PROJECT

DELIVERY SYSTEM
1. BUILDING
CONTRACT,
2. CONTRACT
APPROACH &
3. CONTRACTUAL
ARRANGEMENTS

DR AN NISHA NUR
WELLIANA BINTI ABD
RASED
INTRODUCTION
There are many alternatives contractual
approaches to bring together a team for
the design and construction of a project.

Project delivery system is referred to method or way that use in

implementing the project and also refer to the parties that
involve such as owner/client and professional member
(engineer , architect) in do their duties in construction project..
1. BUILDING CONTRACT
Introduction to a basic understanding on
building contract

DEFINITION OF A CONTRACT:
A contract:
• is a legally binding document between that
defines and governs the rights and duties
of the parties to an agreement.

• is legally enforceable because it meets the

requirements and approval of the law.

• typically involves the exchange of goods,

service, money, or promise of any of those.
Basic elements that should be included to establish contract according
the contract act

01 OFFER 05 INTENTION
INFOGRAPHIC

02 ACCEPTANCE 06 FREE CONSENT

CONTRACT
ELEMENT
CONSENSUS
03 CONSIDERATION 07 AD ITEM

OPTION

04 CAPACITY 08 NOT VOID

 CONTRACT APPROCH

A TRADITIONAL CONTRACT
OPTION

Design-Bid-Build

OPTION

B POST MODERN APPROACH

OPTION

Design and Build Contract

 TRADITIONAL CONTRACT
(design-bid-build)

Much of the work may actually be performed by individual trade

contractors under subcontract to the general contractor.

Although the subcontractors normally bid upon a portion of the

owner’s plans and specifications, BUT…..their legal contractual
relationships are directly with the Main contractor; the latter, in turn,
is responsible to the owner for all the work, including that which is
subcontract.
TRADITIONAL CONTRACT
(design-bid-build)
The owner first hires a design professional, who
then prepares a design, including complete
contract documents.

With a complete set of documents available, the

owner either conducts a competitive bid opening
to obtain the lowest price from contractors to do
the work or negotiates with a specific contractor.

The contractor is then responsible for delivering

the completed project in accordance with the
dictates of the contract documents.
 TRADITIONAL CONTRACT
(design-bid-build)

Owner
Contract
Designer relationship

Main / General Contractor

Supervise at
site only
Domestic Subcontractors Nominated Subcontractors
ADVANTAGES: Traditional Contract
The traditional method has been well known to many parties; to owners, designers,
and contractors. The procedures and contractual rules of conduct have been worked
out and are well understood.

Many professionals prefer this well defined relationship, which reduces

uncertainty. This means that a project is more likely to proceed smoothly from
beginning to end.

The mode also contains considerable contractual protection for the owner. The
allocation of risk for construction performance rests almost completely on the
contractor and the subcontractors.

Additionally, the traditional method provides the owner with all the benefits of open
market competition.

The open bidding procedure, in which the lowest bidder is the ‘winner’ gives the owner
the lowest price available in the marketplace and presumably the greatest, economic
efficiency.
DISADVANTAGES: Traditional Contract
The construction professional does not enter process until the design
is complete, meaning that the design is not usually reviewed for
constructability before it is finished.

Design features that could have been built more economically or

effectively often result in higher costs.

Some design firms overcome this problem by hiring pre-construction

consultants or having construction professionals on their staffs.
Although this benefits the project, it is not as effective as having the
design reviewed by the person who actually have to build it.

The traditional approach is difficult to reduce the time required to do

both design and construction. From figure below, the process is
sequential and linear, there is no opportunity, to overlap tasks and thus
reduce overall time.
DISADVANTAGES: Traditional Contract (CONT’D)
Finally, all parties work as an individual in this mode.

The designer designs the project based on the owner’s instructions.

The general contractor prices and schedules the project based on the
construction documents alone.

This approach provides little opportunity for interaction and team

building among the participants can lead to major breakdowns in
relationships.
Conventional Sequential Construction

DESIGN

PROCUMENT

CONSTRUCTION
 A In design and build project,
there is no separation of design
and construction.
The owner hires a contractor who
undertakes the entire

B
responsibility of the project from
design to construction and also
commission. Entities offering this services may
be design & build firms with in-
house employees or joint-venture

An owner hired a master builder,

C firms that come together
contractually to perform a single
who designed the project, acquired project
the materials, and hired and
supervised the craft workers on the
site. This mode of delivery became
D
less popular as professional tasks
became more specialized. POST MODERN
APPROACH
(Design and build)
 POST MODERN APPROACH
(Design and build)
OWNER

DESIGN & BUILD

CONTRACTOR

DESIGNER GENERAL CONTRACTOR

SUBCONTRACTOR OWN FORCES WORK

• Single firm responsible for both design and construction
• Specialty subcontractors
• Fixed price, unit price, guaranteed maximum, or cost plus a fixed construction contract
• Negotiated professional fee for design services
 POST MODERN APPROACH
(Design and build)

DESIGN

PROCUMENT

CONSTRUCTION
 ADVANTAGES: Post Modern Approach
• One major reason for choosing a design & build arrangement is to benefit from
the good communication that can occur between the design team and the
construction team.

• This collaboration allows the project to be easily fast tracked, cutting down on
overall schedule for the project.

• Good communication between the designers and the construction professionals

also allows construction input early in the design phase.

• The owner is less heavily involved and sits outside the direct day-to-day
communication between designer and constructor.

• This keeps owner staffing to a minimum and puts the full responsibility for good
communication, problem solving, and project delivery on design/ build team.
 DISADVANTAGES: Post Modern Approach
• Although it is possible to give the owner a fixed, firm price before the project
begins, this generally does not happen in a design/ build arrangement.
• This is because the firm is hired before the design has started, any real pricing is
not possible. Instead, an owner usually enters this arrangement with a conceptual
budget but without the guarantee of a firm price.
• When a design & build company has an organization that is efficient at performing
the work, the project can move very fast.
• Lack of checks and balances. In the traditional arrangement, the designer prepares
a complete set of contract documents, which is then used to measure and evaluate
the performance of the contractor in the field.
• The owner often hires the designer to oversee the work of the contractor and to
ensue that deficient work is identified and corrected.
• But in the design/ build arrangement, the designer works for the same company as
the builder.
• Similarly, during construction the builder sometimes uncovers certain design
deficiencies, errors, or omissions.
 Design and Build in Malaysia
• The Design and Build system was first launched in the Public Works
Department by the Malaysia Prime Minister in 1983. The first project handled
by this unit was the Kuala Terengganu Hospital, which was completed in 1985.

• Other example : Twin Petronas Tower, Kuala Lumpur International Airport,

Malaysia North South Highway, Penang Bridge and etc,.
 KUALA LUMPUR
CONVENTION CENTRE
Contract Value : RM 549,300,000.00
Client : Kuala Lumpur Convention
Center Sdn Bhd
Completion : October 2005
 NATIONAL REGISTRATION DEPARTMENT AND
MINISTRY OF ENTREPRENEUR AND COOPERATIVE
DEVELOPMENT
Contract Value :
RM 319,300,000.00
Client : Putrajaya Holding Sdn
Bhd
Completion: December 2003
 Comparison of Traditional Contract &
Design & Build Contract
TRADITIONAL CONTRACT D&B CONTRACT