volume 10_contract administration

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DID MANUAL Volume 10

Disclaimer

Every effort and care has been taken in selecting methods and recommendations that areappropriate to Malaysian conditions. Notwithstanding these efforts, no warranty or guarantee,

express, implied or statutory is made as to the accuracy, reliability, suitability or results of themethods or recommendations.

The use of this Manual requires professional interpretation and judgment. Appropriate designprocedures and assessment must be applied, to suit the particular circumstances underconsideration.

The government shall have no liability or responsibility to the user or any other person or entitywith respect to any liability, loss or damage caused or alleged to be caused, directly or indirectly,by the adoption and use of the methods and recommendations of this Manual, including but notlimited to, any interruption of service, loss of business or anticipatory profits, or consequentialdamages resulting from the use of this Manual.



Volume 10 DID MANUAL

Foreword

The first edition of the Manual was published in 1960 and was actually based on theexperiences and knowledge of DID engineers in planning, design, construction, operations and

maintenance of large volume water management systems for irrigation, drainage, floods and riverconservancy. The manual became invaluable references for both practising as well as officers newlyposted to an unfamiliar engineering environment.

Over these years the role and experience of the DID has expanded beyond an agriculture-based environment to cover urbanisation needs but the principle role of being the country’s leadingexpert in large volume water management remains. The challenges are also wider covering issuesof environment and its sustainability. Recognising this, the Department decided that it is timely forthe DID Manual be reviewed and updated. Continuing the spirit of our predecessors, this Manual isnot only about the fundamentals of related engineering knowledge but also based on the conceptof sharing experience and knowledge of practising engineers. This new version now includes thelatest standards and practices, technologies, best engineering practices that are applicable and

useful for the country.

This Manual consists of eleven separate volumes covering Flood Management; RiverManagement; Coastal Management; Hydrology and Water Resources; Irrigation and AgriculturalDrainage; Geotechnical, Site Investigation and Engineering Survey; Engineering Modelling;Mechanical and Electrical Services; Dam Safety, Inspections and Monitoring; Contract

Administration; and Construction Management. Within each Volume is a wide range of relatedtopics including topics on future concerns that should put on record our care for the futuregenerations.

This DID Manual is developed through contributions from nearly 200 professionals from theGovernment as well as private sectors who are very experienced and experts in their respectivefields. It has not been an easy exercise and the success in publishing this is the results of hardwork and tenacity of all those involved. The Manual has been written to serve as a source of information and to provide guidance and reference pertaining to the latest information, knowledgeand best practices for DID engineers and personnel. The Manual would enable new DID engineersand personnel to have a jump-start in carrying out their duties. This is one of the many initiativesundertaken by DID to improve its delivery system and to achieve the mission of the Department inproviding an efficient and effective service. This Manual will also be useful reference for non-DIDEngineers, other non-engineering professionals, Contractors, Consultants, the Academia,Developers and students involved and interested in water-related development and management.Just as it was before, this DID Manual is, in a way, a record of the history of engineeringknowledge and development in the water and water resources engineering applications in Malaysia.

There are just too many to name and congratulate individually, all those involved in preparing this

Manual. Most of them are my fellow professionals and well-respected within the profession. I wishto record my sincere thanks and appreciation to all of them and I am confident that theircontributions will be truly appreciated by the readers for many years to come.

Dato’ Ir. Hj. Ahmad Husaini bin Sulaiman,Director General,Department of Irrigation and Drainage Malaysia.




Acknowledgement

Steering Committee:

Dato’ Ir. Hj. Ahmad Husaini bin Sulaiman, Dato’ Nordin bin Hamdan, Dato’ Ir. K. J. Abraham, Dato’ Ong Siew Heng, Dato’ Ir. Lim Chow Hock, Ir. Lee Loke Chong, Tuan Hj. Abu Bakar bin Mohd Yusof,Ir. Zainor Rahim bin Ibrahim, En. Leong Tak Meng, En. Ziauddin bin Abdul Latiff, Pn. Hjh. Wardiahbte Abd. Muttalib, En. Wahid Anuar bin Ahmad, Tn. Hj. Zulkefli bin Hassan, Ir. Dr. Hj. Mohd. Norbin Hj. Mohd. Desa, En. Low Koon Seng, En. Wan Marhafidz Shah bin Wan Mohd. Omar, Sr MdFauzi bin Md Rejab, En. Khairuddin bin Mat Yunus, & Cik Khairiah bt Ahmad.

Coordination Committee:

Dato’ Nordin bin Hamdan, Dato’ Ir. Hj. Ahmad Fuad bin Embi, Dato’ Ong Siew Heng, Ir. Lee LokeChong, Tuan Hj. Abu Bakar bin Mohd Yusof, Ir. Zainor Rahim bin Ibrahim, Ir. Cho Weng Keong, En.

Leong Tak Meng, Dr. Mohamed Roseli Zainal Abidin, En. Zainal Akamar bin Harun, Pn. NoraziaIbrahim, Ir. Mohd. Zaki, En. Sazali Osman, Pn. Rosnelawati Hj. Ismail, En. Ng Kim Hoy, Ir. Lim SeeTian, Sr Mohd. Fauzi bin Rejab, Ir. Hj. Daud Mohd Lep, Tn. Hj. Muhamad Khosim Ikhsan, En.Roslan Ahmad, En. Tan Teow Soon, Tn. Hj. Ahmad Darus, En. Adnan Othman, Ir. Hapida Ghazali,En. Sukemi Hj. Sidek, Pn. Hjh. Fadzilah Abdul Samad, Pn. Hjh. Salmah Mohd. Som, Ir. Sahak Che

Abdullah, Pn. Sofiah Mat, En. Mohd. Shafawi Alwi, En. Ooi Soon Lee, En. Muhammad KhairudinKhalil, , Tn. Hj. Azmi Md Jafri, Ir. Nor Hisham Ghazali, En. Gunasegaran M., En. Rajaselvam G., Cik Nur Hareza Redzuan, Ir. Chia Chong Wing, Pn. Norlida Mohd. Dom, Ir. Lee Bea Leang, Dr. Hj. Md.Nasir Md. Noh, Pn. Paridah Anum Tahir, Pn. Nurazlina Mohd Zaid, PWM Associates Sdn. Bhd.,Institut Penyelidikan Hidraulik Kebangsaan Malaysia (NAHRIM), RPM Engineers Sdn. Bhd., & J.U.B.M. Sdn. Bhd.

Working Group :

Sr Md Fauzi bin Md Rejab (Pengerusi), Pn. Norazia binti Ibrahim, Pn. Hashimah binti Said, Pn.Fazidah binti Zainal Abidin, Pn. Zalina binti Mat Zain, Pn. Rohimah binti Yusof, Pn. Nor Hasni MuhdSupian, En. Roslan bin Ahmad, Tn. Hj. Hussin bin Haron, Ir. Nasser bin Salim, Ir. Nor Hisham binMohd. Ghazali, Kapt. Ir. Anuar bin Yahya, En. Roslan bin Hussin, Tn. Hj. Muhd Khosim bin Hj.Ikhsan, En. Sulaimi bin Nordin, En. Ratna Rajah, En. Alexander Anak Ngindang, En. Teo SiawChung, En. Mohd Adnan bin Ahmad Fauzi, Ir. Hj. Mohd Razali bin Husain, En. Wan Mohd Azam binWan Long, Tn. Hj. Rashiddi bin Hj Hussein, En. S. Valiappan, En. Adnan bin Ab Latif, Pn. Belindabinti Adzmi, Cik Intan Suraya binti Ayob, Pn. Zaliza binti Mohamad Ibrahim, Sr Ong See Lian, SrNur Aziz Abu Bakar, Lt Kol (B) Ir. Shahar Abdullah, Cik Ho Sook Chin, Pn. Zilawati Hj. Yaakub & Pn.Idura binti Hj. Ariffin.




Registration Of Amendments

Amend No. Page No. Date of Amendment

Amend No. Page No. Date of Amendment




Table of Contents

Disclaimer ............................................................................................................................ i

Foreword ............................................................................................................................. ii

Acknowledgement ................................................................................................................. iii

Registration of Amendments .................................................................................................. iv

Table of Contents .................................................................................................................. v

List of Volumes ...................................................................................................................... vii

List of Abbreviations (English) ................................................................................................ ix

List of Abbreviations (Bahasa Malaysia) ................................................................................... xi

Glossary ................................................................................................................................ xiii

PART I - INTRODUCTION

Chapter 1 Introduction to Volume 10

Chapter 2 DID Organisation Structure

Chapter 3 Procurement - Overview

Chapter 4 Project Implementation - Overview

PART II – PRE-CONTRACT

Chapter 5 Authority

Chapter 6 Preparation of Tender Documents

Chapter 7 Invitation and Receipt of Tender

Chapter 8 Tender Evaluation and Acceptance

PART III – POST-CONTRACT

Chapter 9 Contract Documentation

Chapter 10 Payments

Chapter 11 Variations

Chapter 12 Adjustment of Contract Sum

Chapter 13 Delays and Extension of Time

Chapter 14 Non-Completion

Chapter 15 Loss and Expense




Table of Contents

PART III – POST-CONTRACT (Cont’d)

Chapter 16 Determination

Chapter 17 Completion

Chapter 18 Defects Management

Chapter 19 Final Accounts and Final Certificate

Chapter 20 Prime Cost & Provisional Sums

Chapter 21 Dispute Management and Resolution




List Of Volumes

Volume 1 FLOOD MANAGEMENT

Volume 2 RIVER MANAGEMENT

Volume 3 COASTAL MANAGEMENT

Volume 4 HYDROLOGY AND WATER RESOURCES

Volume 5 IRRIGATION AND AGRICULTURAL DRAINAGE

Volume 6 GEOTECHNICAL MANUAL, SITE INVESTIGATION AND ENGINEERING SURVEY

Volume 7 ENGINEERING MODELLING

Volume 8 MECHANICAL AND ELECTRICAL SERVICES

Volume 9 DAM SAFETY, INSPECTIONS AND MONITORING

Volume 10 CONTRACT ADMINISTRATION

Volume 11 CONSTRUCTION MANAGEMENT




(This page is deliberately left blank)




List of Abbreviations(English)

AtP Authorised Party

CAO Contract Administration Officer;the term CAO includes Contracts Officer and/or Quantity Surveyor

CPC Certificate of Practical Completion

CMGD Certificate of Completion of Making Good Defects

CNC Certificate of Non-Completion

DB/T Design and Build / Turnkey

DID Department of Irrigation and Drainage.

DT Design Team, or Designer

FD Finance Division

IO Implementation Officer

Engr Engineer

PD Project Director

PDR Project Director’s Representative

PH Project Head

PS Project Supervisor

PM Project Manager

PO Procurement Officer

PST Project Supervision Team

PT Project Team

PWD Public Works Department

QA Quality Audit / Quality Auditor

QSCD Quantity Surveying and Contracts Division

SO Superintending Officer;in DID Manual Volume 10, the term SO may include Project Director (PD) of adesign and build contract unless the context requires otherwise.

SOR S.O. Representative;in DID Manual Volume 10, the term SOR may include Project Director’s

Representative (PDR) of a design and build contract unless the context requiresotherwise




List of Abbreviations(English)

QS Quantity Surveyor

TI Treasury Instruction

TS Tender Secretariat

VO Variation Order




List of Abbreviations(Bahasa Malaysia)

AK Audit Kualiti(Quality Audit)

AP Arahan Perbendaharaan(Treasury Instruction)

APK Arahan Perubahan Kerja(Variation Order)

BUBK Bahagian Ukur Bahan dan Kontrak (Quantity Surveying and Contracts Division)

JKR Jabatan Kerja Raya.

(Public Works Department)

JPS Jabatan Pengairan dan Saliran.(Department of Irrigation and Drainage)

KPK Kelulusan Perubahan Kerja(Variation Approval)

PHK Pelarasan Harga Kontrak (Adjustment of Contract Sum)

PK Perubahan Kerja

(Variation)

PMK Pegawai Mentadbir Kontrak (Contract Administration Officer)

SPJPS Surat Pekeliling JPS(DID Circular)

SPP Surat Pekeliling Perbendaharaan.(Treasury Circular)




Glossary

Term Definitioni

Addendum(Addenda)

Written information adding to, clarifying or modifying the tender documents. An addendum is generally issued by the Government to the contractor duringthe tender process and as such, addenda are intended to become part of thecontract documents when the construction contract is executed.

Advancepayment

Prepayment, payment made on account, in advance of the commencement of works, supply or services.

Advancepaymentguarantee

Guarantee submitted by a party receiving an advance payment to theGovernment, for advancing the payment. It provides that the advanced sumwill be returned if the agreement under which the advance was made cannotbe fulfilled.

Alternativetender

An alternative tender is a tender that offers an alternative proposal that stillsatisfies the Government's requirements. Alternative tenders will not beconsidered unless they are allowed in the conditions of tendering.

As-BuiltDrawings

Drawings (plans) that show the work, as actually installed.

Audit An independent examination of a work product or set of work products toassess compliance with procedures, specifications, standards, contractualagreements, or other criteria.

Award Acceptance of a tender or proposal for a contract.

Best practice The most effective and desirable method of carrying out a function or processderived from experience rather than theory.

Best value Continuous improvement in the exercise of all functions undertaken by theGovernment, whether statutory or not, having a regard to economy, efficiencyand effectiveness.

Bid See ‘Tender’.

Bidder See ‘Tenderer’.

Bill of Quantities A document usually prepared by a quantity surveyor which (ideally) details theterms and conditions under which a contract is to be let, and itemises all worksto enable a contractor to price the work for which he is tendering. The firstmain step in preparing a bill is the "taking off" or recording of dimensions fromdrawings or schedules of work. Similar types of work are then brought togetherunder one item, a process known as "abstracting", all of this information isthen "worked up" into the bill of quantities.

Build-own-operate (BOO)

A mode of business in which a project company builds and operates a propertyproject pursuant to the concession rights granted by the government




Glossary

Term Definitioni

Build-operate-transfer (BOT)

A mode in which Government or local authorities grant the rights to anenterprise by concession agreement to undertake the financing, construction,operation and maintenance of a construction project. Upon expiry of theconcession period, the relevant facilities will be transferred back to thecontracted government authorityat (usually) nil consideration.

Build-transfer A variant of build-operate-transfer (BOT) in which the contractor undertakesthefinancing of construction expenditures and transfers the project back to theproprietor upon completion and inspection for acceptance. The proprietor willcompensate the contractor for such construction expenditure and Financing

costs in installments pursuant to agreement.

Bond See ‘Guarantee’.

Certificate of payment

See ‘Payment certificate’.

Certificate of practicalcompletion

Document that confirms the stage reached in the contract where theGovernment can take beneficial occupation and/or utilise the works for itsintended use, without undue interference.

Claim A written demand or assertion by a contractor seeking adjustment orinterpretation of the terms of the contract documents, payment of money,extension of time, or other relief with respect to the contract documents, ordetermination of other disputes or matters in question between theGovernment and contractor regarding the contract documents or theperformance of the work.

Claimscommittee

The group of officers who are authorised under the Government procurementprocedures to approve claims submitted by a contractor.

Closed tender Competitive tendering in which the tender-opening is conducted at a privatevenue, and in the presence only of the authorised personnel of the partyrequesting the tenders, ie officers of the Government.

Close out The completion of project work once the project has been implemented. Thephase at the end of the project lifecycle just before the operations begin.

Competitivetender

See ‘Open tender’.

Completion See ‘Practical completion’.

Compliance Certification or confirmation that the doer of an action (such as the writer of areport), or the manufacturer or supplier of a product, meets the terms of acontract; or the requirements of accepted practices, legislation, prescribedrules and regulations, specified standards. See also conformance.




Glossary

Term Definitioni

Conceptualdesign

The first of three sub-phases of the design phase. The design professionalascertains the requirements of the project and prepares design studiesconsisting of drawings and other documents illustrating the scale andrelationships of the project.

Conditions of contract

Terms and conditions that set the rights and obligations of the contractingparties, when a contract is awarded or entered into. These include 'generalconditions' which are common to all types of contracts, as well as 'specialconditions' (or special provisions) which are peculiar to a specific contract (suchas variation of price clauses).

Conditions of

tendering

The rules governing what the tender submission should contain, how it should

be submitted, and how it will be evaluated. There are general conditions of tender for building and construction that apply to all tenders, such as treatmentof late tenders. Pro-forma conditions of tender for the purchase of goods andservices are provided under Resources / Publications. Pro-forma conditions of tender for the procurement of works, supplies and services are provided by theGovernment.

Conformance Certification or confirmation that a good, service, or conduct meets the termsof a contract; or the requirements of legislation, accepted practices, prescribedrules and regulations, specified standards. See also compliance.

Consultant A particular type of contractor who is engaged to provide recommendations orspecialist or professional advice (or more generally non-manual services) toassist or influence Government’s decision making.

Contingency An amount of money reserved by the Government (project manager) forunforeseen changes in the work

Contract A mutually binding, legal relationship obligating the seller to furnish supplies orservices, and the buyer to pay for them.

Contractadministration

Administrative activities usually associated with handling of contracts, such as(1) invitation to tender, (2) tender evaluation, (3) award of contract, (4)contract implementation, (5) measurement of work completed, and (6)

computation of payments. It also includes monitoring contract relationship,addressing related problems, incorporating necessary changes or modificationsin the contract, ensuring both parties meet or exceed each other'sexpectations, and actively interacting with the contractor to achieve thecontract's objective(s). Also called contract management.

Contractdocuments

Executed (signed) agreements, supplementary conditions, drawings,specifications, and other documents specific to a contract.

Contract period Number of working days or calendar days, calculated from a specifiedcommencement date to a specified date for completion, as provided for in acontract. For works contract, also called construction period.

Contractmanagement

See ‘Contract administration’.




Glossary

Term Definitioni

Contract price See ‘Contract sum’.

Contract priceanalysis

See ‘Contract sum analysis’.

Contract sumanalysis

Examination of a cost proposal in view of the supporting data, and by applyingappropriates rates and factors.

Contractor Independent entity that agrees to furnish certain number or quantity of goods,material, equipment, personnel, and/or services that meet or exceed statedrequirements or specifications, at a mutually agreed upon price and within aspecified timeframe to the Government.

Contract sum Mutually agreed upon total amount that a principal (Government) pays to acontractor on completion of the contract, in accordance with contract termsand conditions and their subsequent modifications (if any).

Contractualliability

Obligation assumed by any contracting party under the terms of a contract.

Cost estimate Approximation of the probable total cost of a product, program, or project,computed on the basis of available information. Four common types of costestimates are: (1) Planning estimate: rough approximation of cost within areasonable range of values, prepared for information purposes only. Also calledball park estimate. (2) Budget estimate: approximation based on well defined

(but preliminary) cost data and established ground rules. (3) Firm estimate:based on cost data sound enough for entering into a binding contract. (4) Not-to-exceed /Not-less-than estimate: maximum or minimum amount required toaccomplish a given task, based on firm cost estimate.

Date forcompletion

Fixed date specified in a contract to complete a job or project. If permittedunder the terms of the contract, the date for completion may be modified orrevised.

Date of commencement

The date established in a written notice to proceed with the works, from theGovernment to the contractor.

Deliverable Report, document or item that must be completed and delivered under theterms of an agreement or contract.

Design Application of engineering or architectural theories and techno-economicapproaches, based on the prevailing technical standards, for conducting all-round design (including non-standardized equipment design) andtechnoeconomic analysis on newly constructed, expansion and reconstructionprojects in respect of their technical process, land construction, civil works andenvironmental works; provision of design papers and blueprints as the basis forconstruction work.

Design andbuild (DB)contract

Construction contract where both the design and the construction of astructure are the responsibilities of the same contractor.




Glossary

Term Definitioni

Design-build-operate (DBO)contract

Construction contract where a single contractor has the responsibility fordesigning and constructing a facility, as well of operating and maintaining it fora specified period prior to handing it over to the client or principal.

Designdevelopment

A project design phase in which all design decisions need to be completed. Thedesign professional (designers) further develops the preliminary (schematic)design and detailing and ensures that basic technical issues are resolved andare capable of technical description. Plan arrangements, specific spaceaccommodations, plant equipment and furnishings, building design, materialsand colors, and complete definitions of systems serving the project aredeveloped.

Designer The professional individual or organisation that performs the design andprepares plans and specifications for the work to be performed. Theprofessional can be an architect, an engineer, or an organisation whichcombines professional services.

Design-tender-build

Traditional contracting method in which design is carried out by theGovernment (or tendered and performed by design consultant), and theconstruction phase are tender and performed by contractor.

Detailed design The phase of the design process on a project when drawings and specificationsare completed for construction tender purposes. The phase is preceded by thepreliminary design phase, and followed by the tender and award phase.

Direct costs The field costs directly attributed to the construction of a project, includinglabor, material, equipment, subcontracts and their associated costs.

Drawings A term used to represent that portion of the contract documents thatgraphically illustrates the design, location and dimensions of thecomponents and elements contained in a specific project.

A line drawing.

Engineering,procurementandconstruction

(EPC)

Commissioned by the Government to contract the whole process or certainstages of a project based on the contract including exploration, design,procurement, construction and trial operations (inspection upon completion)

Escalationclause

See ‘Variation of price clause’.

Estimate To calculate approximately the amount, extent or value of something To form an opinion of estimated costs

EvaluationCriteria

Evaluation criteria are used to assess the merit of offers/tenders received. Theevaluation criteria are specified in the quotation or tender documentation.

Extension of time

An extension of time to a contract period authorised by the Government forreasons of adverse weather conditions, an unusual number of variations etc.The reasons for which an extension of time may be granted are usually given inthe conditions of contract.




Glossary

Term Definitioni

Fair andreasonable price

A price that is fair to both parties considering quality, performance, supplysituation, delivery time, and payment options.

Fast track The process of dividing the design of a project into phases in such a manner asto permit construction to start before the entire design phase is complete. Theoverlapping of the construction phase with the design phase.

Final certificate A certificate stating that the works are now complete and the Government isdue a full and final settlement to the contractor.

Final payment The last payment from the Government to the contractor of the entire unpaidbalance of the contract sum as adjusted by any approved variation orders or

other contractual adjustment to the contract sum.

Firm price See ‘Fixed price’

Firm pricecontract

See ‘Fixed price contract’

Fixed price A price which is not subject to variation.

Fixed pricecontract

Contract that provides for a price which normally is not subject to anyadjustment unless certain provisions (such as variation of price clause) areincluded in the agreement.

Fluctuations Increases or decreases in costs of labour and materials.

Force majeure Standard clause found in construction and supply contracts, it exempts thecontracting parties from fulfilling their contractual obligations for causes thatcould not be anticipated and/or are beyond their control. These causes usuallyinclude act of God, act of man, act of parliament, and other impersonal eventsor occurrences. (French for, superior force.)

Form of tender Standard printed form given or sold to tenderers so that they may submit theinformation required for evaluation of the tender, in correct format andsequence.

Generalcontractor

Contractor that performs a contract all by itself, or through the use of subcontractors whose activities it supervises and coordinates.

Guarantee Three-party contingent liability agreement under which a third-party (theguarantor; usually bank or insurance company) agrees to be directly orcollaterally responsible for the obligation (contract fulfillment) of a first-party(the principal; usually the contractor) to a second-party (beneficiary; ie theGovernment) in case the first-party defaults or fails to fulfill its part of a deal.Unlike a warranty, a guarantee may refer to things as well as persons and, tobe legally enforceable, must be in writing.




Glossary

Term Definitioni

Invitation totender (ITT)

Initiating step of a competitive tendering process in which qualified (or pre-qualified) contractors or suppliers are invited to submit sealed tenders forconstruction works or for supply of specific and clearly defined goods orservices during a specified timeframe.

Lead time The period of time between when the contractor receives the order and theGovernment receives the goods/services.

Letter of acceptance

A letter that creates an immediate binding contractual relationship between theGovernment and the successful tenderer prior to entering into a formalcontract.

Letter of intent A letter informing a successful tenderer that it is the Government’s intention toenter into a contract with them in the future but creates no liability in regard tothat future contract

Liquidated andascertaineddamages (LAD)

A fixed sum that is specified in the contract and which the contractor isassessed as a measure of damages that the Government will suffer for eachday the work remains incomplete beyond the expiration of the contract time.The sum usually stated a daily rate is recovered from the contractor. The rateof LAD should be reasonable, and justifiable under the circumstances.

Liquidateddamages

See ‘Liquidated and ascertained damages’.

Lump sum A fixed price for contract work, not intended to be adjusted in any way eitherby variation or remeasurement. A lump sum contract therefore is a contract foran agreed amount of work for a lump sum of money.

Lump sumcontract

Written agreement under which the Government agrees to pay a contractor aspecified amount, for completing an agreed scope of work (e.g. involving avariety of items of work which are based on drawings and specifications set outin the contract) without requiring a measurement of quantities involved.

Main contractor Chief contractor who has a contract with the Government, and has the fullresponsibility for its completion. A main contractor undertakes to perform acomplete contract, and may employ (and manage) one or more subcontractors

to carry out specific parts of the contract.

Method of procurement

Procedure used in converting requirements or requisitions into purchase ordersor contracts. Methods of procurement include (1) open competitive tender, (2)selective competitive tender, (3) direct negotiations, and (4) direct purchasefrom internal pool of contractors/suppliers.

Needsstatement

See ‘Specifications’.

Negotiatedcontract

Contract awarded on the basis of a direct agreement with a contractor, withoutgoing through the competitive tendering process.




Glossary

Term Definitioni

Nominated sub-contractor

A contractor whom the main contractor usually employs under instruction fromthe Government pursuant to terms of the contract. Usually contractors forspecialist works, such as mechanical and/or electrical works.

Nominatedsuppliers

A supplier whom the main contractor usually employs under instruction fromthe Government pursuant to terms of the contract. Usually suppliers of goodsnot widely available such as some plant/equipment or a particular brand of plant/equipment which the designer considers is the most suitable for theparticular job.

Non-completion Not practical completion. See ‘Practical completion’

Non-compliance Not compliance. See ‘Compliance’.

Non-conformance

Not conformance. See ‘Conformance’.

Notice of tender Document used in sealed-tender procurement procedures through which theGovernment advises the potential suppliers of (1) statement and scope of work, (2) specifications, (3) schedules or timelines, (4) contract type, (5) datarequirements, (6) terms and conditions, (7) description of goods and/orservices to be procured, (8) general criteria used in evaluation procedure, (9)special contractual requirements, (10) technical goals, (11) instructions forpreparation of technical, management, and/or cost proposals. Notices of tenderare publicly advertised and contractors/suppliers respond with a detailedtender, not with only a price quotation. They provide for negotiations aftersealed tenders are opened, and the award of contract may not necessarily goto the lowest tenderer.

Open tender Tender process that is open to all qualified tenderers and where the sealedtenders may be opened in public for scrutiny and are chosen on the basis of price and quality. Also called ‘competitive tender’ or ‘public tender’.

Tender submitted in response to open competitive tender request/invitation.

Paymentcertificate

Document verified by an officer of the Government (usually the ‘SuperintendingOfficer’ named in the contract) that the noted work has been completed and isapproved for payment by the Government to the contractor.

Performancebond

Written guarantee from a third party guarantor (usually a bank or an insurancecompany) submitted to a principal (i.e. the Government) by a contractor onwinning the tender. Performance bond ensures payment of a sum (notexceeding a stated maximum) of money in case the contractor fails in the fullperformance of the contract. These bonds usually cover 100 percent of thecontract price and replace the tender bonds on award of the contract.

Post tenderclarification

Discussions between the Government with the prospective contractors(suppliers), after the receipt of tenders but before the award of contract. Thesenegotiations are supposed to be confined to clarification of any points; pricechanges are normally ruled out.

Post tendernegotiation

See ‘Post tender clarification’




Glossary

Term Definitioni

Practicalcompletion

Stage or designated portion of a construction project that is sufficientlycomplete in accordance with a contract for the Government to occupy and/orutilise it for its intended use, without undue interference.

Preliminaries Matters which feature at the beginning of a bill of quantities or summary of tender, which are relevant to the contractor in terms of his obligations andresponsibilities and which will therefore influence his costings. These wouldinclude such items as names of clients and consultants, insurancerequirements, length of contract, descriptions of the site in terms of its access,working areas and adjacent buildings etc, a detailed description of the work tobe undertaken and the order in which it should be tackled.

Preliminarydesign

The second phase of a project's design process. During this phase ancillaryspace is developed and dimensions are finalized. Outline specifications aredeveloped into technical specifications; sections are delineated and elevationsare defined.

Pre-qualification Preliminary stage in a tender process where it is determined if an applicant hasthe requisite resources and experience to complete the job as required.

Pre-qualificationof tenderers

Screening of potential contractors, suppliers, or vendors (on the basis of factorssuch as experience, financial ability, managerial ability, reputation, work history, etc.) to develop a list of qualified tenderers who will receive the letterof invitation to tender.

Prime cost sum An amount included in a bill of quantities or summary of tender to cover aparticular bit of work or supply of materials to be carried out by a nominatedsub-contractor or a supplier.

Project The erection, construction, alteration, repair, or improvement of any plant,structure, building, road, or other improvement.

Projectmanagement

The use of integrated systems and procedures by a team of professionalsduring project design and construction. As applied to a construction project,project management can be used synonymously with constructionmanagement.

Provisional sum A sum included in a bill of quantities or summary of tender for work that isrequired but cannot be sufficiently designed or specified at the outset of thecontract.

Private financeinitiative (PFI)

A form of partnership between the private and public sector which is normallyused for high risk/high value contracts, principally to raise money for highervalue projects

Procurement The process of obtaining work, supplies and services - covering acquisitionfrom third parties and from in-house providers - from preparation andprocessing of a requisition through to approval of the invoice/claim forpayment. The process spans the whole life cycle from identification of needs,through to the end of a services contract or the end of the useful life of anasset.




Glossary

Term Definitioni

Procurementboard

The group of officers who are authorised under the Government’s procurementprocedures to approve the award of a particular tender to acontractor/supplier.

Professionalindemnityinsurance

Consultants arrange insurance to cover their liability for damages and costs dueto breaches of their professional duty caused by neglect, error or omission. Italso covers costs of liability and their defence arising out of dishonest orfraudulent acts. Insurers usually reserve their right to take all reasonable stepsof recovery against any party. Contractors with a design responsibility will alsobe required to obtain such insurance.

Public liability

insurance

The insurance taken out by the contractor for third party claims. Under the

contract the contractor is usually required to indemnify the Government for anyexpense, loss, liability, claim or proceedings under statute or common law inrespect of which personal injury or death is caused by the carrying out of theworks other than that caused by the act or neglect of the employer.

Additionally, the contractor is usually required to insure his obligation toindemnify the Government for any damage to property to the extent that it isdue to negligence of the contractor.

Public privatepartnership(PPP)

Very similar to a PFI arrangement, but the aim is centered more on servicedelivery than finance.

Public tender See ‘Open tender’.

Purchasing Also known as procurement, purchasing is the acquisition of goods or services.

Qualifiedtenderer

Potential tenderer who meets the minimum standards of experience, financialability, managerial ability, reputation, and work history for a specified class of supplies, services, or projects (works).

Quotation Formal statement of promise (submitted usually in response to a request forquotation) by potential supplier to supply the goods; or services required by abuyer; or works required by a contractor; at specified prices, and within aspecified period. It may also contain terms of sale and payment, andwarranties. Acceptance of quotation by the Government constitutes an

agreement binding on both parties.

Reasonableprice

Price that provides the best total value—comprising of availability, deliverytime, fitness for purpose, payment terms, quality, quantity, and service. A reasonable price is not necessarily the lowest price.

Rejected tender Response to an invitation to tender that is unacceptable, because (1) anothertender has been chosen, (2) tender fails to fall within the establishedcompetitive range, (3) absence of competitive tenders invalidates the tenderingexercise, (4) invitation to tender is readvertised, (5) tender is void due toirresponsibility of the tenderer, or rigging or other fraud is discovered.




Glossary

Term Definitioni

Request forinformation

Request made typically during the project planning phase where a Governmentcannot clearly identify product requirements, specifications, and purchaseoptions. Such requests clearly indicate that award of a contract will notautomatically follow.

Request forquotation (RFQ)

Document used in soliciting price and delivery quotations that meet minimumquality specifications for a specific quantity of specific goods and/or services.RFQ are usually not advertised publicly, and are used commonly for (1)standard, off-the-shelf items, (2) items built to known specifications, (3) itemsrequired in small quantities, or (4) items whose purchase price falls belowsealed-tender threshold. Suppliers respond to a RFQ with firm quotations, andgenerally the lowest-priced quotation is awarded the contract.

Retentions An amount, usually 5-10% held back from the sum due to a contractor, forpayment at a later date. The amount will be specified in the conditions of contract. Retentions are usually released on the basis of half at the issue of thecertificate of practical completion, the remainder at the issue of the finalcertificate. Note: the Government of Malaysia’s forms of contract do notrequire retentions.

Retention fund See ‘Retentions’.

Retention sum See ‘Retentions’.

Risk Factors that may adversely affect the successful completion of a project.

Schedule of rates

A list of works activities or items usually priced at a rate per unit.

Schematicdesign

See ‘Preliminary design’.

Scope of work Description (usually in chronological division) of work to be performed under acontract or subcontract in the completion of a project.

Sealed tender Document enclosed in a glued (sealed) envelope and submitted in response toinvitation to tender (ITT). Sealed tenders received up to the deadline date are

generally opened at a stated time and place, and evaluated for award of acontract.

Selective tender Invitation to tender sent only to selected contractors, sellers, or vendors whohave been pre-qualified through a screening process.

Specialprovisions toconditions of contract

Conditions of a contract that are peculiar to the project under considerationand do not fall under the general conditions.




Glossary

Term Definitioni

Specification A description of requirements and standards to which the goods, works orservices should conform. Also known as a statement of needs (needsstatement), a statement of requirement, an operational requirement, or a brief.Its purpose is to present prospective contractors/suppliers with a clear,accurate and full description of the Government’s needs, to enable them topropose a solution to meet them

Stakeholder An individual or organisation that has an active interest or a stake in aparticular organisation or issue. For example, funders, members, contractors,purchasers, trustees, beneficiaries, volunteers and paid staff are allstakeholders in a voluntary organisation

Sub-contract Agreement, purchase order, or any such legal instrument issued under a maincontract (by the main contractor to a third party—the subcontractor), callingfor the performance of a defined piece of work or production and/or delivery of specified goods or services. Subcontracts contain special terms and conditionsthat are unique to the main contract, and flow-down provisions that proceedfrom it.

Sub-contractor Junior or secondary contractor who contracts with a main contractor (and notthe Government) to perform some or all of the main contractor's contractual-obligations under the main contract.

Summary of tender

Lists of jobs, like those in bills of quantities except that they contain noquantities. Rates may be inserted by tenderers

Supplementaryagreement

Document that describes additions, alterations, or removal, of the scope (or theterms) of a contract, mutually agreed upon by the parties to the contract.

Supplementarycontract

See ‘supplementary agreement’.

Supplier An individual or firm who supplies and/or fabricates goods, materials orequipment for a specific portion of a construction project but does notperform any labor on the project.

One that sells goods, materials or equipment not fabricated to a specialdesign.

Survey Survey, explore, test, and undertake overall assessment on landscape, geologyand water for planning, design, implementation, operations and integratedmanagement of the project; provide feasibility assessment and requiredinformation on the exploration results for construction; carry out rock exploration, design, management and monitoring activities.

Tender Complete proposal (submitted in competition with other tenderers) to executespecified work(s) within prescribed time, and not exceeding a proposed amount(that usually includes labor, equipment, and materials). The tender-receivingparty may reject the tender, make a counter offer, or turn it into a bindingcontract by accepting it. See also offer and proposal.




Glossary

Term Definitioni

Tender bond Written guarantee from a third party guarantor (usually a bank or an insurancecompany) submitted to a principal (eg Government) by a contractor (tender)with a tender. Tender bond ensures that on acceptance of tender by theGovernment the contractor will proceed with the contract and will replace thetender bond with a performance-bond. Otherwise, the guarantor will pay theGovernment the difference between the contractor's tender and the nexthighest tenderer. This difference is called liquidated damages which cannotexceed the amount of the tender bond. Also called tender guarantee or tendersurety.

Tender box Box where tender documents (or proposal) must be lodged by the tender dateto be eligible for consideration.

Tender date Prescribed date and time by which a tender must be submitted (or lodged inthe tender depository) to be considered. Also called tender time.

Tenderdocuments

Documents required to be submitted in response to an invitation to tender.These include the prescribed tender form, drawings, specifications, time lines,charts, price breakdowns, etc. Tenders not accompanied by all the requireddocuments are considered incomplete or non-compliant tenders, and areusually automatically rejected.

Tenderer Contractor, supplier, or vendor (services provider) who responds to aninvitation to tender. Also called offeror or quoter.

Tenderevaluation

The formal process of examining contractor’s (or supplier’s) tenders to identifywhich provides best “value for money”.

Tenderevaluationcommittee

The group of officers who are authorised under the Government procurementprocedures to analyse received tenders. They also make recommendations onwho is awarded the contract.

Tender form See ‘Form of Tender’

Tenderguarantee

Alternative term for tender bond.

Tender opening Stage in a tender process where the received tender-envelopes are opened andexamined by the advertiser (ie the Government ) of an invitation to tender(ITT). In an open or public tender opening, the tenderers (and other parties)are allowed to witness the process and inspect the tenders, in a closed openingonly the officers of the Government are present.

Tender openingcommittee

The group of officers who are authorised under the Government’s procurementprocedures to witness, administer and record the tender opening process.

Tender price Price offered by tender (contractor, supplier, vendor) for a specific work, supplyor service, and valid only for the specified period.

Turnkeycontractor

A contractor who is responsible for the whole process of design, procurement,construction and installation work in a project. When transferred to theGovernment, a turnkey project is fully ready for use.




Glossary

Term Definitioni

Valueengineering

A process of reviewing all aspects of a design to re-examine all assumptionsand minimize the life-cycle costs of the project.

Value for money Utility derived from every purchase or every sum of money spent. ‘Value formoney’ is based not only on the minimum purchase price (economy) but alsoon the maximum efficiency and effectiveness of the purchase.

Variation Changes in work permitted under the contract. See also ‘Variation order’.

Variation of price clause

Provision in a contract for increasing or decreasing the contracted price forlabor, material, etc., in step with an agreed upon benchmark such as the costindex issued by the Department of Statistics.

Variation order(VO)

Document issued by the Government, directing variations (changes) in acontract as authorised under the contract's variation clause.

Variation ordercommittee

The group of officers who are authorised under the Government’s procurementprocedures to approve variation of works under a contract.

Work Construction and services required by the contract documents, as amended bycontract modifications, whether completed or partially completed, including alllabor, materials, equipment, tools, and services provided or to be provided bythe contractor to fulfill the contractor's obligations. The work may constitutethe whole or part of the project.

_______________________

Part of the items in the Glossary was extracted / modified from: www.businessdictionary.com.



DID MANUAL

VOLUME 10

CONTRACT ADMINISTRATION

PART I : INTRODUCTION

CHAPTER 1

INTRODUCTION



Chapter 1 – INTRODUCTION

1-iRevision 0 : March 2009

Table of Contents

Table of Contents ..................................................................................................................... 1-i

1.1 INTRODUCTION.......................................................................................................... 1-1

1.2 SCOPE OF VOLUME 10................................................................................................. 1-1

1.3 CONTENTS OF VOLUME 10 .......................................................................................... 1-1

1.3.1 Part I : Introduction........................................................................................1-1

1.3.2 Part II : Pre-contract.......................................................................................1-1

1.3.3 Part III : Post-contract ....................................................................................1-1

1.4 DOCUMENT BINDING, AND UPDATES............................................................................1-2

1.5 FLOWCHARTS, PROCEDURES, GUIDELINES, AND APPENDICES ......................................1-2

1.5.1 Flowcharts...................................................................................................... 1-2

1.5.2 Procedures .....................................................................................................1-2

1.5.3 Guidelines / Guidance Notes ............................................................................1-2

1.5.4 Reference Documents .....................................................................................1-2

1.5.5 Appendices..................................................................................................... 1-3

1.5.6 References .....................................................................................................1-3

1.5.7 Volume 10A – Reference Documents................................................................1-3

1.6 DOCUMENT CHANGE CONTROL AND APPROVAL ............................................................1-3

APPENDIX 1A Pro-Forma : Document Change Control / A pproval.......................................... 1A-1

APPENDIX 1B Pro-Forma : Amendment Record Sheet for Revision ........................................1A-2




1-ii Revision 0 : March 2009





1-1Revision 0 : March 2009

1 INTRODUCTION

1.1 INTRODUCTION

This chapter provides:

An overview of the scope, contents and document structure of Volume 10. Procedures on updating the document.

1.2 SCOPE OF VOLUME 10

Volume 10 covers all general procedures and practices pertaining to contract administration,commencing from tender stage until the completion of defects liability stage.

It is aimed to be the first point of reference for all matters pertaining to DID contract procedures,e.g.

the tender processes, the compilation of contract documents, contract administration, and close-out for the contracts.

1.3 CO NTE NTS OF V OLUME 10

The chapters within the Volume 10 are grouped to 3 parts, and covering subjects, as follows:

1.3.1 Part I : Introduction

Part I gives a whistle-stop tour of the whole DID organization structure and procurement processes,

including an outline on project implementation.

It serves as background information only.

1.3.2 Part II : Pre-contract

Although pre-contract works are usually not considered as ‘contract administration’, it is part of theprocurement process and included in Volume 10 for ease of reference.

Part II covers the DID general procurement processes, and the procedures for preparation of tenderdocuments (for works) up to the acceptance of tender (or award of contract).

1.3.3 Part III : Post-contract

Post-Contract administration can be defined as the coordination of the actions required for theperformance of the contract, including guidance and monitoring necessary to assure that allcontractual obligations are fulfilled by the parties to the contract, i.e. the Department of Irrigationand Drainage (representing the Government) and the Contractor.

Part III covers the contract administration procedures and best practices.

It also includes explanatory notes on contractual issues such as delays and extension of time,practical completion and disputes resolution.




1-2 Revision 0 : March 2009

1.4 DOCUMENT BINDING, AND UPDATES

Volume 10 is a “live document” and shall be updated from time to time.

For this purpose, the document is ring bound.

Upon receipt of a document change notification, the superseded page/document shall be removedand replaced by the new page/document.

Changes must be recorded in the ‘Registration of Amendments’ sheet at the front of the Volume.

1.5 FLOWCHARTS, PROCEDURES, GUIDELINES, AND APPENDICES

Where applicable, the information are presented in the following manner and order:

1.5. 1 Flo wcha rts

The flowchart provides an overview of the processes set out within the chapter, and the sequenceand interrelationship between the processes.

1.5. 2 Pr ocedur es

The procedures section describes work processes outlined in the flowchart.

1.5.3 Guidelines / Guidance Notes

The guidelines or guidance notes on contract administration practices are set out after theprocedures. These shall be presented in bullet-point format, as far as possible.

The guidelines or guidance notes are summaries only. For further details, reference must be made

to the relevant and current DID Circulars, Treasury Circulars and Treasury Instructions. See ‘References’.

1.5.4 Reference Documents

A list of Reference Documents is included in each chapter. Reference documents are

- sample do cuments- and other documents

as may be relevant to the chapter.

The Reference Documents are compiled under Volume 10A – Reference Documents.

Comment [scho1]: “”list of sample docu

(which are compiled under Volume 10A’ d




1-3Revision 0 : March 2009

1.5.5 App endices

The Appendix or Appendices are appended at the end of each chapter, and generally includechecklist(s) of work processes relating to that chapter.

1.5.6 References

A list of the relevant DID Circulars, Treasury Circulars and Treasury Instructions are included at theend of each chapter.

1.5.7 Volume 10A – Reference Documents

Sample documents or pro forma documents are set out in Volume 10A of the DID Manual.

1.6 DOCUMENT CHANGE CONTROL AND APPROVAL

An officer may propose changes to the contents or procedures set out in Volume 10, by using theDocument Change Control Form.

The officer should state the proposed amendments together with reasons for the amendments in the Amendment Record Sheet.

Upon approval, the new document shall be inserted, and the Registration of Amendments sheet atthe front of the Volume 10 must be updated.




1-4 Revision 0 : March 2009




DID MANUALVolume 10

Contract Administration

Revision Number : Revision 0

Revision Date : March 2009

Chapter 1

– Introduction to Volume 10

APPENDIX 1A

Pro-Forma- Document Change Control / Approval




APPENDIX 1A PRO-FORMA : DOCUMENT CHANGE CONTROL/APPROVAL

TO :…………………………………………….

CHANGE REQUEST

DOCUMENT REFERENCE PROPOSED AMENDMENT

DID MANUAL VOLUME 10

................................................................... ........................................[OFFICER] Date

Name :Designation:Contact No :

APPROVAL RECORD

Approved for Implementation Not Approved

Remarks :

.................................................................[APPROVING OFFICER]

Name :Designation:Contact No :

..............................….......Date



DID MANUALVolume 10




Chapter 1

– Introduction to Volume 10

APPENDIX 1B

Pro-Forma- Amendment Record Sheet for Revision




APPENDIX 1B AMENDMENTS RECORD SHEET FOR REVISION

AMENDMENT RECORD SHEET FOR REVISION : _______

TO:……………………………………….

The amendment enclosed herewith is the revision to your DID Manual.

DOCUMENTS ISSUED

REMOVE INSERT AMENDMENT/DOCUMENTED

PROCEDURE

REASON FOR AMENDMENT/

DOCUMENTEDPROCEDURE

Volume 10, Chapter ……….

Page ____ toPage ___, Rev.

___

Page ___ toPage ___, Rev. ___

Attachment ___,Page ___ to Page

___ , Rev. ___


___ , Rev. ___

Volume 10, Chapter ……….

Page ____ toPage ___, Rev.

___

Page ____ toPage ___, Rev. ___


___ , Rev. ___


___ , Rev. ___

After Revision : ____ has been inserted, please complete the Registration of Amendments Sheet on

Page ___ of your Manual.



DID MANUAL

VOLUME 10



CHAPTER 2

DID ORGANISATION STRUCTURE



Chapter 2 – DID ORGANISATION STRUCTURE

Table of Contents

Table of Contents .......................................................................................................................2-i

List of Figures ...........................................................................................................................2-ii

2.1 INTRODUCTION ............................................................................................................. 2-1

2.2 BACKGROUND................................................................................................................ 2-1

2.3 CORPORATE INFORMATION............................................................................................ 2-2

2.4 ORGANISATION STRUCTURE .......................................................................................... 2-3




List of Figures

Figure Description Page

Figure 2.1 Organisation Chart 2-4




2 DID ORGANISATION STRUCTURE

2.1 INTRODUCTION


Brief history and background information of the DID. An overview of the organisation structure of the DID.

2.2 BACKGROUND

"It was the vital need for irrigation facilities - to open new areas for a fledging paddy growingindustry - that provided the impetus for the establishment of the Department of Irrigation andDrainage or the DID as it is popularly known."

Prior to the formation of DID in 1932, all works in connection with drainage and irrigation was

related to by the Public Works Department. Following the slump in the tin and rubber industries inthe late twenties and the worsening rice situation in the country, the then British High Commissionerappointed in 1930 a Rice Cultivation Committee to determine "the best steps to be taken in order toencourage rice cultivation in Malaya".

The Committee made a comprehensive survey and published its report in 1931. One of its mainrecommendations was "that an Irrigation and Drainage Department should be established which willexecute in the Straits Settlement and Federated Malay States and advisory in the Unfederated MalayStates, which will absorb the Hydraulics Branch of the Public Works Department, Federated MalayStates". This recommendation was accepted as a separate department on the 1st. of January 1932.

During the first 10 years of the Department's existence up to the Japanese occupation, 20,000

hectares of new padi land were developed and improved, irrigation and drainage facilities wereprovided to some 50,000 hectares of existing padi lands. The Department took over the maintenanceof drainage works on 40,000 hectares of estate and smallholder lands in Selangor and Perak.

Reconstruction of these works and their extension raised the total area to about 80,000 hectares in1942. During the Japanese Occupation, little or no new development took place apart from thecompletion of some structures that were partly finished when the war broke out. In the drainageareas, neglect resulted in drains being silted up and overgrown with plants, and in some instancesalmost entirely filled up.

On the re-occupation of Malaya in 1945, emphasis was given to the rehabilitation of irrigation works.The established policy of the Government was to reduce the country's dependence on imported foodsupplies, with emphasis towards self-sufficiency in rice, and every effort was made to increase thelocal production of rice. Following the Independence of Malaya in 1957, greater emphasis was placedon increasing the income and employment opportunities of the rural poor.

With this objective, the irrigation and drainage programmes were formulated to provide adequateirrigation facilities to enable double cropping of padi lands, and drainage facilities for improvedproduction of tree crops especially in small holdings.




