What Is Determination?: Pam Contract With Quantities

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PAM CONTRACT WITH QUANTITIES

DETERMINATION : CLAUSE 25 - 26
Clause 25 : Determination of contractor’s employment
by employer
Clause 26 : Determination of own employment
by contractor
WHAT IS DETERMINATION?
Determination has many different meanings in different situations.
1. strong intention or a fixed intention to achieve a specific purpose. -
2. to have strong will power in order to achieve a task in life.
3. a strong sense of self-devotion and self-commitment in order to achieve or

perform a given task.
4. calculating, ascertaining or even realizing a specific amount, limit, character, etc.

It also refers to a certain result of such ascertaining or even defining a certain
concept.
5. to reach at a particular decision and firmly achieve its purpose.
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WHAT IS THE DEFINITION OF

DETERMINATION IN PAM 2006?
Determination in construction contract means:
1. Employer allowed for to determine the contractors employment
2. Contractor allowed for to determine own employment
3. under the condition of contract

by employer
by contractor
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25. 0 Determination Of Contractors Employment by Employer
25.1 Defaults by Contractor
25.2 Procedure for determination
25.3 Contractor's insolvency
25.4 Rigbts and duties of Employer and

Contractor
25.5 Records of Works
25.6 Final Account upon determination
25.7 Remedy limited to damages only
25.8 Employer's rights and remedies not

prejudiced
The Employer may determine the employment of the

Contractor if the Contractor defaults in any of the
following:
25.3 Contractor's insolvency 25.1(a) if without reasonable cause, he fails to

commence the Works in accordance with the Contract;
Contractor 25.1(b) if without reasonable cause, he wholly or
substantially suspends the carrying out of the Works
25.5 Records of Works before completion;
25.1(c) if he fails to proceed regularly and/or diligently

with the Works;
25.1 (d) if he persistently refuses or neglects to comply

with an AI;
25.1(e) if he fails to comply with the provision in clause 17
prejudiced 25.1(f) if he has abandoned the Works
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Explanation to determination defaults

PAM 2006 Explanation
25.1 The Employer may determine the employment of the Determine the employment means, contractor
Contractor if the Contractor defaults in any of the employment is terminated however contract is still alive
following:
25.1(a) if without reasonable cause, he fails to Contractor don’t start work for a significant amount of
commence the Works in accordance with the Contract; time after award without any reasons
25.1(b) if without reasonable cause, he wholly or Clear cut suspension of wholly / substantially without
substantially suspends the carrying out of the Works reason causing delay to the project.
before completion;
25.1(c) if he fails to proceed regularly and/or diligently Very hard to proof as it is very subjective. Documentation
with the Works; that lead to the determination of this clause must be solid
evidence documenting default, time and effect to contract
25.1 (d) if he persistently refuses or neglects to comply Neglect a series of Architect Instruction, notices or
with an AI; direction in accordance to contract. Do not make rash
decision vexatiously
25.1(e) if he fails to comply with the provision in clause Assign contract without consent of the employer
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25.1(f) if he has abandoned the Works Abandoning the work is very difficult to proof unless
clear cut abandon.
Consultant have to prove that the contractor has abandon
the works.
Upon the occurrence of any default under Clause 25.1, and if

the Employer decides to determine the Contractor's
employment, the Employer or Architect on his behalf shall give
25.2 Procedure for determination to the Contractor a written notice delivered by hand or by
registered post specifying the default.
If the Contractor shall continue with such default for fourteen
(14) Days from the receipt of such written notice, then the
25.4 Rigbts and duties of Employer and Employer may, within ten (10) Days from the expiry of the said
Contractor fourteen (14) Days, by a further written notice delivered by hand
or by registered post, forthwith determine the employment of
25.5 Records of Works the Contractor under the Contract.
Provided always that such notice shall not be given
25.6 Final Account upon determination unreasonably or vexatiously
Short notes
•Refer diagram

prejudiced
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Procedure for determination

Default identified
accordance to clause 25.1
Series of Warning letter
Contractor don’t comply

Other alternative
3rd Party contractor
Notice of default via hand and Assignment of contract to 3rd
registered post party
Contractor satisfy and don’t Contractor continue default after

commit any more default 14 days
Within 10 days after 14 days, Arch recommend to

Status quo client for determination of contractors employment
or if Arch given authority by client, determine on
behalf of client
Notice of determination must be issued

within 10 days
In the event of the Contractor becoming insolvent or making a

25.1 Defaults by Contractor composition or arrangement with his creditors, or have a
winding up order made, or (except for purposes of
25.2 Procedure for determination reconstruction or amalgamation) a resolution for voluntary
winding up, or having a liquidator or receiver or manager of his
25.3 Contractor's insolvency business or undertaking duly appointed, or having possession
taken by or on behalf of the holders of any debentures secured
25.4 Rights and duties of Employer and by a floating charge, or of any property comprised in or subject
Contractor to the floating charge, the employment of the Contractor shall
be forthwith automatically determined

Short notes
•Contractor insolvent or making composition or arrangement

with creditors or winding up order made, resolution of
25.7 Remedy limited to damages only voluntary winding up and etc– contractor employment
automatically determined
prejudiced •Insolvent is the inability to pay debt. Insolvent individual may
be declare bankrupt under bankrupt act 1967.
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Upon termination under clause 25.1 and 25.3

25.4 (a)The Contractor shall vacate the Site and return
25.2 Procedure for determination possession of the Site to the Employer who may employ and
pay other Person to carry out and complete the Works . Such
Person may enter upon the Works and use all temporary
buildings,
25.4 Rights and duties of Employer and …… and may purchase all materials and goods necessary for
Contractor the carrying out and the completion of the Works.
The Contractor if so required by the Employer or by the
Architect on behalf of the Employer shall within twenty one (21)
25.5 Records of Works Days of the dale of determination, assign to the Employer the
benefit of any agreement for the continuation of the hire of
25.6 Final Account upon determination construction plant and equipment already on the Site
25.4 (b) the Contractor if so required by the Employer or

Architect, shall within twenty one (21) Days of the date of
determination, assign to the Employer without payment the
25.7 Remedy limited to damages only benefit of any agreement for the supply of materials, goods
and/or for the execution of any work for the purposes of the
Contract to the extent that the same is assignable
prejudiced 25.4 (c ) the Contractor when instructed in writing by the
Architect shall remove from the Works any temporary buildings,
construction plant, tools. equipment, materials and goods
belonging to or hired by him.
Upon termination under

clause 25.1 and 25.3,
employers right
25.4 (a)The 25.4 (a) within 21 25.4 (b) within 21 25.4 (c ) when
Contractor shall days assign to the days assign to the instructed in writing
vacate the Site and Employer the benefit Employer without by the Architect shall
return possession of of any agreement for payment the benefit remove from the
the Site to the the continuation of of any agreement for Works any temporary
Employer who may the hire of the supply of buildings,
employ and pay construction plant materials, goods construction plant,
other Person to carry and equipment and/or for the tools. equipment,
out and complete the already on the Site execution of any materials and goods
Works . work for the belonging to or hired
purposes of the by him.
Contract
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25.4 (d) the Contractor shall allow or pay to the Employer all
cost incurred to complete the Works including all loss and/or
expense suffered by the Employer.
Until after the completion of the Works under Clause 25.4(a), the
Employer shall not be bound by any provision in the Contract to
25.3 Contractor's insolvency make any further payment to the Contractor, including
payments which have been certified but not yet paid when the
25.4 Rights and duties of Employer and employment of the Contractor was determined.
Contractor
Upon completion of the Works, an account taking into
consideration the value of works carried out by the Contractor
and all cost incurred by the Employer to complete the Works
including loss and/or expense suffered by the Employer shall
25.6 Final Account upon determination be incorporated in a final account prepared in accordance with
Clause 25.6..

