Construction Law and Contract

Lecturer:
Ir. Dr. Rosli Mohamad Zin

P.W.D. FORM 203A

JKR 203A
STANDARD FORM OF CONTRACT Conditions Of Contract (56 Clauses)

1. Definitions and Interpretation

Define the following word terms Contract, Contractor, Contract Sum, S.O, S.O Representatives, Site, approved, directed, Work.

2. Duties of S.O and S.O.s Representative

a) S.O shall be responsible for the overall supervision and direction of the Works.
b) S.O.'s Representative shall be responsible to the S.O. and his duties are to watch and supervise the Works. c) S.O. may from time to time in writing delegate to the S.O.'s Representative any of the powers and authorities vested in the S.O. and shall furnish to the Contractor a copy of all such written delegation of powers and authorities.

3. S.O.'s Right to Take Action

a) Officer empowered to act on behalf of Government and to approve variations. Arises out of provision of Clauses 40, 43, 51, 52 or 54.
b) Contractor shall not be entitled to claim for any delay and extension of time or any extra cost or expense or whatsoever arising for compliance with the provisions of this Condition.

4. Scope of Contract
Obligation of the contractor to carry out and complete the Works in accordance with the Contract Documents. The contractor is obligated to provide materials, goods and standards of workmanship of the quality and standards.
Contractor to make good any defect, imperfection, shrinkage or other fault which may appear during Defect Liability Period in accordance with Clause 45.

5. S.Os Instructions
a) S.O. may in his absolute discretion and from time to time issue further drawings, details, and/or written instructions.
b) Contractor shall (subject to sub-clause (c) hereof) forthwith comply with all instructions issued to him by the S.O. within seven (7) days after receipt of a written notice from the S.O.

5. S.O.s Instructions (Cont)

c) All instructions issued by the S.O. shall be issued in writing. Any instruction issued orally shall be of no immediate effect, but shall be confirmed in writing by the Contractor to the S.O.
d) The Contractor shall within one (1) month of receipt of such instruction, give notice in writing of his intention to claim for such expense or loss to the S.O. together with an estimate of the amount of such expense and/or loss, subject always to Clause 48 (a) hereof.

6. Notices
Contractor shall notify the S.O. an address where written notices and instructions of the S.O. under this Contract may be served upon him and shall inform the S.O. of any change of address.

7. Contract Documents
a) The Contract Documents as aforesaid shall remain in the custody of the S.O. and shall be produced as and when required by the Contractor.
b) Copies of Contract Documents - one certified true copy of the Contract Documents - two copies of the Contract Drawings - two copies of the unpriced Bills of Quantities

7. Contract Documents (Cont)

c) S.O. shall have two copies of such further working drawings or details as are reasonably necessary either to explain and amplify the Contract Drawings or the Specification.
d) Contractor shall keep one copy of the Contract Drawings, the Specification (if any), unpriced Bills of Quantities and documents on the Site and the S.O. shall at all reasonable times have access to the same.

7. Contract Documents (Cont)

e) Return to the S.O. all drawings, details, specifications, unpriced copy of Bills of Quantities and other documents of like nature after completion of work
f) None of the documents hereinbefore mentioned shall be used by the Contractor for any purpose other than this Contract.

8. Sufficiency of Contract Documents

a) Contract Documents are to be taken as mutually explanatory of one another.
b) Contractor shall find any discrepancy in or divergence between any two or more of the Contract Documents including a discrepancy or divergence between parts of any one of them, he shall immediately give to the S.O. a written notice specifying the discrepancy.

9. Materials and Workmanship

a) All materials, goods and workmanship shall be of the respective kinds and standards described in the Bills of Quantities and/or Specification.
b) The Contractor shall entirely at his own cost provide samples of materials and goods for testing. The Contractor shall oblige when instructed by the S.O. as per Clause 5.

10. Unfixed Materials and Goods

Unfixed materials and goods delivered to, placed on or adjacent to the Works and intended for incorporation therein, shall not be removed except for use upon the Works.
S.O. has included the value of such materials or goods in any certificate in accordance with Clause 47. Contractor shall remain responsible for loss or damage to the same.