Subsequent to the formation of Malaysia in 1963, additional State Drainage and IrrigationDepartments were established in Sabah and Sarawak and this increased the number of StateDepartments to thirteen with the Federal Headquarters being responsible for the overall drainageand irrigation matters in the country. The significant increase in development since 1957 is reflectedin the areas provided with irrigation facilities increasing from 205,000 hectares (3,000 hectares with

double cropping facilities) to 332,000 hectares (249,000 hectares with double cropping facilities) bythe end of 1981. The areas provided with drainage facilities, too, has increased from 142,000hectares to 476,000 hectares in the same period.

In 1970/71, severe floods occurred in many parts of West Malaysia and the situation was so seriousthat a national disaster had to be declared on January 5th. 1971. Subsequent to this occurrence,flood mitigation and hydrology was made an additional responsibility of the Department from 1972onwards.

From 1986, coastal engineering has become an added function of the DID. The River ManagementConference was held on 1988, and a subsequently lead to the establishment of the River EngineeringDivision in 1990.

The Department has moved from the Ministry of Agriculture (MOA) to the Ministry of NaturalResources & Environment (NRE) on March 27th, 2004 and taken on new and expandedresponsibilities. Today, the DID's duties encompass :

Hydrology and Water Resources

River Management

Flood Mitigation

Coastal Management

Stormwater Management

The DID can look back on its history of successfully executed programmes with pride. Theexperience and knowledge that it has gained, together with its current dynamism have placed theDepartment in the forefront as the custodian of the nation's water resources.

2.3 CORPORATE INFORMATION

Vision

To be a world class organization by the year 2010.

Mission

To manage water resources, river basins, flood risks and coastal zones to achieve environmentalsustainability and enhanced quality of life.

Objective

To provide engineering services which are beyond the capability of the target group itself andsubsequently to ensure optimum land utilization and more efficient management of the nation'swater resources.




Core Values

Doing The Right Things, and Doing Things Right

with

Quality

Integrity

Caring

Q Policy

DID Malaysia is committed to an excellence work culture focused on continuous improvementtowards customer and employee satisfaction.

2.4 ORGANISATION STRUCTURE

The organisation structure of the DID is set out in Figure 2.1.

The Department consists of

15 divisions 15 state departments special project teams.

The DID is headed by the Director-General and assisted by Deputy Director-General (Development)and Deputy Director-General (Operation).

Each division and state department is headed by a Director, and assisted by Deputy Directors andofficers.

The special projects are under the purview of the Project Management Division, and each project isheaded by its Project Engineer.

Please refer to the DID official website for the current name and contact of the Director General,Deputy Director General, and Division and State Directors : http://www.water.gov.my/.

The organisation structure and corporate information of each division and state can be obtainedthrough the links to the website.




Figure 2.1 Organisation Chart

Organisation chart of DID, Malaysia effective from 1st June 2008. Please refer to the officialwebsite, http://www.water.gov.my, for the current chart and other corporate information.

DIRECTOR GENERAL

DEPUTYDIRECTOR GENERAL

(DEVELOPMENT)

DEPUTYDIRECTOR GENERAL

(OPERATIONS)

DIRECTORPROJECT

MANAGEMENT

CORPORATEDEVELOPMENT

LEGAL ADVISOR

STATE

FLOODMITIGATION

COASTAL

RIVER

URBANDRAINAGE

STRUCTURALGEOTECHNICAL

AND DAM

QUANTITYSURVEYING &

CONTRACT

JOHOR KEDAH

MELAKA

KELANTAN

TERENGGANU

PAHANG

SABAH

SARAWAK

LABUAN

PERLIS

SELANGOR

W.P.PUTRAJAYA

PERAK

PULAU PINANG

N.SEMBILAN

MANAGEMENTSERCVICES

MECHANICAL &ELECTRICAL

SERVICES

HYDROLOGY &WATERRESOURCES

TRAINING &CAREER

DEVELOPMENT

HUMID TROPICCENTRE

INFORMATIONTECHNOLOGY

QUALITY &PERFORMANCE

AUDIT

SMARTCONTROLCENTRE

RTBMSC

RTBSUNGAI PERAI

RTBKUALA LUMPUR

RPSA BERIS

UPPPKELANTAN

RTBSUNGAI KLANG

RANCANGANPENGAIRANMUDA

RTBSUNGAI MUDA



DID MANUAL

VOLUME 10



CHAPTER 3

PROCUREMENT

– OVERVIEW



Chapter 3 – PROCUREMENT- OVERVIEW

Table of Contents



List of Tables.............................................................................................................................3-ii

3.1 INTRODUCTION ............................................................................................................. 3-1

3.2 GENERAL PROCUREMENT STRATEGY .............................................................................. 3-1

3.3 METHODS OF PROCUREMENT......................................................................................... 3-3

3.3.1 Quotation Exercise ............................................................................................. 3-3

3.3.2 Tender Exercise ................................................................................................. 3-3

3.3.3 Direct Negotiation .............................................................................................. 3-3

3.4 METHODS OF PROCUREMENT FOR GOODS AND SERVICES .............................................. 3-4

3.4.1 Procurement for Goods ...................................................................................... 3-4

3.4.2 Procurement for Services.................................................................................... 3-5

3.5 PROCUREMENT OPTIONS FOR WORKS............................................................................ 3-5

3.5.1 General Principles .............................................................................................. 3-5

3.5.2 Conventional Or Traditional ................................................................................ 3-6

3.5.2.1 Advantages under the traditional lump sum contract ............................. 3-7

3.5.2.2 Disadvantages under the traditional lump sum contract......................... 3-7

3.5.3 Design And Build................................................................................................ 3-73.5.3.1 Advantages associated with Design and Build ....................................... 3-8

3.5.3.2 Disadvantages associated with Design and Build................................... 3-8

3.5.4 Private Finance Initiative (PFI) ............................................................................ 3-8

3.5.4.1 The Advantages of PFI ........................................................................ 3-9

3.5.4.2 The Disadvantages of PFI .................................................................... 3-9

3.5.5 Forms Of Contract.............................................................................................. 3-9

3.6 REFERENCE DOCUMENTS ..............................................................................................3-10

3.7 REFERENCES.................................................................................................................3-10

APPENDIX 3A Procurement of Goods.................................................................................... 3A-1

APPENDIX 3B Procurement of Works.................................................................................... 3A-9

APPENDIX 3C Procurement of Services ............................................................................... 3A-15




List of Figures


Figure 3.1 Government Procurement 3-2

List of Tables

Table Description Page

Table 3.1 Procurement of Goods 3-4




3 PROCUREMENT

3.1 INTRODUCTION


An overview of the procurement strategy An outline of DID’s procurement strategy for supplies, works and services. The standard forms of contract used for DID projects

3.2 GENERAL PROCUREMENT STRATEGY

“Procurement” is about making choices and can be defined as the process of acquiring goods (orsupplies), works and services from suppliers, contractors and consultants, as the case may be asshown in Figure 3.1.

The procurement process covers the whole life cycle from identification of needs, through to thesatisfactorily delivery of goods or service or handing over of completed works.

Procurement, therefore, has a broader meaning than that of simply purchasing. It is concerned withsecuring services and products that best meet the needs of users and stakeholders. The keyobjectives of the procurement should be met.

The Treasury1 requires good governance practices when procuring for the Government throughtenders. The Project Team should be mindful of these principles when acquiring goods, works orservices:

Public accountability. Transparency. Value for Money. Open and fair competition. Fair dealings.

The determination the most acceptable price for the procurement of works, goods or servicesgenerally shall be carried out through:

quotation exercise, or tender exercise, or negotiation.

1 Surat Pekeliling Perbendaharaan Bil. 5 Tahun 2007 - Tatacara Pengurusan Perolehan KerajaanSecara Tender




GovernmentProcurement

Works

Supplies

Services

An overview on

procurement andprocurement strategyfor Works are coveredin Chapter 3.

The guidelines andprocedures forConstructionManagement are setout in DID Manual

Volume 11.

The guidelines andprocedures forContract

Administration are setout in DID Manual

Volume 10.

A brief outline onprocurement processfor supply of goods isset out in Appendix 3A of Chapter 3

A brief outline onprocurement processfor services is set outin Appendix 3C of Chapter 3

Figure 3.1 Government Procurement




3.3 METHODS OF PROCUREMENT

3.3.1 Quotation Exercise

The quotation exercise is used where the estimated value of works, goods or service does not

exceed RM500,000.00 per year. (Please refer to Treasury Circulars for current thresholds).

The quotation exercise is a simplified version of the tender exercise.

3.3.2 Tender Exercise

The tender processes involve a combination of ‘Open’ and ‘Selective’ tendering methods. Thefollowing are some of the often used processes.

Open tender - Suppliers, contractors or consultants are invited through advertisement. Allrespondents to the advertisement who request tender documentation will be invited to submit atender. There is no pre-qualification questionnaire or short-listing stage prior to invitation to

tender. Minimum standards of suitability may be lay down for respondent, failing which no tenderdocument will be issued.

Selective tender - Only suppliers, contractors or consultants who are short-listed will be invited tosubmit a tender. Care must be taken to ensure that the number invited is adequate to providecompetition. The tender list may be drawn from DID’s existing database, or through a pre-qualification exercise.

Pre-Qualification Exercise - Tenderers shall be invited through advertisements. All respondents tothe advertisement will be given a set of questionnaires to complete. The responses are assessedbased on agreed criteria. The tender list is prepared, based on the respondents who qualifiedunder the assessment, and shall be invited to tender.

‘Two Envelope’ Tenders – This method is often used in private sector only and not applicable onGovernment Projects. The purpose of the "two-envelope" tender method is to eliminate anyperceived or actual pre-judgment that may develop for, or against, lower or higher priced tendersbefore non-price criteria are evaluated. The ‘technical bid’ and the ‘financial bid’ are evaluatedseparately, by separate evaluation committees.

Refer to Chapter 7 for more details on the process and procedures.

For Government projects all procurement whether works, supply of goods or service exceedingRM500,000.00 per year shall be invited through tender.

3.3.3 Direct Negotiation

Goods, services or works may be directly sourced through direct negotiations, where usually there isno competitive process.

Direct negotiation is permitted where a directive is given by the Ministry of Finance to procureparticular goods, services or works from an identified party.

Detailed written records of negotiations must be maintained to avoid disputes, and providetransparency.

The process and procedures shall be as described in Appendix 3B (Procurement of Works).




3.4 METHODS OF PROCUREMENT FOR GOODS AND SERVICES

The general procurement strategy of goods and services are outlined in Section 3.4.

Reference must be made to the current Government Circulars on the purchasing of goods and

services, in respect of:

The financial thresholds for purchasing goods and services and by what method

The standard terms and conditions of contract

The procedure for opening tenders, evaluating them and awarding contracts

The non-commercial considerations that need to take place in advertising tenders and tenderevaluation.

3.4.1 Procurement for Goods

The general procurement route for supply of goods for Government projects is as follows:

Table 3.1 Procurement of Goods

Value of each item per annum Procurement Option

Exceeding RM500,000 Tender

Exceeding RM100,000 but not exceedingRM500,000

Quotation from at least 5 registered suppliers

Exceeding RM50,000 but not exceedingRM100,000 Quotation from at least 5 registered Bumiputerasuppliers

Not exceeding RM50,000 Direct purchase or negotiations from registeredor non registered suppliers (both Bumiputera andnon Bumiputera).

Reference : AP170 and 171

Procurement for Emergency Cases

Exemptions to the Treasury Instructions are permitted for emergency cases only subject to theconditions stated in Treasury Instruction 173.2.

A brief outline on procurement process for supply of goods is set out in Appendix 3A (Procurement of Goods) of this Chapter.




3.4.2 Procurement for Services

The scope of services is divided into two categories, namely:

a) Consultancy Services

b) Non Consultancy services

The consultancy services encompasses consultancy services for both physical and non physicaldevelopment and other category required by the Ministry/ Department and decided by Treasury fromtime to time.

The non consultancy services covers services such as provision of training and courses, maintenanceand repairs, cleaning, rental and building management, security and others.

A brief outline on procurement process for services is set out in Appendix 3C (Procurement of Services) of this Chapter.

3.5 PROCUREMENT OPTIONS FOR WORKS

3.5.1 General Principles

For Government projects the following procurement routes are commonly adopted:

a) Work order or indent - value of works not exceeding RM100,000 and shall be based onapproved Schedule of Rates for Civil Engineering and Building Works. For Electrical Work thevalue shall not exceed RM50,000 and shall be based on approved Schedule of Rates forElectrical Works.

b) Requisition works - minor and repair works (which do not alter the original structure) whichvalue do not exceed RM100,000 and shall be based on approved Schedule of Rates.

c) Non requisition works – works which are not based on approved Schedule of Rates and thevalue of works does not exceed RM500,000.

d) Works which estimated value exceeds RM500,000 must be procured through tender, eitherthrough conventional or design and build contract.

The procurement strategy should be consistent with the objectives of the project and should enablethe risks (i.e. uncertainties of time, cost and performance) to be controlled to achieve a successfuloutcome. It is the outcome of a series of decisions which are made during the early stages of aproject and the chosen strategy influences the allocation of risk, the design strategy and the

employment of consultants and contractors. It has a major impact on the time scale and ultimatelythe cost of the project.

The main types of procurement option commonly adopted by the Government are as follows:

a) Conventional or traditional : design by consultants (or in house) is completed beforecontractors tender for, then carry out the construction works

b) Design and build : design and construction are both undertaken by a single contractor inreturn for a lump sum price.




The chosen option should also reflect the Government’s technical ability and resources and theamount of control over the process which the Government wishes to exert directly or indirectly.

Therefore, Project Head and/or Project Team must have a clear understanding of where the ultimateauthority and responsibility for controlling and managing the important risks lie.

There are a number of key factors to be considered when selecting a procurement option. Theseinclude:

the availability of in-house resources and experience; the project size and complexity; the importance of timescales and possible phased completion requirements; the importance of quality and issues surrounding whole-life use of the facility; and the availability of funding (in addition to setting and agreeing the budget for the project).

Whatever procurement route is chosen, sufficient time must be built into the overall programme toallow for all planning stages to be fully completed (both before construction starts and during the

progress of the project). Good planning will include getting the construction sequence right,assessing and managing project risks, and using value management to assess the contribution of each part of the construction process. These steps will minimise the likelihood of delays, extra costs,and waste/inefficiency.

The procurement routes briefly described in Sections 3.6 to 3.7 may be adopted for a DID project.

3.5.2 Conventional Or Traditional

Under the ‘conventional’ or ‘traditional’ contract, the contractor builds to a defined scope of work fora fixed lump sum price. It is sometimes referred to as lump sum contract. The fixed lump sum pricecontract may be based on drawings, specifications and quantities or based on drawings and

specifications only.

With this type of contract, the Design Team (whether in-house designers, or Consultants appointedby the Government) are to fully develop the design prior to going out to tender.

The contract is with the main contractor who has responsibility only for the construction works.

If the design has been fully thought out, developed and frozen, then in theory, this type of contractshould provide a reasonable degree of cost certainty at tender stage.

However, the need to work to tight timescales may mean that a fully developed design cannot beprepared in advance of tendering, in which case, subsequent design changes will invariably lead tocost escalation




3.5.2.1 Advantages under the traditional lump sum contract

Competitive fairness. Design-led, facilitating a high level of quality in design and construction is achievable as the

scope of the work is prescribed on an input basis. The Government retains direct contractual relationships with the design team, cost consultant

and main contractor. Price certainty and transfer of risk to the main contractor is achieved at contract award provided

no subsequent changes are instructed to the design. The procedure is well known, and changes to the works can be easily arranged and valued based

on known prices obtained in competition without necessarily excessive cost or time implications. Satisfactorily public accountability.

3.5.2.2 Disadvantages under the traditional lump sum contract

The overall programme may be longer due to the need to produce a fully detailed design beforethe project goes out to competitive tender and work starts on site i.e. no parallel working.

No buildability input by contractor. The Government must have the resources and access to the expertise necessary to administer

the contracts of consultants and the main contractor since the traditional method often results inadversarial relationship developing.

Claims for delay and disruption can arise if the design is not fully detailed prior to agreeing thecontract sum or if the Government varies the design afterwards. Thus it could be open to abuse,resulting in less certainty.

3.5.3 Design And Build

Under a design and build contract, a single contractor assumes the risk and responsibility fordesigning and building the project in return for a fixed lump sum price.

Since it is a fast track procurement strategy, construction normally commences before thecompletion of all detailed design but at the contractor’s risk.

The range of design and build options available ranges from “turnkey” where the Government haslittle involvement in the design development or construction procurement process, to “develop andconstruct” where the Government appoints the designers to develop the brief to a level of sophistication which will leave the design and build contractor to develop the detail or specificationselements.

Under design and build the risk is transfer to the contractor and the Government loses some controlover the project. Any requirement which is not directly specified in the Needs Statement or tenderdocuments will invariably constitute variation to the contract which are usually more expensive to

introduce after the contract is awarded compared with other types of procurement strategy.

Therefore the Needs Statement must be fully and unambiguously defined in the tender documents(i.e. clear, accurate and delivered on time) and if the requirements are not specific, then theperformance specifications should be provided at the tender stage. Under this procurement optionthe contractor is likely to deliver the greatest performance benefits to the Government throughinnovation and standardisation, where appropriate output specifications are used.




Where in some circumstances where the design and build procurement contract is extended to coverthe maintenance and/or the operation of the facility for a substantial period, the contractor hasincreased opportunity for adopting innovative solutions that provide greater value for money whenconsidering the whole life costs.

Design and Build contract may be procured through negotiation or tender process. See Appendix 3 –Flow Chart on Procurement of a Design and Build Contract through Direct Negotiation.

3.5.3.1 Advantages associated with Design and Build

Single point responsibility for design and cost risks (i.e. the Government has only to deal withone firm).

Price certainty is obtained before construction starts provided the Government’s requirementsare adequately specified and changes are not introduced.

Potential for more economical construction due to early consideration of building methods('buildability').

Reduced total project time due to the possibility of early completion i because of overlapping

activities.

3.5.3.2 Disadvantages associated with Design and Build

Difficulties in preparing adequate Government’s Requirements / Needs Statement. TheGovernment’s design needs must be properly specified as variations to the scope of the project,once awarded, can be expensive.

The Government has little control over design and quality standards once the contract isawarded, as the building is specified on a performance basis. There is no design overview unlessseparate check consultants are appointed by the Government for this purpose.

Government has to commit itself before the detailed designs are completed. Relatively fewer capable local construction firms undertaking the design and build projects so

there is less real competition. Design liability offered by design and build contractors is limited.

3.5.4 Private Finance Initiative (PFI)

The Private Finance Initiative or PFI is a form of public-private partnership (PPP) that combines two(2) procurement options, i.e.

where the Government purchases capital items from the private sector, and where the Government the contracts-out the provision of public services from the private sector.

PFI differs from privatisation in that the public sector retains a substantial role in PFI projects, eitheras the main purchaser of services or as an essential enabler of the project.

PFI differs from contracting-out in that the private sector provides the capital asset as well as theservices. The PFI also differs from other PPPs in that the private sector contractor also arrangesfinance for the project.

Under the most common form of PFI, the private sector designs, builds, finances and operates(DBFO) facilities based on ‘output’ specifications decided by public sector managers and theirdepartments.




The private sector already builds most public facilities but the PFI also enables the design, financingand operation of public services to be carried out by the private sector. Under the PFI, the publicsector does not own an asset, such as a hospital or school but pays the PFI contractor a stream of committed revenue payments for the use of the facilities over the contract period. Once the contracthas expired, ownership of the asset either remains with the private sector contractor, or is returned

to the public sector, depending on the terms of the original contract.

PFIs are usually initiated at the Treasury or Ministry levels. There are no ‘standard’ terms andconditions, as each PFI largely depends on the assets and services requirements and the financingpackage.

3.5.4.1 The Advantages of PFI

Benefits include:

The process is service rather than project focused and concentrates on the whole life of theservice and associated assets.

There is a single point of responsibility for service delivery. There is an opportunity to draw on a wider range of management and innovation skills.

Construction projects of high capital value are more likely to achieve value for money under the PFIroute.

All PFI projects should be assessed on a case-by-case basis.

3.5.4.2 The Disadvantages of PFI

Risks include:

The process will be at risk without a long-term commitment from both the Government and"service providers".

The process leading up to the completion of a new building can take a long time and needs anextensive and fully refined brief at the outset.

There is a significant cost to the industry in tendering which has to be recovered by each bidder. Change is difficult to achieve and potentially expensive to incorporate once the contract is let.

3.5.5 Forms Of Contract

Forms of contract that are used by the DID include

For works

o PWD203 – Standard Form of Contract To Be Used Where Drawings and Specificationsform Part of the Contract

o PWD 203A – Standard Form of Contract To Be Used Where Bills of Quantities Form Partof The Contract

o PWD 203N – Standard Form of Contract for Nominated Sub-Contractor Where the MainContract is based Upon PWD Form 203 or 203A

o PWD DB/T – Standard Form of Design and Build Contract




For Goods

o PWD 203P – Standard Form of Contract for Nominated Supplier Where the Main Contractis based Upon PWD Form 203 or 203A

o PWD 203E – Standard Form of Contract for Supply and Delivery of EngineeringEquipment and Plant

For consultants (where the professional fees are based on Scale of Fees prescribed by therespective professional boards)

o BEM/JKR FORM A – For Engineers

o BAM/JKR FORM B – For Architects

o BQSM/JKR FORM C – For Quantity Surveyors

3.6 REFERENCE DOCUMENTS

Royal Institution of Chartered of Surveyors – The Procurement Guide

3.7 REFERENCES

Treasury Circular(Surat Pekeliling Perbendaharaan)

[1] Bil 2 Tahun 1999: Had Nilai Perolehan dan Kuasa, Tanggungjawab Lembaga Perolehan danJawatankuasa Sebutharga

[2] Bil 8 Tahun 2006: Peraturan Perolehan Perkhidmatan Perunding

[3] Bil 5 Tahun 2007: Tatacara Pengurusan Perolehan Kerajaan Secara Tender

[4] Bil 12 Tahun 2007: Had Nilai Dan Syarat-syarat Pembelian Terus Bagi Bekalan DanPerkhidmatan

[5] Bil 5 Tahun 2009: Pembahan Had Nilai dan Tatacara Pengurusan Perolehan SecaraSebutharga

Treasury Instruction(Arahan Perbendaharaan)

[1] Arahan Perbendaharaan 31 Julai 2008

DID Circulars(Surat Pekeliling / Edaran JPS)

[1] SP JPS Bil. 3/2004: Garis Panduan Perolehan Kerja Secara Sebutharga

[2] SP JPS Bil 3/2008: Tatacara Baru Permohonan dan Perlantikan Perunding di JPS Malaysia



DID MANUALVolume 10




Chapter 3

– Procurement - Overview

APPENDIX 3A

Procurement of Goods




APPENDIX 3A PROCUREMENT OF GOODS

Estimated Value of Goods / Supplies

Any type or class of Goods, up to the value

of RM 50,000 per year

ExceedingRM 50,000

Up toRM 100,000

Direct purchase fromany suppliers

Quotation fromminimum 5Bumiputeraregisteredsuppliers

Selective TenderOpen Tender

Ref: Arahan Perbendaharaan 170 SPP Bil 5/2009

ExceedingRM 100,000

Up toRM 500,000

Quotation fromminimum 5registeredsuppliers

Flowchart 3A.1 – Procurement Options (Based on value of supplies)

More thanRM 500,000




Flowchart Description Action By

1. Establish Government’s needs. Head of Department

2. Ascertain the budget allocationincluding approval.

Controlling Officer

3. Ascertain the procurement route to beused (Direct purchase, quotation ortender?)

Procurement Officer

4. Procurement Process. Procurement Officer

5. Issue Purchase Order (AM 75), and of Letter of Acceptance (for purchasesthrough either Quotation or Tender).

Procurement Officer

6. Receive Goods and Purchase Ordersigned by the supplier. Check that theGoods are in good order.

Receiving Officer

7. Payment Finance Division

Flowchart 3A.2 – Process for Procurement of Goods

1

2

3

4

5

6

7




Flowchart Description

1. Establish Government’s needs.

2. Ascertain the budget allocation includingapproval.

3. Preparation of quotation document.

4. Invite and Display of Quotation Notice.

5. Issuance, receiving at closing date and timeand opening of Quotation Submission.

6. Evaluation Report and Recommendation.

7. Decision and Approval.

8. Issue Local Order, with cover letter.

9. Receive goods and signed Local Order.

10. Payment

Flowchart 3A.3 – Quotation Process

1

2

3

4

5

6

7

8

10

9




Flowchart Description

1. Establish Government’s needs.

2. Ascertain the budget allocation including approval.

3. Planning.

4. Preparation of Tender Documents and comply withGovernment’s needs.

5. Tender Advertisements.

6. Issuance, receiving at closing date and time andopening of tender submission.

7. Tender Evaluation Report and Recommendation.


9. Prepare and signing Letter of Acceptance.

10. Issue Letter of Acceptance and Letter informing Acceptance of Tender.

11. Preparation & signing of Contract Documents.

12. Receipt of Goods.

13. Payment.

Flowchart 3A.4 – Tender Process

1

2

3

4

5

6

7

8

9

10

11

13

12




3A.1 PROCEDURES

Please refer to Flowchart 3A.2 – Process for Procurement of Goods.

Step Procedures / Tasks Action By

General

For the purposes of these procedures, the “ProcurementOfficer” may be one of more persons who is/are given theduties of carrying out tasks of procuring Goods for or on behalf of the Department or section.

For information

1 & 2 Establish Needs and Ascertain Budget

Establish the Department’s (or section) needs for the particularGoods, including

o Quantityo Qualityo When the Goods is required.

Ascertain that budget is allocated for the Goods.

Action By:Head of

Department/Procurement Officer

3 & 4 Ascertain the procurement route to be used & The ProcurementProcess

Generally, the procurement route is pre-determined by thevalue of the Goods (or supplies) to be purchased and shallComply with the current Government’s guidelines on directpurchase

Direct purchase/ Quotations

Value of each item perannum

Procurement Option

Exceeding RM500,000 Tender

Exceeding RM100,000 up toRM500,000

Quotation from at least 5registered suppliers

Exceeding RM50,000 up to

RM100,000

Quotation from at least 5

registered Bumiputerasuppliers

Not exceeding RM50,000 Direct purchase fromregistered or non registeredsuppliers (both Bumiputeraand non Bumiputera).

Action By:Procurement Officer





Tender exercise.

o Open tender or selective tender.

o If procurement through selective tender:

- For the value of the Goods up to RM50 million, thenthe tender list and the acceptance of tender must beapproved by the Procurement Board convenedunder the Department / Ministry.

- For the value of the Goods exceeding RM50 million,then the tender list and the acceptance of tendermust be approved by the Procurement Boardconvened under the Ministry of Finance level.

5 Issue Purchase Order (AM 75), and Letter of Acceptance (forpurchases through either Quotation or Tender)

All purchases of goods by direct order

The current Form AM75 shall be used.

All purchases of goods by quotation or tender

The Letter of Acceptance of Quotation / Letter of Acceptance of Tender shall be used

Action By:Procurement Officer

6 Receive Goods and Purchase Order signed by the supplier.Check that the Goods are in good order.

The officer who receives the Goods (Receiving Officer) shallensure that the Goods are in good order, including

that the Goods are in accordance with the quantity anddescription stated on the Purchase Order

free from damage or visual defects is received on time a copy of the Purchase Order is duly signed and

accompanies the Goods.

Refuse or reject all damaged Goods, or Goods not inaccordance with the description stated in the Purchase Order.

Action By:Receiving Officer





7 Payment

Forward the claims and supporting documents for payment to

the relevant Finance Division.

The Finance Division shall check and submit the supportingdocuments together with payment voucher to the AccountantGeneral, Ministry’s Accountant or State Treasury (as the casemay be) to honour payment.

Please also refer to DID Manual Volume 10, Chapter 10 –Payments.

Action By:Receiving Officer



DID MANUALVolume 10




Chapter 3


APPENDIX 3B

Procurement of Works




APPENDIX 3B PROCUREMENT OF WORKS

(Estimated Value of Works not exceeding RM500,000)

Project Brief

Selectprocurement

route

Requisition for minorand repair works which

do not alter original

structure

Non Requisition Works

Value?

Value?

< RM20,000 > RM 200,000

up to

RM 500,000

< RM20,000

RM 20,000up to

RM100,000

> RM 200,000up to

RM500,000

Directappointmentof registered

Class FContractor

Appointmentof registered

Class FContractor tobe based on

approvedSchedule of

Rates

Directappointmentof registered

Class FContractors

Quotationsfrom

registeredClass E

Contractors

Construction by contractor

Completion and Hand-over to DID Ref: Arahan Perbendaharaan 180 SPP Bil 5/2009

Quotationsfrom

registeredClass F

Contractor

> RM100,000 up to

RM200,000

Quotationsfrom

registeredClass F

Contractors

RM 20,000up to

RM200,000

Flowchart 3B.1 – Direct Appointment/ Quotation Procurement Options




(Estimated Value of Works exceeding RM500,000)

Project Brief

Selectprocurement

route

Conventional Contract(Design-tender-

construct)

Design and BuildContract

(Tender-design-construct)

Prepare NeedsStatement (By DID)

Tender / DirectNegotiation Process

Design and

construction bycontractor

Completion andHand-over to DID

In-House

Design stage

Tender / DirectNegotiation

Design stage

Appointment of consultants

Construction bycontractor

ByconsultantsDesign in-

house or byconsultants?

Flowchart 3B.2– Tender/ Direct Negotiation Procurement Options




Flowchart Description Action by

1. Establish Government’s needs. -

2. Ascertain the budget allocationincluding approval.

3. Preparation of quotation document.

4. Invite and Display of Quotation Notice.

5. Issue, receive at closing date and timeand opening of Quotation Submission.

6. Evaluation Report andRecommendation.


8. Issue Works Indent.

9. Contractor completes the Work andreturns Works Indent duly signed.

10.Payment.

1

2

3

4

5

6

7

9

8

10

Flowchart 3B.3 – Quotation Process






2. Ascertain budget allocation includingapproval.

ImplementationDepartment/PH

3. Preparation of tender documents andpreliminary estimates.

PO/ Engr

4. Check tender documents and Bills of Quantities.

PO /QS or Engr

5. Tender documents in order? -

6. Tender notice and advertisement. PO

7. Issue tender documents to Contractorsfor pricing, and received priced tenderdocuments.

BUBK

8. Tender Evaluation Report, andRecommendation.

Evaluation Officer/Evaluation

Committee / BUBK

9. Decision and approval Tender ProcurementBoard

10. Prepare Letter of Acceptance PO

11. Sign Letter of Acceptance AtP

12. Issue Letter of Acceptance, and Letterinforming the acceptance of Tender

PO/SO

13. Preparation of contract documents CAO

14. Signing of contract documents; anddistribution of copies of contractdocuments

AtP; CAO

15. Post-contract Administration SO

16. Payment SO

PROCUREMENT OF WORKS

Yes

1

2

5

3

4

6

7

8

9

10

11

12

13

14

15

16

No

Flowchart 3B.4 – Tender Process






2. Ascertain budget. ImplementationDepartment/PH

3. Received Instruction / Approval from Ministry of Finance.

-

4. Issue Letter of Intent to Contractor. AtP

5. Preparation of tender documents andpreliminary estimates.

PO/ Engr

6. Check tender documents and Bills of Quantities. PO /QS or Engr

7. Tender documents in order? -

8. Issue tender documents to Contractor forpricing, and received priced tender documents.

BUBK

9. Analyse contractor’s price. Evaluation Officer/Evaluation Committee /

BUBK

10. Price Negotiation Committee Meeting. Price Negotiation

Committee

11. Report Price Negotiation result to Ministry forendorsement. Forward endorsed report toMinistry of Finance for approval.

BUBK

12. Approval from Ministry of Finance. -


14. Sign Letter of Acceptance. AtP

15. Issue Letter of Acceptance of Tender and Letterinforming the acceptance of Tender

PO/SO


17. Signing of contract documents and distributionof copies of contract documents

AtP; CAO

18. Post-contract Administration SO

19. Payment SO

3

1

4

5

6

8

2

9

10

11

12

13

14

15

16

17

18

19

7

Yes

No

Flowchart 3B.5 – Direct Negotiation for Conventional Contract






2. Ascertain budget. ImplementationDepartment/PH

3. Received Instruction / Approval from Ministryof Finance

-

4. Issue Letter of Intent and pre-bid documentsto Contractor

ImplementationDepartment/PD

5. Received Contractor’s Proposal -

6. Evaluate the proposal Departmental Design

Team

7. Complying with Needs Statement? -

8. Analyse contractor’s price Evaluation Officer/Evaluation Committee /

BUBK

9. Price Negotiation Committee Meeting. Price NegotiationCommittee

10. Report Price Negotiation result to Ministry for

endorsement. Forward endorsed report toMinistry of Finance for approval.

BUBK

11. Approval from Ministry of Finance.-


13. Sign Letter of Acceptance. AtP

14. Issue Letter of Acceptance of Tender andLetter informing the acceptance of Tender

PO/SO


16. Signing of contract documents anddistribution of copies of contract documents

AtP; CAO

17. Post-contract AdministrationSO

18. Payment SO

1

18

2

3

9

4

10

6

5

8

11

12

13

14

16

15

17

7

Yes

No

Flowchart 3B.6 – Direct Negotiation for Design and Build



DID MANUALVolume 10




Chapter 3


APPENDIX 3C

Procurement of Services




APPENDIX 3C PROCUREMENT OF SERVICES

Type of Services

Non Consultancy(Conducting courses and

training, maintenanceand repairs, cleaning

and clearing, rental andbuilding management,security and etc.

Consultancy

Value perannum

Procurement Option

ExceedingRM500,000

- Tender

Exceeding

RM100,000up toRM500,000

- Quotation from at

least 5 registeredsuppliers

ExceedingRM50,000up toRM100,000

- Quotation from atleast 5 registeredBumiputera suppliers

NotexceedingRM50,000

-Direct purchase fromregistered or nonregistered suppliers

(both Bumiputera andnon Bumiputera).

PhysicalDevelopmentConsultancy

Physical / NonPhysical Studies

Consultancy

Direct Appointment(physical

development scopeof works, land and

environmentalsurvey and where

the requiredexpertise is limited)

Appointmentthrough

Technical andFinancialProposal

(physical andnon physicaldevelopmentand/or when

theimplementingagency doesnot have the

expertise

Reference: AP 185 – 190; 31 July 2008 SPP Bil 5/2009

Flowchart 3C.1 – Procurement of Services





1. Propose 5 names of Consultant, prepareevaluation, scoring marks and

recommendation paper.

PH

2. Receive the recommendation paper for theappointment of Consultant.

BUBK

3. Check. BUBK

4. Agree with recommendation paper? [8] BUBK

5. Propose different consultants BUBK

6. Approval of new selection. [1] Deputy Director General(Development)

7. Submit the recommendation paper to the Authorised Party and inform PH. BUBK

8 Approval from Authorised Party -

9. Issue Letter of Intent to Consultant. PH

10. Consultant submits Technical and FinancialProposal.

-

11. Evaluation of Technical Proposal andFinancial Proposal.

PH

12. Negotiation. Technical and FinancialNegotiation Committee

13. Evaluation and recommendation. PH

14. Check and submit recommendation to Authorised Party for approval.

BUBK

15. Decision from Authorised Party. [11] -

16. Issue Letter of Acceptance to Consultant. PH

17. Sign the Consultancy Agreement AtP

18. Consultant performs the Work. -

19. Payment. -

1

2

3

4

5

6

9

12

13

14

16

7

10

17

18

19

15

8

11

No

Yes

Approve

Disagree

Flowchart 3C.2 – Direct Appointment of Consultants(Ref : SPP 8/2006 and SP JPS 3/2008)





1. Propose minimum 5 names of Consultants,prepare evaluation, scoring marks andrecommendation paper.

PH

2. Receives the recommendation paper for theappointment of Consultants.

BUBK

3. Check. BUBK

4. Agree with recommendation paper? BUBK

5. Secretariat proposes different name(s). BUBK

6. Approval of new selection). Deputy DG(Development)

7. Submit the recommendation paper to the

Authorised Party.

8 Approval from Authorised Party

9. Invitation to shortlisted consultants to submitTechnical and Financial Proposals.

10 Shortlisted consultants submit Technical andFinancial Proposals

11. Evaluation of Technical Proposals and FinancialProposals.

12. Forward recommendation (report) to BUBK. PH/PO

13. Check and submit recommendation on cost to Authorised Party for decision.

BUBK

14. Authorised Party approves recommendation?

15. Issue Letter of Intent to Consultant.

16. Technical and Financial negotiation withConsultant

17. Secretariat prepares and submits recommendation

paper to Approving Authority for decision

18. Decision by Approving Authority

19. Issue Letter of Acceptance to Consultant.

20. Sign the Consultancy Agreement.

21. Consultant performs the services.

22. Payment.

1

2

3

4

5

6

9

12

13

15

7

10

17

14

19

20

21

22

18

16

8

11

No

Disagree

Disagree

Approverequiring

negotiation

Agree

Approvewithout

negotiation

Yes

Flowchart 3C.3 – Appointment of Consultants through Technical and Financial ProposalRef : SPP 8/ 2006 and SP JPS 3/2008




3C.1 LIMIT OF AUTHORITHY FOR THE APPOINTMENT AND APPROVAL OF COST OF

CONSULTANCY SERVICES

The Authorised Party and limit of authority for the appointment and approval the cost of consultancyservices are as follows:

a) Physical Development Projects

Authorised Party Authority Limit

Project Cost Consultancy Cost

a. Treasury Exceeding RM50 million Exceeding RM5 million

b. Procurement Board “A” Ministry of Natural Resources and Environment

Up to RM50 million Up to RM5 million

b) Physical/ Non Physical Studies

Authorised Party Authority Limit for approving the appointment

and consultancy cost

a. Treasury Exceeding RM1 million

b. Procurement Board “A” Ministry of NaturalResources and Environment

Up to RM1 million

c) Land Survey and Environmental Works

Authorised Party Authority Limit for approving the appointment

and consultancy cost

a. Treasury Exceeding RM300,000


Up to RM300,000

d) Additional Consultancy Cost

Authorised Party Authority Limit for approving the additionalconsultancy cost

a. Treasury Exceeding 30% of original cost


Up to 30% of original cost

(Ref : Treasury Circulars No. 8/ 2007 and DID Circular JPS No 3/2008).



DID MANUAL

VOLUME 10



CHAPTER 4

PROJECT IMPLEMENTATION

– OVERVIEW



Chapter 4 – PROJECT IMPLEMENTATION – OVERVIEW

Table of Contents



4.1 INTRODUCTION ............................................................................................................. 4-1

4.2 FUNCTION OF PROJECT MANAGEMENT........................................................................... 4-1

4.3 PROJECT LIFE CYCLE...................................................................................................... 4-3

4.3.1 Project Initiation ................................................................................................ 4-4

4.3.2 Project Planning Stage ....................................................................................... 4-6

Design and Build .............................................................................................. 4-6

4.3.3 Conceptual Design Stage .................................................................................... 4-6

Design and Build .............................................................................................. 4-6

4.3.4 Preliminary Design Stage (Schematic Design Stage) ............................................. 4-7

Design and Build .............................................................................................. 4-7

4.3.5 Detailed Design Stage ........................................................................................ 4-7

Design and Build .............................................................................................. 4-7

4.3.6 Tender Stage ..................................................................................................... 4-7

4.3.7 Construction Stage............................................................................................. 4-8

4.3.8 Completion and Hand-Over................................................................................. 4-8

4.3.9 Defects Liability Stage & Close Out...................................................................... 4-94.4 SPECIAL PROJECTS ........................................................................................................ 4-9

4.5 IMPLEMENTATION OF PROJECT: PROJECT TEAM, AND RESPONSIBILITES .......................4-10

4.5.1 Project Team (PT).............................................................................................4-10

4.5.2 Project Head (PH) .............................................................................................4-12

4.5.3 Superintending Officer’s Representative (SOR)....................................................4-12

4.5.4 Procurement Officer (PO) ..................................................................................4-13

4.5.6 Contract Administration Officer (CAO) ................................................................4-13

4.5.7 Project Supervisor (PS)......................................................................................4-13

4.5.8 Design Team or Designer (DT) ..........................................................................4-13

4.5.9 Consultant ........................................................................................................4-14

4.6 PARTIES NAMED IN THE CONTRACT ..............................................................................4-14

4.6.1 Superintending Officer (SO) or Project Director (PD) ...........................................4-14

4.6.2 SO’s Representatives (SOR) and PD’S Representatives (PDR)...............................4-14

4.6.3 Contractor ........................................................................................................4-15

4.7 AUTHORISED PARTY .....................................................................................................4-15




List of Figures


Figure 4.1 Functional Project Organisation 4-2

Figure 4.2 Project Life Cycle Flow Chart (Outline) 4-3

Figure 4.3 Project Initiation Chart (Other than Special Projects) 4-5

Figure 4.4 Project Team Organisation 4-11




4 PROJECT IMPLEMENTATION - OVERVIEW

4.1 INTRODUCTION


An overview of the process of implementing and managing the projects undertaken by the DID. A brief outline of the roles and responsibilities of the various member of the project team.

4.2 FUNCTION OF PROJECT MANAGEMENT

Project management may be defined as the overall planning, co-ordination and control of a project from inception to completion aimed at meeting the Government’s and stakeholders’ requirements in order to produce a functionally and financially viable project that will be completed on time within authorized cost and to the

required quality standards.

From inception to completion, a project involves many parties, e.g.

the stakeholders, who have vested interest in the success or outcome of the project.

Internal stakeholders include the Government department who is the originator of the project, orthe end-user of the works. External stakeholders include such parties who may be affected byproject, including neighbouring landowners and those who may benefit from the completion of the project (say, residents at a flood prone area, under a flood mitigation project).

the various professionals and specialists forming the project team.

These professionals and specialists contribute knowledge and experience to the decision matrixat each stage of the project implementation.

the contractors(s) and nominated subcontractors / suppliers who shall deliver the completedproject.

The functional relationship of the various parties in the project is as shown in Figure 4.1.

The task of project management is to bring all the parties together and co-ordinate the actions toenable them to make their best possible contribution in the most efficient manner.

In larger scale projects, the management function of a project is often separated from the designand execution functions, whilst in smaller projects both the management and design functions maybe carried out by the leader of the design team.

The roles of the Project Team and the parties in connection with the implementation or project andadministration of contract are further discussed in section 4.5, below.




Legend:

Direct Relationship

Indirect Relationship

Figure 4.1 Functional Project Organisation

PROJECT TEAM

InternalStakeholders External

Stakeholders

Contractor

Nominated Sub-Contractors /

Suppliers




4.3 PROJECT LIFE CYCLE

The project is implemented in a number of steps or stages.

For the purpose of this Chapter, the stages in the project life cycle are summarised into the nine (9)

main stages, as outlined below and represented in Figure 4.2.

The main activities and responsibilities of the Project Team at each state are set out below.

Volume 10 shall only cover Tender, Construction, Completion and Hand-over and Defects Liabilityand Close out Stage.

START

END

PROJECTINITIATION STAGE

DEFECTS LIABILITY & CLOSE OUT STAGE

PROJECTPLANNING STAGE

CONCEPTUALDESIGN STAGE

PRELIMINARY DESIGN STAGE

DETAILEDDESIGN STAGE

TENDER STAGE

CONSTRUCTION STAGE

Volume 10:Contract Administration

COMPLETION ANDHAND-OVER

Figure 4.2 Project Life Cycle Flow Chart (Outline)




4.3.1 Project Initiation

Government projects implemented by DID may be initiated by

The Treasury or The Ministry’s Development Division or A DID Division or State

The project initiation and implementation chart is set out in Figure 4.3.

At this stage, the general objectives of the project are established and a budget may be allocated forits implementation.

Once the project is approved, and the budget is allocated, the Controlling Officer or Director-General(as the case may be) shall delegate the implementation of the project to the respective Division orState Director.

The Division or State Director shall then appoint the Project Head for the implementation of theproject.

At the pre-implementation or pre-tender stages of each project and/or contract, the Project Headand Project Team must check that sufficient budget is available for the project and/or contract.

(The remainder of this page is deliberately left blank)




1. Ministry /Controlling

Officer

2. DG of DID

3. ImplementingDivision /

State

4. ProjectHead

5. Project Team

1. The Ministry approves the budgetary allocation andlist of projects to be implemented by DID. The

Controlling Officer shall notify the Director-Generalthe approved allocations and project list.

2. The Director-General shall assign the project to therelevant implementing Division or State Director,and sets the project’s ceiling budget, for theexecution and completion of the project.

3. The implementing Division / State Director shallmanage and be responsible for the execution andcompletion of the project. The Division or StateDirector shall appoint an officer as the ProjectHead. The implementing Division / State and theProject Head shall be assisted by officers from theimplementing Division / State, and officers from thesupporting Divisions, e.g. Contracts and QuantitySurveying Division, Mechanical and ElectricalServices Division, Hydrology and Water ResourcesDivision, etc.

4. The Project Head shall identify the resources andpersonnel requirements for the project. The

Project Head shall recommend and appoint themembers of the Project Team and Design Teamfrom within DID, or where necessary, Consultantsshall be appointed.

5. The PH / Project Team shall determine theplanning data and design criteria. Further studiessuch as geotechnical studies, environmental impactstudies, etc. shall be carried out as necessary.

6. The Project Head / Project Team shall determinethe design brief and criteria. Once the scope of works is determined, the PH/Project Team shallconsider the procurement option best suited for theimplementation of the project, including whether todesign in-house or to appoint Consultants. Pleaserefer to Chapter 3 [Procurement] for procurementprocesses and procedures.

6. Design & Procurement

Figure 4.3 Project Initiation Chart (Other than Special Projects)




4.3.2 Project Planning Stage

At the project planning stage, the Project Head and his team shall develop the package strategy forthe overall implementation of the project, including:

The project brief and project cost plan (preliminary estimate) Project master programme, outlining the procurement of Consultants (if required), design stages,

tendering, construction and handover.

The programme should include key stages, including the review, verification and validation of variousdesign output produced by the Design Team / Consultant.

Considerations should be given, and decision made, whether to procure under a traditional contract(i.e. design-tender-construct), or under a design a build contract.

Further studies may be required before the Conceptual Design Stage may commence, or to becarried out concurrently with the Conceptual Design Stage, including:

Feasibility study Site investigation Hydrological and Hydraulic investigation Geotechnical investigation Environmental impact assessment.

Other issues to be considered and included in the project planning stage are:

Land acquisition. Co-ordination and liaison with other Government departments and agencies

Design and Build

For design and build contracts, the Needs Statement shall be prepared by DID to be included in thepre-bid document to be issued to the Tenderers for the submission of the technical and commercialproposal.

4.3.3 Conceptual Design Stage

The Design Team / Consultants shall develop the conceptual design based on the Needs Statement.

The conceptual design process should provide the outline design to a level such that the scope of works can be fully confirmed and agreed.

The endorsement of the Division / State Director is required before proceeding to Preliminary DesignStage.

Design and Build

For design and build contracts, the Tenderer’s proposal shall include the conceptual design. Thisshall be one of the basis for consideration for the award of contract.




4.3.4 Preliminary Design Stage

At the preliminary design stage, the Project Team shall appraise the soundness of various designproposal and assess the buildability, as more information is gathered following the approval of theconceptual design.

Value management should be carried out during the process so as to have optimal performance atthe advantageous economic value. The Project Head / Project Team shall appraise the variousoptions, and propose to the relevant Division / State Director or Funding Body for implementation.

The output from the preliminary design process should secure a preliminary endorsement from theDivision / State Director or Funding Body, and enable the Design Team to proceed to the DetailedDesign Stage.

Design and Build

This process is also applicable for Design and Build Contracts, where the approval of the Preliminary

Designs shall enable the Contract Sum to be finalized.

The PH ensures that the decisions and matters agreed in the earlier stages are effectively andefficiently implemented.

4.3.5 Detailed Design Stage

During the detailed design stage, the Design Team shall carry out technical design and production of drawings concurrently. The Designer shall ensure that the design coordination is carried out closely.Interaction between the End-User is also required, especially in the selection of materials, goods andplants.

The Design Team should advise on the suitability and reliability of the selected items. The DesignTeam must allow sufficient time for the End-User to consider and approve the submitted designsand drawings.

Design and Build

This process is also applicable for Design and Build Contracts, where the detailed design stage iscarried out by the Contractor.

4.3.6 Tender Stage

At this stage, the Project Team has sufficient information to identify the various scope of works, e.g.the various construction packages ranging from main contractor, nominated sub-contractors and

nominated suppliers.

The Project Team should formulate the procurement strategy, including:

Pre-qualification of tenderers Type of Tender (Open, selective or direct negotiation) Preparing list of tenders for approval by Tender Procurement Board Packaging the works into multiple contracts Types of contract, e.g. with quantities (JKR203A) or without quantities (JKR203). The decision to

use design and build contract (JKR DB/T) is usually made at the Project Planning Stage. Activity schedule for the tendering process, until construction completion.

Please refer to Part II – Pre-Contract for the tendering and award process and procedures.




4.3.7 Construction Stage

In this stage, the Project Team is principally involved in monitoring the performance of theContractor, and the progress of the works.

