CC202

CONTRACT
PROCEDURE

CHAPTER 1
THE CONSTRUCTION INDUSTRY IN GENERAL

CONSTRUCTION INDUSTRY IN GENERAL

Generally :
Construction industry is one of the important element to stabilize our
country. Its also act as business course that involving building works,
civil works, mechanics, water, electricity, quary, development of land &
forest and many more. The main objective is to get
investment/investment profits to the nearest maximum. To ensure
construction projects run smoothly, a well-organised management
including tender/contract document preparations should be done from
early stages to the end.
Definition :
Industry that involving construction of civil & building works

CONSTRUCTION INDUSTRY IN GENERAL

Types of works in construction industry :

Buiding

Civil work
(basic/common work)

Houses
Offices
Hotel&resort
Hopital
School/learning institute
mosque

* Roads
* Jetty&bridge
* Tunnel
* Sewerage

Civil work
(heavy/complex work)

* Oil rig
* riverdam
* airport
Highway
Railway station

CONSTRUCTION INDUSTRY IN GENERAL

The relationship between the construction industry and

the economic growth
construction industry is considered as the boost to
the development of other industries..
E.g: -tourism.. (elaborate)
-development of technology to expand the
construction industry.. (elaborate)
- development of infrastructure facilities
(elaborate)
- etc.

PROBLEM FACED BY MALAYSIAN

CONSTRUCTION INDUSTRY

There are lots of problems that the

Malaysian construction industry faces.
Effects to the productivity of
construction industry.
caused by manpower, quality of
productivity and time.

Lack of Manpower

Workers from others country like

Indonesia, Bangladesh and Myanmar.
Have a contracts.
Have less local workers.
The workers work at construction
industry does not have any experience.

Quality of Productivity
Lack of trained manpower.
Many of contractors in Malaysia do not
have many skills in engineering
construction.
Do not follow the schedule.
Do not have a good management

Do Not Finish the Project on Time

Do not follow the timetable.
Causes by a weather.
Problem with contract workers

Activities involved in construction

1)Feasibility study: before the engineer/architect can commence
the client/authority of the organization concerned, he must defined
the objective of the project and also submitted a detailed project
brief.
2) Design : to plan more detailed work to get permission from the
authorities and to determine the cost (approximate cost) & provide
all the information needed.
3) Tender level : to appoint the civil engineer contractor to do the
construction work for a certain project.

Activities involved in constructioncont..

4) Contract : to get the tender from the contractor for the project
offer & make a contract agreement.
5) Construction : to build civil engineering works based on the
design & specification with controlling the time, cost & quality of
the project.
6) Completion phase :to make sure that the project are completed
in time & followed the drawing & specification in the contract
document with suitable cost & produce a good quality of works.
7) Maintenance: provide operation order & the guidelines.

CONSTRUCTION INDUSTRY IN GENERAL

Designer member :
1.

Project Developer/owner
* Intent to build a construction project
* appoint consultants & contractor

2.

Architect
* prepare early&detailed dwgs based on owner/project
developer budget
* give advice & suggestion(s) to owner/project developer

3.

Engineer (civil/structure/electrical/machinery)
*same roles as architect which is based on their own
expertise

4.

Quantity surveyor
* act as cost adviser(although detailed dwgs not prepared yet)
* estimate cost(roughly) for owner/project developer reference
* cost planner to analysed each element in
construction/building works and made comparison of total
cost
* preparing tender documents

CONSTRUCTION INDUSTRY IN GENERAL

Builders team member :
1.
Contractor
* build&complete construction works based on contract document
* responsible for works done at site
* completed construction/building project on time & in great shape
based on
contract document
* observed local authorities regulations
* prepare insurances policy for works & workers
2.

