapter 6 – PREPARATION OF TENDER DOCUMENTS

List of Flowcharts

Flowchart Flowchart 6.1

Description Preparation of Tender Documents

Page 6-1

6-ii

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Chapter 6 – PREPARATION OF TENDER DOCUMENTS

Flowchart
1

Description
1. Estimated cost of works qualifies it for tender process, and instruction from PjH to proceed is received.

Action By
PT

Reference
Chapter 3 – Procurement Overview

2

2. Prepare front-end sections.

PO

Tender Document Checklist

3

3. Prepare Summary of Tender / Bills of Quantities

PO

4

4. Forward queries (if any) to Design Team for comments

PO

5

5. Edit Summary of Tender / Bills of Quantities

PO

6

6. Check that document is complete and in proper order

PO

7

7. Convene Design Team / QS coordination meeting, if necessary

PO

8

8. Incorporate comments or changes, and prepare final Tender Document

PO

9

9. Quality Audit

BUBK

10

10. Tender Document ready for printing and issue

PO

Flowchart 6.1 – Preparation of Tender Documents

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6-1

Chapter 6 – PREPARATION OF TENDER DOCUMENTS

6 PREPARATION OF TENDER DOCUMENTS
6.1 INTRODUCTION

This chapter provides:  The guidelines on the preparation of tender documents. 6.2 PROCEDURES

Please refer to Flowchart 6.1 – Preparation of Tender Documents. Step 1 Procedures / Tasks Generally The tender documents should contain accurate information and definitive scope of works. This minimises ambiguity, and reduces the need for variations during construction stage. This may also reduce the risks of disputes arising from discrepancies in or between the documents. (a) Ascertain that the estimated cost of works qualifies it for tender
process

Action By / Reference

For information

Action By: PT

 For tender, the estimated cost of works is more than RM200,000.  If less than RM200,000 – refer Guidelines on Preparation for Quotation Document (b) Ascertain the procurement route agreed     Conventional (with quantities) Conventional (without quantities) Design and Build Special project.

AP 171 & AP 181 See Chapter 3 – Procurement Overview

(c) Commence preparation of tender documents upon receipt of instruction to proceed from the Project Head

6-2

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Chapter 6 – PREPARATION OF TENDER DOCUMENTS

Step 2

Procedures / Tasks Prepare Front End Sections (a) Collate and prepare the documents required for the Tender Document in accordance with the DID requirements and standardized format. Ensure that the documents:     Clearly and concisely defined the works to be executed. Are consistent with one another and free of ambiguity. Have included and highlighted all the bye-laws and Authorities requirements. Comply with the latest policies and circulars.

Action By / Reference Action By: Ir/Sr

(b) Draft the tender documents from the standard DID documents. (c) Prepare/compile specifications for the Tender Document. (d) Prepare Notice of Tender and/or Letter of Invitation to Tenderers, for insertion into the tender document: Please refer Chapter 7 [Invitation and Receipt of Tender]. (e) Use the Tender Document Checklist as guidance. (f) Agree with the Design Team      Programme for receipt of information, request for progressive release of drawings System of numbering drawings Numbers of sets required Revision notation Items to be covered by Prime Cost or Provisional Sums.

Refer Sections 6.5 & 6.6

(g) Obtain/register the tender/contract number, and insert on the cover page. Ensure that the correct format/code is used, with reference to:      Federal/State funded project The state in which the project is carried out Code for types of works / Division Running Number Year

e.g. “JPS/P/J/S/1/99” for Federal funded project, administered in Johor for drainage works/Division, being the first tender for year 1999. Re-tendered works uses the old tender number, with the words “Tawaran Semula” appended at the end. Note that sub-contracts shall follow the main contract number.

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Chapter 6 – PREPARATION OF TENDER DOCUMENTS

Step 2a

Procedures / Tasks Design and Built Pre-bid Documents (a) For design-and-build projects, the Pre-bid documents are documents prepared in anticipation of contractor’s proposal (or ‘bid’). It includes the Government’s needs statement (or requirements). The Contractor’s proposal must comply with the requirements set out in the Pre-bid Document. (b) Collate and prepare the Pre-bid Documents in accordance with the DID requirements and standardized format. Ensure that:  The Government’s Needs Statement clearly identifies the design criteria including performance criteria (and specifications, if applicable) for the works, and the purposes of the works.  The Pre-bid Documents are consistent with one another and free of ambiguity.  Comply with the latest policies and circulars. (c) Draft the tender documents from the standard DID documents. (d) Prepare Notice of Tender and/or Letter of Invitation to Tenderers, for insertion into the tender document: Please refer Chapter 7 [Invitation and Receipt of Tender].

Action By / Reference For information

Action By:
PO

3, 4 & 5

Design Team Coordination Meeting Prepare the Bills of Quantities / Summary of Tender – refer Tender Document Checklist. Forward queries, if any, to the Design Team for comments or clarification. Incorporate all comments and/or clarification, as appropriate. The completed Bills / Summary should be edited and checked by a senior QS/Engr.

Action By:
PO

6

Check that Document is Complete and In Proper Order Check through the documents, and ensure that it is complete and in proper order. Cross references, if any, should be correctly referred.

Action By:
PO

6-4

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Chapter 6 – PREPARATION OF TENDER DOCUMENTS

Step 7

Procedures / Tasks Convene Design Team And Ir/Sr Coordination Meeting, If Necessary If necessary, arrange coordination meeting between Design Team and PO, to answer queries on the drawings and/or specifications, or give comments and clarifications on the tender document.

Action By / Reference Action By:
PO

8

Incorporate comments or changes and prepares final Tender Document Incorporate all comments or changes to the tender document.

Action By:
PO

9

Quality Audit Forward a full set of the finalised Tender Document, together with the Tender Document Checklist to the BUBK for quality audit.

Action By: PO /BUBK

10

Tender Document Ready For Printing And Issue To Tenderers Arrange for the printing the required number of sets of the Tender document. Arrange for the display of the Tender Table Document. Issue invitation to tenderers : Please refer to Chapter 7 [Invitation and Receipt of Tender].

Action By: PO

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Chapter 6 – PREPARATION OF TENDER DOCUMENTS

6.3 6.3.1

GUIDANCE NOTES Prime Cost (P.C.) And Provisional Sums

“Prime Costs Sum” or “P.C. Sum”, and "Provisional Sum" may be included in the Bills of Quantities, or Summary of Tender. “Prime Costs Sum” or “P.C. Sum” is an amount included in a bill of quantities to cover a particular bit of work or supply of materials to be carried out by a nominated sub-contractor or a supplier. o o These are usually specialist works or supplies. The Bills of Quantities or Summary of Tender should allow the Contractor to price for the ‘profit and attendance’ associated with the works or supplies. Where the Contractor is capable of carrying out such specialist works or supplies, the SO is empowered to accept the Contractor’s tender for such works or supplies. The Contractor’s tender is deemed to include the profit and attendance, and no further profit and attendance will be paid.

o

"Provisional Sum" means a sum included and so designated in the Contract as a specific allocation for the execution of work or the supply of goods materials or services which may be used in whole or in part or not at all at the direction and discretion of the SO. o o Allow for the Contractor’s profit margin in the Provisional Sum. At the SO’s discretion, works or supplies to be executed or supplied under Provisional Sums may be treated as allowed under P.C. Sums.

As far as possible, provide a reasonably accurate amount for the P.C. Sum or Provisional Sum. Please also refer to Chapter 20 [Prime Cost and Provisional Sums]. 6.3.2 Tender Documents And Tender Table Documents for Conventional Contracts

The Tender Documents and Tender Table Document comprise the documents in the following order:     Notice of Tender / Letter of invitation to tenderers / Letter of Intent (whichever is applicable) Check List of submission of tenders Instructions to Tenderers & Conditions of Tendering Form of Contract o Based on Quantities – use Form JKR 203A o Based on Drawings and Specifications – use Form JKR 203 Special Provisions to Conditions of Contract Form of Tender o Based on Quantities – use Form JKR 203B o Based on Drawings and Specifications – use Form JKR 203C Letter of Acceptance (JKR 203D) Specifications Preambles Bills of Quantities, OR Summary of Tender and Schedule of Rates. Drawings Form of Guarantees for Performance Bond/Advance Payment Informative Document

 

      

6-6

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Chapter 6 – PREPARATION OF TENDER DOCUMENTS

6.3.3

Pre-bid Documents for Design-and-Build Contract

The Pre-Bid Documents comprise the documents in the following order:         6.4 Notice of Tender / Letter of invitation to tenderers / Letter of Intent (whichever is applicable) Instructions to Tenderers & Conditions of Tendering Form of Contract – PWD Form DB/T Form of Tender Letter of Acceptance The Government’s Requirements (Needs Statement) Form of Guarantees for Performance Bond/Advance Payment Informative Document REFERENCE DOCUMENTS

Please refer to Volume 10A for the standard reference (or sample) documents for the procedures or processes outlined in this Chapter.                  Tender Document Covers Table of Contents Notice of Tender Letter of Invitation to Tenderers Checklist for Submission of Tender for Use by Tenderers (Senarai Semakan Mengemukakan Tender Untuk Kegunaan Pentender) Instructions to Tenders Amendments to Form PWD 203 Amendments to Form PWD 203A Special Provisions to Conditions of Contract Form of Tender & Conditions of Tendering JKR 203B (for JKR 203A) Form of Tender & Conditions of Tendering JKR 203C (for JKR 203) Letter of Acceptance JKR 203D Sample Format for Bills of Quantities Form of Guarantee for Performance Bond Form of Guarantee for Advance Payment Bond Sample Drawings List Informative Documents

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6-7

Chapter 6 – PREPARATION OF TENDER DOCUMENTS

6.5

REFERENCES

Please refer to the latest Treasury Circulars and DID Circulars on preparation of tender documents. Treasury Circular (Surat Pekeliling Perbendaharaan) [1] Bil 13 Tahun 1999: Garis Panduan Penggunaan Khidmat Pengangkutan dan Kemudahan Peralatan Untuk Menguruskan Projek Melalui Kontrak Kerja [2] Bil 7 Tahun 2002: Penggunaan Bahan/Barangan/Perkhidmatan Tempatan Dalam Perolehan Kerajaan [3] Bil 5 Tahun 2007: Tatacara Pengurusan Perolehan Kerajaan Secara Tender

DID Circulars (Surat Pekeliling / Edaran JPS) [1] SPJPT 3/1987: Peruntukan "Contingency Sum" Dalam Dokumen Tender

[2] SPJPS.CUB 1/1992: Pindaan kepada Borang Kontrak PWD 203 (revised 10/83), PWD 203A (revised 10/83), JKR 203B-Pin. 1/82, JKR 203C- Pin. 1/82 dan JKR 203D- Pin. 1/82. [3] SPJPS.UB 2/94: Format Muka Hadapan dan Pemberian Nombor Kepada Dokumen Tender/ Kontrak. [4] [5] [6] Tambahan Pertama SPJPS.UB 2/94: Tambahan Pertama Kepada Surat Pekeliling JPS.UB 2/94. SPJPS.UB 4/1994: Garispanduan Menetapkan Amaun Denda Gantirugi Tertentu dan Ditetapkan. SPJPS 3/1995: Peraturan Penyedian Dokumen Tender dan Kontrak

[7] SPJPS.Bil. 4/1999: Format Muka Hadapan dan Pemberian Nombor Kepada Dokumen Tender/Kontrak [8] SPJPS Bil. 5/2000: Peruntukan Baru Dalam Dokumen/Tender Dan Pindaan-Pindaan Kepada Borang Kontrak JKR 203/203A, Borang Tender Dan Surat Setujuterima Tender. [9] SPJPS 1/2001: Garispanduan Penggunaan Khidmat Pegangkutan Dan Kemudahan Peralatan Untuk Pengurusan Projek Melalui Kontrak Kerja. [10] SPJPS Bil. 1/2002: Penerimaan Jaminan Syarikat Kewangan Berlesen Dan Insurans Bagi Bon Pelaksanaan Serta Bayaran Wang Pendahuluan. (Perlaksanaan Surat Edaran Perbendaharaan Bertarikh 4 Februari 2001)

6-8

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DID MANUAL Volume 10 Contract Administration

Chapter 6 – Preparation of Tender Documents APPENDIX 6A

Tender Document Checklist

Revision Number : Revision Date :

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Chapter 6 – PREPARATION OF TENDER DOCUMENTS

APPENDIX 6A
PROJECT TITLE

TENDER DOCUMENT CHECKLIST
File Ref.: Estimate Contract Sum: Allocation/ Funder: Tender Type:

Action by PO 1 PO 2 QA2 Item No. 1.0

Name of Officer

Send Date

Receipt Date

Completion Date

Description1 Cover Page Format and registration of Tender Nos. The correct procedure is adopted.

PO1

PO2

QA2

Comments Tick () after checking

2.0 2.1 2.2 2.3

Notice of Tender Correct Head and Subhead Correct class of Contractor. State the type of companies which are eligible to participate, base on the estimated value of the tender To state if tender is only for Bumiputera Contractors. Correct place of buying tender. Amount of documentation fee4 and in whose name to be made, is stated. Site visit – date, time & place stated. To state if compulsory Date, time and place for closing of tender is stated. 1. Ref.: SPP 5/2007 – Eligibility of Contractors.3 Ref.: SPP 16/1993

2.4

2.5 2.6

2.7

2.8

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6A-1

Chapter 6 – PREPARATION OF TENDER DOCUMENTS

Item No. 3.0 3.1 3.2

Description1 Instructions to Tenderers Where and when tender closes. Amount and other articulars of Tender Deposit (for International Contracts only) Include clause on information regarding tenderer’s Financial and Technical Capacity if tender is >RM1.0m. If funded by international body, ensure that their guidelines for procurement are complied with. Include clause regarding correction of errors for internationally funded tenders. Form of Contract Use correct form. Articles of Agreement The following to be filled in:

PO1

PO2

QA2

Comments

3.3

Ref.: SP JPS. UB. 3/1994

3.4

3.5

4.0 4.1 4.2

4.2.1 Paragraph 1 (i) Name of Government. For Federal Projects Government of Malaysia. For State Projects - Name of relevant State. (ii) Description of intended Works.

(iii) Drawing nos/as stated in list of drawings.

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Item No. 4.2 (Cont’d)

Description1 4.2.2 Clause 2(e) Special Provisions to Conditions of Contract. (i) Advance Payment clause (ii) Variation of Price clause (iii) Performance Bond in the Form of Performance Guarantee Sum (iv) Performance Bond in the Form of Performance Guarantee Sum Choose relevant one only 4.2.3 Clause 2(I) – New Clause Amendments to PWD Forms.

PO1

PO2

QA2

Comments

4.3

Conditions of Contract The following to be filled in: 4.3.1 Clause 1(a)(i) Same as item 4.2.2 and 4.2.3 4.3.2 Clause 1(a)(iv) Check designation of S.O. is correct. 4.3.3 Clause 26(d) (203A only) Delete this clause if funded by International body. Ref.: SP JPS Bil. 1/2003

4.4

Appendix to Conditions of Contract The following to be filled in: 4.4.1 Clause 3(a)(i) Clauses 40 and 43 and Clauses 51, 52 and 54 are designated to the correct Officers.

Ref.: SP JPS Bil. 1/2003

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Chapter 6 – PREPARATION OF TENDER DOCUMENTS

Item No. 4.4 (Cont’d)

Description1 4.4.2 Clause 3(a)(ii) Powers to approve Variations in accordance with latest Treasury and JPS circulars 4.4.3 Clause 33 Minimum insurance coverage is sufficient5 4.4.4 Clause 33(a) and 36(b) Amount of excess – Nil 4.4.5 Clause 34 Not used. 4.4.6 Clause 36 Insert the following ‘Total Amount Insured’ ... ... ... RM ............... 4.4.7 Clause 38(b) Date for Possession – ‘To be Determined’. 4.4.8 Clause 40 Check if the rate of Liquidated and Ascertained Damages is reasonable6. 4.4.9 Clause 41 Sectional Completion - To be filled if required. 4.4.10 Clause 45 Defects Liability Period in accordance with Arahan Perbendaharaan 200.5(a).7

PO1

PO2

QA2

Comments

Ref.: AP202.2

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Chapter 6 – PREPARATION OF TENDER DOCUMENTS

Item No. 4.4 (Cont’d)

Description1 4.4.11 Clause 47(a) (i) Value of work done before First Interim Certificate will be issued 5% of Builder’s work or RM100,000 whichever is lesser.

PO1

PO2

QA2

Comments

(ii) Value of work done before each subsequent interim certificate will be issued – 15% of average monthly value of Builder’s Work or ½ of the first interim payment, whichever is lesser. 4.4.12 Period for honouring payment 5.0 Special Provisions to Conditions of Contract Advance Payment 5.1.1 Use correct Special Provision. 5.2 Variation Of Price 5.2.1 Use correct Special Provision / forms. 5.2.2 Quantity of steel bars and cement are stated in Lampiran……..... if required for the works. 5.2.3 Forms for estimation of diesel consumption & bitumen are included. 5.2.4 Complete the forms, and enter the relevant information Ref.: SPP 3/2008 Sufficient period to be stated but not less than 30 days.

5.1

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Chapter 6 – PREPARATION OF TENDER DOCUMENTS

Item No. 5.3

Description1 Performance Bond in the Form of Performance Guarantee Sum 5.3.1 Use correct Special Provision.

PO1

PO2

QA2

Comments

5.4

Restriction and Procedure on Use of Imported Good/Materials 5.4.1 Use correct Special Provision.

5.5

Amendments to Standard PWD forms Use correct amendments.

6.0 6.1 6.2

Form of Tender Use the correct form. The following are filled in:6.2.1 Title of tender 6.2.2 List of drawings including checking the number of drawings against the List of Drawings. 6.2.3 Completion period (fixed by Department). Ensure period of completion fixed by the Department is reasonable, taking into account factors like urgency, complexity and rainy periods. 6.2.4 Prime Cost or Provisional Sums if applicable.

6.3

Tender validity period is amended.

90 days for conventional contracts. 180 days for DB contracts.

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Chapter 6 – PREPARATION OF TENDER DOCUMENTS

Item No. 6.4

Description1 Include as clause 7(e) the following phrase:‘Polisi Insurans Kerja atau Nota Liputan berserta dengan resit bagi premium yang telah dibayar’.

PO1

PO2

QA2

Comments

6.5

Conditions of Tendering (i) Clause 1 (c) - Second line to be deleted if funded by International body.

(ii) Clause 8 - Amend Tender Validity period. (iii) Clause 10(e) - Insert as per item 6.4 above. 7.0 7.1 7.2 Letter of Acceptance Use correct form. List of addresses where copies to be sent is correct. Specifications Scope of Works. To correspond to works indicated on site plan and measured in B.Q./Summary of Tender. 8.2 Technical specifications are provided for all items of work and are comprehensive, clear, appropriate and relevant to the works. Cross References and Page Nos. are correct. Addendum Specification prepared for specific works (for Lump Sum contract only)

8.0 8.1

8.3

8.4

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Chapter 6 – PREPARATION OF TENDER DOCUMENTS

Item No. 9.0 9.1 Preamble

Description1

PO1

PO2

QA2

Comments

To check the unit of measurement as stated in the preamble is consistent with the measurement in the Bills for the various items. The method of measurement is stated. The method of measurement does not give rise to unnecessary or impractical maintenance of site records. The general composition of the unit rate is stated. No duplication in the measurement of items. Bill of Quantities A general look at the quantities to ensure no obvious mistakes. All necessary dimensions are given All necessary items are measured. No ‘Rate Only’ items. (Items without quantities). No ‘Contingency Sum’ items.

9.2

9.3

9.4

9.5

10.0 10.1

10.2 10.3

10.4

P.C. Sum – to include item for Profit (%) and attendance (Lump Sum). Amounts for P.C and Provisional Sums stated in ‘Amount’ column. Item descriptions are concise, consistent and accurate. Item description to correspond to drawings and/or specification. Cross References and Specification clause Nos. correct.

10.5

10.6

10.7

10.8

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Item No. 10.9

Description1 All sections of the Bill of Quantities are carried to the Summary. Summary page provided. Summary of Tender (For Contract Based on Form JKR203) For Lump Sum items, statement on quantities should be avoided, otherwise ensure consistency with those stated in specifications and drawings. Drawings Drawings must be clear and up to date Drawing Nos. tally with list of drawings. Drawings for works based on Lump Sum tender must be complete and scope/extent of works are coloured if necessary Form of Guarantees for Performance Bond/Advance Payment Use correct form. Latest list of Approved Banks & Insurance Companies attached Informative Documents All standard forms are incorporated Form BA (Bank/Financial Institution Report) attached, not bound.

PO1

PO2

QA2

Comments

10.10 11.0 11.1

12.0 12.1

12.2

12.3

13.0

Ref.: SPP 5/2007

13.1 13.2

14.0 14.1

Ref.: SP JPS 3/1994

14.2

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Chapter 6 – PREPARATION OF TENDER DOCUMENTS

Item No. 15.0 15.1 General

Description1

PO1

PO2

QA2

Comments

All tender documents must be carefully prepared and complete so as to give effect to the expressed requirements of the Department. The work to be executed must be clearly and concisely defined and specified, consistent with one another and free of ambiguity. Documents must be free of inconsistencies and discrepancies between the various sections and the drawings. Ensure that all bye-laws and Authorities requirements are included and highlighted in the tender documents: Complies with the latest policies and circulars

15.2

15.3

15.4

15.5

Signature of Checking Officer Date of Completion of Task:

Signature of Verifying Officer Date of Completion of Task:

Signature of Quality Auditor Date of Completion of Task:

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Chapter 6 – PREPARATION OF TENDER DOCUMENTS

1

ENDNOTE:

1

This Checklist may be adapted for the Design and Build / Turnkey Contract, with relevant changes to the Clause reference. Quality Audit; If Relevant. Estimated Tender Value, and Eligibility of Contractor to Register: SPP 5/2007 Estimated Tender Value < RM 30 million RM30 – RM50 million > RM50 million Eligibility (a) (a) dan (b) (a), (b) or (c)

2

3

Classification / Eligibility to register (a) Local company wholly (100%) owned by Malaysian citizens. (b) Local company listed on the Bursa Malaysia, that is, a company incorporated in Malaysia by Malaysian citizens with condition that no foreign shareholder may hold more than 30% of the shares, and the board of directors, management and staff are wholly (100%) Malaysian citizens. (c) Joint venture company incorporated in Malaysia (whether or not listed on the KLSE), with the condition that foreign equities do not exceed forty nine percent (49%), and majority members of the Board of Directors, management and staff and Malaysian citizens.
4

Documentation fee & Drawings Documents A4 @ RM 0.35 = A3 @ RM 0.70 = Drawings A3 @ RM0.70 = A2 @ RM3.50 A1 @ RM6.50 A @ RM8.00 Total = Total = = = =

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Chapter 6 – PREPARATION OF TENDER DOCUMENTS

ENDNOTE: (Cont’d)
5

Minimum insurance coverage for third party (public liability) insurance. amounts may be used as a guide: Contract Sum Not exceeding RM 50,000 RM 50,001 to RM 100,000 RM 100,001 to RM 200,000 RM 200,001 to RM 500,000 RM 500,001 to RM 5.0 million RM 5.0 million to RM 20.0 million RM 20.0 million to RM 50.0 million Exceeding RM 50.0 million limits of liability a.o.a. for Unlimited Number of Accidents RM10,000 RM25,000 RM50,000 RM100,000 RM200,000 RM500,000 RM1.0 million RM2.0 million

The following

6

Liquidated and Ascertained Damages at the rate of : [(BLR*/365)% x Contract Sum] per day. *BLR = Base Lending Rate Guideline for Defects Liability Period: Contract Sum RM20,000 – RM200,000 > RM200,000 Design and Build/ Turnkey Defects Liability Period 6 months 12 months 24 months

7

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DID MANUAL VOLUME 10 CONTRACT ADMINISTRATION PART II : PRE-CONTRACT

CHAPTER 7

INVITATION AND RECEIPT OF TENDER

Chapter 7 – INVITATION AND RECEIPT OF TENDER

Table of Contents

Table of Contents .......................................................................................................................7-i List of Flowcharts ..................................................................................................................... 7-ii 7.1 7.2 7.3 7.4 INTRODUCTION.......................................................................................................... 7-3 PROCEDURES ............................................................................................................. 7-3 REFERENCE DOCUMENTS .......................................................................................... 7-10 REFERENCES ............................................................................................................ 7-10 Checklist for Tender Opening Committee (Senarai Semakan Oleh Jawatankuasa Pembuka Tender)…………………..……………………………………………. 7A-1

APPENDIX 7A

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7-i

Chapter 7 – INVITATION AND RECEIPT OF TENDER

List of Flowcharts
Flowchart Description Page

Flowchart 7.1 Flowchart 7.2

Flowchart – Invitation and Receipt of Tender (Open / Selective) Flowchart – Pre-Qualification of Contractors

7-1 7-2

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Chapter 7 – INVITATION AND RECEIPT OF TENDER

Flowchart
1 Open Yes
2

Description
1. Applicable for Open & Selective tendering.

Action By
-

Reference
See Chapter 3

Selective tender No Yes
3

2. Is it open tender? 3. Selection of Tenderers by Authorised Party? 4. Select Tenderers

PO

No 4 5

PO

5. Undertake PreQualification of Tenders
6

Various parties

Refer to Flowchart 7.2 See Chapter 5 - Authority

No 6. Is the List of Tenderers approved?
7

Yes

Procurement Board / MoF

8A

8B

7. Either  Re-select tenderers, or  Proceed with open tender process

9

8A. Prepare and issue Notice of Tender (Open) 8B Prepare and issue Letter of Invitation (Selective)

PO PO

10

9. Sale of / Issue Tender Document 10. Issue Addendum (if any)

PO

11

PO

12

11. Prepare Tender estimates 12. Convening of Tender Opening Committee

PO BUBK

13 13. Closing / Receipt of tender BUBK/ Tender Opening Committee

14

14. Tender evaluation

See Chapter 8

Flowchart 7.1 – Invitation and Receipt of Tender (Open / Selective)

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Chapter 7 – INVITATION AND RECEIPT OF TENDER

Flowchart

Description

Action By

Reference

5a

5a. Ascertain the criteria for selection of contractors

PT / PO

From Flowchart 7.1, step 3

5b

5b. Prepare and issue Notice of Tender for Prequalification

PO

5c

5c. Receive submissions from contractors.

PO

5d

5d. Evaluate the submission from contractors.

Evaluation Officer

5e

5e. Prepare Pre-Q evaluation report (Kertas laporan penilaian)

PO

5f

5f. Endorsement of Pre-Q Evaluation Report

Evaluation Committee

5g

5g. Approval of Pre-Q Evaluation Report

DG

5h

5h. Submit Pre-Q evaluation report to Procurement Board for approval

BUBK

5i

5i. Decision and approval

Procurement Board

5j

5j. Notify the unsuccessful contractors

PO

Return to Flowchart 7.1, step 6

Flowchart 7.2 – Pre-Qualification of Contractors

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Chapter 7 – INVITATION AND RECEIPT OF TENDER

7 INVITATION AND RECEIPT OF TENDER

7.1

INTRODUCTION

This chapter provides:  The guidelines on the invitation, receipt and opening of tenders. 7.2 PROCEDURES

Please refer to Flowchart 7.1 – Invitation and Receipt of Tender (Open/Selective). Action By / Reference For information

Step 1&2

Procedures / Tasks Determine procurement procedure adopted Determine procurement procedure to be adopted :     Open tender Selective tender Negotiation Quotation

The procedures in Chapter 7 to Open and Selective Tendering only. Refer Chapter 3 on the description of the procurement procedures. 3 Selective Tender Owing to the specialist nature and complexity of requirements of certain projects, it may be desirable to invite a tender from selected tenderers. Such special requirement may include:      Complexity of nature of works Urgency Limited pool of specialist contractors Special safety and/or environmental requirements National security. Action By : PO

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Chapter 7 – INVITATION AND RECEIPT OF TENDER

Step 4

Procedures / Tasks List of Tenderers selected by Authorised Party This method usually applied where there is insufficient time to undertake a pre-qualification exercise. The tenderers are selected from PKK’s (Pusat Khidmat Kontraktor) database of contractors with good track records. The selection of tenderers is based on:    Requirement of specialist skills or knowledge, Safety, and Urgency.

Action By / Reference Action By : PO

The List of Tenderers shall be proposed by the Project Head / Project Team. The list shall be submitted, through BUBK, to DG for approval prior to submission to the Tender Procurement Board at Ministry/MoF. 5 Pre-Qualification - Generally The purpose of the pre-qualification exercise is to ensure contractors who are suitably qualified are invited to tender. Generally, the tenders are assessed on:       5a General reputation of the tenderer. Capability, based on management, personnel, number of technical staff Track records (and recent work experience) Available capacity in relation to the current workload. Financial stability and record. Other relevant criteria. Action By : PT/PO

Refer to Flowchart 7.2 – PreQualification of Contractors

Ascertain the Criteria for Selection of Contractors Ascertain and agree with the Project Team the criteria for selection of contractors. For selection under Procurement Board, at least 10 Bumiputra contractors must be included. Refer to current DID/Treasury Circulars on selection of contractors.

Refer SPP 5/2007

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Chapter 7 – INVITATION AND RECEIPT OF TENDER

Step 5b

Procedures / Tasks Prepare and issue Notice of Tender for Pre-Qualification Ensure that the details are correctly filled in the Notice. The Notice must be:  State the qualifications and other special requirements, required of the tenderers. Be published in at least 1 national daily newspapers (in Bahasa Malaysia). Published at relevant websites, e.g. DID website, MyGov Portal (www.gov.my) and CIDB website.

Action By / Reference Action By : PO

 5c

Receive Pre-Qualification (Pre-Q) Submissions The closing date, time and office where the Pre-Q submissions is received, is stated in the Notice of Tender for Pre-Q. Submissions shall be opened by an Opening Committee (see Tender Opening Committee, Chapter 7). Late submissions must be rejected without opening. Forward the submissions received to the Evaluation Officer.

Action By : PO

Action By : BUBK Action By : Evaluation Officer

5d

Evaluate Pre-Qualification (Pre-Q) Submissions The Evaluation Officer will evaluate the submissions received, based on the pre-agreed criteria (see Step 5a, above).

5e

Pre-Qualification (Pre-Q) Evaluation Report Prepare the Pre-Q Evaluation Report (Kertas Laporan Penilaian) in the approved format, with list of qualifying contractors, for submission to the Tender Procurement Board.

Action By : Evaluation Officer

5f & 5g

Endorsement & Approval of Pre-Q Evaluation Report The Pre-Q Evaluation Report shall be submitted to the Evaluation Committee for review and endorsement. Submit recommendations to the Director General, through BUBK, for the DG’s approval prior to submission to the Tender Procurement Board at Ministry.

Action By : Evaluation Officer

Action By : BUBK

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Chapter 7 – INVITATION AND RECEIPT OF TENDER

Step 5h & 5i

Procedures / Tasks Submission to the Procurement Board for Decision Present the Pre-Q Evaluation Report to the Procurement Board for decision. Prepare the list of approved or short-listed contractors.

Action By / Reference Action By : PO / Procurement Board

Action By : PO Action By : PO

5j

Notify Unsuccessful Contractors Notify the contractors who were not approved or short-listed.

6&7

List of Approved Contractors Only the approved contractors will be invited to tender. If the short-listed contractors is not approved, then the Tender Procurement Board may either decide to: • • Re-select tenderers, or Proceed with open tender process

For information

8A

Notice of Tender (Open Tender) For open tenders, prepare Notice of Tender. Ensure that the details are correctly filled in. The Tender Notice must be:  Be published in at least 1 national daily newspapers (in Bahasa Malaysia). Published at relevant websites, e.g. DID website, MyGov Portal (www.gov.my) and CIDB website.

Action by: PO

Refer also SPP 5/2007

8B

Letter of Invitation (Selective Tender) For selective tendering, issue Letter of Invitation to the listed tenderers. Ensure that the details are correctly filled in.

Action by: PO

Refer also SPP 5/2007

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Chapter 7 – INVITATION AND RECEIPT OF TENDER

Step 9

Procedures / Tasks Sale of / Issue Tender Document Sale of document shall be made during office hours through out the tender period Check that  The person collecting the tender documents is authorized to do so. The contractor’s registration(s) are still valid. The Contractor’s details are correctly and completely entered onto the Form of Tender, and in the information box stamped onto the front cover of the Tender Documents.

Action By / Reference Action by: PO

 

Where the contractor’s registration(s) had expired, the sale may be carried out if the contractor signed and returned the conditional letter for sale of the tender document, stating that the tender will not be accepted if the contractor fails to renew his registration(s) prior to the tender closing date. The proceeds from the sale of tender documents shall be credited to the revenue. Tender deposits (where applicable) shall be credited to “security deposit” account, for eventual refund to the tenderers. Minimum Tender Period The tender period shall be as follows:  Conventional tenders: at least 21 days from o the 1st day of sale of tender documents is available, as notified in the Tender Notice, or o 21 days from the site visit whichever is the later. Design and build tender: at least 45 days from the 1st day of sale of tender documents [This is pending approval from top management] is available, as notified in the Tender Notice.

Refer: SPP 5/2007, pages 17 & 18

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Chapter 7 – INVITATION AND RECEIPT OF TENDER

Step 10

Procedures / Tasks Issue Addendum (if any) Addendum, if necessary, is prepared by the Engr/QS. Addendum must be issued to all tenders at least 1 week before the closing of tender. The Tender Addendum together with the instructions, listing the page numbers issued and substitution to be made.

Action By / Reference Action by: Engr/QS

11

Prepare Tender estimates Prepare the tender estimates. The tender estimate shall be deposited into the tender box prior to the tender opening date and time, in accordance with the Tender Notice. Action by: Engr/QS Action by: BUBK Action by: Engr/QS

12

Appointment of Tender Opening Committee The Director General shall appoint the Tender Opening Committee. The Tender Secretariat shall facilitate the calling of the Tender Opening Committee, informing them of the closing date, time and office where tender is received and to be opened. Action by: DG Action by: TS

13

Closing / Receipt of tender The closing date, time and office where tender is received is stated in the Tender Notice and/or Letter of Invitation. Late tenders must be rejected without opening.

Action by: TS/ Tender Opening Committee

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Chapter 7 – INVITATION AND RECEIPT OF TENDER

Step 13 (Cont’d)

Procedures / Tasks Closing / Receipt of tender Opening of tenders & Tender Opening Report Prepare the Tender Schedule. The tenders must be collected from the tender box, and all tenders (including the departmental tender estimates) be opened in the presence of the Tender Opening Committee. Number each tender and enter the details for each tender onto the Tender Schedule, in the order which the tender is opened. For public tender opening, read aloud and check that the details are entered correctly. Ensure that the Tender Schedule is complete and is signed by all relevant officers. A copy of the completed Tender Schedule must be displayed at the office where the tender was closed. Forward the tender documents received and the completed Tender Schedule to the office where the tender was called for evaluation.

Action By / Reference

Action by: TS/ Tender Opening committee

14

Tender evaluation See Chapter 8 – Tender Evaluation and Acceptance

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Chapter 7 – INVITATION AND RECEIPT OF TENDER

7.3

REFERENCE DOCUMENTS

Please refer to Volume 10A for the standard reference (or sample) documents for the procedures or processes outlined in this Chapter.      7.4 Notice of Tender Letter of Invitation to Tenderers Sample stamp (chop) for ‘Maklumat Pendaftaran Kontraktor’ Conditional Letter for sale of tender document Jadual Tender REFERENCES

Please refer to the latest Treasury Circulars and DID Circulars on the calling and receipt of tenders. Treasury Circular (Surat Pekeliling Perbendaharaan) [1] Bil 5 Tahun 2007: Tatacara Penguruasan Perolehan Kerajaan Secara Tender

DID Circulars (Surat Pekeliling / Edaran JPS) [1] [2] [3] SP JPT.CUB 1/1989: Penyediaan Anggaran Jabatan Mengenai Sesuatu Tender SP JPS. UB 1/1993: Garispanduan Mengenai Pengurusan Tender SP JPS.UB 3/1993 : Surat Pemberitahuan Penerimaan Tender

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Chapter 7 – Invitation and Receipt of Tender APPENDIX 7A

Checklist for Tender Opening Committee (Senarai Semakan Oleh Jawatankuasa Pembuka Tender)

Revision Number : Revision Date :

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Chapter 7 – INVITATION AND RECEIPT OF TENDER

APPENDIX 7A
No. Tender TAJUK PROJEK

CHECKLIST FOR TENDER OPENING COMMITTEE (SENARAI SEMAKAN OLEH JAWATANKUASA PEMBUKA TENDER)

Tarikh Tender Ditutup: Haribulan:

Jenis Tender:

Kelas/Kepala/Sub-Kepala yang ditetapkan:

Jam: BIL. KETERANGAN JKPT* ULASAN Tandakan () selepas semakan 1.0 Peti tawaran dibuka secepat mungkin selepas tender ditutup. Semak keseluruhan dokumen yang dikemukakan (submission) dan pastikan ianya mengikut peraturan yang sepatutnya. Beri nombor bersiri kepada setiap tawaran yang diterima. Catatkan di kulit muka hadapan dokumen, nombor siri pentender serta turunkan tandatangan dan tarikh pembukaan. Setiap dokumen terasing yang dikemukakan oleh seseorang pentender hendaklah seboleh-bolehnya dikepilkan menjadi satu atau paling kurang yang mungkin. Catatkan nombor siri pentender bagi setiap dokumen yang terasing dan turunkan tandatangan ringkas (initial). Pastikan juga pentender tidak membuka penjilidan asal dokumen tender. Sebarang dokumen/maklumat tambahan hendaklah dikemukakan berasingan dari dokumen tender asal. Semak Borang Tender: Catatkan sebarang pemerhatian di Jadual Tender.

2.0

Catatkan sebarang pemerhatian di Jadual Tender. Catatkan sebarang pemerhatian di Jadual Tender.

3.0

3.1

3.2

4.0

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Chapter 7 – INVITATION AND RECEIPT OF TENDER

BIL. 4.2

KETERANGAN Pastikan syarikat yang mengemukakan tender adalah sama dengan syarikat yang membeli dokumen tender. Pastikan pentender melengkapkan keseluruhan Borang Tender. Pastikan harga tawaran di Borang Tender sama dengan di `Grand Summary'. Pastikan harga tawaran yang di catatkan di dalam angka sama dengan yang dicatatkan di dalam perkataan. Pemerhatian: (i)

JKPT*

ULASAN

4.3

4.4

4.5

Sekiranya pentender tidak menandatangani Borang Tender, jangan catatkan harganya di ruangan harga kerana tendernya tidak akan dipertimbangkan. Walau bagimanapun, catatan boleh dibuat di akhir Jadual.
Sekiranya terdapat perbezaan harga tawaran di dalam bentuk angka dan perkataan, pada umumnya harga tender yang diambil adalah yang di dalam perkataan, kecuali jika terdapat kesilapan yang ketara pada harga di dalam perkataan, yang mana harga dalam angka bolehlah diambil (setelah dibandingkan dengan harga di `Grand Summary').