The principle activities include:

Ensuring contract documents are prepared and issued to the Contractor Ensuring the contracts are signed Arranging the handover of the Site to the Contractor Reviewing contractor’s construction programme and method statements Ensuring that procedures are in place and being followed Ensuring that site meetings are held and documented Confirming the insurance cover, performance bond and other deliverables from the Contractor

are in accordance with the Contract Reviewing progress for the Contractor Monitoring the Contractor’s performance

Ensuring that the design information required by the Contractor is supplied by the Design Team(where the works are not contracted under a ‘design and build’ contract)

Monitoring financial status Preparing payments and arranging payment authorisation Managing variations Managing adjustments to the Contract Sum(s) Anticipate and resolve potential problems before they develop or escalate. Assisting the Superintending Officer (or Project Director) in the assessment of contractor’s claims

for extension of time and for loss and/or expense Reporting to the Superintending Officer (or Project Director), the Director-General or Controlling

Officer, or Funding Body, as the case may be.

Please refer to Volume 10, Part III – Post-Contract for the contract administration process andprocedures for the construction stage.

Please refer to Volume 11 for the construction management process and procedures for theconstruction stage.

4.3.8 Completion and Hand-Over

The Project Team shall ensure that all prerequisites as per the contract has been completed anddelivered (except the obligations to be carried out in Defects Liability Stage, or deferred/exemptedunder the terms of the Contract) before the Certificate of Practical Completion is issued, including:

All testing, commissioning and/or endurance tests must be successfully completed. The relevant records, documents and drawings are handed over. Design Guarantee (if applicable) is submitted.

The Consultants / Superintending officer’s Representative shall prepare and submit therecommendation report, together with the Schedule of Defects and list of acceptable outstandingworks, if any, to the Project Team.

Refer to Volume 11, for the process and procedures relating to project completion and hand-over.




4.3.9 Defects Liability & Close Out Stage

The Project Team shall demobilise upon the issuance of the Certificate of Practical Completion, savefor such remaining members who are given the responsibilities of monitoring and managing theDefects Liability Stage, and the preparation of the Final Accounts and Final Certificate (Close Out

Team).

The Close Out Team is to ensure that

all defective works which had been identified during the defects liability period have beenrectified, and properly closed out.

Upon the expiry of the Defects Liability Period, a Schedule of Defects (if necessary) is preparedand the defects therein rectified by the Contractor.

The Final Accounts are prepared and signed off by the Contractor. the final inspection shall be arranged, and jointly carried out by the relevant parties, and the

Certificate of Making Good Defects is issued as per the Contract. The final deliverables, such as statutory declaration (or letter from the Labour Department) are

submitted prior to issuance of the Final Certificate.

Refer to Volume 11, for the process and procedures relating to the on-site management of DefectsLiability Stage.

Refer to Volume 10, chapters 18 and 19 for contract administration for defects management, andFinal Account and Final Certificate.

4.4 SPECIAL PROJECTS

Special Projects are one-off projects, initiated by the Government or by a third party, to meet aparticular need. The source of funding may be an external Funding Body, or funded through

alternative procurement strategies such as Private Finance Initiative (PFI), Build-Operate-Transferand other methods of procurement.

Examples of such special projects include: the Sg. Muda Flood Mitigation Project, SMART Tunnel,Bertam - Kepala Batas Flood Mitigation Project, etc.

The project initiation, planning and implementation procedures (including terms of the contract andcontract administration) are dependant on the particular circumstances, and are excluded from thisManual.

Nevertheless, the procedures and description set out in this manual may be used as generalguidelines, subject to the needs and circumstances of the project, and terms and conditions of thecontract.




4.5 IMPLEMENTATION OF PROJECT: PROJECT TEAM, AND RESPONSIBILITES

4.5.1 Project Team (PT)

The DID practices the project team concept to perform the activities required to complete a project.

The Project Team Organisation is set out in Figure 4.4.

The DID Project Head (PH) is the leader of this project team, and is ultimately responsible for theexecution and delivery of a project.

During the implementation a project, the PH will rely on

the Procurement Officer (PO) to perform tender administration duties;

the Contract Administration Officer (CAO) to perform contract administration duties, and

the Superintending Officer’s Representative (SOR) and Project Supervisor (PS) to perform

construction management duties.

Where third party consultants (Consultant) are appointed, these duties are performed by theConsultant and audited by the CAO or SOR, as the case may be.




Figure 4.4 Project Team Organisation

ProjectSupervisor

ImplementationOfficer / SOR

Project Head

Consultant(s)


Officer

Design Team /Designer

ProcurementOfficer

TenderSecretariat




Typical duties for the PH, SOR, PO, CAO, PS and other project team members are detailed below:

4.5.2 Project Head (PH)

The PH has overall responsibility and authority for entire execution of the project.

The PH is the single point of contact for all project activities from planning through project close out.

The PH may delegate responsibilities to members of his project team, including on-site constructionmanagement duties to the Superintending Officer’s Representative, but the PH remains fullyaccountable for the execution of the project within the scope, schedule, and budget parametersestablished for the project.

The duties and responsibilities of the PH includes but not limited to:

Responsibility for the project’s technical and financial directions and for ensuring external andinternal stakeholder satisfaction with project results.

Administer professional service, design and construction contracts, including involvement indesign contract negotiations. Establish initial project budgets, cost estimates, cash flow projections and master schedules. Develop and provide periodic updates (monthly or such period set by the Stakeholders) of project

schedules and budgets. Monitor project schedules and budgets to ensure financial and schedule milestones are met. Resolve public questions and concerns about the project. Co-ordinate with other Government departments and agencies and/or private utilities and

companies involved in the project. Oversee easement acquisition/utility relocation and permitting activities. Prevent or resolve problems occurring during project development and execution. Participate in the development of bidding documents and the construction contract award process

(as applicable). Analyse problems occurring during the project and take actions to ensure project goals are met. Provide regular progress reports and monthly briefings. Ensure project records and documentation are properly maintained. Select and assign projects to staff, SOR and consultants. Set schedules for interim project reviews. Supervise the quality assurance manager and safety and health officer for the project.

4.5.3 Superintending Officer’s Representative (SOR)

The PH may delegate duties or responsibilities to the SOR, or PDR for design and contracts.

The SOR will ensure that the Contractor’s work is supervised and routinely inspected. The SOR must

confirm that the Contractor complies with all required contractual, cost, schedule, safety and qualityobligations, including environmental requirements.




4.5.4 Procurement Officer (PO)

For the purpose of this Manual, the Procurement Officer (PO) is responsible for the pre-contractadministration functions including coordination with the PH to choose a project-delivery method,selecting and appointing Consultants and carrying out exercises for selection of contractors.

The PO shall facilitate the necessary approvals from the appropriate Authorised Party.

4.5.5 Tender Secretariat (TS)

The Tender Secretariat is responsible for the preparation of the tender evaluation paper for theTender Procurement Board meeting.

4.5.6 Contract Administration Officer (CAO)

The Contract Administration Officer is responsible for all post-contract functions, including facilitatingpayment applications, tracking changes and costs, assisting the SO/PD or their Representative in the

assessment of contractor’s claims for additional time and payments, and project close out with theproject team.

The CAO shall facilitate the necessary approvals from the appropriate Authorised Party.

4.5.7 Project Supervisor (PS)

The Project Supervisor (PS) will perform day-to-day construction management activities in support of the SOR.

The PS’s responsibilities include daily supervision of the Contractor’s work, daily preparation of written reports, and facilitating communications between the Contractor and SOR.

The PS reports to the SOR.

4.5.8 Design Team or Designer (DT)

The Designer is responsible for designing the project and preparing plans, specifications andestimates and design manuals.

DID’s own engineering staff, especially on smaller design projects where a quick turn around isrequired, may perform Designer services inhouse.

Large projects requiring a full range of professional services (soils, investigation, survey, publicinvolvement, hydraulic analysis, etc.) are typically performed by the Consultant who has been

awarded a qualification-based professional services contract with the DID.




4.5.9 Consultant

Where Consultant is appointed to carry out design works or to provide specialist services, the PHmay also appoint the Consultant as his representative on contract-related and construction-relatedmatters.

Within the limits of the delegation, the Consultant will inspect the Contractor’s work and ensure thatthe Contractor meets the required contractual, cost, schedule, safety and quality obligations.

The Consultant may be assisted by his own site staff.

4.6 PARTIES NAMED IN THE CONTRACT

Notwithstanding the roles and responsibilities of the parties implementing the project under thecontract, the execution and supervision are ultimately the responsibilities of the SO/PD and theContractor.

4.6.1 Superintending Officer (SO) / Project Director (PD)

The administration of the construction contract is the responsibility of the SO/PD duly named in thecontract.

Who may be appointed or named as the SO/PD depends on a number of factors, including:

Value of the works (please refer to section 5.3) Whether the project is undertaken at HQ or State level The location of the works.

The PH and the SO/PD need not be the same officer.

4.6.2 SO’s Representatives (SOR) / PD’S Representatives (PDR)

The supervision of the construction work is generally carried out by the SOR/PDR.

The SO/PD may delegate powers to more than one officer to perform different duties on his behalf,as follows:

Principal SO’s Representative / PD’s Representative

Overall supervision and direction of the execution of the works.

Specialist SO’s Representative / PD’s Representative

E.g. an electrical or mechanical construction manager to supervise the execution of electrical ormechanical works.

The format of letters delegations are appended under Volume 10A, Chapter 9 – ContractDocumentation.




4.6.3 Contractor

For the purposes of this Volume 10, the Contractor refers to the general contractor on a DIDconstruction project.

The Contractor is the prime contract holder with ultimate responsibility for completion of theconstruction work.

The PH, SOR/PDR and other DID officers typically should only have direct communications with theContractor (i.e. the PH should not correspond directly with subcontractors).

For the purposes of this Volume 10, the PH’s primary point of contact with the Contractor is theContractor’s representative, as designated by the Contractor.

The PS’s primary point of contact with the Contractor is the Contractor’s site agent (or foreman).

4.7 AUTHORISED PARTY

The DID is required to comply with the procurement and payment procedures set by the Treasury.

Only such person who is duly authorised (Authorised Party) may accept, approve, certify orotherwise act on behalf of the Government, in matters of procurement or administration of contract,irregardless who the Project Head or Superintending Officer / Project Director may be.

Such Authorised Party may be:

An officer, by virtue of his office, or A board or committee duly convened and comprising the relevant officers.

Further details of the Authorised Party and the limit of authority are set out in Chapter 5 – Authority.



DID MANUAL

VOLUME 10


PART II : PRE-CONTRACT

CHAPTER 5

AUTHORITY



Chapter 5 – AUTHORITY

Table of Contents

Table of Contents ....................................................................................................................... 5-i

List of Tables……………………………………………………………………………………………………………………….. 5-ii

5.1 INTRODUCTION ............................................................................................................. 5-1

5.2 AUTHORISED PARTY....................................................................................................... 5-1

5.3 LIMITS OF AUTHORITY................................................................................................... 5-1

5.3.1 Selection of Tenderers ....................................................................................... 5-2

5.3.2 Limit and Authority of Procurement Board for Acceptance of Tenders ................... 5-3

5.3.3 Execution of Contracts ....................................................................................... 5-4

5.3.4 Superintending Officer / Project Director and Contract Administration................... 5-5

5.3.5 Certification under the Terms of Contract............................................................ 5-6

5.3.6 Approval of Variation Order................................................................................ 5-7

5.3.7 Instruction for Variation for Special Cases ........................................................... 5-8

5.3.7 Expenditure of Provisional Sums ......................................................................... 5-9

5.3.8 Approval of Contractor’s Claims for Loss and Expense, Permitted under theContract………………………. .............................................................................……5-9

5.4 CIRCULATION OF DOCUMENTS ....................................................................................... 5-9

5.5 REFERENCES ................................................................................................................ 5-10

APPENDIX 5A Distribution of Documents for Works Funded by Federal Government[Pengedaran Dokumen-Dokumen (Kontrak Kerja) Biayaan Persekutuan] .......... 5A-1




List of Tables

Table Description Page

Table 5.1 Selection of Tenderers 5-2

Table 5.2 Acceptance of Tenders 5-3

Table 5.3 Execution of Contracts 5-4

Table 5.4 Contract Administration 5-5

Table 5.5 Terms of Contract 5-6

Table 5.6 Approval of Variation Order 5-7

Table 5.7 Special Cases 5-8

Table 5.8 Provisional Sums 5-9Table 5.9 Loss and Expense 5-9




5 AUTHORITY

5.1 INTRODUCTION


A brief explanation on the demarcation between administration of contract, and the authority toaccept, approve or certify on behalf of the Government.

The types and limits of authority applicable to contracts let by the DID. Circulation of documents to the relevant parties.

5.2 AUTHORISED PARTY

The DID complies with the procurement guidelines set under the current relevant TreasuryInstructions.

The person who is duly authorized (‘Authorised Party’) may accept, approve, certify or otherwise acton behalf of the Government, in matters of procurement or administration of contract, irregardlesswho the Project Head or Superintending Officer / Project Director may be.

Such Authorised Party may be:

An officer, by virtue of his office, or A board or committee duly convened and comprising the relevant officers.

The limit of authority is usually dependent on the value or estimated value of the contract.

5.3 LIMITS OF AUTHORITY

For pre-contract and post-contract procedures, all actions requiring acceptance, approval orcertification and the Party who is authorised to act on behalf of the Government / DID are set out inthe following sub-sections.

Notwithstanding these summaries, reference should be made to the latestDID circulars, Treasury Circulars and Treasury Instructions for the currentlimits of authority, or for further details.




5.3.1 Selection of Tenderers

In general any works estimated exceeding RM200,000 or supplies which value exceeding RM200,000per annum for each item must be procured through open tenders with the exception for supplieswhere the qualified suppliers under each trade is known to be less than five (5) suppliers then

approval from the Chief Secretary of Treasury or State Financial Officer (where applicable) must beobtained before tender notice can be sent through registered letter or express delivery.

The Authorised Party for approval of list of tenderers for selective tenders or direct negotiationpurposes is as follows:

Table 5.1 Selection of Tenderers

Authorised Party Limit of Authority

Works Supplies/ Services

Ministry of Finance Exceeding RM5 million Exceeding RM 5 million

Ministry / Department Procurement Board Up to RM 5 million Up to RM 5 million

Ref : Ministry of Finance Guidelines for Tender Evaluation (January 2008 Edition).




5.3.2 Limit and Authority of Procurement Board for Acceptance of Tenders

The limit of value and authority of the procurement board for acceptance of tenders is as follows:

Table 5.2 Acceptance of Tenders

Authorised PartyLimit of Authority

Works Supplies / Services

Ministry of Finance a) Open tender -exceeding RM 100million

b) Selective tender –exceeding RM5million

a) Open tender -exceeding RM 50million

b) Selective tender –exceeding RM5million

Ministry / Department Procurement Board a) Open tender - Up toRM 100 million

b) Selective tender – Upto RM5 million

a) Open tender - Up toRM 50 million


Federal Procurement Board (State level) a) Open tender - Up toRM 20 million


Not permitted toconsider and accepttender for supplies andservices at state level

Where the procurement process requires the approval from the Ministry of Finance, the TenderCommittee shall submit the Procurement Board’s recommendation to the Ministry of Finance forfurther decision. In addition if the decision is not unanimous then it must be referred to the Ministryof Finance.

Ref : Ministry of Finance Guidelines for Tender Evaluation (January 2008 Edition) and AP198.1




5.3.3 Execution of Contracts

Section 2 of Government Contracts Act 1949 (Revision 1973) states that all contracts made inMalaysia on behalf of the Government shall, if reduced to writing, be made in the name of theGovernment of Malaysia and may be signed by a Minister or by any public officer duly authorised in

writing by a Minister, either specially in any particular case, or general for all contracts below acertain value in his department or otherwise as may be specified in the authorisation.

For the execution (signing) of any contracts, the officer authorised to sign on behalf of the DID is asfollows:

Table 5.3 Execution of Contracts

Authorised Party Limit of AuthorityWorks, Suppliers & Services

Minister of Ministry of Natural Resources andEnvironment

Exceeding RM100 million

Chief Secretary Ministry of Natural Resources andEnvironment

Not exceeding RM100 million

Deputy Chief Secretary I Ministry of Natural Resourcesand Environment

Not exceeding RM30 million

Deputy Chief Secretary II Ministry of Natural Resourcesand Environment

Head of Department at Head Quarters

Not exceeding RM 10 million

Deputy Head of Department at Head Quarters

Divisional Secretary of Administration and Finance,Ministry of Natural Resources and Environment


Departmental Divisional Directors at Head Quarters

Departmental Directors at State Level


Departmental Deputy Directors at State Level

Chief Assistant Secretary (Finance) of Administrationand Finance Division, Ministry of Natural Resources andEnvironment

Chief Assistant Secretary (Administration) of Administration and Finance Division, Ministry of NaturalResources and Environment

Not exceeding RM 500,000

Assistant Secretary (Finance) of Administration and Finance Division, Ministry of NaturalResources and Environment

Not exceeding RM 100,000

Ref : Minister of NRE Delegation of Power under Section 2, Government Contracts Act 1949 dated 18February 2009 and AP198.1




5.3.4 Superintending Officer / Project Director and Contract Administration

For contract administration, the appropriate DID officers to be named as Superintending Officer (JKR Form 203 or 203A) or Project Director (JKR Form DB/T) or to exercise the relevant powers under theconditions of contract, are as follows:

Table 5.4 Contract Administration

ContractSum

SuperintendingOfficer / ProjectDirector

SO Representative / PDRepresentative

Officer(s) empowered to takeaction on behalf of the Government

/ DID in respect of**:

Supervisionby DIDofficer

SupervisionbyConsultant

LiquidatedDamages fornon-completion

Delay andExtension of

time

Determinationof theemployment of Contractor

Effects of Waror Earthquake

Arbitration Mutual

Termination

More thanRM 100.0million

Director Generalor Officernamed by theDirector General

Officernamed bythe DirectorGeneral

AppointedConsultant

Director General Director GeneralNot morethan RM100.0million

Federal Director / State Director / ProjectEngineer

FederalDirector /State

Director /ProjectEngineer

Not morethan RM25.0million

Deputy DirectorGeneral

Deputy DirectorGeneral

Not morethan RM10.0million

ProjectEngineer /DistrictEngineer

TheSuperintendingOfficer /ProjectDirector namedin the Contract

TheSuperintendingOfficer /ProjectDirector namedin the Contract

Not morethan RM500,000.00

District Engineer Engineer

**Subject Matter Form JKR 203 / 203A Form DB/T

Liquidated Damages for non-completion

Clause 40 Not applicable

Delay and Extension of time Clause 43 Clause 45

Determination of theemployment of Contractor

Clause 51 Clause 54

Effects of War or Earthquake Clause 52 Clause 55

Arbitration Clause 54 Clause 56

Mutual Termination Not applicable Clause 40

Ref: SP JPS Bil 1/2003




5.3.5 Certification under the Terms of Contract

The DID officer who is empowered to certify (sign) or give recommendation under the terms of thecontract are set out below:

Table 5.5 Terms of Contract

Authorised Party Certificate or Recommendation

Superintending Officer / Project Director Variation Order*

Superintending Officer / Project Director Adjustment of Contract Sum

Superintending Officer / Project Director, orPrincipal SO’s Representative / Principal PD’sRepresentative

Certificate of Practical Completion

Superintending Officer / Project Director Certificate of Non-completion


Certificate of Sectional Completion


Certificate of Partial Possession

Superintending Officer / Project Director Certificate of Delay and Extension of Time


Certificate of Completion of Making Good Defects

Superintending Officer / Project Director Interim Certificate

Superintending Officer / Project Director Final Certificate

* Subject to the approval of the Variation Order Committee. Please refer to Section 5.3.7.

Ref: SP JPS Bil 1/2003




5.3.6 Approval of Variation Order

Table 5.6 Approval of Variation Order

Authorised Party Limit of Authority(Value of Variation)

Variation Order Committeechaired by the SO or PD named in the Contract

(If the Deputy Director General is the S.O. orP.D., then the Authorised Party shall be the

Variation Order Committee chaired by theDeputy Director General).

Where the original Contract Sum is less thanRM10 million, and the aggregate value of variation works is not more than 10% of theContract Sum,

Or

Where the original Contract Sum is more thanRM10 million, and the aggregate value of variation works is not more than RM 1 million.

Variation Order Committeechaired by the Deputy Director General of DID


Or

Where the original Contract Sum is more thanRM10 million, and the aggregate value of variation works is not more than RM 2 million.

Variation Order Committeechaired by the Director General of DID


Or

Where the original Contract Sum is more thanRM20 million, and the aggregate value of variation is not more than RM 6 million.

Chief Secretary to the Treasury All other cases

Ref : AP202.2

Note: the officer who applies for or presents the request for Variation Order approval may not bethe chairman of the Variation Order Committee, or be a member of the Committee.

For the composition of the committee please refer to SP JPS Bil 2/2008.




5.3.7 Instruction for Variation for Special Cases

Table 5.7 Special Cases

Authorised Party Variation Category

Superintending Officer / Project Director Instructions for Variations / Re-measurement of provisional quantities not involving addition orvariation to the original scope of works, andwhich result in reduction in contract sum

Superintending Officer / Project Director Price adjustments as approved by the Treasury

Superintending Officer / Project Director Adjustment of Prime Cost Sum, Provisional Sumand re-measurement of provisional quantities inaccordance with provisions of contract.

Variation Order Committeechaired by the SO or PD named in the Contract

Variation Order Committee chaired by DeputyDirector General

Variation Order Committee chaired by DirectorGeneral

Chief Secretary of Treasury or State Financeofficer where relevant

Re-measurement of provisional quantitieswithout addition or variation to original scope of works

a) value of price increase for the re-measurement of quantities allowed upto30% of original contract sum but notexceeding RM3 million which ever is thelowest

b) value of price increase for the re-measurement of quantities allowed upto

40% of original contract sum but notexceeding RM4.5 million which ever isthe lowest

c) value of price increase for the re-measurement of quantities allowed upto50% of original contract sum but notexceeding RM6 million which ever is thelowest

d) In all other case

Ref : SPP 7/2007 and AP 202 (31 July 2008); SP JPS Bil. 5/2008

For the composition of committee for re-measurement of provisional quantities, please refer to SPJPS Bil 5/2008.




5.3.8 Expenditure of Provisional Sums

The Authorised Party, for approval of expenditure of Provisional Sums under any contract, is asfollows:

Table 5.8 Provisional Sums

Authorised Party Value

VO Committee at level of SO Not exceeding 1 million

VO Committee at level of Deputy DirectorGeneral

Exceeding RM1 million – RM 3 million

VO Committee at level of Director General Exceeding RM 3 million

5.3.9 Approval of Contractor’s Claims for Loss and Expense, Permitted under the

Contract

Table 5.9 Loss and Expense

Authorised Party Types of Claim

A committeechaired by Head of Department, andincludes the Legal Advisor

Loss and expense due to delay on the part of the Government, and/or due to compliance withstatutory requirements.

A committeechaired by Head of Department, and

includes the Legal Advisor

Discrepancies in or between the contractdocuments.

A committeechaired by Head of Department

Other claims permitted under the conditions of contract.

A committeechaired by Head of Department

Any other costs in connection with fees andcharges for relocation of sewerage, watersupply, electric supply, etc.

Ref : SPP 7/2007 and AP 202 (31 July 2008)

5.4 CIRCULATION OF DOCUMENTS

In the administration of the contract, pertinent documents or information such as:

Letter of Acceptance (Chapter 8) Contract documents (Chapter 9) Certificate of Adjustment of Contract Sum (Chapter 12) Extension of time (Chapter 13) Etc.

must be conveyed to various pertinent parties, who may not be directly connected to the contract.

Refer to Appendix 5A : Distribution of Documents for Works Funded by Federal Government

(Pengedaran Dokumen-dokumen (Kontrak Kerja) Biayaan Persekutuan), and ensure that copies of such documents or information are forwarded to the relevant parties.




5.5 REFERENCES

Please refer to the latest Treasury Circulars and DID Circulars for the limits of authority.

Treasury Circular

(Surat Pekeliling Perbendaharaan)

[1] SPP Bil. 2/1999: Had Nilai Perolehan, Kuasa, Tanggungjawab Lembaga Perolehan DanJawatankuasa Sebutharga.

[2] SPP Bil. 2/2001 (Tambahan Pertama Kepada SPP Bil. 2/1999): Had Nilai Perolehan, Kuasa,Tanggungjawab Lembaga Perolehan Dan Jawatankuasa Sebutharga.

[3] SPP Bil. 11/2001 (Tambahan Kedua Kepada SPP Bil. 2/1999): Perubahan Had Nilai Dan KuasaLembaga Perolehan Agensi

[4] Bil 7 Tahun 2007: Peraturan Arahan Perubahan Kerja (Variation Order)

[5] Bahagian Perolehan Kerajaaan Ministry of Finance: Garis Panduan Penilaian Tender (Edisi Januari2008)


[1] AP 198: Setuju Terima Tender[2] AP 202: Arahan Perubahan Kerja[3] AP 203: Pengiraan Nilai Arahan Perubahan Kerja

DID Circulars

(Surat Pekeliling / Edaran JPS)

[1] SPJPS.UB 1/1997: Peraturan dan pihak-pihak Berkuasa Meluluskan Pengukuran Semula KuantitiSementara

[2] (36)dlm. PPS.10/4/2 CUB Jld.3 (27/7/98): Pengedaran Dokumen-dokumen (Kontrak Kerja)Biayaan Persekutuan

[3] (37) dlm. PPS. 10/4/2 CUB Jld.3 (21/9/98): Urusan Dengan Lembaga Perolehan KementerianSumber Asli dan Alam Sekitar & Perbendaharaan Malaysia

[4] SP JPS Bil. 2/2001: Peraturan dan Pihak-Pihak Berkuasa Meluluskan Pengukuran Semula KuantitiSementara (Tambahan Pertama Kepada Surat Pekeliling JPS.UB.1/1997)

[5] SP JPS Bil. 1/2003: Perlantikan Pegawai Penguasa (P.P), Perwakilan Kuasa Pegawai Penguasa(Wakil P.P) Dan Pegawai-Pegawai Yang Diberi Kuasa (PYDK) Dalam UrusanPentadbiran Kontrak.

[6] SP JPS Bil. 2/2008: Peraturan Mengenai Arahan Perubahan Kerja Dan Pelarasan Harga BagiKontrak Kerja

[7] Minister of Natural Resources and Environment: Pemberian Kuasa Di Bawah Seksyen 2 AktaKontrak 1949 tarikh 18 Februari 2009



DID MANUALVolume 10




Chapter 5

– Authority

APPENDIX 5A

Distribution of Documentsfor Works Funded byFederal Government

[Pengedaran Dokumen-Dokumen(Kontrak Kerja)

Biayaan Persekutuan]




APPENDIX 5A DISTRIBUTION OF DOCUMENTS FOR WORKS FUNDED BY FEDERAL GOVERNMENT [PENGEDARAN DOKUMEN-DOKUMEN(KONTRAK KERJA) BIAYAAN PERSEKUTUAN]

Item Office Letter of

AcceptanceContract

Document

Adjustmentof Contract

Sum

Certificateof Delayand

Extensionof Time

Certificateof Non-

completion

Certificate of

Completion/Certificate of

Completion of Making Good

Defects

1. Chief Secretary,Ministry of NaturalResources andEnvironment

√ √ √ √ √ √

2. Auditor General √ √ √ √ √ √

3. Internal Audit Unit,Ministry of NaturalResources and

Environment

√

4. Director General,Board of IncomeTax

√

5. Banks/ InsuranceCompanies

√ √ √ (AR) √ (AR) √

6. Pusat KhidmatKontraktor

√ √ √ √

7. CIDB √

8. State Labour Office√

9. State PERKESO √ √

10. Contractor √√ (AR) √√ (AR) √ √ √ √

11. Divisional Director,DID HQ

√ √√ √ √ √ √

12. Director QSCD√

#√√

(original) √ √ √ √

13. * Director AdministrationService , DID HQ

√ √ √ √ √ √

14. ** Senior AccountantTreasury (State)

√ √ √ √ √ √

15. State Director/Project Engineer

√ √√ √ √ √ √

16. Consultants (if any) √ √√ √ √ √ √

17. Ministry of Finance,GovernmentProcurement

AdministrationDivision (For directnegotiated contractsonly)

√ √

Notes:√√ - Contract Documents and Plans

AR - Registered Post

* - if payment made at HQ only** - if payment made at State only# - Contract exceeding RM 1 million only



DID MANUAL

VOLUME 10



CHAPTER 6

PREPARATION OF

TENDER DOCUMENTS



Chapter 6 – PREPARATION OF TENDER DOCUMENTS

Table of Contents


List of Flowcharts ......................................................................................................................6-ii

6.1 INTRODUCTION ............................................................................................................. 6-2

6.2 PROCEDURES................................................................................................................. 6-2

6.3 GUIDANCE NOTES.......................................................................................................... 6-6

6.3.1 Prime Cost (P.C.) And Provisional Sums ............................................................... 6-6

6.3.2 Tender Documents And Tender Table Documents ................................................ 6-6

6.3.3 Pre-bid Documents for Design-and-Build ............................................................. 6-7

6.4 REFERENCE DOCUMENTS ............................................................................................... 6-7

6.5 REFERENCES.................................................................................................................. 6-8

APPENDIX 6A Tender Document Checklist ............................................................................ 6A-1




List of Flowcharts

Flowchart Description Page

Flowchart 6.1 Preparation of Tender Documents 6-1




Flowchart Description Action By Reference

1. Estimated cost of worksqualifies it for tender process,

and instruction from PjH toproceed is received.

PT Chapter 3 – Procurement -

Overview

2. Prepare front-end sections. PO Tender Document

Checklist

3. Prepare Summary of Tender /Bills of Quantities

PO

4. Forward queries (if any) toDesign Team for comments

PO

5. Edit Summary of Tender / Billsof Quantities

PO

6. Check that document iscomplete and in proper order

PO

7. Convene Design Team / QScoordination meeting, if necessary

PO

8. Incorporate comments orchanges, and prepare finalTender Document

PO

9. Quality Audit BUBK

10. Tender Document ready forprinting and issue

PO

Flowchart 6.1 – Preparation of Tender Documents

1

2

4

5

10

6

3

7

8

9




6 PREPARATION OF TENDER DOCUMENTS

6.1 INTRODUCTION


The guidelines on the preparation of tender documents.

6.2 PROCEDURES

Please refer to Flowchart 6.1 – Preparation of Tender Documents.


/ Reference

1 Generally

The tender documents should contain accurate informationand definitive scope of works.

This minimises ambiguity, and reduces the need for variationsduring construction stage. This may also reduce the risks of disputes arising from discrepancies in or between thedocuments.

For information

(a) Ascertain that the estimated cost of works qualifies it for tenderprocess

For tender, the estimated cost of works is morethan RM200,000.

If less than RM200,000 – refer Guidelines onPreparation for Quotation Document

(b) Ascertain the procurement route agreed

Conventional (with quantities)

Conventional (without quantities)

Design and Build

Special project.

(c) Commence preparation of tender documents upon receiptof instruction to proceed from the Project Head

Action By:PT

AP 171 &

AP 181

See Chapter 3 – Procurement -

Overview





/ Reference

2 Prepare Front End Sections

(a) Collate and prepare the documents required for the Tender

Document in accordance with the DID requirements andstandardized format. Ensure that the documents:

Clearly and concisely defined the works to beexecuted.

Are consistent with one another and free of ambiguity. Have included and highlighted all the bye-laws and

Authorities requirements. Comply with the latest policies and circulars.

(b) Draft the tender documents from the standard DIDdocuments.

(c) Prepare/compile specifications for the Tender Document.

(d) Prepare Notice of Tender and/or Letter of Invitation toTenderers, for insertion into the tender document: Pleaserefer Chapter 7 [Invitation and Receipt of Tender].

(e) Use the Tender Document Checklist as guidance.

(f) Agree with the Design Team

Programme for receipt of information, request for

progressive release of drawings System of numbering drawings Numbers of sets required Revision notation Items to be covered by Prime Cost or Provisional

Sums.

(g) Obtain/register the tender/contract number, and insert onthe cover page. Ensure that the correct format/code isused, with reference to:

Federal/State funded project The state in which the project is carried out Code for types of works / Division Running Number Year

e.g. “JPS/P/J/S/1/99” for Federal funded project,administered in Johor for drainage works/Division, beingthe first tender for year 1999. Re-tendered works uses theold tender number, with the words “Tawaran Semula” appended at the end. Note that sub-contracts shall followthe main contract number.

Action By:Ir/Sr

Refer Sections

6.5 & 6.6





/ Reference

2a Design and Built Pre-bid Documents

(a) For design-and-build projects, the Pre-bid documents are

documents prepared in anticipation of contractor’sproposal (or ‘bid’).

It includes the Government’s needs statement (orrequirements). The Contractor’s proposal must complywith the requirements set out in the Pre-bid Document.

(b) Collate and prepare the Pre-bid Documents in accordancewith the DID requirements and standardized format.Ensure that:

The Government’s Needs Statement clearly identifies

the design criteria including performance criteria (andspecifications, if applicable) for the works, and thepurposes of the works.

The Pre-bid Documents are consistent with one anotherand free of ambiguity.

Comply with the latest policies and circulars.

(c) Draft the tender documents from the standard DIDdocuments.

(d) Prepare Notice of Tender and/or Letter of Invitation toTenderers, for insertion into the tender document: Pleaserefer Chapter 7 [Invitation and Receipt of Tender].

For information

Action By:PO

3, 4 & 5 Design Team Coordination Meeting

Prepare the Bills of Quantities / Summary of Tender – referTender Document Checklist.

Forward queries, if any, to the Design Team for comments orclarification.

Incorporate all comments and/or clarification, as appropriate.

The completed Bills / Summary should be edited and checkedby a senior QS/Engr.

Action By:PO

6 Check that Document is Complete and In Proper Order

Check through the documents, and ensure that it is completeand in proper order.

Cross references, if any, should be correctly referred.

Action By:PO





/ Reference

7 Convene Design Team And Ir/Sr Coordination Meeting, If Necessary

If necessary, arrange coordination meeting between DesignTeam and PO, to answer queries on the drawings and/orspecifications, or give comments and clarifications on thetender document.

Action By:PO

8 Incorporate comments or changes and prepares final TenderDocument

Incorporate all comments or changes to the tender document.

Action By:PO

9 Quality Audit

Forward a full set of the finalised Tender Document, together

with the Tender Document Checklist to the BUBK for qualityaudit.

Action By:PO /BUBK

10 Tender Document Ready For Printing And Issue To Tenderers

Arrange for the printing the required number of sets of theTender document.

Arrange for the display of the Tender Table Document.

Issue invitation to tenderers : Please refer to Chapter 7[Invitation and Receipt of Tender].

Action By:PO




6.3 GUIDANCE NOTES

6.3.1 Prime Cost (P.C.) And Provisional Sums

“Prime Costs Sum” or “P.C. Sum”, and "Provisional Sum" may be included in the Bills of Quantities, or

Summary of Tender.

“Prime Costs Sum” or “P.C. Sum” is an amount included in a bill of quantities to cover a particular bitof work or supply of materials to be carried out by a nominated sub-contractor or a supplier.

o These are usually specialist works or supplies.

o The Bills of Quantities or Summary of Tender should allow the Contractor to price for the ‘profit and attendance’ associated with the works or supplies.

o Where the Contractor is capable of carrying out such specialist works or supplies, the SO isempowered to accept the Contractor’s tender for such works or supplies. The Contractor’s

tender is deemed to include the profit and attendance, and no further profit and attendancewill be paid.

"Provisional Sum" means a sum included and so designated in the Contract as a specific allocationfor the execution of work or the supply of goods materials or services which may be used in whole orin part or not at all at the direction and discretion of the SO.

o Allow for the Contractor’s profit margin in the Provisional Sum.

o At the SO’s discretion, works or supplies to be executed or supplied under Provisional Sumsmay be treated as allowed under P.C. Sums.

As far as possible, provide a reasonably accurate amount for the P.C. Sum or Provisional Sum.

Please also refer to Chapter 20 [Prime Cost and Provisional Sums].

6.3.2 Tender Documents And Tender Table Documents for Conventional Contracts

The Tender Documents and Tender Table Document comprise the documents in the following order:

Notice of Tender / Letter of invitation to tenderers / Letter of Intent (whichever is applicable) Check List of submission of tenders Instructions to Tenderers & Conditions of Tendering Form of Contract

o Based on Quantities – use Form JKR 203A

o Based on Drawings and Specifications – use Form JKR 203 Special Provisions to Conditions of Contract Form of Tender

o Based on Quantities – use Form JKR 203Bo Based on Drawings and Specifications – use Form JKR 203C

Letter of Acceptance (JKR 203D) Specifications Preambles Bills of Quantities, OR Summary of Tender and Schedule of Rates. Drawings Form of Guarantees for Performance Bond/Advance Payment Informative Document




6.3.3 Pre-bid Documents for Design-and-Build Contract

The Pre-Bid Documents comprise the documents in the following order:

Notice of Tender / Letter of invitation to tenderers / Letter of Intent (whichever is applicable) Instructions to Tenderers & Conditions of Tendering Form of Contract – PWD Form DB/T Form of Tender Letter of Acceptance The Government’s Requirements (Needs Statement) Form of Guarantees for Performance Bond/Advance Payment Informative Document


Please refer to Volume 10A for the standard reference (or sample) documents for the procedures orprocesses outlined in this Chapter.

Tender Document Covers

Table of Contents

Notice of Tender

Letter of Invitation to Tenderers

Checklist for Submission of Tender for Use by Tenderers (Senarai Semakan MengemukakanTender Untuk Kegunaan Pentender)

Instructions to Tenders

Amendments to Form PWD 203

Amendments to Form PWD 203A

Special Provisions to Conditions of Contract

Form of Tender & Conditions of Tendering JKR 203B (for JKR 203A)

Form of Tender & Conditions of Tendering JKR 203C (for JKR 203)

Letter of Acceptance JKR 203D

Sample Format for Bills of Quantities

Form of Guarantee for Performance Bond

Form of Guarantee for Advance Payment Bond

Sample Drawings List

Informative Documents




6.5 REFERENCES

Please refer to the latest Treasury Circulars and DID Circulars on preparation of tender documents.

Treasury Circular


[1] Bil 13 Tahun 1999: Garis Panduan Penggunaan Khidmat Pengangkutan dan KemudahanPeralatan Untuk Menguruskan Projek Melalui Kontrak Kerja

[2] Bil 7 Tahun 2002: Penggunaan Bahan/Barangan/Perkhidmatan Tempatan Dalam PerolehanKerajaan



[1] SPJPT 3/1987: Peruntukan "Contingency Sum" Dalam Dokumen Tender

[2] SPJPS.CUB 1/1992: Pindaan kepada Borang Kontrak PWD 203 (revised 10/83), PWD 203A (revised 10/83), JKR 203B-Pin. 1/82, JKR 203C- Pin. 1/82 dan JKR 203D- Pin. 1/82.

[3] SPJPS.UB 2/94: Format Muka Hadapan dan Pemberian Nombor Kepada Dokumen Tender/Kontrak.

[4] Tambahan Pertama SPJPS.UB 2/94: Tambahan Pertama Kepada Surat Pekeliling JPS.UB 2/94.

[5] SPJPS.UB 4/1994: Garispanduan Menetapkan Amaun Denda Gantirugi Tertentu dan Ditetapkan.

[6] SPJPS 3/1995: Peraturan Penyedian Dokumen Tender dan Kontrak

[7] SPJPS.Bil. 4/1999: Format Muka Hadapan dan Pemberian Nombor Kepada DokumenTender/Kontrak

[8] SPJPS Bil. 5/2000: Peruntukan Baru Dalam Dokumen/Tender Dan Pindaan-Pindaan KepadaBorang Kontrak JKR 203/203A, Borang Tender Dan Surat Setujuterima Tender.

[9] SPJPS 1/2001: Garispanduan Penggunaan Khidmat Pegangkutan Dan Kemudahan PeralatanUntuk Pengurusan Projek Melalui Kontrak Kerja.

[10] SPJPS Bil. 1/2002: Penerimaan Jaminan Syarikat Kewangan Berlesen Dan Insurans Bagi BonPelaksanaan Serta Bayaran Wang Pendahuluan. (Perlaksanaan Surat Edaran PerbendaharaanBertarikh 4 Februari 2001)



DID MANUALVolume 10




Chapter 6

– Preparation of Tender Documents

APPENDIX 6A

Tender Document Checklist




APPENDIX 6A TENDER DOCUMENT CHECKLIST

PROJECTTITLE

File Ref.:

Estimate Contract Sum: Allocation/ Funder:

Tender Type:

Action by Name of Officer Send Date Receipt

DateCompletion

Date

PO 1

PO 2

QA 2

Item No. Description1 PO1 PO2 QA 2 Comments

Tick () after checking

1.0 Cover Page Format andregistration of Tender Nos.

The correct procedure isadopted.

2.0 Notice of Tender

2.1 Correct Head and Subhead Ref.: SPP 16/1993

2.2 Correct class of Contractor.

2.3 State the type of companies whichare eligible to participate, base onthe estimated value of the tender

1. Ref.: SPP 5/2007 –Eligibility of Contractors.3

2.4 To state if tender is only forBumiputera Contractors.

2.5 Correct place of buying tender.

2.6 Amount of documentation fee4 andin whose name to be made, isstated.

2.7 Site visit – date, time & placestated.To state if compulsory

2.8 Date, time and place for closing of tender is stated.





3.0 Instructions to Tenderers

3.1 Where and when tender closes.

3.2 Amount and other articulars of Tender Deposit (for InternationalContracts only)

3.3 Include clause on informationregarding tenderer’s Financial andTechnical Capacity if tender is>RM1.0m.

Ref.: SP JPS. UB.3/1994

3.4 If funded by international body,ensure that their guidelines for

procurement are complied with.

3.5 Include clause regardingcorrection of errors forinternationally funded tenders.

4.0 Form of Contract

4.1 Use correct form.

4.2 Articles of Agreement

The following to be filled in:

1 Paragraph 1

(i) Name of Government. For Federal Projects -Government of Malaysia.

For State Projects- Name of relevantState.

(ii) Description of intendedWorks.

(iii) Drawing nos/as stated inlist of drawings.





4.2(Cont’d)

4.2.2 Clause 2(e)

Special Provisions to

Conditions of Contract.(i) Advance Payment clause(ii) Variation of Price clause(iii) Performance Bond in the

Form of PerformanceGuarantee Sum

(iv) Performance Bond in theForm of PerformanceGuarantee Sum

Choose relevant one only

4.2.3 Clause 2(I) – New Clause

Amendments to PWD Forms.

4.3 Conditions of Contract


4.3.1 Clause 1(a)(i)

Same as item 4.2.2 and 4.2.3

4.3.2 Clause 1(a)(iv)

Check designation of S.O. iscorrect.

Ref.: SP JPS Bil.1/2003

4.3.3 Clause 26(d) (203A only)

Delete this clause if funded byInternational body.

4.4 Appendix to Conditions of Contract


4.4.1 Clause 3(a)(i)Clauses 40 and 43 andClauses 51, 52 and 54 aredesignated to the correctOfficers.

Ref.: SP JPS Bil.1/2003





4.4

(Cont’d)

4.4.2 Clause 3(a)(ii)

Powers to approve Variations

in accordance with latestTreasury and JPS circulars

Ref.: AP202.2

4.4.3 Clause 33

Minimum insurance coverageis sufficient5

4.4.4 Clause 33(a) and 36(b)

Amount of excess – Nil

4.4.5 Clause 34

Not used.

4.4.6 Clause 36

Insert the following

‘Total Amount Insured’

... ... ... RM ...............

4.4.7 Clause 38(b)

Date for Possession – ‘To beDetermined’.

4.4.8 Clause 40

Check if the rate of Liquidated and Ascertained

Damages is reasonable6.

4.4.9 Clause 41

Sectional Completion- To be filled if required.

4.4.10 Clause 45

Defects Liability Period in

accordance with Arahan

Perbendaharaan 200.5(a).7





4.4(Cont’d)

4.4.11 Clause 47(a)

(i) Value of work done

before First InterimCertificate will be issued5% of Builder’s work orRM100,000 whichever islesser.

(ii) Value of work donebefore each subsequentinterim certificate will beissued – 15% of averagemonthly value of Builder’s Work or ½ of the first interim

payment, whichever islesser.

4.4.12 Period for honouringpayment

Sufficient period to bestated but not lessthan 30 days.

5.0 Special Provisions to Conditionsof Contract

5.1 Advance Payment

5.1.1 Use correct SpecialProvision.

5.2 Variation Of Price

5.2.1 Use correct Special Provision / forms.

5.2.2 Quantity of steel bars andcement are stated inLampiran……..... if required

for the works.

5.2.3 Forms for estimation of diesel consumption & bitumen are included.

5.2.4 Complete the forms, andenter the relevant information

Ref.: SPP 3/2008





5.3 Performance Bond in the Form of Performance Guarantee Sum


5.4 Restriction and Procedure on Useof Imported Good/Materials


5.5 Amendments to Standard PWDforms

Use correct amendments.

6.0 Form of Tender

6.1 Use the correct form.

6.2 The following are filled in:-

6.2.1 Title of tender

6.2.2 List of drawings includingchecking the number of drawings against the List of Drawings.

6.2.3 Completion period (fixed byDepartment).

Ensure period of completionfixed by the Department isreasonable, taking intoaccount factors like urgency,complexity and rainyperiods.

6.2.4 Prime Cost or ProvisionalSums if applicable.

6.3 Tender validity period is amended. 90 days forconventional contracts.180 days for DBcontracts.





9.0 Preamble

9.1 To check the unit of measurement

as stated in the preamble isconsistent with the measurementin the Bills for the various items.

9.2 The method of measurement isstated.

9.3 The method of measurement doesnot give rise to unnecessary orimpractical maintenance of siterecords.

9.4 The general composition of theunit rate is stated.

9.5 No duplication in the measurementof items.

10.0 Bill of Quantities

10.1 A general look at the quantities toensure no obvious mistakes.

10.2 All necessary dimensions are given

10.3 All necessary items are measured. No ‘Rate Only’ items.(Items withoutquantities).

10.4 P.C. Sum – to include item forProfit (%) and attendance (LumpSum).

No ‘Contingency Sum’ items.

10.5 Amounts for P.C and ProvisionalSums stated in ‘Amount’ column.

10.6 Item descriptions are concise,consistent and accurate.

10.7 Item description to correspond todrawings and/or specification.

10.8 Cross References and Specificationclause Nos. correct.





10.9 All sections of the Bill of Quantitiesare carried to the Summary.

10.10 Summary page provided.

11.0 Summary of Tender (For ContractBased on Form JKR203)

11.1 For Lump Sum items, statementon quantities should be avoided,otherwise ensure consistency withthose stated in specifications anddrawings.

12.0 Drawings

12.1 Drawings must be clear and up todate

12.2 Drawing Nos. tally with list of drawings.

12.3 Drawings for works based onLump Sum tender must becomplete and scope/extent of works are coloured if necessary

13.0 Form of Guarantees forPerformanceBond/Advance Payment

Ref.: SPP 5/2007

13.1 Use correct form.

13.2 Latest list of Approved Banks & Insurance Companies attached

14.0 Informative Documents Ref.: SP JPS 3/1994

14.1 All standard forms areincorporated

14.2 Form BA (Bank/FinancialInstitution Report) attached, notbound.





15.0 General

15.1 All tender documents must be

carefully prepared and completeso as to give effect to theexpressed requirements of theDepartment.

15.2 The work to be executed must beclearly and concisely defined andspecified, consistent with oneanother and free of ambiguity.

15.3 Documents must be free of

inconsistencies and discrepanciesbetween the various sections andthe drawings.

15.4 Ensure that all bye-laws and Authorities requirements areincluded and highlighted in thetender documents:

15.5 Complies with the latest policiesand circulars

Signature of Checking OfficerDate of Completion of Task:

Signature of Verifying OfficerDate of Completion of Task:

Signature of Quality AuditorDate of Completion of Task:




1ENDNOTE:

1 This Checklist may be adapted for the Design and Build / Turnkey Contract, with relevantchanges to the Clause reference.

2 Quality Audit; If Relevant.

3 Estimated Tender Value, and Eligibility of Contractor to Register: SPP 5/2007

Estimated Tender Value Eligibility

< RM 30 million (a)

RM30 – RM50 million (a) dan (b)

> RM50 million (a), (b) or (c)

Classification / Eligibility to register

(a) Local company wholly (100%) owned by Malaysian citizens.

(b) Local company listed on the Bursa Malaysia, that is, a company incorporated in Malaysiaby Malaysian citizens with condition that no foreign shareholder may hold more than30% of the shares, and the board of directors, management and staff are wholly(100%) Malaysian citizens.

(c) Joint venture company incorporated in Malaysia (whether or not listed on the KLSE),

with the condition that foreign equities do not exceed forty nine percent (49%), andmajority members of the Board of Directors, management and staff and Malaysiancitizens.