11. STATUTORY OBLIGATIONS

a) Compliance with written law, regulations and bye-laws The Contractor shall give all notices and pay all fees and charges required under any written law, regulations and byelaws in relation to the execution of works or any temporary works.

11. STATUTORY OBLIGATIONS (Cont)

b) Charges to be borne by Government
Any costs incurred by the Contractor in relation to fees and charges for removal and installation of permanent connections to public sewers and permanent water and electricity supply shall be borne by the Government. The Government shall reimburse the Contractor for such costs by adding it by the way of Provisional Sum or etc. to the Contract Sum (if not included).

11. STATUTORY OBLIGATIONS (Cont)

c) Indemnity to the Government
The Contractor shall keep the Government indemnified against all penalties and liabilities of every kind of breach under provision of any written law, regulations and bye-laws which may be applicable to the works or any temporary works.

11. STATUTORY OBLIGATIONS (Cont)

d) Changes in written law etc.
If there is any change or amendment in any written law, regulations and byelaws after the date of tender which necessitates any variation to the works or any temporary woks, the Contractor shall give written notice that specifying and giving the reason for such variation to the S.O. and follow the S.O.s instruction before making such variation.

12. FOSSILS etc.

All fossils, coins, articles of value or antiquities and structures, other remains or things of geological or archaeological discovered on the site of works shall be deemed to be absolute property of the Government.
The Contractor shall take the reasonable precautions to prevent his workmen or any other persons from removing or damaging any such articles or things.

12. FOSSILS etc. (cont)

The Contractor shall immediately informs S.O. or S.O. Representative of such discovery and carry out the removal of such articles or things at the expense of the Government.

13. PATENT RIGHTS AND ROYALTIES

The Contractor shall save harmless and indemnify the Government from all claims and proceedings or on account of infringement of any patent rights, design, trademark or name or other protected rights in respect of any plant, machine work or material used in connection with works or any of them.

13. PATENT RIGHTS AND ROYALTIES (Cont)

Except where other specified, the Contractor shall pay all tonnage and other royalties, rent, fees and other payments for getting stone, sand, gravel, clay or other materials required for the works.

14. SETTING OUT

The S.O. shall provide information such as levels, boundary stone, and any other points of reference which may be required for the execution of the works for Contractor to set out works at ground level.
The Contractor shall take the responsible and shall entirely at his own cost amend any errors arising from his own inaccurate setting out.

15. INSPECTION OF SITE

The Contractor shall be deemed to have inspected and examined the site and its surrounding areas and have to satisfy himself before submitting his tender as to the nature of the ground and subsoil, the form and nature of the site, the extent and nature of the work, necessary materials and goods for the completion of the works, communication and access to the site, accommodation, all necessary information as to risks contingencies and all circumstance influencing and affecting his tender.

15. INSPECTION OF SITE (Cont)

Any information or document given or forwarded by the Government to the Contractor shall not relieve the Contractor of his obligations under the provisions of the clause.

The Contractor shall make use of and interpret those information at his own risk.

16. EMPLOYMENT OF WORKMEN

a) Malaysian citizens.

The Contractor shall employ only Malaysian citizens as workmen.

The contractor can only employ nonMalaysian citizens if he can satisfy the S.O. and can prove that Malaysian citizens are not available for some particular trades or skills that required to complete the works.
Employment of non-Malaysian citizens is still subject to the approval of the Ministry of Labour and Manpower.

16. EMPLOYMENT OF WORKMEN (Cont)

b) Ratio of workmen.

The ratio of Malaysian citizens who shall be employed by the Contractor in the execution of the contract shall reflect the racial ratio of the citizens of the country as prescribed by the Government from time to time.

16. EMPLOYMENT OF WORKMEN (Cont)

c) Particulars of labour.

The Contractor shall furnish all particulars in respect of labour employed by him to the Department of Labour on the commencement of the works in accordance with the requirements of the Employment Ordinance 1955, employment (Restriction) Act 1968, and Internal Security (Registration of Labour) Regulation 1960 or any subsequent modification or re-enactment.