(ii)

5.0

Semak samada terdapat surat-surat pengesahan bank di dalam sampul surat yang berlakri disertakan bersama. Jika ada, buka sampulsampul surat berkenaan dan catatkan nombor siri pentender serta turunkan tandatangan. Stapelkan pada dokumen tender berkenaan.

Catatkan di Jadual tender yang pentender ada mengemukakan surat pengesahan bank di dalam sampul surat berlakri dan telah di buka oleh Jawatankuasa. Nyatakan juga bilangan surat bank yang diterima.

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Chapter 7 – INVITATION AND RECEIPT OF TENDER

BIL. 6.0

KETERANGAN Turunkan tandatangan ringkas di: (i) (ii) semua muka surat di Borang Tender `Grand Summary' di Senarai Kuantiti dan

JKPT*

ULASAN

(iii) setiap kesilapan atau pertindihan tulisan di Borang Tender dan Senarai Kuantiti. 7.0 Buka Anggaran Jabatan dan turunkan tandatangan serta catatkan tarikh. Semua semakan dan tindakan di atas hendaklah saling disemak oleh Ahli Jawatankuasa untuk mempastikan tiada kesilapan berlaku.

8.0

9.0

Peraturan Tambahan Untuk Tender Bekalan/Perkhidmatan dan `Design and Build' Pastikan dokumen tawaran harga dan tawaran teknikal dikemukakan dalam dua (2) sampul surat yang berasingan. Pastikan nama pentender tidak tercatat di dalam dokumen penentuan teknikal.

9.1

Catatkan semua pemerhatian di atas di Jadual Tender.

9.2

Sekiranya terdapat nama/tanda syarikat dalam dokumen teknikal, pastikan identiti
tersebut dipadamkan. 9.3 Catatkan nombor siri pentender di dokumen tawaran harga dan tawaran teknikal.

Tandatangan Jawatankuasa Membuka Tender

Tandatangan Jawatankuasa Membuka Tender

*Jawatankuasa Pembuka Tender

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7A-3

DID MANUAL VOLUME 10 CONTRACT ADMINISTRATION PART II : PRE-CONTRACT

CHAPTER 8

TENDER EVALUATION AND ACCEPTANCE

Chapter 8 – TENDER EVALUATION AND ACCEPTANCE

Table of Contents

Table of Contents .......................................................................................................................8-i List of Flowcharts ......................................................................................................................8-ii 8.1 8.2 8.3 8.4 INTRODUCTION ............................................................................................................. 8-2 PROCEDURES................................................................................................................. 8-2 REFERENCE DOCUMENTS ............................................................................................... 8-5 REFERENCES.................................................................................................................. 8-5

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8-i

Chapter 8 – TENDER EVALUATION AND ACCEPTANCE

List of Flowcharts

Flowchart Flowchart 8.1

Description Tender Evaluation and Acceptance

Page 8-1

8-ii

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Chapter 8 – TENDER EVALUATION AND ACCEPTANCE

Flowchart

Description

Action By

Reference

1

1. Selection and appointment of Evaluation Officer(s)

PH

2

2. Tender Evaluation

Evaluation Officer(s)

3

3. Tender Clarification, if required

Evaluation Officer(s)

SPP 5/2007

4

4. Prepare Tender Evaluation Report (Kertas Taklimat Tender)

PO / Evaluation officer(s)

5

5. Endorsement by Tender Evaluation Committee

6

6. Presentation of Tender Evaluation Report / Tender Recommendation to Procurement Board / MoF

TS

7

No

7. Unconditional approval?

Procurement Board / MoF

8

Yes
9

8. Issue Letter of Intent

PO

9. Comply with conditions

PH/PO

10

10. Issue Letter of Acceptance

PO

Flowchart 8.1 – Tender Evaluation and Acceptance

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Chapter 8 – TENDER EVALUATION AND ACCEPTANCE

8 TENDER EVALUATION AND ACCEPTANCE
8.1 INTRODUCTION

This chapter provides:  The guidelines on the evaluation and acceptance of tender. 8.2 PROCEDURES

Please refer to Flowchart 8.1 – Tender Evaluation and Acceptance. Item 1 Procedures / Tasks Selection And Appointment of Evaluation Officer(s) The Project Head shall assign the Evaluation Officer(s). The Evaluation Officer(s) cannot be a member of the Tender Opening Committee. 2 Tender Evaluation Refer to the latest Treasury / DID guidelines on Tender Evaluation process. Tender evaluation report should be completed within 30 days from the receipt of the tender documents. All information pertaining to tender evaluation to be treated as confidential. 3 Tender Clarification If tender clarification (of the tender(s) received) is required by the Evaluation Officer:  Prior written permission of the chairman of the Tender Procurement Board must be obtained. The clarification process is conducted by the Tender Secretariat No communication is allowed between any Evaluation Officer and any tenderer unless written permission is given by the chairman of the Tender Procurement Board. Action by: Tender Secretariat Action by: Evaluation Officer Action By / Reference Action by: PH

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Chapter 8 – TENDER EVALUATION AND ACCEPTANCE

Item 4 & 4A

Procedures / Tasks Tender Evaluation Report The Evaluation Officer(s) shall prepare the Tender Evaluation Report (Kertas Taklimat Tender) in the approved format. The Tender Evaluation Report shall be submitted to the Tender Evaluation Committee for review and endorsement. Design and Build For Design and Build contracts, the tender evaluation shall be divided into 2 stages; technical evaluation and financial evaluation.

Action By / Reference Action by: Evaluation Officer(s)

The Tender Evaluation Committee is appointed by the DG, in accordance with the Treasury Instruction (AP 191 & 192).

5

Tender Recommendation Tender Evaluation Committee shall make necessary recommendations to the Director General, through BUBK, for the DG’s approval prior to submission to the Tender Procurement Board at Ministry. BUBK shall submit the approved report to the Tender Secretariat at Ministry for tabling at the Tender Procurement Board. The Tender Secretariat shall be responsible for convening the Tender Procurement Board. The Evaluation Officer shall present the Tender Evaluation Report to the Tender Procurement Board for decision. The composition of the Tender Procurement Board shall be in accordance with the value of the tender/contract and the limit of authority (see Chapter 5 - Authority). Action by: Tender Secretariat / Tender Procurement Board Action by: Tender Evaluation Committee

Action by: BUBK

6

Approval The Tender Procurement Board may approve the tender, with or without condition.

7

Letter of Intent Where the approval of the Tender Procurement Board is conditional, then a Letter of Intent must be issued pending negotiation with the approved tenderer. The Letter of Intent shall be in the approved format. Complete and check that the information on the Letter of Intent is correct. The Letter of Intent ought to be signed by an authorized officer.

Action by: PO

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Chapter 8 – TENDER EVALUATION AND ACCEPTANCE

Item 8

Procedures / Tasks Negotiations The Project Head shall conduct the negotiations with the approved tenderer, with the assistance of the Procurement Officer. Inform the Tender Procurement Board or Treasury (as the case may be) of the results of the negotiations, and for final approval, if required.

Action By / Reference Action by: PH / PO

9

Letter of Acceptance Check that approval of the Tender Procurement Board is given. Confirm that the funds / budget is available. Prepare the Letter of Acceptance, using the current form/format. Complete and check that the information on the Letter of Acceptance, and Notification of Acceptance of Tender, are correct, i.e.             The name and address are correct Project title The accepted Contract Sum Amount for Performance Bond Amount for Advance Payment Amount of coverage for insurances Period of insurance coverage Date of Possession of Site Completion Period and Date for Completion Defects Liability Period Name of SO/PD Name of officer-in-charge / contact person

Action by: PO

See also chapter 5 Appendix– Distribution List

The Letter of Acceptance must be signed by an authorized officer (see Chapter 5 - Authority). Send the Notification of Acceptance of Tender, and Letter of Acceptance by registered post to Contractor, and copies to the relevant parties.

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8.3

REFERENCE DOCUMENTS

Please refer to Volume 10A for the standard reference (or sample) documents for the procedures or processes outlined in this Chapter.          8.4 Format Laporan Pernilaian Tender Kerja Contoh Kertas Talimat Tender Kerja Contoh Kertas Keputusan Tender Kerja Contoh Surat Niat / Letter of Intent Letter of Notification of Tender (Pemberitahuan Penerimaan Tender) Letter of Acceptance – JKR 203D Contoh Surat Pengesahan Budget Garispanduan - Tugas Jawatan Kuasa Pernilaian Garispanduan Pernilaian Tender Kerja REFERENCES

Please refer to the latest Treasury Circulars and DID Circulars on the calling and receipt of tenders. Treasury Circular (Surat Pekeliling Perbendaharaan) [1] Bil 5 Tahun 2007: Tatacara Penguruasan Perolehan Kerajaan Secara Tender

[2] S/K.KEW/PK/PP/1100/00000010/31 Jld.23 SK.7(20), dated 21 March 2008: Garis Panduan Penilaian Tender DID Circulars (Surat Pekeliling / Edaran JPS) [1] [2] SP JPS.UB 3/1994: Peraturan Penilaian Tender Kerja SP JPS.UB 2/1995: Penyediaan Laporan Penilaian Tender

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Chapter 8 – TENDER EVALUATION AND ACCEPTANCE

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DID MANUAL VOLUME 10 CONTRACT ADMINISTRATION PART III : POST-CONTRACT

CHAPTER 9

CONTRACT DOCUMENTATION

Chapter 9 – CONTRACT DOCUMENTATION

Table of Contents

Table of Contents .......................................................................................................................9-i List of Flowcharts ......................................................................................................................9-ii 9.1 9.2 9.3 9.4 INTRODUCTION ............................................................................................................. 9-2 PROCEDURES................................................................................................................. 9-2 REFERENCE DOCUMENTS ............................................................................................... 9-8 REFERENCES.................................................................................................................. 9-8 Checklist for Preparation of Contract Documents (Senarai Semakan Penyediaan Dokumen Kontrak)………………………………..………………………………………………….. 9A-1

APPENDIX 9A

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Chapter 9 – CONTRACT DOCUMENTATION

List of Flowcharts

Flowchart Flowchart 9.1

Description Contract Documentation

Page 9-1

9-ii

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Chapter 9 – CONTRACT DOCUMENTATION

Flowchart

Description

Action By

Reference

1

1. Letter of Acceptance is issued

-

2

2. Compile the Contract Documents.

CAO

3

3. Check that each document is complete, correct and compliant.

CAO

Refer: Contract Documentation Checklist

4

4. Quality Audit

CAO/BUBK*

5

5. Correctly mark the ‘Original’ and ‘Duplicate’ documents

CAO

6

6. Signing of Contract Document

CAO

7

7. Stamping of documents

CAO

8

8. Distribute the Contract Documents

CAO

*Where the Contract is signed at the DID Headquarters or Ministry, the documents shall be audited by BUBK Flowchart 9.1 – Contract Documentation

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Chapter 9 – CONTRACT DOCUMENTATION

9 CONTRACT DOCUMENTATION
9.1 INTRODUCTION

This chapter provides:  The guidelines on the compilation and preparation of the Contract Documents for signing and distribution to the relevant parties. 9.2 PROCEDURES

Please refer to Flowchart 9.1 – Contract Documentation. Step 1 Procedures / Tasks Letter of Acceptance is issued Upon issuance of the Letter of Acceptance, the contractor must submit the required documents and information stated in the Letter of Acceptance for verification by CAO. Letter of Delegation of Power Upon the issuance of the Letter of Acceptance, issue the necessary letters of delegation of power. Ensure that the following documents, as may be required by the Letter of Acceptance of Tender, are submitted by the Contractor:     Performance Bond (where ‘Performance Guarantee Sum’ is not used) Insurance policies together with original receipts Details of SOCSO Advance payment bond (if Advance Payment is applied by the Contractor and permitted under the Contract). Action by : SO For information Action By / Reference

Action by : CAO

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Step

Procedures / Tasks Check that the information on the Performance Bond (where ‘Performance Guarantee Sum’ is not used) is in order:       Parties Contract number and references Validity period (dates) All other information are correctly inserted Issued by a bank or insurance company approved by Bank Negara Verification from the bank is attached.*

Action By / Reference

Action by : CAO

*Write to issuing bank and request for verification. Check that the information on the relevant insurance policies are in order :      2 Parties Validity period (dates) Contract references and amounts insured Excess clauses, if any Relevant endorsements Action by : CAO

Compile the Contract Documents The Contract Documents are compiled and bound as soon as is practicable after the issuance of the Letter of Acceptance, but no later than 4 months after the issuance of the Letter of Acceptance. Refer to the Contract Documentation Checklist (Senarai Semakan Penyediaan Dokumen Kontrak) Using the accepted Tenderer’s tender document, compile the documents for contract binding in the format and order set out in the Tender Table Document (refer Chapter 6). Design and Build Contract Documents For design and build contracts, Step 2 and Step 8 shall be carried out by the Contractor.  The design and build contract documents shall be compiled by the Contractor.  The certified true copy of the Performance Bond and Insurance Policies shall be inserted into the Contract Documents.

Refer: Contract Documentation Checklist

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Chapter 9 – CONTRACT DOCUMENTATION

Step 2a

Procedures / Tasks Contract Front Cover Ensure that the   cover is in accordance with DID’s approved format; title (of project, etc), Contract Number and names are in accordance with the Letter of Acceptance.

Action By / Reference Action by : CAO

2b

Contents Generally,  the contents and order of the Contract Documents is based on the Tender Table Document, and the Contract Documents contains the accepted Tenderer’s tender documents.

Action by : CAO

Ensure that:    Variation of Price schedules are completed, and the quantities inserted. Check for irregularities. Make correction if necessary and as agreed by contractor. All information are correctly entered in the Appendix to the Conditions of Contract.

Ensure that all other pertinent information is correctly entered or inserted in the contract forms and other documents. Ensure that all superseded information are marked as such. 2c Numerical checks, Corrections and Rationalisation of Rates  Check for arithmetical errors. Arithmetical errors in the Bills of Quantities or the Summary of Tender must be corrected.  Check the rates and prices for reasonableness and consistencies. Check the distribution of prices to prevent “front loading”. Carry out “rationalisation” of the rates and prices as necessary.  Where rationalization of rates had been carried out, these changes must be agreed by the Contractor. Action by : CAO

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Chapter 9 – CONTRACT DOCUMENTATION

Step

Procedures / Tasks  Both the Authorised Party and the Contractor must initial next to all corrections, or changes due to rationalisation, of rates and prices.  The letters to and from the Contractor, amending or confirming the original tender or affecting the Contract in any way, shall be included in the Contract Document (arranged in date order with the latest letter first, and inserted these after Letter of Acceptance)

Action By / Reference Action by : CAO

2d

Contract Documentation Checklist The Checklist must be ticked (checked) and initialed by the compiler, and together with the compiled documents shall be forwarded to the checker for checking and verification.

Action by : CAO

3

Check the compiled Contract Document Refer to the Contract Documentation Checklist Check every document and ensure they are complete, correct and compliant. The checker initial against each checked item.

Action by : CAO

Refer: Contract Documentation Checklist

4

Quality Audit The Quality Auditor shall check that the documents are in order and free from errors. Where the Contract is signed at the DID Headquarters, the documents shall be audited by BUBK.

Action by : CAO / BUBK

5

Correctly mark the ‘Original’ and ‘Duplicate’ documents. Identify the original Contract Document and correctly print or chop/stamp the words “Original” or “Duplicate” on the cover of the Contract Documents. Copy documents must be certified as true copy by the Authorised Party (Kumpulan Pengurusan Profesional).

Action by : CAO

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Chapter 9 – CONTRACT DOCUMENTATION

Step 6

Procedures / Tasks Signing of Contract Document The Contract shall be signed by the officer duly authorised to sign the contract (‘Authorised Party’) , based on the value of the contract (refer Chapter 5 - Authority). Arrange for the Original Contract Document to be signed by the Authorised Party and the Contractor The Contractor’s representative for signing of contract must furnish a certified copy of the company resolution (or other documentary evidence) to prove that he is authorized to sign the Contract Document on behalf of the Contractor. The following documents must be signed by both Parties:     Articles of Agreement Form of Tender Letter of Acceptance List Contract Drawings

Action By / Reference Action by : CAO

Where corrections were made due to arithmetical errors, or rationalisation of rates had been carried out, the changes must be initialed by both the Authorised Party and the Contractor. The following documents must also be signed by Contractor:  Schedules of Rates

Stamp all drawings as “Contract Drawings”. Drawings Drawings prepared in-house shall be signed by relevant officer. If drawings by Consultant, to be signed by Registered Engineer, Registered Architect and accepted by Director of Division/State [To be confirmed by BUBK] Design and Build Contract - Drawings All contract drawings must be signed and endorsed by a Registered Engineer, Registered Architect etc, who prepared the design.

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Chapter 9 – CONTRACT DOCUMENTATION

Step 7

Procedures / Tasks Stamping of Contract Documents Arrange for the stamping of the Contract Documents (original and duplicate only). The stamp must be affixed to the first page of the Articles of Agreement. The costs for stamping shall be borne by the Contractor. Exemption of Stamp Duty – Forms JKR 203/203A In the alternative to stamping of Contract Documents, the CAO may apply for exemption of stamp duty under Section 35 of the Stamp Act 1949 (Act 378). The exemption endorsement must be affixed to the first page of the Articles of Agreement (original and duplicate only). Design and Build Contracts The Contractor shall be responsible for both the costs of and arranging for the stamping of the Design and Build Contract Document.

Action By / Reference Action by : CAO

Refer JPS letter ref: (60)dlm.PPS.10/4/2 BUB Jld. 4 bth. 2.10.2007

8

Distribute Contract Documents Issue and distribute the Contract Document to the relevant parties. Distribute the copies in accordance with the Distribution List set out in Appendix 5A. The original Contract Document for project of value more than RM3 million shall be kept at BUBK. For other projects, the original Contract Document is retained and kept by the Division / State which implements the project. The Performance Bond shall be retained and keep safe at the division/state office which issued the Letter of Acceptance. Unless there is any unresolved dispute between the Government and the Contractor, the Contract Document must be retained for 7 years after the issuance of the Final Certificate. If the is any unresolved dispute between the Government and the Contractor, then the Contract Documents (and all documents in connection with the project) must be retained until the dispute is resolved, or otherwise as instructed by the Attorney General Office.

Action by : CAO

Refer: Chapter 5, Appendix 5A – Distribution List

For information

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Chapter 9 – CONTRACT DOCUMENTATION

9.3

REFERENCE DOCUMENTS

Please refer to Volume 10A for the standard reference (or sample) documents for the procedures or processes outlined in this Chapter.    Sample Contract Document Cover Sample Contents Page Surat Perwakilan Kuasa (Kepada wakil P.P. Kerja Utama Untuk Penyeliaan dan Arahan Keseluruhan Kerja) Pemberitahu Perwakilan Kuasa (bagi Wakil P.P. Kerja Utama) Surat Perwakilan Kuasa (Kepada Wakil P.P. Pakar untuk Penyeliaan Kerja Tertentu) Pemberitahu Perwakilan Kuasa (bagi Wakil P.P. Pakar) REFERENCES

   9.4

Please refer to the latest Treasury Circulars and DID Circulars on the contract documentation. Treasury Circular (Surat Pekeliling Perbendaharaan)  Nil

DID Circulars (Surat Pekeliling / Edaran JPS) [1] SPJPS.UB 1/1995: Perlantikan Pegawai Penguasa, Perwakilan Kuasa Pegawai Penguasa dan Pegawai-Pegawai Yang diberi Kuasa Dalam Urusan Pentadbiran Kontrak. [2] SPJPS.UB 3/1995: Peraturan Penyediaan Dokumen Tender dan Kontrak

[3] (36)dlm. PPS.10/4/2 CUB Jld.3 (27/7/98): Pengedaran Dokumen-dokumen (Kontrak Kerja) Biayaan Persekutuan [4] SP JPS Bil. 1/2003: Perlantikan Pegawai Penguasa (P.P), Perwakilan Kuasa Pegawai Penguasa (Wakil P.P) Dan Pegawai-Pegawai Yang Diberi Kuasa (PYDK) Dalam Urusan Pentadbiran Kontrak. (Tambahan kepada Surat pekeliling SPJPS.UB 1/1995) [5] ( 60 )dlm. PPS 10/4/2 BUB Jld 4 2 Oktober 2007: Duti Setem Bagi Dokumen Kontrak

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DID MANUAL Volume 10 Contract Administration

Chapter 9 – Contract Documentation APPENDIX 9A

Checklist for Preparation of Contract Documents (Senarai Semakan Penyediaan Dokumen Kontrak)

Revision Number : Revision Date :

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Chapter 9 – CONTRACT DOCUMENTATION

APPENDIX 9A
TAJUK PROJEK Untuk Tindakan PMK 1 PMK 2 AK* BIL.

CHECKLIST FOR PREPARATION OF CONTRACT DOCUMENTS (SENARAI SEMAKAN PENYEDIAAN DOKUMEN KONTRAK)

Nama Pegawai

Tarikh Diberi Kepada

Tarikh Diterima Oleh

Tarikh Siap Semakan

KETERANGAN

PMK1

PMK2

AK*

ULASAN Tandakan () selepas semakan

1.0

PENGENALAN Secara amnya setiap Dokumen Kontrak mestilah lengkap dan teratur serta mengandungi semua Dokumen sebagaimana yang terkandung di dalam Dokumen Meja Tender. Secara khusus Dokumen Kontrak mestilah mengandungi Dokumen Tender Pentender yang disetujuterima oleh Lembaga Perolehan. Dokumen Kontrak hendaklah disediakan dengan kadar segera selepas Surat Setujuterima Tender yang Asal ditandatangani oleh Kontraktor dan saksi beliau. Insuran-insuran beserta resit-resit resmi pembayaran Premium insuran-insuran tersebut. No.Kod PERKESO, Gerenti Bank/Insuran/Syarikat Kewangan untuk Bon perlaksanaan, Gerenti Bank/Insuran/Syarikat Kewangan untuk Bayaran Pendahuluan (Jika Kontraktor memohon untuk mendapatkan Wang Pendahuluan) yang Asal dikembalikan.

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BIL. 2.0 2.1 2.2

KETERANGAN MUKA HADAPAN (KULIT) Warna hendaklah warna kuning cair Isikan maklumat-maklumat berikut pada muka hadapan Dokumen Kontrak ASAL atau SALINAN, Cop Perkataan ASAL pada muka hadapan Dokumen yang asal dan Cop perkataan SALINAN pada tiap-tiap muka hadapan salinansalinan Dokumen Kontrak. Salinan mestilah diakui sah dan ditandatangani oleh pegawai dari Kumpulan Pengurusan dan Profesional.

PMK1

PMK2

AK*

ULASAN

(a) (b) (c)

Logo Kerajaan Malaysia. Nama Kerajaan Malaysia. Nama Jabatan Pengairan dan Saliran Malaysia. Perkataan Dokumen Kontrak. Tajuk projek mestilah sama seperti dengan tajuk kerja yang terkandung di dalam Surat Setujuterima Tender. Nombor Kontrak. Jilid dan Seksyen Dokumen Kontrak. Logo JPS
-

(d) (e)

(f) (g) (h)

Di sebelah bawah ‘Logo JPS’ catitkan Bulan dan Tahun Dokumen Kontrak disediakan. Di sebelah kanan bertentangan dengan ‘Logo JPS’ catitkan :KETUA PENGARAH JABATAN PENGAIRAN DAN SALIRAN MALAYSIA JALAN SULTAN SALAHUDDIN, 50626 KUALA LUMPUR

-

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BIL. 3.0 3.1

KETERANGAN ISI KANDUNGAN DOKUMEN KONTRAK ARAHAN KEPADA PENTENDER. Sebagaimana terkandung di dalam Dokumen Meja Tender.

PMK1

PMK2

AK*

ULASAN

3.2 3.2.1

BORANG TENDER : Pastikan Borang Tender Asal digunakan. Maklumat-maklumat yang perlu disemak dan yang perlu diisi. Muka Surat 1

3.2.2

(a) (b)

Isikan Nombor Kontrak. Isikan tarikh Kontrak ditandatangani oleh Pegawai yang diberi kuasa menandatangani kontrak. Pastikan Cop Syarikat, Tandatangan Kontraktor dan Saksi, beserta nama dan alamat dicop dan diisi oleh Kontraktor pada ruang yang disediakan. Pastikan Cop Pegawai yang diberi kuasa menandatangani Kontrak dan saksi beserta nama dan alamat dicop dan diisi pada ruang yang disediakan.

(c)

(d)

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Chapter 9 – CONTRACT DOCUMENTATION

BIL. 3.0

KETERANGAN ISI KANDUNGAN DOKUMEN KONTRAK (Samb.) SURAT SETUJUTERIMA TENDER – Borang JKR 203D Pastikan Borang Surat Setujuterima Asal digunakan. Maklumat-maklumat yang perlu diisi. Muka Surat 1.

PMK1

PMK2

AK*

ULASAN

3.3

3.3.1

3.3.2

(a) (b)

Isikan Nombor Kontrak. Isikan tarikh Kontrak ditandatangani oleh Pegawai yang diberikuasa menandatangani kontrak. Pastikan Cop Syarikat, Tandatangan Kontraktor dan Saksi, beserta nama dan alamat dicop dan diisi oleh Kontraktor pada ruang yang disediakan. Pastikan Cop Pegawai yang diberi kuasa menandatangani Kontrak dan saksi beserta nama dan alamat dicop dan diisi pada ruang yang disediakan. SYARAT-SYARAT KONTRAK : Maklumat-maklumat yang perlu diisi

(c)

(d)

3.4

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KETERANGAN ISI KANDUNGAN DOKUMEN KONTRAK (Samb.) SYARAT-SYARAT KONTRAK : (Samb.) Muka Surat 1

PMK1

PMK2

AK*

ULASAN

(a)

Nombor Kontrak, Kepala dan Pecahan Kepala peruntukan. Nama Kerajaan Malaysia. Nama Kontraktor dan alamat, sama seperti yang terkandung di dalam Surat Setujuterima Tender. Nama projek, sama seperti yang terkandung di dalam Surat Setujuterima Tender. Senarai Lukisan, sama seperti yang terkandung di dalam Dokumen Meja Tender. Muka Surat 2.

(b) (c)

(d)

(e)

(a)

Para 2(d) Tambahkan perkataan Addenda No. 1 selepas Syarat-syarat Kontrak sama seperti yang terkandung di dalam Dokumen Meja Tender.

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BIL. 3.0 3.4

KETERANGAN ISI KANDUNGAN DOKUMEN KONTRAK (Samb.) SYARAT-SYARAT KONTRAK : (Samb.) Muka Surat 2. (Samb.)

PMK1

PMK2

AK*

ULASAN

(b)

Para 2(e) Peruntukan Khas Syarat-syarat Kontrak (i) Perubahan Harga Bahan-Bahan Binaan. (ii) Bayaran Pendahuluan (iii) Restriction and Procedure on use of Imported Goods. (iv) Bon Perlaksanaan dalam bentuk Wang Jaminan Perlaksanaan.

(c)

Para 4 Harga Kontrak diisi dalam perkataan dan nilai mestilah sama seperti yang terkandung di dalam Surat Setujuterima Tender. Muka Surat 3.

(a)

Pastikan Cop Syarikat, Tandatangan Kontraktor dan Saksi, beserta nama dan alamat dicop dan diisi oleh Kontraktor pada ruang yang disediakan dan pastikan pegawai yang tandatangan bagi pihak kontraktor hendaklah yang diberi kuasa menandatangani Kontrak. Pastikan Cop Pegawai yang diberi kuasa menandatangani Kontrak dan saksi beserta nama dan alamat dicop dan diisi pada ruang yang disediakan.

(b)

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KETERANGAN ISI KANDUNGAN DOKUMEN KONTRAK (Samb.) SYARAT-SYARAT KONTRAK : (Samb.) Muka Surat 4.

PMK1

PMK2

AK*

ULASAN

(a)

Fasal 1(a)( i ) Sama seperti di para 2(d), 2(e) dan 2(h) di Muka Surat 2 Syarat-syarat Kontrak.

(b)

Fasal 1(a)(iv) Nama Jawatan Pegawai Penguasa yang diberi kuasa mengikut had kewangan yang ditetapkan di bawah SP JPS Bil. 1/2003 – Perlantikan Pegawai Penguasa (P.P.), Perwakilan Kuasa Pegawai Penguasa (Wakil P.P.) Dan PegawaiPegawai Yang Diberi Kuasa (PYDK) Dalam Urusan Pentadbiran Kontrak. LAMPIRAN KEPADA SYARAT-SYARAT KONTRAK. Muka Surat 30.

(a)

Fasal 3(a)(i) Nama Pegawai yang diberi kuasa untuk bertindak bagi pihak kerajaan mengenai Fasal 40, Fasal 43, Fasal 51, fasal 52 dan Fasal 54 sama seperti yang telah ditentukan mengikut had kewangan yang ditetapkan di bawah SP JPS 1/2003.

(b)

Fasal 3(a)(ii) Nama pegawai yang berkuasa untuk meluluskan perubahan mengikut hadhad seperti yang telah ditentukan di dalam Dokumen Meja Tender. Untuk mendapatkan maklumat yang lebih jelas lagi sila Rujuk kepada S.P Perbendaharaan Bil. 7/2007, ‘Peraturan Arahan Perubahan Kerja (Variation Order)

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KETERANGAN ISI KANDUNGAN DOKUMEN KONTRAK (Samb.) SYARAT-SYARAT KONTRAK : (Samb.) Muka Surat 31. Fasal 11(d) Isikan tarikh tender ditutup.

PMK1

PMK2

AK*

ULASAN

(b)

Fasal 33 (i) Jumlah minimum Liabiliti Awam ia bergantung kepada jumlah harga Kontrak dan diisi dalam bentuk nilai seperti yang telah ditentukan di dalam Dokumen Meja Tender.

(ii) No. Polisi dan nama Syarikat Insuran. (iii) Tempoh Insuran termasuk tempoh kontrak dicampur tempoh tanggungan kecacatan dicampur 3 Bulan 14 Hari. (c) Fasal 33(a) Amaun Fasal lebihan hendaklah diisi jika ada. (d) Fasal 35 Isikan No. Pendaftaran Skim PERKESO. (e) Fasal 36 (i) Jumlah harga kontrak, isikan dengan perkataan ‘tiada’ jika Projek baru.

(ii) No. Polisi dan Nama Syarikat Insuran. (iii) Tempoh Insuran, isikan tempoh kontrak sahaja.

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Chapter 9 – CONTRACT DOCUMENTATION

BIL. 3.0 3.4

KETERANGAN ISI KANDUNGAN DOKUMEN KONTRAK (Samb.) SYARAT-SYARAT KONTRAK (Samb.) Maklumat-maklumat yang perlu diisi (Samb.) LAMPIRAN KEPADA SYARAT-SYARAT KONTRAK (Samb.) Muka Surat 31. (Samb.)

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(f)

Fasal 36(b) Amaun Fasal lebihan hendaklah diisi jika ada.

(g)

Fasal 37 (i) Jumlah amaun untuk Bon Perlaksanaan iaitu 5% dari harga kontrak seperti yang telah ditentukan di dalam Dokumen Meja tender dan diisi dalam bentuk nilai.

(ii) No. Gerenti Bank/Insuran/Syarikat Kewangan, jika Kontraktor memilih Bon Perlaksanaan dalam bentuk gerenti Bank/Insuran/Syarikat Kewangan.
(h) Fasal 38(b) Isikan tarikh milik tapak. (i) Fasal 39 Isikan tarikh siap bagi kesemua kerja.

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Chapter 9 – CONTRACT DOCUMENTATION

BIL. 3.0 3.4

KETERANGAN ISI KANDUNGAN DOKUMEN KONTRAK (Samb.) SYARAT-SYARAT KONTRAK (Samb.) Maklumat-maklumat yang perlu diisi (Samb.) LAMPIRAN KEPADA SYARAT-SYARAT KONTRAK (Samb.) Muka Surat 31. (Samb.)

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(j)

Fasal 40 Isikan Ganti rugi tertentu dan ganti rugi ditetapkan berasaskan Dokumen Meja Tender, dalam bentuk nilai RM, memundarkan kepada puluh yang terdekat. Muka Surat Terakhir

(a)

Fasal 41 Isikan maklumat-maklumat berikut di dalam jadual jika terdapat penyiapan bangunan yang hendak diserahkan kepada pemilik mengikut bahagianbahagian seperti yang telah ditentukan di dalam Dokumen Meja Tender. (i) Nama seksyen atau bahagian.

(ii) Tarikh Milik (Fasal 38(c)) (iii) Tarikh Siap (iv) Ganti rugi tertentu dan ganti rugi ditetapkan. (b) Fasal 45 Isikan tempoh tangungan kecacatan sama seperti terkandung di dalam Dokumen Meja Tender.

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Chapter 9 – CONTRACT DOCUMENTATION

BIL. 3.0 3.4

KETERANGAN ISI KANDUNGAN DOKUMEN KONTRAK (Samb.) SYARAT-SYARAT KONTRAK (Samb.) Maklumat-maklumat yang perlu diisi (Samb.) LAMPIRAN KEPADA SYARAT-SYARAT KONTRAK (Samb.) Muka Surat Terakhir (Samb.)

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(c)

Fasal 47(a)

(i)

Nilai kerja yang perlu dilaksanakan termasuk bahanbahan dan barang-barang yang perlu diserah- hantar sebelum perakuan Interim Pertama dikeluarkan iaitu tidak kurang dari 5% Harga Kontrak Asal atau RM100,000, yang mana lebih kurang (Rujuk dokumen tender).

(d)

Fasal 47(a)

(ii) Nilai kerja yang perlu dilaksanakan termasuk bahanbahan dan barang-barang yang perlu diserah-hantar sebelum tiap-tiap Perakuan Interim kemudiannya dikeluarkan iaitu tidak kurang dari RM1,000.00.
(follow checklist payment) (c) Fasal 47(d) Tempoh menunaikan perakuan bayaran interim isikan 30 Hari (Rujuk dokumen tender).

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Chapter 9 – CONTRACT DOCUMENTATION

BIL. 3.0 3.5

KETERANGAN ISI KANDUNGAN DOKUMEN KONTRAK (Samb.) ADDENDA KEPADA SYARAT-SYARAT KONTRAK (i) Masukkan Addenda No. 1

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Pada Borang Pengesahan Addenda. Maklumat-maklumat yang perlu diisi:(a) Nombor-nombor dan jumlah mukasurat Adenda-addenda tersebut. Pastikan Cop Syarikat, Tandatangan Kontraktor dan Saksi, beserta nama dan alamat dicop dan diisi oleh Kontraktor pada ruang yang disediakan pada muka hadapan Addenda tersebut. Pastikan Cop Pegawai yang diberi kuasa menandatangani Kontrak dan saksi beserta nama dan alamat dicop dan diisi pada ruang yang disediakan pada muka hadapan Addenda tersebut. PERUNTKAN KHAS KEPADA SYARATSYARAT KONTRAK

(b)

(c)

3.6

(i)

Syarat-syarat Kontrak – Perubahan Harga ke atas Bahan-bahan Binaan.

(ii) Sertakan Senarai Bangunan, Kategori yang berkaitan, Faktor Pulangan dan Index Asas untuk tujuan Pelarasan Perubahan Harga menurut Peruntukan Khas Syaratsyarat Kontrak.

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Chapter 9 – CONTRACT DOCUMENTATION

BIL. 3.0 3.6

KETERANGAN ISI KANDUNGAN DOKUMEN KONTRAK (Samb.) PERUNTKAN KHAS KEPADA SYARATSYARAT KONTRAK (Samb.) Isikan Index Asas mengikut Jenis dan Kategori- Kategori Bangunan untuk kawasan yang telah ditetapkan. Index Asas diambil berdasarkan Bulan Tender ditutup, Index Kos Bangunan diperolehi dari Jabatan Perangkaan Malaysia yang dikeluarkan dari bulan ke bulan. (iii) Syarat-syarat Kontrak – Bayaran Wang Pendahuluan. (iv) ‘Restriction procedure on use of imported goods and List of government multimodal transport operator’ (v) Bon Perlaksanaan dalam bentuk Wang Jaminan Perlaksanaan.

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3.7 (a)

SPESIFIKASI PIAWAI

Masukkan Spesifikasi Piawai Kerjakerja Bangunan sama seperti yang terkandung di dalam Dokumen Meja Tender.
Masukkan Spesifikasi Piawai Kerja-kerja Mekanikal dan Elektrikal sekiranya projek dipanggil secara Pakej sama seperti yang terkandung di dalam Dokumen Meja Tender. Masukan Spesifikasi bagi Kawalan Kualiti Alam Persekitaran dan Kawalan Hakisan dan Mendapan. SPESIFIKASI ADDENDA Masukkan Spesifikasi Addenda sama seperti yang terkandung di dalam Dokumen Meja Tender.

(b)

(c)

3.8 (a)

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Chapter 9 – CONTRACT DOCUMENTATION

BIL. 3.0 3.8

KETERANGAN ISI KANDUNGAN DOKUMEN KONTRAK (Samb.) SPESIFIKASI ADDENDA (Samb.) Pada Borang Pengesahan Spesifikasi Addenda Maklumat-maklumat yang perlu diisi:(i) Nama projek, sama seperti yang terkandung di dalam Surat Setujuterima Tender.

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(ii) Nombor Kontrak. (iii) Tarikh Kontrak iaitu Tarikh semasa Kontrak ditandatangani oleh Pegawai yang diberikuasa menandatangani Kontrak. (iv) Jumlah Mukasurat Spesifikasi Addenda. (v) Pastikan Cop Syarikat, Tandatangan Kontraktor dan Saksi, beserta nama dan alamat dicop dan diisi oleh Kontraktor pada ruang yang disediakan. (iv) Pastikan Cop Pegawai yang diberi kuasa menandatangani Kontrak dan saksi beserta nama dan alamat dicop dan diisi pada ruang yang disediakan.