prejudiced
25.4 Rights and duties of

Employer and Contractor
Contractor shall allow or pay to Employer shall not be bound by Upon completion of the Works, an
the Employer all cost incurred to any provision in the Contract to account taking into consideration
complete the Works including all make any further payment to the the value of works carried out by
loss and/or expense suffered by Contractor, including payments the Contractor and all cost incurred
the Employer. which have been certified but by the Employer to complete the
not yet paid when the Works including loss and/or
employment of the Contractor expense suffered by the Employer
was determined. shall be incorporated in a final
account
Interpretation : Interpretation : Interpretation :

This means contractor will have This means after determination, After completion of the works
to pay amount to complete the employer need not pay the and final value ascertain,
project thus their final account contractor. amount shall be included in
can only be finalize after the determine contractor final
project is completed account.
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Contractor The Architect or Quantity Surveyor shall within twenty eight (28)
Days of the determination of the Contractor's employment, give
a written notice to the Contractor of the date of inspection on
25.5 Records of Works Site to jointly record the extent of the Works executed and the
materials and goods delivered to the Site – findings sent copy
25.6 Final Account upon determination to contractor.

prejudiced
Post determination
Notice of determination by client or on behalf by Arch
14 Within 14 days : Contractor yield possession of the site
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Within 21 days : assign to employer Benefit of any agreement for the continuation
•of hire for construction plant and equipment already on site
•Supply of material , goods or execution of work for the purpose of the contract
•To remove
28 Within 28 days: Architect give written notice to contractor of the date for joint inspection on site
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25.1 Defaults by Contractor Architect Within 6 months on completion of the work

submit to the Employer and Contractor for their agreement, a
25.2 Procedure for determination final account for all cost incurred to complete the Works
including the sums previously certified to the Contractor before
25.3 Contractor's insolvency the date of determination, Liquidated Damages, set-off and all
other loss and/or expense suffered.
Contractor
25.6 (a) If nothing in the said final account is disputed by the
Employer or Contractor within three (3) Months from the date of
receipt of the final account from the Architect or Quantity
Surveyor, the final account shall be conclusive and deemed
25.6 Final Account upon determination agreed by the parties.
If the amount in the final account exceeds the total amount

which would have been payable on completion in accordance
with the Contract, the difference shall be a debt payable to the
25.7 Remedy limited to damages only Employer by the Contractor or where applicable, the Employer
may recover such sum from the Performance Bond.
prejudiced If the said amount is less than the said total amount, the
difference shall be a debt payable to the Contractor by the
Employer.
SUMMARY CLAUSE 25.6 (a)
25.6 Architect Within 6 months on completion of the work

submit to the Employer and Contractor for their
agreement, a final account
25.6 If no dispute after 3 month date of receipt of the final
(a) account, Final account is conclusive
If final amount to complete work is more than old
contractor final account – difference shall be paid by old
contractor through debt payable to the employer
If payment to date for old contractor + rescue contractor
value less than Final account – difference shall be paid
by employer
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26.6 (b) If either party has any dispute on the final account,
the party disputing the final account shall by written notice to
the other party (with copies to the Architect and Quantity
Surveyor) set out any disagreement complete with particulars
within 3 Months of the date of receipt of the final account from
25.3 Contractor's insolvency the Architect or Quantity Surveyor.
25.4 Rigbts and duties of Employer and The Architect or Quantity Surveyor within 3 Months from the
Contractor date of receipt of the grounds of dispute shall either amend or
not amend the final account.
Any party disagreeing with the amended final account or
decision not to amend the final account shall refer the dispute
25.6 Final Account upon determination to arbitration under Clause 34.0 within 3 Months from the date
of receipt of the amended final account or decision not to
amend the final account.
Failure to refer the dispute to arbitration within the stipulated

25.7 Remedy limited to damages only time, the final account or amended final account shall deem to
be conclusive and agreed by the parties
prejudiced
26.6 (c )Any dispute on Liquidated Damages, set-off and
interest which the Employer is entitled to make under the
Contract shall be referred to arbitration
BREACHED
SUMMARY PROCESS MAPPING
CLAUSE 25 NOTICE
REPEAT/CONTINUE BREACH
within after 10 dys 14 Dys
NOTICE to DETERMINE
No Instruction from Arch Instruction from Arch

28 Dys
14 Dys
Appoint another party to Leave the site except remove temp bldg,
Arch/QS Notice to
complete the works temporary bldgs plant, plants, tools
tools contractor for final
After CPC & final acc evaluation
21 Dys Employer will sell off
rescue contractor
Surrender assignment
6 months contract of Bldg Materials - Less owe to Employer,
If requested Balance return to contractor
Arch to submit Final Account
to Employer & old Contractor
3 months
3 months 3 months Refer
If there is dispute If there is dispute ARBITRATION
FINALISED Notice to the Arch to issue

other party. Cc amended FA
to architect
3 months
FINALISED
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Contractor

Upon receipt of a written notice by the Contractor from the
Employer to determine the employment of me Contractor, the
Contractor shall yield possession of the Site within fourteen
(14) Days from the receipt of the said written notice and shall
remove his personnel and lahour force (but not construction
plant, tools and equipment unless so instructed by the
Architect) from the Site. Irrespective of the validity of the said
25.7 Remedy limited to damages only written notice the Contractor's remedy shall be limited to
compensation for damages only.
prejudiced The provisions of Clause 25.0 are without prejudice to any other
rights and/or remedies which the Employer may possess.

by employer
by contractor
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26. 0 Determination Of Own Employment By Contractor
The Contractor may determine his own employment if

26.1 Defaults by Employer
26.1 (a) if the Employer fails or neglects to pay the Contractor
26.2 Procedure for determination 26.1 (b)if the Employer interferes with or obstructs the issue of
any certificate by the Architect
26.3 Employer's insolvency
26.1(c )if the Employer fails to nominate a succeeding Architect
or Consultant in accordance with Articles 3, 4, 5 and 6
Contractor
26.1 (d) if before the date of Practical Completion, the
carrying out of the whole or substantially the whole of the
uncompleted Works is suspended for a continuous period
of time exceeding that stated in the Period of Delay stated
in the Appendix by reason of
26.6 Settlement of Accounts i. AI issued by the Architect under Clause 1.4,21.1 or 21.4
unless the instruction is issued to rectify any negligence
26.7 Contractor’s Roghts & Remedies ii. the Contractor not having received in due time the
notPrejudice necessary AI
iii. delay on the part of craftsmen, tradesmen or other
contractors employed or engaged by the Employer
iv. the opening up for inspection of any work covered up or
to arrange for or carry out any testing of any work,
materials and goods
Default by Employer
26.1 (a) Non 26.1 (b) 26.1 (c ) When 26.1 (d)

payment by the Employer employer Suspension of
employer interferes with cannot find a work more than
any certificates replacement for period of delay
such as EOT, consultants. stated in
CPC, INTERIM appendix- if non
stated 3 month
for condition
under 26.1(d) i-
iv
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Upon the occurrence of any default under Clause 26.1, and if the
26.1 Defaults by Employer Contractor decides to determine his own employment then,
the Contractor shall give to the Employer a written notice delivered