4 Documentation fee & Drawings

Documents Drawings

A4 @ RM 0.35 = A3 @ RM0.70 =

A3 @ RM 0.70 = A2 @ RM3.50 =

A1 @ RM6.50 =

A @ RM8.00 =

Total = Total =




ENDNOTE: (Cont’d)

5 Minimum insurance coverage for third party (public liability) insurance. The followingamounts may be used as a guide:

Contract Sum limits of liability a.o.a. for Unlimited

Number of Accidents

Not exceeding RM 50,000 RM10,000

RM 50,001 to RM 100,000 RM25,000

RM 100,001 to RM 200,000 RM50,000

RM 200,001 to RM 500,000 RM100,000

RM 500,001 to RM 5.0 million RM200,000

RM 5.0 million to RM 20.0 million RM500,000

RM 20.0 million to RM 50.0 million RM1.0 million

Exceeding RM 50.0 million RM2.0 million

6 Liquidated and Ascertained Damages at the rate of : [(BLR*/365)% x Contract Sum] perday. *BLR = Base Lending Rate

7 Guideline for Defects Liability Period:

Contract Sum Defects Liability Period

RM20,000 – RM200,000 6 months

> RM200,000 12 months

Design and Build/ Turnkey 24 months



DID MANUAL

VOLUME 10



CHAPTER 7

INVITATION AND

RECEIPT OF TENDER



Chapter 7 – INVITATION AND RECEIPT OF TENDER

Table of Contents


List of Flowcharts ..................................................................................................................... 7-ii

7.1 INTRODUCTION.......................................................................................................... 7-3

7.2 PROCEDURES ............................................................................................................. 7-3

7.3 REFERENCE DOCUMENTS.......................................................................................... 7-10

7.4 REFERENCES ............................................................................................................ 7-10

APPENDIX 7A Checklist for Tender Opening Committee (Senarai Semakan OlehJawatankuasa Pembuka Tender)…………………..……………………………………………. 7A-1




List of Flowcharts


Flowchart 7.1 Flowchart – Invitation and Receipt of Tender (Open / Selective) 7-1

Flowchart 7.2 Flowchart – Pre-Qualification of Contractors 7-2





1. Applicable for Open &

Selective tendering.

2. Is it open tender?

- See Chapter 3

-

3. Selection of Tenderers by Authorised Party?

PO

4. Select Tenderers PO

5. Undertake Pre-Qualification of Tenders

Various parties Refer to Flowchart 7.2

6. Is the List of Tenderersapproved?

ProcurementBoard / MoF

See Chapter 5

- Authority

7. Either Re-select tenderers, or Proceed with open tender

process

8A. Prepare and issue Noticeof Tender (Open)

PO

8B Prepare and issue Letterof Invitation (Selective)

PO

9. Sale of / Issue TenderDocument

PO

10. I ssue Addendum (if any) PO

11. Prepare Tender estimates PO

12. Convening of TenderOpening Committee

BUBK

13. Closing / Receipt of tender BUBK/ TenderOpening

Committee

14. Tender evaluation See Chapter 8

Flowchart 7.1 – Invitation and Receipt of Tender (Open / Selective)

Yes

No

Open Selective

1

14

8A

9

10

2

6

11

12

13

7

3

4 5

8B

No Yes

Yes

No





5a. Ascertain the criteria forselection of contractors

PT / PO From Flowchart

7.1, step 3

5b. Prepare and issue Noticeof Tender for Pre-qualification

PO

5c. Receive submissions fromcontractors.

PO

5d. Evaluate the submissionfrom contractors.

EvaluationOfficer

5e. Prepare Pre-Q evaluationreport (Kertas laporanpenilaian)

PO

5f. Endorsement of Pre-Q

Evaluation Report

Evaluation

Committee

5g. Approval of Pre-QEvaluation Report

DG

5h. Submit Pre-Q evaluationreport to ProcurementBoard for approval

BUBK

5i. Decision and approval ProcurementBoard

5j. Notify the unsuccessfulcontractors

PO Return to

Flowchart 7.1,step 6

Flowchart 7.2 – Pre-Qualification of Contractors

5a

5b

5c

5d

5e

5j

5f

5g

5h

5i




7 INVITATION AND RECEIPT OF TENDER

7.1 INTRODUCTION


The guidelines on the invitation, receipt and opening of tenders.

7.2 PROCEDURES

Please refer to Flowchart 7.1 – Invitation and Receipt of Tender (Open/Selective).


/ Reference

1 & 2 Determine procurement procedure adopted

Determine procurement procedure to be adopted :

Open tender Selective tender Negotiation Quotation

The procedures in Chapter 7 to Open and Selective Tenderingonly.

Refer Chapter 3 on the description of the procurementprocedures.

For information

3 Selective Tender

Owing to the specialist nature and complexity of requirementsof certain projects, it may be desirable to invite a tender fromselected tenderers.

Such special requirement may include:

Complexity of nature of works

Urgency Limited pool of specialist contractors Special safety and/or environmental requirements National security.

Action By : PO





/ Reference

4 List of Tenderers selected by Authorised Party

This method usually applied where there is insufficient time toundertake a pre-qualification exercise.

The tenderers are selected from PKK’s (Pusat KhidmatKontraktor) database of contractors with good track records.

The selection of tenderers is based on:

Requirement of specialist skills or knowledge, Safety, and Urgency.

The List of Tenderers shall be proposed by the Project Head /Project Team.

The list shall be submitted, through BUBK, to DG for approvalprior to submission to the Tender Procurement Board atMinistry/MoF.

Action By : PO

5 Pre-Qualification - Generally

The purpose of the pre-qualification exercise is to ensurecontractors who are suitably qualified are invited to tender.

Generally, the tenders are assessed on:

General reputation of the tenderer. Capability, based on management, personnel, number

of technical staff Track records (and recent work experience) Available capacity in relation to the current workload. Financial stability and record. Other relevant criteria.

Refer to Flowchart 7.2 – Pre-

Qualification of Contractors

5a Ascertain the Criteria for Selection of Contractors

Ascertain and agree with the Project Team the criteria for

selection of contractors.

For selection under Procurement Board, at least 10 Bumiputracontractors must be included.

Refer to current DID/Treasury Circulars on selection of contractors.

Action By : PT/PO

Refer SPP 5/2007





/ Reference

5b Prepare and issue Notice of Tender for Pre-Qualification

Ensure that the details are correctly filled in the Notice.

The Notice must be:

State the qualifications and other special requirements,required of the tenderers.

Be published in at least 1 national daily newspapers (inBahasa Malaysia).

Published at relevant websites, e.g. DID website, MyGovPortal (www.gov.my) and CIDB website.

Action By : PO

5c Receive Pre-Qualification (Pre-Q) Submissions

The closing date, time and office where the Pre-Q submissionsis received, is stated in the Notice of Tender for Pre-Q.

Submissions shall be opened by an Opening Committee (seeTender Opening Committee, Chapter 7).

Late submissions must be rejected without opening.

Forward the submissions received to the Evaluation Officer.

Action By : PO

Action By : BUBK

5d Evaluate Pre-Qualification (Pre-Q) Submissions

The Evaluation Officer will evaluate the submissions received,based on the pre-agreed criteria (see Step 5a, above).

Action By :Evaluation Officer

5e Pre-Qualification (Pre-Q) Evaluation Report

Prepare the Pre-Q Evaluation Report (Kertas Laporan Penilaian)in the approved format, with list of qualifying contractors, forsubmission to the Tender Procurement Board.


5f & 5g Endorsement & Approval of Pre-Q Evaluation Report

The Pre-Q Evaluation Report shall be submitted to theEvaluation Committee for review and endorsement.

Submit recommendations to the Director General, throughBUBK, for the DG’s approval prior to submission to the TenderProcurement Board at Ministry.


Action By : BUBK





/ Reference

5h & 5i Submission to the Procurement Board for Decision

Present the Pre-Q Evaluation Report to the Procurement Boardfor decision.

Prepare the list of approved or short-listed contractors.

Action By : PO /Procurement Board

Action By : PO

5j Notify Unsuccessful Contractors

Notify the contractors who were not approved or short-listed.

Action By : PO

6 & 7 List of Approved Contractors

Only the approved contractors will be invited to tender.

If the short-listed contractors is not approved, then the TenderProcurement Board may either decide to:

• Re-select tenderers, or• Proceed with open tender process

For information

8A Notice of Tender (Open Tender)

For open tenders, prepare Notice of Tender. Ensure that thedetails are correctly filled in.

The Tender Notice must be:

Be published in at least 1 national daily newspapers (inBahasa Malaysia).

Published at relevant websites, e.g. DID website, MyGovPortal (www.gov.my) and CIDB website.

Action by: PO

Refer alsoSPP 5/2007

8B Letter of Invitation (Selective Tender)

For selective tendering, issue Letter of Invitation to the listedtenderers. Ensure that the details are correctly filled in.

Action by: PO

Refer alsoSPP 5/2007





/ Reference

9 Sale of / Issue Tender Document

Sale of document shall be made during office hours through outthe tender period

Check that

The person collecting the tender documents isauthorized to do so.

The contractor’s registration(s) are still valid.

The Contractor’s details are correctly and completelyentered onto the Form of Tender, and in the

information box stamped onto the front cover of theTender Documents.

Where the contractor’s registration(s) had expired, the sale maybe carried out if the contractor signed and returned theconditional letter for sale of the tender document, stating thatthe tender will not be accepted if the contractor fails to renewhis registration(s) prior to the tender closing date.

The proceeds from the sale of tender documents shall becredited to the revenue.

Tender deposits (where applicable) shall be credited to “security

deposit” account, for eventual refund to the tenderers.

Minimum Tender Period

The tender period shall be as follows:

Conventional tenders: at least 21 days from

o the 1st day of sale of tender documents isavailable, as notified in the Tender Notice, or

o 21 days from the site visitwhichever is the later.

Design and build tender: at least 45 days from the 1st

day of sale of tender documents [This is pendingapproval from top management] is available, as notifiedin the Tender Notice.

Action by: PO

Refer: SPP 5/2007,pages 17 & 18





/ Reference

10 Issue Addendum (if any)

Addendum, if necessary, is prepared by the Engr/QS.

Addendum must be issued to all tenders at least 1 week beforethe closing of tender.

The Tender Addendum together with the instructions, listing thepage numbers issued and substitution to be made.

Action by:Engr/QS

11 Prepare Tender estimates

Prepare the tender estimates.

The tender estimate shall be deposited into the tender box prior

to the tender opening date and time, in accordance with theTender Notice.

Action by: Engr/QS

Action by: BUBK

Action by: Engr/QS

12 Appointment of Tender Opening Committee

The Director General shall appoint the Tender OpeningCommittee.

The Tender Secretariat shall facilitate the calling of the TenderOpening Committee, informing them of the closing date, timeand office where tender is received and to be opened.

Action by: DG

Action by: TS

13 Closing / Receipt of tender

The closing date, time and office where tender is received isstated in the Tender Notice and/or Letter of Invitation.

Late tenders must be rejected without opening.

Action by: TS/

Tender OpeningCommittee





/ Reference

13(Cont’d)

Closing / Receipt of tender

Opening of tenders & Tender Opening Report

Prepare the Tender Schedule.

The tenders must be collected from the tender box, and alltenders (including the departmental tender estimates) beopened in the presence of the Tender Opening Committee.

Number each tender and enter the details for each tender ontothe Tender Schedule, in the order which the tender is opened.

For public tender opening, read aloud and check that the details

are entered correctly. Ensure that the Tender Schedule iscomplete and is signed by all relevant officers.

A copy of the completed Tender Schedule must be displayed atthe office where the tender was closed.

Forward the tender documents received and the completedTender Schedule to the office where the tender was called forevaluation.

Action by: TS/Tender Opening

committee

14 Tender evaluation

See Chapter 8 – Tender Evaluation and Acceptance






Notice of Tender Letter of Invitation to Tenderers Sample stamp (chop) for ‘Maklumat Pendaftaran Kontraktor’ Conditional Letter for sale of tender document Jadual Tender

7.4 REFERENCES

Please refer to the latest Treasury Circulars and DID Circulars on the calling and receipt of tenders.

Treasury Circular


[1] Bil 5 Tahun 2007: Tatacara Penguruasan Perolehan Kerajaan Secara Tender


[1] SP JPT.CUB 1/1989: Penyediaan Anggaran Jabatan Mengenai Sesuatu Tender

[2] SP JPS. UB 1/1993: Garispanduan Mengenai Pengurusan Tender

[3] SP JPS.UB 3/1993 : Surat Pemberitahuan Penerimaan Tender



DID MANUALVolume 10




Chapter 7

– Invitation and Receipt of Tender

APPENDIX 7A

Checklist forTender Opening Committee

(Senarai Semakan OlehJawatankuasa Pembuka Tender)




APPENDIX 7A CHECKLIST FOR TENDER OPENING COMMITTEE (SENARAISEMAKAN OLEH JAWATANKUASA PEMBUKA TENDER)

No.

Tender

TAJUK PROJEK

Tarikh Tender Ditutup: Jenis Tender: Kelas/Kepala/Sub-Kepalayang ditetapkan:

Haribulan:

Jam:

BIL. KETERANGAN JKPT* ULASAN

1.0 Peti tawaran dibuka secepat mungkin selepastender ditutup.

Tandakan ()selepas semakan

2.0 Semak keseluruhan dokumen yang dikemukakan(submission) dan pastikan ianya mengikut peraturanyang sepatutnya.

Catatkan sebarang pemerhatian di

Jadual Tender .

3.0 Beri nombor bersiri kepada setiap tawaran yangditerima. Catatkan di kulit muka hadapan dokumen,nombor siri pentender serta turunkan tandatangandan tarikh pembukaan.

Catatkan sebarang pemerhatian di

Jadual Tender .

3.1 Setiap dokumen terasing yang dikemukakan olehseseorang pentender hendaklah seboleh-bolehnyadikepilkan menjadi satu atau paling kurang yangmungkin. Catatkan nombor siri pentender bagisetiap dokumen yang terasing dan turunkantandatangan ringkas (initial).

3.2 Pastikan juga pentender tidak membuka penjilidanasal dokumen tender. Sebarang dokumen/maklumattambahan hendaklah dikemukakan berasingan daridokumen tender asal.

4.0 Semak Borang Tender: Catatkan sebarangpemerhatian diJadual Tender.





4.2 Pastikan syarikat yang mengemukakan tenderadalah sama dengan syarikat yang membeli

dokumen tender.

4.3 Pastikan pentender melengkapkan keseluruhanBorang Tender.

4.4 Pastikan harga tawaran di Borang Tender samadengan di `Grand Summary'.

4.5 Pastikan harga tawaran yang di catatkan di dalamangka sama dengan yang dicatatkan di dalamperkataan.

Pemerhatian:

(i) Sekiranya pentender tidak menandatangani Borang Tender, jangan catatkan harganya di ruangan harga kerana tendernya tidak akan dipertimbangkan. Walau bagimanapun, catatan boleh dibuat di akhir Jadual.

(ii) Sekiranya terdapat perbezaan harga tawarandi dalam bentuk angka dan perkataan, padaumumnya harga tender yang diambil adalah

yang di dalam perkataan, kecuali jika terdapatkesilapan yang ketara pada harga di dalamperkataan, yang mana harga dalam angkabolehlah diambil (setelah dibandingkan denganharga di `Grand Summary').

5.0 Semak samada terdapat surat-surat pengesahanbank di dalam sampul surat yang berlakridisertakan bersama. Jika ada, buka sampul-sampul surat berkenaan dan catatkan nombor siri pentender serta turunkan tandatangan.Stapelkan pada dokumen tender berkenaan.

Catatkan di Jadual tender yang pentender ada mengemukakan surat pengesahan bank di dalam

sampul surat berlakri dan telah di buka oleh Jawatankuasa.Nyatakan juga bilangan surat bank yang diterima.





6.0 Turunkan tandatangan ringkas di:

(i) semua muka surat di Borang Tender

(ii) `Grand Summary' di Senarai Kuantiti dan

(iii) setiap kesilapan atau pertindihan tulisan diBorang Tender dan Senarai Kuantiti.

7.0 Buka Anggaran Jabatan dan turunkan tandatanganserta catatkan tarikh.

8.0 Semua semakan dan tindakan di atas hendaklah

saling disemak oleh Ahli Jawatankuasa untuk mempastikan tiada kesilapan berlaku.

9.0 Peraturan Tambahan Untuk TenderBekalan/Perkhidmatan dan `Design and Build'

Catatkan semua pemerhatian di atas di Jadual Tender.

9.1 Pastikan dokumen tawaran harga dan tawaranteknikal dikemukakan dalam dua (2)sampul surat yang berasingan.

9.2 Pastikan nama pentender tidak tercatat di dalamdokumen penentuan teknikal.Sekiranya terdapat nama/tanda syarikat dalamdokumen teknikal, pastikan identititersebut dipadamkan.

9.3 Catatkan nombor siri pentender di dokumentawaran harga dan tawaran teknikal.

Tandatangan Jawatankuasa Membuka Tender Tandatangan Jawatankuasa Membuka Tender

*Jawatankuasa Pembuka Tender



DID MANUAL

VOLUME 10



CHAPTER 8

TENDER EVALUATION AND

ACCEPTANCE



Chapter 8 – ENDER EVALUATION AND ACCEPTANCE

Table of Contents



8.1 INTRODUCTION ............................................................................................................. 8-2

8.2 PROCEDURES................................................................................................................. 8-2


8.4 REFERENCES.................................................................................................................. 8-5




List of Flowcharts


Flowchart 8.1 Tender Evaluation and Acceptance 8-1





1. Selection and appointmentof Evaluation Officer(s) PH

2. Tender Evaluation EvaluationOfficer(s)

3. Tender Clarification, if required

EvaluationOfficer(s)

SPP 5/2007

4. Prepare Tender EvaluationReport (Kertas TaklimatTender)

PO /Evaluationofficer(s)

5. Endorsement by TenderEvaluation Committee

6. Presentation of TenderEvaluation Report / TenderRecommendation toProcurement Board /

MoF

TS

7. Unconditional approval? ProcurementBoard / MoF

8. Issue Letter of Intent PO

9. Comply with conditions PH/PO

10. I ssue Letter of Acceptance PO

Flowchart 8.1 – Tender Evaluation and Acceptance

1

3

6

10

2

4

8

9

7No

Yes

5




8 TENDER EVALUATION AND ACCEPTANCE

8.1 INTRODUCTION


The guidelines on the evaluation and acceptance of tender.

8.2 PROCEDURES

Please refer to Flowchart 8.1 – Tender Evaluation and Acceptance.

Item Procedures / Tasks Action By

/ Reference

1 Selection And Appointment of Evaluation Officer(s)

The Project Head shall assign the Evaluation Officer(s).

The Evaluation Officer(s) cannot be a member of the TenderOpening Committee.

Action by: PH

2 Tender Evaluation

Refer to the latest Treasury / DID guidelines on TenderEvaluation process.

Tender evaluation report should be completed within 30 days

from the receipt of the tender documents.

All information pertaining to tender evaluation to be treated asconfidential.

Action by: EvaluationOfficer

3 Tender Clarification

If tender clarification (of the tender(s) received) is required bythe Evaluation Officer:

Prior written permission of the chairman of the TenderProcurement Board must be obtained.

The clarification process is conducted by the TenderSecretariat

No communication is allowed between any EvaluationOfficer and any tenderer unless written permission isgiven by the chairman of the Tender ProcurementBoard.

Action by: TenderSecretariat





/ Reference

4 & 4A Tender Evaluation Report

The Evaluation Officer(s) shall prepare the Tender Evaluation

Report (Kertas Taklimat Tender) in the approved format.

The Tender Evaluation Report shall be submitted to the TenderEvaluation Committee for review and endorsement.

Design and Build

For Design and Build contracts, the tender evaluation shall bedivided into 2 stages; technical evaluation and financialevaluation.

Action by:Evaluation Officer(s)

The Tender Evaluation Committee

is appointed by the DG, in accordance

with the Treasury

Instruction (AP 191 & 192).

5 Tender Recommendation

Tender Evaluation Committee shall make necessaryrecommendations to the Director General, through BUBK, forthe DG’s approval prior to submission to the TenderProcurement Board at Ministry.

BUBK shall submit the approved report to the TenderSecretariat at Ministry for tabling at the Tender ProcurementBoard.

The Tender Secretariat shall be responsible for convening theTender Procurement Board.

The Evaluation Officer shall present the Tender EvaluationReport to the Tender Procurement Board for decision.

The composition of the Tender Procurement Board shall be inaccordance with the value of the tender/contract and the limitof authority (see Chapter 5 - Authority).

Action by: TenderEvaluation Committee

Action by:BUBK

Action by:Tender Secretariat /Tender Procurement

Board

6 Approval

The Tender Procurement Board may approve the tender, withor without condition.

7 Letter of Intent

Where the approval of the Tender Procurement Board isconditional, then a Letter of Intent must be issued pendingnegotiation with the approved tenderer.

The Letter of Intent shall be in the approved format.

Complete and check that the information on the Letter of Intent is correct.

The Letter of Intent ought to be signed by an authorizedofficer.

Action by: PO





/ Reference

8 Negotiations

The Project Head shall conduct the negotiations with the

approved tenderer, with the assistance of the ProcurementOfficer.

Inform the Tender Procurement Board or Treasury (as the casemay be) of the results of the negotiations, and for finalapproval, if required.

Action by: PH / PO

9 Letter of Acceptance

Check that approval of the Tender Procurement Board is given.

Confirm that the funds / budget is available.

Prepare the Letter of Acceptance, using the currentform/format.

Complete and check that the information on the Letter of Acceptance, and Notification of Acceptance of Tender, arecorrect, i.e.

The name and address are correct Project title The accepted Contract Sum Amount for Performance Bond

Amount for Advance Payment Amount of coverage for insurances Period of insurance coverage Date of Possession of Site Completion Period and Date for Completion Defects Liability Period Name of SO/PD Name of officer-in-charge / contact person

The Letter of Acceptance must be signed by an authorizedofficer (see Chapter 5 - Authority).

Send the Notification of Acceptance of Tender, and Letter of Acceptance by registered post to Contractor, and copies to therelevant parties.

Action by: PO

See also chapter 5

Appendix–

Distribution List






Format Laporan Pernilaian Tender Kerja

Contoh Kertas Talimat Tender Kerja

Contoh Kertas Keputusan Tender Kerja

Contoh Surat Niat / Letter of Intent

Letter of Notification of Tender (Pemberitahuan Penerimaan Tender)

Letter of Acceptance – JKR 203D

Contoh Surat Pengesahan Budget

Garispanduan - Tugas Jawatan Kuasa Pernilaian

Garispanduan Pernilaian Tender Kerja

8.4 REFERENCES



[1] Bil 5 Tahun 2007: Tatacara Penguruasan Perolehan Kerajaan Secara Tender

[2] S/K.KEW/PK/PP/1100/00000010/31 Jld.23 SK.7(20), dated 21 March 2008: Garis PanduanPenilaian Tender


[1] SP JPS.UB 3/1994: Peraturan Penilaian Tender Kerja

[2] SP JPS.UB 2/1995: Penyediaan Laporan Penilaian Tender



DID MANUAL

VOLUME 10


PART III : POST-CONTRACT

CHAPTER 9

CONTRACT DOCUMENTATION



Chapter 9 – CONTRACT DOCUMENTATION

Table of Contents



9.1 INTRODUCTION ............................................................................................................. 9-2

9.2 PROCEDURES................................................................................................................. 9-2


9.4 REFERENCES.................................................................................................................. 9-8

APPENDIX 9A Checklist for Preparation of Contract Documents (Senarai Semakan PenyediaanDokumen Kontrak)………………………………..………………………………………………….. 9A-1




List of Flowcharts


Flowchart 9.1 Contract Documentation 9-1





1. Letter of Acceptance isissued

-

2. Compile the ContractDocuments.

CAO

Refer: Contract

Document-

ation Checklist

3. Check that each documentis complete, correct andcompliant.

CAO

4. Quality Audit CAO/BUBK*

5. Correctly mark the ‘Original’ and ‘Duplicate’ documents

CAO

6. Signing of ContractDocument

CAO

7. Stamping of documents CAO

8. Distribute the ContractDocuments

CAO

*Where the Contract is signed at the DID Headquarters or Ministry, the documents shall be auditedby BUBK

Flowchart 9.1 – Contract Documentation

1

5

6

8

2

4

7

3




9 CONTRACT DOCUMENTATION

9.1 INTRODUCTION


The guidelines on the compilation and preparation of the Contract Documents for signing anddistribution to the relevant parties.

9.2 PROCEDURES

Please refer to Flowchart 9.1 – Contract Documentation.


/ Reference

1 Letter of Acceptance is issued

Upon issuance of the Letter of Acceptance, the contractor mustsubmit the required documents and information stated in theLetter of Acceptance for verification by CAO.

Letter of Delegation of Power

Upon the issuance of the Letter of Acceptance, issue thenecessary letters of delegation of power.

Ensure that the following documents, as may be required bythe Letter of Acceptance of Tender, are submitted by theContractor:

Performance Bond (where ‘Performance GuaranteeSum’ is not used)

Insurance policies together with original receipts Details of SOCSO Advance payment bond (if Advance Payment is applied

by the Contractor and permitted under the Contract).

For information

Action by : SO

Action by : CAO





/ Reference

Check that the information on the Performance Bond (where ‘Performance Guarantee Sum’ is not used) is in order:

Parties Contract number and references Validity period (dates) All other information are correctly inserted Issued by a bank or insurance company approved by

Bank Negara Verification from the bank is attached.*

*Write to issuing bank and request for verification.

Check that the information on the relevant insurance policiesare in order :

Parties Validity period (dates) Contract references and amounts insured Excess clauses, if any Relevant endorsements

Action by : CAO

2 Compile the Contract Documents

The Contract Documents are compiled and bound as soon as ispracticable after the issuance of the Letter of Acceptance, butno later than 4 months after the issuance of the Letter of

Acceptance.

Refer to the Contract Documentation Checklist (SenaraiSemakan Penyediaan Dokumen Kontrak)

Using the accepted Tenderer’s tender document, compile thedocuments for contract binding in the format and order set outin the Tender Table Document (refer Chapter 6).

Design and Build Contract Documents

For design and build contracts, Step 2 and Step 8 shall becarried out by the Contractor.

The design and build contract documents shall be compiledby the Contractor.

The certified true copy of the Performance Bond andInsurance Policies shall be inserted into the ContractDocuments.

Action by : CAO

Refer: Contract Documentation

Checklist





/ Reference

2a Contract Front Cover

Ensure that the

cover is in accordance with DID’s approved format;

title (of project, etc), Contract Number and names arein accordance with the Letter of Acceptance.

Action by : CAO

2b Contents

Generally,

the contents and order of the Contract Documents isbased on the Tender Table Document, and

the Contract Documents contains the acceptedTenderer’s tender documents.

Ensure that:

Variation of Price schedules are completed, and thequantities inserted.

Check for irregularities. Make correction if necessaryand as agreed by contractor.

All information are correctly entered in the Appendix tothe Conditions of Contract.

Ensure that all other pertinent information is correctly enteredor inserted in the contract forms and other documents.

Ensure that all superseded information are marked as such.

Action by : CAO

2c Numerical checks, Corrections and Rationalisation of Rates

Check for arithmetical errors. Arithmetical errors in the Billsof Quantities or the Summary of Tender must be corrected.

Check the rates and prices for reasonableness andconsistencies. Check the distribution of prices to prevent

“front loading”. Carry out “rationalisation” of the rates andprices as necessary.

Where rationalization of rates had been carried out, thesechanges must be agreed by the Contractor.

Action by : CAO





/ Reference

Both the Authorised Party and the Contractor must initialnext to all corrections, or changes due to rationalisation, of rates and prices.

The letters to and from the Contractor, amending orconfirming the original tender or affecting the Contract inany way, shall be included in the Contract Document(arranged in date order with the latest letter first, andinserted these after Letter of Acceptance)

Action by : CAO

2d Contract Documentation Checklist

The Checklist must be ticked (checked) and initialed by thecompiler, and together with the compiled documents shall beforwarded to the checker for checking and verification.

Action by : CAO

3 Check the compiled Contract Document

Refer to the Contract Documentation Checklist

Check every document and ensure they are complete, correctand compliant.

The checker initial against each checked item.

Action by : CAO

Refer: Contract Documentation

Checklist

4 Quality Audit

The Quality Auditor shall check that the documents are in

order and free from errors.

Where the Contract is signed at the DID Headquarters, thedocuments shall be audited by BUBK.

Action by : CAO /BUBK

5 Correctly mark the ‘Original’ and ‘Duplicate’ documents.

Identify the original Contract Document and correctly print orchop/stamp the words “Original” or “Duplicate” on the cover of the Contract Documents.

Copy documents must be certified as true copy by the Authorised Party (Kumpulan Pengurusan Profesional).

Action by : CAO





/ Reference

6 Signing of Contract Document

The Contract shall be signed by the officer duly authorised tosign the contract (‘Authorised Party’) , based on the value of the contract (refer Chapter 5 - Authority).

Arrange for the Original Contract Document to be signed bythe Authorised Party and the Contractor

The Contractor’s representative for signing of contract mustfurnish a certified copy of the company resolution (or otherdocumentary evidence) to prove that he is authorized to signthe Contract Document on behalf of the Contractor.

The following documents must be signed by both Parties:

Articles of Agreement Form of Tender Letter of Acceptance List Contract Drawings

Where corrections were made due to arithmetical errors, orrationalisation of rates had been carried out, the changes mustbe initialed by both the Authorised Party and the Contractor.

The following documents must also be signed by Contractor:

Schedules of Rates

Stamp all drawings as “Contract Drawings”.

Drawings

Drawings prepared in-house shall be signed by relevant officer.If drawings by Consultant, to be signed by RegisteredEngineer, Registered Architect and accepted by Director of Division/State [To be confirmed by BUBK]

Design and Build Contract - Drawings

All contract drawings must be signed and endorsed by aRegistered Engineer, Registered Architect etc, who preparedthe design.

Action by : CAO





/ Reference

7 Stamping of Contract Documents

Arrange for the stamping of the Contract Documents (originaland duplicate only).

The stamp must be affixed to the first page of the Articles of Agreement.

The costs for stamping shall be borne by the Contractor.

Exemption of Stamp Duty – Forms JKR 203/203A

In the alternative to stamping of Contract Documents, the CAOmay apply for exemption of stamp duty under Section 35 of the Stamp Act 1949 (Act 378).

The exemption endorsement must be affixed to the first pageof the Articles of Agreement (original and duplicate only).

Design and Build Contracts

The Contractor shall be responsible for both the costs of andarranging for the stamping of the Design and Build ContractDocument.

Action by :CAO

Refer JPS letter ref:

(60)dlm.PPS.10/4/2 BUB Jld. 4 bth.

2.10.2007

8 Distribute Contract Documents

Issue and distribute the Contract Document to the relevantparties. Distribute the copies in accordance with theDistribution List set out in Appendix 5A.

The original Contract Document for project of value more thanRM3 million shall be kept at BUBK. For other projects, theoriginal Contract Document is retained and kept by the Division

/ State which implements the project.

The Performance Bond shall be retained and keep safe at thedivision/state office which issued the Letter of Acceptance.

Unless there is any unresolved dispute between the

Government and the Contractor, the Contract Document mustbe retained for 7 years after the issuance of the FinalCertificate.

If the is any unresolved dispute between the Government andthe Contractor, then the Contract Documents (and alldocuments in connection with the project) must be retaineduntil the dispute is resolved, or otherwise as instructed by the

Attorney General Office.

Action by : CAO

Refer: Chapter 5,

Appendix 5A –

Distribution List

For information






Sample Contract Document Cover

Sample Contents Page

Surat Perwakilan Kuasa (Kepada wakil P.P. Kerja Utama Untuk Penyeliaan dan ArahanKeseluruhan Kerja)

Pemberitahu Perwakilan Kuasa (bagi Wakil P.P. Kerja Utama)

Surat Perwakilan Kuasa (Kepada Wakil P.P. Pakar untuk Penyeliaan Kerja Tertentu)

Pemberitahu Perwakilan Kuasa (bagi Wakil P.P. Pakar)

9.4 REFERENCES

Please refer to the latest Treasury Circulars and DID Circulars on the contract documentation.


Nil


[1] SPJPS.UB 1/1995: Perlantikan Pegawai Penguasa, Perwakilan Kuasa Pegawai Penguasa danPegawai-Pegawai Yang diberi Kuasa Dalam Urusan Pentadbiran Kontrak.

[2] SPJPS.UB 3/1995: Peraturan Penyediaan Dokumen Tender dan Kontrak

[3] (36)dlm. PPS.10/4/2 CUB Jld.3 (27/7/98): Pengedaran Dokumen-dokumen (Kontrak Kerja)Biayaan Persekutuan

[4] SP JPS Bil. 1/2003: Perlantikan Pegawai Penguasa (P.P), Perwakilan Kuasa Pegawai Penguasa(Wakil P.P) Dan Pegawai-Pegawai Yang Diberi Kuasa (PYDK) Dalam Urusan Pentadbiran Kontrak.(Tambahan kepada Surat pekeliling SPJPS.UB 1/1995)

[5] ( 60 )dlm. PPS 10/4/2 BUB Jld 4 2 Oktober 2007: Duti Setem Bagi Dokumen Kontrak



DID MANUALVolume 10




Chapter 9

– Contract Documentation

APPENDIX 9A

Checklist forPreparation of

Contract Documents

(Senarai Semakan PenyediaanDokumen Kontrak)




APPENDIX 9A CHECKLIST FOR PREPARATION OF CONTRACT DOCUMENTS(SENARAI SEMAKAN PENYEDIAAN DOKUMEN KONTRAK)

TAJUK

PROJEK

Untuk Tindakan

Nama PegawaiTarikhDiberi

Kepada

TarikhDiterima

Oleh

Tarikh SiapSemakan

PMK 1

PMK 2

AK*

BIL. KETERANGAN PMK1 PMK2 AK* ULASAN

1.0 PENGENALAN

Secara amnya setiap Dokumen Kontrak mestilah lengkap dan teratur sertamengandungi semua Dokumensebagaimana yang terkandung di dalamDokumen Meja Tender. Secara khususDokumen Kontrak mestilahmengandungi Dokumen TenderPentender yang disetujuterima olehLembaga Perolehan.

Dokumen Kontrak hendaklah disediakandengan kadar segera selepas SuratSetujuterima Tender yang Asalditandatangani oleh Kontraktor dansaksi beliau. Insuran-insuran besertaresit-resit resmi pembayaran Premiuminsuran-insuran tersebut. No.KodPERKESO, GerentiBank/Insuran/Syarikat Kewangan untuk Bon perlaksanaan, GerentiBank/Insuran/Syarikat Kewangan untuk Bayaran Pendahuluan (Jika Kontraktormemohon untuk mendapatkan WangPendahuluan) yang Asal dikembalikan.

Tandakan

() selepassemakan





2.0 MUKA HADAPAN (KULIT)

2.1 Warna hendaklah warna kuning cair

2.2 Isikan maklumat-maklumat berikutpada muka hadapan Dokumen Kontrak

ASAL atau SALINAN, Cop Perkataan ASAL pada muka hadapan Dokumenyang asal dan Cop perkataan SALINANpada tiap-tiap muka hadapan salinan-salinan Dokumen Kontrak. Salinanmestilah diakui sah dan ditandatanganioleh pegawai dari Kumpulan

Pengurusan dan Profesional.

(a) Logo Kerajaan Malaysia.

(b) Nama Kerajaan Malaysia.

(c) Nama Jabatan Pengairan dan SaliranMalaysia.

(d) Perkataan Dokumen Kontrak.

(e) Tajuk projek mestilah sama sepertidengan tajuk kerja yang terkandung didalam Surat Setujuterima Tender.

(f) Nombor Kontrak.

(g) Jilid dan Seksyen Dokumen Kontrak.

(h) Logo JPS

- Di sebelah bawah ‘Logo JPS’ catitkan Bulan dan Tahun DokumenKontrak disediakan.

- Di sebelah kanan bertentangandengan ‘Logo JPS’ catitkan :-

KETUA PENGARAHJABATAN PENGAIRAN DANSALIRAN MALAYSIA JALAN SULTAN SALAHUDDIN,50626 KUALA LUMPUR





3.0 ISI KANDUNGAN DOKUMEN KONTRAK

3.1 ARAHAN KEPADA PENTENDER.

Sebagaimana terkandung di dalamDokumen Meja Tender.

3.2 BORANG TENDER :

3.2.1 Pastikan Borang Tender Asaldigunakan.

3.2.2 Maklumat-maklumat yang perlu

disemak dan yang perlu diisi.

Muka Surat 1

(a) Isikan Nombor Kontrak.

(b) Isikan tarikh Kontrak ditandatanganioleh Pegawai yang diberi kuasamenandatangani kontrak.

(c) Pastikan Cop Syarikat, TandatanganKontraktor dan Saksi, beserta nama danalamat dicop dan diisi oleh Kontraktorpada ruang yang disediakan.

(d) Pastikan Cop Pegawai yang diberi kuasamenandatangani Kontrak dan saksibeserta nama dan alamat dicop dandiisi pada ruang yang disediakan.





3.0 ISI KANDUNGAN DOKUMEN KONTRAK (Samb.)

3.3 SURAT SETUJUTERIMA TENDER –Borang JKR 203D

3.3.1 Pastikan Borang Surat Setujuterima Asal digunakan.

3.3.2 Maklumat-maklumat yang perlu diisi.

Muka Surat 1.

(a) Isikan Nombor Kontrak.

(b) Isikan tarikh Kontrak ditandatanganioleh Pegawaiyang diberikuasa menandatanganikontrak.

(c) Pastikan Cop Syarikat, TandatanganKontraktor dan Saksi, beserta nama danalamat dicop dan diisi oleh Kontraktorpada ruang yang disediakan.

(d) Pastikan Cop Pegawai yang diberi kuasamenandatangani Kontrak dan saksibeserta nama dan alamat dicop dandiisi pada ruang yang disediakan.

3.4 SYARAT-SYARAT KONTRAK :

Maklumat-maklumat yang perlu diisi






3.4 SYARAT-SYARAT KONTRAK : (Samb.)

Muka Surat 1

(a) Nombor Kontrak, Kepala dan PecahanKepala peruntukan.

(b) Nama Kerajaan Malaysia.

(c) Nama Kontraktor dan alamat, samaseperti yang terkandung di dalam SuratSetujuterima Tender.

(d) Nama projek, sama seperti yangterkandung di dalam Surat SetujuterimaTender.

(e) Senarai Lukisan, sama seperti yangterkandung di dalam Dokumen MejaTender.

Muka Surat 2.

(a) Para 2(d)

Tambahkan perkataan Addenda No. 1selepas Syarat-syarat Kontrak samaseperti yang terkandung di dalamDokumen Meja Tender.







Muka Surat 2. (Samb.)

(b) Para 2(e)

Peruntukan Khas Syarat-syarat Kontrak

(i) Perubahan Harga Bahan-BahanBinaan.

(ii) Bayaran Pendahuluan(iii) Restriction and Procedure on use

of Imported Goods.(iv) Bon Perlaksanaan dalam bentuk

Wang Jaminan Perlaksanaan.

(c) Para 4

Harga Kontrak diisi dalam perkataandan nilai mestilah sama seperti yangterkandung di dalam Surat SetujuterimaTender.

Muka Surat 3.

(a) Pastikan Cop Syarikat, TandatanganKontraktor dan Saksi, beserta nama danalamat dicop dan diisi oleh Kontraktorpada ruang yang disediakan danpastikan pegawai yang tandatanganbagi pihak kontraktor hendaklah yangdiberi kuasa menandatangani Kontrak.

(b) Pastikan Cop Pegawai yang diberi kuasamenandatangani Kontrak dan saksi

beserta nama dan alamat dicop dandiisi pada ruang yang disediakan.







Muka Surat 4.

(a) Fasal 1(a)( i )

Sama seperti di para 2(d), 2(e) dan2(h) di Muka Surat 2 Syarat-syaratKontrak.

(b) Fasal 1(a)(iv)

Nama Jawatan Pegawai Penguasa yangdiberi kuasa mengikut had kewanganyang ditetapkan di bawah SP JPS Bil.1/2003 – Perlantikan Pegawai Penguasa(P.P.), Perwakilan Kuasa PegawaiPenguasa (Wakil P.P.) Dan Pegawai-Pegawai Yang Diberi Kuasa (PYDK)Dalam Urusan Pentadbiran Kontrak.

LAMPIRAN KEPADA SYARAT-SYARATKONTRAK.

Muka Surat 30.

(a) Fasal 3(a)(i)

Nama Pegawai yang diberi kuasa untuk bertindak bagi pihak kerajaan mengenaiFasal 40, Fasal 43, Fasal 51, fasal 52dan Fasal 54 sama seperti yang telahditentukan mengikut had kewanganyang ditetapkan di bawah SP JPS1/2003.

(b) Fasal 3(a)(ii)

Nama pegawai yang berkuasa untuk meluluskan perubahan mengikut had-had seperti yang telah ditentukan didalam Dokumen Meja Tender. Untuk mendapatkan maklumat yang lebih

jelas lagi sila Rujuk kepada S.PPerbendaharaan Bil. 7/2007, ‘Peraturan

Arahan Perubahan Kerja

(Variation Order)







Muka Surat 31.

Fasal 11(d)

Isikan tarikh tender ditutup.

(b) Fasal 33

(i) Jumlah minimum Liabiliti Awam iabergantung kepada jumlah harga

Kontrak dan diisi dalam bentuk nilai seperti yang telah ditentukandi dalam Dokumen Meja Tender.

(ii) No. Polisi dan nama SyarikatInsuran.

(iii) Tempoh Insuran termasuk tempohkontrak dicampur tempohtanggungan kecacatan dicampur 3Bulan 14 Hari.

(c) Fasal 33(a)

Amaun Fasal lebihan hendaklah diisi jika ada.

(d) Fasal 35

Isikan No. Pendaftaran Skim PERKESO.

(e) Fasal 36

(i) Jumlah harga kontrak, isikandengan perkataan ‘tiada’ jikaProjek baru.

(ii) No. Polisi dan Nama SyarikatInsuran.

(iii) Tempoh Insuran, isikan tempohkontrak sahaja.






3.4 SYARAT-SYARAT KONTRAK (Samb.)

Maklumat-maklumat yang perlu diisi(Samb.)

LAMPIRAN KEPADA SYARAT-SYARATKONTRAK (Samb.)


(f) Fasal 36(b)

Amaun Fasal lebihan hendaklah diisi jika ada.

(g) Fasal 37

(i) Jumlah amaun untuk BonPerlaksanaan iaitu 5% dari hargakontrak seperti yang telahditentukan di dalam Dokumen Mejatender dan diisi dalam bentuk nilai.

(ii) No. GerentiBank/Insuran/SyarikatKewangan, jika Kontraktor memilih Bon Perlaksanaandalam bentuk gerentiBank/Insuran/SyarikatKewangan.

(h) Fasal 38(b)

Isikan tarikh milik tapak.

(i) Fasal 39

Isikan tarikh siap bagi kesemua kerja.










(j) Fasal 40

Isikan Ganti rugi tertentu dan ganti rugiditetapkan berasaskan Dokumen MejaTender, dalam bentuk nilai RM,memundarkan kepada puluh yangterdekat.

Muka Surat Terakhir

(a) Fasal 41

Isikan maklumat-maklumat berikut didalam jadual jika terdapat penyiapanbangunan yang hendak diserahkankepada pemilik mengikut bahagian-bahagian seperti yang telah ditentukandi dalam Dokumen Meja Tender.

(i) Nama seksyen atau bahagian.

(ii) Tarikh Milik (Fasal 38(c))

(iii) Tarikh Siap

(iv) Ganti rugi tertentu dan ganti rugiditetapkan.

(b) Fasal 45

Isikan tempoh tangungan kecacatansama seperti terkandung di dalamDokumen Meja Tender.









Muka Surat Terakhir (Samb.)

(c) Fasal 47(a)

(i) Nilai kerja yang perludilaksanakan termasuk bahan-

bahan dan barang-barang yangperlu diserah- hantar sebelumperakuan Interim Pertamadikeluarkan iaitu tidak kurangdari 5% Harga Kontrak Asal atauRM100,000, yang mana lebihkurang (Rujuk dokumen tender).

(d) Fasal 47(a)

(ii) Nilai kerja yang perlu

dilaksanakan termasuk bahan-bahan dan barang-barang yangperlu diserah-hantar sebelumtiap-tiap Perakuan Interimkemudiannya dikeluarkan iaitutidak kurang dari RM1,000.00.

(follow checklist payment)

(c) Fasal 47(d)

Tempoh menunaikan perakuan bayaraninterim isikan 30 Hari (Rujuk dokumen

tender).






3.5 ADDENDA KEPADA SYARAT-SYARAT

KONTRAK

(i) Masukkan Addenda No. 1

Pada Borang Pengesahan Addenda.Maklumat-maklumat yang perlu diisi:-

(a) Nombor-nombor dan jumlah mukasurat Adenda-addenda tersebut.

(b) Pastikan Cop Syarikat, TandatanganKontraktor dan Saksi, beserta nama danalamat dicop dan diisi oleh Kontraktorpada ruang yang disediakan pada mukahadapan Addenda tersebut.

(c) Pastikan Cop Pegawai yang diberi kuasamenandatangani Kontrak dan saksibeserta nama dan alamat dicop dandiisi pada ruang yang disediakan padamuka hadapan Addenda tersebut.

3.6 PERUNTKAN KHAS KEPADA SYARAT-SYARAT KONTRAK

(i) Syarat-syarat Kontrak – PerubahanHarga ke atas Bahan-bahanBinaan.

(ii) Sertakan Senarai Bangunan,Kategori yang berkaitan, FaktorPulangan dan Index Asas untuk tujuan Pelarasan Perubahan Harga

menurut Peruntukan Khas Syarat-syarat Kontrak.






3.6 PERUNTKAN KHAS KEPADA SYARAT-

SYARAT KONTRAK (Samb.)

Isikan Index Asas mengikut Jenis danKategori- Kategori Bangunan untuk kawasan yang telah ditetapkan.

Index Asas diambil berdasarkan BulanTender ditutup, Index Kos Bangunandiperolehi dari Jabatan PerangkaanMalaysia yang dikeluarkan dari bulan kebulan.

(iii) Syarat-syarat Kontrak – BayaranWang Pendahuluan.

(iv) ‘Restriction procedure on use of imported goods and List of government multimodal transportoperator’

(v) Bon Perlaksanaan dalam bentuk Wang Jaminan Perlaksanaan.

3.7 SPESIFIKASI PIAWAI

(a) Masukkan Spesifikasi Piawai Kerja-kerja Bangunan sama seperti yangterkandung di dalam Dokumen MejaTender.

(b) Masukkan Spesifikasi Piawai Kerja-kerjaMekanikal dan Elektrikal sekiranyaprojek dipanggil secara Pakej samaseperti yang terkandung di dalamDokumen Meja Tender.

(c) Masukan Spesifikasi bagi KawalanKualiti Alam Persekitaran dan KawalanHakisan dan Mendapan.

3.8 SPESIFIKASI ADDENDA

(a) Masukkan Spesifikasi Addenda samaseperti yang terkandung di dalamDokumen Meja Tender.






3.8 SPESIFIKASI ADDENDA (Samb.)

Pada Borang Pengesahan Spesifikasi Addenda

Maklumat-maklumat yang perlu diisi:-

(i) Nama projek, sama seperti yangterkandung di dalam SuratSetujuterima Tender.

(ii) Nombor Kontrak.

(iii) Tarikh Kontrak iaitu Tarikh semasaKontrak ditandatangani olehPegawai yang diberikuasamenandatangani Kontrak.

(iv) Jumlah Mukasurat Spesifikasi Addenda.

(v) Pastikan Cop Syarikat,Tandatangan Kontraktor dan Saksi,beserta nama dan alamat dicopdan diisi oleh Kontraktor padaruang yang disediakan.

(iv) Pastikan Cop Pegawai yang diberikuasa menandatangani Kontrak dan saksi beserta nama dan alamatdicop dan diisi pada ruang yangdisediakan.






3.9 PENGUKURAN DAN FAKTOR

MENGHARGAKAN SENARAI KUANTITI(PREAMBLE) – Bagi Kontrak BerasaskanSenarai Kuantiti

(a) Masukkan Pengukuran dan FaktorMenghargakan Senarai Kuantiti samaseperti yang terkandung didalam Dokumen Meja Tender.

3.10 SENARAI KUANTITI – Kontrak Berasaskan Senarai Kuantiti

(a) Ringkasan Tender.

(i) Setiap nilai Kerja-kerja yang diisiharga di dalam ringkasan Tenderoleh Kontraktor perlu diselaraskandan mestilah sama nilainya dengannilai terkumpul Kerja-kerja Awalan,nilai-nilai terkumpul Kerja-kerjayang Berkenaan, Kerja-KerjaCerucuk (jika ada), Wang KosPrima dan Wang Peruntukan

Sementara yang telahpun disemak,diselaras dan diseragam kadar-kadar harganya terlebih dahulu.

