CONTENT

TOPIC 1: INTRODUCTION TO POST CONTRACT PROCEDURES AND PROFESSIONAL PRACTICE 1.1 Explain the definition of post-contract and professional practice 1.2 Explain the involvement of the QS in post-contract

TOPIC 2: RELATIONSHIP AND COMMUNICATION 2.1 Explain the contractual relationship between the QS and the client 2.1.1 Explain the rights and the responsibility of the QS to fulfill the contract with the applied at the post-contract stage.

2.2 Explain the relationship between the parties involved in the post-contract stage 2.2.1 2.2.2 2.2.3 2.2.4 Relationship between the QS and the architect Relationship between the QS and the engineer Relationship between the QS and the main contractor Relationship between the QS and the sub-contractor, nominated supplier

TOPIC 3: PROGRESS PAYMENT 3.1 Explain the matters that must be paid attention to in the preparation of the progress payment. 3.1.1 3.1.2 3.1.3 3.1.4 3.1.5 Explain the meaning of contract price Explain the meaning of work carried out by the main contractor, sub-contractor and nominated supplier State the meaning of unfixed materials and goods on site Explain the meaning of the previous payment Explain the meaning of advance payment and refund of advance payment

3.2 Explain the purpose, assessment preparation, the certificate that has to be issued and the duties of the technician and the technical assistant in assisting the QS to make payment to the main contractor. 3.2.1 3.2.2 3.2.3 3.2.4 3.2.5 3.2.6 3.2.7 Explain the action by the client and the design team after receiving their progress payment demand from the main contactor State the importance of the progress payment to the main contractor Differentiate between the preparation of the progress payment in the public sector and the private sector Explain the action of the main contractor on the clients delay in settling the progress payment Differentiate the use of standard forms in the public sector and the private sector. Explain the progress payment procedure in the public sector and the private sector. Differentiate the responsibilities of the main contractor, nominated sub-contractor, nominated supplier, QS, architect/superintending officer and client in the issuance of the progress payment to the main contractor. Explain the requirement during the preparation of the progress payment certificate to the main contractor. Explain the procedure to process progress payment claimed from the main contractor, nominated sub-contractor and nominated supplier

3.2.8 3.2.9

TOPIC 4: ARCHITECT, SUPERINTENDING OFFICER & VARIATION ORDER

4.1 Explain the purpose of orders and the amendments issued during contract and the professional practices regarding the related matters 4.1.1 Differentiate the variations issued by the architect/superintending officer and the engineer in the contract. 4.1.2 State the importance of the variation order to the main contractor 4.1.3 4.1.4 Identify the standard form in issuing variation orders in the public and private sectors. Explain the design teams action upon receiving the variation order.

4.1.5 Explain the procedure that must be followed in JKR and PAM standard forms. 4.1.6 State the rules of making an assessment on the variation order according to JKR and PAM standard forms. 4.1.7 Explain the work procedure to handle variation order according to JKR and PAM standard forms

TOPIC 5: THE NOMINATED SUB-CONTRACTOR AND THE NOMINATED SUPPLIER

5.1 Explain the financial control procedure to handle nominated sub-contractors 5.1.1 5.1.2 5.1.3 5.1.4 Explain the contractual relationship between the nsc, ns, client, & the main contractor. Explain the definition and responsibility of the nominated sub contractor and the nominated supplier in JKR and PAM standard forms. Explain the selection method of nominated sub-contractors and nominated supplier. Explain the assessment of claim from the nominated sub-contractor and the nominated supplier.

TOPIC 6: FROM HANDOVER TO FINAL ACCOUNT SETTLEMENT

6.1 Explain the procedure from the time of construction site handover to the final account settlement. 6.1.1 6.1.2 Explain the involvement of the QS at the site handover stage to the final account settlement Explain the certificates issued by the architect/ superintending officer to the main contractor. a) Delay and extension of time b) Liquidated & ascertained damages c) Partial occupation d) Sectional completion e) Termination of work f) Practical completion

g) Final account 6.1.3 Explain the purpose and preparation of the final account. a) Explain the importance of final account b) Identify the forms used in the public sector and the private sector c) Explain the procedures that must be followed in the JKR and PAM standard forms

TOPIC 1: INTRODUCTION TO POST CONTRACT PROCEDURES & PRO. PRACTICE

1.1 Definition of post-contract and professional practice

Post Contract What is the meaning of post contract? Construction industries are time consuming. Therefore they are divided into two broadly stage i.e. pre contract stage and post contract stage. Pre contract stage is a stage before any contract is form between a client and contractor meanwhile Post contract stage is a stage after the contract has been Therefore the stage begins just after the letter of acceptance being post by the client to the contractor and ended up after the obligations of the both parties been completed.

