Chapter 20 – PRIME COST & PROVISIONAL SUMS

Flowchart Description Action By Reference

A Provisional Sum is Refer

A
included in the Contract - Flowchart
Sum 20.1

1 1. Prepare cost estimates of CAO/

works under Provisional Ir/Sr
Sum.

No 2. Is the estimates of works -

2 30% more than the
Provisional Sum.

Yes

3 3. Is the estimates of works -

30% - 50%
No
Yes

4. Obtain approval from CAO / Division Use

4 Division Director Director ‘Borang E’

5. Is the estimates of works -

5 50% - 100%
No
Yes
6. Obtain approval from CAO / Deputy Use
6 Deputy DG ‘Borang E’
DG

Obtain approval from Use

7 7. CAO / DG
DG ‘Borang E’

8 Does the work require the -

8 involvement of the Main
No Contractor

Yes 9 9. Quotation exercise SOR

No
10 10. Is it specialist works? -

Yes

11. Tender or quotation SOR

11 Exercise by Contractor

Issue SO instruction to SOR/ SO/

12.
12 main contractor, and CAO
prepare valuation of works

13. Obtain approval (on costs) CAO/ Use

13 ‘Borang F’
from Committee Committee

Appointment of sub-
14 14.
contractor or supplier

SOR/ SO/ Use

15 15. Adjustment to Contract
Sum CAO PHK

Flowchart 20.2 – Administration of Provisional Sums

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 Chapter 20 – PRIME COST & PROVISIONAL SUMS

20.2.2 Administration of Provisional Sum

Action By
Step Procedures / Tasks
/ Reference
A 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 sub-
contractor or supplier so as to avoid any delay to the works.
1 Preparation of Cost Estimates Action by: CAO

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.

2 Approval Before Proceeding with Procurement Action by: CAO

Approval of the Authorised Person is required if the estimated JPS SP

SPJPS Bil.Bil1/2010
1/2007
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..

3, 4 & 5 Authorised Person

x 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.

x 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.

April 2010
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 Chapter 20 – PRIME COST & PROVISIONAL SUMS

Action By
Step Procedures / Tasks
/ Reference

6&7 Procurement of Works Not Requiring Involvement of the Main Action by: SOR/CAO
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 sub-
contractors or suppliers.

Comply with the DID guidelines on calling of tender/quotation.

Direct payment may be to such sub-contractor or supplier For information.

may be effected through Indent or Local Purchase Order
(Inden / Pesanan Tempatan).

8&9 Works To Be Carried Out By Specialists – Calling of For information

Tender/Quotation By Contractor

For specialist works exceeding RM500,000, open/selective

tender shall be called by the Contractor.

For works value not exceeding RM500,000, 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 Action by:

SOR/PT
x The SOR/PT shall prepare specifications, Needs Statement,
or design (‘design documents’), and provide the same to
the Contractor.

x Design and Build. For DB contracts, the Contractor shall

prepare the specifications, Needs Statement or design
(‘design documents’) for the tender/quotation documents.

x 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.

x 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.

x 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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 Chapter 20 – PRIME COST & PROVISIONAL SUMS

Action By
Step Procedures / Tasks
/ Reference

8&9 Works To Be Carried Out By Specialists – Calling of Action by:

(Cont’d) Tender/Quotation By Contractor (Cont’d) SOR/PT

Contractor shall prepare and call tender/quotation (Cont’d)

x The Contractor shall prepare sufficient number of tender

documents.

x For quotations, the tenderers must submit 2 set of

documents.

Closing of Tender/Quotation

x The SOR shall prepare and issue the invitation for

tenders/quotations.

x The tenders/quotations shall be closed on the fixed date

and time.

x The quotations/tenders shall be opened in the presence of

a committee, comprising representatives of the SOR and
Contractor.

Evaluation of Tender/Quotation

x For tenders, the evaluation shall be carried out by the

SOR, and the SOR shall recommend the lowest and
technically complying tender.

x 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.

x 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.

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 Chapter 20 – PRIME COST & PROVISIONAL SUMS

Action By
Step Procedures / Tasks
/ Reference

8&9 Works To Be Carried Out By Specialists – Calling of

(Cont’d) 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.

x 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%.

x 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 Maximum Rate for P&A

RM500,000 or less 7.5%
> RM500,000 – RM 1 million 5%
> RM 1 million - RM 5 million 4%
> RM 5 million – RM 10 million 3%
> RM 10 million <3%

x 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 Action by: SOR / SO

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.

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 Chapter 20 – PRIME COST & PROVISIONAL SUMS

Action By
Step Procedures / Tasks
/ Reference

11 Approval of Value of Works Action by: SOR

The tender/quotation evaluation and recommended sub-

contract / 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

12 Appointment of Sub-Contractor or Supplier Action by: SOR/SO

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).

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