(ii) Jika perbezaan kesilapankeseluruhan perkiraan itu BesarJumlahnya, Pelarasan peratusanperlu dibuat iaitu denganmenjumlahkan nilai terkumpulkerja- kerja di ringkasan Tender,sekiranya jumlah yang disemak

melebihi dari Harga Tender,Pelarasan peratusannya adalahKurangan, sekiranya jumlah yangdisemak kurang dari Harga Tender,Pelarasan Peratusannya adalahTambahan, di mana pelarasandibuat dengan tidak menjejaskanHarga Tender.






3.10 SENARAI KUANTITI (Samb.)

(a) Ringkasan Tender (Samb.)

(iii) Jika perbezaan kesilapankeseluruhan perkiraan itu kecil

jumlahnya memadailah nilai Kerja-kerja tersebut diselaraskan dengandiagih-agihkan di mana perlu padaitem-item Kerja Awalan ataudiselaraskan dengan diagih-agihkan atau diseragamkan keitem-item Kerja-kerja Berkenaanlain dengan tidak menjejaskan

Harga Tender.

(iv) Jumlah terkumpul nilai kerjakeseluruhan yang diisi olehPentender untuk dibawa ke BorangTender mestilah sama jumlahharga Tender yang dipersetujuioleh Lembaga Perolehan.

(v) Setiap kesilapan pengiraanmestilah diperbetulkan terlebihdahulu dan hendaklah dipersetujuioleh Kontraktor. Kontraktormestilah menurunkan tandatanganringkas pada tempat-tempatpengiraan yang telah diperbetulkanbersama-sama dengan pegawaiyang diberi kuasa bagi pihak kerajaan.

(b) Kerja Awalan.

(i) Setiap item-item Kerja Awalanyang diisi harga oleh Kontraktor

pastikan ia adalah perlu. Semakharga-harga tersebut untukmemastikan kemunasabahanharganya. Sekiranya terdapatkadar-kadar harga yang tidakmunasabah ia hendaklahdiselaraskan denganmengagihkannya pada Item-itemlain pada kerja-kerja Awalan ataudiselaraskan denganengagihkannya ke bahagiankerja-kerja lain.







(b) Kerja Awalan (Samb.)

(ii) Setelah Item-item kerja-Kerja Awalan diselaraskan ataudiperbetulkan hendaklahdipersetujui oleh Kontraktor.Kontraktor mestilah menurunkantandatangan ringkas pada tempat-tempat pengiraan yang telahdiperbetulkan bersama-samadengan pegawai yang diberi kuasabagi pihak kerajaan.

(iii) Jumlah terkumpul nilai keseluruhanKerja-Kerja Awalan yang telahdiselaraskan hendaklah dibawa keRingkasan Tender.

Lampiran Kepada Kerja-kerja Awalan

Kadar kerja harian dan Jumlah Kadar Harga Harian untuk Loji dan Buruh.Pastikan Kadar Harga Upah Lojisehari dan Kadar Harga Upah Buruhsehari diisidengan Kadar Harga yangmunasabah oleh Kontraktor. Jikaterdapat Kadar-kadar harga yangdidapati tidak munasabah ia mestilahdiselaraskan terlebih dahulu danKontraktor mestilah menurunkantandatangan ringkas pada kadar-kadar Harga yang diselaraskan.Kadar Harga tersebut kemudiannyamestilah ditandatangani olehPegawai Penguasa atau Wakil atauPMK sebagai tanda kadar-kadarHarga diterima.







(c) Kerja-kerja yang Berkenaan, dan Kerja-kerja Cerucuk (jika ada)

(i) Kadar-kadar Harga setiap unitItem-item Kerja-kerja Berkenaandan Kerja-kerja Cerucuk (jika ada)dan jumlah yang diisi harga olehKontraktor perlu disemak untuk memastikan kemunasabahanharganya. Ia disemak berpandukanharga pasaran semasa. Sekiranyaterdapat kadar-kadar harga yangtidak munasabah, tidak seragam,kesilapan pengiraan, kadar-kadarharga tersebut perlu diselaraskandan diseragamkan pada itemitemkerja lain yang sama cara kerjanyatermasuk memperbetulkan jumlahpengiraannya.

(ii) Setelah Item-item Kerja-Kerjatersebut diselaraskan ataudiperbetulkan hendaklahdipersetujui oleh Kontraktor.Kontraktor mestilah menurunkantandatangan ringkas pada tempat-tempat pengiraan yang telahdiperbetulkan bersama-samadengan pegawai yang diberi kuasabagi pihak kerajaan.

(iii) Jumlah terkumpul nilai keseluruhanKerja-Kerja tersebut yang telahdiselaraskan hendaklah dibawa keRingkasan Tender.







(d) Wang Kos Prima dan Wang PeruntukanSementera.

(i) Setiap Item-item Wang Kos Primadan Wang Peruntukan Sementarayang diisi harga oleh Kontraktorperlu disemak. Sekiranya terdapatkesilapan ia perlu diselaraskan dandiperbetulkan.

(ii) Setelah Item-item Kerja-Kerjatersebut diselaraskan ataudiperbetulkan hendaklahdipersetujui oleh Kontraktor.Kontraktor mestilah menurunkantandatangan ringkas pada tempat-tempat pengiraan yang telahdiperbetulkan bersama-samadengan pegawai yang diberi kuasabagi pihak kerajaan.

(iii) Jumlah terkumpul nilai keseluruhan

Kerja- Kerja tersebut yang telahdiselaraskan hendaklah dibawa keRingkasan Tender.

3.11 SENARAI LUKISAN YANG DIGUNAKANUNTUK PENYEDIAAN SENARAIKUANTITI

(a) Masukkan Senarai Lukisan yangdigunakan untuk penyediaan SenaraiKuantiti sama seperti yang terkandung

di dalam Dokumen Meja Tender.

(b) Pada Lukisan-Lukisan Kontrak.

(i) Semak catitan pada Senarai-senarai Lukisan dan lukisan-lukisanyang akan dijilidkan dalamDokumen Kontrak adalah samakandungannya seperti di dalamDokumen Meja Tender.






3.11 SENARAI LUKISAN YANG DIGUNAKAN

UNTUK PENYEDIAAN SENARAIKUANTITI (Samb.)

(ii) Pastikan Semua pindaan atauperubahan pada Lukisan-lukisanKontrak mestilah diselaraskan jugapada Dokumen Meja Tender.

(c) Pada Borang Pengesahan Lukisan

Maklumat-maklumat yang perlu diisi:-

(i) Nama projek, sama seperti yangterkandung di dalam SuratSetujuterima Tender.

(ii) Nombor Kontrak.

(iii) Tarikh Kontrak iaitu Tarikh semasaKontrak ditandatangani olehPegawai Yang Diberi KuasaMenandatangani Kontrak.

(iv) Jumlah Mukasurat Lukisan-lukisan.

(v) Pastikan Cop Syarikat,Tandatangan Kontraktor dan Saksi,beserta nama dan alamat dicopdan diisi oleh Kontraktor padaruang yang disediakan.

(vi) Pastikan Cop Pegawai yang diberikuasa menandatangani Kontrak dan saksi beserta nama dan alamat

dicop dan diisi pada ruang yangdisediakan.

3.12 TARIKH KONTRAK

Pastikan tarikh Kontrak (iaitu Tarikhsemasa Kontrak ditandatangani) telahdiisi.

Borang tender Perkara-perkara Perjanjian

(Articles of agreement) Surat Setujuterima Tender Senarai lukisan kontrak





4.0 PENGEDARAN DOKUMEN-DOKUMENKONTRAK

(i) KSU, Kementerian Sumber Aslidan Alam Sekitar- Satu salinan tanpa Lukisan

(ii) Ketua Audit Negara- Satu salinan tanpa Lukisan.

(iii) Bank atau Syarikat yangmengeluarkan Bon Perlaksanaan.- Satu salinan tanpa Lukisan

(iv) Kontraktor- Satu salinan dengan Lukisan

- Berdaftar (AR)

(v) Pengarah Bahagian, Ibu PejabatJPS.

- Satu salinan dengan Lukisan

(vi) Pegarah Bahagian Kontrak danUkur Bahan, Ibu Pejabat JPS

- Kontrak Asal dengan Lukisan.

(vii) Pengarah Bahagian KhidmatPengurusan – Jika bayaran dibuatdi Ibu Pejabat Sahaja.- Satu salinan tanpa Lukisan

(viii) Akauntan Kanan Perbendaharaan(Negeri) – Jika bayaran dibuat diNegeri Sahaja.- Satu salinan tanpa Lukisan

(ix) Pengarah Negeri / Jurutera Projek

- Satu salinan dengan Lukisan.

(x) Juruperunding- Satu salinan dengan Lukisan





5.0 PENYIMPANAN DOKUMEN KONTRAK ASAL DAN BON PERLAKSANAAN

(i) Dokumen Kontrak Asal hendaklahdisimpan dengan selamat diPejabat di mana Dokumen Kontrak disediakan dan disimpan di tempatyang mudah untuk mendapatkannya apabila ianyadikehendaki.

(ii) Bon Perlaksanaan hendaklahdisimpan dengan selamat dalamPeti Keselamatan atau kabinet kalis

api dan ianya mudah didapatkanapabila dikehendaki.

Tandatangan Pegawai SemakanTarikh Selesai Tugasan:

Tandatangan Pegawai PengesahanTarikh Selesai Tugasan:

Tandatangan Kualiti AuditTarikh Selesai Tugasan:

*Audit Kualiti; Jika Berkenaan



DID MANUAL

VOLUME 10



CHAPTER 10

PAYMENTS



Chapter 10 – PAYMENTS

Table of Contents

Table of Contents .....................................................................................................................10-i

List of Flowcharts .................................................................................................................... 10-ii

10.1 INTRODUCTION.........................................................................................................10-3

10.2 PROCEDURES ............................................................................................................10-3

10.2.1 Advance Payment ..........................................................................................10-3

10.2.2 Interim Payment ............................................................................................10-6

10.3 PAYMENT TERMS .....................................................................................................10-10

10.4 METHOD OF VALUATION..........................................................................................10-10

10.5 REFERENCE DOCUMENTS.........................................................................................10-10

10.6 REFERENCES ...........................................................................................................10-11

APPENDIX 10A Checklist for Preparation of Advance Payment (Senarai Semakan PenyediaanBayaran Pendahuluan)…………………………..…………………………………………….….. 10A-1

APPENDIX 10B Task List for Interim Payment (Borang Tindakan Kerja BayaranInterim)…………………………..…………………………………………………………………….. 10A-3

APPENDIX 10C Checklist for Preparation of Interim Payment (Senarai Semakan PenyediaanBayaran Interim)……………….………………………………………………………………....... 10A-5




List of Flowcharts


Flowchart 10.1 Advance Payment 10-1

Flowchart 10.2 Interim Payment 10-2





1. Application for Advance

Payment by Contractor

-

2. Check documents forcompleteness

CAO

3. Prepare SupportingDocuments for AdvancePayment. Checklist for Advance

Payment

CAO

See Appendix 10A

4. Documents are in properorder?

CAO

5. Issue Payment Certificate- Form JKR 66

SO

6. Quality Audit QS/CAO/BUBK*

7. Record payment detailsand issue to FD.

8. Record payment in votebook. Prepare paymentvoucher, and sign / issuepayment voucher to AG

Division / State

FD

9. Submit to AG FD

*Quality Audit: Where payment warrant is through the DID HQ – audit by BUBK; Where payment warrant ischanneled through the State – audit by Quantity Surveyor or Contracts Officer at State.

Flowchart 10.1 – Advance Payment

7

4

3

2

1

No

5

8

Yes

6

No

Yes

9




1

2

5

8

9

3

4

No

6

7

Yes


1. 1st Valuation, or Interim Valuation

-

2. Site valuation PT / PM

3. Check documents forcompleteness, andcomputation

CAO

4. Prepare supporting

documents for payment Checklist for Interim

Payment

CAO

See Appendix 10C

5. Document is in properorder?

CAO

6. Issue Payment Certificate- Form JKR 66

SO

7. Quality Audit QS/CAO/BUBK*

8. Record payment detailsand issue documents toFD

9. Record payment in vote

book. Prepare paymentvoucher, sign and issuepayment voucher to AG

Division / State

FD

*Quality Audit: Where payment warrant is through the DID HQ – audit by BUBK; Where payment warrant ischanneled through the State – audit by Quantity Surveyor or Contracts Officer at State.

Flowchart 10.2 – Interim Payment




10 PAYMENT

10.1 INTRODUCTION


The guidelines on the preparation and checking of the payment documents, and issuance of thepayment certificate for advance payment and interim payment.

10.2 PROCEDURES

10.2.1 Advance Payment

Please refer to Flowchart 10.1 – Advance Payment.


/ Reference Generally

The advance payment shall not exceed 25% of the value of builder’s work (the Contract Sum less Prime Cost andProvisional Sums), subject to a maximum of RM 10 million.

SPP 5/2007

1 Contractor Submits Application for Advance Payment

(a) The Contractor must submit the application for advancepayment in accordance with the Contract, within 3 monthsof the possession of site.

(b) The application must be accompanied by the followingdocuments:

Letter of Acceptance duly signed and witnessed Performance Bond, or Letter of Confirmation on using

Performance Guarantee Sum Bank/insurance guarantee for advance payment. Insurance Policies and receipt issued by insurance

company Proof of registration with Socso Contractor’s Letter stating bank details, and signed by

authorized person.

For Information





/ Reference

2 Check documents for completeness

Upon receipt of the Contractor’s documents,

Check that the Contractor’s application is accompanied bythe necessary documents mentioned in Step 1

Check that each document is complete and/or in order.

Obtain confirmation from the bank or insurance companyagainst the bank or insurance guarantee.

Action By:CAO

3 & 4 Prepare the Supporting Documents for payment

Refer to Checklist for Preparation of Advance Payment (Senarai

Semakan Penyedian Bayaran Pendahuluan)

Complete and initials the Checklist for Preparation of Advance Payment.

Complete the Form JKR66.

Make six (6) copies of the completed JKR66 Form beforesigning.

The recommending officer signs the Form JKR66.

Submit Form JKR66, together with attached documents, to theSO for signature

Attach the following additional documents to the application

Approval of Tender Board / Treasury (if necessary)

Form JKR66, duly filled in with the correct information

Ensure the relevant documents are certified by a DID officer.

Fill in and initials the Tasklist (Borang Tindakan) and the

Checklist for Preparation of Advance Payment,, and attachthese to the documents.

Action By:CAO

Refer Appendix 10A

5 Issuance of Certificate of Advance Payment

If the advance payment document is duly completed, and thedocuments checked and endorsed by the relevant officers, theSO shall sign payment certificate.

Forward documents to State or HQ for Quality Audit orpayment processing, depending on the value of the Contract.

Action By:SO

Action By:CAO





/ Reference

6 Quality Audit

Quality Auditor shall check the documents are in order and arefree of errors.

Action By:BUBK

7 Recording of Payment Details

Record payment in the relevant State / HQ section, as relevant.

Make duplicates of payment documents (except paymentvoucher).

Action By:Relevant State /

Division

8 & 9 Recording Payment Details & Prepare payment voucher

Ensure that the correct amount is entered into the vote book.

Check that the documents are in order, and ensure that thepayment voucher is signed

Submit to the relevant to Accountant General for issuance of payment:

Form JKR66, payment voucher and supporting documents, together with duplicates.

Action By:Finance Division

Note: Recoupment of Advance Payment

The recoupment for advance payment only is made throughinterim payments, and in accordance with the recoupmentformula set out in the Special Provision to the Conditions of Contract.

For Information




10.2.2 Interim Payment

Please refer to Flowchart 10.2 – Interim Payment.

Step Procedures / Tasks

Action By

/ Reference

1 Generally

For contracts using Standard Form of Contract JKR 203 and203A, interim valuations must be carried out at least once amonth.

For contract using Form JKR DB/T, interim valuations must becarried out at least once a month, unless a Payment Schedule isincluded in the Contract.

Comply with the method of valuation set out in Section 10.4.

For Information

SP JPS Bil. 2/2000 &

SP JPS Bil. 4/2008

2 Interim Valuation at Site

The SO shall make a first interim valuation based on the workswhich have been executed by the Contractor including theunfixed materials delivered to or adjacent to the Works.

Ensure the total value of claim reaches to the sum appeared inthe Appendix to the Conditions of Contract (for First InterimCertificate) whilst the subsequent claims must not less than theamount appeared (subsequent Interim Certificates) in the same

Appendix.

Inform the Contractor the method of valuation adopted by DID,to avoid disputes.

If the Contractor wishes to submit his interim claims (not arequirement under the Contract), then explain and agree withthe Contractor the format of claim.

Action By: CAO

Refer Form JKR 203/203A Clause 47(a); and Form JKR DB/T Clause

50.3(b)(i)

3 & 4 Check documents, and Prepare the Supporting Documents forPayment

Upon completion of the valuation, prepare the paymentdocuments.

Refer: Task List, and Checklist for Interim Payment.

Action By:CAO

See Appendix 10B

& Appendix 10C





/ Reference

3 & 4(Cont’d)

Check documents, and Prepare the Supporting Documents forPayment (Cont’d)

1st Valuation and Certification

Generally, the SO shall issue the Certificate within fourteen (14)days from the date of such valuation stating the due amount tothe contractor i.e. estimated total value of works executed andninety (90) percent of the value of the unfixed materials andgoods delivered at site. Variation of Price (if any) shall beincluded in the valuation.

Refer to the Appendix to the Conditions of Contract for theminimum value of work to be executed including materials andgoods to be delivered before 1st Interim Certificate will be

issued.

The amount due to the Contractor must be thereon and up tothe date of valuation.

The following documents must form part of 1st payment’sdocuments (unless already submitted under the application for

Advance Payment): Letter of Acceptance duly signed and witnessed Performance Bond, or Letter of Confirmation using

Performance Guarantee Sum Insurance Policies and receipt for insurance policies issued by

the insurance company Proof of registration with Socso Contractor’s letter stating bank details, and signed by

authorized person. Consultant’s certification of works done (if using Consultant). Form JKR66 Tasklist

The copies of relevant documents shall be certified by SO orSOR.

Fill-in and initials both the Task List (Borang Tindakan Kerja) for Interim Payment and Checklist for Preparation of Interim

Payment , and attach these to the documents.

Subsequent Interim Valuation and Certification Generally, the SO shall issue the subsequent interim certificatewithin fourteen (14) days from the date of such valuationstating the due amount to the contractor i.e. estimated totalvalue of works executed and ninety (90) percent of the value of the unfixed materials and goods delivered at site. Variation of Price (if any) shall be included in the valuation.

For information

Action By:CAO

Refer Appendix 10B & Appendix

10C

For information





/ Reference

3 & 4(Cont’d)

Check documents, and Prepare the Supporting Documents forPayment (Cont’d)

Subsequent Interim Valuation and Certification (Cont’d)

Refer to the Appendix to the Conditions of Contract for theminimum value of work to be executed including materials andgoods to be delivered before the Interim Certificate will beissued.

The following documents must be form part of the paymentdocuments:

Form JKR 66

Consultant’s certification of works done (if using Consultant) Task List (Borang Tindakan Kerja) for Interim Payment, duly

filled in and initialed.

Fill in and initials both the Task List for Interim Payment andChecklist for Preparation of Interim Payment , and attach theseto the documents

Advance Payment

Where Advance Payment was made, check and ensure that theamount to be recouped is stated in the payment certificate as acontractual deduction.

Refer to the Special Provisions to the Conditions of Contract forthe recoupment formula to be applied.

Generally, the recoupment of Advance Payments shall be madewhen the value of works reaches 25% and must fully recoupedat 75% works completed.

Action By:CAO

Action By:CAO

5 Checks documents for completeness

Check that each document is complete and/or in order. Refer tothe Checklist for Preparation of Interim Payment.

Fill in and initials the Checklist for Preparation of Interim Payment.

The recommending officer (Pegawai Pengesyor) shall sign theForm JKR66.

Submit Form JKR66, together with attached documents, to the Authorised Person for signature.

Action By:CAO





/ Reference

6 Issuance of Interim Certificate

If the Interim Payment document is duly completed, and thedocuments checked and endorsed by the relevant officers, theSO/Officer Empowered (Pegawai yang Memperakukan) shallsign and issue the Interim Certificate.

Forward documents to State or HQ for Quality Audit or paymentprocessing, depending on the value of the Contract.

Action By:SO

7 Quality Audit

Quality Auditor shall check the documents are in order and arefree of errors.

Action By:BUBK

8 Recording of Payment Details

Record payment in the relevant State / HQ section, as relevant.

Make duplicates of payment documents (except paymentvoucher).

Action By:Relevant State /

Division

9 Recording Payment Details & Prepare Payment Voucher

Ensure that the correct amount is entered into the vote book.

Check that the documents are in order, and ensure that thepayment voucher is signed

Submit to the relevant to Accountant General of issuance of payment:

Form JKR66, payment voucher and supporting documents

Action By:Finance Division




10.6 REFERENCES

Please refer to the latest Treasury Circulars and DID Circulars on payments.

Treasury Instructions

(Arahan Perbendaharaan)

[1] AP103: Semua Bil Dan Tuntutan Bayaran Hendaklah Dibayar Dengan Segera


[1] Bil 7 Tahun 2006: Pindaan Ke Atas Arahan Perbendaharaan (AP103)

[2] Bil 3 Tahun 2008: Pelaksanaan Syarat Perubahan Harga Di Dalam Kontrak Kerja

DID Circulars

(Surat Pekeliling / Edaran JPS)

[1] SP JPS Bil. 2/2000: 2. Pindaan ke atas Borang JKR 66, Perakuan Pelarasan Jumlah HargaKontrak (PPJHK) dan Perakuan Muktamad

3. Pindaan Kepada Syarat-syarat Kontrak Berkaitan Bayaran

[2] SP JPS Bil 4/2008: Langkah-langkah Untuk Mempercepatkan Bayaran Interim (Pindaan kepadaPerkara 1 dalam SP JPS Bil. 2/2000)



DID MANUALVolume 10




Chapter 10

– Payments

APPENDIX 10A

Checklist for Preparation OfAdvance Payment

[Form JKR 66]

(Senarai Semakan PenyediaanBayaran Pendahuluan)




APPENDIX 10A CHECKLIST FOR PREPARATION OF ADVANCE PAYMENT(SENARAI SEMAKAN PENYEDIAAN BAYARAN PENDAHULUAN)

TAJUK

PROJEK

Untuk Tindakan


Kepada

TarikhDiterima

Oleh

Tarikh SiapSemakan

PMK 1

PMK 2

AK*


1. Pastikan penyediaan BayaranPendahuluan menggunakan BorangJKR66 (Pin. 3/99).

Tandakan

() selepassemakan

2. Pastikan permohonan Kontraktor untuk mendapatkan Bayaran Pendahuluanhendaklah dalam tempoh 3 bulan dariTarikh Milik Tapak.

3. Dokumen-dokumen yang perludisertakan bersama-sama Bayaran

Pendahuluan hendaklah seperti berikut :

(a) Keputusan Lembaga Perolehan /Surat Kelulusan KementerianKewangan / Surat KelulusanPegawai Kewangan Negeri, yangmana berkenaan.

(b) Surat Setujuterima Tender yangtelah ditandatangani oleh kontraktordan saksi.

(c) Gerenti Bank / Syarikat Insuran /

Syarikat Kewangan/Takaful bagiBayaran Pendahuluan.

(d) Gerenti Bank / Syarikat Insuran /Syarikat Kewangan / Takaful bagiBon Perlaksanaan, jika Kontraktormemilih dalam bentuk Gerenti.

(e) Surat pengesahan daripada Bank /Insuran / Syarikat Kewangan yangmengeluarkan para ( c ) di atas.

(f) Insuran Polisi Liabiliti Awam & Kerja(CAR).




BIL. KETERANGAN PMK 1 PMK 2 AK* ULASAN

3.(samb.)

Dokumen-dokumen yang perludisertakan bersama-sama Bayaran

Pendahuluan hendaklah seperti berikut :(samb.)

(g) Resit Bayaran Premium untuk PolisiInsuran CAR.

(h) Surat daripada PERKESO yangmenyatakan khusus untuk projek berkenaan sahaja

(i) Surat daripada kontraktormenyatakan No. Akaun Bank :

(i) hendaklah ditandatangani oleh

orang yang diberi kuasa.(ii) lengkap dengan Nama, alamat

dan No. Akaun Bank

4 Pastikan Gerenti bagi BayaranPendahuluan teratur dari segi

(a) Format piawai,(b) Butiran Kontrak,(c) Nilai Gerenti,(d) Tempoh Gerenti,(e) Ditandatangani dan dicop oleh

Pegawai Bank / Syarikat Insuran /Syarikat Kewangan / Takaful,

(f) Duti setem telah dibayar

5 Pastikan semua salinan-salinan dokumendipara 3 disahkan oleh pegawaikumpulanpengurusan pengurusan danprofesional.

6 Pastikan perakuan dikemukakan kepadaPegawai Penguasa atau Wakil PP Utama

untuk ditandatangani dan tindakanseterusnya.







DID MANUALVolume 10




Chapter 10

– Payments

APPENDIX 10B

Task List for Interim Payment

[Form JKR 66]

(Borang TindakanKerja Bayaran Interim)




APPENDIX 10B TASK LIST FOR INTERIM PAYMENT(BORANG TINDAKAN KERJA BAYARAN INTERIM BAGI KONTRAK

YANG WAREN PEERUNTUKANNYA DISALURKAN KE NEGERI)

Pegawai Penguasa :Tajuk Kerja :

No. Kontrak :Bayaran Interim No. :

Bil Proses Kerja TarikhPegawai

bertanggung jawab

Tandatangan

Catatan

1 Penilaian di tapak Penyelia Projek

2 Perakuan Bayaran Interim (JKR 66) siap Penyelia Projek

3 Tandatangan Pegawai Pengesyor PegawaiPengesyor

4 Hantar kepada Unit Ukur Bahan &

Kontrak JPS Negeri Penyelia Projek

5 Diterima oleh Unit Ukur Bahan &

Kontrak JPS NegeriPegawai JuruBahan/Kontrak

6 Semakan Audit Teknik Pegawai Juru

Bahan/Kontrak

7 Hantar kepada Unit Berkenaan di JPS

NegeriPegawai JuruBahan/Kontrak

8 Diterima oleh Unit Berkenaan di JPS

Negeri

Unit Projek JPS

Negeri

9 Semak Peruntukan dan Rekod bayaran Unit Projek JPS

Negeri

10 Tandatangan Pegawai Yang

Memperakukan

PegawaiPenguasa/Wakil P.P.

Jumlah Tempoh hari

11 Kemukakan kepada Bahagian Kewangan Unit Projek JPS

Negeri

12 Diterima oleh Bahagian Kewangan

13 Rekod perbelanjaan dan sedia baucer

14 Baucer bayaran ditandatangani

15 Hantar kepada Pihak Pembayar

Jumlah Tempoh * hari

JUMLAH TEMPOH KESELURUHAN * hari

Perhatian

Carta ini hendaklah dikepilkan bersama Perakuan Bayaran Interim (JKR 66) dan disimpan di dalam fail bayaranUnit Teknikal yang berkenaan.




APPENDIX 10B TASK LIST FOR INTERIM PAYMENT(BORANG TINDAKAN KERJA BAYARAN INTERIM BAGI KONTRAK

YANG WAREN PEERUNTUKANNYA DI IBU PEJABAT JPSMALAYSIA)

Pegawai Penguasa :Tajuk Kerja :

No. Kontrak :Bayaran Interim No. :

Bil Proses Kerja TarikhPegawai

bertanggung jawab

Tandatangan

Catatan

1 Penilaian di tapak Penyelia Projek

2 Perakuan Bayaran Interim (JKR 66) siap Penyelia Projek

3 Tandatangan Pegawai Pengesyor Pegawai

Pengesyor

4 Tandatangan Pegawai Yang

Memperakukan

PegawaiPenguasa/Wakil P.P.

5 Hantar kepada Bahagian Ukur Bahan &

Kontrak Ibu Pejabat JPS Malaysia Penyelia Projek

6 Diterima oleh Bahagian Ukur Bahan &

Kontrak Ibu Pejabat JPS Malaysia Jurukur Bahan

7 Semakan Audit Teknik Jurukur Bahan

8 Hantar kepada Bahagian Berkenaan di

JPS M'sia. Jurukur Bahan

9 Diterima oleh Bahagian Berkenaan di

JPS M'sia.Unit Projek Bahagian

10 Rekod bayaran Unit Projek

Bahagian

11 Kemukakan kepada Bahagian Kewangan Unit Projek

Bahagian

Jumlah Tempoh hari

12 Diterima oleh Bahagian Kewangan

13 Rekod perbelanjaan dan sedia baucer

14 Baucer bayaran ditandatangani

15 Hantar kepada Pihak Pembayar

Jumlah Tempoh * hari

JUMLAH TEMPOH KESELURUHAN * hari

PerhatianCarta ini hendaklah dikepilkan bersama Perakuan Bayaran Interim (JKR 66) dan disimpan di dalam fail bayaranUnit Teknikal yang berkenaan.



DID MANUALVolume 10




Chapter 10

– Payments

APPENDIX 10C

Checklist for Preparation OfInterim Payment

[Form JKR 66]

(Senarai Semakan PenyediaanBayaran Interim)




APPENDIX 10C CHECKLIST FOR PREPARATION OF INTERIM PAYMENT(SENARAI SEMAKAN PENYEDIAAN BAYARAN INTERIM)

TAJUK PROJEK

Untuk Tindakan


Kepada

TarikhDiterima

Oleh

Tarikh SiapSemakan

PMK 1

PMK 2

AK*

BIL. KETERANGAN PMK1 PMK 2 AK* ULASAN

1. Interim No: - sila pastikan nombor

berturutan.

Tandakan ()selepas

semakan

2. Anggaran Pembangunan: KepalaPerbelanjaan, Pecahan Kepalahendaklah diisi sama seperti dalamdokumen kontrak.

3. No. Kontrak - hendaklah diisi samaseperti dalam dokumen kontrak.

4. Tarikh Penilaian: hendaklahmengikut tarikh penilaian sebenar.

(Pastikan Perakuan diterima selewat-lewatnya dua (2) minggu selepastarikh penilaian).

5. Pastikan nilai kerja mengikut'engineer's certification' berdasarkanCPM atau penilaian tapak (jika tiada

‘engineer’s certification’).

6. Nilai kerja dilaksanakan dan amaun-amaun lain yang kena dibayarhendaklah merangkumi :

(a) Nilai kerja Kontraktor Utamatermasuk APK dan PHK,

(b) 90% daripada nilai bahan binaandi tapak,

(c) Pelarasan turun naik harga(VOP),

(d) Nilai kerja Sub-KontraktorDinamakan termasuk APK danPHK,

(e) Nilai kerja Pembekal Dinamakantermasuk APK dan PHK,

(f) Bayaran kepada Juruperunding

(Bagi Kontrak Design & Build/Turnkey).





6.(samb.)

NOTA :

(i) V.O.P. untuk kerja bangunan"Current Index" yang digunakan

adalah untuk bulan sebelumbayaran Interim dinilaikan.

(ii) V.O.P. untuk kerja kejuruteraan Awam - "Current Price" adalahuntuk bulan bayaran Interimdinilaikan.

7. KURANGAN

(a) Pastikan amaun sebenar yangtelah dibayar untuk bayaran

interim terdahulu berasaskanbaucer bayaran.

(b) Pastikan jumlah nilai terkumpulbayaran Interim yang terdahuluditolak.

8. POTONGAN

a) Pastikan bayaran WangPendahuluan telah dibuat(samaada di Peringkat Negeri

atau Ibu Pejabat KualaLumpur).

b) Semak pengiraan bayaran balik Wang Pendahuluan, jika ada.

c) Semak dan pastikan jumlahamaun potongan terdahuluuntuk Wang JaminanPerlaksanaan (WJP) adalah10% daripada nilai kerjatertakluk kepada nilai

maksimum 5% daripada hargakontrak, jika kontraktor memilihkaedah WJP.

d) Semak kadar LAD/hari dantempoh yang dikenakan dansebarang Pengecualian (jikaada) berserta dengan rujukansurat.

e) Semak potongan lain-lain jikaada (sertakan lampiranketerangan).





9. Semak pengiraan bayaran disyorkan.

10. Tandatangan Pegawai Pengesyorhendaklah pegawai yang diberikuasa dan catitkan nama dan

jawatan.

11. Perakuan Bayaran :

(a) Pastikan amaun berasingan diperakukan untuk berikut :

i) Kontraktor Utamaii) Bayaran kepada

subkontraktor/ PenerimaBayaran (pastikan Lampiran A Borang JKR 66dilengkapkan)

(b) Pastikan nilai bersih potonganWang Jaminan Perlaksanaandicatitkan untuk dikreditkandalam akaun deposit

(c) Jumlah yang perlu dibayarhendaklah digenapkan kepada

ratus yang hampir.

(d) Pastikan perakuan dikemukakankepada Pegawai Penguasa atauWakil PP Utama untuk ditandatangani dan tindakanseterusnya.







DID MANUAL

VOLUME 10



CHAPTER 11

VARIATIONS



Chapter 11 – VARIATIONS

Table of Contents



11.1 INTRODUCTION.........................................................................................................11-2

11.2 PROCEDURES ............................................................................................................11-2

11.3 REFERENCE DOCUMENTS...........................................................................................11-6

11.4 REFERENCES .............................................................................................................11-6

APPENDIX 11A Checklist for Preparation of Variation Works Order (Senarai Semakan ArahanPerubahan Kerja)…………………………..……………………………………………..………... 11A-1




List of Flowcharts


Flowchart 11.1 Variations 11-1





1. SO Instruction is required SOR/PT

2a Is it a VO?

2b Any cost implication? SOR/PT

3. Issue SOI using JKR203U SOR/SO

4. Prepare approximate VOCosts

CAO

5. Net addition to ContractSum?

-

6. Prepare and submit Application for VO Approval (Form JKR-KPK)

SOR/CAO

7. Approval by VOCommittee?

VOCommittee

Refer Chapter 5 - Authority

8. Issue Variation Order toContractor (form JKR- APK), with copy to allrelevant parties

SOR/SO

9. Contractor complies withinstruction / variationorder

SOR/PjS

10. Actual VO value more thanthe approved amount?

-

11. Submit Form JKR-KPK to VO Committee

CAO

12. F inalisation of VO Value SOR Refer Chapter 12

Flowchart 11.1 – Variations

3

2b

4

8

9

12

1

No

6

5

7

11

10

END

Yes

No

Yes

No

Yes

No

Yes

2a

Yes

No




11 VARIATIONS

11.1 INTRODUCTION


The guidelines and general procedures on the process and approval of variations works andother changes to the Contract.

Notes:

“Variation” of Works may be defined as any alteration or modification of the design, specificationand/ or Bills of Quantities of the Works as shown upon in the Contract Drawings and described orreferred to in the Contract Bills, and includes the addition, omission or substitution of any works.

The Treasury Instruction (Arahan Perbendaharaan) 202 states that each Variation must comply with

the following criteria:

The contract period has not ended when the Variation Order (APK) is issued;

The Variation shall not change or alter a major part of the original scope of works;

For additional works, the Variation works must be carried out on Site; and

For substitution of works, the Variation works must be within the original scope of contract,and the original scope of works (or substituted works) must be identifiable in the Variationworks.

11.2 PROCEDURES

Please refer to Flowchart 11.1 – Variations.


/ Reference

1, 2 and 3 SO Instruction and Variation Order

The SO may issue instructions requiring a variation and hemay sanction in writing any variation made by the Contractor.

The SO may issue instruction on any matter, which the SO is

empowered to do so under the Contract, including variationworks as described in the Contract.

SO and his representatives shall ensure and comply therequirements of Treasury Circulars 202, which stipulates thatprior approval of the relevant authority must be obtainedbefore instruction requiring work to be varied may be issued.

The instruction may or may not involve cost implications; if the instruction does not involve cost implications, use FormJKR- 203U, or otherwise use Form JKR-APK for instructionwhich incurs cost implications.

Action by :SOR/PT/SO





/ Reference

4 & 5 Prepare approximate VO Costs

Refer Checklist for Variation Works.

Prepare the estimated costs of the Variation Order (VO)works. The cost estimates should be as accurate as possiblebased on information available and be supported by details.

The circumstances upon the preparation of estimated Variation Order (VO) cost:

If the estimates show nett additional to the ContractSum, then the SOR or CAO shall prepare a Form JKR-KPK for approval by VO Committee.

If the estimates show reduction (or no addition) tothe Contract Sum, then the SO shall issue aninstruction using Form JKR-APK (Variation Order toContractor)

For very urgent works, indicative estimates or ‘ball park figures’ may be used, but the estimates must besubstantiated as soon as possible.

No Variation works should be carried out prior to the approvalof Variation Order Committee.

Action by:PM/CAO/SO

6 Application for VO Approval

Check that there is sufficient budget or allocation for the Variation Order.

The application to VO Committee shall comprise:

Application for Approval of Variation Order (FormJKR-KPK) – duly certified by the SO (see part D of theform)

VO Costs Estimates (with supporting details)

Justification for the needs of VO

Submit all documents to the VO Secretariat.

Action by : PH/CAO





/ Reference

7 Approval by VO Committee

Approval for Variation Order (VO) must be given by

(i) Variation Order Committee, or(ii) the Ministry of Finance (MoF),

depending on the Contract Sum and aggregate value of variation works.

For composition and limits of authority of the VO Committee,please refer Chapter 5.

Note that the officer who applies for the Variation Ordercannot be the chairman or member of the Variation Order

Committee.

Where approval of MoF is required, the application for VOapproval shall be checked by BUBK at the DID headquarters,and submitted through the Director General of DID.

Action by :SOR/CAO

8 Issue Variation Order to Contractor

Prepare the Variation Order (use the current Form JKR-APK)and issue to the Contractor.

All particulars in the Form JKR-APK must be correctlyinserted. All space for information / insertion must be

filled.

The date of the Variation Order is the date on which it issigned by the Authorised Party.

Description of the work to be varied must be clear andconcise.

All relevant drawings, sketches and other details areappended.

The Contract Sum shall be adjusted accordingly by the

amount stated in the (Form JKR-APK).

The SO must sign the Form JKR-APK and copied to allrelevant parties.

Action by :SOR/CAO

Refer Chapter 5 – Appendix 5A





/ Reference

9 Contractor complies with instruction / variation order

The Contractor shall acknowledge receipt and compliance

with the VO instruction (Form JKR-APK).

The Contractor is required to comply with the SuperintendingOfficer’s instruction or the Variation Order within 7 days of receipt of the same.

Action by : SOR/PjS

10 & 11 Actual VO value more than approved amount

Where the actual costs of VO is more than the approvedamount for the particular VO, the SO is required to submit theadditional costs under new application (JKR-KPK) to the

Variation Committee for approval based on the aggregate

value of VO todate.

For composition and limits of authority of the VO Committee,please refer Chapter 5.

Action by :SOR/CAO

12 Finalisation of VO Value

Every amount stated in the Form JKR-APK is provisional andtemporary only, and must be finally adjusted through FormJKR-PHK.

For adjustment of Contract Sum based on the final value of variation works, the amount stated in the JKR-PHK shall be

the difference between the final VO value and the amountstated in the JKR-APK. If there is no difference, the JKR-PHK shall state “zero”.

For information

See also Chapter 12 – Adjustment of

Contract Sum






Form JKR 203U: Arahan Melibatkan Perubahan Kerja

Form JKR-KPK: Permohonan Untuk Mendapatkan Kelulusan Perubahan Kerja

Form JKR-APK: Arahan Perubahan Kerja

Form JKR-PHK: Pelarasan Harga Kontrak

11.4 REFERENCES



[1] Bil 7 Tahun 2007: Peraturan Perubahan Kerja (Variation Order)


[1] Arahan Perbendaharaan 202: Arahan Perubahan Kerja


[1] SPJPS Bil. 2/2008: Peraturan Mengenai Arahan Perubahan Kerja dan Pelarasan Harga BagiKontrak Kerja



DID MANUALVolume 10




Chapter 11

– Variations

APPENDIX 11A

Checklist for Preparation ofVariation Works Order

[Form JKR APK]

(Senarai Semakan Arahan Perubahan Kerja)




APPENDIX 11A CHECKLIST FOR PREPARATION OF VARIATION WORKS ORDER (SENARAI SEMAKAN ARAHAN PERUBAHAN KERJA)

TAJUK PROJEK

Untuk Tindakan


Kepada

TarikhDiterima

Oleh

Tarikh SiapSemakan

PMK 1

PMK 2

AK*

No. Kontrak HargaKontrak

RM

P.P Dalam Kontrak

Had Kewangan PK P.P RM

Jumlah Nilai APK Tambahan Yg. Telah LulusJumlah Nilai APK KuranganJumlah Peratusan APK Tambahan Yang Telah LulusBil. APK Yang Telah Dikeluarkan

RMRM%

Tarikh TerimaPermohonan

No. APK YangDisemak

Tajuk Kerja APK

Nilai Anggaran APK (Sertakan butiran anggaran/pengesahan anggaran)

RMKURANGAN/TAMBAHAN


A PK KURANGAN - Pastikan :Tandakan ()selepassemakan

1. Ada surat permohonan dari Jabatan/Kementerian Pelanggan yangditandatangani oleh Pegawai DiberiKuasa, jika PK diminta oleh Pelanggan.

2. Nilai bersih adalah hasil penilaian PK untuk bahagian/elemen/komponen kerjayang sama.

3. Kerja tidak diperlukan dan tidak akandilaksanakan.

B PK TAMBAHAN – Pastikan :

1. Ada surat permohonan dariJabatan/Kementerian Pelanggan yangditandatangani oleh Pegawai Diberi

Kuasa, jika PK diminta oleh Pelanggan.





B PK TAMBAHAN (samb…)

2. Skop kerja dirangkumi oleh Kontrak (within scope of Contract).

3. Arahan perlaksanaan kerja masih dalamtempoh Kontrak.

4. Perlaksanaan kerja tidak menyebabkangangguan kepada kemajuan kerja/tempohpenyiapan Kontrak.

5. Peruntukan mencukupi untuk melaksanakan kerja.

6. Surat kelulusan KementerianKewangan/Perbendaharaan Negeri jika PK menyebabkan nilai jumlah harga Kontrak melebihi peruntukan projek.

7. Surat kelulusan Ketua Setiausaha Kem.Kewangan jika nilai PK Tambahanmelebihi 30% atau RM 6.0 Juta dariJumlah Harga Kontrak mengikut yangmana lebih rendah.

C BORANG APK

1. Format Borang yang digunakan adalahJKR-APK yang terkini

2. Satu Borang APK bagi satu PK

3. Tandatangan hendaklah P.P. yangdinamakan dalam Kontrak




* Audit Kualiti; Jika Berkenaan



DID MANUAL

VOLUME 10



CHAPTER 12

ADJUSTMENT OF CONTRACT SUM



Chapter 12 – ADJUSTMENT OF CONTRACT SUM

Table of Contents



12.1 INTRODUCTION.........................................................................................................12-2

12.2 PROCEDURES ............................................................................................................12-2


12.4 REFERENCES .............................................................................................................12-5

APPENDIX 12A Checklist for Adjustment of Contract Sum (Senarai Semakan Penyediaan PelarasanHarga Kontrak)…………………………..……………………………………………..……………. 12A-1




List of Flowcharts


Flowchart 12.1 Adjustment of Contract Sum 12-1





1. Adjustment to ContractSum is required

-

2. Determine if and whensuch adjustment can bemade. Make the

necessary adjustmentsfor:

CAO

(a) Variation Orders

(b) Adjustment for PrimeCost Sums

(c) Adjustment for Provisional Sums

(d) Remeasurement of Provisional Quantities

(e) Variation of Prices

(f) Approved contractualclaims

(g) Errors or omissions inBills of Quantities

3. Issue the Certificate of Adjustment of Contract

Sum (Form JKR- PHK)

SO/CAO

Flowchart 12.1 – Adjustment of Contract Sum

1

2

3




12 ADJUSTMENT OF CONTRACT SUM

12.1 INTRODUCTION


The guidelines and general procedures for the adjustment of Contract Sum.

12.2 PROCEDURES

Please refer to Flowchart 12.1 – Adjustment of Contract Sum.


/ Reference

1 Generally

The Contract Sum shall be adjusted upon the issuance of JKR- APK to indicate the approved temporary value.

Every JKR-APK must be adjusted through JKR-PHK based onthe approved amount in JKR-KPK regardless of its value ischanged or not. However the value shows in the Form JKR-PHK is net difference between temporary value and ultimatevalue.

For Information

See SPP 5/2007 - Peraturan Pelarasan

Harga Kontrak

2 Adjustment of Contract Sum

Refer to Checklist for Adjustment of Contract Sum.

Determine the reasons for adjustment of Contract Sum. It ispermitted under the following circumstances only:

Action by: CAO

Refer: Appendix 12A

a) Variation Orders

Every issuance of JKR-APK must be followed by the issuanceof Form JKR-PHK.

The provisional amount stated in the JKR-APK must befinalized through Form JKR-PHK, even if there is no differencebetween the provisional amount and the final value of the

Variation works.

Check that the Variation Order (JKR-APK) is issued.

The adjustment is made as soon as the value of the variationwork is certified.

Refer Chapter 11 - Variations





/ Reference

b) Adjustment of Prime Cost Sums

Check that the works is awarded to the nominated sub-

contractor/ supplier. Omit the original PC Sum and add theawarded NSC’s/ NS’s contract sum and profit and attendancewhich is allowed in Contract.

The final adjustment is made after completion of works andfinal cost is ascertained.

Refer also Chapter 20

– PC and Provisional Sum.

c) Adjustment of Provisional Sums

The Provisional Sums may be expended as follows:

Works shall carried out by Main Contractor,

Works shall be omitted from Contract, and tenderedout to third party, or Works shall be carried out by Nominated sub-

contractor / nominated supplier.

If the works under a Provisional Sum is carried out by NSC/NS, and if the Main contractor is entitled to ‘profit andattendance’ stated under the terms of the Contract and DIDcircular, then this must be included in the PHK.

Ensure ‘Borang E’ and ‘Borang F’ (where applicable) is signedby Authorised Person.

Check that the work or supply under a provisional sum isapproved in accordance with the DID procurementprocedures.

The adjustment is made as soon as the net costs of the works / supply is approved.

Refer also Chapter 20

– PC and Provisional

Sum

d) Remeasurement of Provisional Quantities

The final remeasurement to the Provisional Quantities is madeas soon as works is completed and the quantities can beaccurately measured.

If there is a net increase in quantities, approval from theCommittee must be obtained for the additional quantities.

If there is further increased upon the approval of additionalworks, the approval by the same or higher ranking of Committee must be obtained using Form JKR-KKS. Refer tothe guidelines in SPP7/2007 Lampiran V.

If no nett increased or changed in quantities, no approval isrequired but still need to be adjusted.

Please refer to the current Treasury

Instruction No. 202,

Schedule 3

Refer to the Guidelines in SPP

7/2007 - Lampiran V.





/ Reference

e) Variation of Prices

The Variation of Prices exercise must be carried out monthly

in Interim Payment, and the final adjustment is made afterthe whole of the Works is completed.

For the Civil Works, ensure the adjustments made must notexceed the quantities allowed in Contract.

The valuation and calculation must be in accordance with theSpecial Provisions to the Conditions of Contract.

Please refer to SPP 3/2008

f) Approved Contractual Claims

The adjustment to the Contract Sum may be made after the

contractual claims had been approved by the ClaimCommittee, or Ministry of Finance, as the case may be.

Ensure every claim by Contractor must be checked andevaluate by SO prior forward to Claim Committee. Five (5)copies applications must be attached with SO report beforesend to Claim Committee Secretariat.

g) Errors in Bills of Quantities

The error of quantities/ or error in description/ or omission of works in the Bills of Quantities is not considered a variation of works, but to be adjusted through Form JKR-PHK.

This adjustment is applicable to contracts let under Form JKR,under Clause 26.

3 Approval of Certificate of Adjustment of Contract Sum

Check that all the details are correct.

The Form JKR- PHK must be signed by the SuperintendingOfficer (or Project Director, as the case may be) named in theContract.

Action by: CA

Action by: CA






Permohonan Kelulusan Tambahan Kuantiti Sementara (Borang D)

Permohonan Kelulusan Wang Peruntukan Sementara (Borang F)

Perakuan Pelarasan Harga Kontrak (Borang JKR-PHK Pind. 1/2001)

Borang Kelulusan Kuantiti Sementara (JKR-KKS)

12.4 REFERENCES

Please refer to the latest Treasury Circulars and DID Circulars on the adjustment of contract sum.