Architect
* observed projects during construction
* act as a leader among consultant
* always interacts/communicate with contractor

CONSTRUCTION INDUSTRY IN GENERAL

Builder member :
3. Engineer (civil/structure/electrical/machinery)
* observed projects during construction
* main adviser based on their own expertise at site
4. Quantity surveyor
* analysed wprks at site for interim payment
* Estimate VO (variation order)
* preparing final account
* make sure contractor repair/rebuild damages completed project
during defects liability period

CONSTRUCTION INDUSTRY IN GENERAL

Contractor firm organization generally

management
top
observation / technical
middle
workers
lower

based on
contractor
firm power &
policy

CONSTRUCTION INDUSTRY IN GENERAL

Manager/
owner

Administration

General

Financial

Technical

Purchase

Project

Size or types of contractor firms organization whether big, medium or small usually
based on firm or projects that will be held but basically organised as state above

CONSTRUCTION INDUSTRY IN GENERAL

The importance of Contractor Firm Organization Chart

Construction projects run smoothly

Everybody know their roles & duties
To ensure a well-organised firm/money well spend
Save on expenditure

CONSTRUCTION INDUSTRY IN GENERAL

HEAD SYSTEM

Head system play large role in construction industry. Party involved

named head contractor.
This system streamline to specialization some nature of the work.
Each contractor that want are registered with Pusat Khidmat
Kontraktor (PKK) must be state the heads that want to registered
according to respective expertise.
Head contractor have a close relationship with contractor but the
employee not the contractor employee. Only head contractor which
have contract with contractor will complete works given.
Head contractor work based on profit. The basic/manual equipment is
under head contractor provision and maintenance. Contractor only
providing equipment or heavy machinery only.

CONSTRUCTION INDUSTRY IN GENERAL

HEAD SYSTEM ADVANTAGES

Contractor broke away from responsibility to manage and control the

construction worker.
It more flexible (employee can change to another workplace)
Work can be finished faster.

HEAD SYSTEM DISADVANTAGES

Employee surveillance (contractor no authority to oversee directly the

head contractor employee)
Work quality
Building material wastage.

CONSTRUCTION INDUSTRY IN GENERAL

TYPES OF HEAD
1)
2)
3)
4)
5)

Head I : Civil Engineering Works

Head II : Building Works
Head III : Mechanical, Sanitary and Water Engineering Works
Head IV : Other Specialist Civil Engineering Works
Head V : Quarrying Metal and Earth Supply, Cartage and
Transport
6) Head VI : Forest and Land Development
7) Head VII : Electric Works
8) Head VIII : Telecommunication Works

CONSTRUCTION INDUSTRY IN GENERAL

CONSTRUCTION INDUSTRY DEVELOPMENT BOARD (CIDB)

To promote and stimulate the development, improvement and expansion of the

construction industry;
To advise and make recommendations to the Federal Government and the
State Governments on matters affecting or connected with the construction
industry;
To promote, stimulate and undertake research into any matter related to the
construction industry;
To provide consultancy and advisory services with respect to the construction
industry;
To promote quality assurance in the construction industry;

CIDB REGISTRATION

Official website : http://www.cidb.gov.my/v6/

CONSTRUCTION INDUSTRY IN GENERAL

PUSAT KHIDMAT KONTRAKTOR (PKK) @ CONTRACTOR SERVICE CENTRE

PKK FUNCTIONS
i. Registration center for all contractors working on federal or state level.
ii. Giving recognition to qualified.Bumiputera contractors
iii. As a referers to contractor
iv. To provide advice and assistance to Bumiputera contractors.

Official website : http://pkk.kkr.gov.my/home

REGISTRATION PROCEDURE(CONTRACTOR)@PKK
registered (business) Pejabat Pendaftaran Perniagaan
minimum capital
technical qualification (certificate / diploma / degree)
work experience or employment record company

credit facilities, supply of materials and machinery

letter of support from supervisors and project from the main contractor
equipment and machinery
technical staff and management.
Applicants who have the conditions (qualified) may apply and be interviewed on the
PKK.
REGISTRATION PROCEDURE-CIVIL/BUILDING WORKS

REGISTRATION PROCEDURE-ELECTRICAL WORKS

TECHNICAL QUALIFICATION-HEAD/SUB-HEAD

End of Chapter 1..