SBQ 3722 PROFESSIONAL

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

QUESTIONS :
1) DESCRIBE THE WORK PROCESS FOR THE
SERVICE
2) UNDERTAKES THE PLANNING & ORGANIZING
OF ITS SOURCES TO ACCOMPLISH
3) IDENTIFY THE PROBLEMS AND NECESSARY
SUGGESTIONS TO IMPROVE
4) MONITORING MECHANISM
ADJUSTMENT OF CONTRACT
SUM
& FINAL ACCOUNT
Adjustment of Contract Sum
The Certificate adjustments of Contract Sum were introduced for
the purpose of adjusting the amount of the contract price. The
total contract price shall be adjusted to take into account any
additional or lack of the total contract price.
Adjustment of Final Account
Final account is an accounts that are provided to show the
payments that have been made including defects, claim
for damages or extra expenses.
Final accounts must be provided as soon as possible after the
contractor to meet its obligations under the contract
Adjustment of the contract sum in the final account
falls under several relevant items which is listed in the
standard form of contract and conditions

Sums that are to be Deducted :-
a) prime cost sums
b) provisional sums
c) variations that are omissions
d) any other amount that are to be deducted from
the contract sum/
An important part of the contractors
quantity surveyors work is the agreement of
the Final Account.

Both Clients Quantity Surveyor and
Contractors Quantity Surveyor to work
together to produce an agreed statement of
the amount money to be paid at the end of a
building contract by the employer to the
contractor
The person who is responsible to prepare the Adjustment of
Contract Sum and Final Account
a) Contract Manager
b) Senior Quantity Surveyor

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





Adjustment of Contract Sum includes :

a) APK Arahan Perubahan Kerja
b) PHK - Pelarasan Harga Kontrak
c) Provisional Sum
d) Prime Cost Sum
Adjustment of Contract Sum includes
a) APK Arahan Perubahan Kerja
Continuity of board approval on V.O, APK are required.
Consist of instructions to be carried out by the Contractor
Any claim due to this VO will be highlighted in this form.
S.O and Contractor to signed (if agreed)
b) PHK - Pelarasan Harga Kontrak
After finalized the APK, new contract sum will be adjusted
accordingly
All collective APK will be summarized
Endorsement and agreement from both parties are required



Adjustment of Contract Sum
c) Provisional Sum
For a specific element of the works that is not yet
defined in enough detail for tenderer to price.
Together with a brief description, allows tenders to
apply mark up and costs within their
overall tender price.
The adjustment is made after completion of works
and final cost is ascertained. Provisional Sums that
are not used shall be deducted from the Contract
Sum




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





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




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

Example APK Form
Arahan Perubahan Kerja-
kerja tambahan untuk
membekalkan Peralatan
Elektrik.


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



Preparation of Adjustment Contract Sum
Total contract price adjustment certificate must be
prepared and remove when the total contract price
should be adjusted. It covers variation order.
All items in the certificate must be properly filled
Date is the date the certificate is a certificate signed PP
Calculation detail of the adjustment must be
appended except for adjustments due to changes in
work.
The certificate must be signed by the PP and the
original shall be issued to the contractor.
The contractor have to provide the architect or QS with all
documents necessary for the final account preparation not later
than 6 months after practical completion. Within 3 months of for
the architect or QS to prepare the final account sum and send this
to the contractor
The area to be cover under preparations of Final Account:
Variations
Re-measurement of provisional quantity in the Contract Bills
NSC account
Nominated supplier account
Loss and expense caused by disturbance of the regular process
of the works
Its about sense of finality to the negotiations leading up to the
agreement of the Final Account between the parties to the
contract.
Preparation of Final Account
If there a doubt about the accuracy of any the original billed
items, he can make a request to the QS for work concerned to
be measured on-site.
Sums to be deducted:
a) Provisional sums and the value of work for which
approximate quantities are included in contract bills.
b) Variations that are omissions
c) Amounts allowable to the employer under the fluctuations
clauses
d) Any other amount that is required by the contract to be
deducted from the contract sum.

Preparation of Final Account
Sums to be added:

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

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

Problem faced by the Firm
Necessary Suggestions To Improve

Verify the work progress within one(1) month period.

Held a meeting at least twice a week to solve small
problem that occur at site .

The architect has the authority to order minor changes
in the work not involving adjustment in the contract
sum. Such changes shall be done in writing and shall
bind with owner and contractor.



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




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