[1] Bil 7 Tahun 2007: Peraturan Arahan Perubahan Kerja (Variation Order)

[2] Bil 3 Tahun 2008: Pelaksanaan Syarat Perubahan Harga Di Dalam Kontrak Kerja

[3] Bil 5 Tahun 2007: Peraturan Pelarasan Harga Kontrak

Treasury Instructions(Arahan Perbendaharaan)

[1] AP 202: Definisi dan Kriteria Arahan Perubahan Kerja


[1] SPJPS Bil. 3/2008: Peraturan Mengenai Arahan Perubahan Kerja dan Pelarasan Harga BagiKontrak Kerja

[2] SPJPS1/2007: Peraturan Mengenai Wang Peruntukan Sementara



DID MANUALVolume 10




Chapter 12

– Adjustment of Contract Sum

APPENDIX 12A

Checklist forAdjustment of Contract Sum

[Form JKR PHK]

(Senarai Semakan PenyediaanPelarasan Harga Kontrak)




APPENDIX 12A CHECKLIST FOR ADJUSTMENT OF CONTRACT SUM (SENARAI

SEMAKAN PENYEDIAAN PELARASAN HARGA KONTRAK)

TAJUK PROJEK

Untuk Tindakan


Kepada

TarikhDiterima

Oleh

Tarikh SiapSemakan

PMK 1

PMK 2

AK*

No. Kontrak Harga Kontrak RM

P.P Dalam Kontrak

Had KewanganPHK P.P

RM

Jumlah Nilai PHK Tambahan Yang Telah Dikeluarkan

Jumlah Nilai PHK Kurangan Yang Telah DikeluarkanJumlah Bersih PHK TerkumpulBilangan PHK Yang Telah Dikeluarkan

RM

RMRM

Tarikh TerimaPermohonan

No. PHK YangDisemak

Tajuk KerjaPHK

Nilai Anggaran PHK (Sertakan butiran anggaran/pengesahan anggaran)

RMKURANGAN/TAMBAHAN


BHG. 1 TUJUAN PHK(Pilih Yang Berkenaan)

Tandakan ()

selepassemakan

A MEMUKTAMADKAN APK.

1. Kelulusan J/K PHK mengikut AP 202.2dalam Borang JKR - KPK (Terkini) bagi PHK Tambahan sahaja.

2. Pengukuran kuantiti yang berkenaan telahdimuktamadkan

3. Kadar Harga yang berkenaan telahdimuktamadkan

B PELARASAN WANG KOS PRIMA

1. Kerja telah diawadkan kepadasubkontraktor/pembekal.

2. Jumlah keuntungan dan caj layananKontraktor telah diambilkira.

3. Jumlah Wang Kos Prima termasuk jumlahkeuntungan dan caj layanan di dalamKontrak telah diselaraskan.

4. Pastikan pelarasan mengambilkira PK

ke atas kerja Wang Kos Prima.





BHG. 1(samb.)

TUJUAN PHK (samb.)(Pilih Yang Berkenaan)

C PERBELANJAAN WANG PERUNTUKANSEMENTARA

1. Jumlah harga kerja, perkhidmatan ataubekalan telah ditentukan mengikut tatacaraperbelanjaan Wang Peruntukan Sementaramengikut panduan proses perolehan kerja.

2. Jumlah yang diperuntukan di dalam Kontrak sebagai Wang Kos Sementara untuk kerja,perkhidmatan atau bekalan telahdiselaraskan.

3. Kelulusan Pegawai jika jumlah nilai kerja,perkhidmatan atau bekalan yangdijangkakan melebihi 30% daripada jumlahyang diperuntukan di dalam Kontrak,kecuali perolehan kerja /perkhidmatan /bekalan diluluskan oleh LembagaPerolehan. Rujuk SP JPS 1/2007.

D PENGUKURAN SEMULA KUANTITISEMENTARA

1. Pengukuran kuantiti sementara di dalamKontrak telah dimuktamadkan.

2. Kelulusan Jawatankuasa Tambahan KuantitiSementara mengikut A.P. 202 Jadual IIIdalam Borang JKR - KKS (jika perlu )

E PERLAKSANAAN SYARAT TURUN NAIK HARGA

1. Kesemua perkiraan bulanan turun naik harga hingga tarikh siap Kontrak telahdiselesaikan.

2. Semua Pelarasan Harga Kontrak diluluskan.

3. Pelarasan perkiraan turun naik harga telahdisediakan apabila keseluruhan kerja didalam Kontrak telah disiapkan.

F KELULUSAN TUNTUTAN KONTRAKTOR

1. Pastikan kelulusan J/K Tuntutan.

2. Sertakan kelulusan Kementerian Kewangan / Perbendaharaan Negeri bagi tuntutan ex- gratia dan tuntutan di luar terma Kontrak.

3. Butiran Penilaian Jumlah Amaun Tuntutanyang diluluskan disertakan.





BHG. 1(samb.)

TUJUAN PHK (samb.)(Pilih Yang Berkenaan)

G KESILAPAN KUANTITI/PENINGGALANKERJA DALAMSENARAI KUANTITI

1. Butiran perkiraan jumlah harga akibatkesilapan/peninggalan kerja dalam SenaraiKuantiti disediakan.

2. Surat pengesahan mengenaikesilapan/peninggalan kuantiti daripadaPejabat / Perunding yang menyediakanSenarai Kuantiti berkenaan.

BHG. 2 BORANG PELARASAN HARGA KONTRAK (JKR-PHK)

1. Format Borang yang digunakan adalah JKR-PHK yang terkini.

2. Pelarasan harga kontrak dimasukan didalam Bayaran Interim.

3. Tandatangan hendaklah Pegawai Penguasayang dinamakan dalam Kontrak.







DID MANUAL

VOLUME 10



CHAPTER 13

DELAYS AND

EXTENSION OF TIME



Chapter 13 – DELAYS AND EXTENSION OF TIME

Table of Contents



13.1 INTRODUCTION ............................................................................................................13-3

13.2 PROCEDURES................................................................................................................13-3

13.3 DELAY AND EXTENSION OF TIME ..................................................................................13-5

13.4 PURPOSE OF EXTENSION OF TIME PROVISIONS ............................................................13-5

13.5 GROUNDS FOR EXTENSION OF TIME IN STANDARD FORMS OF CONTRACT.....................13-5

13.6 POINTS TO REVIEW FOR CONSIDERATIONS OF EXTENSION OF TIME .............................13-6

13.7 METHODS FOR ASSESSMENT OF EXTENSION OF TIME ...................................................13-6


13.9 REFERENCES.................................................................................................................13-7

APPENDIX 13A Checklist for the Preparation of Certificate of Delay and Extensionof Time (Senarai Semakan Penyediaan Perakuan Kelewatan danLanjutan Masa) …………………………………………………………………………………..….. 13A-1




List of Flowcharts


Flowchart 13.1 Delay 13-1

Flowchart 13.2 Extension of Time 13-2




YES NO

YES

REFER TO CHAPTER 14 -NON-COMPLETION

Flowchart 13.1 – Delay

Delay become apparent; SOR issues warningletter to Contractor

Contractor to explain / issue letter explaining onreasons of delay

Acceptance

SOR to issue warning letter toContractor informing on his intention

to issue Certificate of Non-Completion and impose Liquidated

and Ascertained Damages

Reasons of delayare acceptable asper contract?

Contractor to continue work and at thesame time SOR to prepare Certificate

of Non-Completion for the approvaland signature of Authorised Party

Prepare Certificate of Delay and Extensionof Time for approval and signature of

Authorised Party

NO





1. Notice of Delay and Application for extensionof time.

-

2. Assess the application forextension of time; reasonsfor delay and quantum of delay.

SOR

3. Contractor eligible forextension of time?

SOR

4. Prepare report andCertificate of Delay andExtension of Time.Submit for the approval of Authorised Party.

SOR Refer: Checklist for

Preparation of Certificate of

Delay and Extension of

Time 5. Check report of Delay and

Extension of TimeCAO

6. Issue Certificate of Delayand Extension of Time tothe Contractor.

SOR

7. Completion of Works isdelayed and there is nomatter entitling theContractor to an extensionof time? Issue warningletters, and if delayed

beyond Date forCompletion then issueCertificate of Non-Completion and imposeLiquidated and Ascertained Damages.

- Refer: Chapter 14

Flowchart 13.2 – Extension of Time

1

6

2

4

5

No

Yes

3

7

Yes

No




13 DELAYS AND EXTENSION OF TIME

13.1 INTRODUCTION


An overview of the delay and extension of time provisions and procedure for works contracts The standard forms of contract use for DID projects

13.2 PROCEDURES

Please refer to Flowchart 13.1 – Delay and Flowchart 13.2 – Extension of Time.


/ Reference

1 Notice of Delay and Application for extension of time

Contractor to put in application for extension of time as soonas it becomes apparent that the progress of the Works isdelayed.

Contractor to extent Performance Bond and all Insurancesuntil the estimated new completion date.

For information

2 Assess the application for extension of time

It is the duty of the SOR to review the extension of timeapplication based on the supporting documents submitted by

Contractor.

SOR to assess reasons and quantum of delay as allowed andacceptable grounds in contract.

Action by: SOR

Refer : AP201 – Perubahan Dan

Pelanjutan Tempoh Kontrak Untuk

Kontrak Bekalan Dan Perkhidmatan

3 Contractor eligible for extension of time?

If Contractor is eligible, determine new Date of Completion.If not eligible, go to step 7.

Action by: SOR

4 Prepare report and Certificate of Delay and Extension of Time. Submit for the approval of Authorised Party

After determining new Date for Completion, prepare reportof Delay and Extension of Time complete with grounds,quantum and calculation.

Submit report and Certificate of Delay and Extension of timefor approval from Authorised Party.

Use the latest Form JKR 203T.

Action by: SOR

Refer to Checklist for the Preparation of

Certificate of Delay and Extension of

Time.

5 Check report of Delay and Extension of Time

Submit the report to the CAO for verification.

Action by: CAO





/ Reference

6 Issue Certificate of Delay and Extension of Time to theContractor

As soon as it is approved issue to Contractor the Certificateof Delay and Extension of Time and inform on new Date forCompletion.

Action by: SOR

7 Completion of Works is delayed and there is no matterentitling the Contractor to an extension of time?

Refer Chapter 14 – Non-completion

For information

Refer: Chapter 14 – Non-completion




13.3 DELAY AND EXTENSION OF TIME

Most construction contracts will specify a time for completion. The contractor is obliged to completethe works within the stipulated date subject to any extension of time.

Time is of the essence is a phrase loosely used in construction contracts to underscore theGovernment’s insistence on the contractor’s performance obligation by the stipulated date of completion. It often has to do with extension of time application by contactors and for disruption anddelays with related money application in the form of direct loss and/or expense application and onthe Government’s side, the right to Liquidated And Ascertained Damages for delays on the part of the Contractor.

Time will be at large where the extensions of time provisions have been improperly applied oradministered, or where the original time for completion has been waived.

13.4 PURPOSE OF EXTENSION OF TIME PROVISIONS

For the Government

Enables to fix a new completion date Keeps alive the Government’s right to Liquidated And Ascertained Damages

For the Contractor

Reduces the liability to pay Liquidated And Ascertained Damages May entitle to claim for prolongation costs incurred

Other consequences

Avoids time being at large Extinguishes the previously issued certificate of non-completion (if any)

13.5 GROUNDS FOR EXTENSION OF TIME IN STANDARD FORMS OF CONTRACT

The grounds of extension of time allowed in JKR 203A form of contract is under Clause 43: Delaysand Extension of Time as follows:-

a) Force majeureb) Exceptionally inclement weatherc) Instructions consequential upon disputes with neighbouring ownersd) Fire or other insurable damagee) Compliance with S.O’s / P.D.’s instruction for discrepancies, variations, date of commence

and completion or postponementf) Late issue of instruction, drawings, levels or instruction in regards to NSC/NSg) Delay in giving possession of siteh) Civil commotion, strike or lockouti) Delay by artists, tradesmen and other direct contractors

j) Shortages of labour or materialsk) Delay by NSC/NS

In JKR Design & Build / Turnkey Contract (2002 Edition) the relevant clause for Delay and Extensionof Time is found in Clause 45.




Other requirements related to submission of extension of time application by contractor include:-

Notice Provisions

a) Provide advance warning of delays so that necessary mitigation measures can be

undertaken before it become too lateb) When it becomes reasonable apparent

13.6 POINTS TO REVIEW FOR CONSIDERATIONS OF EXTENSION OF TIME

It is the duty of the SOR to review the extension of time claim.

a) Records and Contract Provisions- Actual facts and record are critical- Programmes and notices should not be ignored or left

b) Sequence of works

- The order in which works logically have to take place

c) Critical paths- Those items which must be completed in a certain order

d) Use of float time- Spare time / capacity in the programme between critical events- Over estimation of activity durations

e) Ownership of float- As a general rule, the party which needs it uses it

f) Mitigation measures undertaken by contractor- Limitation of actual delay impact- Contractor must progress work diligently

g) Contractual duties- Contractor must limit the impact of any delay- S.O / P.D. should grant extension of time as the works progress, wherever possible

h) Concurrency- A number of competing connected events- A number of unrelated events occurring at the same time

i) Dominant cause

- The event which really causes the delay- Usually determined by using as-built programmes / critical path analysis

13.7 METHODS FOR ASSESSMENT OF EXTENSION OF TIME

a) Based on programme analysis – Critical Path Method (CPM) / As built

b) Must demonstrate actual cause and subsequent event

c) Net vs. Gross Assessments- Granted extension of time to be added to previous Completion Date- Assessment based upon time related to the relevant event

- Not a consideration of when the event actually occurred




d) Nominated Sub-Contractors or Nominated Supplier- Delays caused by NSC / NS (such delay shall be cause by the same reasons affecting

their work as stated in item 13.5 (a) – (i)) are acceptable grounds provided theContractor has done all possible to mitigate loss of time

e) Direct Contractors- Delays caused by Direct Contractors are not acceptable grounds


Please refer to Volume 10A for the standard reference or sample documents mentioned in theprocedures or processes outlined in this Chapter.

Form JKR 203T (Pin. 4/83) : Perakuan Kelambatan dan Lanjutan Masa

13.9 REFERENCES

Please refer to the latest Treasury Circulars and DID Circulars on the administration of delays andextension of time.

Treasury Circular(Surat Pekeliling Perbendaharaan / Surat Arahan Perbendaharaan)

[1] Surat Arahan Perbendaharaan S/K.KEW/PK/PP/1100/000000/10/31 Jld. 22 (7) 16 Mei 2007:Pelanjutan Masa (Extension of Time) Bagi Kontrak Projek Kerja


[1] AP 201: Perubahan Dan Pelanjutan Tempoh Kontrak Untuk Kontrak Bekalan Dan Perkhidmatan






DID MANUALVolume 10




Chapter 13 – Delays and Extension of Time

APPENDIX 13A

Checklist for thePreparation of Certificate of

Delay and Extension of Time

[Form JKR 203T]

(Senarai Semakan PenyediaanPerakuan Kelewatan dan Lanjutan Masa)




APPENDIX 13A CHECKLIST FOR THE PREPARATION OF CERTIFICATE OF DELAY AND EXTENSION OF TIME (SENARAI SEMAKAN PENYEDIAANPERAKUAN KELEWATAN DAN LANJUTAN MASA)

TAJUK PROJEK

Untuk Tindakan


Kepada

TarikhDiterima

Oleh

Tarikh SiapSemakan

PMK 1

PMK 2

AK*


1. (i) Perakukan Kelambatan danLanjutan Masa hendaklahdisediakan sebaik sahaja tempohkelambatan dapat ditentukan, danseboleh- bolehnya tidak lewatdaripada dua bulan sebelumberakhirnya tempoh siap kontrak.

Tandakan (

)selepas semakan

(ii) Pastikan Kontraktor telahmengemukakan permohonan untuk lanjutan masa secara bersuratdengan menyatakan alasan- alasan

kelewatan, tempoh lanjutan masayang diperlukan dan sebagainya.

(iii) Pastikan semua polisi Insuran, BonPerlaksanaan (sekiranyarecoupment belum habis dibuat)telah dilanjutkan oleh kontraktoruntuk tujuan lanjutan masa ini.Sekiranya kontraktor gagalmelanjutkan polisi insuran, PMK hendaklah menguruskan pelanjutan(hendaklah ditolak daripada wangyang kena bayar kepadakontraktor).

2. Borang yang digunakan ialah JKR 203Tyang terkini.

Muka surat 1 (Borang 203T)

3. KERAJAAN – bermaksud ‘KERAJAANMALAYSIA’ bagi projek Persekutuanatau ‘KERAJAAN ......’ BAGI PROJEK Negeri.





4. PKLM No. – sila pastikan nomborberturutan.

5. Rujukan – sila masukkan nombor failprojek pejabat Pegawai Penguasa yangmenyediakan.

6. Pejabat – isikan alamat pejabat PegawaiPenguasa.

7. Tarikh - Tarikh PKLM ditandantanganioleh Pegawai Penguasa.

8. Kepada ( Nama dan alamat kontraktor),Kelas Pendaftaran, No. kontrak dannama kontrak - hendaklah sama sepertiyang terdapat di dalamdokumen kontrak.

9. Bahagian - masukkan nama penyiapanbahagian- bahagian(jika berkenaan) sepertimana yangdinyatakan dalam lampiran kepadaSyarat-Syarat Kontrak JKR 203/203A semakan 10/83 Klausa 41.

10. Para 1 –

(i) Masukkan Tarikh Siap Asal atauLanjutan yang telah diluluskansebelumnya.

(ii) Nyatakan sebab-sebab iaitu alasan-alasan yang menyebabkanberlakunya kelewatan ataukelambatan kerja sepertimana yangdibenarkan di bawah klausa 43Syarat-syarat Kontrak. Lampirkan

sinopsis dan dokumen-dokumensokongan yang lengkap danmunasabah sesuai dengan setiapalasan/sebab- sebab yang diberi.

iii) Klausa - sila nyatakan sub-klausauntuk klausa 43 yang bersesuaiandengan setiap alasan/sebab yangdikemukakan.





10(Samb.) (iv) Tempoh Kelambatan dan Lanjutan

Masa – nyatakan tempoh dalamkiraan hari dan tarikh sebenar

berlakunya kelambatan tersebut (didalam kurungan)

Muka surat 2 (Borang 203T)

11 Para 2 - masukkan jumlah bilangan hariyang diperakukan untuk lanjutan masa.Jumlah hari bertindih hendaklah ditolak dari jumlah keseluruhan.

12 Para 3 –

(i) Tarikh siap yang ditetapkanhendaklah sama seperti mana yangdinyatakan di dalam Para1(i).

(ii) Tarikh dilanjutkan ialah tarikh barusetelah tarikh siap ditetapkandicampurkan dengan jumlah haripada Para 2 iaitu :-

Tarikh lanjutan masa baru = Tarikh

Para 1 + bilangan hari Para 2

Maklumat Tambahan

13 Sebarang maklumat tambahan seperti :-

(i) Peratus Kemajuan Kerja Sebenarpada tarikh PKLM dikemukakan.

(ii) Nombor dan tempoh lanjutan

Gerenti Bon Perlaksanaan, Gerentibayaran pendahuluan, polisi daninsurans CAR. Endorsement asaluntuk tiap-tiap polisi tersebuthendaklah disertakan bersama-sama PKLM ini.

boleh dimasukkan dalam sinopsissebab-sebab lanjutan masa yangdilampirkan bersama PKLM.

14 Tandatangan, Nama dan JawatanPegawai Penguasa





15 Tandatangan, Nama dan JawatanPegawai Yang DiberikuasaMenandatangani PKLM




* Jika berkenaan



DID MANUAL

VOLUME 10



CHAPTER 14

NON- COMPLETION



Chapter 14 – NON-COMPLETION

Table of Contents



14.1 INTRODUCTION ............................................................................................................14-3

14.2 PROCEDURES................................................................................................................14-3

14.3 NON-COMPLETION........................................................................................................14-4

14.4 PREPARATION AND SUBMISSION OF CERTIFICATE OF NON-COMPLETION ......................14-5


14.6 REFERENCES.................................................................................................................14-6

APPENDIX 14A Checklist for the Preparation of Certificate of Non-Completion(Senarai Semakan Penyediaan Perakuan Kerja Tidak Siap…………….……………...14A-1




List of Flowcharts


Flowchart 14.1 Delay 14-1

Flowchart 14.2 Non-Completion Procedure 14-2




YES NO

YES

REFER TO CHAPTER 13 -DELAY AND EXTENSION TIME

Flowchart 14.1 – Delay

Delay become apparent; SOR issues warningletter to Contractor

Contractor to explain / issue letter explaining onreasons of delay

Acceptance

SOR to issue warning letter toContractor informing on his intention

to issue Certificate of Non-Completion and impose Liquidated

and Ascertained Damages

Reasons of delayare acceptable as

per contract?

Contractor to continue work and at thesame time SOR to prepare Certificate

of Non-Completion for the approvaland signature of Authorised Party

Prepare Certificate of Delay and Extensionof Time for approval and signature of

Authorised Party

NO





1. Warning letter / notice tocontractor on issuance of Certificate of Non-Completion, and intentionto impose Liquidated and Ascertained Damages.

SOR

2. Prepare Certificate of Non-Completion

SOR

3. Verify the Certificate of Non-Completion forcompleteness andissuance is valid

CAO

4. Issue Certificate of Non-Completion and issueletter on intention toimpose LAD

SOR Refer : Form

JKR 203X

5. Impose LAD SOR

6. Inform Contractor onamount of deduction of LAD; if necessary

SOR

Flowchart 14.2 – Non-Completion Procedure

1

3

2

6

4

5




14 NON-COMPLETION

14.1 INTRODUCTION


An overview of the non-completion provisions and procedure for works contracts

14.2 PROCEDURES

Please refer to Flowchart 14.1 – Delay and Flowchart 14.2 – Non-Completion Procedure.


/ Reference

1 Warning letter / notice to contractor on issuance of Certificate

of Non-Completion (CNC) and LAD

To issue warning letter to Contractor that Certificate of Non-Completion will be issue due to the late completion, and thatLiquidated and Ascertained Damages will be imposed.

Action by: SOR

2 Prepare CNC

Ensure that the latest Form JKR 203X is used.

Complete the form, and make sure that all the particulars arecorrect. Refer Section 14.4

Action by: SOR

3 Verify the CNC

Before issuance of the CNC, CAO to check on thecompleteness and that the reasons for the issuance is valid.

Action by: CAO

4 Issue CNC

When Date for Completion is due and the Works has notreached practical completion, issue Certificate of Non-Completion to avoid time at large.

Ensure that all related Insurance Policies and PerformanceBond are submitted accordingly, and still valid.

Issue instruction to Contractor to extend the validity of theInsurance Policies and Performance Bond, if necessary.

Action by: SOR





/ Reference

5 Impose LAD

The Government shall impose LAD when Certificate of Non-Completion is issued.

Ensure that the LAD is deducted in the next Interim PaymentCertificate.

If there is insufficient payment due to the Contractor to coverthe amount of LAD, then consider recovering the LAD fromthe Performance Bond.

Consider whether there are sufficient grounds to determinethe employment of the Contractor. If yes, go the Chapter 16

– Determination.

Action by: SOR

6 Inform Contractor on amount of deduction of LAD

When LAD is imposed, then inform the Contractor in writingon the amount of deduction of LAD.

Action by: SOR

14.3 NON-COMPLETION

If the Contractor fails to complete the Works by the Date for Completion stated in the ContractDocument or within any extended time under Clause 43 (delay and extension of time), then the S.Oshall issue the Certificate of Non-Completion.

Due to the delay of completing the Works, the Contractor bears the loss or damage suffered by theGovernment. Government has the right to impose liquidated and ascertained damages. Liquidateddamages are intended to be the estimated damages that would be incurred as a result of delay tothe Works for which the Contractor is responsible.




14.4 PREPARATION AND SUBMISSION OF CERTIFICATE OF NON-COMPLETION

Some basic rules must be complied with in the preparation of the Certificate of Non-Completion asfollows:-

a) All particulars in the Certificate must be correctly inserted. Particulars of the Contract andthe Contractor inserted in the Certificate must be the same as those in ContractDocument. No space allowed for insertions in the Certificate, except the date of thesame, shall be left blank. The date of the Certificate shall be the date on which theofficer empowered to do so signs the Certificate.

b) The periods of coverage of the insurance policies must be extended to the expected dateof completion of the Work.

When submitting the Certificate of Non-Completion for approval, particulars of the Contract andother information must be provided on a standard form. In addition, the following must be submittedtogether:-

a) A statement by the recommending officer as to whether he has studied thecircumstances of the case in depth and assessed the ability of the Contractor to proceedand complete the Work; and whether in his opinion, imposition of LAD will ensurecompletion of work the soonest and his reasons for thinking so.

b) A description of the progress of work achieved by the Contractor and the work programme of the balance of work may be completed.

c) Information whether there has been any cause of delay for which Government to beresponsible for and if so, whether a reasonable extension of time has been granted andwhether there is any foreseeable cause of delay for which the Government may be

responsible.

Only the officers empowered can approve the Certificate of Non-Completion. After approval, theoriginal copy must be sent to the Contractor by A.R Registered post. A copy of the CNC must also bedistributed to the parties listed for distribution in the Certificate.



Sample of Warning Letter

Form JKR 203X (Pin. 1/83) : Certificate of Non-Completion

Ringkasan Ke Atas Kontrak Yang Akan Dikeluar “Perakuan Kerja Tidak Siap”




14.6 REFERENCES

Please refer to the latest Treasury Circulars and DID Circulars on the administration of delays andissuance of certificate of non-completion.


Nil


Nil






DID MANUALVolume 10




Chapter 14 – Non- Completion

APPENDIX 14A

Checklist for the Preparation ofCertificate of Non-Completion

[Form JKR 203X]

(Senarai Semakan PenyediaanPerakuan Kerja Tidak Siap)




APPENDIX 14A CHECKLIST FOR THE PREPARATION OF CERTIFICATE OF NON-COMPLETION (SENARAI SEMAKAN PENYEDIAAN PERAKUANKERJA TIDAK SIAP)

TAJUK

PROJEK

Untuk Tindakan


Kepada

TarikhDiterima

Oleh

Tarikh SiapSemakan

PMK 1

PMK 2

AK*


1 Notis untuk Mengenakan Ganti Rugi

Tandakan ()

selepassemakan

1.1 Sila pastikan surat-surat amaran telahdikeluarkan. Untuk surat amaranterakhir, sila pastikan format yangditetapkan digunakan.

2 Penyediaan dan MengemukakanPerakuan untuk Kelulusan

2.1 Pastikan borang yang digunakan adalahborang JKR 203X yang terkini.

2.2 Cara-cara pengisian borang, sila rujuk kepada perkara 5.

2.3 Pastikan semua polisi Insuran, BonPerlaksanaan serta Gerenti untuk bayaran Pendahuluan (sekiranyarecoupment belum habis dibuat) telahdilanjutkan oleh kontraktor. Sekiranyakontraktor gagal melanjutkan polisiInsuran, PMK hendaklah menguruskanpelanjutan (hendaklah ditolak daripadawang yang kena bayar kepada

kontraktor).

2.4 Perakuan Kerja Tidak Siap yang dimajukahendaklah dikepilkan bersama-samaborang ringkasan maklumat piawai.Maklumat- maklumat tambahan berikuthendaklah disertakan :

2.4.1 Huraian mengenai kemajuankerja yang telah dicapai olehkontraktor dan baki kerja yangakan dilaksanakan dan perkiraan

bila baki kerja tersebut bolehdilaksanakan





Penyediaan dan MengemukakanPerakuan untuk Kelulusan (Samb.)

2.4.2 Butir-butir bayaran interimkepada Kontraktor dan sebab-sebab sebarang kelambatanbayaran dan bayaran tidak dibuat.

3 Kuasa Untuk Meluluskan Perakuan

3.1 Pastikan Perakuan ini diluluskan olehPihak Berkuasa yang dinamakan dalamKontrak.

4 Cara-cara Pengisian Borang PerakuanTidak Siap Kerja

4.1 Kerajaan - Masukkan Malaysia bagiprojek Persekutuan dan Kerajaan Negeribagi Projek Negeri.

4.2 Rujukan - Isikan No. Rujukan Fail.

4.3 Pejabat - Pastikan alamat pejabatadalah alamat pejabat PegawaiPenguasa yang akan menandatanganiPerakuan ini.

4.4 Tarikh - Tarikh perakuan iniditandatangani oleh Pegawai Penguasa.

4.5 Kepada - Catitkan Nama dan Alamatkontraktor. Pastikan Nama dan Alamatkontraktor adalah sama seperti tercatitdalam dokumen kontrak.

4.6 Pastikan kelas pendaftaran Kontraktordengan PKK dicatitkan.

4.7 No. kontrak - Masukkan no. kontrak.Pastikan nombor kontrak adalah samaseperti tercatit dalam dokumen kontrak.

4.8 Kontrak Untuk - Masukkan tajuk kontrak dan pastikan ianya adalah sama sepertiyang tercatit dalam dokumen kontrak.





Cara-cara Pengisian Borang PerakuanTidak Siap Kerja (Samb.)

4.9 Bahagian - Masukkan bahagian kerjasekiranya “Sectional Completion" adadiperuntukkan dalam kontrak.

4.10 Para 1

− Sila potong bahagian yang tidak berkenaan samaada kerja atausebahagian kerja-kerja.

− Masukkan tarikh siap sebenar atau

tarikh siap yang dilanjutkan yangsepatutnya kontraktor menyiapkanprojek tersebut.

4.11 Para 2

− Masukkan jumlah denda LAD bagisetiap hari seperti yang tercatitdalam dokumen Kontrak.

4.12 Tandatangan, Nama dan JawatanPegawai Peguasa.

4.13 Tandatangan, Nama dan JawatanPegawai Yang DiberikuasaMenandatangani Perakuan Tidak SiapKerja.




* Audit Kualiti; Jika berkenaan



DID MANUAL

VOLUME 10



CHAPTER 15

LOSS AND EXPENSE



Chapter 15 – LOSS AND EXPENSE

List of Flowcharts


Flowchart 15.1 Loss and Expense Procedure 15-1





1. Received notice and

estimates for loss andexpense

-

2. Is Contractor eligible forpayment of loss andexpense?

SOR

3. Inform Contractor of eligibility for loss andexpense. Request furtherinformation, if necessary.

SOR

4. Received details, andevaluate the informationsubmitted by theContractor

SOR

5. Prepare report and submitto Claim Secretariat

SO/SOR

6. Review and preparerecommendation by ClaimSecretariat

BUBK

7. Decision by ClaimsCommittee

ClaimsCommittee

8. Inform Contractor on theresult

SOR

9. Revise Contract Sum; if approved; if Final Accountis closed, revise Final Account

CAO Refer: Chapter 12 –

Adjustment of Contract Sum

Flowchart 15.1 – Loss and Expense Procedure

1

3

4

9

6

7

5

2

8

Yes

No




15 LOSS AND EXPENSE

15.1 INTRODUCTION


Overview of standard contract provisions and how to deal with Contractor’s claim

15.2 PROCEDURES

Please refer to Flowchart 15.1 – Loss and Expense Procedure.


/ Reference

1 SO/SOR received notice and estimates for loss and expense

Contractor within one (1) month of the occurrence of event,give notice in writing to S.O his intention to claim supported byestimated amount.

The Contractor to submit details of his claim within 3 monthsafter the issuance of Certificate of Practical Completion.

2 Determine contractor’s eligibility for payment of loss andexpense

Carry out preliminary assessment of all claims, and establish if the loss and expense claim is valid

Action by: SOR

3 Inform Contractor of eligibility for loss and expense, andrequest for further information; if necessary

Inform Contractor in writing on eligibility and if documentssubstantiation is not sufficient, request for more supportingdocuments, supporting vouchers, explanation and calculation.

Action by: SOR

4 Received details and evaluate the information submitted by theContractor

The SOR shall forthwith evaluate all information submitted bythe Contractor.

The SOR shall finalise all claims to meet the deadline forcompleting Final Account, which is no later than three (3)months after end of Defects Liability Period.

Action by: SOR

5 Prepare report and submit to Claim Secretariat

After assessment and evaluation, prepare report of evaluationcomplete with eligible amount for approval of the SO.

Submit the report to the Claim Secretariat at BUBK.

Action by: SO/SOR





/ Reference

6 Review and prepare recommendation

Claim Secretariat to assess report prepared by SO/SOR andprepare recommendation to Claims Committee.

Action by: BUBK

7 Decision by Claim Committee

After reviewing report and recommendation; make decision.

Action by: ClaimsCommittee

8 Inform Contractor on the result

After determining the eligible amount claimable for loss and/orexpense and after receive approval, inform Contractor inwriting.

If not eligible, inform Contractor in writing.

Action by: SOR

9 Revise Contract Sum; if approved

Adjust Contract Sum when claim for loss and/or expense isapproved.

Prepare Final Account, based on the adjusted Contract Sum.

If Final Account has been prepared, closed and approved priorto the settlement of claims, then revise the Final Accountaccordingly.

Action by: CAO

Refer Chapter 12 – Adjustment of

Contract Sum

15.3 LOSS AND EXPENSE PROVISIONS IN JKR203 & JKR203A CONDITIONS OF

CONTRACT

The three (3) relevant clauses related to direct loss and/or expense are Clause 5(d), Clause 44 andClause 48.

Clause 5(d) deals with S.O Instruction; Clause 44 deals with Loss and Expense caused by Delayswhilst Clause 48 deals with Final Certificate.

The Contract Conditions has the following provisions/requirements:-

Contractor shall within one (1) months of the occurrence of the event, give notice in writingto S.O of his intention to claim supported by an estimate of the amount of loss and/orexpense likely to be incurred

Within three (3) months after Practical Completion, the Contractor shall submit fullparticulars of all claims together with any documents, supporting vouchers, explanations andcalculations




The grounds for direct loss and/or expense (under Form JKR 203/203A) are limited under todisruption of regular progress of the works or any part thereof by reasons of:-

(i) Directions given by S.O consequential upon disputes with neighboring owners not due toneglect or default of the Contractor of his Sub-Contractors [Clause 48 and Clause 43 (c)]

(ii) Contractor not receiving in due time necessary instructions and information due tonegligence or default of the S.O [Clause 48 and Clause 43 (f)]

(iii) Delay on the part of artists, tradesmen or others engaged by the government for work not forming part of the Contract [Clause 48 and Clause 43(i)]

15.4 RELATIONSHIP BETWEEN LOSS AND/OR EXPENSE AND EXTENSION OF TIME

Many Contractors upon being granted and Extension of Time (EOT) presume that they can claim alladditional costs for the extended period as loss and/or expense.

The granting of EOT does not give an automatic right to loss and/or expense.

EOT and loss and/or expense are separate and must be dealt with independent of each other and ontheir own merits.

Only by examining cause and effect can items of costs, which fall under loss and/or expense, beidentified. If the delay was the responsibility solely of the Contractor, Contractor should not cover hisadditional costs arising from any delay of the building works by claiming Loss and Expense. If delayis due to natural factors, than loss and/or expense is not claimable.

15.5 TYPICAL HEAD CLAIMS AND WHEN THEY ARE JUSTIFIED

“Heads” of claim for Loss and/or Expense may include:-

(a) Additional Site Overheads

Sometimes been referred to extended preliminaries. Should be based on actual additionalcosts incurred by the Contractor resulting from an event or circumstances, which brought todisruption to the regular progress of the works. The actual cost could either be higher orlower than the priced Preliminaries in the Contract Sum. The priced Preliminaries serves as aguide in assessment of loss and/or expense as to expenditure that the Contractor wouldexpend had there been no disruption.

The actual cost should not deviate too far from contract pricing and should it happen, thencheck carefully that the Contractor has not “loaded” his costs which he had incurred as a

result of his own delays or poor management.

(b) Cost of uneconomic working (loss of productivity)

This refers to Contractor’s loss of output or productivity due to disruption of the regularprogress of the works, and includes idling costs. Contractor need to produce detailed recordsbecause the Contractor may generally be inefficient or he may have carried out work incorrectly.

Contractor needs to demonstrate that he has taken measures to mitigate the loss.




15.6 ESTABLISHING IF A LOSS AND EXPENSE CLAIM IS VALID

The basic grounds to deal with a loss and expense claim are as follows:-

(a) The claim is in accordance with the relevant clauses of the Conditions of

Contract.

(b) In line with the above, all notices and claims must be submitted in writing.

(c) The SOR shall assess all claims for loss and/or expense as soon as sufficientinformation is available.

(d) It must be an expense not recoverable elsewhere under the contract.

Assess the claim for loss and/or expense as follows:

(a) Expenses claimed are actual expenses which are supported by documentation.

(b) Loss can be proven through documentary proof and records.

(c) Contractor has shown that the loss and/or expense are direct consequence(s) of the delay/disruption (cause-and-effect).



15.8 REFERENCES

Please refer to the latest Treasury Circulars and DID Circulars on claims for loss and expense.


Nil


[1] AP 202: Arahan Perubahan Kerja


Nil



DID MANUALVolume 10




Chapter 15 – Loss and Expense

APPENDIX 15A

Checklist for the Assessment ofContractor’s Claim and Preparation of

S.O./P.D. Report

(Senarai Semakan PenyediaanPenilaian Tuntutan Kontraktor dan Laporan

Pegawai Penguasa)




APPENDIX 15A CHECKLIST FOR THE ASSESSMENT OF CONTRACTOR’S CLAIM AND PREPARATION OF S.O./P.D. REPORT (SENARAI SEMAKANPENYEDIAAN PENILAIAN TUNTUTAN KONTRAKTOR DANLAPORAN PEGAWAI PENGUASA)

TAJUK PROJEK

Untuk Tindakan


Kepada

TarikhDiterima

Oleh

Tarikh SiapSemakan

PMK 1

PMK 2

AK*


1.0 AM

1.1 Fahami asas tuntutan dan tentukansinopsis peristiwa yang menyebabkantuntutan oleh Kontraktor.

1.2 Tentukan tuntutan layak dipertimbangkan untuk dibawa ke J/K Tuntutan antaranya seperti berikut :

(a) Asas tuntutan adalah dibenarkan diBawah Kontrak seperti A.P 202Jadual III (e) iaitu:

Kerugian dan perbelanjaandisebabkan oleh kelambatanKerajaan dan/atau mematuhi ArahanPP atau kerana mematuhi keperluanBerkanun

Percanggahan dalam atau antaraDokumen-dokumen kontrak

Tuntutan lain yang nyatanyadibenarkan dalam Syarat-syaratKontrak seperti :o Fasal 43 (c), (f) & (i) Borang JKR

203/203A

Apa-apa kos yang ditanggungberhubung dengan fee & cajpemindahan pembentungan, bekalanair, bekalan elektrik dan lain-lainyang berkaitan





1.0(Samb.)

AM (Samb.)

(b) Tuntutan kontraktor yang berpunca

dari pecah kontrak atau kegagalanKerajaan atau PP yangmenyebabkan pelaksanaan KerjaKontraktor terhalang atau terlewat.

(c) Kontraktor telah melaksanakanobligasi tambahan yang tidakberbentuk fizikal kekal (sepertiitem-item awalan, kerjasementara, penggunaan loji,peralatan termasuk peranca &acuan, perubahan masa / tempohpenyiapan dan lain- lain.)

(d) Kontraktor telah mengeluarkanperbelanjaan tambahan ataumenanggung kerugian secaralangsung yang tidak akan digantibayar melalui pembayaran yangdibuat di bawah mana-manaperuntukan lain dalam kontrak.

2.0 PENILAIAN TUNTUTAN KONTRAKTOR

2.1 Tentukan samaada kontraktor telahmematuhi semua prosedur dan syarat-syarat kontrak yang melayakkantuntutannya dipertimbangkan ;

(a) Kontraktor telah memberi notis yang jelas (menyatakan perkara yangdituntut berserta dengan anggarantentang amaun yang dituntut)menyatakan niatnya untuk membuat

tuntutan dan diberi kepada PP dalamtempoh yang disyaratkan dalamkontrak, dan

b) Kontraktor telah mengemukakanbutiran terperinci, lengkap dengandokumen sokongan bagimembuktikan tuntutannya dalamtempoh yang disyaratkan dalamkontrak.





2.0(Samb.)

PENILAIAN TUNTUTAN KONTRAKTOR (Samb.)

2.2 Dapatkan maklumat tambahan yangberkenaan yang telah disahkan olehPP / Wakil PP seperti;

Surat-menyurat yang berkaitandan/atau

Minit mesyuarat, buku harian tapak dan/atau

Sijil-sijil dalam kontrak yangberkaitan seperti lanjutan masa dll.,dan

Dokumen Kontrak

2.3 Syor sama ada memperaku / menolaktuntutan dari kontraktor disediakanberdasarkan;

(a) Fakta-fakta kes mengikut rekodseperti item 2.2 di atas danmengikut pengetahuan PP dalammengawasi projek, dan

(b) Peruntukan-peruntukan yangberkaitan dalam kontrak.

2.4 Tentukan kuantum bayaran (jika didapatiwajar dibayar) kepada kontraktor ;

(a) Perkara yang diambilkira sebagaiitem yang layak dituntut adalahteratur.

(b) Tempoh yang layak diambilkira (bagituntutan yang berkaitan dengantempoh masa) oleh kontraktor

adalah teratur.

(c) Dokumen-dokumen yangmenyokong tuntutan serta bukti-bukti kerugian yang ditanggung danperbelanjaan tambahan sebenaryang telah dikeluarkan olehkontraktor adalah teratur. (Dokumenhendaklah yang asal atau diakui saholeh PP / Wakil PP)



DID MANUAL

VOLUME 10



CHAPTER 16

DETERMINATION



Chapter 16 – DETERMINATION

Table of Contents



16.1 INTRODUCTION.........................................................................................................16-3

16.2 GENERALLY ...............................................................................................................16-3

16.3 PROCEDURES ............................................................................................................16-3

16.3.1 Determination................................................................................................16-3

16.3.2 Settlement Of The Final Account.....................................................................16-7

16.4 NOTICES ...................................................................................................................16-8

16.4.1 Notice for Intention to Notice Determine the Contractor’s Employment..............16-8

16.4.2 Notice for Determination ................................................................................16-8

16.5 FINAL ACCOUNT ........................................................................................................16-9

16.6 RE-TENDER ...............................................................................................................16-9


16.8 REFERENCES .............................................................................................................16-9




List of Flowcharts


Flowchart 16.1 Determination of the Employment of the Contractor 16-1

Flowchart 16.2 Settlement of Final Account 16-2





1. Establish the ground(s) forthe determination

SOR

2. Issue 1st warning letter SOR

3. Contractor continuesdefault or repeats thedefault?

4. Issue 2nd warning letter SOR

5. Prepare report fordetermination, and submitto JKPPS for approval

SOR Refer SPP 5/2006

6. SO to issue ‘NotisKemungkiran Kontraktor’

SOR

7. Contractor continuesdefault or repeats the

default?

8. Officer Named in Contractto issue Notice of Determination

SOR/ OfficerNamed inContract

9. Forfeit Performance Bondor Advance Payment Bond

SOR/CAO

10. Issue stop work order andevaluate the works done

SOR Ref: Sample of

Sch. of Activities prior

to Tender

11. R e-tendering exercise CAO See Chapter

6 – 8

12. Settlement of Final Account

See Flowchart 16.2

Note: For bankruptcy or insolvency, SOR may go straight to step 8 – 12

Flowchart 16.1 – Determination of the Employment of the Contractor

No

1

2

4

5

7

3

End

6

8

9

Yes

Yes

No

10

11

12




Flowchart

Description Action By Reference

1. Establish the completioncost.

CAO

2. Prepare and issue Final Account

CAO

3. Amount due toGovernment?

CAO

4. Payment to Contractor CAO

5. Issue claim to Contractorby AR Register

SOR

6. Contractor pays?

7. Issue 1st Reminder (within2 weeks)

SOR

8. Contractor fails to pay?

9. Issue 2n Reminder (within2 weeks)

SOR

10. Contractor fails to pay?

11. Issue 3rd Reminder (within2 weeks)

SOR

12. Refer matter to the Legal Adviser at Ministry level / A.G.’s Chamber

BUBK

Flowchart 16.2 – Settlement of Final Account

Yes

Yes

1

2

5

3

12

No

No

Yes

4

9

10

8

7

6

Yes

No

No

End 11




16 DETERMINATION

16.1 INTRODUCTION


To outline the overall procedures on determination of the Contractor.

16.2 GENERALLY

The determination and the subsequent procedures shall be done in accordance with the proceduresset out in the Contract.

Generally, the whole process can be divided into 2 distinct steps:

(i) Determination of the employment of the contractor.

(ii) Settlement of the Final Account of the original contract.

16.3 PROCEDURES

16.3.1 Determination


/ Reference

(Please refer to Flowchart 16.1 – Determination of theEmployment of the Contractor)

Generally

The progress of and works programme submitted by theContractor may reveal the Contractor’s capability orincapability to complete the works on time.

The Conditions of Contract provides the rights of theGovernment to determine the employment of Contractor fordefaults.

For information





/ Reference

1 Establish the Grounds for Determination

Establish / Verify the grounds for the determination:

(a) The Contractor fails to submit Performance Bond orInsurance Policies

(b) The Contractor fails to expedite the works afterreceiving Letter of Acceptance

(c) Any of the ground stated in Conditions of Contract,such as

Suspending the carrying out of works without

reasonable cause Not carrying out the works diligently Failing to execute the works in accordance with the

contract or neglecting to carrying out his obligationunder the Contract

Subletting the whole or any part of the works withoutprior consent of S.O./PD

Contractor went to insolvency, winding up orliquidation

Insolvency of Contractor

If the Contractor becomes insolvent or bankrupt, issue the

Notice of Determination; no warning letter(s) is required.

Action By:SOR

2 Prepare 1st Warning Letter

Upon established the ground for determination, theintention for determination via a warning letter is issuedwith a reason to stop the employment. A time frame,normally fourteen (14) days is given to Contractor forreaction.

Refer to Sample of Warning Letter.

Action By:SOR

3 & 4 Contractor Continues/ Repeats Defaults?Prepare 2nd Warning Letter

If no compliance made by the Contractor, the 2nd warningshall be issued.

If the Contractor repeats and fail to comply the reminder(within fourteen days), the proposal /report shall be madeby PM/ CA to Authorised Officer to stop the employment.

Action By:SOR





/ Reference

5 & 6 Prepare Report and Issue the ‘Notis KemungkiranKontraktor’

(a) Prepare a report on the determination, and submit toJawatan Kuasa Penyelamat Projek Sakit (JKPPS) forapproval.

Other than the recommendation, the report shallinclude the short listed tenderers for execution thedefect works and the recommend the appropriateprocurement option.

If the report is complete and deemed satisfactory bythe Authorised Officer, the SO shall issue a notice of

non-performance (Notis Kemungkiran Kontraktor). A period of fourteen days is given to Contractor to takethe necessary action.

(b) The SO shall report to Authorised Officer on the action(or inaction) of the Contractor prior the issuance of Notice of Determination.

Refer to Sample of ‘Notis Kemungkiran Kontraktor’.

** if the Contractor is in default under Fasal 51(b)Syarat- Syarat Kontrak (Bankruptcy or insolvency), the SOmay submit the report without issuing any warning lettersor default notice.

Action By:SOR

7 & 8 Contractor Continues/ Repeats Defaults?Issuance of Determination Notice

If the Contractor does not comply with the warning letter ordefault notice, or if the Contractor repeats and fail tocomply the reminder (within fourteen days), issue theDetermination Notice.

Refer Section 16.6.2 - Notice for Determination

Action By:SOR/ Officer Named in

Contract

9 Forfeit Performance Bond or Advance Payment Bond

To forfeit Performance Bond and/or Advance Payment Bondof the Contractor immediately after issuance of Notice of Determination.

Refer to Sample of Letter for Calling off Performance Bond

Action By:SOR / CAO





/ Reference

10 Issuance of Stop Work Order and Evaluate Works Done

If the Contractor fails to evacuate from the site, issue aStop Work Order.

Evaluate the works done, including computing the value of works done (for finalisation of accounts purposes) andschedule of defects and out-standing works.

Action By:SOR

Refer: Sample of Sch.

Of Activities prior to

Tender

11 Re- tendering Exercise

Refer to Chapter 6 to 8.

Action By:CAO

12 Settlement of Final Account

Refer to Flowchart and Procedures of Settlement of Final Account.




16.3.2 Settlement Of The Final Account


/ Reference

(Please refer to Flowchart 16.2 – Settlement of Final Account)

1 Establish Completion Cost

Prepare the estimate on the Completion Cost (comprising of loss by Government and new contract sum by newcontractor).

Action By:CAO

2, 3 & 4 Prepare and Issue Settlement of Final Account

Prepare the Settlement of Final Account for the newContractor. Costs comprise of:

(a) Interim Payments(b) Advance Payment(c) Payments to subcontractors and suppliers(d) New Contract Sum(e) Cost for re- tender(f) Loss to Government(g) On- Cost Charge(h) Finalised Contract Sum

Establish the Final Amount due to Contractor orGovernment, as the case may be.

Ensure that all deductions are incorporated into the Final Account. Include the amounts of the forfeited PerformanceBond.

Pay the Contractor if any final amount is due to him.

Action By:CAO

5 Issuance of Claim to Contractor (By A.R. Register)

If under the Final Account an amount is due to Government,send the Final Account and claim for payment (‘claim’) tothe Contractor by A.R. Registered post as soon as ispracticable, preferably within 9 months after determination.