16. EMPLOYMENT OF WORKMEN (Cont)

d) Source of labour.

All workmen employed in connection with the works shall be employed from the district where the works are situated. Employment of workmen from other districts only can be done if such workmen are not available in the said district. The Contractor shall immediately arrange with the Local Labour Office, District Officer to effect such employment after receipt of acceptance of tender.

16. EMPLOYMENT OF WORKMEN (Cont)

e) On-site Training Programme

The Contractor shall employ the Works trainees provided by the Manpower Department, Ministry of Labour and Manpower for the purpose of providing site training to the workers if required by the Government.

16. EMPLOYMENT OF WORKMEN (Cont)

f) Compliance by sub-contractors.

The Contractor shall cause his subcontractors (including labour-only subcontractors) and nominated subcontractors to comply the provisions of this condition.

17. COMPLIANCE WITH EMPLOYMENT ORDINANCE 1955 etc.

The Contractor shall comply and shall cause his sub-contractors (including labour-only sub-contractors) and nominated subcontractors to comply with all the requirements of the Employment Ordinance 1955, Employment (Restriction) Act 1968, Employees Provident Fund Ordinance 1951, the Industrial Relations Act 1967 and any other law relating to the employment of workmen in the employment of workmen for the execution of the contract.

17. COMPLIANCE WITH EMPLOYMENT ORDINANCE 1955 etc. (Cont)

The Contractor shall not be entitled to any claim for additional costs and payments in respect of his compliance with this condition.

18. DAYS AND HOURS OF WORKING

No work shall be done without the written permission of the S.O. on: The weekly day of rest, Any public holiday which is recognized in the district where the contract is being carried out, Between 6 p.m. to 6 a.m. in the following morning.

18. DAYS AND HOURS OF WORKING (Cont)

The Contractor shall comply fully with all the requirements of the Employment Ordinance 1955 or any subsequent modification or reenactment when such written application is approved by the S.O.

19. FOREMAN AND ASSISTANTS

The Contractor shall keep constantly a competent general foreman and assistants who capable of receiving instructions in Bahasa Malaysia or English in each trade on the site. Such foreman shall be deemed as a site agent of the Contractor and any directions, explanations or instructions given to such foreman by the S.O. shall be deemed to have been given to the Contractor under the contract.

20. WAGES BOOKS AND TIME SHEETS

The Contractor shall keep and shall cause his sub-contractors (including labour-only subcontractors) and nominated sub-contractors to keep proper wages books and time sheets showing wages paid to and the time worked by all workmen employed by him and his subcontractor, on demand for inspection by any persons authorized by the S.O. and for the performance of the contract.

21. Default in Payment of Wages

Failure from the contractor or his sub-contractor and Nominated subcontractor to: pay the wages of the workmen contribution to the EPF for the workmen claims filed against the contractor in Department of Labour

21. Default in Payment of Wages (Cont)

The S.O. after viewing the evidence can make ready the payment by deducting any payment towards the contractor at any time during the contract period.

22. Discharge of Workmen

The contractor is responsible for employing his technical and non technical workforce who are both efficient and good in character. If the S.O. finds that the behaviour of person (s) employed misconducts or caused delays or incompetent, he is empowered to instruct in writing the removal of such employees

22. Discharge of Workmen (Cont)

Without delaying, a replacement would be found with the approval of the S.O. The contractor will not be entitled for any expenses claims incurred in this clause.

23. Access for the S.O. to the Works

The contractor has to grant the S.O. and the representatives access at reasonable times to:
Works Site Workshops Other places of the contractor where work is done for the contract

23. Access for the S.O. to the Works (Cont)

The contractor has to do the same for the places of works undertaken by the subcontractors and the nominated sub-contractors

24. Variation
a) The S.O. is empowered to issue change orders which has to be confirmed in writing. These changes would not weaken the contract. b) Variation is defined as:

Alteration or modification of the design, quality or quantity of works shown in the drawings, BQ and specifications. Addition, omission or substitution of works Alteration or removal in the kind or standard or any materials or goods to be used in the works for the contract.