TOPIC 1: INTRODUCTION TO POST CONTRACT PROCEDURES & PRO. PRACTICE

Professional practice What is the meaning of professional practices? The professional mean someone who had an accredited certification given by related board of authorities in a particular area; Engineering, Accounting, Medicine, Quantity Surveying, etc. Section 7 (1) of Quantity Surveyors Act 1967 stated that no person shall unless he is a registered quantity surveyor practice or carry on business or take up employment as a quantity surveyor under any name, style or title containing the words Quantity Surveyor, Building Economist, Building Cost Consultant, Project Cost Consultant or the equivalent thereto in any other language. Practice mean act, perform or conduct. Practice is the act of rehearsing a behavior over and over, or engaging in an activity again and again, for the purpose of improving or mastering it, as in the phrase "practice makes perfect". In quantity surveying, professional practices mean a professional conduct or ethics of registered quantity surveyor in providing their professional services.

1.2 Involvement of the QS in the post contract stage. Advise on the contractors compliance wi. regards to performance bond & insurances requirements Prepare contract docs., rationalized rate. Prepare tender docs. for nsc works. Tender evaluation, report, negotiation & recommend for award of nsc works. Cost control during construction. Evaluate and negotiate contractors claim for loss and expense Prepare and update monthly financial statement. Prepare cash flow projection to show employers monthly expenditure. Process and evaluate contractors and consultants interim and final payment certificates. Monitor contractors contractual obligation wi. regards to retentions including release of retentions, recoupment of advance payment (if any), back charges / set off. Attend to contractual issues with design team. Prepare commercial and contractual correspondence. Attend project and progress meetings. Final account negotiation including statement of final account.

Menyediakan Dokumen Kontrak Contract Document- Apabila Majikan mengeluarkan Surat Setuju Terima kepada tawaran yang dibuat oleh penender, maka Kontrak telah wujud disisi undang-undang kerana telah lengkap asas-asas kontrak iaitu wujudnya tawaran dan penerimaan. Dokumen yang asalnya dokumen tawaran yang telah lengkap diisi oleh penender termasuk Surat Setuju Terima dan dokumen-dokumen tambahan lain seperti polisi insuran dan performance bond akan disusun semula bagi membentuk Dokumen Kontrak. Dokumen kontrak perlu disediakan secepat mungkin selepas kontrak wujud bagi mengelakkan masalah bayaran interim kepada kontraktor. In order to prepare contract document the quantity surveyor have to rationalize all the rate given by the contractor and adjust and made correction for all the arithmetic error found in the bills of quantities. To do so, they have to sit and negotiate with the main contractor for the best result. The duty of QS here in to make sure that there is no front loading of price in the bills of quantities. They also have to ensure and that the main contractor have submitted all the policies to be submitted by the main contractor and checked the document to ensure that the policies are in a good order and compiled it in the contract document and finally make sure that the main contractor signed all the related document. Menyediakan Penilaian Kerja Interim Interim Valuation of works- Setelah terpilih sebagai Kontraktor, penender berkenaan akan memulakan kerja-kerja pembinaan. Memandangkan proses pembinaan ini memakan masa dan kos yang banyak, kontraktor dibenarkan membuat tuntutan kewangan atas kerja yang telah siap dan bahan yang telah dibawa masuk ke tapak bina dari masa ke semasa bagi mengurangkan beban kontraktor. Juruukur Bahan telah diamanahkan oleh Majikan untuk membuat penilaian bagi mengira kos kerja-kerja yang telah disiapkan dan bahan-bahan yang