Action By:SOR

Refer: SP JPS Bil 1/1990

6 & 7 Issuance of 1st Reminder

Issue 1st reminder if Contractor fails to pay, or no action istaken by Contractor, within 14 days of issuance of claim.

Action By:SOR

8 & 9 Issuance of 2nd Reminder

Issue 2nd reminder if Contractor fails to pay, or no action istaken by Contractor, within 14 days after the issuance of 1 st

reminder.

Action By:SOR





/ Reference

10 & 11 Issuance of 3rd Reminder

Issue 3rd reminder if Contractor fails to pay, or no action istaken by Contractor, within 14 days after the issuance of 2 nd

reminder.

Action by:SOR

12 Refer to Legal Adviser at Ministry level/ A.G.’s Chamber

Seeks advice by Legal Advisor (of Ministry or State) if still noaction taken by Contractor.

Action by:BUBK

16.4 NOTICES

16.4.1 Notice for Intention to Notice Determine the Contractor’s Employment

To state clearly the contract no, job title, contract sum contract period, date of possession,completion date and extended completion date, if any.

To state clearly the reason of determination by the Contractor’s default.

To highlight the percentage of works done and aims for completion according to original orrevised works programme.

To state the date and duration by the Contractor suspended the works.

To highlight whether the contractor consistently repeats the default (not for 1st warning) togetherwith all references for previous notices such as serials meetings, date, officers in charged, etc.

To state the assistance given to contractor in form of materials procurements and grantedextension of time

To state the date or last extended date for completion together with method statements worksprogramme.

The notice must be copied to all relevant parties including PKK or bank/ insurance company.

16.4.2 Notice for Determination

To state clearly the contract no, job title, contract sum contract period, date of possession,

completion date and extended completion date, if any.

To state the reference and date of Notice for Intention the Determine the Contractor’sEmployment

To state whether the Contractor is continuing the defaults

If the Contractor replied a notice, to highlight to them the reasons are not accepted.

The notice must be copied to all relevant parties including the registrar of the Contractor andbank/ insurance company.




16.5 FINAL ACCOUNT

To include the Completion Cost which comprises the advance payment, interim payments,payments to sub-contractors, suppliers, new contract price, re- tender cost, loss to Governmentand charge on cost.

To include the Revised Contract Sum which includes deduction for loss, damages and expense.

16.6 RE-TENDER

Evaluate the executed works and check the balance of works to avoid disputes for BQ contracts.

To allow credit for plants, tools, equipment and unfixed materials left on site for use of newcontractor.

Any other above this to refer to Chapter 6 to 8.


Please refer to Volume 10A for the standard reference or sample documents for the procedures orprocesses outlined in this Chapter.

Sample of Warning Letter (‘Notis Kemungkiran Kontraktor’)

Sample of Notice for Determination (‘Penamatan Pengambilan Kerja Kontraktor’)

Sample of Schedule Activities (Bar Charts for Preparation of Tender Invitation)

Sample of Settlement of Final Account Upon Determination

Sample of Letter for Calling off Performance Bond and Advance Payment Bond

Sample of Calculation of Loss by Government

16.8 REFERENCES

Please refer to the latest Treasury Circulars and DID Circulars for the latest procedures andprocesses in respect of determination of the employment of the contractor.


[1] SPP 5/2006: Peraturan Pelantikan Kontraktor Penyiap bagi Projek Sakit


[1] SPJPS. Bil. 1/1990: Perakuan Penamatan Pengambilan Kerja Kontraktor Berasaskan BorangKontrak 203 & 203A



DID MANUAL

VOLUME 10



CHAPTER 17

COMPLETION



Chapter 17 – COMPLETION

Table of Contents



17.1 INTRODUCTION ............................................................................................................17-2

17.2 PROCEDURES................................................................................................................17-2

17.3 COMPLETION ................................................................................................................17-3

17.4 PRACTICAL COMPLETION ..............................................................................................17-3

17.5 SECTIONAL COMPLETION..............................................................................................17-4

17.6 PARTIAL OCCUPATION ..................................................................................................17-4

17.7 HANDING OVER ............................................................................................................17-4

17.8 SUBMISSION AND REQUIREMENTS NECESSARY FOR COMPLETION .................................17-5


APPENDIX 17A Checklist for the Preparation of Certificate of Practical Completion(Senarai Semakan Penyediaan Perakuan Siap Kerja) …………………………………..17A-1




List of Flowcharts


Flowchart 17.1 Completion 17-1





1. Receipt of notice fromContractor -

2. Final Inspection. PT

3. Works (or Section) ispractically completed forall purposes of theContract?

-

4. Issue instruction to rectifydefective works, if any

SOR

5. Issue Certificate of Practical Completion andHand over the Works toClient-Agency

SOR

6. Release of 50% of Performance Bond

SOR/CAO Refer Chapter

10 - Payment

Flowchart 17.1 – Completion

1

2

3

6

4

5

No

Yes




17 COMPLETION

17.1 INTRODUCTION


An overview of the completion provisions and procedure for works contracts The standard forms of contract use for DID projects

17.2 PROCEDURES

Please refer to Flowchart 17.1 – Completion.


/ Reference

1 Receipt of notice from Contractor

Contractor issue notice that the Works are all practicallycompleted and ready for Final Inspection

2 Final Inspection

Carry out Final Inspection especially mechanical and electricalinstallation works to determine Works are practically completed

Action by:PT

3 Works (or Section) is practically completed for all purposes of the Contract

Practically completed meaning, the Contractor has performedand completed all the necessary Works specified in theContract and the patent defect existing are minor

4 Issue Instruction to rectify defective works; if any

If necessary; issue instruction to rectify defective works thatcan effect the issuance of Certificate of Practical Completion

Action by:SOR

5 Issue Certificate of Practical Completion and Hand over theWorks to Client-Agency

If two (2) is acceptable, than issue Certificate of Practical

Completion and thus the Works are handed over to the Client- Agency.

Action by:SOR




When CPC is issued; then 50% of the Performance Bond can be released to the Contractor and inturn Contractor to issue new Performance Bond guaranteeing the remaining sums. If PerformanceGuarantee Sum is used, then 50% of the sum may be released to the Contractor upon issuance of the CPC.

17.5 SECTIONAL COMPLETION

The Conditions of Contract contains provisions, which allows the Government to require the Works tobe completed in sections or parts. Where this is required, the sections or parts must be identified andthe measure of Liquidated and Ascertained Damages for each must be specified in the tender andcontract documents.

Where sectional completion of the Works is specified, the provision of the Contract as regards theCertificate of Practical Completion, Delay and Extension of Time, Liquidated and AscertainedDamages and the Defects of Liability Period apply as if each section or part is the subject of aseparate and distinct contract between the Government and the Contractor.

17.6 PARTIAL OCCUPATION

Prior to the practical completion of the whole Works, the Government may but with the consent of Contractor, take possession of and occupy any part of the completed Works.

Where any part of the Works is taken possession of and occupied by the Government prior tocompletion of the whole of the Works, the following apply:-

a) A Certificate of Partial Occupation must be issued within seven (7) days of the takingpossession and occupation of the part of the Works. The Certificate must state theestimated value of the part of the Works taken possession of and occupied.

b) The Defects Liability Period for the part of the Works taken possession of and occupiedcommences on the date the Government takes possession of and occupies the same.

c) The Liquidated and Ascertained Damages specified in the Contract is reduced in theproportions which the value of the part taken possession of and occupied bears to theContract Sum.

d) The provisions of the Contract as regards of insurance and release of the PerformanceBond are not affected.

17.7 HANDING OVER

Upon the issue of the Certificate of Practical Completion, the Government takes over the Works and

the Contractor cease to be responsible for loss and/or damage to the same other than loss and/ordamage caused by or arising from defective work.

For the purpose of handing over the Works to the Government, a joint inspection of the Works mustbe held and the keys to the Works handed over.

The Government must also be advised of the operation and maintenance requirements of the Worksincluding those relating to mechanical and electrical installations.




17.8 SUBMISSION AND REQUIREMENTS NECESSARY FOR COMPLETION

Notes : Please refer to the DID Manual Volume 11 - Construction Management, Chapter 17



JKR 203S : Certificate of Practical Completion JKR 203W : Certificate of Partial Occupation Perakuan Serahan Kerja Siap Perakuan Serahan Kerja Siap Berbahagian



DID MANUALVolume 10




Chapter 17 – Completion

APPENDIX 17A

Checklist for the Preparation ofCertificate of Practical Completion

[Form JKR 203S]

(Senarai Semakan PenyediaanPerakuan Siap Kerja)




APPENDIX 17A CHECKLIST FOR THE PREPARATION OF CERTIFICATE OFPRACTICAL COMPLETION (SENARAI SEMAKAN PENYEDIAANPERAKUAN SIAP KERJA)

TAJUK PROJEK

Untuk Tindakan


Kepada

TarikhDiterima

Oleh

Tarikh SiapSemakan

PMK 1

PMK 2

AK*


1. Borang Perakuan Siap Kerja Tandakan ()selepassemakan

Borang yang digunakan ialah borangJKR203S yang terkini.

Muka Depan

2. KERAJAAN – bermaksud 'KERAJAANMALAYSIA' bagi projek Persekutuan atau'KERAJAAN ............ ’ bagi projek Negeri.

3. Rujukan - masukkan no. fail projek Pegawai Penguasa.

4. Pejabat - masukkan Pejabat PegawaiPenguasa atau Wakil Pegawai Penguasa.

5. Tarikh - iaitu tarikh ditandatangani olehPegawai Penguasa atau Wakil PP.

6. Kepada - Nama dan alamat Kontraktorhendaklah sama seperti dalam dokumenkontrak.

7. Kelas - mengikut kelas lesen pendaftaran

kontraktor dalam dokumen kontrak.

8. Kontrak No. - hendaklah sama denganyang terdapat dalam dokumen kontrak.

9. Kontrak Untuk - Nama projek samaseperti di dalam dokumen kontrak.

10. Pastikan samada kerja tersebut siapsebahagian atau keseluruhan danpotong yang tidak berkenaan.

11. Siap pada - Nyatakan tarikh siap sebenar.





12. Ambil milik pada - pastikan sehari selepastarikh siap.

13. Tempoh Tanggungan Kecacatan pada -sama dengan tarikh siap kerja sehinggatamat tempoh tanggung kecacatanseperti yang dinyatakan dalam dokumenkontrak.

14. Tempoh berakhir – 6/12/24* bulan daritarikh di atas. *Yang mana berkenaan,mengikut tempoh yang tercatat di dalamLampiran Kepada Syarat-syarat Kontrak.

15. Tandatangan Pegawai Penguasa / Wakil

PP projek berkenaan mengikut kontrak.

16. Nama Penuh dan Jawatan - PegawaiPenguasa / Wakil PP yang berkenaan.




* Jika berkenaan



DID MANUAL

VOLUME 10



CHAPTER 18

DEFECTS MANAGEMENT



Chapter 18 – DEFECTS MANAGEMENT

Table of Contents


List of Flowcharts ...................................................................................................................... 18-ii

18.1 INTRODUCTION ..............................................................................................................18-3

18.2 PROCEDURES..................................................................................................................18-3

18.2.1 Defects Management During Defect Liability Period............................................18-3

18.2.2 Defects Management at End of Defect Liability Period ........................................18-4

18.3 REFERENCE DOCUMENTS ................................................................................................18-5

18.4 REFERENCES...................................................................................................................18-5




List of Flowcharts


Flowchart 18.1 Defects Management During Defect Liability Period 18-1

Flowchart 18.2 Defects Management at End of Defect Liability Period 18-2





1. Receive report fromend-user andestablish defects

SOR

2. Issue SO’s Instructionto rectify defects

SOR/SO

3. Contractor compliesto instruction?

4. If Contractor fails tocomply, appoint thirdparty to rectifydefective works

SOR

5. Deduct from moneydue to Contractor, orfrom PerformanceBond / PerformanceGuarantee Sum

SOR/ CAO

Flowchart 18.1 – Defects Management During Defect Liability Period

1

2

No3

4

Yes

5

End





1. Joint inspection towards endof DLP

SOR

2. Further defects?

3. Identify further defects andissue Schedule of Defects(within 14 days of expiry of DLP)

SOR

4. Instruct Contractor to makegood (make good not laterthan 3 months from issuanceof Schedule of Defects)

SOR

5. Joint re-inspection (on expiryof time given to make goodor upon expiry of 3 monthswhichever is earlier)

SOR

6. Further defects? -

7. Issue Certificate of MakingGood Defects

SOR

8. Issue of FinalCertificate

SOR Refer Chapter

19

Flowchart 18.2 – Defects Management at End of Defect Liability Period

Yes

1

3

No

4

7

2

5

6

8

No Yes




18 DEFECTS MANAGEMENT

18.1 INTRODUCTION


the overall procedures in management of defects throughout and end of the Defects LiabilityPeriod until the issuance of the Final Certificate

18.2 PROCEDURES

18.2.1 Defects Management During Defect Liability Period

Please refer to Flowchart 18.1 – Defects Management During Defect Liability Period.

Step Procedures / Tasks

Action By

/ Reference

1 Receive Report and Establish Defects

End-user (e.g. Client-agency, DID officers or members of thepublic using the Works) to report immediately to SOR, and SOR shall determine if defects had occurred.

Action By:SOR

2 SO’s Instruction to Rectify Defects

SOR shall immediately issue instruction to the Contractor torectify the defects, with a fair and reasonable time frame tocomplete the making good of defects.

SOR may issue instructions to rectify defects as many times asnecessary during the Defects Liability Period.

Action By:SOR

3 & 4 Contractor complies Instruction; Appoint Third Party to Rectify Defects

If the Contractor refuses or fails to make good the defectswithin the time stipulated in the SO Instruction or withinreasonable time if none is stated, then the SO may appointthird party to rectify the defective works.

Action By:SOR

5 Deduct Monies Due to Contractor

If third party executed the defect works, the cost incurred inmaking good defects due to the failure of the contractor mustbe recovered from Contractor:

From monies due or payable to Contractor or As deduction of Performance Bond or Performance

Guarantee Sum (Wang Jaminan Pelaksanaan).

Action By:SOR/ CAO




18.2.2 Defects Management at End of Defect Liability Period

Please refer to Flowchart 18.2 – Defects Management at End of Defect Liability Period.


/ Reference

1 Joint Inspection towards end of Defects Liability Period

To carry out joint inspection together with SOR, ClientDepartment/ Ministry, Contractor and other parties involved.

Action By:SOR

2 & 3 Identify any Further Defects, Issuance of Schedule of Defects

If there are defects at the end of Defects Liability Period,prepare the Schedule of Defects and issue it to the Contractorwithin 14 days after the expiry of DLP.

Action By:SOR

4 Instruction to Rectify the Defects

Issue the instruction to rectify all defect works completelywithin a reasonable time.

Ensure the duration given to the contractor must not exceed 3months from the date of issuance the Schedule of Defects.

Action By:SOR

5 Joint Re-Inspection

To carry out the joint re-inspection with the SOR andrepresentatives from Client Department/ Ministry, Contractorand other parties involved on the date of the expiry of rectification period given to Contractor or upon the expiry of

period of 3 months, whichever is the earlier.

Action By:SOR

6 & 7 Issuance of Certificate of Completion of Making Good Defects(CMGD)

Issue the certificate of completion of making good defects if there are no further defects.

Ensure the date in such certificate is the date of Contractorcompleted the rectification of defective works.

Ensure the copies to be distributed to: Contractor (original)

Other parties named in certificate (copies)Return the Performance Bond / Performance Guarantee Sumto the Contractor.

Action by:SOR

8 Issue Final CertificatePrepare the Final Certificate upon the issuance of CMGD.

Action by:SOR/CAO

Refer to Chapter 19 – Final Account and

Final Certificate.






Form JKR 203Y (Pin.2/2001) : Perakuan Siap Memperbaiki Kecacatan

18.4 REFERENCES

Please refer to the latest Treasury Circulars and DID Circulars defects management.


Nil

Treasury Instructions

(Arahan Perbendaharaan)

[1] AP 200.4 & 200.5: Tempoh Tanggungan Kecacatan


[1] SPJPS. Bil. 1/2003: Perlantikan Pegawai Penguasa (P.P.), Perwakilan Kuasa Pegawai Penguasa(Wakil P.P.) Dan Pegawai-pegawai Yang Diberi Kuasa (PYDK) Dalam Urusan Pentadbiran Kontrak.



DID MANUAL

VOLUME 10



CHAPTER 19

FINAL ACCOUNT AND

FINAL CERTIFICATE



Chapter 19 – FINAL ACCOUNT AND FINAL CERTIFICATE

Table of Contents



19.1 INTRODUCTION.........................................................................................................19-2

19.2 PROCEDURES ............................................................................................................19-2


19.4 REFERENCES .............................................................................................................19-6

APPENDIX 19A Checklist for the Preparation of Final Account(Senarai Semakan Penyediaan Perakuan Akaun Muktamad) ……………………... 19A-1





1. Certificate of PracticalCompletion

-

2. Prepare the Statement of Final Account and FinalCertificate Ensure that the

necessaryadjustments to theContract Sum areapproved

CAO Refer Checklist for Preparation

of Final Account and

Final Certificate;

& the current form JKR66A

3. Quality Audit BUBK Refer Ch. 10,Flowchart 10-2

4. Approval of Statement of Final Account and FinalCertificate

SO / AP

5. Issue Statement of Final

Account and FinalCertificate to Contractorand respective parties.

CAO

6. Forward documents to FDfor payment

CAO

7. Prepare CompletionReport, etc

SOR Volume 11 – Construction Management

Flowchart 19.1 – Final Account and Final Certificate

1

2

7

5

6

4

3

Passes

Fails




19 FINAL ACCOUNT AND FINAL CERTIFICATE

19.1 INTRODUCTION


The guidelines on the preparation of the final accounts, and the issuance of the final certificate.

19.2 PROCEDURES

Please refer to Flowchart 19.1 – Final Account and Final Certificate.


/ Reference

1 Generally

The Final Account must be prepared as soon as is practicable,

after Practical Completion; and

the Contractor has fulfilled his obligations under theContract, which includes the making good of defects

The Contractor is required to submit, not later than 3 monthsafter practical completion, the full particulars of all claims,together with such supporting documents (includingdocuments relating to accounts of Nominated Sub-Contractorand Nominated Supplier, if any) as may be necessary for thepreparation of the Final Accounts.

If the Contractor fails or refuses to submit the informationwithin the time, the Final Accounts may be prepared based onthe information at hand so as to enable the Final Accounts andFinal Certificate to be completed within 3 months after the endof defects liability period or issuance of the Certificate of Completion of Making Good Defects, whichever is the later.

Final Accounts and Final Certificate following Determination

Where the employment of the Contractor was terminated, the

Final Accounts and Final Certificate shall be prepared as soonas practicable after the new contractor is appointed and theassessment of the costs and/or loss or damage to theGovernment/DID is completed. A modified Form JKR66A isused (Final Account After Determination of Employment of theContractor / Perakuan Muktamad Kontrak Yang ManaDitamatkan Pengambilan Kerja Kontraktor).

For procedures following determination, please refer toChapter 16.

For information





/ Reference

2 Preparation of the Statement of Final Account and FinalCertificate

(a) Adjustment of Contract Sum

Before preparing the Final Account and Final Certificate (formJKR66A), ensure that all adjustments to the Contract Sum areapproved and carried out, i.e. for,

o Adjustment for Prime Cost and Provisional Sumso Re-measurement of provisional quantitieso Variations to the Contracto Assessments of claims by the Contractor.

Ensure that all Variation Orders (APK) and Adjustment of

Contract Sum (PHK) have been issued and are correct.

Ensure that the SO and contractor sign the JKR-APK and JKR-PHK, as the case may be.

Action by: SOR/CAO

Refer to Chapter 12, and the

Checklist for Adjustment of

Contract Sum

(b) Prepare Form JKR66A

Use the current Form JKR 66A.

Ensure that the form is duly filled in with the correct contractdata, and that the sums, adjustments and computation arecorrect.

The Final Account must take into account the following:

All adjustments to the Contract Sum;

Payments previously paid to the Contractor, NominatedSub-Contractor and Suppliers, and assignees; and

Permitted deductions under the Contract, such as costsincurred in connection with employment of others toexecute such works to give effect to an S.O.’s instruction,Liquidated Ascertain Damages (LAD), costs for makinggood defects, etc.

Recoupment of Advance Payment

Deductions for direct payment by DID for dues orcontributions under the Employment Ordinance, theEmployee’s Social Security Act, the Employee’s ProvidentFund Ordinance and any other laws relevant to theemployment of workmen.

The release of Performance Guarantee Sum (if any).

Action by: SOR/CAO

Refer to Checklist for Preparation of

Final Account (Penyedian

Perakuan Akaun Muktamad )





/ Reference

(c) Supporting Documents

Attach the required supporting documents to the Final Accountand Final Certificate:

Certificate of Practical Completion;

Certificate of Non- Completion; if any

Certificate of Completion of Making Good Defects;

Certificate of Delay and Extension of Time, if any;

Certificate of Adjustment of Contract Sum, if any;

Certificate of Payment of Performance Guarantee Sum, if any;

Payment voucher(s); and

Letter of release from the Department of Labour, orStatutory Declaration (to the effect that workmenemployed have received all wages) made by theContractor**.

**The letter or statutory declaration must be submitted by the

Contractor before the final payment can be effected to theContractor.

Action by: SOR/CAO

(d) Check documents for completeness, and computation

Upon receipt of the Final Account and Final Certificatedocuments:

Check that each document is complete and/or in order.Refer to the Checklist for Preparation of Final Account (Penyedian Perakuan Akaun Muktamad);

Complete and initial the Checklist for Preparation of Final

Account;

The recommending officer shall sign the Form JKR66A; and

Submit Form JKR66A, together with attached documents,to the SO for signature

Action by: SOR/CAO








/ Reference

3 Quality Audit

Forward the Statement of Final Account and Final Certificate

for checking (quality audit) by the relevant contract officer.

The quality auditor shall check that the documents are in orderand free of errors.

Action by:CAO/BUBK

4 Approval of Final Account and Final Certificate

The Final Account and Final Certificate must be signed by theS.O..

Action by: CAO/SO

5 Issue Final Account and Final Certificate to Contractor

The Final Account and Final Certificate must be forwarded toContractor and copies distributed to all parties involved in theContract (Accountant General).

It is not a contractual requirement that the Contractor mustsign and return a copy of the Final Account and FinalCertificate.

Action by: CAO

6 Forward documents to the Finance Division

The Final Account and Final Certificate must be forwarded tothe relevant Finance Division to effect payment.

Action by: CAO / FD

7 Prepare Completion Report, etc

As final duties, the SOR/PT are to prepare and submit the

Final (Completion) Report, and Contractor’s Performance Report (if necessary).

Please also refer to Volume 11 – Construction Management.

For information






JKR 66A : Final Account and Final Certificate

Letter of Discharge of Bank / Finance Company / Insurance Guarantee

19.4 REFERENCES

Please refer to the latest Treasury Circulars and DID Circulars on Final Account and Final Payment.


Nil




[2] SP JPS Bil. 4/2008: Langkah-langkah Untuk Mempercepatkan Bayaran Interim (Tambahankepada Surat pekeliling SP JPS Bil. 2/2000)



DID MANUALVolume 10




Chapter 19 – Final Account and Final Certificate

APPENDIX 19A

Checklist for the Preparation ofFinal Account

[Form JKR 66A]

(Senarai Semakan PenyediaanPerakuan Akaun Muktamad)




APPENDIX 19A CHECKLIST FOR THE PREPARATION OF FINAL ACCOUNT

(SENARAI SEMAKAN PENYEDIAAN PERAKUAN AKAUN

MUKTAMAD)

TAJUK

PROJEK

Untuk Tindakan


Kepada

TarikhDiterim

aOleh

Tarikh Siap Semakan

PMK 1

PMK 2

AK*


1. Pastikan perkara-perkara berikutdipatuhi sebelum penyediaan PerakuanMuktamad disiapkan.

(i) Semua Wang Kos Prima(termasuk layanan dankeuntungan) & Wang PeruntukanSementara telah diselaraskan.

(ii) Semua item untuk KuantitiSementara telah dibuatPengukuran Semula.

(iii) Semua item/kerja yang tidak

dilaksanakan (omission) ataudikurangkan daripada kontrak telah disediakan APK

(iv) Semua APK & PHK telahdiselaraskan.

(v) Pelarasan pengiraan baki untuk VOP telah dibuat.

(vi) Semua tuntutan antarakontraktor dan Kerajaan telahdiselesaikan

Tandakan ()selepassemakan

2. Borang Perakuan Muktamad.

2.1 Pastikan borang JKR 66A yang terkinidigunakan.

Muka surat 1 / 4

2.2 KERAJAAN - bermaksud 'KERAJAANMALAYSIA' bagi projek Persekutuanatau 'KERAJAAN ...............' bagiprojek Negeri.

2.3 Peruntukan pembangunan, kepala dan

pecahan kepala - hendaklah diisi.





Muka surat 1 / 4 (samb.)

2.4 Tajuk kerja, nama dan alamatkontraktor hendaklah sama seperti didalam dokumen kontrak.

2.5 No.Kontrak dan Jumlah Harga AsalKontrak hendaklah sama seperti didalam dokumen kontrak.

2.6 Jumlah Bersih Tambahan / Potongan

(i) Ambil Jumlah Bersih dari PenyataPelarasan Harga Kontrak di mukasurat 4/4.

2.7 Harga Muktamad Kontrak adalahHarga Kontrak setelahditambah/dipotong jumlah bersih APK & PHK.

2.8 Perkara A - Butir-butir JumlahPotongan / Kurangan

(i) Perkara A.1 - pastikan semula jumlah bayaran interim yangterdahulu berasaskan baucerbayaran.

(ii) Perkara A.2 - pastikan jumlahsemua bayaran WangPendahuluan, jika ada yangdibuat berasaskan baucerbayaran (termasuk bayaranWang Pendahuluan kepadaNSC/NS).

(iii) Perkara A.3 - Jumlah Potonganlain termasuk bayaran kepadapihak ketiga, jika ada (sertakanlampiran dan keteranganpotongan).

2.9 Bayaran Muktamad Dibawah Kontrak adalah Harga Muktamad Kontrak ditolak dengan perkara A.1, 2 dan 3.

2.10 Tandatangan Pegawai Pengesyorhendaklah pegawai yang diberi kuasadan catitkan nama dan jawatan.






2.11 Perkara 'B'

(i) Pastikan amaun dalam perkataan

jumlah sebenar bayaranPerakuan Muktamad.

(ii) Perkara B.1.(ii) - Pastikanketepatan bayaran balik kepadaKontraktor Utama bagi pelepasanDeposit Wang JaminanPelaksanaan. (Jika berkenaan).

(iii) Perkara B.2 - Pastikan ketepatanbaki bayaran kepadaSubkontraktor/Penerima Bayaranseperti di Lampiran A.

(iv) Perkara B.3 - Pastikan ketepatanpengiraan kredit hasil bagi LADberasaskan perbezaan tarikh CPCdengan tarikh Lanjutan Terakhirdan kadar LAD di dalam kontrak.

(v) Perkara B.1.(i) – Pastikanperkiraan nilai kerja dan amaun-amaun lain bagi KontraktorUtama adalah perbezaan antaraBayaran Muktamad dan jumlahPerkara B.1.(ii), B.2 & B.3

2.12 Pastikan Jumlah Bayaran Muktamadmenyamai Bayaran Muktamad diBawah Kontrak.

2.13 Masukkan No. Fasal berkenaan dengan Akuan Statutori mengikut syarat-syaratkontrak berkenaan seperti 48(d) bagiborang JKR 203/203A.

2.14 Tandatangan Pegawai Penguasahendaklah pegawai yang diberi kuasa

dan catitkan nama dan jawatan.





Muka surat 2 / 4

2.15 Perkara ‘C’

Pastikan pihak kontraktor adalah orangyang sama yang menandatanganikontrak atau wakil lain yang diberikuasa. Tandatangan hendaklahdisaksikan dan dilengkapi dengantarikh serta maklumat diri yangdikehendaki.

2.16 Sebelum Perakuan Akaun dan BayaranMuktamad diluluskan, pastikan perkaradi bawah ini telah dilaksanakan.

(a) Perakuan Siap Kerja telahdikeluarkan.

(b) Surat Akuan Statutori atau Surat Akuan Ketua Pengarah Buruhtelah diterima daripada kontraktordan disertakan bersama.







DID MANUAL

VOLUME 10



CHAPTER 20

PRIME COST & PROVISIONAL

SUMS



Chapter 20 – PRIME COST & PROVISIONAL SUMS

Table of Contents



20.1 INTRODUCTION.........................................................................................................20-3

20.2 PROCEDURES ............................................................................................................20-3

20.2.1 Administration of Prime Cost Sums..................................................................20-3

20.2.2 Administration of Provisional Sum .................................................................20-11

20.3 GUIDANCE NOTES ...................................................................................................20-16

20.3.1 Definitions ...................................................................................................20-16

20.3.2 Nomination of Sub-Contractors and Suppliers under P.C. Sum ........................20-16

20.3.3 Appointment of Sub-Contractors and Suppliers under Provisional Sums...........20-16

20.3.4 Expending the P.C. Sums..............................................................................20-17

20.3.5 Expending the Provisional Sums....................................................................20-17

20.3.6 Procurement under P.C. Sum and Provisional Sum .........................................20-17


20.5 REFERENCES ...........................................................................................................20-19




List of Flowcharts


Flowchart 20.1 Administration of Prime Cost Sums 20-1

Flowchart 20.2 Administration of Provisional Sums 20-2





1. Prime Cost Sums orProvisional Sums areincluded in the ContractSum

-

2. Is it Prime Cost Sum? -

A. Administration of Provisional Sums

- Refer

Flowchart

20.2

3. Prepare TenderDocuments

PT/PO

4 Invitation and Receipt of

Tender

PT/PO

5. Tender Evaluation and

Nomination / Acceptance

PT/PO

6. Sub-Contract

Documentation

PT/CAO

7. Sub-Contract

Administration Commencement

Direct Payment

SO’s consent

PT/CAO

8. Completion -

Flowchart 20.1 – Administration of Prime Cost Sums

4

5

8

6

7

1

2

A

No

3

Yes





A Provisional Sum isincluded in the Contract

Sum

- Refer Flowchart

20.1

1. Prepare cost estimates of works under Provisional

Sum.

CAO/Ir/Sr

2. Is the estimates of works

30% more than theProvisional Sum?

-

3. Is the estimates of works50% more than the

Provisional Sum?

-

4. Obtain approval from

Division Director

CAO /

Division DirectorUse

‘Borang E’

5. Obtain approval from DG

or Deputy DG

CAO/

DG /Deputy DGUse

‘Borang E’

6. Does the work require the

involvement of the main

contractor?

-

7. Quotation exercise SOR

8. Is it specialist works? -

9. Tender or quotation

exercise by Contractor

SOR

10. Issue SO instruction tomain contractor, andprepare valuation of works

SOR/ SO/CAO

11. Obtain approval (on costs)from Authorised Person

CAO /Authorised

Person

Use ‘Borang F’

12. Appointment of sub-contractor or supplier.

Flowchart 20.2 – Administration of Provisional Sums

12

11

1

2

3

5

No

4

6

Yes

No

Yes

9

8

10

7

No

Yes

No

Yes

A




20 PRIME COST & PROVISIONAL SUMS

20.1 INTRODUCTION


The guidelines on expenditure of Prime Cost (P.C.) and Provisional Sums. The guidelines on the preparation of tender documents, contract documents and general

administration of nominated sub-contract and supply contracts.

Note: Refer to Section 20.3 for definitions and general overview on procurement of items underPrime Cost Sums and Provisional Sums.

20.2 PROCEDURES

20.2.1 Administration of Prime Cost Sums

(Nominated Sub-Contractor and/or Nominated Supplier)


/ Reference

1 & 2 Prime Cost Sums

Please refer to Flowchart 20.1 – Administration of Prime CostSums.

Where the Contract specifically permits the nomination of sub-contractor to carry out works included under Prime Cost, or theSO has elected that works under Provisional Sums shall beexecuted by nominated sub-contractor or nominated supplier,then the PT/PO shall carry out the tender exercise forprocurement of sub-contract works.

The Project Team must give due consideration to the overallworks programme, and ensure the timely nomination of sub-contractor or supplier so as to avoid any delay to the works.

The procedures for preparation of tender documents,invitation, receipt, evaluation and acceptance of tenders, sub-contract documentation, payment, variation, delay andextension of time, non-completion, determination, completion,

handing over and defects, and final accounts are similar to thatfor the main contract, and reference should be made toChapters 6 to 19, inclusive.

Changes in points of detail are set out in this chapter.

For information





/ Reference

3 Preparation of Tender Documents

The procedures for the preparation of tender documents andtender table documents set out in Chapter 6 are generallyapplicable to the preparation of tender documents and tendertable documents for a nominated sub-contract.

The sub-contract tender document shall follow the maincontract number, with the words ‘NSC’ and the sub-contractworks package number in parentheses appended at the end,eg: JPS/IP/P/1/99(NSC 1).

(a) Generally, the TENDER DOCUMENT FOR WORK comprisesthe documents in the following order:

Tender Notice Instructions to Tenderer Form of Tender (JKR 203N1) Conditions of Contract

(JKR 203N, including amendments and SpecialProvisions)

Relevant Particulars of the Main Contract Specification Summary of Tender and Schedule of Rates; or Bills of

Quantities Schedule of Technical Information List of Drawings

The sample contents page for the tender document is set outin Volume 10A, Chapter 20.

For information

Action by: PT/PO





/ Reference

3(Cont’d)

Preparation of Tender Documents (Cont’d)

(b) Generally, the TENDER DOCUMENT FOR SUPPLY OFMATERIALS OR GOODS comprises the documents in thefollowing order:

Tender Notice Instructions to Tenderer Form of Tender (JKR 203P 1) Conditions of Contract

(JKR 203P, including amendments and SpecialProvisions)

Relevant Particulars of the Main Contract Specification

Schedule of Prices Schedule of Technical Information


(c) Generally, the TENDER DOCUMENT FOR SUPPLY OFMATERIALS OR GOODS comprises the documents in thefollowing order:



Relevant Particulars of the Main Contract Specification Schedule of Prices Schedule of Technical Information


Action by: PT/PO

Action by: PT/PO

4 Invitation and Receipt of Tender

The procedures for the invitation and receipt of tender set outin Chapter 7 are generally applicable to the invitation andreceipt of tender for a nominated sub-contract.

Invite the Main Contractor to tender for the sub-contract worksif the Main Contractor is suitably qualified.

Action by: PT/PO





/ Reference

5 Tender Evaluation and Nomination / Acceptance

(a) Tender Evaluation

The procedures for the tender evaluation and acceptance setout in Chapter 8 are generally applicable to the tenderevaluation of a nominated sub-contract

In the evaluation of tender, the following percentagepreference are applied for specialist bumiputra contractors forsupplies and services:

Value of Work PreferenceWeightage

Exceeding RM100,000 – RM500,000 10%

Exceed RM500,000 - 1.5 million 7%

Exceeding RM 1.5 million – RM 5 million 5%

Exceeding RM 5 million – RM 10 million 3%

Exceeding RM10 million – RM 15 million 2.5%

Exceeding RM15 million No preference

(b) Nomination & Acceptance

Upon the approval of the Procurement Board,

the SO shall issue the Letter of Nomination theContractor and instruct to accept the tender, or

if the Contractor’s tender is accepted, the S.O. shallissue the Letter of Acceptance to the Contractor.

Action by: PT/PO

Refer: SPP 4/1995

Action by: SOR/SO





/ Reference

5(Cont’d)

Tender Evaluation and Nomination / Acceptance (Cont’d)

(b) Nomination & Acceptance (Cont’d)




(i) Letter of Nomination

Use the current form for Letter of Nomination:

for nomination of sub-contractor: Form JKR 203N3

for nomination of supplier: Form 203P3

(ii) Letter of Acceptance

Use the current form for Letter of Acceptance of MainContractor’s Tender for work or Supply of Materials orGoods Under Prime Cost Sum, where the Main Contractorshall carry out works allocated under Prime Cost orProvisional Sums.

Use the current and appropriate form for the nomination,notification and/or acceptance, as the case may be.

Action by: SOR/SO

6 Sub-Contract Documentation

The procedures for the preparation of contract document setout in Chapter 9 are generally applicable for the preparation of the sub-contract documents.

The sample contents page for the contract document is set outin Volume 10A, Chapter 20.

Action by: PT/CAO





/ Reference

7 Sub-Contract Administration

(a) Generally

Generally, the Contractor is fully responsible for the acts of theSub-Contractor/Supplier.

With the exception of payment matters, the Contractor is alsoresponsible for the day-to-day administration of the sub-contract / supply contract, including matters (where applicable)relating to

Variations Delays and Extension of Time

Non-Completion Loss and Expense Determination

The written consent of the SO is required before the Contractormay agree to, or grant, and additional time to the sub-contractor, or to determine the employment of the sub-contractor / supplier, as the case may be.

(b) Direct Payment

Direct payment to nominated sub-contractors and suppliers arepermitted under the terms of the contract and sub-contract,

subject to the following procedures or conditions are fulfilled:

(a) Direct progress payment up to the limit of 90% of Sub-contract Sum

(b) The remainder 10% of the Sub-contract Sum shall be paidto the Main Contractor after the issuance of the Certificateof Practical Completion. The PT shall ensure that the MainContract releases the remainder sums to the Sub-Contractor after the Defects Liability Period.

(c) Ensure that the conditions for direct payment are included

in the tender documents and the sub-contract.

(d) The sub-contractor is registered as bumiputra contractorunder the relevant class, and is a local contractor operatingat the area where the project is to be carried out.

For information

Action by: PT/ CAO/Finance Division





/ Reference

7(Cont’d)

Sub-Contract Administration (Cont’d)

(b) Direct Payment (Cont’d)

(e) Ensure that the conditions for direct payment are stated inthe Letter of Acceptance (LoA) to the Main Contractor, andthat the Main Contractor submits the a complete list of sub-contractors he intents to employ.

(f) Ensure that there is no assignment of payments to others,other than the sub-contractors listed by the MainContractor.

(g) The Main Contractor is not permitted to amend the list of

sub-contractors without written permission of theGovernment/DID.

(h) The main contract includes an indemnity clause tosafeguard the rights of the Government / DID.

(c) Written Consent of the S.O.

The written consent of the SO is required before the Contractormay carry out any of the following under the terms of the sub-contract:

Permit sub-contractor’s to employ workmen not in

accordance with Government’s prescribed ratio (clause12(b))

Permit Sub-letting (clause 19) Grant extension of time (clause 26(b)) determine the employment of the sub-contractor (clauses

28(a) and (b)). employ others or himself undertake the sub-contract work

following the determination of the nominated sub-contractor (clause 28(c)(ii)).






/ Reference

7(Cont’d)


(c) Written Consent of the S.O. (Cont’d)

In addition to the above, the S.O.’s certificate is required forthe following:

a certificate, stating the nominated sub-contractor’s default,be issued by the S.O. prior to calling of performance bondby the Main Contractor (clause 24(b))

a certificate, stating that the nominated sub-contractor is indelay, prior to deduction for loss or damages by the MainContractor (clause 27).

(d) Default on the Part of the Sub-Contractor / Supplier

Where the Nominated Sub-contractor or Supplier in theexecution of the work or the supply of the materials or goodsunder the sub-contractor, the Main Contractor shall beresponsible to have the works executed or the materials orgoods supplied by whatsoever means necessary.

The Government/DID is not required to re-nominate. Thecontractor is only entitled to be paid the same sum as if theNominated Sub-contractor or Supply had not defaulted, andthe contractor is not entitled to extension of time by reasons of such default.

Action by: PT /SO

For information

7 & 8 Commencement and Completion of Sub-Contract Works

The Main Contractor shall issue an Official Order to Commence,using form JKR 203N5, and the Nominated Sub-Contractor isrequired to complete the works within the time for completionstated in its Form of Tender.

Nominated Supplier

The Main Contractor shall issue an Order For Supply andDelivery of Articles, using form JKR 203P5, and the Nominated

Supplier is required to complete the supplies within the timefor completion stated in its Form of Tender.

Defects Liability

Refer to the Main Contract for defects liability obligations andrights.

For information




20.2.2 Administration of Provisional Sum


/ Reference

A Provisional Sums

Please refer to Flowchart 20.2 – Administration of ProvisionalSums.

The Project Team must give due consideration to the overallworks 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

Prepare cost estimates for the works to be carried out undereach Provisional Sum.

At this stage, the scope of works shall have been sufficientlyclearly identified or defined to enable the works to be priced.

The cost estimate for the works shall be prepared by anofficer who has the relevant experience or expertise.

Action by: CAO

2 Approval Before Proceeding with Procurement

Approval of the Authorised Person is required if the estimatedcost of works for each Provisional Sum exceeds thatProvisional 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..

Action by: CAO

JPS SP Bil 1/2007

3, 4 & 5 Authorised Person

If the estimated cost of works exceeds the Provisional Sumby more than 30% up to the limit of 50%, the AuthorisedPerson shall be the Division Director.

If the estimated cost of works exceeds the Provisional Sumby more than 50%, the Authorised Person shall be theDirector General or Deputy Director General.





/ Reference

6 & 7 Procurement of Works Not Requiring Involvement of the MainContractor

If the works do not require the involvement of the Contractor(eg aerial photography or works carried out off-site), thenproceed 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 suppliermay be effected through Indent or Local Purchase Order(Inden / Pesanan Tempatan).

Action by: SOR/CAO

For information.

8 & 9 Works To Be Carried Out By Specialists – Calling of Tender/Quotation By Contractor

For specialist works exceeding RM200,000, open/selectivetender shall be called by the Contractor.

For works value not exceeding RM200,000, work may beprocured by the Contractor through quotation exercise.

The Contractor may tender/quote for the specialist works, if has the necessary qualifications. In such cases, theContractor shall not be entitled to profit and attendance on histender/quotation.

For information

Contractor shall prepare and call tender/quotation

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

Design and Build. For DB contracts, the Contractor shallprepare the specifications, Needs Statement or design(‘design documents’) for the tender/quotation documents.

The Contractor shall prepare the tender/quotationdocument based on the design documents, and providethe list of suitably qualified sub-contractors or suppliers(‘tenderers’) for the SOR’s approval.

The SOR/PT must check the tender/quotation documentsare in order and free from errors. The SOR shall provide alist of suitably qualified tenderers.

To total number of tenders shall not be less than 5,selected from both the lists provided by Contractor and theSOR.

Action by:SOR/PT





/ Reference

8 & 9(Cont’d)

Works To Be Carried Out By Specialists – Calling of Tender/Quotation By Contractor (Cont’d)

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

The Contractor shall prepare sufficient number of tenderdocuments.

For quotations, the tenderers must submit 2 set of documents.

Action by:SOR/PT

Closing of Tender/Quotation

The SOR shall prepare and issue the invitation for

tenders/quotations.

The tenders/quotations shall be closed on the fixed dateand time.

The quotations/tenders shall be opened in the presence of a committee, comprising representatives of the SOR andContractor.

Evaluation of Tender/Quotation

For tenders, the evaluation shall be carried out by the

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

Design and Build. For DB contracts, the evaluation shallbe carried out by the Contractor, and the Contractor shallrecommend the lowest and technically complyingquotation.

For quotations, the evaluation shall be carried out by theContractor, and the Contractor shall recommend the lowestand technically complying quotation.

(a) The SOR shall verify the recommendation, and mayfurther negotiate for a fair sub-contract sum orcontract rates.

(b) The sub-contract sum or contract rates shall beinclusive of the Contractor’s Profit and Attendance.





/ Reference

8 & 9(Cont’d)


Profit and Attendance (P&A)

The Profit and Attendance (P&A) shall be inclusive of Contractor’s management costs, profit and attendance.

For Quotation, the Contractor’s P&A shall be as stated inthe Contract or, if not stated then, it shall not exceed7.5%.

For Tender, the Contractor’s P&A shall be as stated in theContract 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%

If the Contractor’s tender/quotation is accepted, theContractor shall not be entitled to profit and attendance onhis tender/quotation.

10 Works To Be Carried Out By Main Contractor

For normal category of works (‘kategori biasa’), or workswhich the Contractor possesses the necessary skills, the SOmay issue the necessary SO Instruction for the Contractor tocarry out the works.

The valuation of works shall be in accordance with thevaluation rules of the Contract, i.e. based on contract rates or,in the absence of contract rates, based on fair valuation.

Action by: SOR / SO





/ Reference

11 Approval of Value of Works

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

Action by: SOR

12 Appointment of Sub-Contractor or Supplier

SO’s Instruction

Issue the necessary instruction to the Contractor to effect theappointment of the sub-contractor or supplier, as approved bythe VO Committee.

Direct Payment and Deed of Assignment

The DID may make direct payment to such sub-contractor orsupplier through the execution by the Contractor of the ‘Deedof Assignment’ (Surat Ikatan Penyerahan Hak Faedah), infavour of the appointed sub-contractor or supplier.

For avoidance of disputes, a copy of the Deed of Assignmentshall be appended to the SO’s Instruction for the appointmentof sub-contractor or supplier.

The Deed of Assignment may be used if there is nooverlapping of sums which is assigned under the main

contract.

Form JKR 203N

For works let under Form JKR 203N, direct payment to thesub-contractor shall be effected through the procedures forNominated Sub-Contractor or Nominated Supplier (see Section20.3.2, above).

Action by: SOR/SO




20.3 GUIDANCE NOTES

20.3.1 Definitions

"Nominated Sub-contractor" means any contractor, specialist or other person nominated by the S.O.

in accordance with the Contract to be employed by the Contractor for the execution of work orsupply of goods materials or services for which a Prime Cost Sum (or P.C. Sum) has been inserted inthe Contract or ordered by the S.O. to be employed by the Contractor to execute work or supplygoods materials or services under a Provisional Sum.

“Prime Cost Sum” or “P.C. Sum” is an amount included in a bill of quantities to cover a particular bitof work or supply of materials to be carried out by a nominated sub-contractor or a supplier.

Generally, P.C. Sums are included in the Contract for works to be carried out by specialist contractorsor suppliers.

"Provisional Sum" means a sum included and so designated in the Contract as a specific allocation

for the execution of work or the supply of goods materials or services which may be used in whole orin part or not at all at the direction and discretion of the S.O..

Generally, Provisional Sum are allocated for the execution of works or for supply of goods or servicesfor which

an exact price cannot be obtained/ascertained or are not clearly identified or defined

at the time of tender.

20.3.2 Nomination of Sub-Contractors and Suppliers under P.C. Sum

The contract may permit the Government / DID to nominate a sub-contractor to carry out work or asupplier to provide goods which is included under any Prime Cost or Provisional Sum.

The Forms JKR203 and 203A includes such right of nomination, whereas Form JKR DB/T does not.

Under the JKR Forms 203/203A, any work or supply of goods or materials covered by ProvisionalSums may be treated as P.C. Sum items if the S.O. so decides.

20.3.3 Appointment of Sub-Contractors and Suppliers under Provisional Sums

The sub-contractor or supplier may be appointed by the Contractor pursuant to the S.O.’s Instructionon the expenditure of Provisional Sums. The sub-contractor or supplier is not a nominated sub-

contractor or nominated supplier pursuant to the terms of the Contract.

The DID may make direct payment to such sub-contractor or supplier through the execution by theContractor of the ‘Deed of Assignment’ (Surat Ikatan Penyerahan Hak Faedah), in favour of theappointed sub-contractor or supplier.




20.3.4 Expending the P.C. Sums

The tender evaluation report (kertas taklimat tender) for the sub-contract must be submitted to theTender Board for approval.

Please also refer to Chapter 5 – Authority, and Chapter 8 – Tender Evaluation and Acceptance.

20.3.5 Expending the Provisional Sums

If the estimated cost of works is expected to exceed the Provisional Sum by 30% or more, then theProject Team must seek prior approval from the Authorised Person prior to the expenditure of theProvisional Sum.

The valuation or prices for the sub-contract or suppler must be submitted to the Authorised Personfor approval prior to the appointment of the sub-contractor or supplier.

If the estimated cost of works does not exceed the Provisional Sum, or exceeds the Provisional Sum

by less than 30%, the Project Team may proceed with the procurement and seek approval of the Authorised Person prior to the appointment of the sub-contractor or supplier.

20.3.6 Procurement under P.C. Sum and Provisional Sum

The PT/PO shall carry out the

tender exercise, or quotation exercise (as the case may be),

for the sub-contract works, where such Prime Cost Sums or Provisional Sums are included in theContract.