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Chapter 9 – CONTRACT DOCUMENTATION

BIL. 3.0 3.9

KETERANGAN ISI KANDUNGAN DOKUMEN KONTRAK (Samb.) PENGUKURAN DAN FAKTOR MENGHARGAKAN SENARAI KUANTITI (PREAMBLE) – Bagi Kontrak Berasaskan Senarai Kuantiti Masukkan Pengukuran dan Faktor Menghargakan Senarai Kuantiti sama seperti yang terkandung di dalam Dokumen Meja Tender. SENARAI KUANTITI – Kontrak Berasaskan Senarai Kuantiti Ringkasan Tender. (i) Setiap nilai Kerja-kerja yang diisi harga di dalam ringkasan Tender oleh Kontraktor perlu diselaraskan dan mestilah sama nilainya dengan nilai terkumpul Kerja-kerja Awalan, nilai-nilai terkumpul Kerja-kerja yang Berkenaan, Kerja-Kerja Cerucuk (jika ada), Wang Kos Prima dan Wang Peruntukan Sementara yang telahpun disemak, diselaras dan diseragam kadarkadar harganya terlebih dahulu.

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(a)

3.10

(a)

(ii) Jika perbezaan kesilapan keseluruhan perkiraan itu Besar Jumlahnya, Pelarasan peratusan perlu dibuat iaitu dengan menjumlahkan nilai terkumpul kerja- kerja di ringkasan Tender, sekiranya jumlah yang disemak melebihi dari Harga Tender, Pelarasan peratusannya adalah Kurangan, sekiranya jumlah yang disemak kurang dari Harga Tender, Pelarasan Peratusannya adalah Tambahan, di mana pelarasan dibuat dengan tidak menjejaskan Harga Tender.

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Chapter 9 – CONTRACT DOCUMENTATION

BIL. 3.0 3.10 (a)

KETERANGAN ISI KANDUNGAN DOKUMEN KONTRAK (Samb.) SENARAI KUANTITI (Samb.) Ringkasan Tender (Samb.) (iii) Jika perbezaan kesilapan keseluruhan perkiraan itu kecil jumlahnya memadailah nilai Kerjakerja tersebut diselaraskan dengan diagih-agihkan di mana perlu pada item-item Kerja Awalan atau diselaraskan dengan diagihagihkan atau diseragamkan ke item-item Kerja-kerja Berkenaan lain dengan tidak menjejaskan Harga Tender. (iv) Jumlah terkumpul nilai kerja keseluruhan yang diisi oleh Pentender untuk dibawa ke Borang Tender mestilah sama jumlah harga Tender yang dipersetujui oleh Lembaga Perolehan. (v) Setiap kesilapan pengiraan mestilah diperbetulkan terlebih dahulu dan hendaklah dipersetujui oleh Kontraktor. Kontraktor mestilah menurunkan tandatangan ringkas pada tempat-tempat pengiraan yang telah diperbetulkan bersama-sama dengan pegawai yang diberi kuasa bagi pihak kerajaan.

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(b)

Kerja Awalan.

(i)

Setiap item-item Kerja Awalan yang diisi harga oleh Kontraktor pastikan ia adalah perlu. Semak harga-harga tersebut untuk memastikan kemunasabahan harganya. Sekiranya terdapat kadar-kadar harga yang tidak munasabah ia hendaklah diselaraskan dengan mengagihkannya pada Item-item lain pada kerja-kerja Awalan atau diselaraskan dengan engagihkannya ke bahagian kerja-kerja lain.

9A-16

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Chapter 9 – CONTRACT DOCUMENTATION

BIL. 3.0 3.10 (b)

KETERANGAN ISI KANDUNGAN DOKUMEN KONTRAK (Samb.) SENARAI KUANTITI (Samb.) Kerja Awalan (Samb.) (ii) Setelah Item-item kerja-Kerja Awalan diselaraskan atau diperbetulkan hendaklah dipersetujui oleh Kontraktor. Kontraktor mestilah menurunkan tandatangan ringkas pada tempattempat pengiraan yang telah diperbetulkan bersama-sama dengan pegawai yang diberi kuasa bagi pihak kerajaan. (iii) Jumlah terkumpul nilai keseluruhan Kerja-Kerja Awalan yang telah diselaraskan hendaklah dibawa ke Ringkasan Tender. Lampiran Kepada Kerja-kerja Awalan

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Kadar kerja harian dan Jumlah Kadar Harga Harian untuk Loji dan Buruh. Pastikan Kadar Harga Upah Loji sehari dan Kadar Harga Upah Buruh sehari diisidengan Kadar Harga yang munasabah oleh Kontraktor. Jika terdapat Kadar-kadar harga yang didapati tidak munasabah ia mestilah diselaraskan terlebih dahulu dan Kontraktor mestilah menurunkan tandatangan ringkas pada kadarkadar Harga yang diselaraskan. Kadar Harga tersebut kemudiannya mestilah ditandatangani oleh Pegawai Penguasa atau Wakil atau PMK sebagai tanda kadarkadarHarga diterima.

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Chapter 9 – CONTRACT DOCUMENTATION

BIL. 3.0 3.10 (c)

KETERANGAN ISI KANDUNGAN DOKUMEN KONTRAK (Samb.) SENARAI KUANTITI (Samb.) Kerja-kerja yang Berkenaan, dan Kerjakerja Cerucuk (jika ada) (i) Kadar-kadar Harga setiap unit Item-item Kerja-kerja Berkenaan dan Kerja-kerja Cerucuk (jika ada) dan jumlah yang diisi harga oleh Kontraktor perlu disemak untuk memastikan kemunasabahan harganya. Ia disemak berpandukan harga pasaran semasa. Sekiranya terdapat kadar-kadar harga yang tidak munasabah, tidak seragam, kesilapan pengiraan, kadar-kadar harga tersebut perlu diselaraskan dan diseragamkan pada itemitem kerja lain yang sama cara kerjanya termasuk memperbetulkan jumlah pengiraannya.

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(ii) Setelah Item-item Kerja-Kerja tersebut diselaraskan atau diperbetulkan hendaklah dipersetujui oleh Kontraktor. Kontraktor mestilah menurunkan tandatangan ringkas pada tempattempat pengiraan yang telah diperbetulkan bersama-sama dengan pegawai yang diberi kuasa bagi pihak kerajaan. (iii) Jumlah terkumpul nilai keseluruhan Kerja-Kerja tersebut yang telah diselaraskan hendaklah dibawa ke Ringkasan Tender.

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Chapter 9 – CONTRACT DOCUMENTATION

BIL. 3.0 3.10 (d)

KETERANGAN ISI KANDUNGAN DOKUMEN KONTRAK (Samb.) SENARAI KUANTITI (Samb.) Wang Kos Prima dan Wang Peruntukan Sementera. (i) Setiap Item-item Wang Kos Prima dan Wang Peruntukan Sementara yang diisi harga oleh Kontraktor perlu disemak. Sekiranya terdapat kesilapan ia perlu diselaraskan dan diperbetulkan.

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(ii) Setelah Item-item Kerja-Kerja tersebut diselaraskan atau diperbetulkan hendaklah dipersetujui oleh Kontraktor. Kontraktor mestilah menurunkan tandatangan ringkas pada tempattempat pengiraan yang telah diperbetulkan bersama-sama dengan pegawai yang diberi kuasa bagi pihak kerajaan. (iii) Jumlah terkumpul nilai keseluruhan Kerja- Kerja tersebut yang telah diselaraskan hendaklah dibawa ke Ringkasan Tender. 3.11 SENARAI LUKISAN YANG DIGUNAKAN UNTUK PENYEDIAAN SENARAI KUANTITI Masukkan Senarai Lukisan yang digunakan untuk penyediaan Senarai Kuantiti sama seperti yang terkandung di dalam Dokumen Meja Tender. Pada Lukisan-Lukisan Kontrak. (i) Semak catitan pada Senaraisenarai Lukisan dan lukisan-lukisan yang akan dijilidkan dalam Dokumen Kontrak adalah sama kandungannya seperti di dalam Dokumen Meja Tender.

(a)

(b)

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Chapter 9 – CONTRACT DOCUMENTATION

BIL. 3.0 3.11

KETERANGAN ISI KANDUNGAN DOKUMEN KONTRAK (Samb.) SENARAI LUKISAN YANG DIGUNAKAN UNTUK PENYEDIAAN SENARAI KUANTITI (Samb.) (ii) Pastikan Semua pindaan atau perubahan pada Lukisan-lukisan Kontrak mestilah diselaraskan juga pada Dokumen Meja Tender.

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(c)

Pada Borang Pengesahan Lukisan Maklumat-maklumat yang perlu diisi:(i) Nama projek, sama seperti yang terkandung di dalam Surat Setujuterima Tender.

(ii) Nombor Kontrak. (iii) Tarikh Kontrak iaitu Tarikh semasa Kontrak ditandatangani oleh Pegawai Yang Diberi Kuasa Menandatangani Kontrak. (iv) Jumlah Mukasurat Lukisan-lukisan. (v) Pastikan Cop Syarikat, Tandatangan Kontraktor dan Saksi, beserta nama dan alamat dicop dan diisi oleh Kontraktor pada ruang yang disediakan. (vi) Pastikan Cop Pegawai yang diberi kuasa menandatangani Kontrak dan saksi beserta nama dan alamat dicop dan diisi pada ruang yang disediakan. 3.12 TARIKH KONTRAK Pastikan tarikh Kontrak (iaitu Tarikh semasa Kontrak ditandatangani) telah diisi.  Borang tender  Perkara-perkara Perjanjian (Articles of agreement)  Surat Setujuterima Tender  Senarai lukisan kontrak

9A-20

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Chapter 9 – CONTRACT DOCUMENTATION

BIL. 4.0

KETERANGAN PENGEDARAN DOKUMEN-DOKUMEN KONTRAK (i) KSU, Kementerian Sumber Asli dan Alam Sekitar - Satu salinan tanpa Lukisan Ketua Audit Negara - Satu salinan tanpa Lukisan. Bank atau Syarikat yang mengeluarkan Bon Perlaksanaan. - Satu salinan tanpa Lukisan

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(ii)

(iii)

(iv) Kontraktor - Satu salinan dengan Lukisan - Berdaftar (AR) (v) Pengarah Bahagian, Ibu Pejabat JPS. - Satu salinan dengan Lukisan (vi) Pegarah Bahagian Kontrak dan Ukur Bahan, Ibu Pejabat JPS - Kontrak Asal dengan Lukisan. (vii) Pengarah Bahagian Khidmat Pengurusan – Jika bayaran dibuat di Ibu Pejabat Sahaja. - Satu salinan tanpa Lukisan (viii) Akauntan Kanan Perbendaharaan (Negeri) – Jika bayaran dibuat di Negeri Sahaja. - Satu salinan tanpa Lukisan (ix) Pengarah Negeri / Jurutera Projek - Satu salinan dengan Lukisan. (x) Juruperunding - Satu salinan dengan Lukisan

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9A-21

Chapter 9 – CONTRACT DOCUMENTATION

BIL. 5.0

KETERANGAN PENYIMPANAN DOKUMEN KONTRAK ASAL DAN BON PERLAKSANAAN (i) Dokumen Kontrak Asal hendaklah disimpan dengan selamat di Pejabat di mana Dokumen Kontrak disediakan dan disimpan di tempat yang mudah untuk mendapatkannya apabila ianya dikehendaki.

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(ii) Bon Perlaksanaan hendaklah disimpan dengan selamat dalam Peti Keselamatan atau kabinet kalis api dan ianya mudah didapatkan apabila dikehendaki.

Tandatangan Pegawai Semakan Tarikh Selesai Tugasan:

Tandatangan Pegawai Pengesahan Tarikh Selesai Tugasan:

Tandatangan Kualiti Audit Tarikh Selesai Tugasan:

*Audit Kualiti; Jika Berkenaan

9A-22

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DID MANUAL VOLUME 10 CONTRACT ADMINISTRATION PART III : POST-CONTRACT

CHAPTER 10

PAYMENTS

Chapter 10 – PAYMENTS

Table of Contents

Table of Contents .....................................................................................................................10-i List of Flowcharts .................................................................................................................... 10-ii 10.1 10.2 INTRODUCTION.........................................................................................................10-3 PROCEDURES ............................................................................................................10-3 10.2.1 Advance Payment ..........................................................................................10-3 10.2.2 Interim Payment ............................................................................................10-6 10.3 10.4 10.5 10.6 PAYMENT TERMS .....................................................................................................10-10 METHOD OF VALUATION..........................................................................................10-10 REFERENCE DOCUMENTS .........................................................................................10-10 REFERENCES ...........................................................................................................10-11 Checklist for Preparation of Advance Payment (Senarai Semakan Penyediaan Bayaran Pendahuluan)…………………………..…………………………………………….….. 10A-1 Task List for Interim Payment (Borang Tindakan Kerja Bayaran Interim)…………………………..…………………………………………………………………….. 10A-3 Checklist for Preparation of Interim Payment (Senarai Semakan Penyediaan Bayaran Interim)……………….………………………………………………………………....... 10A-5

APPENDIX 10A APPENDIX 10B APPENDIX 10C

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10-i

Chapter 10 – PAYMENTS

List of Flowcharts

Flowchart Flowchart 10.1 Flowchart 10.2

Description Advance Payment Interim Payment

Page 10-1 10-2

10-ii

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Chapter 10 – PAYMENTS

Flowchart
1 1.

Description
Application for Advance Payment by Contractor

Action By
-

Reference

2

2.

Check documents for completeness

CAO

3

3.

Prepare Supporting Documents for Advance Payment.  Checklist for Advance Payment

CAO

See Appendix 10A

No 4 Yes 5. 4. Documents are in proper order? CAO

5

Issue Payment Certificate - Form JKR 66

SO

No 6 Yes 7

6.

Quality Audit

QS/CAO/BUBK*

7.

Record payment details and issue to FD.

Division / State

8

8.

Record payment in vote book. Prepare payment voucher, and sign / issue payment voucher to AG

FD

9

9.

Submit to AG

FD

*Quality Audit: Where payment warrant is through the DID HQ – audit by BUBK; Where payment warrant is channeled through the State – audit by Quantity Surveyor or Contracts Officer at State.

Flowchart 10.1 – Advance Payment

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10-1

Chapter 10 – PAYMENTS

Flowchart

Description

Action By

Reference

1

1. 1st Valuation, or Interim Valuation

-

2

2. Site valuation 3. Check documents for completeness, and computation

PT / PM CAO

3

4

4. Prepare supporting documents for payment  Checklist for Interim Payment

CAO

See Appendix 10C

No 5 Yes 6

5. Document is in proper order?

CAO

6. Issue Payment Certificate - Form JKR 66

SO

7

7. Quality Audit

QS/CAO/BUBK*

8

8. Record payment details and issue documents to FD 9. Record payment in vote book. Prepare payment voucher, sign and issue payment voucher to AG

Division / State

9

FD

*Quality Audit: Where payment warrant is through the DID HQ – audit by BUBK; Where payment warrant is channeled through the State – audit by Quantity Surveyor or Contracts Officer at State.

Flowchart 10.2 – Interim Payment

10-2

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Chapter 10 – PAYMENTS

10 PAYMENT
10.1 INTRODUCTION

This chapter provides:  The guidelines on the preparation and checking of the payment documents, and issuance of the payment certificate for advance payment and interim payment. 10.2 10.2.1 PROCEDURES Advance Payment

Please refer to Flowchart 10.1 – Advance Payment. Step Procedures / Tasks Generally The advance payment shall not exceed 25% of the value of builder’s work (the Contract Sum less Prime Cost and Provisional Sums), subject to a maximum of RM 10 million. 1 Contractor Submits Application for Advance Payment (a) The Contractor must submit the application for advance payment in accordance with the Contract, within 3 months of the possession of site. (b) The application must be accompanied by the following documents:  Letter of Acceptance duly signed and witnessed  Performance Bond, or Letter of Confirmation on using Performance Guarantee Sum  Bank/insurance guarantee for advance payment.  Insurance Policies and receipt issued by insurance company  Proof of registration with Socso  Contractor’s Letter stating bank details, and signed by authorized person.

Action By / Reference

SPP 5/2007

For Information

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10-3

Chapter 10 – PAYMENTS

Step 2

Procedures / Tasks Check documents for completeness Upon receipt of the Contractor’s documents,  Check that the Contractor’s application is accompanied by the necessary documents mentioned in Step 1  Check that each document is complete and/or in order.  Obtain confirmation from the bank or insurance company against the bank or insurance guarantee.

Action By / Reference
Action By: CAO

3&4

Prepare the Supporting Documents for payment Refer to Checklist for Preparation of Advance Payment (Senarai Semakan Penyedian Bayaran Pendahuluan) Complete and initials the Checklist for Preparation of Advance Payment. Complete the Form JKR66. Make six (6) copies of the completed JKR66 Form before signing. The recommending officer signs the Form JKR66. Submit Form JKR66, together with attached documents, to the SO for signature Attach the following additional documents to the application   Approval of Tender Board / Treasury (if necessary) Form JKR66, duly filled in with the correct information

Action By: CAO

Refer Appendix 10A

Ensure the relevant documents are certified by a DID officer. Fill in and initials the Tasklist (Borang Tindakan) and the Checklist for Preparation of Advance Payment,, and attach these to the documents. 5 Issuance of Certificate of Advance Payment If the advance payment document is duly completed, and the documents checked and endorsed by the relevant officers, the SO shall sign payment certificate. Forward documents to State or HQ for Quality Audit or payment processing, depending on the value of the Contract. Action By: SO

Action By: CAO

10-4

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Chapter 10 – PAYMENTS

Step 6

Procedures / Tasks Quality Audit Quality Auditor shall check the documents are in order and are free of errors.

Action By / Reference
Action By: BUBK

7

Recording of Payment Details Record payment in the relevant State / HQ section, as relevant. Make duplicates of payment documents (except payment voucher).

Action By: Relevant State / Division

8&9

Recording Payment Details & Prepare payment voucher Ensure that the correct amount is entered into the vote book. Check that the documents are in order, and ensure that the payment voucher is signed Submit to the relevant to Accountant General for issuance of payment:    Form JKR66, payment voucher and supporting documents, together with duplicates.

Action By: Finance Division

Note: Recoupment of Advance Payment The recoupment for advance payment only is made through interim payments, and in accordance with the recoupment formula set out in the Special Provision to the Conditions of Contract.

For Information

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10-5

Chapter 10 – PAYMENTS

10.2.2

Interim Payment

Please refer to Flowchart 10.2 – Interim Payment. Step 1 Procedures / Tasks Generally For contracts using Standard Form of Contract JKR 203 and 203A, interim valuations must be carried out at least once a month. For contract using Form JKR DB/T, interim valuations must be carried out at least once a month, unless a Payment Schedule is included in the Contract. Comply with the method of valuation set out in Section 10.4. 2 Interim Valuation at Site The SO shall make a first interim valuation based on the works which have been executed by the Contractor including the unfixed materials delivered to or adjacent to the Works. Ensure the total value of claim reaches to the sum appeared in the Appendix to the Conditions of Contract (for First Interim Certificate) whilst the subsequent claims must not less than the amount appeared (subsequent Interim Certificates) in the same Appendix. Inform the Contractor the method of valuation adopted by DID, to avoid disputes. If the Contractor wishes to submit his interim claims (not a requirement under the Contract), then explain and agree with the Contractor the format of claim. 3&4 Check documents, and Prepare the Supporting Documents for Payment Upon completion of the valuation, prepare the payment documents. Refer: Task List, and Checklist for Interim Payment. Action By: CAO Action By: CAO

Action By / Reference
For Information

SP JPS Bil. 2/2000 & SP JPS Bil. 4/2008

Refer Form JKR 203/203A Clause 47(a); and Form JKR DB/T Clause 50.3(b)(i)

See Appendix 10B & Appendix 10C

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Chapter 10 – PAYMENTS

Step 3&4 (Cont’d)

Procedures / Tasks Check documents, and Prepare the Supporting Documents for Payment (Cont’d)

Action By / Reference

1st Valuation and Certification
Generally, the SO shall issue the Certificate within fourteen (14) days from the date of such valuation stating the due amount to the contractor i.e. estimated total value of works executed and ninety (90) percent of the value of the unfixed materials and goods delivered at site. Variation of Price (if any) shall be included in the valuation. Refer to the Appendix to the Conditions of Contract for the minimum value of work to be executed including materials and goods to be delivered before 1st Interim Certificate will be issued. The amount due to the Contractor must be thereon and up to the date of valuation. The following documents must form part of 1st payment’s documents (unless already submitted under the application for Advance Payment):  Letter of Acceptance duly signed and witnessed  Performance Bond, or Letter of Confirmation using Performance Guarantee Sum  Insurance Policies and receipt for insurance policies issued by the insurance company  Proof of registration with Socso  Contractor’s letter stating bank details, and signed by authorized person.  Consultant’s certification of works done (if using Consultant).  Form JKR66  Tasklist The copies of relevant documents shall be certified by SO or SOR. Fill-in and initials both the Task List (Borang Tindakan Kerja) for Interim Payment and Checklist for Preparation of Interim Payment, and attach these to the documents. For information

Action By: CAO

Refer Appendix 10B & Appendix 10C

Subsequent Interim Valuation and Certification Generally, the SO shall issue the subsequent interim certificate within fourteen (14) days from the date of such valuation stating the due amount to the contractor i.e. estimated total value of works executed and ninety (90) percent of the value of the unfixed materials and goods delivered at site. Variation of Price (if any) shall be included in the valuation.

For information

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Chapter 10 – PAYMENTS

Step 3&4 (Cont’d)

Procedures / Tasks Check documents, and Prepare the Supporting Documents for Payment (Cont’d)

Action By / Reference

Subsequent Interim Valuation and Certification (Cont’d)
Refer to the Appendix to the Conditions of Contract for the minimum value of work to be executed including materials and goods to be delivered before the Interim Certificate will be issued. The following documents must be form part of the payment documents:  Form JKR 66  Consultant’s certification of works done (if using Consultant)  Task List (Borang Tindakan Kerja) for Interim Payment, duly filled in and initialed. Fill in and initials both the Task List for Interim Payment and Checklist for Preparation of Interim Payment, and attach these to the documents

Action By: CAO

Advance Payment
Where Advance Payment was made, check and ensure that the amount to be recouped is stated in the payment certificate as a contractual deduction. Refer to the Special Provisions to the Conditions of Contract for the recoupment formula to be applied. Generally, the recoupment of Advance Payments shall be made when the value of works reaches 25% and must fully recouped at 75% works completed. 5 Checks documents for completeness Check that each document is complete and/or in order. Refer to the Checklist for Preparation of Interim Payment. Fill in and initials the Checklist for Preparation of Interim Payment. The recommending officer (Pegawai Pengesyor) shall sign the Form JKR66. Submit Form JKR66, together with attached documents, to the Authorised Person for signature.

Action By: CAO

Action By: CAO

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Chapter 10 – PAYMENTS

Step 6

Procedures / Tasks Issuance of Interim Certificate If the Interim Payment document is duly completed, and the documents checked and endorsed by the relevant officers, the SO/Officer Empowered (Pegawai yang Memperakukan) shall sign and issue the Interim Certificate. Forward documents to State or HQ for Quality Audit or payment processing, depending on the value of the Contract.

Action By / Reference
Action By: SO

7

Quality Audit Quality Auditor shall check the documents are in order and are free of errors.

Action By: BUBK

8

Recording of Payment Details Record payment in the relevant State / HQ section, as relevant. Make duplicates of payment documents (except payment voucher).

Action By: Relevant State / Division

9

Recording Payment Details & Prepare Payment Voucher Ensure that the correct amount is entered into the vote book. Check that the documents are in order, and ensure that the payment voucher is signed Submit to the relevant to Accountant General of issuance of payment:    Form JKR66, payment voucher and supporting documents

Action By: Finance Division

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Chapter 10 – PAYMENTS

10.3

PAYMENT TERMS

The payment(s) shall be valued, certified and paid in accordance with the payment terms in the Contract. 10.4 METHOD OF VALUATION

The followings are the items which constitute the complete payments, whichever is applies:      General Conditions and Preliminaries Builder’s Works Prime Cost and Provisional Sums Variations Materials on Site No valuation/payment for premature delivery of materials on site.  Variation of Price (VOP) The VOP may be categorized into two (2) groups; based on quantities (for Civil Works) and based on index (for Building Works)   Note: Information for VOP may be found in SPP Bil 3 Tahun 2008. 10.5 REFERENCE DOCUMENTS Payment fees for Consultants Recoupment or other deductions i.e. Advance Payment, LAD, etc.

Please refer to Volume 10A for the standard reference (or sample) documents for the procedures or processes outlined in this Chapter.  Form JKR66

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Chapter 10 – PAYMENTS

10.6

REFERENCES

Please refer to the latest Treasury Circulars and DID Circulars on payments. Treasury Instructions (Arahan Perbendaharaan) [1] AP103: Semua Bil Dan Tuntutan Bayaran Hendaklah Dibayar Dengan Segera

Treasury Circular (Surat Pekeliling Perbendaharaan) [1] [2] Bil 7 Tahun 2006: Pindaan Ke Atas Arahan Perbendaharaan (AP103) Bil 3 Tahun 2008: Pelaksanaan Syarat Perubahan Harga Di Dalam Kontrak Kerja

DID Circulars (Surat Pekeliling / Edaran JPS) [1] SP JPS Bil. 2/2000: 2. Pindaan ke atas Borang JKR 66, Perakuan Pelarasan Jumlah Harga Kontrak (PPJHK) dan Perakuan Muktamad 3. Pindaan Kepada Syarat-syarat Kontrak Berkaitan Bayaran [2] SP JPS Bil 4/2008: Langkah-langkah Untuk Mempercepatkan Bayaran Interim (Pindaan kepada Perkara 1 dalam SP JPS Bil. 2/2000)

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DID MANUAL Volume 10 Contract Administration

Chapter 10 – Payments APPENDIX 10A

Checklist for Preparation Of Advance Payment [Form JKR 66] (Senarai Semakan Penyediaan Bayaran Pendahuluan)

Revision Number : Revision Date :

Revision 0 March 2009

Chapter 10 – PAYMENTS

APPENDIX 10A

CHECKLIST FOR PREPARATION OF ADVANCE PAYMENT (SENARAI SEMAKAN PENYEDIAAN BAYARAN PENDAHULUAN)

TAJUK PROJEK Untuk Tindakan PMK 1 PMK 2 AK* BIL. 1. KETERANGAN Pastikan penyediaan Bayaran Pendahuluan menggunakan Borang JKR66 (Pin. 3/99). Pastikan permohonan Kontraktor untuk mendapatkan Bayaran Pendahuluan hendaklah dalam tempoh 3 bulan dari Tarikh Milik Tapak. Dokumen-dokumen yang perlu disertakan bersama-sama Bayaran Pendahuluan hendaklah seperti berikut : (a) Keputusan Lembaga Perolehan / Surat Kelulusan Kementerian Kewangan / Surat Kelulusan Pegawai Kewangan Negeri, yang mana berkenaan. (b) Surat Setujuterima Tender yang telah ditandatangani oleh kontraktor dan saksi. (c) Gerenti Bank / Syarikat Insuran / Syarikat Kewangan/Takaful bagi Bayaran Pendahuluan. (d) Gerenti Bank / Syarikat Insuran / Syarikat Kewangan / Takaful bagi Bon Perlaksanaan, jika Kontraktor memilih dalam bentuk Gerenti. (e) Surat pengesahan daripada Bank / Insuran / Syarikat Kewangan yang mengeluarkan para ( c ) di atas. (f) Insuran Polisi Liabiliti Awam & Kerja (CAR). PMK1 PMK2 AK* ULASAN Tandakan () selepas semakan Nama Pegawai Tarikh Diberi Kepada Tarikh Diterima Oleh Tarikh Siap Semakan

2.

3.

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Chapter 10 – PAYMENTS

BIL. 3. (samb.)

KETERANGAN Dokumen-dokumen yang perlu disertakan bersama-sama Bayaran Pendahuluan hendaklah seperti berikut : (samb.) (g) Resit Bayaran Premium untuk Polisi Insuran CAR. (h) Surat daripada PERKESO yang menyatakan khusus untuk projek berkenaan sahaja (i) Surat daripada kontraktor menyatakan No. Akaun Bank :

PMK 1

PMK 2

AK*

ULASAN

(i)
(ii)

hendaklah ditandatangani oleh orang yang diberi kuasa. lengkap dengan Nama, alamat dan No. Akaun Bank

4

Pastikan Gerenti bagi Bayaran Pendahuluan teratur dari segi (a) (b) (c) (d) (e) (f) Format piawai, Butiran Kontrak, Nilai Gerenti, Tempoh Gerenti, Ditandatangani dan dicop oleh Pegawai Bank / Syarikat Insuran / Syarikat Kewangan / Takaful, Duti setem telah dibayar

5

Pastikan semua salinan-salinan dokumen dipara 3 disahkan oleh pegawai kumpulanpengurusan pengurusan dan profesional. Pastikan perakuan dikemukakan kepada Pegawai Penguasa atau Wakil PP Utama untuk ditandatangani dan tindakan seterusnya.

6

Tandatangan Pegawai Semakan Tarikh Selesai Tugasan:

Tandatangan Pegawai Pengesahan Tarikh Selesai Tugasan:

Tandatangan Kualiti Audit Tarikh Selesai Tugasan:

*Audit Kualiti; Jika Berkenaan
10A-2 Revision 0 : March 2009

DID MANUAL Volume 10 Contract Administration

Chapter 10 – Payments APPENDIX 10B

Task List for Interim Payment [Form JKR 66] (Borang Tindakan Kerja Bayaran Interim)

Revision Number : Revision Date :

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Chapter 10 – PAYMENTS

APPENDIX 10B

TASK LIST FOR INTERIM PAYMENT (BORANG TINDAKAN KERJA BAYARAN INTERIM BAGI KONTRAK YANG WAREN PEERUNTUKANNYA DISALURKAN KE NEGERI)

Pegawai Penguasa : Tajuk Kerja : No. Kontrak : Bayaran Interim No. : Bil 1 2 3 4 5 6 7 8 9 10 Proses Kerja Penilaian di tapak Perakuan Bayaran Interim (JKR 66) siap Tandatangan Pegawai Pengesyor Hantar kepada Unit Ukur Bahan & Kontrak JPS Negeri Diterima oleh Unit Ukur Bahan & Kontrak JPS Negeri Semakan Audit Teknik Hantar kepada Unit Berkenaan di JPS Negeri Diterima oleh Unit Berkenaan di JPS Negeri Semak Peruntukan dan Rekod bayaran Tandatangan Pegawai Yang Memperakukan Jumlah Tempoh 11 12 13 14 15 Kemukakan kepada Bahagian Kewangan Diterima oleh Bahagian Kewangan Rekod perbelanjaan dan sedia baucer Baucer bayaran ditandatangani Hantar kepada Pihak Pembayar Jumlah Tempoh * JUMLAH TEMPOH KESELURUHAN * Perhatian Carta ini hendaklah dikepilkan bersama Perakuan Bayaran Interim (JKR 66) dan disimpan di dalam fail bayaran Unit Teknikal yang berkenaan. Revision 0 : March 2009 10A-3 hari hari Tarikh Pegawai bertanggung jawab Penyelia Projek Penyelia Projek Pegawai Pengesyor Penyelia Projek Pegawai Juru Bahan/Kontrak Pegawai Juru Bahan/Kontrak Pegawai Juru Bahan/Kontrak Unit Projek JPS Negeri Unit Projek JPS Negeri Pegawai Penguasa/ Wakil P.P. hari Unit Projek JPS Negeri Tanda tangan Catatan

Chapter 10 – PAYMENTS

APPENDIX 10B

TASK LIST FOR INTERIM PAYMENT (BORANG TINDAKAN KERJA BAYARAN INTERIM BAGI KONTRAK YANG WAREN PEERUNTUKANNYA DI IBU PEJABAT JPS MALAYSIA)

Pegawai Penguasa : Tajuk Kerja : No. Kontrak : Bayaran Interim No. : Bil 1 2 3 4 5 6 7 8 9 10 11 Proses Kerja Penilaian di tapak Perakuan Bayaran Interim (JKR 66) siap Tandatangan Pegawai Pengesyor Tandatangan Pegawai Yang Memperakukan Hantar kepada Bahagian Ukur Bahan & Kontrak Ibu Pejabat JPS Malaysia Diterima oleh Bahagian Ukur Bahan & Kontrak Ibu Pejabat JPS Malaysia Semakan Audit Teknik Hantar kepada Bahagian Berkenaan di JPS M'sia. Diterima oleh Bahagian Berkenaan di JPS M'sia. Rekod bayaran Kemukakan kepada Bahagian Kewangan Jumlah Tempoh 12 13 14 15 Diterima oleh Bahagian Kewangan Rekod perbelanjaan dan sedia baucer Baucer bayaran ditandatangani Hantar kepada Pihak Pembayar Jumlah Tempoh * JUMLAH TEMPOH KESELURUHAN * Perhatian Carta ini hendaklah dikepilkan bersama Perakuan Bayaran Interim (JKR 66) dan disimpan di dalam fail bayaran Unit Teknikal yang berkenaan. 10A-4 Revision 0 : March 2009 hari hari Tarikh Pegawai bertanggung jawab Penyelia Projek Penyelia Projek Pegawai Pengesyor Pegawai Penguasa/ Wakil P.P. Penyelia Projek Jurukur Bahan Jurukur Bahan Jurukur Bahan Unit Projek Bahagian Unit Projek Bahagian Unit Projek Bahagian hari Tanda tangan Catatan

DID MANUAL Volume 10 Contract Administration

Chapter 10 – Payments APPENDIX 10C

Checklist for Preparation Of Interim Payment [Form JKR 66] (Senarai Semakan Penyediaan Bayaran Interim)

Revision Number : Revision Date :

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Chapter 10 – PAYMENTS

APPENDIX 10C
TAJUK PROJEK Untuk Tindakan PMK 1 PMK 2 AK* BIL. 1.

CHECKLIST FOR PREPARATION OF INTERIM PAYMENT (SENARAI SEMAKAN PENYEDIAAN BAYARAN INTERIM)

Nama Pegawai

Tarikh Diberi Kepada

Tarikh Diterima Oleh

Tarikh Siap Semakan

KETERANGAN Interim No: - sila pastikan nombor berturutan. Anggaran Pembangunan: Kepala Perbelanjaan, Pecahan Kepala hendaklah diisi sama seperti dalam dokumen kontrak. No. Kontrak - hendaklah diisi sama seperti dalam dokumen kontrak. Tarikh Penilaian: hendaklah mengikut tarikh penilaian sebenar. (Pastikan Perakuan diterima selewatlewatnya dua (2) minggu selepas tarikh penilaian). Pastikan nilai kerja mengikut 'engineer's certification' berdasarkan CPM atau penilaian tapak (jika tiada ‘engineer’s certification’). Nilai kerja dilaksanakan dan amaunamaun lain yang kena dibayar hendaklah merangkumi : (a) Nilai kerja Kontraktor Utama termasuk APK dan PHK, (b) 90% daripada nilai bahan binaan di tapak, (c) Pelarasan turun naik harga (VOP), (d) Nilai kerja Sub-Kontraktor Dinamakan termasuk APK dan PHK, (e) Nilai kerja Pembekal Dinamakan termasuk APK dan PHK, (f) Bayaran kepada Juruperunding (Bagi Kontrak Design & Build/Turnkey).

PMK1

PMK 2

AK*

ULASAN Tandakan () selepas semakan

2.

3.

4.

5.

6.

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10A-5

Chapter 10 – PAYMENTS

BIL. 6. (samb.) NOTA :

KETERANGAN

PMK1

PMK 2

AK*

ULASAN

(i) V.O.P. untuk kerja bangunan "Current Index" yang digunakan adalah untuk bulan sebelum bayaran Interim dinilaikan. (ii) V.O.P. untuk kerja kejuruteraan Awam - "Current Price" adalah untuk bulan bayaran Interim dinilaikan.

7.

KURANGAN (a) Pastikan amaun sebenar yang telah dibayar untuk bayaran interim terdahulu berasaskan baucer bayaran. (b) Pastikan jumlah nilai terkumpul bayaran Interim yang terdahulu ditolak.

8.

POTONGAN a) Pastikan bayaran Wang Pendahuluan telah dibuat (samaada di Peringkat Negeri atau Ibu Pejabat Kuala Lumpur). Semak pengiraan bayaran balik Wang Pendahuluan, jika ada. Semak dan pastikan jumlah amaun potongan terdahulu untuk Wang Jaminan Perlaksanaan (WJP) adalah 10% daripada nilai kerja tertakluk kepada nilai maksimum 5% daripada harga kontrak, jika kontraktor memilih kaedah WJP. Semak kadar LAD/hari dan tempoh yang dikenakan dan sebarang Pengecualian (jika ada) berserta dengan rujukan surat. Semak potongan lain-lain jika ada (sertakan lampiran keterangan).

b) c)

d)

e)

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Chapter 10 – PAYMENTS

BIL. 9. 10.

KETERANGAN Semak pengiraan bayaran disyorkan. Tandatangan Pegawai Pengesyor hendaklah pegawai yang diberi kuasa dan catitkan nama dan jawatan. Perakuan Bayaran : (a) Pastikan amaun berasingan di perakukan untuk berikut : i) Kontraktor Utama ii) Bayaran kepada subkontraktor/ Penerima Bayaran (pastikan Lampiran A Borang JKR 66 dilengkapkan) (b) Pastikan nilai bersih potongan Wang Jaminan Perlaksanaan dicatitkan untuk dikreditkan dalam akaun deposit (c) Jumlah yang perlu dibayar hendaklah digenapkan kepada ratus yang hampir. (d) Pastikan perakuan dikemukakan kepada Pegawai Penguasa atau Wakil PP Utama untuk ditandatangani dan tindakan seterusnya.

PMK1

PMK 2

AK*

ULASAN

11.

Tandatangan Pegawai Semakan Tarikh Selesai Tugasan:

Tandatangan Pegawai Pengesahan Tarikh Selesai Tugasan:

Tandatangan Kualiti Audit Tarikh Selesai Tugasan:

*Audit Kualiti; Jika Berkenaan

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DID MANUAL VOLUME 10 CONTRACT ADMINISTRATION PART III : POST-CONTRACT

CHAPTER 11

VARIATIONS

Chapter 11 – VARIATIONS

Table of Contents

Table of Contents .....................................................................................................................11-i List of Flowcharts .................................................................................................................... 11-ii 11.1 11.2 11.3 11.4 INTRODUCTION.........................................................................................................11-2 PROCEDURES ............................................................................................................11-2 REFERENCE DOCUMENTS ...........................................................................................11-6 REFERENCES .............................................................................................................11-6 Checklist for Preparation of Variation Works Order (Senarai Semakan Arahan Perubahan Kerja)…………………………..……………………………………………..………... 11A-1

APPENDIX 11A

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11-i

Chapter 11 – VARIATIONS

List of Flowcharts

Flowchart Flowchart 11.1

Description Variations

Page 11-1

11-ii

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Chapter 11 – VARIATIONS

Flowchart
1 No

Description
1. SO Instruction is required 2a Is it a VO?