25. Measurement & Valuation of Works Including Variation

a) If the works are not similar and not executed under similar conditions, a reasonable rate or a fair valuation shall be made by the S.O.
b) The BQ rates will determine the value of works omitted. If the omission amounts to varying condition of the remaining works, then a reasonable rate or a fair valuation shall be made by the S.O.

25. Measurement & Valuation of Works Including Variation (Cont)

c) Amount to be paid for quantities of work stated as provisional will be subjected to re-measurement once the contract is ended. d) Works which cannot be properly measured or valued:

25. Measurement & Valuation of Works Including Variation (Cont)

an allowance would be made to the contractor to enable him quote day-work price with 15% mark-up which includes the costs for ordinary plants, tool, scaffolding, supervision and profit.
The contractor is to furnish the S.O. with vouchers, receipts and wage books specifying the time, for labour and plant and materials used in not more than 7 days after executing the work.

25. Measurement & Valuation of Works Including Variation (Cont)

e) S.O. is responsible to give prior notice to the contractor to attend or send a qualified agent to assist the S.O. or the representative to undertake the measurement. Failure on the contractor to attend or send a qualified agent would deem whatever measurement taken by the S.O. to be the correct measurement of work.

25. Measurement & Valuation of Works Including Variation (Cont)

f) In respect of variation, the amount to be allowed shall be added or deducted from the contract sum appropriately.

26. Bills of Quantities

a) The BQ is part of the contract and the quality and quantity of works under the contract follows the description of the BQ which shall be the basis of the Contract Sum. b) The BQ, unless stated, shall be prepared with accordance to the Standard Method of Measurement of Building Works published by the Institute of Surveyors Malaysia.

26. Bills of Quantities (Cont)

c) Quantities that are provisional are estimated quantities and therefore the contractor should not be take it as the actual figure. d) Prices and rate submitted by the contractor is subject to agreement of the S.O. and prior to signing the contract, the S.O. can reasonably change the price or rate.

26. Bills of Quantities (Cont)

Any adjustment, error or omission should be rectified prior to signing of the contract and the corrected amount should reflect the amount in the Form of Tender.

27. Sub-Letting and Assignment

a) Unless provided in the contract, the contractor is not to sub-let the entire or part of the works without prior written notice to the S.O.
If consent is given to sub-let, the contractor is still liable under the contract and shall be responsible for the acts, defaults and neglect carried out by the sub-contractors. Provision of labour on a piecework basis is not included in this category.

27. Sub-Letting and Assignment (Cont)

b) The of sub-letting of the subcontractor under sub-contract shall be determined immediately upon the determination of the contractors employment under the contract.

27. Sub-Letting and Assignment (Cont)

c) Sub-contractors employed for the works is only limited within the district where the works are situated or unless an unavailability of such expertise, they can be employed from within the state.
Variation to this is only due from the consent of the S.O.

27. Sub-Letting and Assignment (Cont)

d)

The contractor cannot assign the entire contract or part of it in favour of the contractors banker, financial institution or corporation without prior consent from the government.

28. Nominated Sub-contractors / Suppliers

a) All expertise personnel undertaking the works or supplying materials for works under the P.C. Sums in the BQ shall be nominated by the S.O. and employed by the contractor.
b) The S.O. or contractor is obliged to obtain tenders for nominated subcontractors works or supply of materials for the P.C. Sum works or provisional Sums which are included in the BQ upon
receiving S.O. instruction.

28. Nominated Sub-Contractors / Suppliers (Cont)

c) The S.O. shall not nominate a sub-contractor or a supplier if:
Reasonable objection made by the contractor within 14 days of the instruction by the S.O. The person does not enter into a sub-contract terms and conditions stated in the government standard form of sub-contract under PWD 203N or PWD 203P The person that give no indemnity against government as required under the conditions of the contract

28. Nominated Sub-Contractors / Suppliers (Cont)

d) The S.O. shall undertake one of the following in the event the contractor is not required to enter into a sub-contract: Nominate an alternative sub-contractor or supplier
Vary the works in accordance to the variation clause Arrange for the contractor to undertake the works as per clause 30d