telah dibawa masuk ke tapak bina oleh kontrakor. Biasanya penilaian ini akan disertai oleh wakil kontraktor. Juruukur Bahan setelah membuat penilaian di tapak bina akan mengeluarkan suatu sijil bayaran interim yang menyatakan jumlah bayaran yang perlu dibayar oleh Majikan kepada Kontraktor. Majikan wajib membayar kepada kontraktor jumlah yang telah dinyatakan mengikut tempoh yang ditetapkan kontrak. Kegagalan membawa maksud Majikan melakukan kemungkiran kontrak. In the preparation of interim payment, the quantity surveyor have to make sure that the main contractor have submitted their claims and then arrange for a proper date for valuation. During site valuation, the main contractor will have to assist the quantity surveyor by unlock the store and showing all the item claimed.

Menyediakan Variation Order Perubahan-perubahan kerja biasanya berlaku bagi semua projek melalui Arahan Arkitek/Pegawai Penguasa. Arahan-arahan ini hanya boleh dikeluarkan oleh Arkitek atau Pengawai Penguasa. Juruukur bahan bertanggung-jawab melengkapkan arahan ini dengan menganggarkan perubahan kos yang terhasil dan seterusnya mendapatkan kelulusan dari Jawatankuasa Perubahan Harga. Menyediakan Penyata Kewangan sepanjang tempoh pembinaan Financial Statement of regular intervals during the costruction period- Setelah pembinaan berjalan biasanya banyak perubahan berlaku akibat dari Arahan Arkitek/Arahan Pegawai Penguasa dan ini akan memberi kesan keatas komitmen kewangan majikan. Oleh itu majikan sentiasa perlu dimaklumkan sebarang perubahan

kedudukan kewangan projek berkenaan dalam bentuk penyata kewangan termasuk aliran wang keluar masuk bagi membolehkannya membuat tindakan dan keputusan yang sewajarnya. Menyediakan Akaun/Perakuan Muktamad Final Accounts/Statement.- Setelah Kontraktor menyiapkan kerja. Segala dokumen kewangan seperti tuntutan interim, tuntutan perubahan kerja, perubahan turun naik harga, tuntutan diluar kontrak hendaklah diselesaikan dan dipersetujui oleh semua pihak. Juruukur Bahan akhirnya akan mengeluarkan Perakuan Muktamad dengan menyatakan jumlah akhir yang perlu dibayar kepada kontraktor.

TOPIC 2: RELATIONSHIP AND COMMUNICATION

2.1 The contractual relationship between the QS and the client. 1. In order to enjoy the benefit of the quantity surveying services, the client have to engage a QS consultant. 2. The client will have to engage the QS consultant using a standard MOA issued by the ISM/BQSM. 3. The MOA creates a contractual relationship between both parties. The right and liability of the parties are based on the said MOA, the Conditions of Engagement and the Schedule to Conditions of Engagement.

TOPIC 2: RELATIONSHIP AND COMMUNICATION

2.1.1

Contract rights and responsibility of QS The QS consultant has rights for payment to their professional services. Exercise all reasonable skill, care and diligence in the discharge of his professional services. Prepare bills of quantities in accordance with the principles of the current edition of the standard method of building works issued by the ISM. Do and perform all acts and matters which are usually done and performed by quantity surveyors according to the practice of their profession in relation to the project.

TOPIC 2: RELATIONSHIP AND COMMUNICATION

Basic services during post contract stage i. ii. Preparation of main contract document. Preparation of tender documents, estimates, reports and contract documents for works allowed under P.C. and Provisional Sums other than those under the charge of Mechanical and Electrical Consultants. Valuation of works in progress for interim valuation/certificates, Measurement of variation works and preparation of all related documents for Variation of Work Preparation of Revised ATDA (if necessary) and Adjustments of Contract Sum. Preparation of Final Account and As Completed Detailed Abstract (ACDA). Preparation of Cost Analysis based on accepted Contract Sum.

iii. iv. v. vi. vii.

viii. Preparation of Tender Price Index based on accepted Contract Sum. Additional services during post contract stage i. ii. iii. Preparation of final costs for contracts based on provisional BQ Remeasurement of the building works due to either re-planning of internal layout arising from a change of use or repositioning of the building Preparation and attendance for arbitration/litigation.