Action By
SOR/PT

Reference

2a

2b Any cost implication? 3. Issue SOI using JKR203U

SOR/PT SOR/SO

Yes No
2b

Yes 4 No Yes 6 6. Prepare and submit Application for VO Approval (Form JKR-KPK) SOR/CAO 3 4. Prepare approximate VO Costs CAO

5

5. Net addition to Contract Sum?

-

7

No

END

7. Approval by VO Committee?

VO Committee

Refer Chapter 5 - Authority

Yes 8. Issue Variation Order to Contractor (form JKRAPK), with copy to all relevant parties 9. Contractor complies with instruction / variation order Yes 10. Actual VO value more than the approved amount? SOR/SO

8

9

SOR/PjS

10

No 11 11. Submit Form JKR-KPK to VO Committee CAO

12

12. Finalisation of VO Value

SOR

Refer Chapter 12

Flowchart 11.1 – Variations

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11-1

Chapter 11 – VARIATIONS

11 VARIATIONS
11.1 INTRODUCTION

This chapter provides:  The guidelines and general procedures on the process and approval of variations works and other changes to the Contract. Notes: “Variation” of Works may be defined as any alteration or modification of the design, specification and/ or Bills of Quantities of the Works as shown upon in the Contract Drawings and described or referred to in the Contract Bills, and includes the addition, omission or substitution of any works. The Treasury Instruction (Arahan Perbendaharaan) 202 states that each Variation must comply with the following criteria:     The contract period has not ended when the Variation Order (APK) is issued; The Variation shall not change or alter a major part of the original scope of works; For additional works, the Variation works must be carried out on Site; and For substitution of works, the Variation works must be within the original scope of contract, and the original scope of works (or substituted works) must be identifiable in the Variation works. PROCEDURES

11.2

Please refer to Flowchart 11.1 – Variations. Step 1, 2 and 3 Procedures / Tasks SO Instruction and Variation Order The SO may issue instructions requiring a variation and he may sanction in writing any variation made by the Contractor. The SO may issue instruction on any matter, which the SO is empowered to do so under the Contract, including variation works as described in the Contract. SO and his representatives shall ensure and comply the requirements of Treasury Circulars 202, which stipulates that prior approval of the relevant authority must be obtained before instruction requiring work to be varied may be issued. The instruction may or may not involve cost implications; if the instruction does not involve cost implications, use Form JKR- 203U, or otherwise use Form JKR-APK for instruction which incurs cost implications. Action by : SOR/PT/SO Action By / Reference

11-2

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Chapter 11 – VARIATIONS

Step 4&5

Procedures / Tasks Prepare approximate VO Costs Refer Checklist for Variation Works. Prepare the estimated costs of the Variation Order (VO) works. The cost estimates should be as accurate as possible based on information available and be supported by details. The circumstances upon the preparation of estimated Variation Order (VO) cost:  If the estimates show nett additional to the Contract Sum, then the SOR or CAO shall prepare a Form JKRKPK for approval by VO Committee. If the estimates show reduction (or no addition) to the Contract Sum, then the SO shall issue an instruction using Form JKR-APK (Variation Order to Contractor)

Action By / Reference Action by: PM/CAO/SO

For very urgent works, indicative estimates or ‘ball park figures’ may be used, but the estimates must be substantiated as soon as possible. No Variation works should be carried out prior to the approval of Variation Order Committee. 6 Application for VO Approval Check that there is sufficient budget or allocation for the Variation Order. The application to VO Committee shall comprise:  Application for Approval of Variation Order (Form JKR-KPK) – duly certified by the SO (see part D of the form) VO Costs Estimates (with supporting details) Justification for the needs of VO Action by : PH/CAO

 

Submit all documents to the VO Secretariat.

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Chapter 11 – VARIATIONS

Step 7

Procedures / Tasks Approval by VO Committee Approval for Variation Order (VO) must be given by (i) (ii) Variation Order Committee, or the Ministry of Finance (MoF),

Action By / Reference Action by : SOR/CAO

depending on the Contract Sum and aggregate value of variation works. For composition and limits of authority of the VO Committee, please refer Chapter 5. Note that the officer who applies for the Variation Order cannot be the chairman or member of the Variation Order Committee. Where approval of MoF is required, the application for VO approval shall be checked by BUBK at the DID headquarters, and submitted through the Director General of DID. 8 Issue Variation Order to Contractor Prepare the Variation Order (use the current Form JKR-APK) and issue to the Contractor.  All particulars in the Form JKR-APK must be correctly inserted. All space for information / insertion must be filled. The date of the Variation Order is the date on which it is signed by the Authorised Party. Description of the work to be varied must be clear and concise. All relevant drawings, sketches and other details are appended. Action by : SOR/CAO

  

The Contract Sum shall be adjusted accordingly by the amount stated in the (Form JKR-APK). The SO must sign the Form JKR-APK and copied to all relevant parties.

Refer Chapter 5 – Appendix 5A

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Chapter 11 – VARIATIONS

Step 9

Procedures / Tasks Contractor complies with instruction / variation order The Contractor shall acknowledge receipt and compliance with the VO instruction (Form JKR-APK). The Contractor is required to comply with the Superintending Officer’s instruction or the Variation Order within 7 days of receipt of the same.

Action By / Reference Action by : SOR/PjS

10 & 11

Actual VO value more than approved amount Where the actual costs of VO is more than the approved amount for the particular VO, the SO is required to submit the additional costs under new application (JKR-KPK) to the Variation Committee for approval based on the aggregate value of VO todate. For composition and limits of authority of the VO Committee, please refer Chapter 5.

Action by : SOR/CAO

12

Finalisation of VO Value Every amount stated in the Form JKR-APK is provisional and temporary only, and must be finally adjusted through Form JKR-PHK. For adjustment of Contract Sum based on the final value of variation works, the amount stated in the JKR-PHK shall be the difference between the final VO value and the amount stated in the JKR-APK. If there is no difference, the JKR-PHK shall state “zero”.

For information

See also Chapter 12 – Adjustment of Contract Sum

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Chapter 11 – VARIATIONS

11.3

REFERENCE DOCUMENTS

Please refer to Volume 10A for the standard reference (or sample) documents for the procedures or processes outlined in this Chapter.     Form JKR 203U: Arahan Melibatkan Perubahan Kerja Form JKR-KPK: Permohonan Untuk Mendapatkan Kelulusan Perubahan Kerja Form JKR-APK: Arahan Perubahan Kerja Form JKR-PHK: Pelarasan Harga Kontrak REFERENCES

11.4

Please refer to the latest Treasury Circulars and DID Circulars on the calling and receipt of tenders. Treasury Circular (Surat Pekeliling Perbendaharaan) [1] Bil 7 Tahun 2007: Peraturan Perubahan Kerja (Variation Order)

Treasury Instruction (Arahan Perbendaharaan) [1] Arahan Perbendaharaan 202: Arahan Perubahan Kerja

DID Circulars (Surat Pekeliling / Edaran JPS) [1] SPJPS Bil. 2/2008: Peraturan Mengenai Arahan Perubahan Kerja dan Pelarasan Harga Bagi Kontrak Kerja

11-6

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DID MANUAL Volume 10 Contract Administration

Chapter 11 – Variations APPENDIX 11A

Checklist for Preparation of Variation Works Order [Form JKR APK] (Senarai Semakan Arahan Perubahan Kerja)

Revision Number : Revision Date :

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Chapter 11 – VARIATIONS

APPENDIX 11A
TAJUK PROJEK Untuk Tindakan PMK 1 PMK 2 AK* No. Kontrak P.P Dalam Kontrak

CHECKLIST FOR PREPARATION OF VARIATION WORKS ORDER (SENARAI SEMAKAN ARAHAN PERUBAHAN KERJA)

Nama Pegawai

Tarikh Diberi Kepada

Tarikh Diterima Oleh

Tarikh Siap Semakan

Harga Kontrak RM

RM

Had Kewangan PK P.P

Jumlah Nilai APK Tambahan Yg. Telah Lulus Jumlah Nilai APK Kurangan Jumlah Peratusan APK Tambahan Yang Telah Lulus Bil. APK Yang Telah Dikeluarkan Tarikh Terima Permohonan Tajuk Kerja APK Nilai Anggaran APK (Sertakan butiran anggaran/pengesahan anggaran) BIL. A 1. KETERANGAN PK KURANGAN - Pastikan : Ada surat permohonan dari Jabatan/ Kementerian Pelanggan yang ditandatangani oleh Pegawai Diberi Kuasa, jika PK diminta oleh Pelanggan. Nilai bersih adalah hasil penilaian PK untuk bahagian/elemen/komponen kerja yang sama. Kerja tidak diperlukan dan tidak akan dilaksanakan. PK TAMBAHAN – Pastikan : Ada surat permohonan dari Jabatan/Kementerian Pelanggan yang ditandatangani oleh Pegawai Diberi Kuasa, jika PK diminta oleh Pelanggan. No. APK Yang Disemak

RM RM %

RM KURANGAN/TAMBAHAN PMK 1 PMK 2 AK* ULASAN Tandakan () selepas semakan

2.

3.

B 1.

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Chapter 11 – VARIATIONS

BIL. B 2.

KETERANGAN PK TAMBAHAN (samb…) Skop kerja dirangkumi oleh Kontrak (within scope of Contract). Arahan perlaksanaan kerja masih dalam tempoh Kontrak. Perlaksanaan kerja tidak menyebabkan gangguan kepada kemajuan kerja/tempoh penyiapan Kontrak. Peruntukan mencukupi untuk melaksanakan kerja. Surat kelulusan Kementerian Kewangan/Perbendaharaan Negeri jika PK menyebabkan nilai jumlah harga Kontrak melebihi peruntukan projek. Surat kelulusan Ketua Setiausaha Kem. Kewangan jika nilai PK Tambahan melebihi 30% atau RM 6.0 Juta dari Jumlah Harga Kontrak mengikut yang mana lebih rendah. BORANG APK Format Borang yang digunakan adalah JKR-APK yang terkini Satu Borang APK bagi satu PK Tandatangan hendaklah P.P. yang dinamakan dalam Kontrak

PMK 1

PMK 2

AK*

ULASAN

3.

4.

5.

6.

7.

C 1.

2. 3.

Tandatangan Pegawai Semakan Tarikh Selesai Tugasan:

Tandatangan Pegawai Pengesahan Tandatangan Kualiti Audit Tarikh Selesai Tugasan: Tarikh Selesai Tugasan:

* Audit Kualiti; Jika Berkenaan

11A-2

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DID MANUAL VOLUME 10 CONTRACT ADMINISTRATION PART III : POST-CONTRACT

CHAPTER 12

ADJUSTMENT OF CONTRACT SUM

Chapter 12 – ADJUSTMENT OF CONTRACT SUM

Table of Contents

Table of Contents .....................................................................................................................12-i List of Flowcharts .................................................................................................................... 12-ii 12.1 12.2 12.3 12.4 INTRODUCTION.........................................................................................................12-2 PROCEDURES ............................................................................................................12-2 REFERENCE DOCUMENTS ...........................................................................................12-5 REFERENCES .............................................................................................................12-5 Checklist for Adjustment of Contract Sum (Senarai Semakan Penyediaan Pelarasan Harga Kontrak)…………………………..……………………………………………..……………. 12A-1

APPENDIX 12A

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12-i

Chapter 12 – ADJUSTMENT OF CONTRACT SUM

List of Flowcharts

Flowchart Flowchart 12.1

Description Adjustment of Contract Sum

Page 12-1

12-ii

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Chapter 12 – ADJUSTMENT OF CONTRACT SUM

Flowchart

Description

Action By

Reference

1

1.

Adjustment to Contract Sum is required

-

2.

Determine if and when such adjustment can be made. Make the necessary adjustments for: Variation Orders

CAO

(a)

2

(b) Adjustment for Prime Cost Sums (c) (d) (e) (f) (g) Adjustment for Provisional Sums Remeasurement of Provisional Quantities Variation of Prices Approved contractual claims Errors or omissions in Bills of Quantities

3

3.

Issue the Certificate of Adjustment of Contract Sum (Form JKR- PHK)

SO/CAO

Flowchart 12.1 – Adjustment of Contract Sum

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12-1

Chapter 12 – ADJUSTMENT OF CONTRACT SUM

12 ADJUSTMENT OF CONTRACT SUM
12.1 INTRODUCTION

This chapter provides:  The guidelines and general procedures for the adjustment of Contract Sum. 12.2 PROCEDURES

Please refer to Flowchart 12.1 – Adjustment of Contract Sum. Step 1 Procedures / Tasks Generally The Contract Sum shall be adjusted upon the issuance of JKRAPK to indicate the approved temporary value. Every JKR-APK must be adjusted through JKR-PHK based on the approved amount in JKR-KPK regardless of its value is changed or not. However the value shows in the Form JKRPHK is net difference between temporary value and ultimate value. 2 Adjustment of Contract Sum Refer to Checklist for Adjustment of Contract Sum. Determine the reasons for adjustment of Contract Sum. It is permitted under the following circumstances only: a) Variation Orders Every issuance of JKR-APK must be followed by the issuance of Form JKR-PHK. The provisional amount stated in the JKR-APK must be finalized through Form JKR-PHK, even if there is no difference between the provisional amount and the final value of the Variation works. Check that the Variation Order (JKR-APK) is issued. The adjustment is made as soon as the value of the variation work is certified. Action by: CAO Action By / Reference For Information

See SPP 5/2007 Peraturan Pelarasan Harga Kontrak

Refer: Appendix 12A

Refer Chapter 11 Variations

12-2

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Chapter 12 – ADJUSTMENT OF CONTRACT SUM

Step

Procedures / Tasks b) Adjustment of Prime Cost Sums Check that the works is awarded to the nominated subcontractor/ supplier. Omit the original PC Sum and add the awarded NSC’s/ NS’s contract sum and profit and attendance which is allowed in Contract. The final adjustment is made after completion of works and final cost is ascertained. c) Adjustment of Provisional Sums The Provisional Sums may be expended as follows:    Works shall carried out by Main Contractor, Works shall be omitted from Contract, and tendered out to third party, or Works shall be carried out by Nominated subcontractor / nominated supplier.

Action By / Reference

Refer also Chapter 20 – PC and Provisional Sum.

Refer also Chapter 20 – PC and Provisional Sum

If the works under a Provisional Sum is carried out by NSC/ NS, and if the Main contractor is entitled to ‘profit and attendance’ stated under the terms of the Contract and DID circular, then this must be included in the PHK. Ensure ‘Borang E’ and ‘Borang F’ (where applicable) is signed by Authorised Person. Check that the work or supply under a provisional sum is approved in accordance with the DID procurement procedures. The adjustment is made as soon as the net costs of the works / supply is approved. d) Remeasurement of Provisional Quantities The final remeasurement to the Provisional Quantities is made as soon as works is completed and the quantities can be accurately measured. If there is a net increase in quantities, approval from the Committee must be obtained for the additional quantities. If there is further increased upon the approval of additional works, the approval by the same or higher ranking of Committee must be obtained using Form JKR-KKS. Refer to the guidelines in SPP7/2007 Lampiran V. If no nett increased or changed in quantities, no approval is required but still need to be adjusted.

Please refer to the current Treasury Instruction No. 202, Schedule 3

Refer to the Guidelines in SPP 7/2007 - Lampiran V.

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Chapter 12 – ADJUSTMENT OF CONTRACT SUM

Step

Procedures / Tasks e) Variation of Prices The Variation of Prices exercise must be carried out monthly in Interim Payment, and the final adjustment is made after the whole of the Works is completed. For the Civil Works, ensure the adjustments made must not exceed the quantities allowed in Contract. The valuation and calculation must be in accordance with the Special Provisions to the Conditions of Contract. f) Approved Contractual Claims The adjustment to the Contract Sum may be made after the contractual claims had been approved by the Claim Committee, or Ministry of Finance, as the case may be. Ensure every claim by Contractor must be checked and evaluate by SO prior forward to Claim Committee. Five (5) copies applications must be attached with SO report before send to Claim Committee Secretariat. g) Errors in Bills of Quantities The error of quantities/ or error in description/ or omission of works in the Bills of Quantities is not considered a variation of works, but to be adjusted through Form JKR-PHK. This adjustment is applicable to contracts let under Form JKR, under Clause 26.

Action By / Reference

Please refer to SPP 3/2008

3

Approval of Certificate of Adjustment of Contract Sum Check that all the details are correct. The Form JKR- PHK must be signed by the Superintending Officer (or Project Director, as the case may be) named in the Contract. Action by: CA

Action by: CA

12-4

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Chapter 12 – ADJUSTMENT OF CONTRACT SUM

12.3

REFERENCE DOCUMENTS

Please refer to Volume 10A for the standard reference (or sample) documents for the procedures or processes outlined in this Chapter.     Permohonan Kelulusan Tambahan Kuantiti Sementara (Borang D) Permohonan Kelulusan Wang Peruntukan Sementara (Borang F) Perakuan Pelarasan Harga Kontrak (Borang JKR-PHK Pind. 1/2001) Borang Kelulusan Kuantiti Sementara (JKR-KKS) REFERENCES

12.4

Please refer to the latest Treasury Circulars and DID Circulars on the adjustment of contract sum. Treasury Circular (Surat Pekeliling Perbendaharaan) [1] [2] [3] Bil 7 Tahun 2007: Peraturan Arahan Perubahan Kerja (Variation Order) Bil 3 Tahun 2008: Pelaksanaan Syarat Perubahan Harga Di Dalam Kontrak Kerja Bil 5 Tahun 2007: Peraturan Pelarasan Harga Kontrak

Treasury Instructions (Arahan Perbendaharaan) [1] AP 202: Definisi dan Kriteria Arahan Perubahan Kerja

DID Circulars (Surat Pekeliling / Edaran JPS) [1] SPJPS Bil. 3/2008: Peraturan Mengenai Arahan Perubahan Kerja dan Pelarasan Harga Bagi Kontrak Kerja [2] SPJPS1/2007: Peraturan Mengenai Wang Peruntukan Sementara

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Chapter 12 – ADJUSTMENT OF CONTRACT SUM

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12-6

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DID MANUAL Volume 10 Contract Administration

Chapter 12 – Adjustment of Contract Sum APPENDIX 12A

Checklist for Adjustment of Contract Sum [Form JKR PHK] (Senarai Semakan Penyediaan Pelarasan Harga Kontrak)

Revision Number : Revision Date :

Revision 0 March 2009

Chapter 12 – ADJUSTMENT OF CONTRACT SUM

APPENDIX 12A
TAJUK PROJEK Untuk Tindakan

CHECKLIST FOR ADJUSTMENT OF CONTRACT SUM (SENARAI SEMAKAN PENYEDIAAN PELARASAN HARGA KONTRAK)

Nama Pegawai

Tarikh Diberi Kepada

Tarikh Diterima Oleh

Tarikh Siap Semakan

PMK 1 PMK 2 AK* No. Kontrak Harga Kontrak P.P Dalam Kontrak Had Kewangan RM PHK P.P Jumlah Nilai PHK Tambahan Yang Telah Dikeluarkan Jumlah Nilai PHK Kurangan Yang Telah Dikeluarkan Jumlah Bersih PHK Terkumpul Bilangan PHK Yang Telah Dikeluarkan Tarikh Terima No. PHK Yang Permohonan Disemak Tajuk Kerja PHK Nilai Anggaran PHK (Sertakan butiran anggaran/pengesahan anggaran) BIL. BHG. 1 A 1. KETERANGAN

RM

RM RM RM

RM KURANGAN/TAMBAHAN PMK 1 PMK 2 AK* ULASAN Tandakan () selepas semakan

TUJUAN PHK (Pilih Yang Berkenaan)
MEMUKTAMADKAN APK. Kelulusan J/K PHK mengikut AP 202.2 dalam Borang JKR - KPK (Terkini) bagi PHK Tambahan sahaja. Pengukuran kuantiti yang berkenaan telah dimuktamadkan Kadar Harga yang berkenaan telah dimuktamadkan PELARASAN WANG KOS PRIMA Kerja telah diawadkan kepada subkontraktor/pembekal.

2. 3. B 1. 2. 3.

Jumlah keuntungan dan caj layanan Kontraktor telah diambilkira.
Jumlah Wang Kos Prima termasuk jumlah keuntungan dan caj layanan di dalam Kontrak telah diselaraskan. Pastikan pelarasan mengambilkira PK ke atas kerja Wang Kos Prima.

4.

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Chapter 12 – ADJUSTMENT OF CONTRACT SUM

BIL. BHG. 1 (samb.) C 1.

KETERANGAN TUJUAN PHK (samb.) (Pilih Yang Berkenaan) PERBELANJAAN WANG PERUNTUKAN SEMENTARA Jumlah harga kerja, perkhidmatan atau bekalan telah ditentukan mengikut tatacara perbelanjaan Wang Peruntukan Sementara mengikut panduan proses perolehan kerja. Jumlah yang diperuntukan di dalam Kontrak sebagai Wang Kos Sementara untuk kerja, perkhidmatan atau bekalan telah diselaraskan. Kelulusan Pegawai jika jumlah nilai kerja, perkhidmatan atau bekalan yang dijangkakan melebihi 30% daripada jumlah yang diperuntukan di dalam Kontrak, kecuali perolehan kerja /perkhidmatan / bekalan diluluskan oleh Lembaga Perolehan. Rujuk SP JPS 1/2007. PENGUKURAN SEMULA KUANTITI SEMENTARA Pengukuran kuantiti sementara di dalam Kontrak telah dimuktamadkan. Kelulusan Jawatankuasa Tambahan Kuantiti Sementara mengikut A.P. 202 Jadual III dalam Borang JKR - KKS (jika perlu) PERLAKSANAAN SYARAT TURUN NAIK HARGA Kesemua perkiraan bulanan turun naik harga hingga tarikh siap Kontrak telah diselesaikan. Semua Pelarasan Harga Kontrak diluluskan. Pelarasan perkiraan turun naik harga telah disediakan apabila keseluruhan kerja di dalam Kontrak telah disiapkan. KELULUSAN TUNTUTAN KONTRAKTOR Pastikan kelulusan J/K Tuntutan. Sertakan kelulusan Kementerian Kewangan / Perbendaharaan Negeri bagi tuntutan exgratia dan tuntutan di luar terma Kontrak. Butiran Penilaian Jumlah Amaun Tuntutan yang diluluskan disertakan.

PMK 1

PMK 2

AK*

ULASAN

2.

3.

D 1. 2.

E 1.

2. 3.

F 1. 2.

3.

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Chapter 12 – ADJUSTMENT OF CONTRACT SUM

BIL. BHG. 1 (samb.) G

KETERANGAN

PMK 1

PMK 2

AK*

ULASAN

TUJUAN PHK (samb.) (Pilih Yang Berkenaan)
KESILAPAN KUANTITI/PENINGGALAN KERJA DALAM SENARAI KUANTITI Butiran perkiraan jumlah harga akibat kesilapan/peninggalan kerja dalam Senarai Kuantiti disediakan. Surat pengesahan mengenai kesilapan/peninggalan kuantiti daripada Pejabat / Perunding yang menyediakan Senarai Kuantiti berkenaan. BORANG PELARASAN HARGA KONTRAK (JKR-PHK) Format Borang yang digunakan adalah JKRPHK yang terkini. Pelarasan harga kontrak dimasukan di dalam Bayaran Interim. Tandatangan hendaklah Pegawai Penguasa yang dinamakan dalam Kontrak.

1.

2.

BHG. 2 1. 2. 3.

Tandatangan Pegawai Semakan Tarikh Selesai Tugasan:

Tandatangan Pegawai Pengesahan Tarikh Selesai Tugasan:

Tandatangan Kualiti Audit Tarikh Selesai Tugasan:

* Audit Kualiti; Jika Berkenaan

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12A-3

DID MANUAL VOLUME 10 CONTRACT ADMINISTRATION PART III : POST-CONTRACT

CHAPTER 13

DELAYS AND EXTENSION OF TIME

Chapter 13 – DELAYS AND EXTENSION OF TIME

Table of Contents

Table of Contents .....................................................................................................................13-i List of Flowcharts .................................................................................................................... 13-ii 13.1 13.2 13.3 13.4 13.5 13.6 13.7 13.8 13.9 INTRODUCTION ............................................................................................................13-3 PROCEDURES................................................................................................................13-3 DELAY AND EXTENSION OF TIME ..................................................................................13-5 PURPOSE OF EXTENSION OF TIME PROVISIONS ............................................................13-5 GROUNDS FOR EXTENSION OF TIME IN STANDARD FORMS OF CONTRACT.....................13-5 POINTS TO REVIEW FOR CONSIDERATIONS OF EXTENSION OF TIME .............................13-6 METHODS FOR ASSESSMENT OF EXTENSION OF TIME ...................................................13-6 REFERENCE DOCUMENTS ..............................................................................................13-7 REFERENCES.................................................................................................................13-7 Checklist for the Preparation of Certificate of Delay and Extension of Time (Senarai Semakan Penyediaan Perakuan Kelewatan dan Lanjutan Masa) …………………………………………………………………………………..….. 13A-1

APPENDIX 13A

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13-i

Chapter 13 – DELAYS AND EXTENSION OF TIME

List of Flowcharts

Flowchart Flowchart 13.1 Flowchart 13.2

Description Delay Extension of Time

Page 13-1 13-2

13-ii

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Chapter 13 – DELAYS AND EXTENSION OF TIME

Delay become apparent; SOR issues warning letter to Contractor

Contractor to explain / issue letter explaining on reasons of delay

YES Acceptance

NO

Reasons of delay are acceptable as per contract?

NO

SOR to issue warning letter to Contractor informing on his intention to issue Certificate of NonCompletion and impose Liquidated and Ascertained Damages

YES
Prepare Certificate of Delay and Extension of Time for approval and signature of Authorised Party Contractor to continue work and at the same time SOR to prepare Certificate of Non-Completion for the approval and signature of Authorised Party

REFER TO CHAPTER 14 NON-COMPLETION Flowchart 13.1 – Delay

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13-1

Chapter 13 – DELAYS AND EXTENSION OF TIME

Flowchart

Description

Action By

Reference

1

1. Notice of Delay and Application for extension of time.

-

2

2. Assess the application for extension of time; reasons for delay and quantum of delay.

SOR

3

No
3. Contractor eligible for extension of time? SOR

Yes

4

4. Prepare report and Certificate of Delay and Extension of Time. Submit for the approval of Authorised Party.

SOR

No
5 5. Check report of Delay and Extension of Time CAO

Refer: Checklist for Preparation of Certificate of Delay and Extension of Time

Yes 6
6. Issue Certificate of Delay and Extension of Time to the Contractor. SOR

7

7. Completion of Works is delayed and there is no matter entitling the Contractor to an extension of time? Issue warning letters, and if delayed beyond Date for Completion then issue Certificate of NonCompletion and impose Liquidated and Ascertained Damages.

-

Refer: Chapter 14

Flowchart 13.2 – Extension of Time

13-2

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Chapter 13 – DELAYS AND EXTENSION OF TIME

13 DELAYS AND EXTENSION OF TIME
13.1 INTRODUCTION

This chapter provides:  An overview of the delay and extension of time provisions and procedure for works contracts  The standard forms of contract use for DID projects 13.2 PROCEDURES

Please refer to Flowchart 13.1 – Delay and Flowchart 13.2 – Extension of Time. Step 1 Procedures / Tasks Notice of Delay and Application for extension of time Contractor to put in application for extension of time as soon as it becomes apparent that the progress of the Works is delayed. Contractor to extent Performance Bond and all Insurances until the estimated new completion date. 2 Assess the application for extension of time It is the duty of the SOR to review the extension of time application based on the supporting documents submitted by Contractor. SOR to assess reasons and quantum of delay as allowed and acceptable grounds in contract. 3 Contractor eligible for extension of time? If Contractor is eligible, determine new Date of Completion. If not eligible, go to step 7. 4 Prepare report and Certificate of Delay and Extension of Time. Submit for the approval of Authorised Party After determining new Date for Completion, prepare report of Delay and Extension of Time complete with grounds, quantum and calculation. Submit report and Certificate of Delay and Extension of time for approval from Authorised Party. Use the latest Form JKR 203T. 5 Check report of Delay and Extension of Time Submit the report to the CAO for verification. Action by: CAO Action by: SOR Action by: SOR Action By / Reference For information

Refer : AP201 – Perubahan Dan Pelanjutan Tempoh Kontrak Untuk Kontrak Bekalan Dan Perkhidmatan
Action by: SOR

Refer to Checklist for the Preparation of Certificate of Delay and Extension of Time.

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13-3

Chapter 13 – DELAYS AND EXTENSION OF TIME

Step 6

Procedures / Tasks Issue Certificate of Delay and Extension of Time to the Contractor As soon as it is approved issue to Contractor the Certificate of Delay and Extension of Time and inform on new Date for Completion.

Action By / Reference Action by: SOR

7

Completion of Works is delayed and there is no matter entitling the Contractor to an extension of time? Refer Chapter 14 – Non-completion

For information

Refer: Chapter 14 – Non-completion

13-4

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Chapter 13 – DELAYS AND EXTENSION OF TIME

13.3

DELAY AND EXTENSION OF TIME

Most construction contracts will specify a time for completion. The contractor is obliged to complete the works within the stipulated date subject to any extension of time. Time is of the essence is a phrase loosely used in construction contracts to underscore the Government’s insistence on the contractor’s performance obligation by the stipulated date of completion. It often has to do with extension of time application by contactors and for disruption and delays with related money application in the form of direct loss and/or expense application and on the Government’s side, the right to Liquidated And Ascertained Damages for delays on the part of the Contractor. Time will be at large where the extensions of time provisions have been improperly applied or administered, or where the original time for completion has been waived. 13.4 PURPOSE OF EXTENSION OF TIME PROVISIONS

For the Government   Enables to fix a new completion date Keeps alive the Government’s right to Liquidated And Ascertained Damages

For the Contractor   Reduces the liability to pay Liquidated And Ascertained Damages May entitle to claim for prolongation costs incurred

Other consequences   13.5 Avoids time being at large Extinguishes the previously issued certificate of non-completion (if any) GROUNDS FOR EXTENSION OF TIME IN STANDARD FORMS OF CONTRACT

The grounds of extension of time allowed in JKR 203A form of contract is under Clause 43: Delays and Extension of Time as follows:a) b) c) d) e) Force majeure Exceptionally inclement weather Instructions consequential upon disputes with neighbouring owners Fire or other insurable damage Compliance with S.O’s / P.D.’s instruction for discrepancies, variations, date of commence and completion or postponement f) Late issue of instruction, drawings, levels or instruction in regards to NSC/NS g) Delay in giving possession of site h) Civil commotion, strike or lockout i) Delay by artists, tradesmen and other direct contractors j) Shortages of labour or materials k) Delay by NSC/NS In JKR Design & Build / Turnkey Contract (2002 Edition) the relevant clause for Delay and Extension of Time is found in Clause 45.

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Chapter 13 – DELAYS AND EXTENSION OF TIME

Other requirements related to submission of extension of time application by contractor include: Notice Provisions a) Provide advance warning of delays so that necessary mitigation measures can be undertaken before it become too late b) When it becomes reasonable apparent 13.6 POINTS TO REVIEW FOR CONSIDERATIONS OF EXTENSION OF TIME

It is the duty of the SOR to review the extension of time claim. a) Records and Contract Provisions - Actual facts and record are critical - Programmes and notices should not be ignored or left b) Sequence of works - The order in which works logically have to take place c) Critical paths - Those items which must be completed in a certain order d) Use of float time - Spare time / capacity in the programme between critical events - Over estimation of activity durations e) Ownership of float - As a general rule, the party which needs it uses it f) Mitigation measures undertaken by contractor - Limitation of actual delay impact - Contractor must progress work diligently

g) Contractual duties - Contractor must limit the impact of any delay - S.O / P.D. should grant extension of time as the works progress, wherever possible h) Concurrency - A number of competing connected events - A number of unrelated events occurring at the same time i) Dominant cause - The event which really causes the delay - Usually determined by using as-built programmes / critical path analysis METHODS FOR ASSESSMENT OF EXTENSION OF TIME

13.7

a) Based on programme analysis – Critical Path Method (CPM) / As built b) Must demonstrate actual cause and subsequent event c) Net vs. Gross Assessments Granted extension of time to be added to previous Completion Date Assessment based upon time related to the relevant event Not a consideration of when the event actually occurred

13-6

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Chapter 13 – DELAYS AND EXTENSION OF TIME

d) Nominated Sub-Contractors or Nominated Supplier - Delays caused by NSC / NS (such delay shall be cause by the same reasons affecting their work as stated in item 13.5 (a) – (i)) are acceptable grounds provided the Contractor has done all possible to mitigate loss of time e) Direct Contractors - Delays caused by Direct Contractors are not acceptable grounds 13.8 REFERENCE DOCUMENTS

Please refer to Volume 10A for the standard reference or sample documents mentioned in the procedures or processes outlined in this Chapter.  Form JKR 203T (Pin. 4/83) : Perakuan Kelambatan dan Lanjutan Masa REFERENCES

13.9

Please refer to the latest Treasury Circulars and DID Circulars on the administration of delays and extension of time. Treasury Circular (Surat Pekeliling Perbendaharaan / Surat Arahan Perbendaharaan) [1] Surat Arahan Perbendaharaan S/K.KEW/PK/PP/1100/000000/10/31 Jld. 22 (7) 16 Mei 2007: Pelanjutan Masa (Extension of Time) Bagi Kontrak Projek Kerja

Treasury Instructions (Arahan Perbendaharaan) [1] AP 201: Perubahan Dan Pelanjutan Tempoh Kontrak Untuk Kontrak Bekalan Dan Perkhidmatan

DID Circulars (Surat Pekeliling / Edaran JPS) [1] SPJPS.UB 1/1995: Perlantikan Pegawai Penguasa, Perwakilan Kuasa Pegawai Penguasa dan Pegawai-Pegawai Yang diberi Kuasa Dalam Urusan Pentadbiran Kontrak. [2] SP JPS Bil. 1/2003: Perlantikan Pegawai Penguasa (P.P), Perwakilan Kuasa Pegawai Penguasa (Wakil P.P) Dan Pegawai-Pegawai Yang Diberi Kuasa (PYDK) Dalam Urusan Pentadbiran Kontrak. (Tambahan kepada Surat pekeliling SPJPS.UB 1/1995)

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Chapter 13 – DELAYS AND EXTENSION OF TIME

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13-8

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DID MANUAL Volume 10 Contract Administration

Chapter 13 – Delays and Extension of Time APPENDIX 13A

Checklist for the Preparation of Certificate of Delay and Extension of Time [Form JKR 203T] (Senarai Semakan Penyediaan Perakuan Kelewatan dan Lanjutan Masa)

Revision Number : Revision Date :

Revision 0 March 2009

Chapter 13 – DELAYS AND EXTENSION OF TIME

APPENDIX 13A

CHECKLIST FOR THE PREPARATION OF CERTIFICATE OF DELAY AND EXTENSION OF TIME (SENARAI SEMAKAN PENYEDIAAN PERAKUAN KELEWATAN DAN LANJUTAN MASA)

TAJUK PROJEK Untuk Tindakan PMK 1 PMK 2 AK* BIL. 1. (i) KETERANGAN Perakukan Kelambatan dan Lanjutan Masa hendaklah disediakan sebaik sahaja tempoh kelambatan dapat ditentukan, dan seboleh- bolehnya tidak lewat daripada dua bulan sebelum berakhirnya tempoh siap kontrak. PMK1 PMK2 AK* ULASAN Tandakan () selepas semakan Nama Pegawai Tarikh Diberi Kepada Tarikh Diterima Oleh Tarikh Siap Semakan

(ii) Pastikan Kontraktor telah mengemukakan permohonan untuk lanjutan masa secara bersurat dengan menyatakan alasan- alasan kelewatan, tempoh lanjutan masa yang diperlukan dan sebagainya. (iii) Pastikan semua polisi Insuran, Bon Perlaksanaan (sekiranya recoupment belum habis dibuat) telah dilanjutkan oleh kontraktor untuk tujuan lanjutan masa ini. Sekiranya kontraktor gagal melanjutkan polisi insuran, PMK hendaklah menguruskan pelanjutan (hendaklah ditolak daripada wang yang kena bayar kepada kontraktor). 2. Borang yang digunakan ialah JKR 203T yang terkini. Muka surat 1 (Borang 203T) 3. KERAJAAN – bermaksud ‘KERAJAAN MALAYSIA’ bagi projek Persekutuan atau ‘KERAJAAN ......’ BAGI PROJEK Negeri.

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Chapter 13 – DELAYS AND EXTENSION OF TIME

BIL. 4.

KETERANGAN PKLM No. – sila pastikan nombor berturutan. Rujukan – sila masukkan nombor fail projek pejabat Pegawai Penguasa yang menyediakan. Pejabat – isikan alamat pejabat Pegawai Penguasa. Tarikh - Tarikh PKLM ditandantangani oleh Pegawai Penguasa. Kepada ( Nama dan alamat kontraktor), Kelas Pendaftaran, No. kontrak dan nama kontrak - hendaklah sama seperti yang terdapat di dalam dokumen kontrak. Bahagian - masukkan nama penyiapan bahagian- bahagian (jika berkenaan) sepertimana yang dinyatakan dalam lampiran kepada Syarat-Syarat Kontrak JKR 203/203A semakan 10/83 Klausa 41. Para 1 – (i) Masukkan Tarikh Siap Asal atau Lanjutan yang telah diluluskan sebelumnya.

PMK1

PMK2

AK*

ULASAN

5.

6.

7.

8.

9.

10.

(ii) Nyatakan sebab-sebab iaitu alasanalasan yang menyebabkan berlakunya kelewatan atau kelambatan kerja sepertimana yang dibenarkan di bawah klausa 43 Syarat-syarat Kontrak. Lampirkan sinopsis dan dokumen-dokumen sokongan yang lengkap dan munasabah sesuai dengan setiap alasan/sebab- sebab yang diberi. iii) Klausa - sila nyatakan sub-klausa untuk klausa 43 yang bersesuaian dengan setiap alasan/sebab yang dikemukakan.

13A-2

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Chapter 13 – DELAYS AND EXTENSION OF TIME

BIL. 10 (Samb.)