26.2 Procedure for determination by hand or by registered post specifying the default. If the Employer
shall continue with such default for fourteen (14) Days from the
receipt of such written notice then,
the Contractor may within ten (10) Days from the expiry of the said
fourteen (14) Days, by a further written notice delivered by hand or
by registered post forthwith determine his own employment WIder
the Contract.
Provided always that such notice shall not be given unreasonably or

vexatiously
Procedure for determination

Default identified accordance to
clause 26.1 a-d
Series of notices from

contractor to remind Arch /
Employer
Employer/ Arch don’t comply
Notice of default via hand and

registered post from contractor
Contractor retract Employer continue default after 14

days
Status quo Within 10 days after 14 days, contractor can

determine his own employment through notice of
determination
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In the event of the Employer becoming insolvent or making a

composition or arrangement with his creditors, or have a winding up
order made, or (except for the purposes of reconstruction or
26.3 Employer's insolvency amalgamation) a resolution for voluntary winding up, or having a
liquidator or receiver or manager of his business or undertaking duly
appointed, or having possession taken by or on behalf of the holders
26.4 Rigbts and duties of Employer and of any debentures secured by a floating charge, or of any property
Contractor comprised in or subject to the floating charge, the employment of the
Contractor shall be forthwith automatically determined.
Short notes
26.6 Settlement of Accounts
•Employer insolvent or making composition or arrangement
with creditors or winding up order made, resolution of
26.7 Contractor’s Roghts & Remedies voluntary winding up and etc– contractor employment
notPrejudice automatically determined
•Insolvent is the inability to pay debt. Insolvent individual may

be declare bankrupt under bankrupt act 1967.
26.4 Rights and duties of Employer and

Contractor
In the event that the employment of the Contractor is

determined under Clause 26.1 or 26.3, the following shall be
the respective rights and duties of the Contractor and Employer
26.4(a) the Contractor shall within 26.4(b) the Employer shall allow or pay to
fourteen (14) Days or within such longer the Contractor the total value of work
period as may be agreed in writing by the properly executed and the value of materials
Architect, remove from the Site all his and goods supplied including any loss andlor
temporary buildings, construction plant, expense suffered by the Contractor caused
tools, materials and goods and shall give by such determination
facilities for his Nominated Sub-Contractors
to do the same; and
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The Contractor shall within twenty eight (28) Days of the

determination of his own employment, give a written notice to the
Architect and Quantity Surveyor of the date of inspection on Site to
jointly record the extent of the Works executed and the materials and
goods delivered to the Site.
Upon completion of the record by the Contractor, a copy shall be
sent to the Employer, Architect and Quantity Surveyor and such
26.5 Records of Works records shall form the basis for the evaluation of the value of the
works executed and materials and goods delivered to the Site by the
Contractor up to the date of determination..
26.7 Contractor’s Roghts & Remedies

notPrejudice
Post determination
Notice of determination of own employment by contractor
within 14 Days : remove from the Site all his temporary

buildings, construction plant, tools, materials and goods
14 and shall give facilities for his Nominated Sub-

Contractors to do the same
28 Within 28 days: contractor give written notice to arch /QS of the date for
joint inspection on site
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The Contractor shall within six (6) Months after determination of his
26.1 Defaults by Employer own employment, submit to the Employer, Architect and Quantity
Smveyor for the Employer's agreement, a final account for the total
value of work properly executed, the value of materials and goods
26.2 Procedure for determination supplied and loss and/or expense suffered by the Contractor caused
by such determination.
26.6(a) If nothing in the said final account is disputed by the
26.4 Rigbts and duties of Employer and Employer within three (3) Months from the date of receipt of the fmal
Contractor account from the Contractor, the final account shall be conclusive
and deemed agreed by the parties. If the amount in the fmal account
exceeds the sums previously paid to the Contractor under the
26.5 Records of Works Contract (less any Liquidated Damages and set-off which the
Employer is expressly entitled under the Contract), the balance shall
be a debt payable to the Contractor by the Employer within the
26.6 Settlement of Accounts Period of Honouring Certificates. If the said amount is less than the
said sum, the difference shall be a debt payable to the Employer by
the Contractor or where applicable, the Employer may recover such
difference from the Performance Bond.
notPrejudice
26.6(b) If the Employer disputes the final account, the Employer

26.1 Defaults by Employer shall give written notice to the Contractor setting out any
disagreement complete with particulars within three (3) Months of
the date of receipt of the final account from the Contractor.
The Contractor shall within three (3) Months from the date of receipt
of the grounds of dispute, either make such amendment to the final
account as in his opinion may be appropriate, or decide not to
amend the final account.
Contractor In the event the Employer disagrees with the amended final account
or the decision not to amend the final account, the Employer shall
refer the dispute to arbitration under Clause 34.0 within three (3)
26.5 Records of Works Months from the date of receipt of the amended final account or
decision not to amend the final account.
26.6 Settlement of Accounts Failure to refer the dispute to arbitration within the stipulated time,
the final account or amended final account shall deem to be
conclusive and agreed by the parties.
notPrejudice
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BREACHED by E
SUMMARY PROCESS MAPPING
CLAUSE 26 MC to NOTICE
REPEAT/CONTINUE BREACH
within after 10 dys 14 Dys
NOTICE to DETERMINE
14 Dys 28 Dys
6 months MC to remove temporary
bldgs plant, tools
MC Notice to Arch &
QS for final
evaluation
MC to submit Final Account
to Arch & E
3 months
3 months 3 months Refer
If there is dispute If there is dispute ARBITRATION
FINALISED Notice to the Arch to issue

other party. Cc amended FA
to architect
3 months
FINALISED

Contractor
26.7 Contractor’s Roghts & Remedies The provisions of Clause 26.0 are without prejudice to any other
notPrejudice rights and/or remedies which the Contractor may possess .
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3rd Parties in Contract
Clause 27 : Nominated Sub Contractor
Clause 26 : Nominated Supplier
Clause 26 : Works by craftsmen, tradesmen
/ other contractor employed by employer
Who are the 3rd parties involve in a traditional

building contract PAM 2006?
Direct contract Direct contract
Appendix 3-7
Consultant Employer
Articles of agreement Clause 29.0
Craftsman,
tradesman and
Contractor other contractors.
Domestic Nominated
Clause 17.3 Clause 6.8 Clause 27.0 Clause 28.0

Domestic manufacturer, Nominated Nominated
subcontractor supplier, subcontractor supplier
supplier’s
contractor
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WHAT IS SUB CONTRACTOR
•A subcontractor is an individual or in many cases a business that signs

a contract to perform part or all of the obligations of another's contract.
•A subcontractor is hired by a main contractor to perform a specific task as

part of the overall project and is normally paid for services provided to the
project by the originating general contractor.
•While the most common concept of a subcontractor is in building works

and civil engineering
WHY HIRE SUB CONTRACTOR
•The incentive to hire subcontractors is either to

reduce costs or to mitigate project risks.
•In this way the general contractor receives the

same or better service than the general contractor
could have provided by itself, at lower overall risk.
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Types of subcontractor
Domestic subcontractor Nominated subcontractor
A subcontractor who contracts with Certain contracts permit the architect

the main contractor to supply or fix or superintending officer to reserve the
any materials or goods or execute right of the final selection and approval
work forming part of the main of subcontractors.
contract.
The main contractor is permitted to
Essentially this contractor is make a profit from the use of
employed by the main contractor. nominated subcontractors on site, but
must provide attendance (usually
provision of water, power, etc. to
enable the nominated subcontractor to
do his job