28. Nominated Sub-Contractors / Suppliers (Cont)

e) Interim certificates of the S.O. will separately state the amounts due to each nominated sub-contractors or suppliers.
The amount shall be paid by the contractors to them within 14 days after the contractor receives the

payment from the government pay when paid

28. Nominated Sub-Contractors / Suppliers (Cont)

f) The S.O. is entitled to demand the contractor for proof of previous payment made to the nominated sub-contractors or suppliers.
Failure by the contractor to pay the nominated subcontractors or suppliers promptly can entitle the government to pay directly to the nominated subcontractors or suppliers.

28. Nominated Sub-Contractors / Suppliers (Cont)

g) The conditions stated in the contract cannot be seen as the government being liable for the nominated subcontractors or the suppliers.

29. Responsibilities of Contractor for Nominated Sub-contractors / Suppliers

a) The contractor is fully responsible for the defaults of the nominated subcontractor or nominated supplier and the government is not liable to the contractor inn any way.

29. Responsibilities of Contractor for Nominated Sub-contractors / Suppliers

b) If the nominated subcontractor or supplier abandons the contract, the contractor can:

Engage another subcontractor with the consent of the S.O.

Undertake the subcontract works himself.

30. Prime Cost and Provisional Cost

a) Prime cost sum provided in the BQ are works that would be executed by nominated subcontractors or for materials supplied by nominated suppliers.

The sum due to the contractor shall be in the form of profit or attendance as quoted by the contractor in the BQ.

30. Prime Cost and Provisional Cost (Cont)

b) Provisional sum provided in the BQ are for the works or the supply of goods or materials which cannot be estimated, defined at the time of tender.

If the amount in the provisional sum is not used entirely or partly, the amount not used is deducted from the contract sum. The valuation of the works in the provisional sum shall be subjected to re-measurement upon completion.

30. Prime Cost and Provisional Cost (Cont)

c)

If the S.O. decides to treat the works or materials in the provisional sum as prime cost sum, then the item would be dealt accordingly as the prime cost sum items.

30. Prime Cost and Provisional Cost (Cont)

d)

If the contractor desire to carry out works under the prime cost sum and the S.O. is prepared to accept tenders from the contractor for the works, the contractor may do so without prejudice to governments right to reject the lowest tender

30. Prime Cost and Provisional Cost (Cont)

If the contractor s tender is accepted, the contractor would not be entitled to the profit and attendance charges as contained in the BQ.

31. Artists and Tradesmen

Contractor must allow and permit the tradesmen that may engaged by Government to execute the works that not forming part of the contract. i.e. to allow work to be carried out by others e.g. tenaga, telekom

32. Indemnities to Government in Respect of Personal Injuries and Damage to Property

a) Contractor is liable and shall indemnify the Government for any damage, expense, liability, loss, claim or other proceedings against personal injury or death of any person in the execution of the Works. i.e. coverage against personal injury or death

32. Indemnities to Government in Respect of Personal Injuries and Damage to Property (cont.)
b) Contractor is liable and shall indemnify the Government for any damage, expense, liability, loss, claim or other proceedings due to damage of any property in the execution of the Works, and also due to any negligence, omission, breach of Contract, including default of Contractor responsibilities.

32. Indemnities to Government in Respect of Personal Injuries and Damage to Property (cont.)

c) For any negligence or omission by Government or S.O. in failing to supervise Contractors site operation, the indemnities given by the Contractor under sub-clauses (a) and (b) should not be reduced.

33. Insurance Against Personal Injuries and Damage to Property

a)

That the obligations of the contractor to effect and maintain insurances is additional to and does not effect the indemnity given by the contractor to the government under clause 32

The insurances must be effected before the commencement of any work under the contract

33. Insurance Against Personal Injuries and Damage to Property (cont.)

b) The insurance as referred to sub-clause (a) shall be effected and maintained in the joint names of the Government and Contractor for the whole construction period, including the Defects Liability Period. Contractor is responsible to produce the relevant policies of the insurance together with receipts of premium paid to the S.O.