KETERANGAN (iv) Tempoh Kelambatan dan Lanjutan Masa – nyatakan tempoh dalam kiraan hari dan tarikh sebenar berlakunya kelambatan tersebut (di dalam kurungan) Muka surat 2 (Borang 203T)

PMK1

PMK2

AK*

ULASAN

11

Para 2 - masukkan jumlah bilangan hari yang diperakukan untuk lanjutan masa. Jumlah hari bertindih hendaklah ditolak dari jumlah keseluruhan. Para 3 – (i) Tarikh siap yang ditetapkan hendaklah sama seperti mana yang dinyatakan di dalam Para1(i).

12

(ii) Tarikh dilanjutkan ialah tarikh baru setelah tarikh siap ditetapkan dicampurkan dengan jumlah hari pada Para 2 iaitu :Tarikh lanjutan masa baru = Tarikh Para 1 + bilangan hari Para 2 Maklumat Tambahan 13 Sebarang maklumat tambahan seperti :(i) Peratus Kemajuan Kerja Sebenar pada tarikh PKLM dikemukakan.

(ii) Nombor dan tempoh lanjutan Gerenti Bon Perlaksanaan, Gerenti bayaran pendahuluan, polisi dan insurans CAR. Endorsement asal untuk tiap-tiap polisi tersebut hendaklah disertakan bersamasama PKLM ini. boleh dimasukkan dalam sinopsis sebab-sebab lanjutan masa yang dilampirkan bersama PKLM. 14 Tandatangan, Nama dan Jawatan Pegawai Penguasa

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Chapter 13 – DELAYS AND EXTENSION OF TIME

BIL. 15

KETERANGAN Tandatangan, Nama dan Jawatan Pegawai Yang Diberikuasa Menandatangani PKLM

PMK1

PMK2

AK*

ULASAN

Tandatangan Pegawai Semakan Tarikh Selesai Tugasan:

Tandatangan Pegawai Pengesahan Tandatangan Kualiti Audit Tarikh Selesai Tugasan: Tarikh Selesai Tugasan:

* Jika berkenaan

13A-4

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DID MANUAL VOLUME 10 CONTRACT ADMINISTRATION PART III : POST-CONTRACT

CHAPTER 14

NON- COMPLETION

Chapter 14 – NON-COMPLETION

Table of Contents

Table of Contents .....................................................................................................................14-i List of Flowcharts .................................................................................................................... 14-ii 14.1 14.2 14.3 14.4 14.5 14.6 INTRODUCTION ............................................................................................................14-3 PROCEDURES................................................................................................................14-3 NON-COMPLETION ........................................................................................................14-4 PREPARATION AND SUBMISSION OF CERTIFICATE OF NON-COMPLETION ......................14-5 REFERENCE DOCUMENTS ..............................................................................................14-5 REFERENCES.................................................................................................................14-6 Checklist for the Preparation of Certificate of Non-Completion (Senarai Semakan Penyediaan Perakuan Kerja Tidak Siap…………….……………...14A-1

APPENDIX 14A

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14-i

Chapter 14 – NON-COMPLETION

List of Flowcharts

Flowchart Flowchart 14.1 Flowchart 14.2

Description Delay Non-Completion Procedure

Page 14-1 14-2

14-ii

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Chapter 14 – NON-COMPLETION

Delay become apparent; SOR issues warning letter to Contractor

Contractor to explain / issue letter explaining on reasons of delay

YES Acceptance

NO

Reasons of delay are acceptable as per contract?

NO

SOR to issue warning letter to Contractor informing on his intention to issue Certificate of NonCompletion and impose Liquidated and Ascertained Damages

YES

Prepare Certificate of Delay and Extension of Time for approval and signature of Authorised Party

Contractor to continue work and at the same time SOR to prepare Certificate of Non-Completion for the approval and signature of Authorised Party

REFER TO CHAPTER 13 DELAY AND EXTENSION TIME Flowchart 14.1 – Delay

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14-1

Chapter 14 – NON-COMPLETION

Flowchart

Description

Action By

Reference

1

1. Warning letter / notice to contractor on issuance of Certificate of NonCompletion, and intention to impose Liquidated and Ascertained Damages.

SOR

2

2. Prepare Certificate of NonCompletion

SOR

3

3. Verify the Certificate of Non-Completion for completeness and issuance is valid

CAO

4

4. Issue Certificate of NonCompletion and issue letter on intention to impose LAD

SOR

Refer : Form JKR 203X

5

5. Impose LAD

SOR

6

6. Inform Contractor on amount of deduction of LAD; if necessary

SOR

Flowchart 14.2 – Non-Completion Procedure

14-2

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Chapter 14 – NON-COMPLETION

14 NON-COMPLETION
14.1 INTRODUCTION

This chapter provides:  An overview of the non-completion provisions and procedure for works contracts 14.2 PROCEDURES

Please refer to Flowchart 14.1 – Delay and Flowchart 14.2 – Non-Completion Procedure. Step 1 Procedures / Tasks Warning letter / notice to contractor on issuance of Certificate of Non-Completion (CNC) and LAD To issue warning letter to Contractor that Certificate of NonCompletion will be issue due to the late completion, and that Liquidated and Ascertained Damages will be imposed. 2 Prepare CNC Ensure that the latest Form JKR 203X is used. Complete the form, and make sure that all the particulars are correct. Refer Section 14.4 3 Verify the CNC Before issuance of the CNC, CAO to check on the completeness and that the reasons for the issuance is valid. 4 Issue CNC When Date for Completion is due and the Works has not reached practical completion, issue Certificate of NonCompletion to avoid time at large. Ensure that all related Insurance Policies and Performance Bond are submitted accordingly, and still valid. Issue instruction to Contractor to extend the validity of the Insurance Policies and Performance Bond, if necessary. Action by: SOR Action by: CAO Action by: SOR Action By / Reference Action by: SOR

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Chapter 14 – NON-COMPLETION

Step 5

Procedures / Tasks Impose LAD The Government shall impose LAD when Certificate of NonCompletion is issued. Ensure that the LAD is deducted in the next Interim Payment Certificate. If there is insufficient payment due to the Contractor to cover the amount of LAD, then consider recovering the LAD from the Performance Bond. Consider whether there are sufficient grounds to determine the employment of the Contractor. If yes, go the Chapter 16 – Determination.

Action By / Reference Action by: SOR

6

Inform Contractor on amount of deduction of LAD When LAD is imposed, then inform the Contractor in writing on the amount of deduction of LAD.

Action by: SOR

14.3

NON-COMPLETION

If the Contractor fails to complete the Works by the Date for Completion stated in the Contract Document or within any extended time under Clause 43 (delay and extension of time), then the S.O shall issue the Certificate of Non-Completion. Due to the delay of completing the Works, the Contractor bears the loss or damage suffered by the Government. Government has the right to impose liquidated and ascertained damages. Liquidated damages are intended to be the estimated damages that would be incurred as a result of delay to the Works for which the Contractor is responsible.

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14.4

PREPARATION AND SUBMISSION OF CERTIFICATE OF NON-COMPLETION

Some basic rules must be complied with in the preparation of the Certificate of Non-Completion as follows:a) All particulars in the Certificate must be correctly inserted. Particulars of the Contract and the Contractor inserted in the Certificate must be the same as those in Contract Document. No space allowed for insertions in the Certificate, except the date of the same, shall be left blank. The date of the Certificate shall be the date on which the officer empowered to do so signs the Certificate. The periods of coverage of the insurance policies must be extended to the expected date of completion of the Work.

b)

When submitting the Certificate of Non-Completion for approval, particulars of the Contract and other information must be provided on a standard form. In addition, the following must be submitted together:a) A statement by the recommending officer as to whether he has studied the circumstances of the case in depth and assessed the ability of the Contractor to proceed and complete the Work; and whether in his opinion, imposition of LAD will ensure completion of work the soonest and his reasons for thinking so. A description of the progress of work achieved by the Contractor and the work programme of the balance of work may be completed. Information whether there has been any cause of delay for which Government to be responsible for and if so, whether a reasonable extension of time has been granted and whether there is any foreseeable cause of delay for which the Government may be responsible.

b) c)

Only the officers empowered can approve the Certificate of Non-Completion. After approval, the original copy must be sent to the Contractor by A.R Registered post. A copy of the CNC must also be distributed to the parties listed for distribution in the Certificate. 14.5 REFERENCE DOCUMENTS

Please refer to Volume 10A for the standard reference or sample documents mentioned in the procedures or processes outlined in this Chapter.    Sample of Warning Letter Form JKR 203X (Pin. 1/83) : Certificate of Non-Completion Ringkasan Ke Atas Kontrak Yang Akan Dikeluar “Perakuan Kerja Tidak Siap”

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Chapter 14 – NON-COMPLETION

14.6

REFERENCES

Please refer to the latest Treasury Circulars and DID Circulars on the administration of delays and issuance of certificate of non-completion. Treasury Circular (Surat Pekeliling Perbendaharaan)  Nil

Treasury Instructions (Arahan Perbendaharaan)  Nil

DID Circulars (Surat Pekeliling / Edaran JPS) [1] SPJPS.UB 1/1995: Perlantikan Pegawai Penguasa, Perwakilan Kuasa Pegawai Penguasa dan Pegawai-Pegawai Yang diberi Kuasa Dalam Urusan Pentadbiran Kontrak. [2] SP JPS Bil. 1/2003: Perlantikan Pegawai Penguasa (P.P), Perwakilan Kuasa Pegawai Penguasa (Wakil P.P) Dan Pegawai-Pegawai Yang Diberi Kuasa (PYDK) Dalam Urusan Pentadbiran Kontrak. (Tambahan kepada Surat pekeliling SPJPS.UB 1/1995)

14-6

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DID MANUAL Volume 10 Contract Administration

Chapter 14 – Non- Completion APPENDIX 14A

Checklist for the Preparation of Certificate of Non-Completion [Form JKR 203X] (Senarai Semakan Penyediaan Perakuan Kerja Tidak Siap)

Revision Number : Revision Date :

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Chapter 14 – NON-COMPLETION

APPENDIX 14A

CHECKLIST FOR THE PREPARATION OF CERTIFICATE OF NONCOMPLETION (SENARAI SEMAKAN PENYEDIAAN PERAKUAN KERJA TIDAK SIAP)

TAJUK PROJEK Untuk Tindakan PMK 1 PMK 2 AK* BIL. 1 1.1 KETERANGAN Notis untuk Mengenakan Ganti Rugi Sila pastikan surat-surat amaran telah dikeluarkan. Untuk surat amaran terakhir, sila pastikan format yang ditetapkan digunakan. Penyediaan dan Mengemukakan Perakuan untuk Kelulusan Pastikan borang yang digunakan adalah borang JKR 203X yang terkini. Cara-cara pengisian borang, sila rujuk kepada perkara 5. Pastikan semua polisi Insuran, Bon Perlaksanaan serta Gerenti untuk bayaran Pendahuluan (sekiranya recoupment belum habis dibuat) telah dilanjutkan oleh kontraktor. Sekiranya kontraktor gagal melanjutkan polisi Insuran, PMK hendaklah menguruskan pelanjutan (hendaklah ditolak daripada wang yang kena bayar kepada kontraktor). Perakuan Kerja Tidak Siap yang dimajukan hendaklah dikepilkan bersama-sama borang ringkasan maklumat piawai. Maklumat- maklumat tambahan berikut hendaklah disertakan : 2.4.1 Huraian mengenai kemajuan kerja yang telah dicapai oleh kontraktor dan baki kerja yang akan dilaksanakan dan perkiraan bila baki kerja tersebut boleh dilaksanakan
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Nama Pegawai

Tarikh Diberi Kepada

Tarikh Diterima Oleh

Tarikh Siap Semakan

PMK1

PMK2

AK*

ULASAN Tandakan () selepas semakan

2

2.1

2.2

2.3

2.4

Chapter 14 – NON-COMPLETION

BIL.

KETERANGAN Penyediaan dan Mengemukakan Perakuan untuk Kelulusan (Samb.) 2.4.2 Butir-butir bayaran interim kepada Kontraktor dan sebabsebab sebarang kelambatan bayaran dan bayaran tidak dibuat.

PMK1

PMK2

AK*

ULASAN

3 3.1

Kuasa Untuk Meluluskan Perakuan Pastikan Perakuan ini diluluskan oleh Pihak Berkuasa yang dinamakan dalam Kontrak. Cara-cara Pengisian Borang Perakuan Tidak Siap Kerja Kerajaan - Masukkan Malaysia bagi projek Persekutuan dan Kerajaan Negeri bagi Projek Negeri. Rujukan - Isikan No. Rujukan Fail. Pejabat - Pastikan alamat pejabat adalah alamat pejabat Pegawai Penguasa yang akan menandatangani Perakuan ini. Tarikh - Tarikh perakuan ini ditandatangani oleh Pegawai Penguasa. Kepada - Catitkan Nama dan Alamat kontraktor. Pastikan Nama dan Alamat kontraktor adalah sama seperti tercatit dalam dokumen kontrak. Pastikan kelas pendaftaran Kontraktor dengan PKK dicatitkan. No. kontrak - Masukkan no. kontrak. Pastikan nombor kontrak adalah sama seperti tercatit dalam dokumen kontrak. Kontrak Untuk - Masukkan tajuk kontrak dan pastikan ianya adalah sama seperti yang tercatit dalam dokumen kontrak.

4

4.1

4.2 4.3

4.4

4.5

4.6

4.7

4.8

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BIL.

KETERANGAN Cara-cara Pengisian Borang Perakuan Tidak Siap Kerja (Samb.)

PMK1

PMK2

AK*

ULASAN

4.9

Bahagian - Masukkan bahagian kerja sekiranya “Sectional Completion" ada diperuntukkan dalam kontrak. Para 1 − Sila potong bahagian yang tidak berkenaan samaada kerja atau sebahagian kerja-kerja. − Masukkan tarikh siap sebenar atau tarikh siap yang dilanjutkan yang sepatutnya kontraktor menyiapkan projek tersebut.

4.10

4.11

Para 2 − Masukkan jumlah denda LAD bagi setiap hari seperti yang tercatit dalam dokumen Kontrak.

4.12

Tandatangan, Nama dan Jawatan Pegawai Peguasa. Tandatangan, Nama dan Jawatan Pegawai Yang Diberikuasa Menandatangani Perakuan Tidak Siap Kerja.

4.13

Tandatangan Pegawai Semakan Tarikh Selesai Tugasan:

Tandatangan Pegawai Pengesahan Tandatangan Kualiti Audit Tarikh Selesai Tugasan: Tarikh Selesai Tugasan:

* Audit Kualiti; Jika berkenaan

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14A-3

DID MANUAL VOLUME 10 CONTRACT ADMINISTRATION PART III : POST-CONTRACT

CHAPTER 15

LOSS AND EXPENSE

Chapter 15 – LOSS AND EXPENSE

Table of Contents

Table of Contents .....................................................................................................................15-i List of Flowcharts .................................................................................................................... 15-ii 15.1 15.2 15.3 15.4 INTRODUCTION ............................................................................................................15-2 PROCEDURES................................................................................................................15-2 LOSS AND EXPENSE PROVISIONS IN JKR203 & JKR203A CONDITIONS OF CONTRACT .....15-3 RELATIONSHIP BETWEEN LOSS AND EXPENSE AND EXTENSION OF TIME .......................15-4

15.5 TYPICAL HEAD CLAIMS AND WHEN THEY ARE JUSTIFIED ................................................15-4 15.6 ESTABLISHING IF A LOSS AND EXPENSE CLAIM IS VALID ................................................15-5 15.7 REFERENCE DOCUMENTS ...............................................................................................15-5 15.8 REFERENCES..................................................................................................................15-5 APPENDIX 15A Checklist for the Assessment of Contractor’s Claim and Preparation Of S.O./P.D. Report (Senarai Semakan Penyediaan Penilaian Tuntutan Kontraktor dan Laporan Pegawai Penguasa…………….………..……………………..….15A-1

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15-i

Chapter 15 – LOSS AND EXPENSE

List of Flowcharts

Flowchart Flowchart 15.1

Description Loss and Expense Procedure

Page 15-1

15-ii

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Chapter 15 – LOSS AND EXPENSE

Flowchart
1

Description 1. Received notice and estimates for loss and expense

Action By -

Reference

2

No

2. Is Contractor eligible for payment of loss and expense?

SOR

Yes
3 3. Inform Contractor of eligibility for loss and expense. Request further information, if necessary. SOR

4

4. Received details, and evaluate the information submitted by the Contractor

SOR

5

5. Prepare report and submit to Claim Secretariat

SO/SOR

6

6. Review and prepare recommendation by Claim Secretariat

BUBK

7

7. Decision by Claims Committee

Claims Committee

8

8. Inform Contractor on the result

SOR

9

9. Revise Contract Sum; if approved; if Final Account is closed, revise Final Account

CAO

Refer: Chapter 12 – Adjustment of Contract Sum

Flowchart 15.1 – Loss and Expense Procedure

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15-1

Chapter 15 – LOSS AND EXPENSE

15 LOSS AND EXPENSE
15.1 INTRODUCTION

This chapter provides:  Overview of standard contract provisions and how to deal with Contractor’s claim 15.2 PROCEDURES

Please refer to Flowchart 15.1 – Loss and Expense Procedure. Step 1 Procedures / Tasks SO/SOR received notice and estimates for loss and expense Contractor within one (1) month of the occurrence of event, give notice in writing to S.O his intention to claim supported by estimated amount. The Contractor to submit details of his claim within 3 months after the issuance of Certificate of Practical Completion. 2 Determine contractor’s eligibility for payment of loss and expense Carry out preliminary assessment of all claims, and establish if the loss and expense claim is valid 3 Inform Contractor of eligibility for loss and expense, and request for further information; if necessary Inform Contractor in writing on eligibility and if documents substantiation is not sufficient, request for more supporting documents, supporting vouchers, explanation and calculation. 4 Received details and evaluate the information submitted by the Contractor The SOR shall forthwith evaluate all information submitted by the Contractor. The SOR shall finalise all claims to meet the deadline for completing Final Account, which is no later than three (3) months after end of Defects Liability Period. 5 Prepare report and submit to Claim Secretariat After assessment and evaluation, prepare report of evaluation complete with eligible amount for approval of the SO. Submit the report to the Claim Secretariat at BUBK. Action by: SO/SOR Action by: SOR Action by: SOR Action by: SOR Action By / Reference

15-2

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Chapter 15 – LOSS AND EXPENSE

Step 6

Procedures / Tasks Review and prepare recommendation Claim Secretariat to assess report prepared by SO/SOR and prepare recommendation to Claims Committee.

Action By / Reference Action by: BUBK

7

Decision by Claim Committee After reviewing report and recommendation; make decision.

Action by: Claims Committee Action by: SOR

8

Inform Contractor on the result After determining the eligible amount claimable for loss and/or expense and after receive approval, inform Contractor in writing. If not eligible, inform Contractor in writing.

9

Revise Contract Sum; if approved Adjust Contract Sum when claim for loss and/or expense is approved. Prepare Final Account, based on the adjusted Contract Sum. If Final Account has been prepared, closed and approved prior to the settlement of claims, then revise the Final Account accordingly.

Action by: CAO

Refer Chapter 12 – Adjustment of Contract Sum

15.3

LOSS AND EXPENSE PROVISIONS IN JKR203 & JKR203A CONDITIONS OF CONTRACT

The three (3) relevant clauses related to direct loss and/or expense are Clause 5(d), Clause 44 and Clause 48. Clause 5(d) deals with S.O Instruction; Clause 44 deals with Loss and Expense caused by Delays whilst Clause 48 deals with Final Certificate. The Contract Conditions has the following provisions/requirements: Contractor shall within one (1) months of the occurrence of the event, give notice in writing to S.O of his intention to claim supported by an estimate of the amount of loss and/or expense likely to be incurred Within three (3) months after Practical Completion, the Contractor shall submit full particulars of all claims together with any documents, supporting vouchers, explanations and calculations

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15-3

Chapter 15 – LOSS AND EXPENSE

The grounds for direct loss and/or expense (under Form JKR 203/203A) are limited under to disruption of regular progress of the works or any part thereof by reasons of:(i) (ii) (iii) 15.4 Directions given by S.O consequential upon disputes with neighboring owners not due to neglect or default of the Contractor of his Sub-Contractors [Clause 48 and Clause 43 (c)] Contractor not receiving in due time necessary instructions and information due to negligence or default of the S.O [Clause 48 and Clause 43 (f)] Delay on the part of artists, tradesmen or others engaged by the government for work not forming part of the Contract [Clause 48 and Clause 43(i)] RELATIONSHIP BETWEEN LOSS AND/OR EXPENSE AND EXTENSION OF TIME

Many Contractors upon being granted and Extension of Time (EOT) presume that they can claim all additional costs for the extended period as loss and/or expense. The granting of EOT does not give an automatic right to loss and/or expense. EOT and loss and/or expense are separate and must be dealt with independent of each other and on their own merits. Only by examining cause and effect can items of costs, which fall under loss and/or expense, be identified. If the delay was the responsibility solely of the Contractor, Contractor should not cover his additional costs arising from any delay of the building works by claiming Loss and Expense. If delay is due to natural factors, than loss and/or expense is not claimable. 15.5 TYPICAL HEAD CLAIMS AND WHEN THEY ARE JUSTIFIED

“Heads” of claim for Loss and/or Expense may include:(a) Additional Site Overheads  Sometimes been referred to extended preliminaries. Should be based on actual additional costs incurred by the Contractor resulting from an event or circumstances, which brought to disruption to the regular progress of the works. The actual cost could either be higher or lower than the priced Preliminaries in the Contract Sum. The priced Preliminaries serves as a guide in assessment of loss and/or expense as to expenditure that the Contractor would expend had there been no disruption. The actual cost should not deviate too far from contract pricing and should it happen, then check carefully that the Contractor has not “loaded” his costs which he had incurred as a result of his own delays or poor management.

(b) Cost of uneconomic working (loss of productivity)  This refers to Contractor’s loss of output or productivity due to disruption of the regular progress of the works, and includes idling costs. Contractor need to produce detailed records because the Contractor may generally be inefficient or he may have carried out work incorrectly. Contractor needs to demonstrate that he has taken measures to mitigate the loss.

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15.6

ESTABLISHING IF A LOSS AND EXPENSE CLAIM IS VALID

The basic grounds to deal with a loss and expense claim are as follows:(a) (b) (c) (d) The claim is in accordance with the relevant clauses of the Conditions of Contract. In line with the above, all notices and claims must be submitted in writing. The SOR shall assess all claims for loss and/or expense as soon as sufficient information is available. It must be an expense not recoverable elsewhere under the contract.

Assess the claim for loss and/or expense as follows: (a) (b) (c) 15.7 Expenses claimed are actual expenses which are supported by documentation. Loss can be proven through documentary proof and records. Contractor has shown that the loss and/or expense are direct consequence(s) of the delay/disruption (cause-and-effect).

REFERENCE DOCUMENTS

Please refer to Volume 10A for the standard reference or sample documents mentioned in the procedures or processes outlined in this Chapter. 15.8 REFERENCES

Please refer to the latest Treasury Circulars and DID Circulars on claims for loss and expense. Treasury Circular (Surat Pekeliling Perbendaharaan)  Nil

Treasury Instructions (Arahan Perbendaharaan) [1] AP 202: Arahan Perubahan Kerja

DID Circulars (Surat Pekeliling / Edaran JPS)  Nil

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Chapter 15 – LOSS AND EXPENSE

(This page is deliberately left blank)

15-6

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DID MANUAL Volume 10 Contract Administration

Chapter 15 – Loss and Expense APPENDIX 15A

Checklist for the Assessment of Contractor’s Claim and Preparation of S.O./P.D. Report (Senarai Semakan Penyediaan Penilaian Tuntutan Kontraktor dan Laporan Pegawai Penguasa)

Revision Number : Revision Date :

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Chapter 15 – LOSS AND EXPENSE

APPENDIX 15A

CHECKLIST FOR THE ASSESSMENT OF CONTRACTOR’S CLAIM AND PREPARATION OF S.O./P.D. REPORT (SENARAI SEMAKAN PENYEDIAAN PENILAIAN TUNTUTAN KONTRAKTOR DAN LAPORAN PEGAWAI PENGUASA)

TAJUK PROJEK Untuk Tindakan PMK 1 PMK 2 AK* BIL. 1.0 1.1 AM Fahami asas tuntutan dan tentukan sinopsis peristiwa yang menyebabkan tuntutan oleh Kontraktor. Tentukan tuntutan layak dipertimbangkan untuk dibawa ke J/K Tuntutan antaranya seperti berikut : (a) Asas tuntutan adalah dibenarkan di Bawah Kontrak seperti A.P 202 Jadual III (e) iaitu:  Kerugian dan perbelanjaan disebabkan oleh kelambatan Kerajaan dan/atau mematuhi Arahan PP atau kerana mematuhi keperluan Berkanun Percanggahan dalam atau antara Dokumen-dokumen kontrak Tuntutan lain yang nyatanya dibenarkan dalam Syarat-syarat Kontrak seperti : o Fasal 43 (c), (f) & (i) Borang JKR 203/203A Apa-apa kos yang ditanggung berhubung dengan fee & caj pemindahan pembentungan, bekalan air, bekalan elektrik dan lain-lain yang berkaitan KETERANGAN PMK1 PMK2 AK* ULASAN Nama Pegawai Tarikh Diberi Kepada Tarikh Diterima Oleh Tarikh Siap Semakan

1.2

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Chapter 15 – LOSS AND EXPENSE

BIL. 1.0 (Samb.) AM (Samb.)

KETERANGAN

PMK1

PMK2

AK*

ULASAN

(b) Tuntutan kontraktor yang berpunca dari pecah kontrak atau kegagalan Kerajaan atau PP yang menyebabkan pelaksanaan Kerja Kontraktor terhalang atau terlewat. (c) Kontraktor telah melaksanakan obligasi tambahan yang tidak berbentuk fizikal kekal (seperti item-item awalan, kerja sementara, penggunaan loji, peralatan termasuk peranca & acuan, perubahan masa / tempoh penyiapan dan lain- lain.)
(d) Kontraktor telah mengeluarkan perbelanjaan tambahan atau menanggung kerugian secara langsung yang tidak akan diganti bayar melalui pembayaran yang dibuat di bawah mana-mana peruntukan lain dalam kontrak. 2.0 2.1 PENILAIAN TUNTUTAN KONTRAKTOR

Tentukan samaada kontraktor telah mematuhi semua prosedur dan syaratsyarat kontrak yang melayakkan
tuntutannya dipertimbangkan ; (a) Kontraktor telah memberi notis yang jelas (menyatakan perkara yang dituntut berserta dengan anggaran tentang amaun yang dituntut) menyatakan niatnya untuk membuat tuntutan dan diberi kepada PP dalam tempoh yang disyaratkan dalam kontrak, dan

b) Kontraktor telah mengemukakan butiran terperinci, lengkap dengan dokumen sokongan bagi membuktikan tuntutannya dalam tempoh yang disyaratkan dalam kontrak.

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BIL. 2.0 (Samb.) 2.2

KETERANGAN PENILAIAN TUNTUTAN KONTRAKTOR (Samb.)

PMK1

PMK2

AK*

ULASAN

Dapatkan maklumat tambahan yang berkenaan yang telah disahkan oleh PP / Wakil PP seperti;
   Surat-menyurat yang berkaitan dan/atau Minit mesyuarat, buku harian tapak dan/atau Sijil-sijil dalam kontrak yang berkaitan seperti lanjutan masa dll., dan Dokumen Kontrak

 2.3

Syor sama ada memperaku / menolak tuntutan dari kontraktor disediakan berdasarkan;
(a) Fakta-fakta kes mengikut rekod seperti item 2.2 di atas dan mengikut pengetahuan PP dalam mengawasi projek, dan (b) Peruntukan-peruntukan yang berkaitan dalam kontrak.

2.4

Tentukan kuantum bayaran (jika didapati wajar dibayar) kepada kontraktor ; (a) Perkara yang diambilkira sebagai item yang layak dituntut adalah teratur. (b) Tempoh yang layak diambilkira (bagi tuntutan yang berkaitan dengan tempoh masa) oleh kontraktor adalah teratur. (c) Dokumen-dokumen yang menyokong tuntutan serta buktibukti kerugian yang ditanggung dan perbelanjaan tambahan sebenar yang telah dikeluarkan oleh kontraktor adalah teratur. (Dokumen hendaklah yang asal atau diakui sah oleh PP / Wakil PP)

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Chapter 15 – LOSS AND EXPENSE

BIL. 2.0 (Samb.) 2.4 (Samb.)

KETERANGAN PENILAIAN TUNTUTAN KONTRAKTOR (Samb.) Tentukan kuantum bayaran (samb.) (Contoh dokumen sokongan – Penyata gaji pekerja, bil-bil dan resit-resit bayaran, perkiraan yang disahkan oleh Profesional yang berdaftar dll.) (d) Perkiraan terperinci mengenai amaun gantirugi yang layak dibayar adalah teratur.

PMK1

PMK2

AK*

ULASAN

2.5

Format Laporan PP disediakan mengikut garispanduan dalam Peraturan Mengenai Arahan Perubahan Harga Bagi Kontrak Kerja. Laporan PP yang lengkap dikemukakan kepada PP untuk persetujuan.

2.6

Tandatangan Pegawai Semakan Tarikh Selesai Tugasan:

Tandatangan Pegawai Pengesahan Tandatangan Kualiti Audit Tarikh Selesai Tugasan: Tarikh Selesai Tugasan:

* Jika berkenaan

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DID MANUAL VOLUME 10 CONTRACT ADMINISTRATION PART III : POST-CONTRACT

CHAPTER 16

DETERMINATION

Chapter 16 – DETERMINATION

Table of Contents

Table of Contents .....................................................................................................................16-i List of Flowcharts .................................................................................................................... 16-ii 16.1 16.2 16.3 INTRODUCTION.........................................................................................................16-3 GENERALLY ...............................................................................................................16-3 PROCEDURES ............................................................................................................16-3 16.3.1 Determination................................................................................................16-3 16.3.2 Settlement Of The Final Account .....................................................................16-7 16.4 NOTICES ...................................................................................................................16-8 16.4.1 Notice for Intention to Notice Determine the Contractor’s Employment..............16-8 16.4.2 Notice for Determination ................................................................................16-8 16.5 16.6 16.7 16.8 FINAL ACCOUNT ........................................................................................................16-9 RE-TENDER ...............................................................................................................16-9 REFERENCE DOCUMENTS ...........................................................................................16-9 REFERENCES .............................................................................................................16-9

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Chapter 16 – DETERMINATION

List of Flowcharts

Flowchart Flowchart 16.1 Flowchart 16.2

Description Determination of the Employment of the Contractor Settlement of Final Account

Page 16-1 16-2

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Chapter 16 – DETERMINATION

Flowchart
1

Description 1. Establish the ground(s) for the determination

Action By
SOR

Reference

2

2. Issue 1st warning letter

SOR

3

No

3. Contractor continues default or repeats the default?

Yes
4 4. Issue 2nd warning letter SOR

5

5. Prepare report for determination, and submit to JKPPS for approval 6. SO to issue ‘Notis Kemungkiran Kontraktor’

SOR

Refer SPP 5/2006

SOR

6

7

No

7. Contractor continues default or repeats the default?

Yes
8 8. Officer Named in Contract to issue Notice of Determination 9. Forfeit Performance Bond or Advance Payment Bond 10. Issue stop work order and evaluate the works done SOR/ Officer Named in Contract SOR/CAO

9

SOR

10

Ref: Sample of Sch. of Activities prior to Tender See Chapter 6–8 See Flowchart 16.2

11 End 12

11. Re-tendering exercise 12. Settlement of Final Account

CAO

Note: For bankruptcy or insolvency, SOR may go straight to step 8 – 12

Flowchart 16.1 – Determination of the Employment of the Contractor

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Chapter 16 – DETERMINATION

Description

Flowchart

Action By

Reference

1

1. Establish the completion cost.

CAO

2

2. Prepare and issue Final Account

CAO

No
3

Yes
3. Amount due to Government? 4. Payment to Contractor CAO

4
5

CAO

5. Issue claim to Contractor by AR Register

SOR

No

6 Yes

6. Contractor pays?

No

7

7. Issue 1st Reminder (within 2 weeks)

SOR

No

8 Yes 9

8. Contractor fails to pay?

9. Issue 2nd Reminder (within 2 weeks)

SOR

No

10 Yes

10. Contractor fails to pay?

End

11

11. Issue 3rd Reminder (within 2 weeks)

SOR

12

12. Refer matter to the Legal Adviser at Ministry level / A.G.’s Chamber

BUBK

Flowchart 16.2 – Settlement of Final Account

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Chapter 16 – DETERMINATION

16 DETERMINATION
16.1 INTRODUCTION

This chapter provides:  To outline the overall procedures on determination of the Contractor. GENERALLY

16.2

The determination and the subsequent procedures shall be done in accordance with the procedures set out in the Contract. Generally, the whole process can be divided into 2 distinct steps: (i) (ii) 16.3 16.3.1 Step Determination of the employment of the contractor. Settlement of the Final Account of the original contract. PROCEDURES Determination Procedures / Tasks (Please refer to Flowchart 16.1 – Determination of the Employment of the Contractor) Generally The progress of and works programme submitted by the Contractor may reveal the Contractor’s capability or incapability to complete the works on time. The Conditions of Contract provides the rights of the Government to determine the employment of Contractor for defaults. For information Action By / Reference

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Chapter 16 – DETERMINATION

Step 1

Procedures / Tasks Establish the Grounds for Determination Establish / Verify the grounds for the determination: (a) The Contractor fails to submit Performance Bond or Insurance Policies (b) The Contractor fails to expedite the works after receiving Letter of Acceptance (c) Any of the ground stated in Conditions of Contract, such as  Suspending the carrying out of works without reasonable cause  Not carrying out the works diligently  Failing to execute the works in accordance with the contract or neglecting to carrying out his obligation under the Contract  Subletting the whole or any part of the works without prior consent of S.O./PD  Contractor went to insolvency, winding up or liquidation Insolvency of Contractor If the Contractor becomes insolvent or bankrupt, issue the Notice of Determination; no warning letter(s) is required.

Action By / Reference Action By: SOR

2

Prepare 1st Warning Letter Upon established the ground for determination, the intention for determination via a warning letter is issued with a reason to stop the employment. A time frame, normally fourteen (14) days is given to Contractor for reaction. Refer to Sample of Warning Letter.

Action By: SOR

3&4

Contractor Continues/ Repeats Defaults? Prepare 2nd Warning Letter If no compliance made by the Contractor, the 2nd warning shall be issued. If the Contractor repeats and fail to comply the reminder (within fourteen days), the proposal /report shall be made by PM/ CA to Authorised Officer to stop the employment.

Action By: SOR

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Chapter 16 – DETERMINATION

Step 5&6

Procedures / Tasks Prepare Report and Issue the ‘Notis Kemungkiran Kontraktor’ (a) Prepare a report on the determination, and submit to Jawatan Kuasa Penyelamat Projek Sakit (JKPPS) for approval. Other than the recommendation, the report shall include the short listed tenderers for execution the defect works and the recommend the appropriate procurement option. If the report is complete and deemed satisfactory by the Authorised Officer, the SO shall issue a notice of non-performance (Notis Kemungkiran Kontraktor). A period of fourteen days is given to Contractor to take the necessary action. (b) The SO shall report to Authorised Officer on the action (or inaction) of the Contractor prior the issuance of Notice of Determination. Refer to Sample of ‘Notis Kemungkiran Kontraktor’. ** if the Contractor is in default under Fasal 51(b) Syarat- Syarat Kontrak (Bankruptcy or insolvency), the SO may submit the report without issuing any warning letters or default notice.

Action By / Reference Action By: SOR

7&8

Contractor Continues/ Repeats Defaults? Issuance of Determination Notice If the Contractor does not comply with the warning letter or default notice, or if the Contractor repeats and fail to comply the reminder (within fourteen days), issue the Determination Notice. Refer Section 16.6.2 - Notice for Determination

Action By: SOR/ Officer Named in Contract

9

Forfeit Performance Bond or Advance Payment Bond To forfeit Performance Bond and/or Advance Payment Bond of the Contractor immediately after issuance of Notice of Determination. Refer to Sample of Letter for Calling off Performance Bond

Action By: SOR / CAO

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Chapter 16 – DETERMINATION

Step 10

Procedures / Tasks Issuance of Stop Work Order and Evaluate Works Done If the Contractor fails to evacuate from the site, issue a Stop Work Order. Evaluate the works done, including computing the value of works done (for finalisation of accounts purposes) and schedule of defects and out-standing works.

Action By / Reference Action By: SOR

Refer: Sample of Sch. Of Activities prior to Tender

11

Re- tendering Exercise Refer to Chapter 6 to 8.

Action By: CAO

12

Settlement of Final Account Refer to Flowchart and Procedures of Settlement of Final Account.

16-6

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Chapter 16 – DETERMINATION

16.3.2 Step

Settlement Of The Final Account Procedures / Tasks (Please refer to Flowchart 16.2 – Settlement of Final Account) Action By / Reference

1

Establish Completion Cost Prepare the estimate on the Completion Cost (comprising of loss by Government and new contract sum by new contractor).

Action By: CAO

2, 3 & 4

Prepare and Issue Settlement of Final Account Prepare the Settlement of Final Account for the new Contractor. Costs comprise of: (a) (b) (c) (d) (e) (f) (g) (h) Interim Payments Advance Payment Payments to subcontractors and suppliers New Contract Sum Cost for re- tender Loss to Government On- Cost Charge Finalised Contract Sum

Action By: CAO

Establish the Final Amount due to Contractor or Government, as the case may be. Ensure that all deductions are incorporated into the Final Account. Include the amounts of the forfeited Performance Bond. Pay the Contractor if any final amount is due to him. 5 Issuance of Claim to Contractor (By A.R. Register) If under the Final Account an amount is due to Government, send the Final Account and claim for payment (‘claim’) to the Contractor by A.R. Registered post as soon as is practicable, preferably within 9 months after determination. 6&7 Issuance of 1st Reminder Issue 1st reminder if Contractor fails to pay, or no action is taken by Contractor, within 14 days of issuance of claim. 8&9 Issuance of 2nd Reminder Issue 2nd reminder if Contractor fails to pay, or no action is taken by Contractor, within 14 days after the issuance of 1st reminder. Action By: SOR

Refer: SP JPS Bil 1/1990
Action By: SOR

Action By: SOR

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Chapter 16 – DETERMINATION

Step 10 & 11

Procedures / Tasks Issuance of 3rd Reminder Issue 3rd reminder if Contractor fails to pay, or no action is taken by Contractor, within 14 days after the issuance of 2nd reminder.