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27. 0 Nominated Sub Contractor

27.1 PC Sums and Provisional sums- NSC
27.2 Nomination of Sub- contractor
27.3 Objection to NSC
27.4 Action following objection of NSC
27.5 Payment by contractor to NSC
27.6 Failure of contractor to pay NSC
27.7 Final payment to NSC
27.8 Determination of the NSC employment
27.9 Contractors responsibility for NSC
27.10 Employer no privity contract with NSC
27.11 Re nomination sub contractor due to

determination by contractor
27.12 Re nomination of sub contractor due to

determination by NSC
27.13 Contractor to recover additional

expenses from NSC
27.14 Contractors permitted to tender for PC

sum
CLAUSE 27.1- 27.4 IS

27.1 PC Sums and Provisional sums- NSC
ALL ABOUT THE
27.2 Nomination of Sub- contractor PROCESS OF
FOMALIZING
NOMINATED SUB
CONTRACTOR
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The following provisions of this clause shall apply where
• PC sums are included in the contract bills or
• arise as a result of AI given in regards to the expenditure of
27.1 PC Sums and Provisional sums- NSC provisional sum in respect of person to be nominated by Architect
27.2 Nomination of Sub- contractor to supply and fix materials and goods or to execute works.
27.3 Objection to NSC Such sum shall be expanded in favour of Such person who is
nominated by Architect is hereby referred to as ‘nominated sub
27.4 Action following objection of NSC contractor’.
If NSC propose any alternative design to the sub contract drawings

or if the sub contract leaves any matter design, specification or
choice of material, goods and workmanship to the NSC,
the NSC and not the contractor shall be responsible to ensure that
such contract works are fit for its purpose
Short notes
Clause 27.1 specifies ,

•PC sum& provisional sum can be expanded for NSC.
•If NSC propose design that does not comply fit for its purpose , he is
liable for it.
The Architect shall not nominate any Person as Nominated

27.1 PC Sums and Provisional sums- NSC Sub-Contractor against whom the contractor makes
reasonable objection in accordance with Clause 27.3.
27.2 Nomination of Sub- contractor
The Contractor shall make such reasonable objection in
27.3 Objection to NSC writing not later than fourteen (14) Days from receipt of the
nomination instruction from the Architect.
Short notes
Clause 27.2 describes:
•Architect rights to nominate the NSC and contractors right to

reject within 14 days after Arch notice of nomination.
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RULES TO NOMINATION OF SUB CONTRACTOR

The Architect shall not nominate (except where the Architect and Contractor otherwise agree) any Person
will not enter into a contract with the Contract with the Contractor based upon the terms and conditions of
the PAM Sub- Contract 2006 which provides inter alias:
Clause 27.2 Clause Description Key points
A that the Nominated Sub-Contractor carry out and complete the Sub- NSC to complete works
Contract works in every respect to the reasonable satisfaction of the according to Arch,
Contractor and Architect and conformity with all reasonable contractor and contract
directions and requirements of the Contractor requirements
B that the Nominated Sub-Contractor observe, perform and comply Contractor must be aware
with all the provisions of the Contract which the Contract is of contract condition and
obliged to perform and comply with so far as they relate and apply follow it
to the sub-contract works.
C that the nominated Sub-Contractor indemnify the Contractor against NSC to indemnify
the same liabilities in respect of the contractor in same way
sub-contract works as those for which the Contractor is liable to contractor has to
indemnity the Employer under the Contract. indemnify employer for
NSC mistakes
D that the Nominated Sub-Contractor indemnity the Contractor against NSC to indemnify
claims in respect of any negligence, omission or default of his subcontractor for act of
contractors, his servants or agents or any misuse by him or them of negligence, omission and
any construction plant, access, scaffolding, temporary works, fault.
appliances or other property belonging to or provided by the
contractor.

E that the sub-contract works be completed within the Contractor to seek
period or periods specified and the contractor shall not arch consent for any
without the written recommendation of the Architect EOT to give to NSC
grant any extension of time for the completion of the
sub-contract works cause by any of the Relevant Event
stated in Clause 21.4 of the PAM Sub-Contract
2006.Where the delays are cause by any negligence,
omission, default and/or breach of the Sub-Contract by
the contractor, the Contractor is solely responsible
under Clause 21.6 of the PAM Sub-Contract 2006 to
assess and grant an extension of time to the Nominated
Sub-Contractor.
F that when the Contractor and Nominated Sub- Arch to issue CPC
Contractor consider that the Sub-Contract works have when NSC work is
been practically completed, they shall request the completed.
Architect to issue a certificate to the effect, and if the
Architect is of the opinion that the sub-contract works
have been completed in accordance with the provisions
of clause 17.1 of the PAM Sub-Contract 2006, the
Architect shall forthwith issue a certificate to the effect.
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G that if the Nominated Sub-Contractor fails to complete the NSC to pay LD if delay
sub-contractor fails to complete the sub-contract works is due to them
within the sub-contract completion date or within any
extended time granted by the Contractor, and the
contractor after having given a written notification to the
Nominated Sub-Contractor that the Sub-contract works
ought reasonably so to have been completed, the
Nominated Sub-Contractor shall pay or allow to the
Contractor loss and / or expense suffered by the
Contractor or an agreed Liquidated Damages.
H that payment to Nominated Sub-Contractor shall be made Contractor to pay NSC
within seven (7) Days after the Period of Honoring within 7 days after
Certificate and shall be subject to the retention and period of honouring
deductions expressly provided under the PAM Sub- certificate
Contract 2006,and
I that the Architect, Consultant and their authorised Arch, consultant and rep
repsentatives shall have the right of access to the have right to access site
workshops and other places of the Nominated Sub- according to PAM
Contractor in accordance with the provisions of Clause clause 11.2
11.2 of the PAM Sub-Contract 2006.
Subject to clause 27.4, the contractor shall not require to enter into a sub
contract with any NSC against the contractor has made reasonable
objection
based on the available known facts and documented evidence that
the financial standing or solvency or technical competence of the NS
27.1 PC Sums and Provisional sums- NSC is such that a prudent contractor,
having regard to the scope of the supply contract would be justified in
27.2 Nomination of Sub- contractor rejecting the nomination
Where such reasonable objection is made, the architect may either issue
27.4 Action following objection of NSC further instruction to
• remove the objection so that the contractor can enter into the sub-
contract, or
• cancel such nomination instruction and issue an instruction omitting the
works which was the subject of the nomination instruction or
• re-nominate another sub contractor for the sub contract works
Short notes
•Clause 27.3 clearly states in order contractor to object NSC, must have proper evidence
regarding financial or technical to be submitted to Arch.
•Clause 27.4 gives the power to the architect to make his judgment on the objection of the
nominated sub contractor whether to proceed , to cancel/ omit works or to re-nominate.
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Procedure for PC SUM formalization for NSC

Tender for NSC work in due time
after arch get client consent
Consent of NSC by employer
AI to contractor to get in
contract with NSC –
Clause 27.1
Should the contractor object, seek for

reasonable objection (clause 27.3)
within 14 days of arch notice
Not reasonable objection Reasonable objection

(With evidence that the financial standing or
solvency or technical competence of the
NSC is such that a prudent contractor)
Arch issue further AI to remove
objection – Clause 27.4
Cancel nomination and Arch to re-
Contractor to get in contract with NSC instruction and Issue AI nominate
omitting the works another NSC

