CONFIDENTIAL ASSIGNMENT 3/BQS659

UNIVERSITI TEKNOLOGI MARA

ASSIGNMENT 3

COURSE : PROFESSIONAL PRACTICE

COURSE CODE : BQS659

7.0 CLAIM FOR LOSS AND EXPENSE

QUESTION 1

A Contractor was awarded a contract for the construction and completion of a 3-blocks
of apartments for 18 months. Six (6) months into the progress, the date for completion
the date for completion was extended for 6 months due to the addition of one more
block of apartment. The original completion date was on the 30th September 2019 and
the new completion date was 30th March 2020. Further delay occurred and the
contractor submitted a new extension of time claim. After verifying the delay events, the
Architect extended the construction period to 30th April 2020. The revised completion
date was based on the following reasons:

Item Reasons Period

1 Exceptional inclement weather 15 days
2 Remedial works due to discrepancies between the
Architect’s and Engineer’s drawings 5 days
3 New authority requirements imposed 10 days
Total 30 days

The Contractor via letter dated 18th February 2020 submitted an application for loss and/or
expense based on the reasons he was granted extension of time, Explain:

a) the probable head of claims the Contractor could validly submit.

(10 marks)

b) in each case under which clause in the contract such addition could be authorized.
(8 marks)

c) how he can substantiate such claims and the document and records he may
require to back such claims. (7 marks)
8.0 NOMINATED SUBCONTRACTOR

a) Syarikat Teguh Bersama was awarded a contract worth RM 50 million. The contract
includes a Prime Cost Sum of RM 2,550,000.00 for electrical works. After going through the
normal process, the S.O. decided to award the Electrical Works to Ikatan Mampu Sdn. Bhd.
and proceed by giving instruction to Syarikat Teguh Bersama to enter a contract with Ikatan
Mampu Sdn. Bhd. Upon receiving the instruction, Syarikat Teguh Bersama wrote a letter to
the S.O. giving reasons disagreeing to the nomination.

i) Should the reasons given by the contractor is accepted by the S.O. as reasonable,
explain the action that may be taken by the S.O.

ii) Explain what is meant by reasonable objection.

b) Discuss the situation where the main contractor may be offered to tender for the Prime
Cost works. Explain the effect to the profit and attendance if the main contractor were to be
awarded the work for the Prime Cost Sum.

c) Explain the situation where a Nominated Sub-Contractor could be paid direct as provided
in the PAM Form 2018

9.0 FINAL ACCOUNT AND FINAL CERTIFICATE

QUESTION 1

The following are particulars of a newly completed project for the construction and
completion of a 10-storey office building.

A PARTICULARS OF CONTRACT

Contract Sum RM 8,112,000.00

Date of Possession 1st September 2017
Date for Completion 31st August 2019
Date of Practical Completion 17th September 2019
Extension Of Time Nil
Liquidated and Ascertained Damages RM 1,700.00/day
Amount paid to date RM 6,300,000.00
Performance Guarantee Sum RM 405,600.00
Type of Contract PWD Form 203A (Rev. 1/2010)
(fluctuation of price clause deleted)
B SUMMARY OF CONTRACT SUM

ITEM DESCRIPTION AMOUNT (RM)

1 Preliminaries 386,300.00
2 Administration Block 6,550,500.00
3 Guard House 35,600.00
4 External Works 220,000.00
5 P.C. & Provisional Sums 919,600.00
TOTAL 8,112,000.00

C PRIME COST SUM

ITEM DESCRIPTION AMOUNT ALLOWED

IN BQ (RM)
1 Curtain walling 220,000.00
Profit 2% 4,400.00
Attendance 6,000.00
2 Air conditioning installation 180,000.00
Profit 2% 3,600.00
Attendance 5,000.00
3 Electrical installation 80,000.00
Profit 2% 1,600.00
Attendance 2,000.00
4 Lift installation 350,000.00
Profit 2% 7,000.00
Attendance 7,000.00

C PRIME COST SUM (CONT’D)

ITEM DESCRIPTION AMOUNT ALLOWED

IN BQ (RM)
5 Fire fighting system 50,000.00
Profit 2% 1,000.00
Attendance 2,000.00

D PROVISIONAL SUM

ITEM DESCRIPTION AMOUNT ALLOWED

IN BQ (RM)
1 Built in Furniture 100,000.00
2 TNB Sub-station 75,000.00
3 Landscaping 150,000.00
4 Contingencies 100,000.00

E SUMMARY OF VARIATIONS

i) Building Works
 ITEM DESCRIPTION OMISSION (RM) ADDITION (RM)
1 Ceiling Finishes 33,500.00 20,500.00
2 Floor Finishes 15,300.00 25,300.00
3 Doors and Windows 30,600.00 45,600.00

ii) External Works

ITEM DESCRIPTION OMISSION (RM) ADDITION (RM)

1 Water Reticulation 13,500.00 25,500.00
2 Surface Water Drainage 12,500.00 25,500.00
3 Hardstanding 15,500.00 18,500.00

iii) Prime Cost Sums

ITEM DESCRIPTION OMISSION (RM) ADDITION (RM)

1 Curtain Walling
Accepted tender figure:
RM 195,300.00
V.O. No. 1 25,500.00 38,500.00
2 Air-Conditioning Installation
Accepted tender figure:
RM 155,200.00
V.O. No. 1 15,000.00 25,500.00
3 Electrical Installation
Accepted tender figure:
RM 72,500.00
V.O. No. 1 12,000.00 15,500.00
V.O. No. 2 10,500.00 13,500.00
4 Lift Installation
Accepted tender figure:
RM 330,300.00
0.00 0.00
No variation

5 Fire Fighting System

Accepted tender figure:
RM 35,000.00 0.00 0.00
No variation

iv) Provisional Sums

ITEM DESCRIPTION AMOUNT ALLOWED

IN BQ (RM)
1 Built in Furniture 88,800.00
2 TNB Sub-station 58,500.00
3 Landscaping 125,000.00

a) Based on the information provided, prepare a Statement of the Final Account AND
the Final Certificate for the project.
(20 marks)
 b) What would be the recommended amount certified in the Final Certificate if the
contract was let under the PAM 2018 Standard Form of Contract?
(5 marks)

Instructions:

i. All questions must be answered by handwritten

ii. Front page: Hard cover (blue color) with ring binding. Please decide on the
format of the front page, all of you must have same format for the front page

iii. INDIVIDUAL ASSIGNMENT

iv. Delay in submission shall be treated as NON-SUBMISSION