Action By / Reference Action by: SOR

12

Refer to Legal Adviser at Ministry level/ A.G.’s Chamber Seeks advice by Legal Advisor (of Ministry or State) if still no action taken by Contractor.

Action by: BUBK

16.4 16.4.1

NOTICES Notice for Intention to Notice Determine the Contractor’s Employment

 To state clearly the contract no, job title, contract sum contract period, date of possession, completion date and extended completion date, if any.  To state clearly the reason of determination by the Contractor’s default.  To highlight the percentage of works done and aims for completion according to original or revised works programme.  To state the date and duration by the Contractor suspended the works.  To highlight whether the contractor consistently repeats the default (not for 1st warning) together with all references for previous notices such as serials meetings, date, officers in charged, etc.  To state the assistance given to contractor in form of materials procurements and granted extension of time  To state the date or last extended date for completion together with method statements works programme.  The notice must be copied to all relevant parties including PKK or bank/ insurance company. 16.4.2 Notice for Determination

 To state clearly the contract no, job title, contract sum contract period, date of possession, completion date and extended completion date, if any.  To state the reference and date of Notice for Intention the Determine the Contractor’s Employment  To state whether the Contractor is continuing the defaults  If the Contractor replied a notice, to highlight to them the reasons are not accepted.  The notice must be copied to all relevant parties including the registrar of the Contractor and bank/ insurance company.

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Chapter 16 – DETERMINATION

16.5 

FINAL ACCOUNT

To include the Completion Cost which comprises the advance payment, interim payments, payments to sub-contractors, suppliers, new contract price, re- tender cost, loss to Government and charge on cost. To include the Revised Contract Sum which includes deduction for loss, damages and expense. RE-TENDER

16.6   

Evaluate the executed works and check the balance of works to avoid disputes for BQ contracts. To allow credit for plants, tools, equipment and unfixed materials left on site for use of new contractor. Any other above this to refer to Chapter 6 to 8. REFERENCE DOCUMENTS

16.7

Please refer to Volume 10A for the standard reference or sample documents for the procedures or processes outlined in this Chapter.       Sample of Warning Letter (‘Notis Kemungkiran Kontraktor’) Sample of Notice for Determination (‘Penamatan Pengambilan Kerja Kontraktor’) Sample of Schedule Activities (Bar Charts for Preparation of Tender Invitation) Sample of Settlement of Final Account Upon Determination Sample of Letter for Calling off Performance Bond and Advance Payment Bond Sample of Calculation of Loss by Government REFERENCES

16.8

Please refer to the latest Treasury Circulars and DID Circulars for the latest procedures and processes in respect of determination of the employment of the contractor. Treasury Circular (Surat Pekeliling Perbendaharaan) [1] SPP 5/2006: Peraturan Pelantikan Kontraktor Penyiap bagi Projek Sakit

DID Circulars (Surat Pekeliling / Edaran JPS) [1] SPJPS. Bil. 1/1990: Perakuan Penamatan Pengambilan Kerja Kontraktor Berasaskan Borang Kontrak 203 & 203A

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Chapter 16 – DETERMINATION

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DID MANUAL VOLUME 10 CONTRACT ADMINISTRATION PART III : POST-CONTRACT

CHAPTER 17

COMPLETION

Chapter 17 – COMPLETION

Table of Contents

Table of Contents .....................................................................................................................17-i List of Flowcharts .................................................................................................................... 17-ii 17.1 17.2 17.3 17.4 17.5 17.6 17.7 17.8 17.9 INTRODUCTION ............................................................................................................17-2 PROCEDURES................................................................................................................17-2 COMPLETION ................................................................................................................17-3 PRACTICAL COMPLETION ..............................................................................................17-3 SECTIONAL COMPLETION..............................................................................................17-4 PARTIAL OCCUPATION ..................................................................................................17-4 HANDING OVER ............................................................................................................17-4 SUBMISSION AND REQUIREMENTS NECESSARY FOR COMPLETION .................................17-5 REFERENCE DOCUMENTS ..............................................................................................17-5 Checklist for the Preparation of Certificate of Practical Completion (Senarai Semakan Penyediaan Perakuan Siap Kerja) ………………………………….. 17A-1

APPENDIX 17A

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17-i

Chapter 17 – COMPLETION

List of Flowcharts

Flowchart Flowchart 17.1

Description Completion

Page 17-1

17-ii

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Chapter 17 – COMPLETION

Flowchart

Description

Action By

Reference

1

1. Receipt of notice from Contractor

-

2

2. Final Inspection.

PT

3 Yes 4

No

3. Works (or Section) is practically completed for all purposes of the Contract?

-

4. Issue instruction to rectify defective works, if any

SOR

5

5. Issue Certificate of Practical Completion and Hand over the Works to Client-Agency

SOR

6

6. Release of 50% of Performance Bond

SOR/CAO

Refer Chapter 10 - Payment

Flowchart 17.1 – Completion

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Chapter 17 – COMPLETION

17 COMPLETION
17.1 INTRODUCTION

This chapter provides:  An overview of the completion provisions and procedure for works contracts  The standard forms of contract use for DID projects 17.2 PROCEDURES

Please refer to Flowchart 17.1 – Completion. Step 1 Procedures / Tasks Receipt of notice from Contractor Contractor issue notice that the Works are all practically completed and ready for Final Inspection 2 Final Inspection Carry out Final Inspection especially mechanical and electrical installation works to determine Works are practically completed 3 Works (or Section) is practically completed for all purposes of the Contract Practically completed meaning, the Contractor has performed and completed all the necessary Works specified in the Contract and the patent defect existing are minor 4 Issue Instruction to rectify defective works; if any If necessary; issue instruction to rectify defective works that can effect the issuance of Certificate of Practical Completion 5 Issue Certificate of Practical Completion and Hand over the Works to Client-Agency If two (2) is acceptable, than issue Certificate of Practical Completion and thus the Works are handed over to the ClientAgency. Action by: SOR Action by: PT Action By / Reference

Action by: SOR

17-2

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Chapter 17 – COMPLETION

Step 6

Procedures / Tasks Release of 50% of Performance Bond When CPC is issued, (a) Release 50% of the Performance Bond; or (b) Release 50% of the Performance Guarantee Sum, whichever is applicable. Where the Contractor submitted Performance Bond, then release the 50% only after the Contractor has submitted a new bank/insurance guarantee for the remaining 50%.

Action By / Reference Action by: SOR/CAO

17.3

COMPLETION

When in the opinion of the S.O that the Works are practically completed, meaning that the Contractor has performed and completed all the necessary Works specified in the Contract and the patent defects existing in such Works are ‘minor’ than the S.O shall issue Certificate of Practical Completion. The issuance of Certificate of Practical Completion indicates the start of the Defects Liability Period. 17.4 PRACTICAL COMPLETION

In determining whether the Works has reached practical completion, the S.O must consider the following questions: a) b) c) Has the Works been completed in accordance with the Contract? Is defective work substantial? Will the making good of defects cause undue inconvenience to the occupants or users?

The Contractor should notify the SO/PT when he considers the Works is Practically Completed, to such a stage that it will perform the functions for which it is constructed, or may be occupied and used. A joint inspection must be held where the Contractor, SOR/PD, PM or other involved should attend. Where the Works has been completed to a stage as meets the criteria specified above, the Certificate of Practical Completion may be issued. Where the criteria specified above are not met, the outstanding and defective works must be identified and a list if the same prepared and forwarded for the action of the Contractor. This process must be repeated until the criteria specified are met. The original copy of the Certificate of Practical Completion must be issued to the Contractor. Copies of the same must also be distributed to the parties listed in the Certificate and in addition to all others involves in the Contract. The Defects Liability Period commences from the date of practical completion stated in the Certificate of Practical Completion. Notwithstanding the issue of Certificate of Practical Completion, all defective works have to be made good by the Contractor when the S.O issue instruction; if any. A reasonable time must also be specified for the Contractor to execute and/or make good the same.

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Chapter 17 – COMPLETION

When CPC is issued; then 50% of the Performance Bond can be released to the Contractor and in turn Contractor to issue new Performance Bond guaranteeing the remaining sums. If Performance Guarantee Sum is used, then 50% of the sum may be released to the Contractor upon issuance of the CPC. 17.5 SECTIONAL COMPLETION

The Conditions of Contract contains provisions, which allows the Government to require the Works to be completed in sections or parts. Where this is required, the sections or parts must be identified and the measure of Liquidated and Ascertained Damages for each must be specified in the tender and contract documents. Where sectional completion of the Works is specified, the provision of the Contract as regards the Certificate of Practical Completion, Delay and Extension of Time, Liquidated and Ascertained Damages and the Defects of Liability Period apply as if each section or part is the subject of a separate and distinct contract between the Government and the Contractor. 17.6 PARTIAL OCCUPATION

Prior to the practical completion of the whole Works, the Government may but with the consent of Contractor, take possession of and occupy any part of the completed Works. Where any part of the Works is taken possession of and occupied by the Government prior to completion of the whole of the Works, the following apply:a) A Certificate of Partial Occupation must be issued within seven (7) days of the taking possession and occupation of the part of the Works. The Certificate must state the estimated value of the part of the Works taken possession of and occupied. The Defects Liability Period for the part of the Works taken possession of and occupied commences on the date the Government takes possession of and occupies the same. The Liquidated and Ascertained Damages specified in the Contract is reduced in the proportions which the value of the part taken possession of and occupied bears to the Contract Sum. The provisions of the Contract as regards of insurance and release of the Performance Bond are not affected. HANDING OVER

b) c)

d) 17.7

Upon the issue of the Certificate of Practical Completion, the Government takes over the Works and the Contractor cease to be responsible for loss and/or damage to the same other than loss and/or damage caused by or arising from defective work. For the purpose of handing over the Works to the Government, a joint inspection of the Works must be held and the keys to the Works handed over. The Government must also be advised of the operation and maintenance requirements of the Works including those relating to mechanical and electrical installations.

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Chapter 17 – COMPLETION

17.8

SUBMISSION AND REQUIREMENTS NECESSARY FOR COMPLETION

Notes : Please refer to the DID Manual Volume 11 - Construction Management, Chapter 17 17.9 REFERENCE DOCUMENTS

Please refer to Volume 10A for the standard reference or sample documents for the procedures or processes outlined in this Chapter.     JKR 203S : Certificate of Practical Completion JKR 203W : Certificate of Partial Occupation Perakuan Serahan Kerja Siap Perakuan Serahan Kerja Siap Berbahagian

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Chapter 17 – COMPLETION

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DID MANUAL Volume 10 Contract Administration

Chapter 17 – Completion APPENDIX 17A

Checklist for the Preparation of Certificate of Practical Completion [Form JKR 203S] (Senarai Semakan Penyediaan Perakuan Siap Kerja)

Revision Number : Revision Date :

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Chapter 17 – COMPLETION

APPENDIX 17A

CHECKLIST FOR THE PREPARATION OF CERTIFICATE OF PRACTICAL COMPLETION (SENARAI SEMAKAN PENYEDIAAN PERAKUAN SIAP KERJA)

TAJUK PROJEK Untuk Tindakan PMK 1 PMK 2 AK* BIL. 1. KETERANGAN Borang Perakuan Siap Kerja PMK1 PMK2 AK* ULASAN Tandakan () selepas semakan Nama Pegawai Tarikh Diberi Kepada Tarikh Diterima Oleh Tarikh Siap Semakan

Borang yang digunakan ialah borang JKR203S yang terkini.
Muka Depan 2. KERAJAAN – bermaksud 'KERAJAAN MALAYSIA' bagi projek Persekutuan atau 'KERAJAAN ............ ’ bagi projek Negeri. Rujukan - masukkan no. fail projek Pegawai Penguasa. Pejabat - masukkan Pejabat Pegawai Penguasa atau Wakil Pegawai Penguasa. Tarikh - iaitu tarikh ditandatangani oleh Pegawai Penguasa atau Wakil PP. Kepada - Nama dan alamat Kontraktor hendaklah sama seperti dalam dokumen kontrak. Kelas - mengikut kelas lesen pendaftaran kontraktor dalam dokumen kontrak. Kontrak No. - hendaklah sama dengan yang terdapat dalam dokumen kontrak. Kontrak Untuk - Nama projek sama seperti di dalam dokumen kontrak.

3.

4.

5.

6.

7.

8.

9.

10.

Pastikan samada kerja tersebut siap sebahagian atau keseluruhan dan potong yang tidak berkenaan.
Siap pada - Nyatakan tarikh siap sebenar.

11.

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Chapter 17 – COMPLETION

BIL. 12.

KETERANGAN Ambil milik pada - pastikan sehari selepas tarikh siap. Tempoh Tanggungan Kecacatan pada sama dengan tarikh siap kerja sehingga tamat tempoh tanggung kecacatan seperti yang dinyatakan dalam dokumen kontrak. Tempoh berakhir – 6/12/24* bulan dari tarikh di atas. *Yang mana berkenaan, mengikut tempoh yang tercatat di dalam Lampiran Kepada Syarat-syarat Kontrak. Tandatangan Pegawai Penguasa / Wakil PP projek berkenaan mengikut kontrak. Nama Penuh dan Jawatan - Pegawai Penguasa / Wakil PP yang berkenaan.

PMK1

PMK2

AK*

ULASAN

13.

14.

15.

16.

Tandatangan Pegawai Semakan Tarikh Selesai Tugasan:

Tandatangan Pegawai Pengesahan Tarikh Selesai Tugasan:

Tandatangan Kualiti Audit Tarikh Selesai Tugasan:

* Jika berkenaan

17A-2

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DID MANUAL VOLUME 10 CONTRACT ADMINISTRATION PART III : POST-CONTRACT

CHAPTER 18

DEFECTS MANAGEMENT

Chapter 18 – DEFECTS MANAGEMENT

Table of Contents

Table of Contents ....................................................................................................................... 18-i List of Flowcharts ...................................................................................................................... 18-ii 18.1 18.2 INTRODUCTION ..............................................................................................................18-3 PROCEDURES..................................................................................................................18-3 18.2.1 18.2.2 18.3 18.4 Defects Management During Defect Liability Period............................................18-3 Defects Management at End of Defect Liability Period ........................................18-4

REFERENCE DOCUMENTS ................................................................................................18-5 REFERENCES...................................................................................................................18-5

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18-i

Chapter 18 – DEFECTS MANAGEMENT

List of Flowcharts

Flowchart Flowchart 18.1 Flowchart 18.2

Description Defects Management During Defect Liability Period Defects Management at End of Defect Liability Period

Page 18-1 18-2

18-ii

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Chapter 18 – DEFECTS MANAGEMENT

Flowchart

Description

Action By

Reference

1

1. Receive report from end-user and establish defects

SOR

2

2. Issue SO’s Instruction to rectify defects

SOR/SO

3

No

3. Contractor complies to instruction?

Yes
4. If Contractor fails to comply, appoint third party to rectify defective works SOR

4

5

5. Deduct from money due to Contractor, or from Performance Bond / Performance Guarantee Sum

SOR/ CAO

End

Flowchart 18.1 – Defects Management During Defect Liability Period

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18-1

Chapter 18 – DEFECTS MANAGEMENT

Flowchart

Description

Action By

Reference

1

1.

Joint inspection towards end of DLP Further defects? Identify further defects and issue Schedule of Defects (within 14 days of expiry of DLP) Instruct Contractor to make good (make good not later than 3 months from issuance of Schedule of Defects)

SOR

No 2

Yes

2. 3.

3

SOR

4

4.

SOR

5

5.

Joint re-inspection (on expiry of time given to make good or upon expiry of 3 months whichever is earlier)

SOR

Yes 6 No 7
7. Issue Certificate of Making Good Defects SOR 6. Further defects? -

8

8.

Issue of Final Certificate

SOR

Refer Chapter 19

Flowchart 18.2 – Defects Management at End of Defect Liability Period

18-2

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Chapter 18 – DEFECTS MANAGEMENT

18 DEFECTS MANAGEMENT
18.1 INTRODUCTION

This chapter provides:  the overall procedures in management of defects throughout and end of the Defects Liability Period until the issuance of the Final Certificate 18.2 18.2.1 PROCEDURES Defects Management During Defect Liability Period

Please refer to Flowchart 18.1 – Defects Management During Defect Liability Period. Step 1 Procedures / Tasks Receive Report and Establish Defects End-user (e.g. Client-agency, DID officers or members of the public using the Works) to report immediately to SOR, and SOR shall determine if defects had occurred. 2 SO’s Instruction to Rectify Defects SOR shall immediately issue instruction to the Contractor to rectify the defects, with a fair and reasonable time frame to complete the making good of defects. SOR may issue instructions to rectify defects as many times as necessary during the Defects Liability Period. 3&4 Contractor complies Instruction; Appoint Third Party to Rectify Defects If the Contractor refuses or fails to make good the defects within the time stipulated in the SO Instruction or within reasonable time if none is stated, then the SO may appoint third party to rectify the defective works. 5 Deduct Monies Due to Contractor If third party executed the defect works, the cost incurred in making good defects due to the failure of the contractor must be recovered from Contractor:  From monies due or payable to Contractor or  As deduction of Performance Bond or Performance Guarantee Sum (Wang Jaminan Pelaksanaan). Action By: SOR/ CAO Action By: SOR Action By / Reference Action By: SOR

Action By: SOR

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Chapter 18 – DEFECTS MANAGEMENT

18.2.2

Defects Management at End of Defect Liability Period

Please refer to Flowchart 18.2 – Defects Management at End of Defect Liability Period. Step 1 Procedures / Tasks Joint Inspection towards end of Defects Liability Period To carry out joint inspection together with SOR, Client Department/ Ministry, Contractor and other parties involved. 2&3 Identify any Further Defects, Issuance of Schedule of Defects If there are defects at the end of Defects Liability Period, prepare the Schedule of Defects and issue it to the Contractor within 14 days after the expiry of DLP. 4 Instruction to Rectify the Defects Issue the instruction to rectify all defect works completely within a reasonable time. Ensure the duration given to the contractor must not exceed 3 months from the date of issuance the Schedule of Defects. 5 Joint Re-Inspection To carry out the joint re-inspection with the SOR and representatives from Client Department/ Ministry, Contractor and other parties involved on the date of the expiry of rectification period given to Contractor or upon the expiry of period of 3 months, whichever is the earlier. 6&7 Issuance of Certificate of Completion of Making Good Defects (CMGD) Issue the certificate of completion of making good defects if there are no further defects. Ensure the date in such certificate is the date of Contractor completed the rectification of defective works. Ensure the copies to be distributed to:  Contractor (original)  Other parties named in certificate (copies) Return the Performance Bond / Performance Guarantee Sum to the Contractor. 8 Issue Final Certificate Prepare the Final Certificate upon the issuance of CMGD. Action by: SOR/CAO Refer to Chapter 19 – Final Account and Final Certificate. Action By: SOR Action By / Reference Action By: SOR

Action By: SOR

Action By: SOR

Action by: SOR

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Chapter 18 – DEFECTS MANAGEMENT

18.3

REFERENCE DOCUMENTS

Please refer to Volume 10A for the standard reference or sample documents for the procedures or processes outlined in this Chapter.  Form JKR 203Y (Pin.2/2001) : Perakuan Siap Memperbaiki Kecacatan REFERENCES

18.4

Please refer to the latest Treasury Circulars and DID Circulars defects management. Treasury Circular (Surat Pekeliling Perbendaharaan)  Nil

Treasury Instructions (Arahan Perbendaharaan) [1] AP 200.4 & 200.5: Tempoh Tanggungan Kecacatan

DID Circulars (Surat Pekeliling / Edaran JPS) [1] SPJPS. Bil. 1/2003: Perlantikan Pegawai Penguasa (P.P.), Perwakilan Kuasa Pegawai Penguasa (Wakil P.P.) Dan Pegawai-pegawai Yang Diberi Kuasa (PYDK) Dalam Urusan Pentadbiran Kontrak.

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Chapter 18 – DEFECTS MANAGEMENT

(This page is deliberately left blank)

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DID MANUAL VOLUME 10 CONTRACT ADMINISTRATION PART III : POST-CONTRACT

CHAPTER 19

FINAL ACCOUNT AND FINAL CERTIFICATE

Chapter 19 – FINAL ACCOUNT AND FINAL CERTIFICATE

Table of Contents

Table of Contents .....................................................................................................................19-i List of Flowcharts .................................................................................................................... 19-ii 19.1 19.2 19.3 19.4 INTRODUCTION.........................................................................................................19-2 PROCEDURES ............................................................................................................19-2 REFERENCE DOCUMENTS ...........................................................................................19-6 REFERENCES .............................................................................................................19-6 Checklist for the Preparation of Final Account (Senarai Semakan Penyediaan Perakuan Akaun Muktamad) ……………………... 19A-1

APPENDIX 19A

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19-i

Chapter 19 – FINAL ACCOUNT AND FINAL CERTIFICATE

List of Flowcharts

Flowchart Flowchart 19.1

Description Final Account and Final Certificate

Page 19-1

19-ii

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Chapter 19 – FINAL ACCOUNT AND FINAL CERTIFICATE

Flowchart

Description

Action By

Reference

1

1. Certificate of Practical Completion

-

2

Fails

2. Prepare the Statement of Final Account and Final Certificate  Ensure that the necessary adjustments to the Contract Sum are approved

CAO

Refer Checklist for Preparation of Final Account and Final Certificate; & the current form JKR66A

3. Quality Audit
3

BUBK

Refer Ch. 10, Flowchart 10-2

Passes 4. Approval of Statement of Final Account and Final Certificate SO / AP

4

5

5. Issue Statement of Final Account and Final Certificate to Contractor and respective parties.

CAO

6

6. Forward documents to FD for payment

CAO

7

7. Prepare Completion Report, etc

SOR

Volume 11 – Construction Management

Flowchart 19.1 – Final Account and Final Certificate

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19-1

Chapter 19 – FINAL ACCOUNT AND FINAL CERTIFICATE

19 FINAL ACCOUNT AND FINAL CERTIFICATE
19.1 INTRODUCTION

This chapter provides:  The guidelines on the preparation of the final accounts, and the issuance of the final certificate. 19.2 PROCEDURES

Please refer to Flowchart 19.1 – Final Account and Final Certificate. Step 1 Procedures / Tasks Generally The Final Account must be prepared as soon as is practicable,  after Practical Completion; and  the Contractor has fulfilled his obligations under the Contract, which includes the making good of defects The Contractor is required to submit, not later than 3 months after practical completion, the full particulars of all claims, together with such supporting documents (including documents relating to accounts of Nominated Sub-Contractor and Nominated Supplier, if any) as may be necessary for the preparation of the Final Accounts. If the Contractor fails or refuses to submit the information within the time, the Final Accounts may be prepared based on the information at hand so as to enable the Final Accounts and Final Certificate to be completed within 3 months after the end of defects liability period or issuance of the Certificate of Completion of Making Good Defects, whichever is the later. Final Accounts and Final Certificate following Determination Where the employment of the Contractor was terminated, the Final Accounts and Final Certificate shall be prepared as soon as practicable after the new contractor is appointed and the assessment of the costs and/or loss or damage to the Government/DID is completed. A modified Form JKR66A is used (Final Account After Determination of Employment of the Contractor / Perakuan Muktamad Kontrak Yang Mana Ditamatkan Pengambilan Kerja Kontraktor). For procedures following determination, please refer to Chapter 16. Action By / Reference For information

19-2

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Chapter 19 – FINAL ACCOUNT AND FINAL CERTIFICATE

Step 2

Procedures / Tasks Preparation of the Statement of Final Account and Final Certificate (a) Adjustment of Contract Sum Before preparing the Final Account and Final Certificate (form JKR66A), ensure that all adjustments to the Contract Sum are approved and carried out, i.e. for, o o o o Adjustment for Prime Cost and Provisional Sums Re-measurement of provisional quantities Variations to the Contract Assessments of claims by the Contractor.

Action By / Reference Action by: SOR/CAO

Refer to Chapter 12, and the Checklist for Adjustment of Contract Sum

Ensure that all Variation Orders (APK) and Adjustment of Contract Sum (PHK) have been issued and are correct. Ensure that the SO and contractor sign the JKR-APK and JKRPHK, as the case may be. (b) Prepare Form JKR66A Use the current Form JKR 66A. Ensure that the form is duly filled in with the correct contract data, and that the sums, adjustments and computation are correct. The Final Account must take into account the following:    All adjustments to the Contract Sum; Payments previously paid to the Contractor, Nominated Sub-Contractor and Suppliers, and assignees; and Permitted deductions under the Contract, such as costs incurred in connection with employment of others to execute such works to give effect to an S.O.’s instruction, Liquidated Ascertain Damages (LAD), costs for making good defects, etc. Recoupment of Advance Payment Deductions for direct payment by DID for dues or contributions under the Employment Ordinance, the Employee’s Social Security Act, the Employee’s Provident Fund Ordinance and any other laws relevant to the employment of workmen. The release of Performance Guarantee Sum (if any). Action by: SOR/CAO

Refer to Checklist for Preparation of Final Account (Penyedian Perakuan Akaun Muktamad)

 

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Chapter 19 – FINAL ACCOUNT AND FINAL CERTIFICATE

Step

Procedures / Tasks

Action By / Reference Action by: SOR/CAO

(c) Supporting Documents Attach the required supporting documents to the Final Account and Final Certificate:         Certificate of Practical Completion; Certificate of Non- Completion; if any Certificate of Completion of Making Good Defects; Certificate of Delay and Extension of Time, if any; Certificate of Adjustment of Contract Sum, if any; Certificate of Payment of Performance Guarantee Sum, if any; Payment voucher(s); and Letter of release from the Department of Labour, or Statutory Declaration (to the effect that workmen employed have received all wages) made by the Contractor**.

**The letter or statutory declaration must be submitted by the Contractor before the final payment can be effected to the Contractor. (d) Check documents for completeness, and computation Upon receipt of the Final Account and Final Certificate documents:  Check that each document is complete and/or in order. Refer to the Checklist for Preparation of Final Account (Penyedian Perakuan Akaun Muktamad); Complete and initial the Checklist for Preparation of Final Account; The recommending officer shall sign the Form JKR66A; and Submit Form JKR66A, together with attached documents, to the SO for signature Action by: SOR/CAO

  

Refer to Checklist for Preparation of Final Account (Penyedian Perakuan Akaun Muktamad)

19-4

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Chapter 19 – FINAL ACCOUNT AND FINAL CERTIFICATE

Step 3

Procedures / Tasks Quality Audit Forward the Statement of Final Account and Final Certificate for checking (quality audit) by the relevant contract officer. The quality auditor shall check that the documents are in order and free of errors.

Action By / Reference Action by: CAO/ BUBK

4

Approval of Final Account and Final Certificate The Final Account and Final Certificate must be signed by the S.O..

Action by: CAO/SO

5

Issue Final Account and Final Certificate to Contractor The Final Account and Final Certificate must be forwarded to Contractor and copies distributed to all parties involved in the Contract (Accountant General). It is not a contractual requirement that the Contractor must sign and return a copy of the Final Account and Final Certificate.

Action by: CAO

6

Forward documents to the Finance Division The Final Account and Final Certificate must be forwarded to the relevant Finance Division to effect payment.

Action by: CAO / FD

7

Prepare Completion Report, etc As final duties, the SOR/PT are to prepare and submit the   Final (Completion) Report, and Contractor’s Performance Report (if necessary).

For information

Please also refer to Volume 11 – Construction Management.

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19-5

Chapter 19 – FINAL ACCOUNT AND FINAL CERTIFICATE

19.3

REFERENCE DOCUMENTS

Please refer to Volume 10A for the standard reference (or sample) documents for the procedures or processes outlined in this Chapter.   JKR 66A : Final Account and Final Certificate Letter of Discharge of Bank / Finance Company / Insurance Guarantee REFERENCES

19.4

Please refer to the latest Treasury Circulars and DID Circulars on Final Account and Final Payment. Treasury Circular (Surat Pekeliling Perbendaharaan)  Nil

DID Circulars (Surat Pekeliling / Edaran JPS) [1] SP JPS Bil. 2/2000: 2. Pindaan ke atas Borang JKR 66, Perakuan Pelarasan Jumlah Harga Kontrak (PPJHK) dan Perakuan Muktamad 3. Pindaan Kepada Syarat-syarat Kontrak Berkaitan Bayaran [2] SP JPS Bil. 4/2008: Langkah-langkah Untuk Mempercepatkan Bayaran Interim (Tambahan kepada Surat pekeliling SP JPS Bil. 2/2000)

19-6

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DID MANUAL Volume 10 Contract Administration

Chapter 19 – Final Account and Final Certificate APPENDIX 19A

Checklist for the Preparation of Final Account [Form JKR 66A] (Senarai Semakan Penyediaan Perakuan Akaun Muktamad)

Revision Number : Revision Date :

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Chapter 19 – FINAL ACCOUNT AND FINAL CERTIFICATE

APPENDIX 19A

CHECKLIST FOR THE PREPARATION OF FINAL ACCOUNT (SENARAI SEMAKAN PENYEDIAAN PERAKUAN AKAUN MUKTAMAD)

TAJUK PROJEK Untuk Tindakan PMK 1 PMK 2 AK* BIL. 1. KETERANGAN Pastikan perkara-perkara berikut dipatuhi sebelum penyediaan Perakuan Muktamad disiapkan. (i) Semua Wang Kos Prima (termasuk layanan dan keuntungan) & Wang Peruntukan Sementara telah diselaraskan. Semua item untuk Kuantiti Sementara telah dibuat Pengukuran Semula. Semua item/kerja yang tidak dilaksanakan (omission) atau dikurangkan daripada kontrak telah disediakan APK PMK 1 PMK 2 AK* ULASAN Tandakan () selepas semakan Nama Pegawai Tarikh Diberi Kepada Tarikh Diterim a Oleh Tarikh Siap Semakan

(ii)

(iii)

(iv) Semua APK & PHK telah diselaraskan. (v) Pelarasan pengiraan baki untuk VOP telah dibuat.

(vi) Semua tuntutan antara kontraktor dan Kerajaan telah diselesaikan 2. 2.1 Borang Perakuan Muktamad. Pastikan borang JKR 66A yang terkini digunakan. Muka surat 1 / 4 2.2 KERAJAAN - bermaksud 'KERAJAAN MALAYSIA' bagi projek Persekutuan atau 'KERAJAAN ...............' bagi projek Negeri. Peruntukan pembangunan, kepala dan pecahan kepala - hendaklah diisi.

2.3

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Chapter 19 – FINAL ACCOUNT AND FINAL CERTIFICATE

BIL. 2.4

KETERANGAN Muka surat 1 / 4 (samb.) Tajuk kerja, nama dan alamat kontraktor hendaklah sama seperti di dalam dokumen kontrak. No.Kontrak dan Jumlah Harga Asal Kontrak hendaklah sama seperti di dalam dokumen kontrak. Jumlah Bersih Tambahan / Potongan (i) Ambil Jumlah Bersih dari Penyata Pelarasan Harga Kontrak di muka surat 4/4.

PMK 1

PMK 2

AK*

ULASAN

2.5

2.6

2.7

Harga Muktamad Kontrak adalah Harga Kontrak setelah ditambah/dipotong jumlah bersih APK & PHK. Perkara A - Butir-butir Jumlah Potongan / Kurangan (i) Perkara A.1 - pastikan semula jumlah bayaran interim yang terdahulu berasaskan baucer bayaran. Perkara A.2 - pastikan jumlah semua bayaran Wang Pendahuluan, jika ada yang dibuat berasaskan baucer bayaran (termasuk bayaran Wang Pendahuluan kepada NSC/NS). Perkara A.3 - Jumlah Potongan lain termasuk bayaran kepada pihak ketiga, jika ada (sertakan lampiran dan keterangan potongan).

2.8

(ii)

(iii)

2.9

Bayaran Muktamad Dibawah Kontrak adalah Harga Muktamad Kontrak ditolak dengan perkara A.1, 2 dan 3. Tandatangan Pegawai Pengesyor hendaklah pegawai yang diberi kuasa dan catitkan nama dan jawatan.

2.10

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Chapter 19 – FINAL ACCOUNT AND FINAL CERTIFICATE

BIL. 2.11 Perkara 'B' (i)

KETERANGAN Muka surat 1 / 4 (samb.) Pastikan amaun dalam perkataan jumlah sebenar bayaran Perakuan Muktamad. Perkara B.1.(ii) - Pastikan ketepatan bayaran balik kepada Kontraktor Utama bagi pelepasan Deposit Wang Jaminan Pelaksanaan. (Jika berkenaan). Perkara B.2 - Pastikan ketepatan baki bayaran kepada Subkontraktor/Penerima Bayaran seperti di Lampiran A.

PMK 1

PMK 2

AK*

ULASAN

(ii)

(iii)

(iv) Perkara B.3 - Pastikan ketepatan pengiraan kredit hasil bagi LAD berasaskan perbezaan tarikh CPC dengan tarikh Lanjutan Terakhir dan kadar LAD di dalam kontrak. (v) Perkara B.1.(i) – Pastikan perkiraan nilai kerja dan amaunamaun lain bagi Kontraktor Utama adalah perbezaan antara Bayaran Muktamad dan jumlah Perkara B.1.(ii), B.2 & B.3

2.12

Pastikan Jumlah Bayaran Muktamad menyamai Bayaran Muktamad di Bawah Kontrak. Masukkan No. Fasal berkenaan dengan Akuan Statutori mengikut syarat-syarat kontrak berkenaan seperti 48(d) bagi borang JKR 203/203A. Tandatangan Pegawai Penguasa hendaklah pegawai yang diberi kuasa dan catitkan nama dan jawatan.

2.13

2.14

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Chapter 19 – FINAL ACCOUNT AND FINAL CERTIFICATE

BIL.

KETERANGAN Muka surat 2 / 4

PMK 1

PMK 2

AK*

ULASAN

2.15

Perkara ‘C’ Pastikan pihak kontraktor adalah orang yang sama yang menandatangani kontrak atau wakil lain yang diberi kuasa. Tandatangan hendaklah disaksikan dan dilengkapi dengan tarikh serta maklumat diri yang dikehendaki.

2.16

Sebelum Perakuan Akaun dan Bayaran Muktamad diluluskan, pastikan perkara di bawah ini telah dilaksanakan. (a) Perakuan Siap Kerja telah dikeluarkan. (b) Surat Akuan Statutori atau Surat Akuan Ketua Pengarah Buruh telah diterima daripada kontraktor dan disertakan bersama.

Tandatangan Pegawai Semakan Tarikh Selesai Tugasan:

Tandatangan Pegawai Pengesahan Tarikh Selesai Tugasan:

Tandatangan Kualiti Audit Tarikh Selesai Tugasan:

* Audit Kualiti; Jika Berkenaan

19A-4

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DID MANUAL VOLUME 10 CONTRACT ADMINISTRATION PART III : POST-CONTRACT

CHAPTER 20

PRIME COST & PROVISIONAL SUMS

Chapter 20 – PRIME COST & PROVISIONAL SUMS

Table of Contents

Table of Contents .....................................................................................................................20-i List of Flowcharts .................................................................................................................... 20-ii 20.1 20.2 INTRODUCTION.........................................................................................................20-3 PROCEDURES ............................................................................................................20-3 20.2.1 Administration of Prime Cost Sums..................................................................20-3 20.2.2 Administration of Provisional Sum .................................................................20-11 20.3 GUIDANCE NOTES ...................................................................................................20-16 20.3.1 Definitions ...................................................................................................20-16 20.3.2 Nomination of Sub-Contractors and Suppliers under P.C. Sum ........................20-16 20.3.3 Appointment of Sub-Contractors and Suppliers under Provisional Sums ...........20-16 20.3.4 Expending the P.C. Sums..............................................................................20-17 20.3.5 Expending the Provisional Sums....................................................................20-17 20.3.6 Procurement under P.C. Sum and Provisional Sum .........................................20-17 20.4 20.5 REFERENCE DOCUMENTS .........................................................................................20-17 REFERENCES ...........................................................................................................20-19

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Chapter 20 – PRIME COST & PROVISIONAL SUMS

List of Flowcharts

Flowchart Flowchart 20.1 Flowchart 20.2

Description Administration of Prime Cost Sums Administration of Provisional Sums

Page 20-1 20-2

20-ii

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Chapter 20 – PRIME COST & PROVISIONAL SUMS

Flowchart

Description

Action By

Reference

1

1. Prime Cost Sums or Provisional Sums are included in the Contract Sum

-

2

No
2. Is it Prime Cost Sum? -

Yes

A

A. Administration of Provisional Sums

-

Refer Flowchart 20.2

3 3. Prepare Tender Documents 4 4 Invitation and Receipt of Tender PT/PO PT/PO

5 5. Tender Evaluation and Nomination / Acceptance 6 6. Sub-Contract Documentation PT/CAO PT/PO

7

7. Sub-Contract Administration  Commencement  Direct Payment  SO’s consent

PT/CAO

8 8. Completion -

Flowchart 20.1 – Administration of Prime Cost Sums

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20-1

Chapter 20 – PRIME COST & PROVISIONAL SUMS

Flowchart A

Description A Provisional Sum is included in the Contract Sum 1. Prepare cost estimates of works under Provisional Sum. 2. Is the estimates of works 30% more than the Provisional Sum?