The Architect shall direct the Contractor as to the total value of
27.5 Payment by contractor to NSC
work properly executed and include the percentage of the
value of the materials and goods stated in the Appendix in the
calculation of the amount stated to be due in any certificate
issued under Clause 30.0,
and shall at the same time when the certificate issued, inform
the Nominated Sub-Contractor in writing of the amount of the
said total value.
The sum representing such total value the Contractor shall pay
(less any retention and deductions expressly provided under
PAM Sub-Contract 2006) to the Nominated Sub-Contractor
within seven (7) Days after the Period of Honoring Certificates.
Short notes

•Arch to include NSC work done in Interim according to clause 30.0
•Arch shall inform NSC in writing payment done
•Contractor to pay NSC less retention sum before CPC within 7 days
after POH certificate.
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Procedure of accessing claims

Contractor submit claim with QS valuation
Arch receive claim
Arch check claim for errors and

discrepancies
Arch determine if claim is ok or not

within 21 days (clause 30.1)
If claim is ok or minor discrepancies If Claim is significantly

wrong, Arch send
Arch notify NSC through letter notice to contractor
Issue interim cert/ penultimate/
to fix claim amount
final account to employer
NSC Employer to pay contractor

within period of honouring
Contractor pay NSC
within 7 days after certificate
POH
Contractor receive payment
CAN ARCHITECT PAY DIRECT TO NSC FOR

INTERIM PAYMENT?
1. NO. NSC PAYMENT MUST BE ATTACH ANNEX TO THE INTERIM CERTIFICATE
ADDRESS TO EMPLOYER FOR CONTRACTOR TO PAY TO NSC.
2. FORMAT AS BELOW
NOMINATED SUB CONTRACTOR INTERIM CERTIFICE
ATTACHMENT TO INTERIM CERTIFICATE NO ______ DATED ______
INCLUDED IN THE AMOUT OF THE CERTIFICATE IS THE VALUE OF WORK,MATERIAL OR GOOD DUE TO THE NSC,
AS INDICATED BELOW, IN RESPECT OF WHICH CONTRACTOR HEREBY DIRECTED TO MAE THE FOLLOWING PAYMENTS
NSC Sub- Sub-Contract Gross Less Total Less amount Amount

contract sum valuation retention amount previously included in
work Fund certified certified this
certificate
___________________
ARCHITECT SIGNITURE
__________________
NAME
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Example Notification letter to NSC

Ref:
Date:
NSC address
Project title:
Payment Notification
Pursuant to clause 27.5 of the condition, we are please to inform you that we have issued an interim/ penultimate/ final certificate no
__ dated ______
For payment to be made by employer to contractor. An amount of RM __________________ being the value of your work have
been included in this certificate.
1 Gross value work done RM
Less
2 Retention sum
3 Previous certified amount
Amount included in this Certificate
Yours sincerely,
___________________
ARCHITECT SIGNITURE
__________________
NAME CC to others

The Architect may at any time before the issuance of any
27.6 Failure of contractor to pay NSC
Interim and Penultimate Certificate, request the Contractor to
finish to him reasonable proof that all amounts stated as due
and included in the previous certificate have been discharged.
The Contractor has any reasons for withholding any
Nominated Sub-Contractor’s payments under Clauses16.1
and 26.13of the PAM Sub-Contract 2006; he shall provide the
Architect written details of his compliance.
If the Contractor fails to comply with the Architect’s request
within fourteen (14) Days, the Architect may (but not obliged
to) issued a certificate starting the amount in respect of which
the Contractor has failed to provide such proof.
Where Architect has so certificate, the Employer may (but not
obliged to) pay such amounts directly to the Nominated Sub-
Contractor and deduct the same from any sums due or to
become due to the Contractor.
The Architect may issue the aforesaid certificate irrespective
of whether or not an Interim Certificate under Clause 30.0 is
due for issuance.
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NSC REPORT TO YOU THAT HE HAS NOT BEEN

PAYED. WHAT IS YOUR ACTION?
1. In reference to clause 27.6 of PAM2006 contract and Clause

26.5 of PAM sub-contract, the followings should be done:
2. Request contractor for proof of payment to NSC through

notice.
3. Contractor to furnish Arch with proof within 14 days of
notice
4. If contractor fail to show proof of payment discharge to

NSC, employer can pay direct to NSC and deduct payment
to contractor in the next sum due or become due.
Procedure to pay direct to NSC for non payment under clause 27.6
NSC inform Arch for non payment
Arch to request MC for proof

of payment to NSC
No provision clause 27.6
If Contractor furnish proof of Payment not made by contractor

payment
Inform NSC, payment has been Recommend to employer for

made with proof direct payment to NSC
NSC inform NSC awaiting for Deduct contractors next interim for
payment still not money to clear. OK value paid direct to NSC
receive
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If the Architect wishes to make final payment to any
Nominated Sub-Contractor before final payment is
27.7 Final payment to NSC due to the Contractor, and
if the Nominated Sub-Contractor has indemnified the

Contractor against all of his liabilities under the
Nominated Sub-Contract,
the Architect shall issue, a certified less any retention

and deductions expressly provided under PAM Sub-
Contract 2006.
Upon such final payment, the amount stated in the

Appendix, as Limit of Retention Fund shall be reduced
by the sum of the retention released to the Nominated
Sub-Contractor.
Short notes

•The clause empowers architect with the discretion to make final payment
to NSC before final payment.
•Usually it is for NSC works completed well advance of contractors work
such as piling and earth work.
What are the types of Final payment to NSC
Final payment to NSC
Arch has 3 options on when to release

final payment to NSC
Before contractor CMGD Within 14 days after With final certificate

CMGD
Interim certificate Penultimate certificate Final certificate
NSC adjusted contract sum NSC adjusted contract sum NSC adjusted contract sum
Less Less Less
Retention sum ½ moeity Previous payment Previous payment
Previous payment
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CAN ARCHITECT MAKE EARLY PAYMENT TO NSC

BEFORE CONTRACTOR FINAL CERTIFICATE?
1. YES. NSC EARLY PAYMENT MUST BE ATTACH ANNEX TO THE PENULTIMATE
CERTIFICATE ADDRESS TO EMPLOYER IN ANOTHER INTERIM- Cause 30.13
2. FORMAT AS BELOW
NOMINATED SUB CONTRACTOR PEN ULTIMATE CERTIFICATE
NSC Sub-contract Sub-Contract sum Amendment made Sub Total amount Nett Amount
work to sub contract sum, contract certified under included in this
including VO & etc final previous certificate
account payment
___________________
ARCHITECT SIGNITURE
__________________
NAME
WHAT IS THE FORMAT TO USE FOR NSC FINAL

CERTIFICATE
1. FORMAT AS BELOW, ANNEX TO CONTRACTOR FINAL CERTIFICATE.
NOMINATED SUB CONTRACTOR FINAL CERTIFICATIE
NSC Sub-contract Sub-Contract sum Amendment made Sub Total amount Nett Amount
work to sub contract sum, contract certified under included in this
including VO & etc final previous certificate
account payment
___________________
ARCHITECT SIGNITURE
__________________
NAME
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The Contractor shall not determine the employment of any