33. Insurance Against Personal Injuries and Damage to Property (cont.)

c) If any default in renewing such insurance by Contractor, the Government or S.O. may renew the insurance as aforesaid and may deduct the amount paid due to Contractor in respect of premiums paid.

34. Workmens Compensation

a) Contractor is liable and shall indemnify the Government, and all workmen employed for compensation payment under the Workmens Compensation Ordinance 1952 and the Employees Social Security Act, 1969.

34. Workmens Compensation (cont.)

b) i)Policies of insurance in the joint names of the Government and Contractor are necessary at Contractor own cost and expense to cover his liability in respect of workmen employed by him. Also, if any Nominated Sub-contractor to take out, insurance policies should in the joint names of the Government, the Contractor and the Nominated Sub-contractor to cover the liability of Contractor in respect of workmen employed by the Nominated Sub-contractor.

34. Workmens Compensation (cont.)

b) ii)the policies so taken out shall be as per endorsement A or B.

34. Workmens Compensation (cont.)

c) The policies must be deposited with the S.O. and Contractor shall maintain it for the whole construction period, and also covered during Defects Liability Period where defect rectification work (if any) is carried out. The Contractor also responsible to produce the receipt in respect of premium paid to the S.O.

34. Workmens Compensation (cont.)

d) If any default is made by the Contractor in complying the term of this Condition or any term of this Contract, the Government or S.O. may withhold an amount from any money which would due to Contractor, and pay such claim for compensation by workmen. e) The provision in this clause would not derogate the Governments right to be indemnified by Contractor under sub-clause (a) of this Condition.

35. Employees Social Security Act, 1969

a) The Contractor will not be required to take out any Workmens Compensation Insurance Policy under Cl. 34(b) if the workers are liable for coverage under the Employees Social Security Act, 1969. In this case, Contractor shall register his employees and contribute under Social Security Scheme (SOCSO).

35. Employees Social Security Act, 1969 (cont.)

b) The Contractor shall pay all contributions from time to time until the completion of his Contract. He shall produce to the S.O. contribution cards or stamp vouchers as evidence of payment.

35. Employees Social Security Act, 1969 (cont)

c) If any default caused by Contractor, the Government or S.O. may withhold an amount from any money which would due to Contractor, and pay compensation claim by workmen.

35. Employees Social Security Act, 1969 (cont)

d) Nothing in the clause would derogate the Governments right to be indemnified by Contractor under Clause 34(a) in respect of all compensation, costs and other expenses.

36. Insurance of Works

a) The Contractor shall in the joint names of the Government and Contractor insure against loss and damage by fire, lightning, explosion, storm, flood, ground subsidence and others, including materials and goods so insured until the completion of the whole Works.

36. Insurance of Works (cont.)

b) The insurance shall be effected with an insurance company approved by the S.O. and the Contractor shall produce to the S.O. the policy and the receipts in respect of the premium paid.

36. Insurance of Works (cont.)

c) If Contractor failed to renew such insurance, the Government or S.O. may renew such insurance and pay the premium by deducting the amount from any monies due to the Contractor.

36. Insurance of Works (cont.)

d) If any occurrences of loss or damage to Work prior to the completion of the Works, the Contractor shall restore the damaged work even before the pay out by the insurance company has been made. All monies received from the insurance shall be paid to the Government first and then be released to the Contractor by installments on the certificate for payment issued by S.O.

37. Performance Bond

a) The Contractor shall deposit with the Government a Performance Bond equal to 5% of the Contract Sum for the due observance and performance of this Contract. The Performance Bond shall be in cash, or Treasurys Deposit, Bankers Draft or an approved Bankers or Insurance Guarantee.
b) The Performance Bond shall be held or remain valid and effective for such period as is provided in the approved Bankers or Insurance Guarantee. Normally 6 month after DLP.

37. Performance Bond (cont.)

c) If the Contractor breach the Contract, the Government or S.O. may utilize and make payments form the Performance Bond.
d) The Performance Bond may be released to the Contractor on the completion of making good all defects which may appear during the Defects Liability Period and upon the giving of the Certificate of Completion of Making Good Defects.