Action By -

Reference Refer Flowchart 20.1

1

CAO/ Ir/Sr

No Yes

2

-

3

Yes

3. Is the estimates of works 50% more than the Provisional Sum? 4. Obtain approval from Division Director 5. Obtain approval from DG or Deputy DG

-

No
4 CAO / Division Director CAO/ DG /Deputy DG

Use ‘Borang E’ Use ‘Borang E’

5

6

No

6. Does the work require the involvement of the main contractor? 7 7. Quotation exercise 8. Is it specialist works?

-

Yes

SOR -

8

No

Yes
9 9. Tender or quotation exercise by Contractor 10 10. Issue SO instruction to main contractor, and prepare valuation of works 11. Obtain approval (on costs) from Authorised Person 12. Appointment of subcontractor or supplier. SOR

SOR/ SO/ CAO

11

CAO /Authorised Person

Use ‘Borang F’

12

Flowchart 20.2 – Administration of Provisional Sums

20-2

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Chapter 20 – PRIME COST & PROVISIONAL SUMS

20 PRIME COST & PROVISIONAL SUMS
20.1 INTRODUCTION

This chapter provides:  The guidelines on expenditure of Prime Cost (P.C.) and Provisional Sums.  The guidelines on the preparation of tender documents, contract documents and general administration of nominated sub-contract and supply contracts. Note: 20.2 20.2.1 Refer to Section 20.3 for definitions and general overview on procurement of items under Prime Cost Sums and Provisional Sums. PROCEDURES Administration of Prime Cost Sums (Nominated Sub-Contractor and/or Nominated Supplier) Procedures / Tasks Prime Cost Sums Please refer to Flowchart 20.1 – Administration of Prime Cost Sums. Where the Contract specifically permits the nomination of subcontractor to carry out works included under Prime Cost, or the SO has elected that works under Provisional Sums shall be executed by nominated sub-contractor or nominated supplier, then the PT/PO shall carry out the tender exercise for procurement of sub-contract works. The Project Team must give due consideration to the overall works programme, and ensure the timely nomination of subcontractor or supplier so as to avoid any delay to the works. The procedures for preparation of tender documents, invitation, receipt, evaluation and acceptance of tenders, subcontract documentation, payment, variation, delay and extension of time, non-completion, determination, completion, handing over and defects, and final accounts are similar to that for the main contract, and reference should be made to Chapters 6 to 19, inclusive. Changes in points of detail are set out in this chapter. Action By / Reference For information

Step 1&2

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Chapter 20 – PRIME COST & PROVISIONAL SUMS

Step 3

Procedures / Tasks Preparation of Tender Documents The procedures for the preparation of tender documents and tender table documents set out in Chapter 6 are generally applicable to the preparation of tender documents and tender table documents for a nominated sub-contract. The sub-contract tender document shall follow the main contract number, with the words ‘NSC’ and the sub-contract works package number in parentheses appended at the end, eg: JPS/IP/P/1/99(NSC 1). (a) Generally, the TENDER DOCUMENT FOR WORK comprises the documents in the following order:          Tender Notice Instructions to Tenderer Form of Tender (JKR 203N1) Conditions of Contract (JKR 203N, including amendments and Special Provisions) Relevant Particulars of the Main Contract Specification Summary of Tender and Schedule of Rates; or Bills of Quantities Schedule of Technical Information List of Drawings

Action By / Reference For information

Action by: PT/PO

The sample contents page for the tender document is set out in Volume 10A, Chapter 20.

20-4

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Step 3 (Cont’d)

Procedures / Tasks Preparation of Tender Documents (Cont’d) (b) Generally, the TENDER DOCUMENT FOR SUPPLY OF MATERIALS OR GOODS comprises the documents in the following order:         Tender Notice Instructions to Tenderer Form of Tender (JKR 203P 1) Conditions of Contract (JKR 203P, including amendments and Special Provisions) Relevant Particulars of the Main Contract Specification Schedule of Prices Schedule of Technical Information

Action By / Reference

Action by: PT/PO

The sample contents page for the tender document is set out in Volume 10A, Chapter 20. (c) Generally, the TENDER DOCUMENT FOR SUPPLY OF MATERIALS OR GOODS comprises the documents in the following order:         Tender Notice Instructions to Tenderer Form of Tender (JKR 203P 1) Conditions of Contract (JKR 203P, including amendments and Special Provisions) Relevant Particulars of the Main Contract Specification Schedule of Prices Schedule of Technical Information Action by: PT/PO

The sample contents page for the tender document is set out in Volume 10A, Chapter 20.

4

Invitation and Receipt of Tender The procedures for the invitation and receipt of tender set out in Chapter 7 are generally applicable to the invitation and receipt of tender for a nominated sub-contract. Invite the Main Contractor to tender for the sub-contract works if the Main Contractor is suitably qualified.

Action by: PT/PO

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Step 5

Procedures / Tasks Tender Evaluation and Nomination / Acceptance (a) Tender Evaluation The procedures for the tender evaluation and acceptance set out in Chapter 8 are generally applicable to the tender evaluation of a nominated sub-contract In the evaluation of tender, the following percentage preference are applied for specialist bumiputra contractors for supplies and services: Value of Work Exceeding RM100,000 – RM500,000 Exceed RM500,000 - 1.5 million Exceeding RM 1.5 million – RM 5 million Exceeding RM 5 million – RM 10 million Exceeding RM10 million – RM 15 million Exceeding RM15 million (b) Nomination & Acceptance Upon the approval of the Procurement Board,   the SO shall issue the Letter of Nomination the Contractor and instruct to accept the tender, or if the Contractor’s tender is accepted, the S.O. shall issue the Letter of Acceptance to the Contractor. Preference Weightage 10% 7% 5% 3% 2.5% No preference

Action By / Reference Action by: PT/PO

Refer: SPP 4/1995

Action by: SOR/SO

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Step 5 (Cont’d)

Procedures / Tasks Tender Evaluation and Nomination / Acceptance (Cont’d) (b) Nomination & Acceptance (Cont’d) Upon the approval of the Procurement Board,   the SO shall issue the Letter of Nomination the Contractor and instruct to accept the tender, or if the Contractor’s tender is accepted, the S.O. shall issue the Letter of Acceptance to the Contractor.

Action By / Reference

Action by: SOR/SO

(i) Letter of Nomination Use the current form for Letter of Nomination:   for nomination of sub-contractor: Form JKR 203N3 for nomination of supplier: Form 203P3

(ii) Letter of Acceptance  Use the current form for Letter of Acceptance of Main Contractor’s Tender for work or Supply of Materials or Goods Under Prime Cost Sum, where the Main Contractor shall carry out works allocated under Prime Cost or Provisional Sums.

Use the current and appropriate form for the nomination, notification and/or acceptance, as the case may be. 6 Sub-Contract Documentation The procedures for the preparation of contract document set out in Chapter 9 are generally applicable for the preparation of the sub-contract documents. The sample contents page for the contract document is set out in Volume 10A, Chapter 20. Action by: PT/CAO

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Step 7

Procedures / Tasks Sub-Contract Administration (a) Generally Generally, the Contractor is fully responsible for the acts of the Sub-Contractor/Supplier. With the exception of payment matters, the Contractor is also responsible for the day-to-day administration of the subcontract / supply contract, including matters (where applicable) relating to      Variations Delays and Extension of Time Non-Completion Loss and Expense Determination

Action By / Reference

For information

The written consent of the SO is required before the Contractor may agree to, or grant, and additional time to the subcontractor, or to determine the employment of the subcontractor / supplier, as the case may be. (b) Direct Payment Direct payment to nominated sub-contractors and suppliers are permitted under the terms of the contract and sub-contract, subject to the following procedures or conditions are fulfilled: (a) Direct progress payment up to the limit of 90% of Subcontract Sum (b) The remainder 10% of the Sub-contract Sum shall be paid to the Main Contractor after the issuance of the Certificate of Practical Completion. The PT shall ensure that the Main Contract releases the remainder sums to the SubContractor after the Defects Liability Period. (c) Ensure that the conditions for direct payment are included in the tender documents and the sub-contract. (d) The sub-contractor is registered as bumiputra contractor under the relevant class, and is a local contractor operating at the area where the project is to be carried out. Action by: PT/ CAO/ Finance Division

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Step 7 (Cont’d)

Procedures / Tasks Sub-Contract Administration (Cont’d) (b) Direct Payment (Cont’d) (e) Ensure that the conditions for direct payment are stated in the Letter of Acceptance (LoA) to the Main Contractor, and that the Main Contractor submits the a complete list of sub-contractors he intents to employ. (f) Ensure that there is no assignment of payments to others, other than the sub-contractors listed by the Main Contractor. (g) The Main Contractor is not permitted to amend the list of sub-contractors without written permission of the Government/DID. (h) The main contract includes an indemnity clause to safeguard the rights of the Government / DID. (c) Written Consent of the S.O. The written consent of the SO is required before the Contractor may carry out any of the following under the terms of the subcontract:  Permit sub-contractor’s to employ workmen not in accordance with Government’s prescribed ratio (clause 12(b))  Permit Sub-letting (clause 19)  Grant extension of time (clause 26(b))  determine the employment of the sub-contractor (clauses 28(a) and (b)).  employ others or himself undertake the sub-contract work following the determination of the nominated subcontractor (clause 28(c)(ii)).

Action By / Reference

Action by: PT/ CAO/ Finance Division

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Step 7 (Cont’d)

Procedures / Tasks Sub-Contract Administration (Cont’d) (c) Written Consent of the S.O. (Cont’d) In addition to the above, the S.O.’s certificate is required for the following:  a certificate, stating the nominated sub-contractor’s default, be issued by the S.O. prior to calling of performance bond by the Main Contractor (clause 24(b))  a certificate, stating that the nominated sub-contractor is in delay, prior to deduction for loss or damages by the Main Contractor (clause 27). (d) Default on the Part of the Sub-Contractor / Supplier Where the Nominated Sub-contractor or Supplier in the execution of the work or the supply of the materials or goods under the sub-contractor, the Main Contractor shall be responsible to have the works executed or the materials or goods supplied by whatsoever means necessary. The Government/DID is not required to re-nominate. The contractor is only entitled to be paid the same sum as if the Nominated Sub-contractor or Supply had not defaulted, and the contractor is not entitled to extension of time by reasons of such default.

Action By / Reference

Action by: PT /SO

For information

7&8

Commencement and Completion of Sub-Contract Works The Main Contractor shall issue an Official Order to Commence, using form JKR 203N5, and the Nominated Sub-Contractor is required to complete the works within the time for completion stated in its Form of Tender. Nominated Supplier The Main Contractor shall issue an Order For Supply and Delivery of Articles, using form JKR 203P5, and the Nominated Supplier is required to complete the supplies within the time for completion stated in its Form of Tender. Defects Liability Refer to the Main Contract for defects liability obligations and rights.

For information

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20.2.2 Step A

Administration of Provisional Sum Procedures / Tasks Provisional Sums Please refer to Flowchart 20.2 – Administration of Provisional Sums. The Project Team must give due consideration to the overall works programme, and ensure the timely appointment of subcontractor or supplier so as to avoid any delay to the works. Action By / Reference

1

Preparation of Cost Estimates Prepare cost estimates for the works to be carried out under each Provisional Sum. At this stage, the scope of works shall have been sufficiently clearly identified or defined to enable the works to be priced. The cost estimate for the works shall be prepared by an officer who has the relevant experience or expertise.

Action by: CAO

2

Approval Before Proceeding with Procurement Approval of the Authorised Person is required if the estimated cost of works for each Provisional Sum exceeds that Provisional Sum by more than 30%. Use the current ‘Borang E’ – Permohonan Permohonan Untuk Melaksanakan Item Di Bawah Wang Peruntukan Sementara Yang Dijangka Melebihi *30%/50% Dari Peruntukan Asal..

Action by: CAO JPS SP Bil 1/2007

3, 4 & 5

Authorised Person  If the estimated cost of works exceeds the Provisional Sum by more than 30% up to the limit of 50%, the Authorised Person shall be the Division Director.  If the estimated cost of works exceeds the Provisional Sum by more than 50%, the Authorised Person shall be the Director General or Deputy Director General.

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Step 6&7

Procedures / Tasks Procurement of Works Not Requiring Involvement of the Main Contractor If the works do not require the involvement of the Contractor (eg aerial photography or works carried out off-site), then proceed to invite tender/quotation directly from qualified subcontractors or suppliers. Comply with the DID guidelines on calling of tender/quotation. Direct payment may be to such sub-contractor or supplier may be effected through Indent or Local Purchase Order (Inden / Pesanan Tempatan).

Action By / Reference Action by: SOR/CAO

For information.

8&9

Works To Be Carried Out By Specialists – Calling of Tender/Quotation By Contractor For specialist works exceeding RM200,000, open/selective tender shall be called by the Contractor. For works value not exceeding RM200,000, work may be procured by the Contractor through quotation exercise. The Contractor may tender/quote for the specialist works, if has the necessary qualifications. In such cases, the Contractor shall not be entitled to profit and attendance on his tender/quotation. Contractor shall prepare and call tender/quotation  The SOR/PT shall prepare specifications, Needs Statement, or design (‘design documents’), and provide the same to the Contractor.  Design and Build. For DB contracts, the Contractor shall prepare the specifications, Needs Statement or design (‘design documents’) for the tender/quotation documents.

For information

Action by: SOR/PT

 The Contractor shall prepare the tender/quotation document based on the design documents, and provide the list of suitably qualified sub-contractors or suppliers (‘tenderers’) for the SOR’s approval.  The SOR/PT must check the tender/quotation documents are in order and free from errors. The SOR shall provide a list of suitably qualified tenderers.  To total number of tenders shall not be less than 5, selected from both the lists provided by Contractor and the SOR.

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Step 8&9 (Cont’d)

Procedures / Tasks Works To Be Carried Out By Specialists – Calling of Tender/Quotation By Contractor (Cont’d) Contractor shall prepare and call tender/quotation (Cont’d)  The Contractor shall prepare sufficient number of tender documents.  For quotations, the tenderers must submit 2 set of documents. Closing of Tender/Quotation  The SOR shall prepare and issue the invitation for tenders/quotations.  The tenders/quotations shall be closed on the fixed date and time.  The quotations/tenders shall be opened in the presence of a committee, comprising representatives of the SOR and Contractor. Evaluation of Tender/Quotation  For tenders, the evaluation shall be carried out by the SOR, and the SOR shall recommend the lowest and technically complying tender.  Design and Build. For DB contracts, the evaluation shall be carried out by the Contractor, and the Contractor shall recommend the lowest and technically complying quotation.  For quotations, the evaluation shall be carried out by the Contractor, and the Contractor shall recommend the lowest and technically complying quotation. (a) The SOR shall verify the recommendation, and may further negotiate for a fair sub-contract sum or contract rates. (b) The sub-contract sum or contract rates shall be inclusive of the Contractor’s Profit and Attendance.

Action By / Reference Action by: SOR/PT

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Step 8&9 (Cont’d)

Procedures / Tasks Works To Be Carried Out By Specialists – Calling of Tender/Quotation By Contractor (Cont’d) Profit and Attendance (P&A) The Profit and Attendance (P&A) shall be inclusive of Contractor’s management costs, profit and attendance.  For Quotation, the Contractor’s P&A shall be as stated in the Contract or, if not stated then, it shall not exceed 7.5%. For Tender, the Contractor’s P&A shall be as stated in the Contract or, if not stated then, it shall not exceed the following rates: Value of Works RM500,000 or less > RM500,000 – RM 1 million > RM 1 million - RM 5 million > RM 5 million – RM 10 million > RM 10 million Maximum Rate for P&A 7.5% 5% 4% 3% <3%

Action By / Reference

 If the Contractor’s tender/quotation is accepted, the Contractor shall not be entitled to profit and attendance on his tender/quotation. 10 Works To Be Carried Out By Main Contractor For normal category of works (‘kategori biasa’), or works which the Contractor possesses the necessary skills, the SO may issue the necessary SO Instruction for the Contractor to carry out the works. The valuation of works shall be in accordance with the valuation rules of the Contract, i.e. based on contract rates or, in the absence of contract rates, based on fair valuation. Action by: SOR / SO

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Step 11

Procedures / Tasks Approval of Value of Works The tender/quotation evaluation and recommended subcontract / supply contract value shall be approved by a Variation Order Committee (‘Authorised Person’). The sub-contract / supply contract value shall be inclusive of the Contractor’s Profit and Attendance. Submit the application for the approval of sub-contract value / supply contract value to the Authorised Person for approval. Use the current ‘Borang F’ – Permohonan Untuk Kelulusan Harga Bagi Item Wang Peruntukan Sementara. See Chapter 5 – Authority for Authorised Person, and limit of authority

Action By / Reference Action by: SOR

12

Appointment of Sub-Contractor or Supplier SO’s Instruction Issue the necessary instruction to the Contractor to effect the appointment of the sub-contractor or supplier, as approved by the VO Committee. Direct Payment and Deed of Assignment The DID may make direct payment to such sub-contractor or supplier through the execution by the Contractor of the ‘Deed of Assignment’ (Surat Ikatan Penyerahan Hak Faedah), in favour of the appointed sub-contractor or supplier. For avoidance of disputes, a copy of the Deed of Assignment shall be appended to the SO’s Instruction for the appointment of sub-contractor or supplier. The Deed of Assignment may be used if there is no overlapping of sums which is assigned under the main contract. Form JKR 203N For works let under Form JKR 203N, direct payment to the sub-contractor shall be effected through the procedures for Nominated Sub-Contractor or Nominated Supplier (see Section 20.3.2, above).

Action by: SOR/SO

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20.3 20.3.1

GUIDANCE NOTES Definitions

"Nominated Sub-contractor" means any contractor, specialist or other person nominated by the S.O. in accordance with the Contract to be employed by the Contractor for the execution of work or supply of goods materials or services for which a Prime Cost Sum (or P.C. Sum) has been inserted in the Contract or ordered by the S.O. to be employed by the Contractor to execute work or supply goods materials or services under a Provisional Sum. “Prime Cost Sum” or “P.C. Sum” is an amount included in a bill of quantities to cover a particular bit of work or supply of materials to be carried out by a nominated sub-contractor or a supplier.
Generally, P.C. Sums are included in the Contract for works to be carried out by specialist contractors or suppliers.

"Provisional Sum" means a sum included and so designated in the Contract as a specific allocation for the execution of work or the supply of goods materials or services which may be used in whole or in part or not at all at the direction and discretion of the S.O..
Generally, Provisional Sum are allocated for the execution of works or for supply of goods or services for which   an exact price cannot be obtained/ascertained or are not clearly identified or defined

at the time of tender. 20.3.2 Nomination of Sub-Contractors and Suppliers under P.C. Sum

The contract may permit the Government / DID to nominate a sub-contractor to carry out work or a supplier to provide goods which is included under any Prime Cost or Provisional Sum. The Forms JKR203 and 203A includes such right of nomination, whereas Form JKR DB/T does not. Under the JKR Forms 203/203A, any work or supply of goods or materials covered by Provisional Sums may be treated as P.C. Sum items if the S.O. so decides. 20.3.3 Appointment of Sub-Contractors and Suppliers under Provisional Sums

The sub-contractor or supplier may be appointed by the Contractor pursuant to the S.O.’s Instruction on the expenditure of Provisional Sums. The sub-contractor or supplier is not a nominated subcontractor or nominated supplier pursuant to the terms of the Contract. The DID may make direct payment to such sub-contractor or supplier through the execution by the Contractor of the ‘Deed of Assignment’ (Surat Ikatan Penyerahan Hak Faedah), in favour of the appointed sub-contractor or supplier.

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20.3.4

Expending the P.C. Sums

The tender evaluation report (kertas taklimat tender) for the sub-contract must be submitted to the Tender Board for approval. Please also refer to Chapter 5 – Authority, and Chapter 8 – Tender Evaluation and Acceptance. 20.3.5 Expending the Provisional Sums

If the estimated cost of works is expected to exceed the Provisional Sum by 30% or more, then the Project Team must seek prior approval from the Authorised Person prior to the expenditure of the Provisional Sum. The valuation or prices for the sub-contract or suppler must be submitted to the Authorised Person for approval prior to the appointment of the sub-contractor or supplier. If the estimated cost of works does not exceed the Provisional Sum, or exceeds the Provisional Sum by less than 30%, the Project Team may proceed with the procurement and seek approval of the Authorised Person prior to the appointment of the sub-contractor or supplier. 20.3.6 Procurement under P.C. Sum and Provisional Sum

The PT/PO shall carry out the   tender exercise, or quotation exercise (as the case may be),

for the sub-contract works, where such Prime Cost Sums or Provisional Sums are included in the Contract. 20.4 REFERENCE DOCUMENTS

Please refer to Volume 10A for the standard reference or sample documents for the procedures or processes outlined in this Chapter. Nominated Sub-Contractor  JKR 203N/83 (including addendum) : Form of Contract To Be Used For Nominated SubContractors Where the Main Contractor is Based Upon Form JKR 203 Or 203A  JKR 203N1/83 (including addendum) : Form of Tender For Use by Nominated Sub-Contractor  JKR 203N2/88 : Conditions of Tendering and General Information For Use By Nominated SubContractor  JKR 203N3/93 : Letter of Nomination  JKR 203N4/83 : Letter of Acceptance of Tender By Main Contractor To Nominated Sub-Contractor  JKR 203N5/83 : Official Order to Commence Work By Main Contractor To Nominated SubContractor  JKR 203N6/88 : Letter of Nomination of Sub-Contractor  JKR 203N7/88 : Letter of Indemnity From Nominated Sub-Contractor to the Government

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Nominated Supplier  JKR 203P/83 (including addendum) : Form to be used for Nominated Suppliers Where The Main Contractor is based upon Form JKR 203 or 203A  JKR 203P1/83 : Form of Tender For Use By Nominated Suppliers  JKR 203P2/83 : Suppliers Conditions of Tendering And General Information For Use by Nominated

 JKR 203P3/83 : Letter of Nomination  JKR 203P4/83 : Letter of Acceptance of Tender by Main Contractor To Nominated Supplier  JKR 203P5/83 : Order For Supply and Delivery of Articles – to be issued by Main Contractor to the Nominated Supplier  JKR 203P5A/83 : Schedule of Articles Ordered To Be Supplied and Deliverd  JKR 203P6/88 : Letter of Notification of Nomination of Supplier  JKR 203P7/88 : Letter of Indemnity From Nominated Supplier to the Government Generally  Bank Guarantee Form for Performance Bond (Nominated Sub-Contract Works)  Deed Of Assignment (Security For Direct Payments To A Third Party) (Surat Ikatan Serah Hak)  The Consent Of The Government Of Malaysia To The Deed Of Assignment For Direct Payment To A Third Party Expending Provisional Sum  ‘Borang E’ – Permohonan Permohonan Untuk Melaksanakan Item Di Bawah Wang Peruntukan Sementara Yang Dijangka Melebihi *30%/50% Dari Peruntukan Asal. ‘Borang F’ – Permohonan Untuk Kelulusan Harga Bagi Item Wang Peruntukan Sementara.

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20.5

REFERENCES

Please refer to the latest Treasury Circulars and DID Circulars for sub-contract tender procedures and sub-contract administration. Treasury Circular (Surat Pekeliling Perbendaharaan) [1] [2] [3] Bil 4 Tahun 1995: Dasar dan Keutamaan Kepada Syarikat Bumiputra Dalam Perolehan Kerajaan Bil 4 Tahun 2003: Bayaran Terus Kepada Sub Kontraktor Bil 5 Tahun 2007: Tatacara Pengurusan Perolehan Kerajaan Secara Tender

DID Circulars (Surat Pekeliling / Edaran JPS) [1] [2] SP JPS Bil 4/2003: Bayaran Terus Kepada Sub Kontraktor SP JPS Bil /2007: Garis Panduan Pengurusan Wang Peruntukan Sementara (WPS)

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(This page is deliberately left blank)

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DID MANUAL VOLUME 10 CONTRACT ADMINISTRATION PART III : POST-CONTRACT

CHAPTER 21

DISPUTE MANAGEMENT AND RESOLUTION

Chapter 21 – DISPUTE MANAGEMENT AND RESOLUTION

Table of Contents

Table of Contents .....................................................................................................................21-i List of Flowcharts .................................................................................................................... 21-ii 21.1 21.2 21.3 INTRODUCTION.........................................................................................................21-2 PROCEDURES ............................................................................................................21-2 REFERENCES .............................................................................................................21-6

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List of Flowcharts

Flowchart Flowchart 21.1

Description Dispute Management and Resolution

Page 21-1

21-ii

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Flowchart

Description

Action By

Reference

1

1. Disagreement or difference of opinion or conflict or dispute?

-

2

No

Yes
3

2. Determine if there is a ‘dispute’.

PT

3. To use best endeavour to resolve the ‘issue’ amicably

PT

No Yes
5

4

4. Issue(s) are settled?

-

5. Refer the dispute to the Authorised Party for decision

PT / CQS

6

6. Parties to give effect to Authorised Party’s decision.

PT

Yes
7 7. Is there new information or substantiation from the Contractor? -

No No

8

Yes

8. Contractor gives notice to refer dispute to arbitration?

-

9 End

9. Refer the dispute to Legal Adviser at Ministry / A.G.’s Chamber for advice and action.

Director of Contracts & QS Division

Flowchart 21.1 – Dispute Management and Resolution

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Chapter 21 – DISPUTE MANAGEMENT AND RESOLUTION

21 DISPUTE MANAGEMENT AND RESOLUTION
21.1 INTRODUCTION

This chapter provides:  An overview of the dispute management and resolution procedures for works contracts.  Brief outline of alternative dispute resolution (‘ADR’). 21.2 PROCEDURES

Please refer to Flowchart 21.1 – Dispute Management and Resolution. Step 1 Procedures / Tasks Generally Disagreement or difference of opinion or conflict or dispute often occurs in projects. The best form of dispute avoidance is the ensure that the appropriate procurement method and form of contract is used, and that the scope of works is clearly and accurately set out in the tender and contract documents. If practicable, all disagreements or differences of opinion or conflicts should be resolved as soon as possible to avoid any escalation of the issues into a ‘dispute’. In dispute management, contemporaneous and complete records are of utmost importance. Therefore, the PT must ensure that records are properly kept and updated, and available when required. (See Volume 11). For the purpose of this Manual, a ‘dispute’ is deemed to have occurred when the disagreement or difference of opinion etc has been formally referred by the Contractor to the Authorised Party under the terms of the contract. All other issues (i.e. disagreements or differences of opinion or conflicts) should be resolved by way of negotiation or amicable settlement as soon as practicable. 2 Ascertainment of ‘Dispute’ Ascertain if there is in actuality a “dispute”, whereby the parties must comply with the contractual procedures and arbitration clause. Action by: SOR / PT Action By / Reference For information

21-2

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Step 3&4

Procedures / Tasks Amicable Settlement Unless the ‘dispute’ is formally referred for a decision in accordance with the contract, the PM/PT should use its best endeavour to resolve the matter by way of negotiation or amicable settlement. Upon settlement, record the agreement reached by the parties. This avoids future disagreement on the same issue. Follow up with the relevant adjustment (if any) to the contract by way of extension of time, Variation or adjustment to the Contract Sum, etc, as the case may be. If parties are not able to make an amicable settlement, then any party may refer the matter to the Authorised Party under the Contractor for a decision.

Action By / Reference Action by: SOR/PT

5

Referral of Dispute for Decision If either party has submitted a formally referred the ‘dispute’ to be decided by the Authorised Party: (a) Upon receipt of the Contractor’s formal request to refer the dispute to the Authorised Party, the PM/PT must notify the Contracts and Quantity Surveying Division immediately. Upon receipt of the Contractor’s formal request to refer the dispute to the Authorised Party, the PM/PT must notify the Contracts and Quantity Surveying Division immediate. The PT shall prepare the documents setting out the background of the dispute, with sufficient details for the Authorised Party to make a decision. The Contracts and Quantity Surveying Division shall refer the dispute to the officer authorized under the contract (Authorised Party) to make a decision. Contracts and Quantity Surveying Division, where appropriate to do so, shall advise and assist the Authorised Party in the dispute resolution process. Action by: SOR/PT

(b)

Action by: SOR/PT

(d)

Action by: SOR/PT

(c)

Action by: BUBK

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Step

Procedures / Tasks (e) (f) The Authorised Party is required to make a decision within the time frame stipulated in the contract. The Authorised Party may refer the dispute to the Claim Committee for a decision. For ex-gratia payments, the Claim Committee will refer the matter to Treasury for decision and/or approval. JKR Forms of Contract For the contracts based on the JKR forms, the time frame for the S.O. to give a decision is 45 days after the Contractor’s request for such decision. Other Forms of Contract If the contract is not based on JKR forms of contract, please refer to the appropriate provision in the contract for the dispute reference procedures.

Action By / Reference

Action by: AtP/ Claims Committee Refer: Treasury Instruction 202 (AP202) For information

For information

6

Compliance with Decision Comply with the decision of the Authorised Party. (If the Contractor is dissatisfied with the Authorised Party’s decision, he must nevertheless comply with the decision but may refer the dispute for arbitration.) Follow up with the relevant adjustment (if any) to the contract by way of extension of time, Variation or adjustment to the Contract Sum, etc, as the case may be.

Action by: SOR/PT

7

Authorised Party May review its own Decision If  the Contractor is dissatisfied with the decision of the Authorised Party, and  new information or substantiation has come into the attention of the Authorised Party, then the Authorised Party may review its earlier decision, or refer such review (of earlier decision) to the Claim Committee for confirmation. Action by: AtP

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Step 8

Procedures / Tasks Notice of Arbitration The Contractor may refer the dispute for arbitration if  The Authorised Party fails to give a decision within 45 days after being requested to do so; or  The Contractor is dissatisfied with the decision of the Authorised Party. Such requirement to refer the dispute to arbitration must be made within the period stipulated in the contract. Generally, the arbitration shall not commence until after the completion or alleged of the completion Works, or determination or alleged determination of the employment of the Contractor, except for the followings:  Where there is written consent of the Government/DID and the Contractor; or  For such dispute following the effect of war or earthquake. Other Forms of Contract The above procedure is made in reference to the JKR forms. If the contract is not based on JKR forms of contract, please refer to the appropriate provision in the contract for the procedures on reference to arbitration.

Action By / Reference For information

9

Reference to Legal Adviser at Ministry / A.G.’s Chamber Upon receipt of the Contractor’s notice to refer a dispute for arbitration (whether or not prior reference was made to the Authorised for a decision), the PM/PT must notify the Contracts and Quantity Surveying Division immediately. The Contracts and Quantity Surveying Division shall refer the matters to the Legal Adviser at the Ministry for further advice and action. The matter may then be referred to the Attorney General’s Chamber by the Legal Adviser. The PT shall compile the records and supporting documents relevant to the dispute and as may be required for the arbitral proceedings.

Action by: SOR/PT/BUBK

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Chapter 21 – DISPUTE MANAGEMENT AND RESOLUTION

21.3

REFERENCES

Treasury Instruction (Arahan Perbendaharaan) [1] AP 202: Arahan Perubahan Kerja

21-6

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Chapter 19 – FINAL ACCOUNT AND FINAL CERTIFICATE

Table of Contents

Table of Contents .....................................................................................................................19-i List of Flowcharts .................................................................................................................... 19-ii 19.1 19.2 19.3 19.4 INTRODUCTION.........................................................................................................19-2 PROCEDURES ............................................................................................................19-2 REFERENCE DOCUMENTS ...........................................................................................19-6 REFERENCES .............................................................................................................19-6 Checklist for the Preparation of Final Account (Senarai Semakan Penyediaan Perakuan Akaun Muktamad) ……………………... 19A-1

APPENDIX 19A

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Chapter 19 – FINAL ACCOUNT AND FINAL CERTIFICATE

List of Flowcharts

Flowchart Flowchart 19.1

Description Final Account and Final Certificate

Page 19-1

19-ii

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Chapter 19 – FINAL ACCOUNT AND FINAL CERTIFICATE

Flowchart

Description

Action By

Reference

1

1. Certificate of Practical Completion

-

2

Fails

2. Prepare the Statement of Final Account and Final Certificate  Ensure that the necessary adjustments to the Contract Sum are approved

CAO

Refer Checklist for Preparation of Final Account and Final Certificate; & the current form JKR66A

3. Quality Audit
3

BUBK

Refer Ch. 10, Fig. 10-3

Passes 4. Approval of Statement of Final Account and Final Certificate SO / AP

4

5

5. Issue Statement of Final Account and Final Certificate to Contractor and respective parties.

CAO

6

6. Forward documents to FD for payment

CAO

7

7. Prepare Completion Report, etc

SOR

Volume 11 – Construction Management

Figure 19.1 Flowchart – Final Account and Final Certificate

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Chapter 19 – FINAL ACCOUNT AND FINAL CERTIFICATE

19 FINAL ACCOUNT AND FINAL CERTIFICATE
19.1 INTRODUCTION

This chapter provides:  The guidelines on the preparation of the final accounts, and the issuance of the final certificate. 19.2 PROCEDURES

Please refer to Flowchart 19.1 – Final Account and Final Certificate. Step 1 Procedures / Tasks Generally The Final Account must be prepared as soon as is practicable,  after Practical Completion; and  the Contractor has fulfilled his obligations under the Contract, which includes the making good of defects The Contractor is required to submit, not later than 3 months after practical completion, the full particulars of all claims, together with such supporting documents (including documents relating to accounts of Nominated Sub-Contractor and Nominated Supplier, if any) as may be necessary for the preparation of the Final Accounts. If the Contractor fails or refuses to submit the information within the time, the Final Accounts may be prepared based on the information at hand so as to enable the Final Accounts and Final Certificate to be completed within 3 months after the end of defects liability period or issuance of the Certificate of Completion of Making Good Defects, whichever is the later. Final Accounts and Final Certificate following Determination Where the employment of the Contractor was terminated, the Final Accounts and Final Certificate shall be prepared as soon as practicable after the new contractor is appointed and the assessment of the costs and/or loss or damage to the Government/DID is completed. A modified Form JKR66A is used (Final Account After Determination of Employment of the Contractor / Perakuan Muktamad Kontrak Yang Mana Ditamatkan Pengambilan Kerja Kontraktor). For procedures following determination, please refer to Chapter 16. Action By / Reference For information

19-2

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Chapter 19 – FINAL ACCOUNT AND FINAL CERTIFICATE

Step 2

Procedures / Tasks Preparation of the Statement of Final Account and Final Certificate (a) Adjustment of Contract Sum Before preparing the Final Account and Final Certificate (form JKR66A), ensure that all adjustments to the Contract Sum are approved and carried out, i.e. for, o o o o Adjustment for Prime Cost and Provisional Sums Re-measurement of provisional quantities Variations to the Contract Assessments of claims by the Contractor.

Action By / Reference Action by: SOR/CAO

Refer to Chapter 12, and the Checklist for Adjustment of Contract Sum

Ensure that all Variation Orders (APK) and Adjustment of Contract Sum (PHK) have been issued and are correct. Ensure that the SO and contractor sign the JKR-APK and JKRPHK, as the case may be. (b) Prepare Form JKR66A Use the current Form JKR 66A. Ensure that the form is duly filled in with the correct contract data, and that the sums, adjustments and computation are correct. The Final Account must take into account the following:    All adjustments to the Contract Sum; Payments previously paid to the Contractor, Nominated Sub-Contractor and Suppliers, and assignees; and Permitted deductions under the Contract, such as costs incurred in connection with employment of others to execute such works to give effect to an S.O.’s instruction, Liquidated Ascertain Damages (LAD), costs for making good defects, etc. Recoupment of Advance Payment Deductions for direct payment by DID for dues or contributions under the Employment Ordinance, the Employee’s Social Security Act, the Employee’s Provident Fund Ordinance and any other laws relevant to the employment of workmen. The release of Performance Guarantee Sum (if any). Action by: SOR/CAO

Refer to Checklist for Preparation of Final Account (Penyedian Perakuan Akaun Muktamad)

 

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Chapter 19 – FINAL ACCOUNT AND FINAL CERTIFICATE

Step

Procedures / Tasks

Action By / Reference Action by: SOR/CAO

(c) Supporting Documents Attach the required supporting documents to the Final Account and Final Certificate:         Certificate of Practical Completion; Certificate of Non- Completion; if any Certificate of Completion of Making Good Defects; Certificate of Delay and Extension of Time, if any; Certificate of Adjustment of Contract Sum, if any; Certificate of Payment of Performance Guarantee Sum, if any; Payment voucher(s); and Letter of release from the Department of Labour, or Statutory Declaration (to the effect that workmen employed have received all wages) made by the Contractor**.

**The letter or statutory declaration must be submitted by the Contractor before the final payment can be effected to the Contractor. (d) Check documents for completeness, and computation Upon receipt of the Final Account and Final Certificate documents:  Check that each document is complete and/or in order. Refer to the Checklist for Preparation of Final Account (Penyedian Perakuan Akaun Muktamad); Complete and initial the Checklist for Preparation of Final Account; The recommending officer shall sign the Form JKR66A; and Submit Form JKR66A, together with attached documents, to the SO for signature Action by: SOR/CAO

  

Refer to Checklist for Preparation of Final Account (Penyedian Perakuan Akaun Muktamad)

19-4

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Chapter 19 – FINAL ACCOUNT AND FINAL CERTIFICATE

Step 3

Procedures / Tasks Quality Audit Forward the Statement of Final Account and Final Certificate for checking (quality audit) by the relevant contract officer. The quality auditor shall check that the documents are in order and free of errors.

Action By / Reference Action by: CAO/ BUBK

4

Approval of Final Account and Final Certificate The Final Account and Final Certificate must be signed by the S.O..

Action by: CAO/SO

5

Issue Final Account and Final Certificate to Contractor The Final Account and Final Certificate must be forwarded to Contractor and copies distributed to all parties involved in the Contract (Accountant General). It is not a contractual requirement that the Contractor must sign and return a copy of the Final Account and Final Certificate.

Action by: CAO

6

Forward documents to the Finance Division The Final Account and Final Certificate must be forwarded to the relevant Finance Division to effect payment.

Action by: CAO / FD

7

Prepare Completion Report, etc As final duties, the SOR/PT are to prepare and submit the   Final (Completion) Report, and Contractor’s Performance Report (if necessary).

For information

Please also refer to Volume 11 – Construction Management.

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Chapter 19 – FINAL ACCOUNT AND FINAL CERTIFICATE

19.3

REFERENCE DOCUMENTS

Please refer to Volume 10A for the standard reference (or sample) documents for the procedures or processes outlined in this Chapter.   JKR 66A : Final Account and Final Certificate Letter of Discharge of Bank / Finance Company / Insurance Guarantee REFERENCES

19.4

Please refer to the latest Treasury Circulars and DID Circulars on Final Account and Final Payment. Treasury Circular (Surat Pekeliling Perbendaharaan)  Nil

DID Circulars (Surat Pekeliling / Edaran JPS) [1] SP JPS Bil. 2/2000: 2. Pindaan ke atas Borang JKR 66, Perakuan Pelarasan Jumlah Harga Kontrak (PPJHK) dan Perakuan Muktamad 3. Pindaan Kepada Syarat-syarat Kontrak Berkaitan Bayaran [2] SP JPS Bil. 4/2008: Langkah-langkah Untuk Mempercepatkan Bayaran Interim (Tambahan kepada Surat pekeliling SP JPS Bil. 2/2000)

19-6

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Chapter 19 – FINAL ACCOUNT AND FINAL CERTIFICATE

APPENDIX 19A

CHECKLIST FOR THE PREPARATION OF FINAL ACCOUNT (SENARAI SEMAKAN PENYEDIAAN PERAKUAN AKAUN MUKTAMAD)

TAJUK PROJEK Untuk Tindakan PMK 1 PMK 2 AK* BIL. 1. KETERANGAN Pastikan perkara-perkara berikut dipatuhi sebelum penyediaan Perakuan Muktamad disiapkan. (i) Semua Wang Kos Prima (termasuk layanan dan keuntungan) & Wang Peruntukan Sementara telah diselaraskan. Semua item untuk Kuantiti Sementara telah dibuat Pengukuran Semula. Semua item/kerja yang tidak dilaksanakan (omission) atau dikurangkan daripada kontrak telah disediakan APK PMK 1 PMK 2 AK* ULASAN Tandakan () selepas semakan Nama Pegawai Tarikh Diberi Kepada Tarikh Diterim a Oleh Tarikh Siap Semakan

(ii)

(iii)

(iv) Semua APK & PHK telah diselaraskan. (v) Pelarasan pengiraan baki untuk VOP telah dibuat.

