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DCC2073

CONTRACT AND
ESTIMATING

By Sezee Gorotop JKA


Course Learning Outcome
Upon completion of this course, student should be able to;

Understand the concept on construction industry, tender


1 procedure, contract procedure and terms of contract in
Malaysia

Solve problems systematically for preliminary estimating


2 method and quantity measurement in relation to project
estimation

Adopt the responsibilities and professional ethic based on


3 standard Form of Contract (P.W.D Form 203/203A)
efficiently.

Adhere effectively the value of entrepreneurial skills through


4 quantity measurement and build-up rate in relation to Public
Work Department practice.
Assessment tasks for
coursework

• Coursework Assesment (CA) – 50%


– Test (2) – 20%
• CH1-CH3
– Quiz (1) – 5%
• CH5
– End Of Chapter (1) – 10%
• CH5 – CH7
– Project (1) – 15%

• Final Examination Assessment (FE) – 50%


COURSE SUMMARY

CHAPTER 1
THE CONSTRUCTION INDUSTRY IN GENERAL

CHAPTER 2
THE TENDER PROCEDURE

CHAPTER 3
THE CONTRACT PROCEDURE

CHAPTER 4
THE STANDARD FORM OF CONTRACT (P.W.D
FORM 203/203A)
CHAPTER 5
THE PRELIMINARY ESTIMATING METHOD

CHAPTER 6
THE BUILD-UP METHOD

CHAPTER 7
THE QUANTITY MEASUREMENT
CHAPTER 1
THE CONSTRUCTION INDUSTRY IN
GENERAL

Construction industry;
• Industries includes building work and civil
engineering works.
• The main objectives is to get maximum
profit upon the investment.
• will require collaborate with others.
Works in Construction
Industry

• Civil engineering Work


– Eg; drainage works

• Building Work
– Eg; construction of houses

• Massive Civil Engineering Work


– Eg; bridge, dam etc
Relationship between construction &
growth in economy

• Adopt new approaches & technologies in


construction industry
• Increase job opportunities
• Increase investment & marketing
opportunities
• Develop tourism activities
Differentiate the roles of;

Design Team Members


– Owner/Client
– Architect
– Civil engineer/ structure, Electric and machines
– Quantity Surveyor

Builders Team Members


– Contractor
– Architect
– Civil/ structure Engineer, Electric and Machines
– Quantity Surveyor
Design Team

Owner/Client (Design)
• Owner of the project/ client
• Appoints consultants & contractors
Architect (Design)
• Will materialize the owner’s / clients need
• Prepare preliminary design & detailed
design according to the client’s need &
cost
Civil/Structure Engineer/ Electric/ Machines (Design)
• Play as same role with the architects but within their designated
fields
• Will always communicate with the architects about the project

Quantity Surveyor (Design)


• Functions as a cost advisor in early design stage even though
detailed drawing is not yet completed
• Calculate the preliminary estimation for owner’s reference
• As a cost planner to analyze systematically each elements in the
building and compare with the overall costs
Builders Team

Contractor (Builders)
• Must build & complete the project based on the
specification in the contract document
• Must bear the cost of all the works on site during
construction & after completion
• Must work efficiently to complete the project by
due date
• Must obey & follow local legislation
• Must provide insurance coverage for the project
& workers
Architect (Builders)
• To control & supervise construction project
according to the original design
• Team leader among the consultants
• To communicate with the contractor
Civil/Structure Engineer/Electric/ Machines
(Builders)
• To supervise during the construction
• As an advisor on site according to their
designated fields
Quantity Surveyor (Builders)
• Will evaluate the work at site according to
schedule to prepare progress payment
• Will evaluate corrected defect work
• Will make sure that all defects have been
repaired during the defects liability period
• Will prepare final account/cost
Contractor Organization Chart

• A process where a job need to be done by


a man or a group can be success by
joining all the task in order to achieve the
main objective by systematic operation
system.
Structure Hierarchy

Depends on Management
small @ big the Highest
project are

Supervisor /
Depends on
Medium technical
power and
firms

Lowest
Labors
Jurisdiction in Contractor Firm

Managing Director
Project Manager

Project Coordinator

Site supervisor (civil works) Site supervisor (building works)

Workers Workers
Example of contractor
Organization Chart

MANAGER

ADMINISTRATION TECHNICAL

PURCHASING PROJECT

GENERAL FINANCIAL
CONTRACTOR REGISTRATION
PROCEDURE AT CONSTRUCTION
INDUSTRY DEVELOPMENT BOARD
MALAYSIA (CIDB)

• Construction Industry Development Board was established under the


Construction Industry Development Board Act (Act 520) to develop the
Malaysian construction industry and to enhance its competitiveness and to
develop a world class construction industry