38. Possession of Site

a)

b)

No work shall be commenced unless the Performance Bond and insurance policies have been deposited with the Government or the S.O. Possession of the Site as complete shall be given on or before the date for Possession stated in the Letter of Acceptance

38. Possession of Site (Cont)

c) Restrictions upon possession of the Site shall be stated in the Appendix in the Contract Documents.
d) S.O. may issue instructions to the revision of the Date for Possession and Date for Completion if delay in giving possession of the Site. Contractor shall not be entitled to any claim for loss or damage caused by delay or terminate/end the contract

38. Possession of Site (Cont)

e)

S.O. Shall give written notice to the Contractor of the causes of delay if possession of Site is delayed beyond three months from Date from Possession. Contractor may notice S.O. within fourteen days to agree proceed with the works or determine his own employment.

38. Possession of Site (Cont)

f)

Contractor shall render all necessary assistance and facilities required by representative of Government to carries out investigation to accident or failure in connection with the Works.

39. Completion of Works

a) The Contractor shall complete the whole Works on or before the date for Completion or extended date as per clause 43 (EOT)
b) When the whole Works reached practical completion and the satisfaction of the S.O. the date of completion shall be the date of the commencement of the Defects Liability Period.

PRACTICAL COMPLETION BASED ON THE OPINION OF THE SO i.e. work has reached completion, only very minor work left (ready to be used)

40. Damages for Non-completion

Under this clause, contractor should be responsible for failure to complete work on time, as stated in the Appendix or extended time under Clause 43.
Damages known as Liquidated and Ascertained Damages (LAD) with issuing of Certificate of Non-Completion.

LAD avoid the necessity to prove actual cost suffered

41. Sectional Completion

This clause is invoked when there is separate dates for completion and rates for LAD
SO issues separate Certificate of Practical Completion, Delay and Extension of Time, LAD for delay, and Defect Liability Periods. Apply mutatis mutandis in absence of any express provision in Contract Document i.e. each phases is treated as a separate contract

42. Partial Occupation by Government

Stated that governnment can take possession on part of works done with consent of Contractor under conditions:
a) S.O. shall issue Certificate of Partial Occupation within 7 days from date of possession. b) Relevant part shall reached practical completion (for purpose of Clauses 39 & 45). c) Contractor shall repair relevant part before end of Defects Liability Period.

42. Partial Occupation by Government (cont)

d) Contractor shall give notice to insurer of Partial occupation by Government. e) LAD after certification of practical completion shall be reduced in proportion which the total value of the relevant part bear to Contract Sum. f) Performance Bond shall be released or refunded only after completion of making good all defects.

43. Delay and Extension of Time

Extension of time permitted with written notice of causes of delay by Contractor to S.O. Causes of delay
a) b) c) d) e) By force majeure By exceptionally inclement weather By direction of S.O. By loss or damage, referred to Clause 36 By S.O.s instruction under Clause 5.

43. Delay and Extension of Time

Causes of delay
f) By reason Contractor not received necessary instructions g) By delay of possession of site h) By reason of any action due to local combination of workmen, strike or lockout affecting trades employed. i) By delay by Government j) By Contractor inability for reason beyond his control. k) By delay on part of supplier

44. Loss And Expense Caused by Delays

Under this clause, Contractor can claim loss or expense by giving notice to S.O. within 1 month of the occurrence of the event, as referred to work affected by reason stated in clause 43 (c), (f) or (i).

45. Defects After Completion

a) Defects Liability Period is 6 months after date of practical completion, and Contractor shall be notified by S.O. to make good the defects at own cost. b) Any defect shall be reported by S.O. to Contractor within 14 days after Defects Liability Period and Contractor shall make good the defects within 3 months of notice. c) Failure by Contractor to make good the defects may causes deduction from Performance Bond or liquidated demand (legal action).

45. Defects After Completion (cont)

d) Deduction from sum to be paid to Contractor if existence of defects impracticable or inconvenient to Government to have remedy. e) After Contractor has made good of defects, with approval by S.O., Contractor shall be issued Certificate of Completion of Making Good Detects.