Nominated Sub-Contractor

JKR 203N/83 (including addendum) : Form of Contract To Be Used For Nominated Sub-Contractors Where the Main Contractor is Based Upon Form JKR 203 Or 203A

JKR 203N1/83 (including addendum) : Form of Tender For Use by Nominated Sub-Contractor

JKR 203N2/88 : Conditions of Tendering and General Information For Use By Nominated Sub-Contractor

JKR 203N3/93 : Letter of Nomination

JKR 203N4/83 : Letter of Acceptance of Tender By Main Contractor To Nominated Sub-Contractor

JKR 203N5/83 : Official Order to Commence Work By Main Contractor To Nominated Sub-Contractor

JKR 203N6/88 : Letter of Nomination of Sub-Contractor

JKR 203N7/88 : Letter of Indemnity From Nominated Sub-Contractor to the Government




Nominated Supplier

JKR 203P/83 (including addendum) : Form to be used for Nominated Suppliers Where The MainContractor is based upon Form JKR 203 or 203A

JKR 203P1/83 : Form of Tender For Use By Nominated Suppliers

JKR 203P2/83 : Conditions of Tendering And General Information For Use by NominatedSuppliers

JKR 203P3/83 : Letter of Nomination

JKR 203P4/83 : Letter of Acceptance of Tender by Main Contractor To Nominated Supplier

JKR 203P5/83 : Order For Supply and Delivery of Articles – to be issued by Main Contractor tothe Nominated Supplier

JKR 203P5A/83 : Schedule of Articles Ordered To Be Supplied and Deliverd

JKR 203P6/88 : Letter of Notification of Nomination of Supplier

JKR 203P7/88 : Letter of Indemnity From Nominated Supplier to the Government

Generally

Bank Guarantee Form for Performance Bond (Nominated Sub-Contract Works)

Deed Of Assignment (Security For Direct Payments To A Third Party)(Surat Ikatan Serah Hak)

The Consent Of The Government Of Malaysia To The Deed Of Assignment For Direct Payment To A Third Party

Expending Provisional Sum

‘Borang E’ – Permohonan Permohonan Untuk Melaksanakan Item Di Bawah Wang PeruntukanSementara Yang Dijangka Melebihi *30%/50% Dari Peruntukan Asal.

‘Borang F’ – Permohonan Untuk Kelulusan Harga Bagi Item Wang Peruntukan Sementara.




20.5 REFERENCES

Please refer to the latest Treasury Circulars and DID Circulars for sub-contract tender procedures andsub-contract administration.


[1] Bil 4 Tahun 1995: Dasar dan Keutamaan Kepada Syarikat Bumiputra Dalam Perolehan Kerajaan

[2] Bil 4 Tahun 2003: Bayaran Terus Kepada Sub Kontraktor



[1] SP JPS Bil 4/2003: Bayaran Terus Kepada Sub Kontraktor

[2] SP JPS Bil /2007: Garis Panduan Pengurusan Wang Peruntukan Sementara (WPS)



DID MANUAL

VOLUME 10



CHAPTER 21

DISPUTE

MANAGEMENT AND RESOLUTION



Chapter 21 – DISPUTE MANAGEMENT AND RESOLUTION

Table of Contents



21.1 INTRODUCTION.........................................................................................................21-2

21.2 PROCEDURES ............................................................................................................21-2

21.3 REFERENCES .............................................................................................................21-6




List of Flowcharts


Flowchart 21.1 Dispute Management and Resolution 21-1





1. Disagreement ordifference of opinion orconflict or dispute?

-

2. Determine if there is a ‘dispute’.

PT

3. To use best endeavour toresolve the ‘issue’ amicably

PT

4. Issue(s) are settled? -

5. Refer the dispute to the Authorised Party fordecision

PT / CQS

6. Parties to give effect to

Authorised Party’sdecision.

PT

7. Is there new informationor substantiation from theContractor?

-

8. Contractor gives notice torefer dispute toarbitration?

-

9. Refer the dispute to Legal Adviser at Ministry / A.G.’sChamber for advice andaction.

Director of Contracts & QSDivision

Flowchart 21.1 – Dispute Management and Resolution

Yes

No

1

2

5

7

Yes

No

9

4

No

3

6

End

8

Yes

No

Yes




21 DISPUTE MANAGEMENT AND RESOLUTION

21.1 INTRODUCTION


An overview of the dispute management and resolution procedures for works contracts. Brief outline of alternative dispute resolution (‘ADR’).

21.2 PROCEDURES

Please refer to Flowchart 21.1 – Dispute Management and Resolution.


/ Reference

1 Generally

Disagreement or difference of opinion or conflict or disputeoften occurs in projects.

The best form of dispute avoidance is the ensure that theappropriate procurement method and form of contract isused, and that the scope of works is clearly and accurately setout in the tender and contract documents.

If practicable, all disagreements or differences of opinion orconflicts should be resolved as soon as possible to avoid anyescalation of the issues into a ‘dispute’.

In dispute management, contemporaneous and completerecords are of utmost importance. Therefore, the PT mustensure that records are properly kept and updated, andavailable when required. (See Volume 11).

For the purpose of this Manual, a ‘dispute’ is deemed to haveoccurred when the disagreement or difference of opinion etchas been formally referred by the Contractor to the

Authorised Party under the terms of the contract.

All other issues (i.e. disagreements or differences of opinion

or conflicts) should be resolved by way of negotiation oramicable settlement as soon as practicable.

For information

2 Ascertainment of ‘Dispute’

Ascertain if there is in actuality a “dispute”, whereby theparties must comply with the contractual procedures andarbitration clause.

Action by: SOR / PT





/ Reference

3 & 4 Amicable Settlement

Unless the ‘dispute’ is formally referred for a decision in

accordance with the contract, the PM/PT should use its bestendeavour to resolve the matter by way of negotiation oramicable settlement.

Upon settlement, record the agreement reached by theparties. This avoids future disagreement on the same issue.

Follow up with the relevant adjustment (if any) to the contractby way of extension of time, Variation or adjustment to theContract Sum, etc, as the case may be.

If parties are not able to make an amicable settlement, then

any party may refer the matter to the Authorised Party underthe Contractor for a decision.

Action by: SOR/PT

5 Referral of Dispute for Decision

If either party has submitted a formally referred the ‘dispute’ to be decided by the Authorised Party:

(a) Upon receipt of the Contractor’s formal request torefer the dispute to the Authorised Party, the PM/PTmust notify the Contracts and Quantity SurveyingDivision immediately.

Action by: SOR/PT

(b) Upon receipt of the Contractor’s formal request torefer the dispute to the Authorised Party, the PM/PTmust notify the Contracts and Quantity SurveyingDivision immediate.

Action by: SOR/PT

(d) The PT shall prepare the documents setting out thebackground of the dispute, with sufficient details forthe Authorised Party to make a decision.

Action by: SOR/PT

(c) The Contracts and Quantity Surveying Division shallrefer the dispute to the officer authorized under the

contract (Authorised Party) to make a decision.

Contracts and Quantity Surveying Division, whereappropriate to do so, shall advise and assist the

Authorised Party in the dispute resolution process.

Action by:BUBK





/ Reference

(e) The Authorised Party is required to make a decisionwithin the time frame stipulated in the contract.

(f) The Authorised Party may refer the dispute to theClaim Committee for a decision.

For ex-gratia payments, the Claim Committee willrefer the matter to Treasury for decision and/orapproval.

Action by: AtP/ Claims

CommitteeRefer: Treasury Instruction 202

(AP202)

JKR Forms of Contract

For the contracts based on the JKR forms, the time frame forthe S.O. to give a decision is 45 days after the Contractor’s

request for such decision.

Other Forms of Contract

If the contract is not based on JKR forms of contract, pleaserefer to the appropriate provision in the contract for thedispute reference procedures.

For information

For information

6 Compliance with Decision

Comply with the decision of the Authorised Party.

(If the Contractor is dissatisfied with the Authorised Party’s

decision, he must nevertheless comply with the decision butmay refer the dispute for arbitration.)


Action by: SOR/PT

7 Authorised Party May review its own Decision

If

the Contractor is dissatisfied with the decision of the Authorised Party, and

new information or substantiation has come into theattention of the Authorised Party,

then the Authorised Party may review its earlier decision, orrefer such review (of earlier decision) to the Claim Committeefor confirmation.

Action by: AtP





/ Reference

8 Notice of Arbitration

The Contractor may refer the dispute for arbitration if

The Authorised Party fails to give a decision within 45 daysafter being requested to do so; or

The Contractor is dissatisfied with the decision of the Authorised Party.

Such requirement to refer the dispute to arbitration must bemade within the period stipulated in the contract.

Generally, the arbitration shall not commence until after thecompletion or alleged of the completion Works, ordetermination or alleged determination of the employment of

the Contractor, except for the followings:

Where there is written consent of the Government/DIDand the Contractor; or

For such dispute following the effect of war or earthquake.


The above procedure is made in reference to the JKR forms.If the contract is not based on JKR forms of contract, pleaserefer to the appropriate provision in the contract for theprocedures on reference to arbitration.

For information

9 Reference to Legal Adviser at Ministry / A.G.’s Chamber

Upon receipt of the Contractor’s notice to refer a dispute forarbitration (whether or not prior reference was made to the

Authorised for a decision), the PM/PT must notify theContracts and Quantity Surveying Division immediately.

The Contracts and Quantity Surveying Division shall refer thematters to the Legal Adviser at the Ministry for further adviceand action.

The matter may then be referred to the Attorney General’s

Chamber by the Legal Adviser.

The PT shall compile the records and supporting documentsrelevant to the dispute and as may be required for the arbitralproceedings.

Action by:SOR/PT/BUBK




21.3 REFERENCES






Table of Contents



19.1 INTRODUCTION.........................................................................................................19-2

19.2 PROCEDURES ............................................................................................................19-2


19.4 REFERENCES .............................................................................................................19-6

APPENDIX 19A Checklist for the Preparation of Final Account(Senarai Semakan Penyediaan Perakuan Akaun Muktamad) ……………………... 19A-1




List of Flowcharts


Flowchart 19.1 Final Account and Final Certificate 19-1





1. Certificate of PracticalCompletion

-

2. Prepare the Statement of Final Account and FinalCertificate Ensure that the

necessaryadjustments to theContract Sum areapproved

CAO Refer Checklist for Preparation

of Final Account and

Final Certificate;

& the current form JKR66A

3. Quality Audit BUBK Refer Ch. 10,Fig. 10-3

4. Approval of Statement of Final Account and FinalCertificate

SO / AP

5. Issue Statement of Final

Account and FinalCertificate to Contractorand respective parties.

CAO

6. Forward documents to FDfor payment

CAO

7. Prepare CompletionReport, etc

SOR Volume 11 – Construction Management

Figure 19.1 Flowchart – Final Account and Final Certificate

1

2

7

5

6

4

3

Passes

Fails




19 FINAL ACCOUNT AND FINAL CERTIFICATE

19.1 INTRODUCTION


The guidelines on the preparation of the final accounts, and the issuance of the final certificate.

19.2 PROCEDURES

Please refer to Flowchart 19.1 – Final Account and Final Certificate.


/ Reference

1 Generally

The Final Account must be prepared as soon as is practicable,

after Practical Completion; and

the Contractor has fulfilled his obligations under theContract, which includes the making good of defects

The Contractor is required to submit, not later than 3 monthsafter practical completion, the full particulars of all claims,together with such supporting documents (includingdocuments relating to accounts of Nominated Sub-Contractorand Nominated Supplier, if any) as may be necessary for thepreparation of the Final Accounts.

If the Contractor fails or refuses to submit the informationwithin the time, the Final Accounts may be prepared based onthe information at hand so as to enable the Final Accounts andFinal Certificate to be completed within 3 months after the endof defects liability period or issuance of the Certificate of Completion of Making Good Defects, whichever is the later.

Final Accounts and Final Certificate following Determination

Where the employment of the Contractor was terminated, the

Final Accounts and Final Certificate shall be prepared as soonas practicable after the new contractor is appointed and theassessment of the costs and/or loss or damage to theGovernment/DID is completed. A modified Form JKR66A isused (Final Account After Determination of Employment of theContractor / Perakuan Muktamad Kontrak Yang ManaDitamatkan Pengambilan Kerja Kontraktor).

For procedures following determination, please refer toChapter 16.

For information





/ Reference

2 Preparation of the Statement of Final Account and FinalCertificate

(a) Adjustment of Contract Sum

Before preparing the Final Account and Final Certificate (formJKR66A), ensure that all adjustments to the Contract Sum areapproved and carried out, i.e. for,

o Adjustment for Prime Cost and Provisional Sumso Re-measurement of provisional quantitieso Variations to the Contracto Assessments of claims by the Contractor.

Ensure that all Variation Orders (APK) and Adjustment of

Contract Sum (PHK) have been issued and are correct.

Ensure that the SO and contractor sign the JKR-APK and JKR-PHK, as the case may be.

Action by: SOR/CAO

Refer to Chapter 12, and the

Checklist for Adjustment of

Contract Sum

(b) Prepare Form JKR66A

Use the current Form JKR 66A.

Ensure that the form is duly filled in with the correct contractdata, and that the sums, adjustments and computation arecorrect.

The Final Account must take into account the following:

All adjustments to the Contract Sum;

Payments previously paid to the Contractor, NominatedSub-Contractor and Suppliers, and assignees; and

Permitted deductions under the Contract, such as costsincurred in connection with employment of others toexecute such works to give effect to an S.O.’s instruction,Liquidated Ascertain Damages (LAD), costs for makinggood defects, etc.

Recoupment of Advance Payment

Deductions for direct payment by DID for dues orcontributions under the Employment Ordinance, theEmployee’s Social Security Act, the Employee’s ProvidentFund Ordinance and any other laws relevant to theemployment of workmen.

The release of Performance Guarantee Sum (if any).

Action by: SOR/CAO








/ Reference

(c) Supporting Documents

Attach the required supporting documents to the Final Accountand Final Certificate:

Certificate of Practical Completion;

Certificate of Non- Completion; if any

Certificate of Completion of Making Good Defects;

Certificate of Delay and Extension of Time, if any;

Certificate of Adjustment of Contract Sum, if any;

Certificate of Payment of Performance Guarantee Sum, if any;

Payment voucher(s); and

Letter of release from the Department of Labour, orStatutory Declaration (to the effect that workmenemployed have received all wages) made by theContractor**.

**The letter or statutory declaration must be submitted by the

Contractor before the final payment can be effected to theContractor.

Action by: SOR/CAO

(d) Check documents for completeness, and computation

Upon receipt of the Final Account and Final Certificatedocuments:

Check that each document is complete and/or in order.Refer to the Checklist for Preparation of Final Account (Penyedian Perakuan Akaun Muktamad);

Complete and initial the Checklist for Preparation of Final

Account;

The recommending officer shall sign the Form JKR66A; and

Submit Form JKR66A, together with attached documents,to the SO for signature

Action by: SOR/CAO








/ Reference

3 Quality Audit

Forward the Statement of Final Account and Final Certificate

for checking (quality audit) by the relevant contract officer.

The quality auditor shall check that the documents are in orderand free of errors.

Action by:CAO/BUBK

4 Approval of Final Account and Final Certificate

The Final Account and Final Certificate must be signed by theS.O..

Action by: CAO/SO

5 Issue Final Account and Final Certificate to Contractor

The Final Account and Final Certificate must be forwarded toContractor and copies distributed to all parties involved in theContract (Accountant General).

It is not a contractual requirement that the Contractor mustsign and return a copy of the Final Account and FinalCertificate.

Action by: CAO

6 Forward documents to the Finance Division

The Final Account and Final Certificate must be forwarded tothe relevant Finance Division to effect payment.

Action by: CAO / FD

7 Prepare Completion Report, etc

As final duties, the SOR/PT are to prepare and submit the

Final (Completion) Report, and Contractor’s Performance Report (if necessary).

Please also refer to Volume 11 – Construction Management.

For information






JKR 66A : Final Account and Final Certificate

Letter of Discharge of Bank / Finance Company / Insurance Guarantee

19.4 REFERENCES

Please refer to the latest Treasury Circulars and DID Circulars on Final Account and Final Payment.


Nil




[2] SP JPS Bil. 4/2008: Langkah-langkah Untuk Mempercepatkan Bayaran Interim (Tambahankepada Surat pekeliling SP JPS Bil. 2/2000)




APPENDIX 19A CHECKLIST FOR THE PREPARATION OF FINAL ACCOUNT

(SENARAI SEMAKAN PENYEDIAAN PERAKUAN AKAUN

MUKTAMAD)

TAJUK

PROJEK

Untuk Tindakan


Kepada

TarikhDiterim

aOleh

Tarikh Siap Semakan

PMK 1

PMK 2

AK*


1. Pastikan perkara-perkara berikutdipatuhi sebelum penyediaan PerakuanMuktamad disiapkan.

(i) Semua Wang Kos Prima(termasuk layanan dankeuntungan) & Wang PeruntukanSementara telah diselaraskan.

(ii) Semua item untuk KuantitiSementara telah dibuatPengukuran Semula.

(iii) Semua item/kerja yang tidak

dilaksanakan (omission) ataudikurangkan daripada kontrak telah disediakan APK

(iv) Semua APK & PHK telahdiselaraskan.

(v) Pelarasan pengiraan baki untuk VOP telah dibuat.

(vi) Semua tuntutan antarakontraktor dan Kerajaan telahdiselesaikan

Tandakan ()selepassemakan

2. Borang Perakuan Muktamad.

2.1 Pastikan borang JKR 66A yang terkinidigunakan.

Muka surat 1 / 4

2.2 KERAJAAN - bermaksud 'KERAJAANMALAYSIA' bagi projek Persekutuanatau 'KERAJAAN ...............' bagiprojek Negeri.

2.3 Peruntukan pembangunan, kepala dan

pecahan kepala - hendaklah diisi.






2.4 Tajuk kerja, nama dan alamatkontraktor hendaklah sama seperti didalam dokumen kontrak.

2.5 No.Kontrak dan Jumlah Harga AsalKontrak hendaklah sama seperti didalam dokumen kontrak.

2.6 Jumlah Bersih Tambahan / Potongan

(i) Ambil Jumlah Bersih dari PenyataPelarasan Harga Kontrak di mukasurat 4/4.

2.7 Harga Muktamad Kontrak adalahHarga Kontrak setelahditambah/dipotong jumlah bersih APK & PHK.

2.8 Perkara A - Butir-butir JumlahPotongan / Kurangan

(i) Perkara A.1 - pastikan semula jumlah bayaran interim yangterdahulu berasaskan baucerbayaran.

(ii) Perkara A.2 - pastikan jumlahsemua bayaran WangPendahuluan, jika ada yangdibuat berasaskan baucerbayaran (termasuk bayaranWang Pendahuluan kepadaNSC/NS).

(iii) Perkara A.3 - Jumlah Potonganlain termasuk bayaran kepadapihak ketiga, jika ada (sertakanlampiran dan keteranganpotongan).

2.9 Bayaran Muktamad Dibawah Kontrak adalah Harga Muktamad Kontrak ditolak dengan perkara A.1, 2 dan 3.

2.10 Tandatangan Pegawai Pengesyorhendaklah pegawai yang diberi kuasadan catitkan nama dan jawatan.






2.11 Perkara 'B'

(i) Pastikan amaun dalam perkataan

jumlah sebenar bayaranPerakuan Muktamad.

(ii) Perkara B.1.(ii) - Pastikanketepatan bayaran balik kepadaKontraktor Utama bagi pelepasanDeposit Wang JaminanPelaksanaan. (Jika berkenaan).

(iii) Perkara B.2 - Pastikan ketepatanbaki bayaran kepadaSubkontraktor/Penerima Bayaranseperti di Lampiran A.

(iv) Perkara B.3 - Pastikan ketepatanpengiraan kredit hasil bagi LADberasaskan perbezaan tarikh CPCdengan tarikh Lanjutan Terakhirdan kadar LAD di dalam kontrak.

(v) Perkara B.1.(i) – Pastikanperkiraan nilai kerja dan amaun-amaun lain bagi KontraktorUtama adalah perbezaan antaraBayaran Muktamad dan jumlahPerkara B.1.(ii), B.2 & B.3

2.12 Pastikan Jumlah Bayaran Muktamadmenyamai Bayaran Muktamad diBawah Kontrak.

2.13 Masukkan No. Fasal berkenaan dengan Akuan Statutori mengikut syarat-syaratkontrak berkenaan seperti 48(d) bagiborang JKR 203/203A.

2.14 Tandatangan Pegawai Penguasahendaklah pegawai yang diberi kuasa

dan catitkan nama dan jawatan.





Muka surat 2 / 4

2.15 Perkara ‘C’

Pastikan pihak kontraktor adalah orangyang sama yang menandatanganikontrak atau wakil lain yang diberikuasa. Tandatangan hendaklahdisaksikan dan dilengkapi dengantarikh serta maklumat diri yangdikehendaki.

2.16 Sebelum Perakuan Akaun dan BayaranMuktamad diluluskan, pastikan perkaradi bawah ini telah dilaksanakan.

(a) Perakuan Siap Kerja telahdikeluarkan.

(b) Surat Akuan Statutori atau Surat Akuan Ketua Pengarah Buruhtelah diterima daripada kontraktordan disertakan bersama.








Table of Contents



20.1 INTRODUCTION.........................................................................................................20-3

20.2 PROCEDURES ............................................................................................................20-3

20.2.1 Administration of Prime Cost Sums..................................................................20-3

20.2.2 Administration of Provisional Sum .................................................................20-11

20.3 GUIDANCE NOTES ...................................................................................................20-16

20.3.1 Definitions ...................................................................................................20-16

20.3.2 Nomination of Sub-Contractors and Suppliers under P.C. Sum ........................20-16

20.3.3 Appointment of Sub-Contractors and Suppliers under Provisional Sums...........20-16

20.3.4 Expending the P.C. Sums..............................................................................20-17

20.3.5 Expending the Provisional Sums....................................................................20-17

20.3.6 Procurement under P.C. Sum and Provisional Sum .........................................20-17


20.5 REFERENCES ...........................................................................................................20-19




List of Flowcharts


Flowchart 20.1 Administration of Prime Cost Sums 20-1

Flowchart 20.2 Administration of Provisional Sums 20-2





1. Prime Cost Sums orProvisional Sums areincluded in the ContractSum

-

2. Is it Prime Cost Sum? -

A. Administration of Provisional Sums

- Refer Figure 20.2

3. Prepare TenderDocuments

PT/PO


PT/PO

5. Tender Evaluation andNomination / Acceptance

PT/PO

6. Sub-ContractDocumentation

PT/CAO

7. Sub-Contract Administration

Commencement Direct Payment SO’s consent

PT/CAO

8. Completion -

Flowchart 20.1 – Administration of Prime Cost Sums

4

5

8

6

7

1

2

A

No

3

Yes





A Provisional Sum isincluded in the ContractSum

- Refer Figure 20.1

1. Prepare cost estimates of works under ProvisionalSum.

CAO/Ir/Sr

2. Is the estimates of works30% more than theProvisional Sum?

-

3. Is the estimates of works50% more than the

Provisional Sum?

-

4. Obtain approval fromDivision Director

CAO /Division Director

Use ‘Borang E’

5. Obtain approval from DGor Deputy DG

CAO/DG /Deputy DG

Use ‘Borang E’

6. Does the work require theinvolvement of the main

contractor?

-

7. Quotation exercise SOR

8. Is it specialist works? -

9. Tender or quotationexercise by Contractor

SOR

10. Issue SO instruction tomain contractor, andprepare valuation of works

SOR/ SO/CAO

11. Obtain approval (on costs)from Authorised Person

CAO /Authorised

Person

Use ‘Borang F’

12. Appointment of sub-contractor or supplier.

Flowchart 20.2 – Administration of Provisional Sums

12

11

1

2

3

5

No

4

6

Yes

No

Yes

9

8

10

7

No

Yes

No

Yes

A




20 PRIME COST & PROVISIONAL SUMS

20.1 INTRODUCTION


The guidelines on expenditure of Prime Cost (P.C.) and Provisional Sums. The guidelines on the preparation of tender documents, contract documents and general

administration of nominated sub-contract and supply contracts.

Note: Refer to Section 20.3 for definitions and general overview on procurement of items underPrime Cost Sums and Provisional Sums.

20.2 PROCEDURES

20.2.1 Administration of Prime Cost Sums

(Nominated Sub-Contractor and/or Nominated Supplier)


/ Reference

1 & 2 Prime Cost Sums

Please refer to Flowchart 20.1 – Administration of Prime CostSums.

Where the Contract specifically permits the nomination of sub-contractor to carry out works included under Prime Cost, or theSO has elected that works under Provisional Sums shall beexecuted by nominated sub-contractor or nominated supplier,then the PT/PO shall carry out the tender exercise forprocurement of sub-contract works.

The Project Team must give due consideration to the overallworks programme, and ensure the timely nomination of sub-contractor or supplier so as to avoid any delay to the works.

The procedures for preparation of tender documents,invitation, receipt, evaluation and acceptance of tenders, sub-contract documentation, payment, variation, delay andextension of time, non-completion, determination, completion,

handing over and defects, and final accounts are similar to thatfor the main contract, and reference should be made toChapters 6 to 19, inclusive.

Changes in points of detail are set out in this chapter.

For information





/ Reference

3 Preparation of Tender Documents

The procedures for the preparation of tender documents andtender table documents set out in Chapter 6 are generallyapplicable to the preparation of tender documents and tendertable documents for a nominated sub-contract.

The sub-contract tender document shall follow the maincontract number, with the words ‘NSC’ and the sub-contractworks package number in parentheses appended at the end,eg: JPS/IP/P/1/99(NSC 1).

(a) Generally, the TENDER DOCUMENT FOR WORK comprisesthe documents in the following order:

Tender Notice Instructions to Tenderer Form of Tender (JKR 203N1) Conditions of Contract

(JKR 203N, including amendments and SpecialProvisions)

Relevant Particulars of the Main Contract Specification Summary of Tender and Schedule of Rates; or Bills of

Quantities Schedule of Technical Information List of Drawings


For information

Action by: PT/PO





/ Reference

3(Cont’d)

Preparation of Tender Documents (Cont’d)

(b) Generally, the TENDER DOCUMENT FOR SUPPLY OFMATERIALS OR GOODS comprises the documents in thefollowing order:



Relevant Particulars of the Main Contract Specification

Schedule of Prices Schedule of Technical Information


(c) Generally, the TENDER DOCUMENT FOR SUPPLY OFMATERIALS OR GOODS comprises the documents in thefollowing order:



Relevant Particulars of the Main Contract Specification Schedule of Prices Schedule of Technical Information


Action by: PT/PO

Action by: PT/PO


The procedures for the invitation and receipt of tender set outin Chapter 7 are generally applicable to the invitation andreceipt of tender for a nominated sub-contract.

Invite the Main Contractor to tender for the sub-contract worksif the Main Contractor is suitably qualified.

Action by: PT/PO





/ Reference

5 Tender Evaluation and Nomination / Acceptance

(a) Tender Evaluation

The procedures for the tender evaluation and acceptance setout in Chapter 8 are generally applicable to the tenderevaluation of a nominated sub-contract

In the evaluation of tender, the following percentagepreference are applied for specialist bumiputra contractors forsupplies and services:

Value of Work PreferenceWeightage

Exceeding RM100,000 – RM500,000 10%

Exceed RM500,000 - 1.5 million 7%

Exceeding RM 1.5 million – RM 5 million 5%

Exceeding RM 5 million – RM 10 million 3%

Exceeding RM10 million – RM 15 million 2.5%

Exceeding RM15 million No preference

(b) Nomination & Acceptance




Action by: PT/PO

Refer: SPP 4/1995

Action by: SOR/SO





/ Reference

5(Cont’d)

Tender Evaluation and Nomination / Acceptance (Cont’d)

(b) Nomination & Acceptance (Cont’d)




(i) Letter of Nomination

Use the current form for Letter of Nomination:

for nomination of sub-contractor: Form JKR 203N3

for nomination of supplier: Form 203P3

(ii) Letter of Acceptance

Use the current form for Letter of Acceptance of MainContractor’s Tender for work or Supply of Materials orGoods Under Prime Cost Sum, where the Main Contractorshall carry out works allocated under Prime Cost orProvisional Sums.

Use the current and appropriate form for the nomination,notification and/or acceptance, as the case may be.

Action by: SOR/SO

6 Sub-Contract Documentation

The procedures for the preparation of contract document setout in Chapter 9 are generally applicable for the preparation of the sub-contract documents.

The sample contents page for the contract document is set outin Volume 10A, Chapter 20.

Action by: PT/CAO





/ Reference

7 Sub-Contract Administration

(a) Generally

Generally, the Contractor is fully responsible for the acts of theSub-Contractor/Supplier.

With the exception of payment matters, the Contractor is alsoresponsible for the day-to-day administration of the sub-contract / supply contract, including matters (where applicable)relating to

Variations Delays and Extension of Time

Non-Completion Loss and Expense Determination

The written consent of the SO is required before the Contractormay agree to, or grant, and additional time to the sub-contractor, or to determine the employment of the sub-contractor / supplier, as the case may be.

(b) Direct Payment

Direct payment to nominated sub-contractors and suppliers arepermitted under the terms of the contract and sub-contract,

subject to the following procedures or conditions are fulfilled:

(a) Direct progress payment up to the limit of 90% of Sub-contract Sum

(b) The remainder 10% of the Sub-contract Sum shall be paidto the Main Contractor after the issuance of the Certificateof Practical Completion. The PT shall ensure that the MainContract releases the remainder sums to the Sub-Contractor after the Defects Liability Period.

(c) Ensure that the conditions for direct payment are included

in the tender documents and the sub-contract.

(d) The sub-contractor is registered as bumiputra contractorunder the relevant class, and is a local contractor operatingat the area where the project is to be carried out.

For information






/ Reference

7(Cont’d)


(b) Direct Payment (Cont’d)

(e) Ensure that the conditions for direct payment are stated inthe Letter of Acceptance (LoA) to the Main Contractor, andthat the Main Contractor submits the a complete list of sub-contractors he intents to employ.

(f) Ensure that there is no assignment of payments to others,other than the sub-contractors listed by the MainContractor.

(g) The Main Contractor is not permitted to amend the list of

sub-contractors without written permission of theGovernment/DID.

(h) The main contract includes an indemnity clause tosafeguard the rights of the Government / DID.

(c) Written Consent of the S.O.

The written consent of the SO is required before the Contractormay carry out any of the following under the terms of the sub-contract:

Permit sub-contractor’s to employ workmen not in

accordance with Government’s prescribed ratio (clause12(b))

Permit Sub-letting (clause 19) Grant extension of time (clause 26(b)) determine the employment of the sub-contractor (clauses

28(a) and (b)). employ others or himself undertake the sub-contract work

following the determination of the nominated sub-contractor (clause 28(c)(ii)).






/ Reference

7(Cont’d)


(c) Written Consent of the S.O. (Cont’d)

In addition to the above, the S.O.’s certificate is required forthe following:

a certificate, stating the nominated sub-contractor’s default,be issued by the S.O. prior to calling of performance bondby the Main Contractor (clause 24(b))

a certificate, stating that the nominated sub-contractor is indelay, prior to deduction for loss or damages by the MainContractor (clause 27).

(d) Default on the Part of the Sub-Contractor / Supplier

Where the Nominated Sub-contractor or Supplier in theexecution of the work or the supply of the materials or goodsunder the sub-contractor, the Main Contractor shall beresponsible to have the works executed or the materials orgoods supplied by whatsoever means necessary.

The Government/DID is not required to re-nominate. Thecontractor is only entitled to be paid the same sum as if theNominated Sub-contractor or Supply had not defaulted, andthe contractor is not entitled to extension of time by reasons of such default.

Action by: PT /SO

For information

7 & 8 Commencement and Completion of Sub-Contract Works

The Main Contractor shall issue an Official Order to Commence,using form JKR 203N5, and the Nominated Sub-Contractor isrequired to complete the works within the time for completionstated in its Form of Tender.

Nominated Supplier

The Main Contractor shall issue an Order For Supply andDelivery of Articles, using form JKR 203P5, and the Nominated

Supplier is required to complete the supplies within the timefor completion stated in its Form of Tender.

Defects Liability

Refer to the Main Contract for defects liability obligations andrights.

For information




20.2.2 Administration of Provisional Sum


/ Reference

A Provisional Sums

Please refer to Flowchart 20.2 – Administration of ProvisionalSums.

The Project Team must give due consideration to the overallworks 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

Prepare cost estimates for the works to be carried out undereach Provisional Sum.

At this stage, the scope of works shall have been sufficientlyclearly identified or defined to enable the works to be priced.

The cost estimate for the works shall be prepared by anofficer who has the relevant experience or expertise.

Action by: CAO

2 Approval Before Proceeding with Procurement

Approval of the Authorised Person is required if the estimatedcost of works for each Provisional Sum exceeds thatProvisional 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..

Action by: CAO

JPS SP Bil 1/2007

3, 4 & 5 Authorised Person

If the estimated cost of works exceeds the Provisional Sumby more than 30% up to the limit of 50%, the AuthorisedPerson shall be the Division Director.

If the estimated cost of works exceeds the Provisional Sumby more than 50%, the Authorised Person shall be theDirector General or Deputy Director General.





/ Reference

6 & 7 Procurement of Works Not Requiring Involvement of the MainContractor

If the works do not require the involvement of the Contractor(eg aerial photography or works carried out off-site), thenproceed 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 suppliermay be effected through Indent or Local Purchase Order(Inden / Pesanan Tempatan).

Action by: SOR/CAO

For information.

8 & 9 Works To Be Carried Out By Specialists – Calling of Tender/Quotation By Contractor

For specialist works exceeding RM200,000, open/selectivetender shall be called by the Contractor.

For works value not exceeding RM200,000, work may beprocured by the Contractor through quotation exercise.

The Contractor may tender/quote for the specialist works, if has the necessary qualifications. In such cases, theContractor shall not be entitled to profit and attendance on histender/quotation.

For information

Contractor shall prepare and call tender/quotation

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

Design and Build. For DB contracts, the Contractor shallprepare the specifications, Needs Statement or design(‘design documents’) for the tender/quotation documents.

The Contractor shall prepare the tender/quotationdocument based on the design documents, and providethe list of suitably qualified sub-contractors or suppliers(‘tenderers’) for the SOR’s approval.

The SOR/PT must check the tender/quotation documentsare in order and free from errors. The SOR shall provide alist of suitably qualified tenderers.

To total number of tenders shall not be less than 5,selected from both the lists provided by Contractor and theSOR.

Action by:SOR/PT





/ Reference

8 & 9(Cont’d)


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

The Contractor shall prepare sufficient number of tenderdocuments.

For quotations, the tenderers must submit 2 set of documents.

Action by:SOR/PT

Closing of Tender/Quotation

The SOR shall prepare and issue the invitation for

tenders/quotations.

The tenders/quotations shall be closed on the fixed dateand time.

The quotations/tenders shall be opened in the presence of a committee, comprising representatives of the SOR andContractor.

Evaluation of Tender/Quotation

For tenders, the evaluation shall be carried out by the

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

Design and Build. For DB contracts, the evaluation shallbe carried out by the Contractor, and the Contractor shallrecommend the lowest and technically complyingquotation.

For quotations, the evaluation shall be carried out by theContractor, and the Contractor shall recommend the lowestand technically complying quotation.

(a) The SOR shall verify the recommendation, and mayfurther negotiate for a fair sub-contract sum orcontract rates.

(b) The sub-contract sum or contract rates shall beinclusive of the Contractor’s Profit and Attendance.





/ Reference

8 & 9(Cont’d)


Profit and Attendance (P&A)

The Profit and Attendance (P&A) shall be inclusive of Contractor’s management costs, profit and attendance.

For Quotation, the Contractor’s P&A shall be as stated inthe Contract or, if not stated then, it shall not exceed7.5%.

For Tender, the Contractor’s P&A shall be as stated in theContract 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%

If the Contractor’s tender/quotation is accepted, theContractor shall not be entitled to profit and attendance onhis tender/quotation.

10 Works To Be Carried Out By Main Contractor

For normal category of works (‘kategori biasa’), or workswhich the Contractor possesses the necessary skills, the SOmay issue the necessary SO Instruction for the Contractor tocarry out the works.

The valuation of works shall be in accordance with thevaluation rules of the Contract, i.e. based on contract rates or,in the absence of contract rates, based on fair valuation.

Action by: SOR / SO





/ Reference

11 Approval of Value of Works

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

Action by: SOR

12 Appointment of Sub-Contractor or Supplier

SO’s Instruction

Issue the necessary instruction to the Contractor to effect theappointment of the sub-contractor or supplier, as approved bythe VO Committee.

Direct Payment and Deed of Assignment

The DID may make direct payment to such sub-contractor orsupplier through the execution by the Contractor of the ‘Deedof Assignment’ (Surat Ikatan Penyerahan Hak Faedah), infavour of the appointed sub-contractor or supplier.

For avoidance of disputes, a copy of the Deed of Assignmentshall be appended to the SO’s Instruction for the appointmentof sub-contractor or supplier.

The Deed of Assignment may be used if there is nooverlapping of sums which is assigned under the main

contract.

Form JKR 203N

For works let under Form JKR 203N, direct payment to thesub-contractor shall be effected through the procedures forNominated Sub-Contractor or Nominated Supplier (see Section20.3.2, above).

Action by: SOR/SO




20.3 GUIDANCE NOTES

20.3.1 Definitions

"Nominated Sub-contractor" means any contractor, specialist or other person nominated by the S.O.

in accordance with the Contract to be employed by the Contractor for the execution of work orsupply of goods materials or services for which a Prime Cost Sum (or P.C. Sum) has been inserted inthe Contract or ordered by the S.O. to be employed by the Contractor to execute work or supplygoods materials or services under a Provisional Sum.

“Prime Cost Sum” or “P.C. Sum” is an amount included in a bill of quantities to cover a particular bitof work or supply of materials to be carried out by a nominated sub-contractor or a supplier.

Generally, P.C. Sums are included in the Contract for works to be carried out by specialist contractorsor suppliers.

"Provisional Sum" means a sum included and so designated in the Contract as a specific allocation

for the execution of work or the supply of goods materials or services which may be used in whole orin part or not at all at the direction and discretion of the S.O..

Generally, Provisional Sum are allocated for the execution of works or for supply of goods or servicesfor which

an exact price cannot be obtained/ascertained or are not clearly identified or defined

at the time of tender.

20.3.2 Nomination of Sub-Contractors and Suppliers under P.C. Sum

The contract may permit the Government / DID to nominate a sub-contractor to carry out work or asupplier to provide goods which is included under any Prime Cost or Provisional Sum.

The Forms JKR203 and 203A includes such right of nomination, whereas Form JKR DB/T does not.

Under the JKR Forms 203/203A, any work or supply of goods or materials covered by ProvisionalSums may be treated as P.C. Sum items if the S.O. so decides.

20.3.3 Appointment of Sub-Contractors and Suppliers under Provisional Sums

The sub-contractor or supplier may be appointed by the Contractor pursuant to the S.O.’s Instructionon the expenditure of Provisional Sums. The sub-contractor or supplier is not a nominated sub-

contractor or nominated supplier pursuant to the terms of the Contract.

The DID may make direct payment to such sub-contractor or supplier through the execution by theContractor of the ‘Deed of Assignment’ (Surat Ikatan Penyerahan Hak Faedah), in favour of theappointed sub-contractor or supplier.




20.3.4 Expending the P.C. Sums

The tender evaluation report (kertas taklimat tender) for the sub-contract must be submitted to theTender Board for approval.

Please also refer to Chapter 5 – Authority, and Chapter 8 – Tender Evaluation and Acceptance.

20.3.5 Expending the Provisional Sums

If the estimated cost of works is expected to exceed the Provisional Sum by 30% or more, then theProject Team must seek prior approval from the Authorised Person prior to the expenditure of theProvisional Sum.

The valuation or prices for the sub-contract or suppler must be submitted to the Authorised Personfor approval prior to the appointment of the sub-contractor or supplier.

If the estimated cost of works does not exceed the Provisional Sum, or exceeds the Provisional Sum

by less than 30%, the Project Team may proceed with the procurement and seek approval of the Authorised Person prior to the appointment of the sub-contractor or supplier.

20.3.6 Procurement under P.C. Sum and Provisional Sum

The PT/PO shall carry out the

tender exercise, or quotation exercise (as the case may be),

for the sub-contract works, where such Prime Cost Sums or Provisional Sums are included in theContract.



Nominated Sub-Contractor

JKR 203N/83 (including addendum) : Form of Contract To Be Used For Nominated Sub-Contractors Where the Main Contractor is Based Upon Form JKR 203 Or 203A

JKR 203N1/83 (including addendum) : Form of Tender For Use by Nominated Sub-Contractor

JKR 203N2/88 : Conditions of Tendering and General Information For Use By Nominated Sub-Contractor

JKR 203N3/93 : Letter of Nomination

JKR 203N4/83 : Letter of Acceptance of Tender By Main Contractor To Nominated Sub-Contractor

JKR 203N5/83 : Official Order to Commence Work By Main Contractor To Nominated Sub-Contractor

JKR 203N6/88 : Letter of Nomination of Sub-Contractor

JKR 203N7/88 : Letter of Indemnity From Nominated Sub-Contractor to the Government




Nominated Supplier

JKR 203P/83 (including addendum) : Form to be used for Nominated Suppliers Where The MainContractor is based upon Form JKR 203 or 203A

JKR 203P1/83 : Form of Tender For Use By Nominated Suppliers

JKR 203P2/83 : Conditions of Tendering And General Information For Use by NominatedSuppliers

JKR 203P3/83 : Letter of Nomination

JKR 203P4/83 : Letter of Acceptance of Tender by Main Contractor To Nominated Supplier

JKR 203P5/83 : Order For Supply and Delivery of Articles – to be issued by Main Contractor tothe Nominated Supplier

JKR 203P5A/83 : Schedule of Articles Ordered To Be Supplied and Deliverd

JKR 203P6/88 : Letter of Notification of Nomination of Supplier

JKR 203P7/88 : Letter of Indemnity From Nominated Supplier to the Government

Generally

Bank Guarantee Form for Performance Bond (Nominated Sub-Contract Works)

Deed Of Assignment (Security For Direct Payments To A Third Party)(Surat Ikatan Serah Hak)

The Consent Of The Government Of Malaysia To The Deed Of Assignment For Direct Payment To A Third Party

Expending Provisional Sum

‘Borang E’ – Permohonan Permohonan Untuk Melaksanakan Item Di Bawah Wang PeruntukanSementara Yang Dijangka Melebihi *30%/50% Dari Peruntukan Asal.

‘Borang F’ – Permohonan Untuk Kelulusan Harga Bagi Item Wang Peruntukan Sementara.




20.5 REFERENCES

Please refer to the latest Treasury Circulars and DID Circulars for sub-contract tender procedures andsub-contract administration.


[1] Bil 4 Tahun 1995: Dasar dan Keutamaan Kepada Syarikat Bumiputra Dalam Perolehan Kerajaan

[2] Bil 4 Tahun 2003: Bayaran Terus Kepada Sub Kontraktor



[1] SP JPS Bil 4/2003: Bayaran Terus Kepada Sub Kontraktor

[2] SP JPS Bil /2007: Garis Panduan Pengurusan Wang Peruntukan Sementara (WPS)




Table of Contents



21.1 INTRODUCTION.........................................................................................................21-2

21.2 PROCEDURES ............................................................................................................21-2

21.3 REFERENCES .............................................................................................................21-6




List of Flowcharts


Flowchart 21.1 Dispute Management and Resolution 21-1





1. Disagreement ordifference of opinion orconflict or dispute?

-

2. Determine if there is a ‘dispute’.

PT

3. To use best endeavour toresolve the ‘issue’ amicably

PT

4. Issue(s) are settled? -

5. Refer the dispute to the Authorised Party fordecision

PT / CQS

6. Parties to give effect to

Authorised Party’sdecision.

PT

7. Is there new informationor substantiation from theContractor?

-

8. Contractor gives notice torefer dispute toarbitration?

-

9. Refer the dispute to Legal Adviser at Ministry / A.G.’sChamber for advice andaction.

Director of Contracts & QSDivision

Flowchart 21.1 – Dispute Management and Resolution

Yes

No

1

2

5

7

Yes

No

9

4

No

3

6

End

8

Yes

No

Yes




21 DISPUTE MANAGEMENT AND RESOLUTION

21.1 INTRODUCTION


An overview of the dispute management and resolution procedures for works contracts. Brief outline of alternative dispute resolution (‘ADR’).

21.2 PROCEDURES

Please refer to Flowchart 21.1 – Dispute Management and Resolution.


/ Reference

1 Generally

Disagreement or difference of opinion or conflict or disputeoften occurs in projects.

The best form of dispute avoidance is the ensure that theappropriate procurement method and form of contract isused, and that the scope of works is clearly and accurately setout in the tender and contract documents.

If practicable, all disagreements or differences of opinion orconflicts should be resolved as soon as possible to avoid anyescalation of the issues into a ‘dispute’.

In dispute management, contemporaneous and completerecords are of utmost importance. Therefore, the PT mustensure that records are properly kept and updated, andavailable when required. (See Volume 11).

For the purpose of this Manual, a ‘dispute’ is deemed to haveoccurred when the disagreement or difference of opinion etchas been formally referred by the Contractor to the

Authorised Party under the terms of the contract.

All other issues (i.e. disagreements or differences of opinion

or conflicts) should be resolved by way of negotiation oramicable settlement as soon as practicable.

For information

2 Ascertainment of ‘Dispute’

Ascertain if there is in actuality a “dispute”, whereby theparties must comply with the contractual procedures andarbitration clause.

Action by: SOR / PT





/ Reference

3 & 4 Amicable Settlement

Unless the ‘dispute’ is formally referred for a decision in

accordance with the contract, the PM/PT should use its bestendeavour to resolve the matter by way of negotiation oramicable settlement.

Upon settlement, record the agreement reached by theparties. This avoids future disagreement on the same issue.


If parties are not able to make an amicable settlement, then

any party may refer the matter to the Authorised Party underthe Contractor for a decision.

Action by: SOR/PT

5 Referral of Dispute for Decision

If either party has submitted a formally referred the ‘dispute’ to be decided by the Authorised Party:

(a) Upon receipt of the Contractor’s formal request torefer the dispute to the Authorised Party, the PM/PTmust notify the Contracts and Quantity SurveyingDivision immediately.

Action by: SOR/PT

(b) Upon receipt of the Contractor’s formal request torefer the dispute to the Authorised Party, the PM/PTmust notify the Contracts and Quantity SurveyingDivision immediate.

Action by: SOR/PT

(d) The PT shall prepare the documents setting out thebackground of the dispute, with sufficient details forthe Authorised Party to make a decision.

Action by: SOR/PT

(c) The Contracts and Quantity Surveying Division shallrefer the dispute to the officer authorized under the

contract (Authorised Party) to make a decision.

Contracts and Quantity Surveying Division, whereappropriate to do so, shall advise and assist the

Authorised Party in the dispute resolution process.

Action by:BUBK





/ Reference

(e) The Authorised Party is required to make a decisionwithin the time frame stipulated in the contract.

(f) The Authorised Party may refer the dispute to theClaim Committee for a decision.

For ex-gratia payments, the Claim Committee willrefer the matter to Treasury for decision and/orapproval.

Action by: AtP/ Claims

CommitteeRefer: Treasury Instruction 202

(AP202)

JKR Forms of Contract

For the contracts based on the JKR forms, the time frame forthe S.O. to give a decision is 45 days after the Contractor’s

request for such decision.


If the contract is not based on JKR forms of contract, pleaserefer to the appropriate provision in the contract for thedispute reference procedures.

For information

For information

6 Compliance with Decision

Comply with the decision of the Authorised Party.

(If the Contractor is dissatisfied with the Authorised Party’s

decision, he must nevertheless comply with the decision butmay refer the dispute for arbitration.)


Action by: SOR/PT

7 Authorised Party May review its own Decision

If

the Contractor is dissatisfied with the decision of the Authorised Party, and

new information or substantiation has come into theattention of the Authorised Party,

then the Authorised Party may review its earlier decision, orrefer such review (of earlier decision) to the Claim Committeefor confirmation.

Action by: AtP





/ Reference

8 Notice of Arbitration

The Contractor may refer the dispute for arbitration if

The Authorised Party fails to give a decision within 45 daysafter being requested to do so; or

The Contractor is dissatisfied with the decision of the Authorised Party.

Such requirement to refer the dispute to arbitration must bemade within the period stipulated in the contract.

Generally, the arbitration shall not commence until after thecompletion or alleged of the completion Works, ordetermination or alleged determination of the employment of

the Contractor, except for the followings:

Where there is written consent of the Government/DIDand the Contractor; or

For such dispute following the effect of war or earthquake.


The above procedure is made in reference to the JKR forms.If the contract is not based on JKR forms of contract, pleaserefer to the appropriate provision in the contract for theprocedures on reference to arbitration.

For information

9 Reference to Legal Adviser at Ministry / A.G.’s Chamber

Upon receipt of the Contractor’s notice to refer a dispute forarbitration (whether or not prior reference was made to the

Authorised for a decision), the PM/PT must notify theContracts and Quantity Surveying Division immediately.

The Contracts and Quantity Surveying Division shall refer thematters to the Legal Adviser at the Ministry for further adviceand action.

The matter may then be referred to the Attorney General’s

Chamber by the Legal Adviser.

The PT shall compile the records and supporting documentsrelevant to the dispute and as may be required for the arbitralproceedings.

Action by:SOR/PT/BUBK




21.3 REFERENCES