TOPIC 2: RELATIONSHIP AND COMMUNICATION

2.2 The relationship between the parties involved in the post-contract stage

Architect & Engineer (including all other consultants) In the traditional arrangement, quantity surveyor does not have a direct contract relationship with the Architect; however they have a communication link with the Architect as they are the quantity surveyor for the client.

Main contractor, NSC & NS In the traditional arrangement, quantity surveyor does not have a direct contract relationship with the main contractor; however they have a communication link with the main contractor as they are the quantity surveyor for the client.

TOPIC 3: PROGRESS PAYMENT

3.1.1 Contract Price Mutually agreed upon total amount that a principal (client or project owner) pays to a contractor on completion of the contract, in accordance with contract terms and conditions and their subsequent modifications (if any). Also called contract sum.

3.1.2

Work Carried Out Work properly done/executed

3.1.3

Unfixed materials and goods Including delivery to or adjacent to the Works. 75% of value of unfixed materials

3.1.4

Previous payment Last payment

3.1.5

Advance payment & refund of advance payment Payment before any work done Recoupment of advance payment

1. 2. 3. 4. 5. 6.

Must be done within 3 months from Date of Site Possession 25 % of builders work / RM 10 million ( main contract ) 10 % of NSC value of work / RM 5 million ( NSC contract ) 25 % / RM 10 million for supply contract (kontrak bekalan) 15 % / RM 5 million for service contract (kontrak perkhidmatan) Must be prepared before first interim payment

3.2.1

Action by the Client and Design Team upon receiving Progress Claims.

3.2.2

The importance of the progress payment to the MC. Payments are of major concern to Contractors and Employers. As the duration of the construction projects are usually long, contract sums involved are large and payments are only progressively paid rather than on delivery, thus the payments are lifeblood of the Construction Industry. In common law and in the absence of any provision in the contract for interim payments during the progress of work, the Contractor would not be entitled to such payment for his work done progressively unless he has fully or substantially completed his contracted work.

3.2.3

Differentiate the preparation of the progress payment in the public sector and the private sector Refer note on Payment Procedure

3.2.4

Explain the action of the main contractor on the clients delay in settling the progress payment Refer note on Payment Procedure

3.2.5

Differentiate the use of standard forms in the public sector and the private sector. Refer note on Payment Procedure

3.2.6

Explain the progress payment procedure in the public sector and the private sector. Refer note on Payment Procedure

3.2.7

Differentiate the responsibilities of the main contractor, nominated sub-contractor, nominated supplier, QS, architect/superintending officer and client in the issuance of the progress payment to the main contractor. Refer note on Payment Procedure

3.2.8

Explain the requirement during the preparation of the progress payment certificate to the main contractor. Refer note on Payment Procedure

3.2.9

Explain the procedure to process progress payment claimed from the main contractor, nominated sub-contractor and nominated supplier Refer note on Payment Procedure

TOPIC 4: ARCHITECT, SUPERINTENDING OFFICER & VARIATION ORDER

4.1 4.1.1 4.1.2 4.1.3 4.1.4 4.1.5 4.1.6 4.1.7 Explain the purpose of orders and the amendments issued during contract and the professional practices regarding the related matters (Refer note on Payment Procedure) Differentiate the variations issued by the architect/superintending officer and the engineer in the contract. State the importance of the variation order to the main contractor Identify the standard form in issuing variation orders in the public and private sectors. Explain the design teams action upon receiving the variation order. Explain the procedure that must be followed in JKR and PAM standard forms. State the rules of making an assessment on the variation order according to JKR and PAM standard forms. Explain the work procedure to handle variation order according to JKR and PAM standard forms

TOPIC 5: SUB-CONTRACTOR AND THE NOMINATED SUPPLIER

5.1

Explain the financial control procedure to handle sub-contractors

5.1.1

Explain the contractual relationship between the nsc, ns, client, & the main contractor.

5.1.2

Explain the definition and responsibility of the nominated sub contractor and the nominated supplier in JKR and PAM standard forms.