46. Unfulfilled Obligations

Contractor and Government shall remain liable for the fulfillments of any obligation incurred.

This provision normally applies to any outstanding yet to be completed on practical completion

47. Payment to Contractor and Interim Certificates.

a) After Contractor has executed work, S.O. shall make evaluation of the work so that payment can be made to Contractor. b) Within 14 days from valuation, S.O. shall issue Interim Certificate to Contractor.

47. Payment to Contractor and Interim Certificates.

c) Sum to be certified in Interim Certificate subject to agreement between parties. d) Government shall make interim payment on the amount certified to Contractor within 30 days or period stated in Appendix.

48. Final Certificate

a) Contractor shall submit all claims (final) with all supporting documents to the S.O. within three month after practical completion. b) S.O. shall issue Final Certificate within three month after the expiry of the Defects Liability. c) Final Certificate shall be supported by document showing works accordance with the terms of Contract.

48. Final Certificate (Cont)

d)

S.O. Must make sure contractors employee received all wages before making payment under Final Certificate.

49. Effect of S.O.s Certificates

S.O.s certificate shall not be considered as conclusive evidence to the sufficiency of work, materials or goods.

i.e. all certificates can be opened up, reviewed, and revised by the arbitrator or court in the event dispute arises

50. Deduction From Money Due to Contractor

The Government or The S.O. entitled to deduct money owing by the Contractor to The Government from the sum due and payable to the contractor.

51. Determination of Contractors Employment

a) S.O. may give Contractor a notice by registered post to continue default within fourteen days. b) The Government sent a notice to Contractor by registered post to determine the employment if Contractor commits an act of bankruptcy.

51. Determination of Contractors Employment (Cont)

c)
(I)

(II)

If the Contractor employment is determined under sub-clause (a) or (b), contractor shall stop all operation on site, remove all his personnel, plant, tools, equipment and goods from site. The Government may complete the Works departmentally or employ other contractor.

51. Determination of Contractors Employment (Cont)

c)
(III)

(IV)

The Contractor is obliged if required by SO to assign to the Government without payment the benefit of any contracts (execution of work or supply of good). The Contractor when instructed is required to remove from the site any temporary buildings, plants, tools, equipment goods and materials belonging to or hired by him. The Government has the power to sell those items if the Contractor fails to fulfill instruction.

51. Determination of Contractors Employment (Cont)

c)
(V)

(VI)

The Government may claim any direct loss and/or damage the Government has suffered as a result of the determination which include the additional completion cost, lost of use, expenses incurred due to delay in completion If the Government completes the works departmentally, costs of supervision, interest, plant and equipment, depreciation, overhead charges and profit are included for calculating the completion costs

52. Effect of War or Earthquake

When war or earthquake arises during Contract, the continuance, suspension or termination of contract shall be settled by agreement between Government and Contractor, or settled by Arbitration.

53. Fluctuation of Price

The amount payable to the Contractor shall be increased or decreased in accordance with the formulae in the Special Provisions to the Conditions of Contract.

54. Arbitration
a) Dispute or difference arise between the Government and the Contractor shall be referred to the S.O. for decision.
b) The S.O.s decision must be in writing. c) Dispute or difference referred to arbitration within forty-five days if the S.O. fails to give decision or the Contractor dissatisfied with S.O. decision.

54. Arbitration (Cont)

d) Reference shall not be commenced until after the completion of the works or determination of the Contractors Employment, or abandonment of the work.
e) The Arbitrator have power to review and revise certificate, opinion, decision, requisition or notice and to determine all matters in dispute.

54. Arbitration (Cont)

f) The award of the Arbitrator shall be final and binding on the parties.

g) The Government and the Contractor shall appoint another person to act as the Arbitrator if the original Arbitrator is dead or unwillingness or inability to act. h) Reference shall be reference to arbitration within the Arbitration Act 1952.

55. Stamp Duty

Stamp Duty on the Contract will be borne by the Government.

56. Bahasa Malaysia Text Shall Prevail

The text in Bahasa Malaysia shall prevail if any inconsistency occurs in any texts.