Nominated Sub-Contractor without the writing consent of the
Architect.
27.8 Determination of the NSC employment
If the contractor intends to determine the employment of the
Nominated Sub-Contractor,
the Contractor shall send to the Architect a written report

stating the Nominated Sub-Contractor’s default with a copy to
the Nominated Sub-Contractor,
The Architect may request that the Nominated Sub-Contractor

response to the Contractor’s report before he decides
whether or not to give his written consent.
What is the procedure for NSC determination
NSC Default identified accordance to

clause 23.1 a-f & 23.3 sub-contract
Contractor Send Series of Warning letter

(to satisfy notice shall not be un reasonable
and vexatious under 23.2 sub contract)
NSC don’t comply
Contractor send written report to Arch and

seek Arch consent ( arch may request
NSC respond)
Arch don’t consent Arch consent, Contractor send

notice of default
Status quo NSC continue default within 14 days
Contractor send Notice of determination must be

issued within 10 days
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The contractor shall be fully responsible to ensure that all

NSC carry out the sub-contract works in accordance with
the NSC and in compliance therewith provide design (if any)
, materials, goods and standards of workmanship of quality
and standards specified therein to the reasonable
satisfaction of the architect
27.9 Contractors responsibility for NSC
27.10 Employer no privity contract with NSC

Neither the existence of or exercise of the foregoing
provisions nor anything else contained in the contract shall
create a privity of contract between employer and any of the
NSC.
Short notes

•The contractor is responsible for the carrying out of NSC works
•there fore responsible for negligence , omission, default or breach of
contract by NSC.
•The clause 27.10 is complementary to clause 27.9

•Emphasize no privity between employer and NSC
•any claim against NSC will be channel through contractor.

27.11 Re nomination sub contractor due to If the Contractor with the written consent of the Architect
determination by contractor determines the employment of a Nominated Sub-Contractor,
27.12 Re nomination of sub contractor due to the Architect shall re-nominate another Nominated Sub-
determination by NSC Contractor.
In the event, the Contractor shall be entitled to be paid such

different (if any) between the sum payable to the Contractor
and the new Nominated Sub-Contractor and the sum payable
to the previous Nominated Sub- Contractor after taking into
consideration of any sum that will be recoverable from the
defaulting Nominated Sub-Contractor Under Clause 27.13.
An extension of time under Clause 23.8(i) may be granted to

the contractor but the contractor shall not be entitled to any
damages, loss and / or expense.
Short notes
Clause 27.11 describes,

•If arch satisfy that NSC is not performing his contractual obligation, he
will give consent to contractor to determine.
•Arch is obligated to nominate new NSC and must be done expediently.
•Contractor entitle for extra sum to perform NSC work and EOT.
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27.11 Re nomination sub contractor due to
If a Nominated Sub-Contractor determines his own employment
determination by contractor under the Nominated Sub-Contract due to negligence, default or
breach of the Contract or,
27.12 Re nomination of sub contractor due to the Architect shall re-nominate another Nominated Sub-Contractor.
determination by NSC
In the event, the Contractor shall be paid the same sums as would
have been payable to the previous Nominated Sub-Contractor.
The Contractor will be liable to pay the new Nominated Sub-
Contractor any additional cost to complete the Sub-Contract Works
and to pay the Employer for all additional costs incurred in re-
nomination and loss and / or expense suffered by the Employer by
such determination.
The Contractor shall not be entitled to any extension of time unless
and until the Contractor has established that the determination by
the Nominated Sub-Contractor of his own employment is invalid. In
the event the determination by the Nominated Sub-Contractor of his
own employment has been established to be invalid by arbitration or
litigation, Clause 27.11 will apply.
Short notes

•If NSC determine own employment with reasons under clause 24.1, contractor is liable.
•Contractor has to bare the cost of NSC to complete the works and employers cost to re-
nominate a new NSC
•No entitlement of EOT for contractor.
•If NSC determination is invalid by arbitration or litigation, clause 27.11 will prevail.
•Arch have to nominate a new NSC.
27.13 Contractor to recover additional In the event the Architect consents to determine the
expenses from NSC employment of the Nominated Sub-Contractor under Clause
27.11,
the Contractor shall recover all additional expenses

(including any additional expenses incurred by the Employer)
from the Nominated Sub-Contractor as a debt or from any
monies due or to become due to the Nominated Sub-
Contractor and filing which the Contractor may recover such
sum from the Nominated Sub-Contractor’s Performance
Bond.
Short notes
•The contractor is to pursue all avenues to recover all additional expenses

from the NSC
•Under NSC contract, contractor can call performance bond to cure the
default.
•Employer can join contractor for counter claim using a collateral

agreement.
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27.14 Contractors permitted to tender for PC

sum • Where the contractor carries out works for which
PC sums and provisional are included in the
contract bills, the contractor shall be permitted to
tender for the same.
• If the tender of the contractor for such works is

accepted, it shall be considered as a variation and
the contractor shall not be entitled to profit and
attendance charged as a variation under the
relevant PC sum, not withstanding the provision
of clause 30.11(c) .
Short notes
•Contractor can tender for PC sum or provisional sum.
•If his tender is accepted, no P&A and works to be considered as variation

order.
WHICH PROVISION IN THE PAM CONTRACT 2006

STATES THAT THE CONTRACTOR IS ENTITLE FOR
P&A FOR NSC WORKS?
1. There is no direct provision in PAM contract that states contractor will

get P&A in the case of NSC works.
2. However, refer clause 27.14 for contractor permitted to tender for PC

sum,
‘ if the tender of the contractor for such work (being the work for PC sum) is
accepted, it shall be considered as a variation and the contractor shall
not be entitle to profit and attendance charges as price under the
relevant PC sum,…..’
3. This implies that should the work be given to NSC, contractor is entitle for
P&A.
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WHAT IS THE SIGNIFICANT OF EMPLOYER GIVING

P&A TO THE CONTRACTOR FOR NSC
APPOINTMENT?
1. Profit and attendance is given to contractor as a consideration for the

contractor’s responsibility to take the NSC to carry out NSC works under
clause 27.9
2. Profit and Attendance means :

• Profit - contractor is permitted to make a profit from the use of nominated
subcontractors on site,
• Attendance – contractor must provide "attendance" (usually the provision of water,
power, restrooms, and other services to enable the nominated subcontractor to do
his job.
3. Without P&A given or excluded from the contract, there is no reason why the
contractor should accept the onerous liability without the opportunity to price
for the risk or being remunerated unless agreed for in writing.