Nominated sub contractor nominated by Superintending officer for certain work which is generally specialist work which is provided in the tender document or bills of quantities as prime cost sums. Nominated supplier All specialists, merchants, tradesmen or others who are nominated by S.O. to supply materials or goods to the Contractor. The nominated sub-contractor shall carry out and complete the sub-contract Works in every respect to the reasonable satisfaction of the main contractor and of the Architect. The nominated sub-contractor shall observe, perform and comply with all the provisions of the contract on the part of the main contractor to be observed, performed and complied with so far as they relate and apply to the sub-contract works. (Clause 5.1 JKR203N) The nominated sub-contractor shall indemnify the main contractor against the same liabilities in respect of the sub-contract works, any negligence, omission or default of such sub-contractor and shall insure himself against any such claims and produce the policies when required by the architect or the main contractor. (Clause 5.2 JKR203N)

5.1.3

Explain the selection method of nominated sub-contractors and nominated supplier. In order to select the nsc, the QS have to prepare tender document for the nsc or ns works and then calling for tender and prepare tender valuation. The client will then select the nsc or ns. The S.O. then will instruct the contractor to enter into sub-contract with the said nsc or ns. The S.O. shall nominate any persons or firms as a nsc or a ns except: 1) A person against whom the contractor shall make in writing within twenty one (21) days from the date of the S.O.s instruction hereof what the S.O. considers to be reasonable objection. 2) A person who will not enter into a sub-contract with terms and conditions as provided in the Government standard form of sub-contract for NSC Form PWD203N or for NS (Form PWD203P) 3) A person who will not give to the Government such indemnity with the terms and conditions as provided in the Government standard form of Letter of Indemnity for NSC - Form PWD203N7 or for NS - Form PWD203P7 If pursuant to the above, the Contractor is not required to enter a sub-contract, S.O. shall do one or more of the following:1) Nominate an alternative nsc or ns. 2) Vary the work by order under clause 24 including if necessary omit the work so that they may be provided by other workmen, contractors or suppliers employed by the Government. 3) Arrange for the contractor to execute such work.

5.1.4

Explain the assessment of claim from the nominated sub-contractor and the nominated supplier. Valuation of work done by the nominated sub contractor & ns for the interim certificates is prepared by the related consultant e.g. for electrical work, the valuation will be done by the electrical consultant engineer. The consultant will prepare a certificates stating relevant particular of the work including the contract sums and the value of work done and the recommended amount to be certified for payment. Part of this information will be included in the certificated of interim payment to main contractor. Clause 60.1 of PWD 203A standard form of contract states that the interim certificate shall state separately the amounts in each certificate due to each nominated sub-contractor. Clause 28 of PWD 203A and Clause 34 of PWD 203N also state that all the payment to nominated sub-contractor and nominated supplier will be paid directly to the nominated subcontractor from the employer. (Addendum). Unfixed Material and good which are supplied and delivered by NSC or NS for which payment shall be made for the full value of the unfixed materials and goods.

TOPIC 6:
FROM HANDOVER TO FINAL ACCOUNT SETTLEMENT

6.1

Explain the procedure from the time of construction site handover to the final account settlement.

6.1.1

Explain the involvement of the QS at the site handover stage to the final account settlement Prepare Final Account and Final Payment

6.1.2

Explain the certificates issued by the architect/ superintending officer to the main contractor. a) Delay and extension of time

Certificates of Delay and Extension of Time Upon it becoming reasonable apparent that the progress of the Works is delayed, the Contractor shall forthwith give written notice to the Superintending Officer as to the cause of delay and relevant information with supporting documents enabling the said officer to form an opinion as to the cause and calculation of the length of delay. If in the opinion of the said officer the completion of the Works is likely to be delayed or has been delayed beyond the date of completion or beyond any extended date for completion then the officer may if he of the opinion that the extension of time should be granted, so soon as he is able to estimate the length of the delay issue a Certificate of Delay and Extension of Time giving a fair reasonable extension of time for completion of the Works.

b)