• The Government has decided on the implementation of a Single Contractor


Registration (SSPK) from 15 October 2012 that coordinates all contractors
registration under the CIDB and PKK. PKK is responsible for overseeing and
managing the Bumiputera status to qualified contractors.
Term and condition for Contractor
registration at CIDB

1) Registered with Companies Commission of Malaysia (SSM)


2) Experience:-
– Experience of the firm/company or by using experience of technical personnel.
– All main contracts or nominated sub-contract executed.
– Sub-contract executed by the applicants supported by evidence.
3) Financial Capacity:-
– Financial capacity of an applicant registered with the Registrar of Companies (ROC) shall be
evaluated on the paid-up capital of the companies.
– For applicants registered with the Registrar of Business (ROB), whether sole proprietorship
or partnership, financial capacity shall be evaluated in terms of net capital worth.
4) Personnel Resources:-
– Fulltime personnel resources in Malaysia to undertake the work corresponding to
the registration grade and category applied for. (With recognized qualifications &
relevant EPF contribution statements)
– Eg; Manpower and machineries
Grade System (CIDB)

Grade Financil Limit to tender (RM)


G1 Not more than 100,000.00
G2 Not more than 500,000.00
G3 Not more than 1 Million
G4 Not more than 3 Million
G5 Not more than 5 Million
G6 Not more than 10 Million
G7 Unlimited
Category and specification

Contractors only allowed to tender project according to their


registered expertise only

Category Expertise
CE Civil Engineering Works
B Building construction
ME Mechanical and Electrical
Contractor Service Centre
Pusat Khidmat Kontraktor (PKK)

• To help develop quality of Bumiputera contractors


• To ensure greater Bumiputera participation as the
country moves towards achieving Vision 2020.
• Development of quality and competitive Bumiputera
contractors.
• Encourage more Bumiputera to venture into business as
contractors.
• Only contractors registered with PKK can take part in
government project (tender).
• Registration valid for 2 years only (RM50 to RM500
based on class registration)
What are the grades and financial limit values
in effect for contractors working for
government procurement?

BUILDING WORKS CONTRACTOR / CIVIL / MECHANICAL


Class Financial Limit
RM200,000 and below

F RM200,000 and below

E Exceeding RM200,001 up to RM500,000.00

D Exceeding RM500,001.00 up to RM2,000,000

C Exceeding RM2,000,001.00 up to RM5,000,000.00

B Exceeding RM5,000,001.00 up to RM10,000,000.00

A Exceeding RM10,000,000.00
HEAD SYSTEM (PKK)

• Plays important roles in construction field.


• Refers to majoring works
• have to state the HEAD - major skill
HEAD SYSTEM

TYPE JURISDICTION
HEAD I Civil Engineering Works
( Kerja Kejuruteraan Awam)
HEAD II Building Works
(Kerja Bangunan)
HEAD III Mechanical, Sanitary and Water Engineering Works
(Kerja Kejuruteraan Mekanikal, Kejuruteraan Pembersihan dan Kejuruteraan Air)
HEAD IV Other Specialist, Civil Engineering Works
(Lain-lain Kerja Kejuruteraan ‘Specialist’)

HEAD V Quarrying Metal and Earth Supply, Cartage and Transport


(Kerja Pecah Batu, Pembekalan Tanah dan Pengangkutan)
HEAD VI Forest and Land Development
(Kerja Perhutanan dan Pembangunan Tanah)
HEAD VII Electric Works
(Kerja Elektrik)
HEAD VIII Telecommunication Works
(Kerja Telekomunikasi)
Bumiputra Recognition by PKK

• Majority or at least 51% of members of the


Board Of Directors are Bumiputra.
• Majority or at least 51% of members of the
management are Bumiputra .
• Majority or at least 51% of shares are
owned by Bumiputra.
• Majority or at least 51% of workers
(clerical and building site) are Bumiputra.
Registration void if;

• certificate holder has been convicted as a bankrupt or


• winding up petition has been submitted in relation to the contractor or
• certificate holder fails to comply with any provision of the Act or the regulations or
registration
• certificate holder has obtained a certificate or certificate by making a false statement
in writing or otherwise, or
• certificate holder leave the construction work being carried out or
• certificate holder has been found guilty by a court or any investigating body
established under any written law for negligence in the execution of construction work
performed or
• certificate holder has contravened or failed to comply, or has helped breach any of
the terms, conditions or limitations imposed by the Board.
• Upon registration with the Registrar of Business has expired, unless the contractor
submits a copy of the certificate of renewal of the Business registrar within one (1)
month after the date of expiry of the Business Registration Certificate
THANK YOU!