(vi) Semua tuntutan antara kontraktor dan Kerajaan telah diselesaikan 2. 2.1 Borang Perakuan Muktamad. Pastikan borang JKR 66A yang terkini digunakan. Muka surat 1 / 4 2.2 KERAJAAN - bermaksud 'KERAJAAN MALAYSIA' bagi projek Persekutuan atau 'KERAJAAN ...............' bagi projek Negeri. Peruntukan pembangunan, kepala dan pecahan kepala - hendaklah diisi.

2.3

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Chapter 19 – FINAL ACCOUNT AND FINAL CERTIFICATE

BIL. 2.4

KETERANGAN Muka surat 1 / 4 (samb.) Tajuk kerja, nama dan alamat kontraktor hendaklah sama seperti di dalam dokumen kontrak. No.Kontrak dan Jumlah Harga Asal Kontrak hendaklah sama seperti di dalam dokumen kontrak. Jumlah Bersih Tambahan / Potongan (i) Ambil Jumlah Bersih dari Penyata Pelarasan Harga Kontrak di muka surat 4/4.

PMK 1

PMK 2

AK*

ULASAN

2.5

2.6

2.7

Harga Muktamad Kontrak adalah Harga Kontrak setelah ditambah/dipotong jumlah bersih APK & PHK. Perkara A - Butir-butir Jumlah Potongan / Kurangan (i) Perkara A.1 - pastikan semula jumlah bayaran interim yang terdahulu berasaskan baucer bayaran. Perkara A.2 - pastikan jumlah semua bayaran Wang Pendahuluan, jika ada yang dibuat berasaskan baucer bayaran (termasuk bayaran Wang Pendahuluan kepada NSC/NS). Perkara A.3 - Jumlah Potongan lain termasuk bayaran kepada pihak ketiga, jika ada (sertakan lampiran dan keterangan potongan).

2.8

(ii)

(iii)

2.9

Bayaran Muktamad Dibawah Kontrak adalah Harga Muktamad Kontrak ditolak dengan perkara A.1, 2 dan 3. Tandatangan Pegawai Pengesyor hendaklah pegawai yang diberi kuasa dan catitkan nama dan jawatan.

2.10

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Chapter 19 – FINAL ACCOUNT AND FINAL CERTIFICATE

BIL. 2.11 Perkara 'B' (i)

KETERANGAN Muka surat 1 / 4 (samb.) Pastikan amaun dalam perkataan jumlah sebenar bayaran Perakuan Muktamad. Perkara B.1.(ii) - Pastikan ketepatan bayaran balik kepada Kontraktor Utama bagi pelepasan Deposit Wang Jaminan Pelaksanaan. (Jika berkenaan). Perkara B.2 - Pastikan ketepatan baki bayaran kepada Subkontraktor/Penerima Bayaran seperti di Lampiran A.

PMK 1

PMK 2

AK*

ULASAN

(ii)

(iii)

(iv) Perkara B.3 - Pastikan ketepatan pengiraan kredit hasil bagi LAD berasaskan perbezaan tarikh CPC dengan tarikh Lanjutan Terakhir dan kadar LAD di dalam kontrak. (v) Perkara B.1.(i) – Pastikan perkiraan nilai kerja dan amaunamaun lain bagi Kontraktor Utama adalah perbezaan antara Bayaran Muktamad dan jumlah Perkara B.1.(ii), B.2 & B.3

2.12

Pastikan Jumlah Bayaran Muktamad menyamai Bayaran Muktamad di Bawah Kontrak. Masukkan No. Fasal berkenaan dengan Akuan Statutori mengikut syarat-syarat kontrak berkenaan seperti 48(d) bagi borang JKR 203/203A. Tandatangan Pegawai Penguasa hendaklah pegawai yang diberi kuasa dan catitkan nama dan jawatan.

2.13

2.14

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Chapter 19 – FINAL ACCOUNT AND FINAL CERTIFICATE

BIL.

KETERANGAN Muka surat 2 / 4

PMK 1

PMK 2

AK*

ULASAN

2.15

Perkara ‘C’ Pastikan pihak kontraktor adalah orang yang sama yang menandatangani kontrak atau wakil lain yang diberi kuasa. Tandatangan hendaklah disaksikan dan dilengkapi dengan tarikh serta maklumat diri yang dikehendaki.

2.16

Sebelum Perakuan Akaun dan Bayaran Muktamad diluluskan, pastikan perkara di bawah ini telah dilaksanakan. (a) Perakuan Siap Kerja telah dikeluarkan. (b) Surat Akuan Statutori atau Surat Akuan Ketua Pengarah Buruh telah diterima daripada kontraktor dan disertakan bersama.

Tandatangan Pegawai Semakan Tarikh Selesai Tugasan:

Tandatangan Pegawai Pengesahan Tarikh Selesai Tugasan:

Tandatangan Kualiti Audit Tarikh Selesai Tugasan:

* Audit Kualiti; Jika Berkenaan

19A-4

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Chapter 20 – PRIME COST & PROVISIONAL SUMS

Table of Contents

Table of Contents .....................................................................................................................20-i List of Flowcharts .................................................................................................................... 20-ii 20.1 20.2 INTRODUCTION.........................................................................................................20-3 PROCEDURES ............................................................................................................20-3 20.2.1 Administration of Prime Cost Sums..................................................................20-3 20.2.2 Administration of Provisional Sum .................................................................20-11 20.3 GUIDANCE NOTES ...................................................................................................20-16 20.3.1 Definitions ...................................................................................................20-16 20.3.2 Nomination of Sub-Contractors and Suppliers under P.C. Sum ........................20-16 20.3.3 Appointment of Sub-Contractors and Suppliers under Provisional Sums ...........20-16 20.3.4 Expending the P.C. Sums..............................................................................20-17 20.3.5 Expending the Provisional Sums....................................................................20-17 20.3.6 Procurement under P.C. Sum and Provisional Sum .........................................20-17 20.4 20.5 REFERENCE DOCUMENTS .........................................................................................20-17 REFERENCES ...........................................................................................................20-19

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Chapter 20 – PRIME COST & PROVISIONAL SUMS

List of Flowcharts

Flowchart Flowchart 20.1 Flowchart 20.2

Description Administration of Prime Cost Sums Administration of Provisional Sums

Page 20-1 20-2

20-ii

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Flowchart

Description

Action By

Reference

1

1. Prime Cost Sums or Provisional Sums are included in the Contract Sum

-

2

No
2. Is it Prime Cost Sum? -

Yes

A

A. Administration of Provisional Sums

-

Refer Figure 20.2

3

3. Prepare Tender Documents

PT/PO

4

4

Invitation and Receipt of Tender

PT/PO

5

5. Tender Evaluation and Nomination / Acceptance

PT/PO

6

6. Sub-Contract Documentation

PT/CAO

7

7. Sub-Contract Administration  Commencement  Direct Payment  SO’s consent

PT/CAO

8

8. Completion

-

Flowchart 20.1 – Administration of Prime Cost Sums

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Chapter 20 – PRIME COST & PROVISIONAL SUMS

Flowchart A

Description A Provisional Sum is included in the Contract Sum 1. Prepare cost estimates of works under Provisional Sum. 2. Is the estimates of works 30% more than the Provisional Sum?

Action By -

Reference Refer Figure 20.1

1

CAO/ Ir/Sr

No Yes

2

-

3

Yes

3. Is the estimates of works 50% more than the Provisional Sum? 4. Obtain approval from Division Director 5. Obtain approval from DG or Deputy DG

-

No
4 CAO / Division Director CAO/ DG /Deputy DG

Use ‘Borang E’ Use ‘Borang E’

5

6

No

6. Does the work require the involvement of the main contractor? 7 7. Quotation exercise 8. Is it specialist works?

-

Yes

SOR -

8

No

Yes
9 9. Tender or quotation exercise by Contractor 10 10. Issue SO instruction to main contractor, and prepare valuation of works 11. Obtain approval (on costs) from Authorised Person 12. Appointment of subcontractor or supplier. SOR

SOR/ SO/ CAO

11

CAO /Authorised Person

Use ‘Borang F’

12

Flowchart 20.2 – Administration of Provisional Sums

20-2

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Chapter 20 – PRIME COST & PROVISIONAL SUMS

20 PRIME COST & PROVISIONAL SUMS
20.1 INTRODUCTION

This chapter provides:  The guidelines on expenditure of Prime Cost (P.C.) and Provisional Sums.  The guidelines on the preparation of tender documents, contract documents and general administration of nominated sub-contract and supply contracts. Note: 20.2 20.2.1 Refer to Section 20.3 for definitions and general overview on procurement of items under Prime Cost Sums and Provisional Sums. PROCEDURES Administration of Prime Cost Sums (Nominated Sub-Contractor and/or Nominated Supplier) Procedures / Tasks Prime Cost Sums Please refer to Flowchart 20.1 – Administration of Prime Cost Sums. Where the Contract specifically permits the nomination of subcontractor to carry out works included under Prime Cost, or the SO has elected that works under Provisional Sums shall be executed by nominated sub-contractor or nominated supplier, then the PT/PO shall carry out the tender exercise for procurement of sub-contract works. The Project Team must give due consideration to the overall works programme, and ensure the timely nomination of subcontractor or supplier so as to avoid any delay to the works. The procedures for preparation of tender documents, invitation, receipt, evaluation and acceptance of tenders, subcontract documentation, payment, variation, delay and extension of time, non-completion, determination, completion, handing over and defects, and final accounts are similar to that for the main contract, and reference should be made to Chapters 6 to 19, inclusive. Changes in points of detail are set out in this chapter. Action By / Reference For information

Step 1&2

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Chapter 20 – PRIME COST & PROVISIONAL SUMS

Step 3

Procedures / Tasks Preparation of Tender Documents The procedures for the preparation of tender documents and tender table documents set out in Chapter 6 are generally applicable to the preparation of tender documents and tender table documents for a nominated sub-contract. The sub-contract tender document shall follow the main contract number, with the words ‘NSC’ and the sub-contract works package number in parentheses appended at the end, eg: JPS/IP/P/1/99(NSC 1). (a) Generally, the TENDER DOCUMENT FOR WORK comprises the documents in the following order:          Tender Notice Instructions to Tenderer Form of Tender (JKR 203N1) Conditions of Contract (JKR 203N, including amendments and Special Provisions) Relevant Particulars of the Main Contract Specification Summary of Tender and Schedule of Rates; or Bills of Quantities Schedule of Technical Information List of Drawings

Action By / Reference For information

Action by: PT/PO

The sample contents page for the tender document is set out in Volume 10A, Chapter 20.

20-4

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Chapter 20 – PRIME COST & PROVISIONAL SUMS

Step 3 (Cont’d)

Procedures / Tasks Preparation of Tender Documents (Cont’d) (b) Generally, the TENDER DOCUMENT FOR SUPPLY OF MATERIALS OR GOODS comprises the documents in the following order:         Tender Notice Instructions to Tenderer Form of Tender (JKR 203P 1) Conditions of Contract (JKR 203P, including amendments and Special Provisions) Relevant Particulars of the Main Contract Specification Schedule of Prices Schedule of Technical Information

Action By / Reference

Action by: PT/PO

The sample contents page for the tender document is set out in Volume 10A, Chapter 20. (c) Generally, the TENDER DOCUMENT FOR SUPPLY OF MATERIALS OR GOODS comprises the documents in the following order:         Tender Notice Instructions to Tenderer Form of Tender (JKR 203P 1) Conditions of Contract (JKR 203P, including amendments and Special Provisions) Relevant Particulars of the Main Contract Specification Schedule of Prices Schedule of Technical Information Action by: PT/PO

The sample contents page for the tender document is set out in Volume 10A, Chapter 20.

4

Invitation and Receipt of Tender The procedures for the invitation and receipt of tender set out in Chapter 7 are generally applicable to the invitation and receipt of tender for a nominated sub-contract. Invite the Main Contractor to tender for the sub-contract works if the Main Contractor is suitably qualified.

Action by: PT/PO

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Chapter 20 – PRIME COST & PROVISIONAL SUMS

Step 5

Procedures / Tasks Tender Evaluation and Nomination / Acceptance (a) Tender Evaluation The procedures for the tender evaluation and acceptance set out in Chapter 8 are generally applicable to the tender evaluation of a nominated sub-contract In the evaluation of tender, the following percentage preference are applied for specialist bumiputra contractors for supplies and services: Value of Work Exceeding RM100,000 – RM500,000 Exceed RM500,000 - 1.5 million Exceeding RM 1.5 million – RM 5 million Exceeding RM 5 million – RM 10 million Exceeding RM10 million – RM 15 million Exceeding RM15 million (b) Nomination & Acceptance Upon the approval of the Procurement Board,   the SO shall issue the Letter of Nomination the Contractor and instruct to accept the tender, or if the Contractor’s tender is accepted, the S.O. shall issue the Letter of Acceptance to the Contractor. Preference Weightage 10% 7% 5% 3% 2.5% No preference

Action By / Reference Action by: PT/PO

Refer: SPP 4/1995

Action by: SOR/SO

20-6

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Chapter 20 – PRIME COST & PROVISIONAL SUMS

Step 5 (Cont’d)

Procedures / Tasks Tender Evaluation and Nomination / Acceptance (Cont’d) (b) Nomination & Acceptance (Cont’d) Upon the approval of the Procurement Board,   the SO shall issue the Letter of Nomination the Contractor and instruct to accept the tender, or if the Contractor’s tender is accepted, the S.O. shall issue the Letter of Acceptance to the Contractor.

Action By / Reference

Action by: SOR/SO

(i) Letter of Nomination Use the current form for Letter of Nomination:   for nomination of sub-contractor: Form JKR 203N3 for nomination of supplier: Form 203P3

(ii) Letter of Acceptance  Use the current form for Letter of Acceptance of Main Contractor’s Tender for work or Supply of Materials or Goods Under Prime Cost Sum, where the Main Contractor shall carry out works allocated under Prime Cost or Provisional Sums.

Use the current and appropriate form for the nomination, notification and/or acceptance, as the case may be. 6 Sub-Contract Documentation The procedures for the preparation of contract document set out in Chapter 9 are generally applicable for the preparation of the sub-contract documents. The sample contents page for the contract document is set out in Volume 10A, Chapter 20. Action by: PT/CAO

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Chapter 20 – PRIME COST & PROVISIONAL SUMS

Step 7

Procedures / Tasks Sub-Contract Administration (a) Generally Generally, the Contractor is fully responsible for the acts of the Sub-Contractor/Supplier. With the exception of payment matters, the Contractor is also responsible for the day-to-day administration of the subcontract / supply contract, including matters (where applicable) relating to      Variations Delays and Extension of Time Non-Completion Loss and Expense Determination

Action By / Reference

For information

The written consent of the SO is required before the Contractor may agree to, or grant, and additional time to the subcontractor, or to determine the employment of the subcontractor / supplier, as the case may be. (b) Direct Payment Direct payment to nominated sub-contractors and suppliers are permitted under the terms of the contract and sub-contract, subject to the following procedures or conditions are fulfilled: (a) Direct progress payment up to the limit of 90% of Subcontract Sum (b) The remainder 10% of the Sub-contract Sum shall be paid to the Main Contractor after the issuance of the Certificate of Practical Completion. The PT shall ensure that the Main Contract releases the remainder sums to the SubContractor after the Defects Liability Period. (c) Ensure that the conditions for direct payment are included in the tender documents and the sub-contract. (d) The sub-contractor is registered as bumiputra contractor under the relevant class, and is a local contractor operating at the area where the project is to be carried out. Action by: PT/ CAO/ Finance Division

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Chapter 20 – PRIME COST & PROVISIONAL SUMS

Step 7 (Cont’d)

Procedures / Tasks Sub-Contract Administration (Cont’d) (b) Direct Payment (Cont’d) (e) Ensure that the conditions for direct payment are stated in the Letter of Acceptance (LoA) to the Main Contractor, and that the Main Contractor submits the a complete list of sub-contractors he intents to employ. (f) Ensure that there is no assignment of payments to others, other than the sub-contractors listed by the Main Contractor. (g) The Main Contractor is not permitted to amend the list of sub-contractors without written permission of the Government/DID. (h) The main contract includes an indemnity clause to safeguard the rights of the Government / DID. (c) Written Consent of the S.O. The written consent of the SO is required before the Contractor may carry out any of the following under the terms of the subcontract:  Permit sub-contractor’s to employ workmen not in accordance with Government’s prescribed ratio (clause 12(b))  Permit Sub-letting (clause 19)  Grant extension of time (clause 26(b))  determine the employment of the sub-contractor (clauses 28(a) and (b)).  employ others or himself undertake the sub-contract work following the determination of the nominated subcontractor (clause 28(c)(ii)).

Action By / Reference

Action by: PT/ CAO/ Finance Division

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Chapter 20 – PRIME COST & PROVISIONAL SUMS

Step 7 (Cont’d)

Procedures / Tasks Sub-Contract Administration (Cont’d) (c) Written Consent of the S.O. (Cont’d) In addition to the above, the S.O.’s certificate is required for the following:  a certificate, stating the nominated sub-contractor’s default, be issued by the S.O. prior to calling of performance bond by the Main Contractor (clause 24(b))  a certificate, stating that the nominated sub-contractor is in delay, prior to deduction for loss or damages by the Main Contractor (clause 27). (d) Default on the Part of the Sub-Contractor / Supplier Where the Nominated Sub-contractor or Supplier in the execution of the work or the supply of the materials or goods under the sub-contractor, the Main Contractor shall be responsible to have the works executed or the materials or goods supplied by whatsoever means necessary. The Government/DID is not required to re-nominate. The contractor is only entitled to be paid the same sum as if the Nominated Sub-contractor or Supply had not defaulted, and the contractor is not entitled to extension of time by reasons of such default.

Action By / Reference

Action by: PT /SO

For information

7&8

Commencement and Completion of Sub-Contract Works The Main Contractor shall issue an Official Order to Commence, using form JKR 203N5, and the Nominated Sub-Contractor is required to complete the works within the time for completion stated in its Form of Tender. Nominated Supplier The Main Contractor shall issue an Order For Supply and Delivery of Articles, using form JKR 203P5, and the Nominated Supplier is required to complete the supplies within the time for completion stated in its Form of Tender. Defects Liability Refer to the Main Contract for defects liability obligations and rights.

For information

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20.2.2 Step A

Administration of Provisional Sum Procedures / Tasks Provisional Sums Please refer to Flowchart 20.2 – Administration of Provisional Sums. The Project Team must give due consideration to the overall works programme, and ensure the timely appointment of subcontractor or supplier so as to avoid any delay to the works. Action By / Reference

1

Preparation of Cost Estimates Prepare cost estimates for the works to be carried out under each Provisional Sum. At this stage, the scope of works shall have been sufficiently clearly identified or defined to enable the works to be priced. The cost estimate for the works shall be prepared by an officer who has the relevant experience or expertise.

Action by: CAO

2

Approval Before Proceeding with Procurement Approval of the Authorised Person is required if the estimated cost of works for each Provisional Sum exceeds that Provisional Sum by more than 30%. Use the current ‘Borang E’ – Permohonan Permohonan Untuk Melaksanakan Item Di Bawah Wang Peruntukan Sementara Yang Dijangka Melebihi *30%/50% Dari Peruntukan Asal..

Action by: CAO JPS SP Bil 1/2007

3, 4 & 5

Authorised Person  If the estimated cost of works exceeds the Provisional Sum by more than 30% up to the limit of 50%, the Authorised Person shall be the Division Director.  If the estimated cost of works exceeds the Provisional Sum by more than 50%, the Authorised Person shall be the Director General or Deputy Director General.

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Step 6&7

Procedures / Tasks Procurement of Works Not Requiring Involvement of the Main Contractor If the works do not require the involvement of the Contractor (eg aerial photography or works carried out off-site), then proceed to invite tender/quotation directly from qualified subcontractors or suppliers. Comply with the DID guidelines on calling of tender/quotation. Direct payment may be to such sub-contractor or supplier may be effected through Indent or Local Purchase Order (Inden / Pesanan Tempatan).

Action By / Reference Action by: SOR/CAO

For information.

8&9

Works To Be Carried Out By Specialists – Calling of Tender/Quotation By Contractor For specialist works exceeding RM200,000, open/selective tender shall be called by the Contractor. For works value not exceeding RM200,000, work may be procured by the Contractor through quotation exercise. The Contractor may tender/quote for the specialist works, if has the necessary qualifications. In such cases, the Contractor shall not be entitled to profit and attendance on his tender/quotation. Contractor shall prepare and call tender/quotation  The SOR/PT shall prepare specifications, Needs Statement, or design (‘design documents’), and provide the same to the Contractor.  Design and Build. For DB contracts, the Contractor shall prepare the specifications, Needs Statement or design (‘design documents’) for the tender/quotation documents.

For information

Action by: SOR/PT

 The Contractor shall prepare the tender/quotation document based on the design documents, and provide the list of suitably qualified sub-contractors or suppliers (‘tenderers’) for the SOR’s approval.  The SOR/PT must check the tender/quotation documents are in order and free from errors. The SOR shall provide a list of suitably qualified tenderers.  To total number of tenders shall not be less than 5, selected from both the lists provided by Contractor and the SOR.

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Step 8&9 (Cont’d)

Procedures / Tasks Works To Be Carried Out By Specialists – Calling of Tender/Quotation By Contractor (Cont’d) Contractor shall prepare and call tender/quotation (Cont’d)  The Contractor shall prepare sufficient number of tender documents.  For quotations, the tenderers must submit 2 set of documents. Closing of Tender/Quotation  The SOR shall prepare and issue the invitation for tenders/quotations.  The tenders/quotations shall be closed on the fixed date and time.  The quotations/tenders shall be opened in the presence of a committee, comprising representatives of the SOR and Contractor. Evaluation of Tender/Quotation  For tenders, the evaluation shall be carried out by the SOR, and the SOR shall recommend the lowest and technically complying tender.  Design and Build. For DB contracts, the evaluation shall be carried out by the Contractor, and the Contractor shall recommend the lowest and technically complying quotation.  For quotations, the evaluation shall be carried out by the Contractor, and the Contractor shall recommend the lowest and technically complying quotation. (a) The SOR shall verify the recommendation, and may further negotiate for a fair sub-contract sum or contract rates. (b) The sub-contract sum or contract rates shall be inclusive of the Contractor’s Profit and Attendance.

Action By / Reference Action by: SOR/PT

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Step 8&9 (Cont’d)

Procedures / Tasks Works To Be Carried Out By Specialists – Calling of Tender/Quotation By Contractor (Cont’d) Profit and Attendance (P&A) The Profit and Attendance (P&A) shall be inclusive of Contractor’s management costs, profit and attendance.  For Quotation, the Contractor’s P&A shall be as stated in the Contract or, if not stated then, it shall not exceed 7.5%. For Tender, the Contractor’s P&A shall be as stated in the Contract or, if not stated then, it shall not exceed the following rates: Value of Works RM500,000 or less > RM500,000 – RM 1 million > RM 1 million - RM 5 million > RM 5 million – RM 10 million > RM 10 million Maximum Rate for P&A 7.5% 5% 4% 3% <3%

Action By / Reference

 If the Contractor’s tender/quotation is accepted, the Contractor shall not be entitled to profit and attendance on his tender/quotation. 10 Works To Be Carried Out By Main Contractor For normal category of works (‘kategori biasa’), or works which the Contractor possesses the necessary skills, the SO may issue the necessary SO Instruction for the Contractor to carry out the works. The valuation of works shall be in accordance with the valuation rules of the Contract, i.e. based on contract rates or, in the absence of contract rates, based on fair valuation. Action by: SOR / SO

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Step 11

Procedures / Tasks Approval of Value of Works The tender/quotation evaluation and recommended subcontract / supply contract value shall be approved by a Variation Order Committee (‘Authorised Person’). The sub-contract / supply contract value shall be inclusive of the Contractor’s Profit and Attendance. Submit the application for the approval of sub-contract value / supply contract value to the Authorised Person for approval. Use the current ‘Borang F’ – Permohonan Untuk Kelulusan Harga Bagi Item Wang Peruntukan Sementara. See Chapter 5 – Authority for Authorised Person, and limit of authority

Action By / Reference Action by: SOR

12

Appointment of Sub-Contractor or Supplier SO’s Instruction Issue the necessary instruction to the Contractor to effect the appointment of the sub-contractor or supplier, as approved by the VO Committee. Direct Payment and Deed of Assignment The DID may make direct payment to such sub-contractor or supplier through the execution by the Contractor of the ‘Deed of Assignment’ (Surat Ikatan Penyerahan Hak Faedah), in favour of the appointed sub-contractor or supplier. For avoidance of disputes, a copy of the Deed of Assignment shall be appended to the SO’s Instruction for the appointment of sub-contractor or supplier. The Deed of Assignment may be used if there is no overlapping of sums which is assigned under the main contract. Form JKR 203N For works let under Form JKR 203N, direct payment to the sub-contractor shall be effected through the procedures for Nominated Sub-Contractor or Nominated Supplier (see Section 20.3.2, above).

Action by: SOR/SO

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20.3 20.3.1

GUIDANCE NOTES Definitions

"Nominated Sub-contractor" means any contractor, specialist or other person nominated by the S.O. in accordance with the Contract to be employed by the Contractor for the execution of work or supply of goods materials or services for which a Prime Cost Sum (or P.C. Sum) has been inserted in the Contract or ordered by the S.O. to be employed by the Contractor to execute work or supply goods materials or services under a Provisional Sum. “Prime Cost Sum” or “P.C. Sum” is an amount included in a bill of quantities to cover a particular bit of work or supply of materials to be carried out by a nominated sub-contractor or a supplier.
Generally, P.C. Sums are included in the Contract for works to be carried out by specialist contractors or suppliers.

"Provisional Sum" means a sum included and so designated in the Contract as a specific allocation for the execution of work or the supply of goods materials or services which may be used in whole or in part or not at all at the direction and discretion of the S.O..
Generally, Provisional Sum are allocated for the execution of works or for supply of goods or services for which   an exact price cannot be obtained/ascertained or are not clearly identified or defined

at the time of tender. 20.3.2 Nomination of Sub-Contractors and Suppliers under P.C. Sum

The contract may permit the Government / DID to nominate a sub-contractor to carry out work or a supplier to provide goods which is included under any Prime Cost or Provisional Sum. The Forms JKR203 and 203A includes such right of nomination, whereas Form JKR DB/T does not. Under the JKR Forms 203/203A, any work or supply of goods or materials covered by Provisional Sums may be treated as P.C. Sum items if the S.O. so decides. 20.3.3 Appointment of Sub-Contractors and Suppliers under Provisional Sums

The sub-contractor or supplier may be appointed by the Contractor pursuant to the S.O.’s Instruction on the expenditure of Provisional Sums. The sub-contractor or supplier is not a nominated subcontractor or nominated supplier pursuant to the terms of the Contract. The DID may make direct payment to such sub-contractor or supplier through the execution by the Contractor of the ‘Deed of Assignment’ (Surat Ikatan Penyerahan Hak Faedah), in favour of the appointed sub-contractor or supplier.

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20.3.4

Expending the P.C. Sums

The tender evaluation report (kertas taklimat tender) for the sub-contract must be submitted to the Tender Board for approval. Please also refer to Chapter 5 – Authority, and Chapter 8 – Tender Evaluation and Acceptance. 20.3.5 Expending the Provisional Sums

If the estimated cost of works is expected to exceed the Provisional Sum by 30% or more, then the Project Team must seek prior approval from the Authorised Person prior to the expenditure of the Provisional Sum. The valuation or prices for the sub-contract or suppler must be submitted to the Authorised Person for approval prior to the appointment of the sub-contractor or supplier. If the estimated cost of works does not exceed the Provisional Sum, or exceeds the Provisional Sum by less than 30%, the Project Team may proceed with the procurement and seek approval of the Authorised Person prior to the appointment of the sub-contractor or supplier. 20.3.6 Procurement under P.C. Sum and Provisional Sum

The PT/PO shall carry out the   tender exercise, or quotation exercise (as the case may be),

for the sub-contract works, where such Prime Cost Sums or Provisional Sums are included in the Contract. 20.4 REFERENCE DOCUMENTS

Please refer to Volume 10A for the standard reference or sample documents for the procedures or processes outlined in this Chapter. Nominated Sub-Contractor  JKR 203N/83 (including addendum) : Form of Contract To Be Used For Nominated SubContractors Where the Main Contractor is Based Upon Form JKR 203 Or 203A  JKR 203N1/83 (including addendum) : Form of Tender For Use by Nominated Sub-Contractor  JKR 203N2/88 : Conditions of Tendering and General Information For Use By Nominated SubContractor  JKR 203N3/93 : Letter of Nomination  JKR 203N4/83 : Letter of Acceptance of Tender By Main Contractor To Nominated Sub-Contractor  JKR 203N5/83 : Official Order to Commence Work By Main Contractor To Nominated SubContractor  JKR 203N6/88 : Letter of Nomination of Sub-Contractor  JKR 203N7/88 : Letter of Indemnity From Nominated Sub-Contractor to the Government

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Nominated Supplier  JKR 203P/83 (including addendum) : Form to be used for Nominated Suppliers Where The Main Contractor is based upon Form JKR 203 or 203A  JKR 203P1/83 : Form of Tender For Use By Nominated Suppliers  JKR 203P2/83 : Suppliers Conditions of Tendering And General Information For Use by Nominated

 JKR 203P3/83 : Letter of Nomination  JKR 203P4/83 : Letter of Acceptance of Tender by Main Contractor To Nominated Supplier  JKR 203P5/83 : Order For Supply and Delivery of Articles – to be issued by Main Contractor to the Nominated Supplier  JKR 203P5A/83 : Schedule of Articles Ordered To Be Supplied and Deliverd  JKR 203P6/88 : Letter of Notification of Nomination of Supplier  JKR 203P7/88 : Letter of Indemnity From Nominated Supplier to the Government Generally  Bank Guarantee Form for Performance Bond (Nominated Sub-Contract Works)  Deed Of Assignment (Security For Direct Payments To A Third Party) (Surat Ikatan Serah Hak)  The Consent Of The Government Of Malaysia To The Deed Of Assignment For Direct Payment To A Third Party Expending Provisional Sum  ‘Borang E’ – Permohonan Permohonan Untuk Melaksanakan Item Di Bawah Wang Peruntukan Sementara Yang Dijangka Melebihi *30%/50% Dari Peruntukan Asal. ‘Borang F’ – Permohonan Untuk Kelulusan Harga Bagi Item Wang Peruntukan Sementara.

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20.5

REFERENCES

Please refer to the latest Treasury Circulars and DID Circulars for sub-contract tender procedures and sub-contract administration. Treasury Circular (Surat Pekeliling Perbendaharaan) [1] [2] [3] Bil 4 Tahun 1995: Dasar dan Keutamaan Kepada Syarikat Bumiputra Dalam Perolehan Kerajaan Bil 4 Tahun 2003: Bayaran Terus Kepada Sub Kontraktor Bil 5 Tahun 2007: Tatacara Pengurusan Perolehan Kerajaan Secara Tender

DID Circulars (Surat Pekeliling / Edaran JPS) [1] [2] SP JPS Bil 4/2003: Bayaran Terus Kepada Sub Kontraktor SP JPS Bil /2007: Garis Panduan Pengurusan Wang Peruntukan Sementara (WPS)

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Chapter 21 – DISPUTE MANAGEMENT AND RESOLUTION

Table of Contents

Table of Contents .....................................................................................................................21-i List of Flowcharts .................................................................................................................... 21-ii 21.1 21.2 21.3 INTRODUCTION.........................................................................................................21-2 PROCEDURES ............................................................................................................21-2 REFERENCES .............................................................................................................21-6

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List of Flowcharts

Flowchart Flowchart 21.1

Description Dispute Management and Resolution

Page 21-1

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Chapter 21 – DISPUTE MANAGEMENT AND RESOLUTION

Flowchart

Description

Action By

Reference

1

1. Disagreement or difference of opinion or conflict or dispute?

-

2

No

Yes
3

2. Determine if there is a ‘dispute’.

PT

3. To use best endeavour to resolve the ‘issue’ amicably

PT

No Yes
5

4

4. Issue(s) are settled?

-

5. Refer the dispute to the Authorised Party for decision

PT / CQS

6

6. Parties to give effect to Authorised Party’s decision.

PT

Yes
7 7. Is there new information or substantiation from the Contractor? -

No No

8

Yes

8. Contractor gives notice to refer dispute to arbitration?

-

9 End

9. Refer the dispute to Legal Adviser at Ministry / A.G.’s Chamber for advice and action.

Director of Contracts & QS Division

Flowchart 21.1 – Dispute Management and Resolution

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21 DISPUTE MANAGEMENT AND RESOLUTION
21.1 INTRODUCTION

This chapter provides:  An overview of the dispute management and resolution procedures for works contracts.  Brief outline of alternative dispute resolution (‘ADR’). 21.2 PROCEDURES

Please refer to Flowchart 21.1 – Dispute Management and Resolution. Step 1 Procedures / Tasks Generally Disagreement or difference of opinion or conflict or dispute often occurs in projects. The best form of dispute avoidance is the ensure that the appropriate procurement method and form of contract is used, and that the scope of works is clearly and accurately set out in the tender and contract documents. If practicable, all disagreements or differences of opinion or conflicts should be resolved as soon as possible to avoid any escalation of the issues into a ‘dispute’. In dispute management, contemporaneous and complete records are of utmost importance. Therefore, the PT must ensure that records are properly kept and updated, and available when required. (See Volume 11). For the purpose of this Manual, a ‘dispute’ is deemed to have occurred when the disagreement or difference of opinion etc has been formally referred by the Contractor to the Authorised Party under the terms of the contract. All other issues (i.e. disagreements or differences of opinion or conflicts) should be resolved by way of negotiation or amicable settlement as soon as practicable. 2 Ascertainment of ‘Dispute’ Ascertain if there is in actuality a “dispute”, whereby the parties must comply with the contractual procedures and arbitration clause. Action by: SOR / PT Action By / Reference For information

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Step 3&4

Procedures / Tasks Amicable Settlement Unless the ‘dispute’ is formally referred for a decision in accordance with the contract, the PM/PT should use its best endeavour to resolve the matter by way of negotiation or amicable settlement. Upon settlement, record the agreement reached by the parties. This avoids future disagreement on the same issue. Follow up with the relevant adjustment (if any) to the contract by way of extension of time, Variation or adjustment to the Contract Sum, etc, as the case may be. If parties are not able to make an amicable settlement, then any party may refer the matter to the Authorised Party under the Contractor for a decision.

Action By / Reference Action by: SOR/PT

5

Referral of Dispute for Decision If either party has submitted a formally referred the ‘dispute’ to be decided by the Authorised Party: (a) Upon receipt of the Contractor’s formal request to refer the dispute to the Authorised Party, the PM/PT must notify the Contracts and Quantity Surveying Division immediately. Upon receipt of the Contractor’s formal request to refer the dispute to the Authorised Party, the PM/PT must notify the Contracts and Quantity Surveying Division immediate. The PT shall prepare the documents setting out the background of the dispute, with sufficient details for the Authorised Party to make a decision. The Contracts and Quantity Surveying Division shall refer the dispute to the officer authorized under the contract (Authorised Party) to make a decision. Contracts and Quantity Surveying Division, where appropriate to do so, shall advise and assist the Authorised Party in the dispute resolution process. Action by: SOR/PT

(b)

Action by: SOR/PT

(d)

Action by: SOR/PT

(c)

Action by: BUBK

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Step

Procedures / Tasks (e) (f) The Authorised Party is required to make a decision within the time frame stipulated in the contract. The Authorised Party may refer the dispute to the Claim Committee for a decision. For ex-gratia payments, the Claim Committee will refer the matter to Treasury for decision and/or approval. JKR Forms of Contract For the contracts based on the JKR forms, the time frame for the S.O. to give a decision is 45 days after the Contractor’s request for such decision. Other Forms of Contract If the contract is not based on JKR forms of contract, please refer to the appropriate provision in the contract for the dispute reference procedures.

Action By / Reference

Action by: AtP/ Claims Committee Refer: Treasury Instruction 202 (AP202) For information

For information

6

Compliance with Decision Comply with the decision of the Authorised Party. (If the Contractor is dissatisfied with the Authorised Party’s decision, he must nevertheless comply with the decision but may refer the dispute for arbitration.) Follow up with the relevant adjustment (if any) to the contract by way of extension of time, Variation or adjustment to the Contract Sum, etc, as the case may be.

Action by: SOR/PT

7

Authorised Party May review its own Decision If  the Contractor is dissatisfied with the decision of the Authorised Party, and  new information or substantiation has come into the attention of the Authorised Party, then the Authorised Party may review its earlier decision, or refer such review (of earlier decision) to the Claim Committee for confirmation. Action by: AtP

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Step 8

Procedures / Tasks Notice of Arbitration The Contractor may refer the dispute for arbitration if  The Authorised Party fails to give a decision within 45 days after being requested to do so; or  The Contractor is dissatisfied with the decision of the Authorised Party. Such requirement to refer the dispute to arbitration must be made within the period stipulated in the contract. Generally, the arbitration shall not commence until after the completion or alleged of the completion Works, or determination or alleged determination of the employment of the Contractor, except for the followings:  Where there is written consent of the Government/DID and the Contractor; or  For such dispute following the effect of war or earthquake. Other Forms of Contract The above procedure is made in reference to the JKR forms. If the contract is not based on JKR forms of contract, please refer to the appropriate provision in the contract for the procedures on reference to arbitration.

Action By / Reference For information

9

Reference to Legal Adviser at Ministry / A.G.’s Chamber Upon receipt of the Contractor’s notice to refer a dispute for arbitration (whether or not prior reference was made to the Authorised for a decision), the PM/PT must notify the Contracts and Quantity Surveying Division immediately. The Contracts and Quantity Surveying Division shall refer the matters to the Legal Adviser at the Ministry for further advice and action. The matter may then be referred to the Attorney General’s Chamber by the Legal Adviser. The PT shall compile the records and supporting documents relevant to the dispute and as may be required for the arbitral proceedings.

Action by: SOR/PT/BUBK

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21.3

REFERENCES

Treasury Instruction (Arahan Perbendaharaan) [1] AP 202: Arahan Perubahan Kerja

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