Liquidated & ascertained damages

Certificate of Non Completion If the Contractor fails to complete the Works by the Date for Completion or within any extended time granted, the Superintending Officer shall issue a Certificate of Non Completion to the Contractor. Prior to the issuance of the Certificate of Non-Completion, the Superintending Officer shall issue a notice to the Contractor informing the Contractor the intention of the Government to impose Liquidated and Ascertained Damages to the Contractor if the Contractor fails to complete the Works by the Date for Completion or within any extended time granted. Upon the issuance of the Certificate of NonCompletion, the Government shall be entitled to recover from the Contractor Liquidated and Ascertained Damages from the period of the issuance of the Certificate of Non-Completion to the date of issuance of Certificate of Practical Completion or the date of termination of the Contract. The Superintending Officer may deduct such damages from any money due or become due to the Contractor failing which such damages shall be recovered from the Performance Bond or as a debt due from the Contractor.

c)

Partial occupation

Certificate of Partial Occupation If at any time before the whole of the Works have reached practical completion, the Government with the consent of the Contractor shall take possession of and occupy any part or parts of the Works and within seven (7) day from the date of possession, the Superintending Officer shall issue a Certificate of Partial Occupation in respect of the relevant part stating the estimated value of the said relevant part. The relevant part shall be deemed to have reached practical completion and the Defects Liability Period shall be deemed to have commenced on the date of possession. At the end of the Defects Liability Period of the relevant part and if in the opinion of the Superintending Officer any defect, imperfection, shrinkage or any other fault have been made good by the Contractor, the Superintending Officer shall issue a certificate of Making Good Defects for the relevant part. The Liquidated and Ascertained damages for the remainder of the Works shall be reduced in the proportion which the value of the part so certified bears to the value of the whole of the Works.

d)

Sectional completion

Certificate of Practical Completion Where different completion dates for different sections or parts of the Works are stated and identified in Appendix or elsewhere in the Contract Documents and different and separate LAD are provided for each section or part of the Works, the provision of contract in regard to CPC, Delay & EOT, LAD & DLP shall apply as if each such section or part was the subject of a separate and distinct contract.

e)

Termination of work

No certificates issued regarding termination of work

f)

Practical completion Certificate of Practical Completion If the Contractor considers that the works have achieved practical completion, the Contractor shall notify the Superintending Officer in writing to the effect. Within fourteen (14) days of receipt of such notice, the Superintending Officer shall carry out inspection of the Works. Pursuant to such inspection, the Superintending Officer shall give instruction to the Contractor specifying all defective works which are required to be completed by the Contractor before the issuance of the Certificate of Practical Completion. The S.O. shall issue the Certificate of Practical Completion to the Contractor if in his opinion the whole Works have reached Practical Completion and have satisfactorily passed any inspection carried out by him or the Contractor has effectively carried out the remedial work instructed by him. The date of such completion shall be certified by the S.O. and such date shall be the date of the commencement of the Defects Liability Period. The Contractor has three (3) months after the issuance of the Certificate of Practical Completion to submit full particulars of their claim for direct loss and expense to enable the Final Account to be prepared by the S.O.

g)

Final account

6.1.3

Explain the purpose and preparation of the final account. a) Explain the importance of final account

Final Account is a statement which taking into account all calculation and adjustment required to the original contract sum in order to compute the actual contract sum. Later on the final certificate will be issued based on the final account. Final certificate certified the final amount to be paid to the contractor. Delay in preparation of the final account will delay the issuance of final certificate. Both will delay the final payment to the contactor and delay in the release of performance bond and retention sum if any. Delay in the final payment mean a troublesome to the contractor as he still unable to finalize their own project account or close their account with their sub-contractor and supplier. They still unable to verify their actual project profit. The postponement of final payment also means loss of benefit of money and postponement to invest for another project. Same as to the contractor, final account and final certificate enable the client to realize the final payment to be paid to the contractor which may allow the client to be ready in advance by set aside a proper amount for the said final payment. Final account enable the client to identify the total cost or investment spent for the project and the information can be very useful in planning strategy for future project and better planning to recoup the investment. All consultants have their own interest in the final account and final certificate. Actual contract sum in the final account will be used as the basis of computation of their actual professional fees for the whole project. In order to calculate the final payment of professional fees, the amount of previous certified fees is deducted from the actual professional fees

and the balance of it has to be claimed from the client. This will enable the consultant to prepare their final claim for the balance of their professional fees. Consultant will greatly suffer when payment is delayed as it is their main and only source of income.

b) c)

Identify the forms used in the public sector and the private sector Explain the procedures that must be followed in the JKR and PAM standard forms