SBQ 3722 PROFESSIONAL

PRACTISE III
ADJUSTMENT OF CONTRACT SUM
& FINAL ACCOUNT
By
SHAZLYN BT. APIU
TIMOTHY THOMAS
RUBBY DEAN

QUESTIONS :
1) DESCRIBE THE WORK PROCESS FOR THE
SERVICE
2) UNDERTAKES THE PLANNING & ORGANIZING
OF ITS SOURCES TO ACCOMPLISH
3) IDENTIFY THE PROBLEMS AND NECESSARY
SUGGESTIONS TO IMPROVE
4) MONITORING MECHANISM

ADJUSTMENT OF CONTRACT
SUM
& FINAL ACCOUNT

Adjustment of Contract Sum

The Certificate adjustments of Contract Sum were introduced for
the purpose of adjusting the amount of the contract price. The
total contract price shall be adjusted to take into account any
additional or lack of the total contract price.

Adjustment of Final Account

Final account is an accounts that are provided to show the
payments that have been made including defects, claim
for damages or extra expenses.
Final accounts must be provided as soon as possible after the
contractor to meet its obligations under the contract

 Adjustment of the contract sum in the final

account falls under several relevant items
which is listed in the standard form of
contract and conditions
Sums that are to be Deducted :a) prime cost sums
b) provisional sums
c) variations that are omissions
d) any other amount that are to be
deducted from
the contract sum/

 An important part of the

contractors quantity surveyors
work is the agreement of the Final
Account.
Both Clients Quantity Surveyor
and Contractors Quantity
Surveyor to work together to
produce an agreed statement of
the amount money to be paid at
the end of a building contract by
the employer to the contractor

The person who is responsible to prepare the

Adjustment of Contract Sum and Final Account
a) Contract Manager
b) Senior Quantity Surveyor
Duties:
c) Re-measurements usually done by the junior Qs.
d) Adjustment, VO, Form APK & PHK & negotiation
with the contractor by the Sr. QS.
e) Final Account by the Contract Manager

Adjustment of Contract Sum

includes :
a) APK Arahan Perubahan
Kerja
b) PHK - Pelarasan Harga
Kontrak
c) Provisional Sum

Adjustment of Contract Sum includes

a) APK Arahan Perubahan Kerja

) Continuity of board approval on V.O, APK are
required.
) Consist of instructions to be carried out by the
Contractor
) Any claim due to this VO will be highlighted in
this form.
) S.O and Contractor to signed (if agreed)

b)PHK - Pelarasan Harga Kontrak

) After finalized the APK, new contract sum will be
adjusted accordingly
) All collective APK will be summarized
) Endorsement and agreement from both parties
are required

Adjustment of Contract Sum

c) Provisional Sum
For a specific element of the works that is
not yet defined in enough detail
fortendererto price.
Together with a brief description,
allowstendersto apply mark up
andcostswithin their overalltenderprice.
The adjustment is made after completion
of works and final cost is ascertained.
Provisional Sums that are not used shall be
deducted from the Contract Sum

Adjustment of Contract Sum

d) Prime Cost Sum
is an allowance that calculated by theconsultant
for the supply of work or materials to be provided
by acontractor or supplier that nominated by
theclient.
The works is awarded to the nominated subcontractor / supplier. Omit the original PC Sum and
add the awarded NSCs/NSs contract sum and
profit and attendance which is allowed in Contract.
The final adjustment is made after completion of
works and final cost is ascertained. PC Sums that
are not used shall be deducted from the Contract
Sum.

Adjustment of Contract Sum

e) KKS Kelulusan kuantiti
Sementara
is an allowance that calculated by theconsultant
for the supply of work or materials to be provided
by acontractor or supplier that nominated by
theclient.
The works is awarded to the nominated subcontractor / supplier. Omit the original PC Sum and
add the awarded NSCs/NSs contract sum and
profit and attendance which is allowed in Contract.
The final adjustment is made after completion of
works and final cost is ascertained. PC Sums that
are not used shall be deducted from the Contract
Sum.

Example PHK Form

Pelarasan
Harga
Kontrak PHK bagi
item Credit for
Material for the
Material on Site.
Pelarasan
harga
dinilai
mengikut
kiraan yang telah
ditetapkan.

Example APK Form

Arahan Perubahan
Kerja-kerja
tambahan
untuk
membekalkan
Peralatan Elektrik.

Example APK Form

Arahan Perubahan
Kerja-kerja
tambahan untuk
membekalkan
Peralatan Elektrik.
Permohonan untuk
mendapatkan
kelulusan
Perubahan Kerja.
Di nyatakan
huraian kerja,
anggaran
perubahan kerja &
Penca-punca
perubahan kerja.

Preparation of Adjustment
Contract Sum
Total contract price adjustment certificate must
be prepared and remove when the total contract
price should be adjusted. It covers variation
order.
All items in the certificate must be properly
filled
Date is the date the certificate is a certificate
signed PP
Calculation detail of the adjustment must be
appended except for adjustments due to
changes in work.
The certificate must be signed by the PP and
the original shall be issued to the contractor.

Preparation of Final Account

The contractor have to provide the architect or QS
with all documents necessary for the final account
preparation not later than 6 months after practical
completion. Within 3 months of for the architect or QS
to prepare the final account sum and send this to the
contractor
The area to be cover under preparations of Final
Account:
Variations
Re-measurement of provisional quantity in the
Contract Bills
NSC account
Nominated supplier account
Loss and expense caused by disturbance of the
regular process of the works
Its about sense of finality to the negotiations leading

Preparation of Final Account

If there a doubt about the accuracy of any the
original billed items, he can make a request to
the QS for work concerned to be measured onsite.
Sums to be deducted:
a) Provisional sums and the value of work for which
approximate quantities are included in contract
bills.
b) Variations that are omissions
c) Amounts allowable to the employer under the
fluctuations
clauses
d) Any other amount that is required by the
contract to be

Preparation of Final Account

Sums to be added:
a) Total amounts of nominated subcontracts finally
adjusted
b) Where the contractor has tendered for work that
was to have been performed by a nominated
subcontractor and his tender has been accepted,
the amount of the tender suitably adjusted
c) Any amounts due to nominated suppliers, including
cash discounts of 5 per cent
d) The contractor's profit on the above amounts

Problem faced by the Firm

Variation Orders (VO) are often a cause of

contract conflicts and may lead to negotiation,
mediation / arbitration. It includes changing in
design, quantities, quality, working conditions,
and sequence of work.
The contractor fails to agree with the valuation
of work. The disagreement may cause delay in
certifying the amount of final account.
There a rate that the contractor had to follow in
certain specification but the contractor
normally put the item rate uncertain because of
strategies.

Necessary Suggestions To
Improve
Verify the work progress within one(1) month
period.
Held a meeting at least twice a week to solve
small problem that occur at site .

The architect has the authority to order

minor changes in the work not involving
adjustment in the contract sum. Such
changes shall be done in writing and shall
bind with owner and contractor.

Monitoring Mechanism
Review actual site practices and processes to control
expenditure for materials, labor plant/machinery and
subcontractors.
External relationship and information; communicating
with, coordinating with, and influencing related
management units, stakeholders and clients.
Internal relationship, including the use of inter-unit
committees within the same management systems
and communicating with other individuals
Monitoring physical, financial, accounting and social
effects; andPeriodic evaluation of performance at
indicator events and timely adjustment of plans.

THANK YOU