STANDARD FORM OF CONTRACT

PROF MADYA NGAH YAHYA EMBONG

FORMS OF CONTRACT
Standard forms Model forms Modified forms Ad hoc [because of situation / not planned in advance] Bespoke [specially drafted/ according to the needs of individual project]

STANDARD FORM OF CONTRACT

WHAT IS STANDARD FORM OF CONTRACT?
DEFINATION Building Contract Dictionary (Blackwell Science, third edition) defines standard form as : A PRINTED FORM OF ONTRACT CONTAINING STANDARD CONDITIONS WHICH ARE APPLICABLE (OR CAN BE MADE APPLICABLE BY THE USE OF ALTERNATIVE) TO A WIDE RANGE OF PROJECTS. THEY ARE PREFERABLE TO SPECIALLY DRAFTED CONTRACTS BECAUSE THEY ARE INTENDED TO BE COMPREHENSIVE & AVOID MOST OF THE PITFALLS WHICH SURROUND CONTRACTUAL RELATIONS IN THE BUILDING INDUSTRY. CHARACTERISTICS Arrived at through a process of consultation & negotiation between representatives of various sectors of the industry like professional institutions & contractors associations The form set out the terms & conditions on which the contract between the parties are to be executed The terms & condition are generally suitable for a wide range of common projects or jobs

ADVANTANGES OF STANDARD FORM Familiarity Fair to all parties Less ambigious Cost & time saving TYPES OF STANARDS FORMS In Malaysia, the two (2) most commonly used are : JKR (PWD) Standard Form of Contract PAM Standard Form of Contract The forms are widely used for government projects (public sector) & the latter for private projects. Figure 1 completes the picture on the use of standard form of contracts locally & internationally

STANDARD FORMS OF CONTRACT

GOVERNMENT/PUBLIC SECTOR

PRIVATE SECTOR

INTERNATIONAL CONTRACTS

FIDIC Conditions
JKR/PWD 203 (Rev 2007) without quantities 203A (Rev 2007) For NSC 203P (Rev 10/83) For Nominated Suppliers PWD form DB/T (2000 Edn) for Design & Build Turnkey Contract PWD (2010) ? Latest revison MISCELLANEOUS CIDB Form for building contracts 2000 Edn Modified JKR/PWD Forms, e.g. LPK, MHA etc. BUILDING WORKS PAM 2006-Without Quantities PAM 2006-With Quantities PAM NSC 2006 Figure 1 : Standard Form of Contract (Part II)

ICE Conditions IEEE Conditions ImechE Conditions JCT Conditions

CIVIL ENGINEERING WORKS IEM Conditions -IEM.CE 1/89 -IEM.CES 1/90

M&E WORKS

IEM Conditions -IEM.ME 1/94 TNB Conditions, etc

Source: Adapted from, Harban Singh KS, Engineering and Construction Contracts Management; Law and Principle, 2002

BACKGROUND
Historically, the initial set of Standard Forms were drafted by the various government agencies for works in the public sector i.e. earlier version of PWD form modeled on the RIBA Form of Contract 1931 and the latest revisions coming in 1983. Due to progress of development projects, many other professional bodies published their own version of standard forms to suit the current development and modernisation and variation of procurement methods i.e. IEM was first published in 1989 and PAM in 1969 (Lian, Im and Kheng, 2000).

GOVERNMENT / PUBLIC SECTOR

Public Works Department PWD Form 203 (Rev 2007) without quantities. PWD Form 203A (Rev 2007) with quantities. PWD Form 203N (Rev 2007) for Nominated Sub-Contractors.

Government / Public Sector

Public Works Department (contd) PWD Form 203P (Rev 10/83) for Nominated Suppliers. PWD Form DB/T for Design and Build Turnkey Contracts.

Government / Public Sector (cont d)

Construction Industry Development Board CIDB Form for Building Contracts 2000 Edition. Standard Proforma for Contract Administration (For use in conjunction with The CIDB Standard Form of Contract for Building Works).

Government / Public Sector (cont d)

CIDB Standard Form of Sub-contract For Nominated Sub-Contractor [Form CIDB.B (NSC) / 2002] (To complement the Standard Form of Contract for Building Works). Model Terms of Construction Contract for Subcontract Work (2006) [CIDB / CICC].

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Model Terms of Construction Contract for Subcontract Work.

Intended to be used as part of a generally stand alone subcontract and not back to back to any one main contract. The generic drafting style and flexibility mean it can be used as subcontract terms with any main contract whether a one-off contract (bespoke & ad hoc) or published standard form such as the PWD, PAM, IEM, CIDB, FIDIC or JCT contracts.
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CIDB Forms
CIDB published its own version of Standard Forms for building works (main contract and sub contract). But the question is do we need another public sector standard form? There is presumption that CIDB will replace PWD Standard Forms?

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Other Public Sector Forms

Some statutory bodies and public sector related bodies utilise the PWD Standard Forms with slight modifications and/or amendments.  Drainage and Irrigation Department (DID/JPS)  Lembaga Pelabuhan Kelang (Port Klang Authority)

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Private Sector
PAM PAM 2006 with quantities. PAM 2006 without quantities. PAM NSC 2006 to be used for NSC where the main contract is based upon the above.

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PAM
Origin Rather than developing and drafting a new standard form on its own, PAM in collaboration with the ISM in 1969 adopted 1963 JCT Standard Form of Building Contract (Reprinted 1968) with modifications to be used for private sector building works through traditional general contracting contract procurement method comprised:
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PAM [Previous Version]

 PAM/ISM 1969 Standard Form of Building Contract With Quantities.  PAM/ISM 1969 Standard Form of Building Contract Without Quantities.  PAM NSC 1970 Standard Form of Contract for Nominated Sub-Contractors to be used with PAM/ISM 1969.

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PAM 1998
Usage Essentially for : 1. 1. Private sector projects 2. 2. Building works 3. 3. Contracts undertaken through Traditional General Contracting Procurement

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Private Sector
Civil Engineering works IEM Condition IEM.CE 1/89. Mainly for Civil Engineering Construction (Second Reprint 1994). IEM Condition IEM.CES 1/90. Sub-contract for use in conjunction with the IEM Condition (First Reprint 1994).

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Private Sector
M&E works IEM Condition IEM.ME. For mechanical and electrical work (First Edition 1994). Sub contract? [absent]

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IEM Forms
Origin Due to rigorous/harsh and pitfalls of the JKR/PWD forms and unsuitability of the PAM forms for engineering and projects, construction infrastructure engineering professionals attempted to employ UK engineering forms i.e. ICE, IMECHE, IEE, JCT and FIDIC forms with modifications.

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IEM Forms
Origin (contd) The modifications were subject to job specific and ad hoc basis. Thus, leading to uncertainty, inconsistency and leading to construction disputes. Due to that, IEM attempted to fill in the lacuna by drafting their own Standard Forms started in 1989 for the traditional general contracting.
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IEM Forms
Usage  Private sector projects.  Civil engineering, Mechanical and Electrical works.  Procured under the Traditional General Contracting.

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International Contracts
FIDIC family JCT Family IEEE IMechE ECC PPC 2000

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