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28. 0 Nominated Supplier (NS)
28.1 PC Sums and Provisional sums- NS
28.2 NS and their obligation
28.3 Objection to NS
28.4 Action following objection of NS
28.5 Value and material good supply by NS
28.6 Payment to Nominated supplier
28.7 Contractors liability for NS
28.8 Employer no privity contract with NS
WHAT IS A SUPPLIER?
• Supplier's is a business that operates through a

company to provide construction materials and
equipment to the construction site
• They are one of the most important parties in the

construction industry.
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Types of supplier
Domestic Supplier Nominated supplier
•this type is common supplier which Nominated supplier is a supplier

supplies building materials to construction who has been nominated by Arch to
sites. the main contractor..
•main contractors are free to choose their
suppliers for the supply of building supplier tender for the supply and
materials like cement, brick block, wood deliver only material or equipment that
and others. has been accepted when dealing with
the contractors.
Advantages:
•the supplier provide large amount of credit
to the main contractor
•or can offer a wide choice of building
materials and equipment for the use of
main contractors.
WHAT IS NOMINATED SUPPLIER DEFINITION IN

PAM 2006?
Nominated supplier is a supplier that is nominated by

the architect under clause 28.1 PAM 2006
It exist when architect formalize
• Predetermine PC Sum provision, or Provisional

sum expanded for the purpose to nominate a
supplier
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CLAUSE 28.1- 28.4 IS

28.1 PC Sums and Provisional sums- NS
ALL ABOUT THE
28.2 NS and their obligation PROCESS OF
FOMALIZING
28.4 Action following objection of NS
NOMINATED SUB
SUPPLIER
28.1 PC Sums and Provisional sums- NS The following provisions of this clause shall apply where
• PC sums are included in the contract bills or
• arise as a result of AI given in regards to the expenditure of
provisional sum in respect of person to be nominated by Architect
to supply any materials and goods to be fixed by the contractor.
Such person as the architect shall instruct is refered as ‘nominated
supplier’
Short notes
•In PAM 2006, PC sum is define as Article 7(as) means – the sums provided in the
contract ………for materials and goods to be supplied by Nominated supplier
•Nominated supplier can be nominated when there is PC sum provision included

in contract bills.
•The provisional sum can be expanded into a PC sum during construction should
the employer wishes or required to nominate a NSC during construction.
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28.2 NS and their obligation The Architect shall not nominate any Person as a Nominated
Supplier against whom the Contractor makes a reasonable objection
in accordance with Clause 28.3. The Contractor shall make such
reasonable objection in writing not later than fourteen (14) Days from
receipt of the nomination instruction from the Architect.
Short notes
•Architect rights to nominate NS and contractors right to

reject within 14 days after Arch notice of nomination.
RULES TO NOMINATION OF SUPPLIER

who will not enter into a contract of sale which provides inter alias.
A that the materials and goods to be supplied shall be of the quality Material and goods
and standard specified, provided always that where approval of quality/ standards
the quality and standard of material is a matter of opinion of the delivered is subject to
Architect, such quality and standard shall be to the reasonable Arch satisfaction
satisfaction of the Architect.
B that the Nominated Supplier shall make good by replacement or NS is subject to defect
otherwise any defect in the materials and goods supplied which liability period and shall
appear within the Defects Liability Period and shall bear any rectify his latent defects.
express reasonably incurred by the Contractor as a direct
consequence of such defects provided always that: He shall bear all cost
relating to his defects
28.2(b)(i) Where the materials and goods have been
used or fixed, such defect are not such that examination by the
Contractor ought to have revealed them before using or fixing; or
28.2(b((ii) Such defect are due solely to defective

workmanship, materials and goods supplied and not caused by
misuse, improper storage or any act or neglect by the Contractor;
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RULES TO NOMINATION OF SUPPLIER

who will not enter into a contract of sale which provides inter alias.
Clause Clause Description Key points

27.2
C that the delivery of the materials and goods supplied shall Contractor dictate NS
commence and be completed in accordance with a delivery delivery program.
programmed to be agreed between the Contractor and
Nominated Supplier, or at such times as the Contractor may
reasonable direct;
D that the ownership of materials and goods shall pass to the Material delivered by
Contractor upon delivery by the Nominated Supplier, NS will be the
whether or not payment has been made in full; and property of contractor
not withstanding
payments
E the payment to Nominated Supplied shall be made within Payment to NS must

seven (7) Days after the Period of Honoring Certificates be paid within 7 days
and shall be subject to the retention by the Contractor under after POH certificate
Clause 28.5.

Subject to clause 28.4, the contractor shall not require to enter into a
supply contract with any NS against the contractor has made reasonable
objection
based on the available known facts and documented evidence that
the financial standing or solvency or technical competence of the NS
is such that a prudent contractor,
having regard to the scope of the supply contract would be justified in
rejecting the nomination
Where such reasonable objection is made, the architect may either issue
28.4 Action following objection of NS further instruction to
• remove the objection so that the contractor can enter into the supply
contract, or
• cancel such nomination or
• issue an instruction omitting the material and goods which was the
subject of the nomination instruction or
• re-nominate another NS.
Short notes
•Clause 28.3 clearly states in order contractor to object NS, must have proper evidence regarding
financial or technical to be submitted to Arch.
•Clause 28.4 gives the power to the architect to make his judgment on the objection of the
nominated supplier whether to proceed , to cancel or to re-nominate.
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Procedure for PC SUM/Provisional sum formalization for NS

Tender for NS work in due time after
arch get client consent
Employer confirms NS selection
Arch AI to contractor to get in contract

with NS – Clause 28.1
Should the contractor object

within 14 days , seek for
reasonable objection –
clause 28.3
Not reasonable objection Reasonable objection

(With evidence that the financial standing or
solvency or technical competence of the
NS is such that a prudent contractor)
Arch issue further AI to remove
objection – Clause 28.4
Cancel nomination and Arch to re-
Contractor to get in supply contract with instruction and Issue AI nominate
NS omitting material another NS

The Architect shall direct the Contractor as to the total value of
materials and goods supplied by a Nominated Supplier which has
been included in any certificate issued under Clause 30.0,
28.5 Value and material good supply by NS
and shall at the same time when the certificate are issued,
inform the Nominated Supplier in writing of the amount of the
said total.The Contractor shall retain from the sums included for
the value of materials and goods the percentage of such value
stated in the Appendix as Percentage of Certified Value Retained
up to an amount not exceeding five (5) percent of the Nominated
Supplier’s sum.The Contractor’s interest in any sums so retained
shall be fiduciary as trustee for the Nominated Supplier ( but
without obligation to invest ) ; and the Contractor’s beneficial
interest in such sums shall be subject only to the right of the
Contractor to have recourse from time to time for payment of any
amount which he is entitled under the nominated supply contract
to deduct from any sum due or the Nominated Supplier. Upon the
Architect having certified the release of the Retention Fund
Clause 30.6, such sums shall be released to the Nominated
Supplier within seven (7) Days after the Period of Honoring
Certificate and that if and when such sums are release to the
Nominated Supplier, they shall be paid in full.
Short notes
Refer next question and diagram
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Procedure of accessing claims

Contractor submit claim
Arch receive claim
Arch check claim is valid ( with

help from QS, COW)
Arch determine if claim is ok or not
If claim is ok If Claim is wrong, Arch

send notice to
Arch notify NS through letter contractor to fix claim
Issue interim cert/ penultimate/
amount
final account to employer
NS Employer to pay contractor

within period of honouring
Contractor pay NS
within 7 days after certificate
POH
Contractor receive payment
Example Notification letter to Nominated supplier

Ref:
Date:
NS address
Project title:
Payment Notification
Pursuant to clause 28.5 of the condition, we are please to inform you that we have issued an interim/ penultimate/ final certificate no
__ dated ______
For payment to be made by employer to contractor. An amount of RM __________________ being the value of materials and
goods supplied by you have been included in this certificate.
1 Gross value work done RM
Less
2 Retention sum
3 Previous certified amount
Amount included in this Certificate
Yours sincerely,
___________________
ARCHITECT SIGNITURE
__________________
NAME CC to others
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28.6 Payment to Nominated supplier All payments in respect of the value of material and goods supplied
by a NS shall be made within 7 days after period of honouring
certificate and shall be subject to the retention by the contractor
under clause 28.5
Short notes
•This clause explains that all payment received from the employer to the
contractor must be paid within 7 days of period honoring certificate to the
nominated supplier
•It will also be subject to retention sum under clause 28.5 and can be deduce by
contractor.
CAN NOMINATED SUPPLIER SEEK

DIRECT PAYMENT FROM EMPLOYER IN
THE CASE OF FAILURE TO PAY BY THE
CONTRACTOR?
1. No.
2. PAM 2006 has no provision for direct payment to NS.
3. Although architect may inform the nominated supplier of the
value of material and goods included in the certificate, he has
no power to pay direct to NS.
4. contractor is fully responsible for NS including making
payments in accordance with their agreement.
5. Any dispute on payment, NS must seek remedies through
common law.
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CAN ARCHITECT PAY DIRECT TO NOMINATED

SUPPLIER FOR INTERIM PAYMENT?
1. NO. NS PAYMENT MUST BE ATTACH ANNEX TO THE INTERIM
CERTIFICATE ADDRESS TO EMPLOYER FOR CONTRACTOR
PAYMENT TO NSC
2. FORMAT AS BELOW
NOMINATED SUPPLIER INTERIM CERTIFICE
NS Nominated Nominated Gross Less Total Less amount Amount

Supplier Supplier sum valuation retention amount previously included in
item Fund certified certified this
certificate
___________________
ARCHITECT SIGNITURE
__________________
NAME
CAN ARCHITECT MAKE EARLY PAYMENT TO NS

BEFORE CONTRACTOR FINAL ACCOUNT?
1. YES. NSC EARLY PAYMENT MUST BE ATTACH ANNEX TO THE PENULTIMATE
CERTIFICATE ADDRESS TO EMPLOYER IN ANOTHER INTERIM- Cause 30.13
2. FORMAT AS BELOW
NOMINATED SUPPLIER PEN ULTIMATE CERTIFICATE
NSC Nominated Nominated Adjustment made Nominated Total amount Nett Amount
Supplier Supplier sum to Nominated Supplier certified included in
work Supplier sum, final under this certificate
including VO & account previous
etc payment
___________________
ARCHITECT SIGNITURE
__________________
NAME
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The contractor shall be fully responsible for any negligence for any
omission, default and/or breach of contractor by the nominated
supplier and the employer shall in no circumstances be liable to the
28.7 Contractors liability for NS contractor.
28.8 Employer no privity contract with NS Neither the existence of or the exercise of the foregoing provisions
nor anything else contained in the contract shall create a privity
between the employer and any of the nominated supplier.
Short notes

•The contractor is responsible for the overall work
•there fore responsible for negligence , omission, default or breach of
contract by NS.
•The clause 28.8 is complementary to clause 28.7

•Emphasize no privity between employer and NS
•any claim against NS will be channel through contractor.
WHAT IS THE FORMAT TO USE FOR NS FINAL

CERTIFICATE
1. FORMAT AS BELOW, ANNEX TO CONTRACTOR FINAL CERTIFICATE.
NOMINATED SUPPLIER FINAL CERTIFICATIE
NS Nominated Nominated Amendment made Nominated Total amount Nett Amount

Supplier Supplier sum to Nominated Supplier certified included in
work Supplier sum, final under this certificate
including VO & account previous
etc payment
___________________
ARCHITECT SIGNITURE
__________________
NAME
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29. 0 Work by Craftsmen, Tradesmen or contractors

employed or engaged by employer
29.1 Works by employers craftmen
The contractor shall permit execution of works not forming
part of the contract on the works by craftsmen, tradesmen or
other contractors engaged by the employer.
Such craftsmen, tradesmen or other contractors engage by

the employer shall be deemed to be a person for whom the
employer is responsible and not be a sub-contractor of the
contractor.
46
20/03/2013
What is this clause 29.0 all about?
1. It is common that at times, employer wishes to engage certain

craftsmen, tradesmen or other contractor directly to execute
certain works that do not form part of the contractors scope of
work at site.
2. This clause provides that contractor shall permit tradesmen or

other works not forming part of the contract by craftsmen,
tradesmen or other contractors to be engaged by the employer.
Who is a craftsman or tradesmen?
1. a skilled manual worker in a particular trade or craft.
2. Economically and socially, a tradesman's status is considered

between a laborer and a professional, with a high degree of both
practical and theoretical knowledge of their trade.
3. Example craftsmen or tradesmen : Carpenter, Mural artist, Rock

iron bender, Graffiti Artist, installation artist
47
20/03/2013
What are the examples of Other contractor?
Some employer prefers to tender out separate contract for other

contractor. Common example for employer to have direct contract
with are:
1. Infra contractor
2. Landscape contractor
3. ID contractor
THE END – TO BE CONTINUED WITH CLAUSE 31-38

& SUB-CONTRACT NEXT WEEK
48

What Is Determination?: Pam Contract With Quantities

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What Is Determination?: Pam Contract With Quantities

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20/03/2013

PAM CONTRACT WITH QUANTITIES

1. strong intention or a fixed intention to achieve a specific purpose. -

2. to have strong will power in order to achieve a task in life.

3. a strong sense of self-devotion and self-commitment in order to achieve or

4. calculating, ascertaining or even realizing a specific amount, limit, character, etc.

5. to reach at a particular decision and firmly achieve its purpose.

WHAT IS THE DEFINITION OF

Determination in construction contract means:

1. Employer allowed for to determine the contractors employment

2. Contractor allowed for to determine own employment

3. under the condition of contract

PAM CONTRACT WITH QUANTITIES

25. 0 Determination Of Contractors Employment by Employer

25.1 Defaults by Contractor

25.2 Procedure for determination

25.3 Contractor's insolvency

25.4 Rigbts and duties of Employer and

25.5 Records of Works

25.6 Final Account upon determination

25.7 Remedy limited to damages only

25.8 Employer's rights and remedies not

25. 0 Determination Of Contractors Employment by Employer

The Employer may determine the employment of the

25.3 Contractor's insolvency 25.1(a) if without reasonable cause, he fails to

25.1(c) if he fails to proceed regularly and/or diligently

25.1 (d) if he persistently refuses or neglects to comply

Explanation to determination defaults

25. 0 Determination Of Contractors Employment by Employer

Upon the occurrence of any default under Clause 25.1, and if

25.8 Employer's rights and remedies not

Procedure for determination

Series of Warning letter

Contractor don’t comply

Contractor satisfy and don’t Contractor continue default after

Within 10 days after 14 days, Arch recommend to

Notice of determination must be issued

25. 0 Determination Of Contractors Employment by Employer

In the event of the Contractor becoming insolvent or making a

25.5 Records of Works

25.6 Final Account upon determination

•Contractor insolvent or making composition or arrangement

25. 0 Determination Of Contractors Employment by Employer

Upon termination under clause 25.1 and 25.3

25.4 (b) the Contractor if so required by the Employer or

25. 0 Determination Of Contractors Employment by Employer

Upon termination under

25. 0 Determination Of Contractors Employment by Employer

25.7 Remedy limited to damages only

25.8 Employer's rights and remedies not

25.4 Rights and duties of

Interpretation : Interpretation : Interpretation :

25. 0 Determination Of Contractors Employment by Employer

25.1 Defaults by Contractor

25.2 Procedure for determination

25.3 Contractor's insolvency

25.4 Rigbts and duties of Employer and

25.7 Remedy limited to damages only

25.8 Employer's rights and remedies not

Notice of determination by client or on behalf by Arch

14 Within 14 days : Contractor yield possession of the site

25. 0 Determination Of Contractors Employment by Employer

25.1 Defaults by Contractor Architect Within 6 months on completion of the work